UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant  o

Check the appropriate box:

o	Preliminary Proxy Statement
o	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒	Definitive Proxy Statement
o	Definitive Additional Materials
o	Soliciting Material under Rule 14a-12

AIRCASTLE LIMITED

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o	No fee required.
☒	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)	Title of each class of securities to which transaction applies:
		Common shares, $0.01 par value per share
	(2)	Aggregate number of securities to which transaction applies:
		53,350,787 common shares issued and outstanding that are subject to the transaction (including 92,996 restricted shares) (which is the difference between the 74,956,134 common shares that are issued and outstanding and the 21,605,347 common shares that are beneficially owned by Marubeni Corporation); 872,287 common shares issuable upon the vesting or settlement of outstanding performance share units (“PSUs”) (assuming the achievement, if applicable, of performance metrics at the maximum level of performance); and 45,573 common shares issuable upon the vesting or settlement of outstanding restricted share units (“RSUs”).
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
		The maximum aggregate value was determined based upon the sum of: (1) 53,350,787 common shares issued and outstanding that are subject to the transaction (including 92,996 restricted shares) (which is the difference between the 74,956,134 common shares that are issued and outstanding and the 21,605,347 common shares that are beneficially owned by Marubeni Corporation) multiplied by $32.00 per share; (2) 872,287 common shares issuable upon the vesting or settlement of outstanding PSUs (assuming the achievement, if applicable, of performance metrics at the maximum level of performance) multiplied by $32.00 per share; and (3) 45,573 common shares issuable upon the vesting or settlement of outstanding RSUs multiplied by $32.00 per share. In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying the sum calculated in the preceding sentence by 0.0001298.
	(4)	Proposed maximum aggregate value of transaction: $1,736,596,704.00
	(5)	Total fee paid: $227,649.39
☒	Fee paid previously with preliminary materials.
o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:

Aircastle Limited
c/o Aircastle Advisor LLC
201 Tresser Boulevard, Suite 400
Stamford, CT 06901

January 23, 2020

Dear Shareholder:

We cordially invite you to attend a special general meeting of the shareholders of Aircastle Limited, a Bermuda exempted company (the “Company”), which will be held at 201 Tresser Boulevard, Stamford, Connecticut, USA, 06901, on March 6, 2020, starting at 11 a.m. Eastern time.

At the special general meeting, holders of our common shares, par value $0.01 per share, will be asked to consider and vote on a proposal to approve and adopt an Agreement and Plan of Merger, dated as of November 5, 2019 (as it may be amended from time to time, the “Merger Agreement”), and a related Statutory Merger Agreement (the “Statutory Merger Agreement”), by and among MM Air Limited, a Bermuda exempted company (“Parent”), MM Air Merger Sub Limited, a Bermuda exempted company and wholly-owned subsidiary of Parent (“Merger Sub”), and the Company, and the consummation of the transactions contemplated thereby, including the merger described below (the “Merger Proposal”).

Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Company, with the Company as the surviving company in the merger. Upon completion of the merger, each common share issued and outstanding at the effective time of the merger (other than common shares held by Parent, Merger Sub, the Company or their wholly-owned subsidiaries or by Marubeni Aviation Holding Coöperatief U.A.) will be cancelled and converted into the right to receive $32.00, in cash, without interest.

If the merger is completed, the Company will become a privately-held company whose only shareholders will be Marubeni Aviation Holding Coöperatief U.A., which is an indirect subsidiary of Marubeni Corporation, and Parent. Parent is controlled by affiliates of Marubeni Corporation and Mizuho Leasing Company, Limited.

The board of directors of the Company (the “Board of Directors”) has unanimously (other than directors Jun Horie, Takashi Kurihara and Takayuki Sakakida (the “Marubeni Directors”), who did not participate due to their affiliation with Marubeni Corporation), (a) determined that the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the merger, are fair to and in the best interest of the Company, (b) approved the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the merger, and (c) resolved to recommend that the Company’s shareholders approve and adopt the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the merger. The Board of Directors (other than the Marubeni Directors) made these determinations after consultation with its legal and financial advisors and consideration of a number of factors. The Marubeni Directors did not participate in the deliberations and vote of the Board of Directors due to their affiliation with Marubeni Corporation.

After careful consideration, the Board of Directors unanimously (other than the Marubeni Directors) recommends that you vote “FOR” the approval and adoption of the Merger Proposal, and “FOR” the adjournment of the special general meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special general meeting to approve the Merger Proposal.

Approval of the above proposals requires the affirmative vote of a majority of the votes cast at the special general meeting, provided a quorum is present.

Pursuant to rules of the Securities and Exchange Commission, you also will be asked to vote at the special general meeting on an advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger, as described in the proxy statement. The Board of Directors also unanimously (other than the Marubeni Directors) recommends that the shareholders of the Company vote “FOR” the advisory (non-binding) proposal to approve the specified compensation that may become payable to the named executive officers of the Company in connection with the merger.

The enclosed proxy statement describes the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the merger, and provides specific information concerning the special

general meeting. In addition, you may obtain information about us from documents filed with the Securities and Exchange Commission. We urge you to read the entire proxy statement, including the annexes and the documents referred to or incorporated by reference in the proxy statement, carefully, as they set forth the details of the Merger Proposal.

Your vote is very important, regardless of the number of common shares you own. The Merger Proposal cannot be approved (and the merger cannot be completed) without the affirmative vote of a majority of the votes cast by holders of common shares present in person or represented by proxy and entitled to vote at the special general meeting in favor of the approval and adoption of the Merger Proposal. In addition, the Merger Agreement makes the approval by shareholders of the proposal to adopt the Merger Agreement a condition to the parties’ obligations to consummate the merger.

If you own common shares of record, you will find enclosed a proxy and voting instruction card or cards and an envelope in which to return the card(s). Whether or not you plan to attend this meeting, please sign, date and return your enclosed proxy and voting instruction card(s), or vote over the phone or Internet, as soon as possible so that your common shares can be voted at the meeting in accordance with your instructions. You can revoke your proxy before the special general meeting and issue a new proxy as you deem appropriate. You will find the procedures to follow if you wish to revoke your proxy beginning on page 63 of the enclosed proxy statement. Your vote is very important.

If you are a shareholder of record, submitting a proxy will not prevent you from voting your shares in person if you subsequently choose to attend the special general meeting.

If you are a shareholder who holds your common shares in “street name” through a broker, bank or other nominee, please be aware that you will need to follow the directions provided by such broker, bank or nominee regarding how to instruct it to vote your common shares at the special general meeting.

If you have any questions or need assistance voting your common shares, please call Georgeson LLC, the Company’s proxy solicitor in connection with the special general meeting, toll-free at 888-877-5360.

Sincerely,
Peter V. Ueberroth	Michael J. Inglese
Chairman of the Board of Directors	Chief Executive Officer
Stamford, Connecticut

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

This proxy statement will not be filed with any government or regulatory authority in Bermuda. Neither the Bermuda Monetary Authority nor the Registrar of Companies in Bermuda accepts any responsibility for Aircastle’s financial soundness or the correctness of any of the statements made or opinions expressed in this proxy statement.

This proxy statement is dated January 23, 2020 and
is first being mailed to shareholders on or about January 29, 2020.

Aircastle Limited
c/o Aircastle Advisor LLC
201 Tresser Boulevard, Suite 400
Stamford, CT 06901

Notice of Special General Meeting of Shareholders

To Our Shareholders:

Aircastle Limited will hold a special general meeting, at its office headquarters, located at 201 Tresser Boulevard, Stamford, Connecticut, USA, 06901, on March 6, 2020, at 11 a.m., Eastern time. The matters to be considered and acted upon at the special general meeting, which are described in detail in the accompanying materials, are:

1. To approve and adopt the Agreement and Plan of Merger, dated November 5, 2019, and the related Statutory Merger Agreement, by and among Aircastle Limited, a Bermuda exempted company (the “Company”), MM Air Limited, a Bermuda exempted company (“Parent”), and MM Air Merger Sub Limited, a Bermuda exempted company and wholly-owned subsidiary of Parent (“Merger Sub”), and the transactions contemplated thereby, including the merger (the “Merger Proposal”);

2. To approve, on an advisory (non-binding) basis, specified compensation that may become payable to the named executive officers of the Company in connection with the merger (the “Compensation Proposal”);

3. To approve the adjournment of the special general meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special general meeting to approve the Merger Proposal (the “Adjournment Proposal”); and

4. To act upon other business that may properly come before the special general meeting or any adjournment or postponement thereof.

Your Board of Directors unanimously (other than the Marubeni Directors) recommends that you vote in favor of proposals 1, 2, 3 and 4 which are set forth in the accompanying proxy statement.

Shareholders registered in our records or our agents’ records at the close of business on January 22, 2020, are entitled to receive notice of and to vote at the special general meeting and at any adjournment thereof. All shareholders of record are invited to attend the special general meeting in person. Your vote is important, regardless of the number of common shares you own. A quorum of two or more persons present in person at the start of the special general meeting and representing in person or by proxy in excess of 50% of all votes attaching to all common shares is required for the proposals to be put to a vote at the special general meeting. The Merger Proposal cannot be approved (and the merger cannot be completed) without the affirmative vote of a majority of the votes cast by holders of common shares present in person or represented by proxy and entitled to vote at the special general meeting in favor of the Merger Proposal. Pursuant to our bye-laws, our common shares are entitled to one vote per share.

The advisory (non-binding) proposal to approve the Compensation Proposal and the Adjournment Proposal require the affirmative vote of a majority of the votes cast at the special general meeting, provided a quorum is present.

Even if you plan to attend the special general meeting in person, we request that you complete, sign, date and return the enclosed proxy and thus ensure that your common shares will be represented at the special general meeting if you are unable to attend. You also may submit your proxy by using a toll-free telephone number or the Internet. We have provided instructions in the enclosed proxy statement and on the proxy and voting instruction card for using these convenient services.

If you sign, date and return your proxy and voting instruction card(s) without indicating how you wish to vote, your proxy will be voted in favor of the Merger Proposal, in favor of the Compensation Proposal and in favor of the Adjournment Proposal. If you fail to attend the special general meeting or submit your proxy, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special general meeting.

You may revoke your proxy at any time before the vote at the special general meeting by following the procedures outlined in the enclosed proxy statement. If you are a shareholder of record, attend the special general meeting and wish to vote in person, you may revoke your proxy and vote in person.

If you are a shareholder who holds your common shares in “street name” through a broker, bank or other nominee, please be aware that you will need to follow the directions provided by such broker, bank or nominee regarding how to instruct it to vote your common shares at the special general meeting.

By order of the Board of Directors,

 

Christopher L. Beers

Chief Legal Officer & Secretary

Stamford, CT
Dated: January 23, 2020

TABLE OF CONTENTS

	Page
SUMMARY TERM SHEET		1
The Parties to the Merger and Their Principal Affiliates		1
The Merger Proposal		2
The Special General Meeting		3
Record Date and Quorum		3
Required Shareholder Votes for the Merger		3
Conditions to the Merger		3
Expected Timing of the Merger		4
Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors		4
Opinion of Citigroup Global Markets Inc.		5
Purposes and Reasons of Parent and Merger Sub for the Merger		5
Certain Effects of the Merger		6
Treatment of Company Equity Awards and Director Restricted Cash Awards		6
Interests of the Company’s Directors and Executive Officers in the Merger		6
Voting and Support Agreement		7
U.S. Federal Income Tax Consequences of the Merger		7
Anticipated Accounting Treatment of the Merger		7
Appraisal Rights		7
Litigation Relating to the Merger		8
No Solicitation; No Adverse Recommendation Change		8
Financing		8
Limited Guaranty		8
Termination		9
Termination Fee		9
QUESTIONS AND ANSWERS ABOUT THE SPECIAL GENERAL MEETING AND THE MERGER		11
SPECIAL FACTORS		16
Background of the Merger		16
Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors		27
Opinion of Citigroup Global Markets Inc.		31
Purposes and Reasons of Parent and Merger Sub for the Merger		36
Position of the Marubeni Shareholders, Parent and Merger Sub as to Fairness of the Merger		38
Plans for the Company After the Merger		41
Certain Effects of the Merger		41
Projected Financial Information		42
Interests of the Company’s Directors and Executive Officers in the Merger		43
Financing		52
Limited Guaranty		52
Voting and Support Agreement		52
Anticipated Accounting Treatment of the Merger		53
Appraisal Rights		53
U.S. Federal Income Tax Consequences of the Merger		53
Regulatory Approvals		55
Fees and Expenses		56
Litigation Relating to the Merger		56
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION		58
THE PARTIES TO THE MERGER AND THEIR PRINCIPAL AFFILIATES		59
Aircastle Limited		59
MM Air Limited		59
MM Air Merger Sub Limited		59

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	Page
THE SPECIAL GENERAL MEETING		61
Date, Time and Place		61
Record Date and Quorum		61
Required Shareholder Votes for the Merger		61
Voting; Proxies; Revocation		62
Adjournments and Postponements		63
Solicitation of Proxies		63
THE MERGER AGREEMENT		64
VOTING AND SUPPORT AGREEMENT INVOLVING COMMON SHARES		81
PROVISIONS FOR PUBLIC SHAREHOLDERS		82
IMPORTANT INFORMATION REGARDING AIRCASTLE		82
Company Background		82
Directors and Executive Officers		82
Prior Public Offerings		86
Historical Selected Financial Information		86
Book Value Per Share		89
Market Price of the Company’s Common Shares		90
Dividends		90
Security Ownership of Directors, Executive Officers and Certain Beneficial Owners		91
Transactions in Common Shares		92
IMPORTANT INFORMATION REGARDING THE MARUBENI SHAREHOLDERS, PARENT AND MERGER SUB		94
APPRAISAL RIGHTS		104
ADVISORY VOTE ON MERGER RELATED COMPENSATION		106
The Non-Binding Advisory Proposal		106
Board of Directors Recommendation		106
ELIMINATING DUPLICATIVE PROXY MATERIALS		107
SUBMISSION OF SHAREHOLDER PROPOSALS		108
WHERE YOU CAN FIND ADDITIONAL INFORMATION		109
ANNEX A: MERGER AGREEMENT		A-1
ANNEX B: VOTING AND SUPPORT AGREEMENT		B-1
ANNEX C: OPINION OF CITI		C-1
ANNEX D: COPY OF SECTION 106 OF THE BERMUDA COMPANIES ACT		D-1

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SUMMARY TERM SHEET

This Summary Term Sheet discusses certain material information contained in this proxy statement, including with respect to the Agreement and Plan of Merger, dated as of November 5, 2019, by and among Aircastle Limited, a Bermuda exempted company (“Aircastle” or the “Company”), MM Air Limited, a Bermuda exempted company (“Parent”), and MM Air Merger Sub Limited, a Bermuda exempted company and a wholly-owned subsidiary of Parent (“Merger Sub”), which we sometimes refer to in this proxy statement as the “Merger Agreement.” We encourage you to read carefully this entire proxy statement, including its annexes and the documents referred to or incorporated by reference in this proxy statement, as this Summary Term Sheet may not contain all of the information that may be important to you. Each item in this Summary Term Sheet includes page references directing you to a more complete description of that item in this proxy statement.

If the merger is completed, the Company will become a privately-held company, owned by Marubeni Aviation Holding Coöperatief U.A. (“MHC”), which is an indirect subsidiary of Marubeni Corporation (“Marubeni”), and Parent. Parent is a newly-formed entity controlled by affiliates of Marubeni and Mizuho Leasing Company, Limited (“Mizuho Leasing”).

The Parties to the Merger and Their Principal Affiliates

Aircastle Limited

Aircastle Limited is a Bermuda exempted company. Founded in 2004, Aircastle Limited acquires, leases and sells commercial jet aircraft to airlines throughout the world. As of September 30, 2019, Aircastle owned and managed on behalf of its joint ventures 277 aircraft leased to 87 customers located in 48 countries. For information about the Company, see “Important Information Regarding Aircastle—Company Background” beginning on page 82.

The principal executive office of Aircastle Limited is located at 201 Tresser Boulevard, Suite 400, Stamford, CT 06901.

Additional information about Aircastle is contained in its public filings, certain of which are incorporated by reference into this proxy statement. See “Where You Can Find Additional Information” beginning on page 109.

MM Air Limited

MM Air Limited is a Bermuda exempted company and is a newly-formed entity controlled by affiliates of Marubeni and Mizuho Leasing. Parent has not engaged in any business other than in connection with the merger and other related transactions. See “The Parties to the Merger and Their Principal Affiliates—MM Air Limited” beginning on page 59 and “Important Information Regarding Marubeni Shareholders, Parent and Merger Sub” beginning on page 94.

The registered office of MM Air Limited is located at Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda.

MM Air Merger Sub Limited

MM Air Merger Sub Limited is a Bermuda exempted company. Merger Sub is a wholly-owned subsidiary of Parent and was formed solely for the purpose of engaging in the merger and other related transactions. Merger Sub has not engaged in any business other than in connection with the merger and other related transactions. See “The Parties to the Merger and Their Principal Affiliates—MM Air Merger Sub Limited” beginning on page 59 and “Important Information Regarding Marubeni Shareholders, Parent and Merger Sub” beginning on page 94.

The registered office of MM Air Merger Sub Limited is located at Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda.

Marubeni Corporation

Marubeni Corporation and its consolidated subsidiaries use their broad business networks, both within Japan and overseas, to conduct importing and exporting (including third country trading), as well as domestic business, encompassing a diverse range of business activities across wide-ranging fields including lifestyle, ICT & real

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estate business, forest products, food, agricultural business, chemicals, power business, energy, metals & mineral resources, plant, aerospace & ship, finance & leasing business, construction, auto & industrial machinery, and next generation business development. Additionally, the Marubeni Group offers a variety of services, makes internal and external investments, and is involved in resource development throughout all of the above industries.

The principal executive office of Marubeni Corporation is located at 7-1 Nihonbashi 2-chome, Chuo-ku, Tokyo, 103-6060 Japan.

Marubeni Aviation Holding Coöperatief U.A.

Marubeni Aviation Holding Coöperatief U.A. is a Netherlands coöperatief and a wholly-owned subsidiary of Marubeni. MHC was organized for the purpose of acquiring and holding common shares of Aircastle.

The principal executive office of Marubeni Aviation Holding Coöperatief U.A. is located at Herikerbergweg 238, Luna Arena, 1101 CM Amsterdam, the Netherlands.

Marubeni Aviation Corporation

Marubeni Aviation Corporation is a Japanese corporation and a wholly-owned subsidiary of Marubeni. Marubeni Aviation Corporation owns 50% of the outstanding shares of Parent and all the outstanding shares of MHC. Its principal business is business investment, particularly in the aviation industry.

The principal executive office of Marubeni Aviation Corporation is located at Nihombashi Tower, 18th Floor, 7-1 Nihonbashi 2-chome, Chuo-ku, Tokyo, 103-6060 Japan.

Mizuho Leasing Company, Limited

Mizuho Leasing Company, Limited (Mizuho Leasing) was established in 1969 as a general leasing company under the initiative of The Industrial Bank of Japan, Ltd. (now Mizuho Bank, Ltd.) and with investment from major companies across Japanese industry.

Mizuho Leasing has focused on financing for equipment and other assets through leasing and installment sales, while also actively growing its operations in Japan and overseas as a comprehensive financial services group serving the business community. In addition to providing finance for capital investment in industrial machine tools, IT equipment, medical equipment and other business assets, Mizuho Leasing has been expanding its reach into new business areas by proposing a wide range of solutions that address the diverse needs of corporate clients, increasing its presence in the financial sector, and leveraging M&A activities.

In March 2019, in order to achieve further business growth and enhance the corporate value of the Mizuho Financial Group, Inc., Mizuho Leasing entered into a capital and business alliance with Mizuho Bank, Ltd. and an alliance in the lease financing business with Marubeni Corporation. Now, as a leasing company named “Mizuho Leasing Company, Limited” (formerly, IBJ Leasing Company, Limited), which is the only equity-method affiliate in the Mizuho Financial Group, Inc., it strives to deliver services that solve the management issues faced by its clients.

The principal executive office of Mizuho Leasing Company, Limited, is located at 1-2-6 Toranomon, Minato-ku, Tokyo, 105-0001 Japan.

The Merger Proposal

You are being asked to consider and vote upon a proposal to approve and adopt the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the merger (the “Merger Proposal”).

The Merger Agreement and the Statutory Merger Agreement provide that, at the closing of the merger, Merger Sub will be merged with and into the Company, with the Company as the surviving entity in the merger. Upon completion of the merger, each outstanding common share of the Company, par value $0.01 per share (other than common shares held by Parent, Merger Sub, the Company or their wholly-owned subsidiaries, or by MHC, as described more fully under “The Merger Agreement—Effect of the Merger on the Common Shares of the Company and Merger Sub” beginning on page 65) will be converted into the right to receive $32.00 per

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common share, in cash, without interest and less any required withholding taxes (the “Merger Consideration”). Upon completion of the merger, the common shares will no longer be publicly traded, and shareholders (other than MHC and Parent) will cease to have any ownership interest in the Company.

The Special General Meeting (Page 61)

The special general meeting will be held at 201 Tresser Boulevard, Stamford, Connecticut, USA, 06901, on March 6, 2020, starting at 11 a.m., Eastern time.

Record Date and Quorum (Page 61)

The holders of record of the common shares as of the close of business on January 22, 2020 (the record date for determination of shareholders entitled to notice of and to vote at the special general meeting) are entitled to receive notice of and to vote at the special general meeting.

At any special general meeting of the Company, the presence of two or more persons at the start of the meeting and representing, in the aggregate of those present in person or represented by proxy entitling the holder to vote at the special general meeting, in excess of 50% of all votes attaching to all shares of the Company in issue, shall form a quorum for the transaction of business. If a quorum is not present, the special general meeting may be adjourned by the chairman of the meeting until a quorum has been obtained. Abstentions will be counted toward the presence of a quorum at the special general meeting but will not be considered votes cast on any proposal brought before the special general meeting. Under the Voting and Support Agreement, Marubeni, Marubeni Aviation Corporation and MHC (collectively, the “Marubeni Shareholders”) as holder of approximately 28.8% of the outstanding common shares, agreed to vote all common shares they own in favor of the Merger Proposal.

Required Shareholder Votes for the Merger (Page 61)

If a quorum is present, pursuant to the Company’s bye-laws, the approval of the Merger Proposal requires the affirmative vote of a majority of the votes cast by holders of common shares present in person or represented by proxy and entitled to vote at the special general meeting or any adjournment thereof in accordance with the Company’s bye-laws. Pursuant to Aircastle’s bye-laws, common shares are entitled to one vote per share. The approval of the Merger Proposal is a condition to the parties’ obligations to consummate the merger.

As of the record date, there were 74,956,134 common shares outstanding. Marubeni holds 21,605,347 common shares, representing approximately 28.8% of the outstanding voting power as of the record date. Under the Voting and Support Agreement, the Marubeni Shareholders agreed to vote all common shares they own in favor of the Merger Proposal.

Each of the directors and executive officers of the Company has informed the Company that, as of the date of this proxy statement, he or she intends to vote in favor of the Merger Proposal.

Conditions to the Merger (Page 77)

Each party’s obligation to complete the merger is subject to the satisfaction or, to the extent permitted by law, waiver of the following conditions:

• approval and adoption of the Merger Proposal by the affirmative vote of a majority of the votes cast at the special general meeting at which a quorum is present;

• the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), the receipt of any applicable pre-clearance or similar approval of certain other specified jurisdictions (i.e., Brazil, Chile, Mexico, Morocco, the Philippines, Russia, South Africa and Turkey), and all such required regulatory approvals being in full force and effect; and

• no law or order being in effect that prevents, makes illegal or prohibits the consummation of the merger and the other transactions contemplated hereby.

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The obligations of the Company to consummate the merger are subject to the satisfaction or, to the extent permitted by law, waiver of the following conditions:

• the representations and warranties of Parent and Merger Sub in the Merger Agreement related to Parent’s and Merger Sub’s organization, standing and power; and authority, execution, delivery and enforceability must be true and correct in all material respects as of the closing as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date);

• the other representations and warranties of Parent and Merger Sub in the Merger Agreement must be true and correct (without giving effect to any limitation as to “materiality” or “Parent Material Adverse Effect” set forth therein), as of the closing as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to “materiality” or “Parent Material Adverse Effect” set forth therein), individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect (the condition described in this bullet, together with the condition described in the first bullet of this paragraph, the “Parent Representation Condition”); and

• Parent and Merger Sub shall have performed in all material respects all obligations required to be performed by them under the Merger Agreement at or prior to the closing of the merger (the “Parent Covenant Condition”).

The obligations of Parent and Merger Sub to consummate the merger are subject to the satisfaction or, to the extent permitted by law, waiver of the following conditions:

• the representations and warranties of the Company in the Merger Agreement related to the Company’s organization, standing and power; authorized and outstanding share capital; authority, execution, delivery and enforceability; anti-takeover provisions; and brokers’ fees and expenses must be true and correct in all material respects as of the closing as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date);

• the representations and warranties of the Company in the Merger Agreement related to absence of a “Company Material Adverse Effect” from December 31, 2018 until the date of the Merger Agreement, must be true and correct in all respects as of the closing as if made at and as of such time;

• the other representations and warranties of the Company in the Merger Agreement must be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth therein) as of the closing as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect” set forth therein), individually or in the aggregate, has not had and would not reasonably be expected to have a Company Material Adverse Effect (the condition described in this bullet, together with the conditions described in the first and second bullets of this paragraph, the “Company Representation Condition”);

• the Company shall have performed in all material respects all obligations required to be performed by it under the Merger Agreement at or prior to the closing of the merger (the “Company Covenant Condition”); and

• no Company Material Adverse Effect shall have occurred since the date of the Merger Agreement.

Expected Timing of the Merger

We anticipate completing the merger in the first half of 2020, subject to approval of the Merger Proposal by the Company’s shareholders as specified herein and the satisfaction or waiver of the other conditions to closing, although Aircastle cannot assure completion by any particular date, if at all.

Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors (Page 27)

The Board of Directors, after considering various factors described herein, adopted resolutions by unanimous vote of the directors (other than the Marubeni Directors) at a meeting duly called at which a quorum of directors was present (i) determining that the Merger Consideration constitutes fair value for each common share in accordance with

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the Companies Act 1981 of Bermuda (the “Bermuda Companies Act”), (ii) determining that the terms of the Merger Agreement and the Statutory Merger Agreement and the transactions contemplated thereby, including the merger, are fair to and in the best interests of Aircastle, (iii) approving and declaring advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement and the consummation of the transactions contemplated thereby, including the merger, and (iv) subject to the right of the Board of Directors to change its recommendation in certain circumstances, recommending that Aircastle’s shareholders vote in favor of the Merger Proposal at a duly held meeting of such shareholders for such purpose.

The Board of Directors unanimously (other than the Marubeni Directors) recommends that you vote “FOR” the Merger Proposal.

For purposes of Section 106(2)(b)(i) of the Bermuda Companies Act, the Board of Directors considers $32.00, without interest and less any applicable withholding taxes, to be fair value for each issued and outstanding common share.

For a more complete discussion of the factors considered by the Board of Directors in reaching its decision to approve and adopt the Merger Proposal, see “Special Factors—Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors” beginning on page 27.

Opinion of Citigroup Global Markets Inc. (Page 31 and Annex C)

Aircastle retained Citigroup Global Markets Inc. (“Citi”) as its exclusive financial advisor in connection with a possible transaction involving Aircastle. In connection with Citi’s engagement, Aircastle requested that Citi evaluate the fairness, from a financial point of view, to the holders of Company common shares (other than Parent and its affiliates) of the Merger Consideration to be received in the proposed merger by such holders pursuant to the terms and subject to the conditions set forth in the Merger Agreement. On November 5, 2019, at a meeting of the Board of Directors (other than the Marubeni Directors) held to evaluate the proposed merger and at which the Merger Agreement was approved, Citi rendered to the Board of Directors (other than the Marubeni Directors) an oral opinion, confirmed by delivery of a written opinion, dated November 5, 2019, to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi as set forth in its written opinion, the Merger Consideration was fair, from a financial point of view, to the holders of Company common shares (other than Parent and its affiliates).

The full text of Citi’s written opinion, dated November 5, 2019, to the Board of Directors, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi in rendering its opinion, is attached to this proxy statement as Annex C and is incorporated herein by reference in its entirety. The summary of Citi’s opinion in the section entitled “Special Factors—Opinion of Citigroup Global Markets Inc.” beginning on page 31 of this proxy statement is qualified in its entirety by reference to the full text of Citi’s opinion. Citi’s opinion was rendered to the Board of Directors (in its capacity as such) in connection with its evaluation of the proposed merger and was limited to the fairness, from a financial point of view, as of the date of the opinion, to the holders of Company common shares (other than Parent and its affiliates) of the Merger Consideration. Citi’s opinion did not address any other aspects or implications of the proposed merger or the Merger Agreement. Citi’s opinion is not intended to be and does not constitute a recommendation to any shareholder as to how such shareholder should vote or act on any matters relating to the proposed merger or otherwise.

For more information, see the section entitled “Special Factors—Opinion of Citigroup Global Markets Inc.” beginning on page 31.

Purposes and Reasons of Parent and Merger Sub for the Merger (Page 36)

For Parent, Merger Sub and their affiliates (including Marubeni and Mizuho Leasing (together, the “Marubeni Consortium”)), the purpose of the merger is for Parent to acquire all of the common shares of the Company not already held by the Marubeni Shareholders. When the merger is completed, all of the Company’s common shares will be owned by MHC (which is Marubeni’s indirect subsidiary) and Parent. Marubeni decided

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to pursue the merger after learning that third parties had expressed interest in acquiring the Company, and after the non-Marubeni Directors advised Marubeni that they would be willing to waive a contractual “standstill” provision that otherwise would have prohibited Marubeni from making a takeover proposal or publicly announcing an interest in doing so.

For a full description of the purposes and reasons of Parent and Merger Sub, see “Special Factors—Purposes and Reasons of Parent and Merger Sub for the Merger” beginning on page 36.

Certain Effects of the Merger (Page 41)

If shareholders approve the Merger Proposal and the other conditions to the closing of the merger are either satisfied or waived, Merger Sub will be merged with and into the Company with the Company being the surviving company. If the merger is completed, all of Aircastle’s equity interests will be owned by MHC (which is Marubeni’s indirect subsidiary) and Parent. None of Aircastle’s current shareholders (except for MHC and its affiliates) will have any ownership interest in, or be a shareholder of, the Company after the completion of the merger. As a result, our current shareholders (other than MHC and its affiliates) will no longer benefit from any increase in Aircastle’s value or bear the risk of any decrease in Aircastle’s value. Following the merger, only MHC, Parent and their affiliates will benefit from any increase in our value and also will bear the risk of any decrease in our value.

For more information about certain effects of the merger, see “The Merger Agreement—Effect of the Merger on the Common Shares of the Company and Merger Sub” beginning on page 65.

Treatment of Company Equity Awards and Director Restricted Cash Awards (Page 66)

Effective as of immediately prior to the time of the merger, each outstanding performance share unit (“PSU”), restricted share unit (“RSU”) and restricted share award granted under the Company’s Amended and Restated 2014 Omnibus Incentive Plan (the “Omnibus Incentive Plan”) will become fully vested, assuming the achievement, if applicable, of performance metrics at the maximum level of performance, and be canceled in exchange for the right to receive a single lump sum cash payment, without interest, equal to (A) the Merger Consideration, less (B) any applicable taxes required to be withheld. Effective as of immediately prior to the time of the merger, each director restricted cash award granted under the Omnibus Incentive Plan will become fully vested and payable.

All such payments will be made by the surviving corporation, without interest, on or as soon as practicable following the effective time of the merger, and in no event later than five business days following the effective time of the merger.

Interests of the Company’s Directors and Executive Officers in the Merger (Page 43)

In considering the recommendations of the Board of Directors with respect to the Merger Proposal, you should be aware that, aside from their interests as shareholders of the Company, the Company’s directors and executive officers have interests in the merger that are different from, or in addition to, those of other shareholders of the Company generally. In particular, the Marubeni Directors currently serve on the board of directors of or are otherwise employed by Parent the Marubeni Shareholders, which currently own a portion of the Company’s common shares and following the merger will own (both separately and, together with Mizuho Leasing, indirectly through Parent) all of the Company’s common shares. The Marubeni Directors did not participate in the deliberations of the Board of Directors regarding the takeover proposals submitted by Marubeni or by other parties or in the Board of Directors’ decision to approve the Merger Agreement. Interests of executive officers and directors (other than the Marubeni Directors) that may be different from or in addition to the interests of the Company’s shareholders include the fact that:

• the Company’s executive officers hold unvested PSUs and restricted share awards that will become fully vested (assuming the achievement, if applicable, of performance metrics at the maximum level of performance) and canceled in exchange for the right to receive the Merger Consideration;

• the Company’s directors hold unvested director restricted cash awards that will become fully vested and payable upon completion of the merger;

• the Company’s executive officers have entered into individual agreements that provide for certain severance protections upon a qualifying termination;

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• the Company’s executive officers may receive restricted cash awards in 2020 and pro-rated annual bonus payments, in each case in connection with the merger;

• the Company’s executive officers may enter into arrangements with Parent prior to or following the closing;

• the Company’s executive officers as of the effective time of the merger are expected to become the initial executive officers of the surviving corporation; and

• the Company’s directors and executive officers are entitled to continued indemnification and insurance coverage under the Merger Agreement, and the Company’s directors and certain executive officers are entitled to continued indemnification and insurance coverage under indemnification agreements.

These interests are discussed in more detail in the section entitled “Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 43. The Board of Directors was aware of the different or additional interests described herein and considered those interests along with other matters in recommending and/or approving, as applicable, the Merger Proposal.

Voting and Support Agreement (Page 52)

As a condition to the Company’s willingness to enter into the Merger Agreement, the Statutory Merger Agreement and to proceed with the transactions contemplated thereby, including the merger, the Marubeni Shareholders entered into a Voting and Support Agreement with the Company on November 5, 2019 (the “Voting and Support Agreement”). At the date of this proxy statement, the Marubeni Shareholders party to the Voting and Support Agreement beneficially own in the aggregate 21,605,347 common shares, representing approximately 28.8% of the outstanding common shares. The terms and conditions of the Voting and Support Agreement will apply to any common shares owned and acquired by any Marubeni Shareholder during the “voting period” from November 5, 2019 through the termination of the Voting and Support Agreement.

For more information, see “Voting and Support Agreement Involving Common Shares” beginning on page 81.

U.S. Federal Income Tax Consequences of the Merger (Page 53)

The receipt of cash in exchange for common shares pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Because Aircastle and certain of its subsidiaries have been classified, and expect to continue to be classified, as “passive foreign investment companies,” or “PFICs,” for U.S. federal income tax purposes, any gain recognized by a U.S. holder (as defined in the section entitled “Special Factors—U.S. Federal Income Tax Consequences of the Merger”) could be subject to special rules if the U.S. holder has not made timely “qualified electing fund” elections, as discussed in the section entitled “Special Factors—U.S. Federal Income Tax Consequences of the Merger” beginning on page 53, which you should read in its entirety. The tax consequences of the merger to you will depend upon your own personal circumstances. You should consult your tax advisors for a full understanding of the U.S. federal, state, local, foreign and other tax consequences of the merger to you.

Anticipated Accounting Treatment of the Merger (Page 53)

Aircastle, as the surviving company, may account for the merger as a business combination using the purchase method of accounting for financial accounting purposes, whereby the estimated purchase price would be allocated to the assets and liabilities of Aircastle based on their relative fair values following FASB Accounting Standards Codification Topic 805, Business Combinations.

Appraisal Rights (Page 53 and Annex D)

Under Bermuda law, Aircastle shareholders of record have rights of appraisal, pursuant to which those Aircastle shareholders who do not vote in favor of the Merger Proposal and who are not satisfied that they have been offered fair value for their shares will be permitted to apply to the Supreme Court of Bermuda (which we refer to as the “Bermuda Court”) for an appraisal of the fair value of their shares within one month from the giving of the notice convening the special general meeting. For the avoidance of doubt, this proxy statement constitutes such notice. See the sections of this proxy statement titled “Special Factors—Appraisal Rights” beginning on page 53 and “Appraisal Rights” beginning on page 104 for a more detailed description of the appraisal rights available to Aircastle shareholders.

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Litigation Relating to the Merger (Page 56)

As of January 22, 2020, Aircastle was aware of five lawsuits that were filed by purported Aircastle shareholders against Aircastle and its directors and certain of its officers, challenging the transactions contemplated by the merger agreement. For a more detailed description of the litigation, see the sections of this proxy statement titled “Special Factors—Litigation Relating to the Merger” beginning on page 56.

No Solicitation; No Adverse Recommendation Change (Page 71)

For purposes of this proxy statement, each of “alternative proposal,” “superior proposal,” “acceptable confidentiality agreement,” “intervening event” is defined in the section entitled “The Merger Agreement—Other Covenants and Agreements—No Solicitation; No Adverse Recommendation Change” beginning on page 71;

In the Merger Agreement, the Company agreed that subject to certain exceptions, none of the Company, its subsidiaries, or its or their officers, directors, managers, employees or representatives will: (i) solicit, initiate, knowingly encourage or facilitate any inquiry, discussion, offer or request that constitutes, or would reasonably be expected to lead to, an alternative proposal (an “inquiry”); (ii) furnish non-public information regarding the Company and its subsidiaries to any person in connection with an inquiry or an alternative proposal; (iii) enter into, continue or maintain discussions or negotiations with any person with respect to an inquiry or an alternative proposal; (iv) otherwise cooperate with or assist or participate in or facilitate any discussions or negotiations regarding, or furnish or cause to be furnished to any person or group any non-public information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or could be reasonably expected to result in, an alternative proposal; (v) approve, agree to, accept, endorse or recommend any alternative proposal; (vi) submit to a vote of its shareholders, approve, endorse or recommend any alternative proposal; (vii) effect any adverse recommendation change; or (viii) enter into any letter of intent or agreement in principle or any agreement providing for any alternative proposal (except for acceptable confidentiality agreements).

The Merger Agreement provides, however, that at any time prior to the Company shareholders meeting seeking the approval of the Merger Proposal, the Compensation Proposal and Adjournment Proposal (such meeting, the “Company Shareholders Meeting”), the Board of Directors may, subject to certain conditions, in the case of an intervening event or if the Company has received a superior proposal, change the Company’s recommendation that its shareholders approve the Merger Proposal (such approval, the “Company Shareholder Approval”) (such recommendation, the “Company Recommendation”), in each case, if the Board of Directors has determined in good faith, after consultation with outside legal counsel, that the failure to take such action would be inconsistent with the directors’ exercise of their fiduciary duties under applicable law, subject to complying with certain notice and other specified conditions set forth therein, including negotiating with Parent (to the extent Parent desired to so negotiate) with respect to the terms and conditions of the Merger Agreement in response to a such superior proposal. If the Company has received a superior proposal (after taking into account the terms of any revised offer by Parent), the Company may terminate the Merger Agreement to enter into a definitive written agreement providing for such superior proposal simultaneously with the termination of the Merger Agreement.

For a full description of the no solicitation and no adverse recommendation, see “The Merger Agreement—Other Covenants and Agreements—No Solicitation; No Adverse Recommendation Change” beginning on page 71.

Financing (Page 52)

The Company and Parent estimate that the total amount of funds required to complete the merger and other related transactions and pay related fees and expenses will be approximately $1.8 billion. These payments are expected to be funded entirely by cash on hand at Parent at the effective time of the merger. See “Special Factors—Financing” beginning on page 52. Marubeni and Parent each expect that at least some portion of the funds that will be required to consummate the transactions will be borrowed, directly or indirectly, from third parties. The obtaining of financing is not a condition to the obligations of Parent and Merger Sub to effect the merger pursuant to the terms of the Merger Agreement.

Limited Guaranty (Page 52)

Pursuant to the Limited Guaranty, dated as of November 5, 2019 (the “Limited Guaranty”), by and among the Company, Marubeni and Mizuho Leasing, Marubeni and Mizuho Leasing have guaranteed the due and punctual observance, performance and discharge of Parent’s obligations under the Merger Agreement to deposit

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with the paying agent cash sufficient to pay the Merger Consideration, use reasonable best efforts to consummate the transactions contemplated by the Merger Agreement (and each of Marubeni and Mizuho Leasing will comply with the obligations of Parent thereunder to the same extent as if it were party thereto), provide the Company with expense reimbursement and indemnification in connection with financing by Parent, and specific performance.

For a further description of the purposes and reasons of Parent and Merger Sub, see “Special Factors—Purposes and Reasons of Parent and Merger Sub for the Merger” beginning on page 36.

Termination (Page 78)

The Company and Parent may terminate the Merger Agreement by mutual written consent at any time prior to the effective time of the merger. The Company or Parent may also terminate the Merger Agreement:

• if the merger is not consummated on or before August 5, 2020 (the “end date”); provided, however, that either Parent or the Company may extend the end date to November 3, 2020 if, on August 5, 2020, all of the closing conditions, as described in “The Merger Agreement—Conditions to the Merger” beginning on page 77, have been satisfied or waived other than the Required Regulatory Approvals Condition (as defined in “The Merger Agreement—Conditions to the Merger” beginning on page 77) or the Legal Restraints Condition (as defined in “The Merger Agreement—Conditions to the Merger” beginning on page 77);

• if the Legal Restraints Condition is not satisfied and such legal restraint is final and non-appealable; or

• if the Company Shareholder Approval shall not have been obtained at a duly convened Company Shareholders Meeting or any adjournment or postponement thereof at which a vote on the merger was taken.

The Company may terminate the Merger Agreement:

• if Parent or Merger Sub has breached any representation, warranty, covenant or agreement contained in the Merger Agreement, or if any representation or warranty of Parent or Merger Sub has become untrue, in each case, such that the Parent Representation Condition or the Parent Covenant Condition could not be satisfied as of the closing date of the merger and which has not been cured by the earlier of (i) 60 days after receipt of notice of such breach or (ii) the end date;

• at any time prior to receipt of the Company Shareholder Approval, in order to enter into a definitive written agreement providing for a superior proposal in accordance with the Merger Agreement, provided that the Company pays the termination fee prior to or simultaneously with such termination (as described in “The Merger Agreement—Termination Fee” beginning on page 79); or

• if all of the conditions to Parent and Merger Sub’s obligations to effect the merger (including the mutual conditions to each party’s obligations to effect the merger) (as described in “The Merger Agreement—Conditions to the Merger” beginning on page 77) have been satisfied or waived (other than those conditions which by their terms are to be satisfied at the closing), and Parent fails to consummate the closing of the merger, subject to certain conditions.

Parent may terminate the Merger Agreement:

• if the Company has breached any representation, warranty, covenant or agreement contained in the Merger Agreement, or if any representation or warranty of the Company has become untrue, in each case, such that the Company Representation Condition or the Company Covenant Condition could not be satisfied as of the closing date of the merger and which has not been cured by the earlier of (i) 60 days after receipt of notice of such breach or (ii) the end date; or

• if at any time prior to the Company Shareholders Meeting, an adverse recommendation change shall have occurred.

Termination Fee (Page 79)

Except as specifically provided in the Merger Agreement, all fees and expenses incurred in connection with the merger and the other transactions contemplated by the Merger Agreement will be paid by the party incurring such fees or expenses, whether or not such transactions are consummated.

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The Company will pay to Parent a fee of $73,500,000 if:

• the Company terminates the Merger Agreement prior to receipt of the Company Shareholder Approval in order to enter into a definitive written agreement providing for a superior proposal;

• Parent terminates the Merger Agreement prior to the Company Shareholders Meeting, in the event an adverse recommendation change shall have occurred; or

• (A) after the date of the Merger Agreement, an alternative proposal shall have been made by a third party to the Company and not publicly withdrawn prior to the Company Shareholders Meeting or shall have been made directly to the Company’s shareholders generally by a third party and not publicly withdrawn prior to the Company Shareholders Meeting; (B) thereafter the Merger Agreement is terminated because the Company Shareholder Approval was not obtained at a duly convened shareholders meeting or any adjournment or postponement thereof at which a vote on the merger was taken; and (C) within 12 months of such termination, (x) the Company enters into a definitive contract for an alternative proposal and such alternative proposal is consummated (whether during or after such 12-month period) or (y) an alternative proposal is consummated, provided that for purposes of this bullet, the references to 20% in the definition of “alternative proposal” shall be deemed to be references to 50.1%.

The payment of the termination fee will be the sole and exclusive remedy available to Parent and Merger Sub with respect to the Merger Agreement and the transactions contemplated thereby in the event any such payment becomes due and payable, and, upon payment of the termination fee, the Company (and the Company’s affiliates and its and their respective directors, officers, employees, shareholders and representatives) will have no further liability to Parent and Merger Sub under the Merger Agreement, provided that this paragraph will not limit the right of the Company to seek specific performance of the Merger Agreement prior to the termination of the Merger Agreement. In no event will the Company be obligated to pay the termination fee on more than one occasion. See “The Merger Agreement—Termination Fee” beginning on page 79.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL GENERAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the special general meeting, the Merger Agreement, the Statutory Merger Agreement and the merger. These questions and answers may not address all questions that may be important to you as a shareholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement for further information.

Q: What is the proposed transaction?

A: The proposed transaction is the merger of Merger Sub with and into the Company pursuant to the Merger Agreement. If the merger is consummated, the Company will become a privately-held company whose only shareholders will be MHC (which is Marubeni’s indirect subsidiary) and Parent.

Q: What will I receive in the merger?

A: If the merger is completed and you do not properly exercise appraisal rights, you will be entitled to receive the $32.00 per share cash consideration, without interest and less any applicable withholding taxes, for each common share that you own. You will not be entitled to retain or receive shares in the surviving company.

Q: Will shareholders receive dividends before the merger is completed or the Merger Agreement is terminated?

A: Under the Merger Agreement, the Company is permitted to declare and pay regular quarterly dividends on its common shares of $0.32 per common share, one of which will be paid on December 13, 2019 to shareholders of record on November 29, 2019. No regular quarterly dividends will be paid if the effective date of the merger precedes the applicable record date. The Company will pay any quarterly dividend declared for which the record date occurred prior to the closing of the merger but which is not yet paid as of the closing, without interest.

Q: When and where is the special general meeting?

A: The special general meeting will take place on March 6, 2020, starting at 11 a.m., Eastern time, at 201 Tresser Boulevard, Stamford, Connecticut, USA, 06901.

Q: What matters will be voted on at the special general meeting?

A: You will be asked to vote on the following proposals:

• to approve and adopt the Merger Proposal;

• to approve, on an advisory (non-binding) basis, specified compensation that may be payable to the named executive officers of the Company in connection with the merger (the “Compensation Proposal”);

• to approve the adjournment of the special general meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special general meeting to approve the Merger Proposal (the “Adjournment Proposal”); and

• to act upon other business that may properly come before the special general meeting or any adjournment or postponement thereof.

Q: What constitutes a quorum for the special general meeting?

A: The presence of two or more persons at the start of the meeting and representing, in the aggregate of those present in person or represented by proxy entitling the holder to vote at the special general meeting, in excess of 50% of all votes attaching to all shares of the Company in issue, shall form a quorum for the transaction of business.

Q: What vote of Aircastle’s shareholders is required to approve the Merger Agreement?

A: The consummation of the merger is conditioned upon the approval of the Merger Proposal by the affirmative vote of a majority of the votes cast by holders of outstanding common shares present in person

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or represented by proxy and entitled to vote at the special general meeting or any adjournment thereof in accordance with Aircastle’s bye-laws. In addition, the Merger Agreement makes the approval of the Merger Proposal a condition to the parties’ obligations to consummate the merger. Marubeni has agreed, subject to certain conditions, to vote all common shares that it beneficially owns in favor of the Merger Proposal, pursuant to the Voting and Support Agreement. See “Voting and Support Agreement Involving Common Shares” beginning on page 81.

As of the record date, there were 74,956,134 outstanding common shares. As of the record date, the Marubeni Shareholders party to the Voting and Support Agreement beneficially owned 21,605,347 common shares, or approximately 28.8% of the outstanding common shares.

Each of the directors and executive officers of the Company has informed the Company that, as of the date of this proxy statement, he or she intends to vote in favor of the Merger Proposal.

Q: What effect do abstentions and “broker non-votes” have on the proposals?

A: Abstentions and “broker non-votes” will be counted toward the presence of a quorum at the special general meeting. Abstentions and “broker non-votes” will not be considered votes cast on any proposal brought before the special general meeting. Because the vote required to approve the proposals to be voted upon at the special general meeting is the affirmative vote of a majority of the votes cast assuming a quorum is present, an abstention or a “broker non-vote” with respect to any proposal to be voted on at the special general meeting will not have the effect of a vote for or against the relevant proposal, but will reduce the number of votes cast and therefore increase the relative influence of those shareholders voting.

Q: If I do not favor the adoption and approval of the Merger Agreement, what are my appraisal rights?

A: If you are a shareholder of the Company as of the close of business on January 22, 2020, the record date, and you do not vote your common shares in favor of the Merger Proposal and you are not satisfied that you have been offered a fair value for your common shares, you will have the right under Section 106(6) of the Bermuda Companies Act to apply to the Bermuda Court for an appraisal of the fair value of your shares within one month from the giving of notice convening the special general meeting (and such notice is constituted by this proxy statement). The right to make this demand is known as “appraisal rights.” Shareholders of the Company who wish to exercise their appraisal rights must: (i) not vote affirmatively in favor of the Merger Proposal (whether in person or by proxy), and (ii) apply to the Bermuda Court to appraise the fair value of their common shares within the requisite one-month period of the giving of the notice of the meeting at which the Merger Proposal will be voted upon. For additional information regarding appraisal rights, see “Special Factors—Appraisal Rights” beginning on page 53 of this proxy statement, “Appraisal Rights” beginning on page 104 of this proxy statement and the complete text of the applicable sections of the Bermuda Companies Act attached to this proxy statement as Annex D.

Q: What vote of Aircastle’s shareholders is required to approve other matters to be presented at the special general meeting?

A: The advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and the proposal to adjourn the special general meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special general meeting to approve the Merger Proposal requires the affirmative vote of a majority of the votes cast at the special general meeting.

Q: With respect to the advisory (non-binding) proposal to approve specified compensation that may be payable to the named executive officers of the Company in connection with the merger, why am I being asked to cast an advisory (non-binding) vote to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger?

A: SEC rules require us to seek an advisory, non-binding vote with respect to certain categories of compensation that may be provided to named executive officers in connection with a merger transaction.

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Q: What will happen if shareholders do not approve the advisory (non-binding) proposal regarding compensation matters?

A: Approval of the advisory (non-binding) proposal regarding compensation matters is not a condition to the completion of the merger. This vote is an advisory vote and will not be binding on the Company. Therefore, if shareholders approve the Merger Proposal by the requisite majority and the merger is completed, the payments that are the subject of the vote may become payable to the named executive officers regardless of the outcome of such vote.

Q: How does the Board of Directors recommend that I vote?

A: The Board of Directors unanimously (other than the Marubeni Directors) recommends that Aircastle’s shareholders vote:

• “FOR” the Merger Proposal;

• “FOR” the Compensation Proposal; and

• “FOR” the Adjournment Proposal, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special general meeting to approve the Merger Proposal.

You should read “Special Factors— Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors” beginning on page 27 for a discussion of the factors that the Board of Directors (other than the Marubeni Directors, who did not participate in the determination related to such recommendation due to their affiliation with Marubeni) considered in deciding to recommend and/or approve, as applicable, the Merger Agreement. See also “Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 43.

Q: What effects will the merger have on Aircastle?

A: The common shares are currently registered under the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act,” and the common shares are quoted on the New York Stock Exchange under the symbol “AYR.” As a result of the merger, the Company will cease to be a publicly traded company and will become a privately-held company whose only shareholders will be MHC (which is Marubeni’s indirect subsidiary) and Parent. Following the consummation of the merger, the registration of the common shares and our reporting obligations with respect to the common shares under the Exchange Act will be terminated upon application to the SEC. In addition, upon the consummation of the merger, the common shares will no longer be listed on any stock exchange or quotation system, including on NYSE.

Q: What will happen to my PSUs, RSUs and restricted share awards under the Omnibus Incentive Plan?

A: If the merger is completed, any PSUs, RSUs and restricted share awards will become fully vested, assuming the achievement, if applicable, of performance metrics at the maximum level of performance, and be canceled in exchange for the right to receive a single lump sum cash payment, without interest, equal to (A) the Merger Consideration, less (B) any applicable taxes required to be withheld.

Q: What will happen if the merger is not consummated?

A: If the merger is not consummated for any reason, the Company’s shareholders will not receive any payment for their common shares in connection with the merger. Instead, the Company will remain a public company and the common shares will continue to be registered under the Exchange Act, listed and traded on NYSE. Under specified circumstances, if the Merger Agreement is terminated, the Company may be required to pay Parent a termination fee of $73,500,000. See “The Merger Agreement—Termination” beginning on page 78 and “The Merger Agreement—Termination Fee” beginning on page 79.

Q: What do I need to do now?

A: We urge you to read this entire proxy statement carefully, including its annexes and the documents referred to or incorporated by reference in this proxy statement, as well as the related Schedule 13E-3, including the exhibits thereto, filed with the SEC, and to consider how the merger affects you.

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If you are a shareholder of record, you can ensure that your shares are voted at the special general meeting by submitting your proxy via:

• telephone, using the toll-free number listed on your proxy and voting instruction card;

• the Internet, at the address provided on your proxy and voting instruction card; or

• mail, by completing, signing, dating and mailing your proxy and voting instruction card and returning it in the envelope provided.

If you hold your common shares in “street name” through a broker, bank or other nominee, you should follow the directions provided by it regarding how to instruct it to vote your common shares. Without those instructions, your common shares will not be voted.

Q: Should I send in my share certificates or other evidence of ownership now?

A: No. After the merger is completed, you will be sent a letter of transmittal with detailed written instructions for exchanging your common shares for the Merger Consideration. If your common shares are held in “street name” by your broker, bank or other nominee, you may receive instructions from your broker, bank or other nominee as to what action, if any, you need to take to effect the surrender of your “street name” common shares in exchange for the Merger Consideration. Please do not send in your certificates now.

Q: Can I revoke my proxy and voting instructions?

A: Yes. You can revoke your proxy and voting instructions at any time before your proxy is voted at the special general meeting. If you are a shareholder of record, you may revoke your proxy by notifying the Company’s Secretary in writing at Aircastle Limited c/o Aircastle Advisor LLC, 201 Tresser Boulevard, Suite 400, Stamford, CT 06901, by submitting a new proxy by telephone, the Internet or mail, in each case, dated after the date of the proxy being revoked, or by attending the special general meeting and voting in person (but simply attending the special general meeting will not cause your proxy to be revoked).

Please note that if you hold your common shares in “street name” and you have instructed a broker, bank or other nominee to vote your common shares, the above-described options for revoking your voting instructions do not apply, and instead you must follow the instructions received from your broker, bank or other nominee to revoke your voting instructions.

Q: What does it mean if I get more than one proxy and voting instruction card?

A: If your common shares are registered differently or held in more than one account, you will receive more than one proxy or voting instruction card. Please complete and return all of the proxy cards or voting instruction cards you receive (or submit each of your proxies by telephone or the Internet, if available to you) to ensure that all of your common shares are voted.

If your common shares are held through a broker, bank or other nominee, you will receive either a voting form or a proxy card from the nominee with specific instructions about the voting methods available to you. As a beneficial owner, in order to ensure your common shares are voted, you must provide voting instructions to the broker, bank or other nominee by the deadline provided in the materials you receive from them.

Q: Who will count the votes?

A: All votes will be counted by the inspector of election appointed for the special general meeting.

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Q: Who can help answer my other questions?

A: If you have more questions about the merger, or require assistance in submitting your proxy or voting your common shares or need additional copies of the proxy statement or the enclosed proxy and voting instruction card(s), please contact Georgeson LLC, which is acting as the proxy solicitation agent and information agent in connection with the merger.

 

1290 Avenue of the Americas, 9th Floor
New York, NY 10104

Shareholders, Banks and Brokers

Call Toll Free:

(888) 877-5360

If your broker, bank or other nominee holds your common shares, you can also call your broker, bank or other nominee for additional information.

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SPECIAL FACTORS

Background of the Merger

The following summarizes certain events and contacts that led to the signing of the Merger Agreement. It does not purport to describe every conversation among the Board of Directors or between the Company’s officers or representatives and other parties.

As part of its ongoing strategic planning process, the Company’s officers and the Board of Directors have regularly reviewed and assessed, among other things, the Company’s long-term strategic goals and opportunities, competitive environment and industry trends, and short- and long-term performance in light of the Company’s strategic plan, with the goal of maximizing shareholder value. In connection with these activities, the Company’s officers and the Board of Directors evaluated potential strategic alternatives, including, among others, business combinations, acquisitions, dispositions, internal restructurings, joint ventures and minority investments.

On June 6, 2013, the Company and Marubeni entered into a Transaction Agreement, pursuant to which the Company issued and sold to Marubeni 12,320,000 common shares, representing approximately 15.25% of the then issued and outstanding Company common shares after giving effect to the issuance of such Company common shares, at a price of $17.00 per share. The Company had entered into the transaction with Marubeni, among other reasons, to obtain capital to take advantage of growth opportunities and to leverage Marubeni’s global presence and network to expand the Company into new markets, business opportunities and funding sources.

In connection with the Marubeni investment, the Company and Marubeni entered into a Shareholder Agreement (as amended, the “Shareholder Agreement”). The Shareholder Agreement provided Marubeni with the right to designate up to three individuals for election to the Board of Directors depending on its percentage ownership of the Company, imposed certain voting restrictions on shareholder proposals that were not recommended by a majority of the non-Marubeni designated directors on the Board of Directors for so long as Marubeni and its affiliates held more than 21% of the voting power of the Company’s securities or tendering their shares into a tender offer not supported by a majority of the non-Marubeni designated directors on the Board of Directors, and imposed certain standstill restrictions that limited Marubeni’s ability, without the approval of a majority of the non-Marubeni designated directors on the Board of Directors, to effect direct or indirect acquisitions of voting securities of the Company that would result in Marubeni and its affiliates collectively holding (i) more than 21% of the voting power of the Company prior to July 12, 2016 or (ii) more than 27.5% of the voting power of the Company prior to July 12, 2023, or making offers or proposals to make such acquisitions (as amended, the “Marubeni Standstill”). The Marubeni Standstill contained customary exceptions and would terminate upon, among other things, the acquisition by a third party of beneficial ownership of more than 30% (which was subsequently amended to be 35%) of the voting power of the Company.

From August 9, 2013 to February 18, 2015, in accordance with the Shareholder Agreement, MHC purchased an aggregate of 4,439,233 Company common shares pursuant to a stock purchase plan. Marubeni and its affiliates owned 16,759,233 Company common shares, or approximately 20.70% of the Company’s then issued and outstanding common shares as of February 18, 2015, after giving effect to these purchases.

On February 18, 2015, the Company and Marubeni amended the Shareholder Agreement to permit Marubeni to acquire up to 27.5% of the voting power in the Company through secondary market purchases, subject to certain exceptions. Additionally, the term of the Marubeni Standstill was extended from July 12, 2023 until January 12, 2025.

From February 19, 2015 to February 22, 2016, in accordance with the Shareholder Agreement, MHC purchased an aggregate of 4,846,114 common shares of the Company in the open market pursuant to a stock purchase plan. Marubeni and its affiliates owned 21,605,347 common shares of the Company, or approximately 27.50% of the Company’s then issued and outstanding common shares as of February 22, 2016, after giving effect to these purchases. Subsequently, as a result of open market share buybacks by the Company, Marubeni’s share ownership percentage increased to 28.8% of the Company’s then issued and outstanding common shares, as permitted under the provisions of the Marubeni Standstill.

On February 18, 2016, the Company formed an aircraft leasing joint venture with IBJ Leasing Co., Ltd., a Japanese general leasing company which is an equity-method affiliate of Mizuho Financial Group, Inc. and is

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now known as Mizuho Leasing Company, Limited (formerly, IBJ Leasing Company, Limited, and referred to throughout this proxy statement as Mizuho Leasing). The joint venture targets investments in newer narrow-body aircraft leased to premier airlines. The Company owns 25% of the joint venture.

Since the time of Marubeni’s investment in the Company, the Board of Directors and the Company’s officers have evaluated the Company’s potential strategic alternatives, with a view to further enhancing shareholder value. As part of this evaluation, the Board of Directors has regularly reviewed the Company’s share price and shareholder returns, both on an absolute basis and relative to the Company’s peers, and the potential risks that the Company faced in executing its strategic plan, including risks relating to the Company’s operations, the aviation and aircraft finance industries, general economic conditions and other factors.

In furtherance of this assessment of strategic alternatives, the Company’s officers have from time to time periodically met with investment banks covering the aircraft leasing industry, including Citi, to discuss the Company’s strategic alternatives, and have participated in exploratory discussions with certain third parties to discuss potential transactions. However, none of such transactions advanced past the preliminary exploration stage. From time to time, representatives of Skadden, Arps, Slate, Meagher & Flom LLP, the Company’s legal counsel (“Skadden”), updated the Board of Directors on the directors’ fiduciary duties in connection with such exploration, and advised members of the Board of Directors that the Company’s officers should defer discussions with any potential bidders regarding management compensation arrangements until after receipt of the final bids if the Board of Directors determined to explore a potential sale of the Company. Members of the Board of Directors directed the Company’s officers to defer such discussions until that time in the event that the Board of Directors determined to explore a potential sale of the Company. The Board of Directors determined to continue to explore the Company’s strategic alternatives, including a potential sale transaction.

On April 4, 2019, Michael J. Inglese, the Company’s Chief Executive Officer, met with representatives of Mizuho Leasing and Mizuho Bank, Ltd. in Tokyo, Japan to provide an overview of the Company in connection with Mizuho Leasing’s and Mizuho Bank, Ltd.’s preliminary exploration of a potential investment or other transaction involving the Company.

On July 22, 2019, Mr. Inglese, Christopher L. Beers, the Company’s Chief Legal Officer, and Roy Chandran, the Company’s Executive Vice President, Corporate Finance & Strategy, met with representatives of Marubeni and Mizuho Leasing and received an overview of Mizuho Leasing and further discussed the Company in connection with Mizuho Leasing’s preliminary exploration of a potential investment or other transaction involving the Company.

On August 6, 2019, after the Company announced its second quarter 2019 earnings results, representatives of a consortium of private equity funds identified herein as “Party A” communicated an unsolicited preliminary expression of interest for an acquisition of the Company. Party A did not provide a specific price, but stated that the valuation would be at or around book value, which was $26.96 per share as of June 30, 2019, and that the transaction would involve cash consideration for 100% of the Company’s shares. Following consultation with certain Company officers and at their direction, representatives of Citi requested that Party A submit a written indication of interest with an indication of price. Subsequently, Citi and Party A discussed and further clarified certain terms of Party A’s preliminary expression of interest.

After receipt of Party A’s preliminary expression of interest, Company officers began to have discussions with potential financial advisors, including Citi, to evaluate whether this was the right time to explore a potential sale of the Company to maximize shareholder value in light of the Company’s recent share price performance and growth prospects and the risks that the Company was facing in executing its strategic plan. In connection with that exploration, representatives of Skadden reminded certain Company officers of the Board of Directors’ direction to defer discussions with any potential bidders regarding management compensation arrangements until after receipt of the final bids if the Board of Directors determined to explore a potential sale of the Company.

On August 22, 2019, at Party A’s request, Mr. Inglese and Mr. Chandran met with representatives of Party A at the New York City offices of Skadden. At this meeting, certain Company officers and representatives of Party A discussed a potential transaction, and Party A submitted a written non-binding indication of interest for the acquisition of the Company at a preliminary price indication range of $26.00 to $28.00 per share in cash. The non-binding indication of interest was subject to several conditions, including the negotiation of definitive documentation and completion of due diligence.

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In late August 2019, in furtherance of the Company’s exploration of strategic alternatives, certain Company officers contacted representatives of Marubeni and inquired as to whether Marubeni would be interested in exploring a potential transaction. Marubeni subsequently confirmed that it was potentially interested in exploring a possible transaction.

On September 6, 2019, certain Company officers updated members of the Board of Directors that serve on the Company’s investment committee on the preliminary discussions with the Marubeni Consortium and Party A, including the receipt of Party A’s non-binding indication of interest, and those members of the Board of Directors discussed the Company’s strategic alternatives. The other members of the Board of Directors were subsequently updated on the preliminary discussions with the Marubeni Consortium and Party A, including the receipt of Party A’s non-binding indication of interest.

On September 11, 2019, the Company, the Marubeni Consortium and Mizuho Bank, Ltd. entered into a confidentiality agreement in connection with their evaluation of a potential transaction. The confidentiality agreement contained a standstill provision that would permit the Marubeni Consortium to make non-public proposals for a transaction with the Company (after requesting the right to make such a non-public proposal and being granted that right by the Company). Additionally, Marubeni remained subject to the Marubeni Standstill in the Shareholder Agreement.

On September 13, 2019, the Company and Party A entered into a confidentiality agreement in connection with their evaluation of a potential transaction. The confidentiality agreement contained a standstill provision that would permit Party A to make non-public proposals for a transaction with the Company (after requesting the right to make such a non-public proposal and being granted that right by the Company), and terminated the standstill provisions in the event that the Company entered into a strategic transaction with a third party.

Promptly after entering into confidentiality agreements with Marubeni and Party A, the Company provided certain due diligence information about the Company to the Marubeni Consortium and Party A and their representatives. During the weeks of September 16 and September 23, 2019, each of the Marubeni Consortium and Party A conducted preliminary due diligence on the Company.

On September 27, 2019, representatives of JP Morgan Securities LLC, financial advisor to the Marubeni Consortium (“JP Morgan”), contacted representatives of Citi and certain Company officers to discuss on a confidential basis whether the Company might be willing to entertain exploratory discussions with the Marubeni Consortium regarding an acquisition of the Company at a hypothetical indicative price range of $27.00 to $28.00 per share in cash, if the requisite approvals from the appropriate members of the Marubeni Consortium were obtained and subject to Marubeni’s receipt of a limited waiver of the Marubeni Standstill.

On September 28, 2019, Party A submitted a revised written non-binding indication of interest for the acquisition of the Company at a revised price indication of $28.00 per share in cash. The revised indication of interest was subject to certain conditions, including the negotiation of definitive documentation and completion of due diligence. Party A also requested expense reimbursement of up to $10 million and a 30-day exclusivity period. Following discussions with representatives of the Company and Skadden, at the direction of the Company, representatives of Citi informed Party A that the Company was not willing to grant exclusivity or expense reimbursement because the Company needed to preserve flexibility to evaluate its strategic alternatives.

On October 3, 2019, the members of the Board of Directors, other than Jun Horie, Takashi Kurihara and Takayuki Sakakida, the Marubeni designees serving on the Board of Directors (collectively, the “Marubeni Directors”), were provided with the following materials for a Board of Directors meeting to be held on October 4, 2019: a presentation from Skadden on the directors’ fiduciary duties, materials prepared by Citi on potential strategic alternatives, a description of the Marubeni Standstill, a presentation regarding engaging a financial advisor and draft resolutions to be considered at the meeting.

On October 4, 2019, the Board of Directors (other than the Marubeni Directors) (the “Company Directors”) met telephonically, with certain Company officers and representatives of Skadden and Citi participating, to discuss the directors’ fiduciary duties, the Company’s potential strategic alternatives, including the preliminary discussions with the Marubeni Consortium and Party A and the option to not engage in a business combination transaction and remain an independent stand-alone public company, the potential waiver of the Marubeni Standstill and the engagement of a financial advisor. The Marubeni Directors did not participate in the Board of Directors meeting in light of the foregoing agenda items. Certain Company officers updated the Company

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Directors on the preliminary discussions with the Marubeni Consortium and Party A. Representatives of Skadden reviewed the presentation previously provided to the Company Directors regarding the directors’ fiduciary duties. Representatives of Skadden and the Company Directors discussed that the Board of Directors should exercise its business judgment as to whether any potential transaction would be in the best interests of the Company, including considering alternatives such as remaining an independent public company. Representatives of Skadden and the Company Directors also discussed the importance of running a fair process that was designed to achieve the best value reasonably attainable for the Company’s shareholders.

At this meeting, representatives of Citi then provided an overview of the discussions with the Marubeni Consortium and Party A, other potential strategic alternatives and preliminary financial considerations. The Company Directors and representatives of Skadden and Citi discussed the Company’s evaluation of strategic alternatives, including whether the Company should contact other third parties as part of a market check. The Company Directors discussed and considered the potential benefits and risks of contacting additional parties, including the risk that contacting additional parties could lead to leaks that could potentially harm the Company and potentially dissuade bidders from proceeding with a potential transaction or reduce the value that could be obtained in a transaction. The Company Directors determined that the Company and its advisors should contact the parties that were most likely to be interested in a strategic transaction at an attractive price while limiting the total number of parties contacted in order to reduce the likelihood of a leak and minimize other risks that could put the Company at risk of harm and jeopardize a potential transaction. Following this discussion, the representatives of Citi were excused from the meeting.

Also at this meeting, the Company Directors and certain Company officers then discussed the Marubeni Standstill, and the possibility of granting Marubeni a limited waiver of the Marubeni Standstill to allow Marubeni to make a non-public offer or proposal to the Board of Directors or management for a strategic transaction. The Company Directors also discussed whether to grant a waiver and the timing of delivering the waiver of the Marubeni Standstill if the Company Directors determine to grant the waiver, and the possibility that Marubeni would file a Schedule 13D amendment disclosing the waiver and its interest in pursuing a potential transaction. The Company Directors considered and discussed the positive and negative aspects of running a private compared to a public sale process, including the risk that publicly disclosing Marubeni’s interest in a possible transaction may dissuade other bidders. The Company Directors approved the waiver of the Marubeni Standstill in connection with the strategic transactions, contingent upon the Transaction Committee (as defined below) determining that such waiver is advisable and in the best interests of the Company at the time the waiver is granted, and granted the Transaction Committee, subject to any further direction that may be provided by the Company Directors from time to time, the authority to waive the Marubeni Standstill in connection with the strategic transactions if the Transaction Committee determines that such waiver is advisable and in the best interests of the Company. That approval constituted approval of a waiver of the Marubeni Standstill by a majority of the Company’s directors that are not affiliated with Marubeni, as required by the Shareholder Agreement.

Also at this meeting, the Company Directors and representatives of Skadden discussed the formation of a transaction committee consisting solely of certain independent members of the Board of Directors (the “Transaction Committee”) to assist the Board of Directors in its evaluation of its strategic alternatives. The Company Directors discussed that the Transaction Committee, in consultation with Citi, should determine the third parties that the Company should contact to ascertain their interest in a potential strategic transaction. Finally, the Company Directors and certain Company officers discussed retaining a financial advisor to further explore strategic alternatives and determined to engage Citi, subject to finalizing an engagement letter with Citi.

At this meeting, the Company Directors determined that it was in the best interests of the Company to proceed with the exploration of a potential sale transaction. The Company Directors discussed with representatives of Skadden and Citi and considered that the preliminary discussions with both the Marubeni Consortium and Party A would value the Company above its book value and that for the past several years the Company’s stock price had not been as high as the price levels discussed with the Marubeni Consortium and Party A. The Company Directors, among other things, (i) established a Transaction Committee consisting of Peter V. Ueberroth, Michael J. Cave, Douglas A. Hacker and Charles W. Pollard; (ii) granted the Transaction Committee, subject to any further direction that may be provided by the Company Directors from time to time, the authority to (A) review, consider and evaluate the strategic transactions and make recommendations to the Board of Directors with respect thereto, (B) oversee the negotiations of expressions of interest in respect of the

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strategic transactions and any definitive documentation related thereto and (C) provide direction and guidance to management of the Company on the conduct of the process for the evaluation of any strategic transactions (provided that, the Transaction Committee did not have the authority to approve any binding definitive agreement for a strategic transaction on behalf of the Company); (iii) authorized Company management and other personnel of the Company to assist and advise the Transaction Committee with respect to the strategic transactions; and (iv) authorized the Company to retain Citi as its financial advisor in connection with a possible strategic transaction.

Immediately following the Board of Directors meeting on October 4, 2019, as requested by the Company Directors, the Transaction Committee met telephonically, with certain Company officers and representatives of Skadden and Citi participating, to discuss the potential outreach to additional third parties to assess their interest in a potential strategic transaction with the Company. The Transaction Committee and representatives of Citi discussed other potential counterparties that might be interested in a potential transaction with the Company at a competitive price. Representatives of Citi discussed that a potential strategic buyer identified herein as “Party B” was likely the only strategic buyer (other than the Marubeni Consortium) that would be willing and able to pay a competitive price. Representatives of Citi also advised that the Company could contact additional private equity firms, but that a private equity buyer would likely require a protracted due diligence process without necessarily getting to a higher price, which could cause the existing interested parties to disengage from the process or potentially expose the Company to risks that the macroeconomic environment could become less favorable before a transaction is consummated. The Transaction Committee and representatives of Citi discussed which private equity firms would be best positioned to offer a competitive price and a high likelihood of consummating a transaction. Representatives of Citi advised that a private equity firm identified herein as “Party C” would likely be in the best position to make an attractive offer given its resources and experience. After further discussion, the Transaction Committee instructed representatives of Citi to contact representatives of Party B and Party C to ascertain their interest in exploring a potential strategic transaction with the Company.

As directed by the Company Directors and the Transaction Committee, on October 6, 2019, representatives of Citi contacted the chief executive officer of Party B to ascertain whether Party B had any interest in exploring a potential strategic transaction. As further directed by the Company Directors and the Transaction Committee, Citi informed Party B that it would need to be willing to pay a premium to the Company’s book value per share to be considered by the Company. Party B indicated that it was potentially interested in exploring a transaction and would respond within a few days.

As directed by the Company Directors and the Transaction Committee, also on October 6, 2019, representatives of Citi contacted representatives of Party C to ascertain whether Party C had any interest in exploring a potential strategic transaction. Citi informed Party C that it would need to be willing to pay a premium to the Company’s book value per share to be considered by the Company. Party C indicated that it would consider whether it was interested in exploring a transaction and would follow up with Citi.

On October 8, 2019, the Marubeni Consortium and Party A and their representatives were provided access to the electronic data room containing additional due diligence information that the parties had requested.

In response to the Company’s October 6, 2019 inquiry regarding whether Party B would be interested in exploring a potential transaction with the Company at a premium to the Company’s book value, on October 10, 2019, Party B contacted Citi and indicated that it was interested in exploring a potential strategic transaction with the Company at a premium to the Company’s book value per share. That day, representatives of Skadden sent a draft confidentiality agreement to representatives of Party B. Thereafter, the parties negotiated the confidentiality agreement, and on October 12, 2019 the Company and Party B entered into the confidentiality agreement. The confidentiality agreement contained a standstill provision that would permit Party B to make non-public proposals for a transaction with the Company (after requesting the right to make such a non-public proposal and being granted that right by the Company), and terminated the standstill provisions in the event that the Company entered into a strategic transaction with a third party. That same day, Party B was provided access to the electronic data room.

Also on October 10, 2019, representatives of Citi met telephonically with representatives of Party C to discuss Party C’s interest in exploring a potential strategic transaction. In response to the Company’s October 6, 2019 inquiry regarding whether Party C would be interested in exploring a potential transaction with the Company at a premium to the Company’s book value, Party C indicated that it would not be able to pay a

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price for an acquisition of the Company at or above the Company’s book value per share, and inquired whether the Company would be interested in pursuing a partial asset sale transaction rather than a sale of the Company. Representatives of Citi informed representatives of Party C that a potential partial asset sale transaction would likely not maximize value for the Company’s shareholders compared to a whole company transaction. The next day, representatives of Party C contacted representatives of Citi and stated that Party C was not interested in pursuing a potential acquisition of the Company at a price at or above the Company’s book value per share.

On October 11, 2019, members of the Transaction Committee were updated on developments with each of the potential bidders that had arisen since the Transaction Committee meeting on October 4, 2019.

Also on October 11, 2019, the Company and Citi entered into an engagement letter providing that Citi would act as the Company’s exclusive financial advisor in connection with a possible strategic transaction.

On October 15, 2019, the chief executive officer of Party B met with Mr. Ueberroth to express Party B’s interest in a potential transaction, and stated that Party B was able to move quickly in negotiating agreements for a transaction at a premium to the Company’s book value per share. On October 16, 2019, the chief executive officer of Party B met with Mr. Inglese and further discussed a potential transaction and the reasons that Party B believed that a transaction between Party B and the Company would be advantageous to both companies. At this meeting, Mr. Inglese reiterated that the Company was interested in the most favorable deal for its shareholders and that it would be a fair process for all potential bidders in order to maximize value for the Company’s shareholders.

Also on October 15, 2019, the members of the Transaction Committee were provided with the following materials for a meeting of the Transaction Committee to be held on October 16, 2019: materials prepared by Citi on leveraged buyout transactions and the status of the Company’s strategic transaction evaluation process, a communications plan in the event that Marubeni were to file a Schedule 13D amendment, a draft waiver of the Marubeni Standstill, and a draft of the Company’s business plan.

On October 16, 2019, the Transaction Committee met telephonically, with certain Company officers and representatives of Skadden and Citi participating, to discuss the status of discussions with each of the potential bidders and next steps with each party and timing for the process. The Transaction Committee also discussed with representatives of Citi and considered the Company’s standalone business prospects in the absence of a strategic transaction. Representatives of Citi advised the Transaction Committee that Party C and other private equity bidders would not likely pay significantly above the indications of value the Company had previously received from Party A, and the hypothetical indicative value from the Marubeni Consortium. The Transaction Committee also considered whether to grant a waiver and the timing of delivering the waiver of the Marubeni Standstill if the Transaction Committee determines to deliver the waiver, and the risk that publicly disclosing that Marubeni is interested in a possible transaction may dissuade other bidders. The Transaction Committee discussed with representatives of Citi and considered the scope of the Company’s outreach to other potential bidders and whether there was any benefit to expanding the process to include additional potential third parties at that time, and weighed that against the potential risks of contacting additional parties, including that such a process could lead to leaks that would harm the Company and potentially dissuade bidders from proceeding with a potential transaction and reduce the value that could be obtained in a transaction, as well as the low likelihood that other parties would be interested in a transaction at a premium to book value. The Transaction Committee determined to continue the existing process without reaching out to other third parties at that time. Additionally, the Transaction Committee discussed and determined to grant at the appropriate time a limited waiver of the Marubeni Standstill for 90 days solely to allow Marubeni, either alone or in concert with Mizuho Leasing, to make an offer or proposal to the Board of Directors or the Company’s senior management to acquire all of the outstanding Company common shares (the “Standstill Waiver”).

On October 18, 2019, Party B submitted a written, non-binding indication of interest for the acquisition of the Company at a preliminary price indication of $28.00 per share in cash. The non-binding indication of interest stated that it was not subject to a financing contingency and was not conditioned on further due diligence, but requested an opportunity to discuss the transaction with Marubeni and that Marubeni enter into a voting and support agreement agreeing to vote its shares in favor of the transaction with Party B. Party B was subsequently informed by Citi that it would not be allowed to discuss with Marubeni at this time, but Citi reiterated that the

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Company was interested in the most favorable deal for its shareholders and that it would be a fair process for all potential bidders in order to maximize value for the Company’s shareholders. Subsequently, the Transaction Committee was given an update on this indication of interest.

On October 22, 2019, the Transaction Committee met telephonically, with certain Company officers and representatives of Skadden and Citi participating, to discuss the latest status of discussions with each of the potential bidders and next steps with each party and timing for the process, including Party B’s indication of interest. The Transaction Committee discussed the importance of running a fair process that was designed to achieve the best value reasonably attainable for the Company’s shareholders. Certain Company officers discussed that given the constructive discussions with the Marubeni Consortium, it would be appropriate to consider granting the Standstill Waiver to enable the Marubeni Consortium to make a confidential offer or proposal to the Board of Directors or the Company’s senior management and allow Marubeni to amend its Schedule 13D to reflect its interest in making such an offer or proposal. The Transaction Committee discussed that its willingness to grant the Standstill Waiver at this time was dependent upon the likelihood that the Marubeni Consortium would be able to make an offer at a premium to book value soon after receiving the Standstill Waiver, and representatives of Citi confirmed that they expected that the Marubeni Consortium would be able to make an offer at a premium to book value promptly after receiving the Standstill Waiver. The Transaction Committee discussed that the Company was receptive to receiving an offer that was at a premium to book value, and that in order for the Marubeni Consortium to be able to make such an offer the Company would need to grant the Standstill Waiver. Representatives of Citi discussed that they did not expect that granting the Standstill Waiver or the Schedule 13D amendment filing would dissuade Party A or Party B from continuing in the transaction process. After further discussion, the Transaction Committee directed the Company to grant the Standstill Waiver. The Transaction Committee then discussed the Company’s communications plan and authorized the Company to issue a press release announcing an exploration of strategic alternatives in the event that Marubeni filed a Schedule 13D amendment.

On October 23, 2019, the Standstill Waiver was delivered to Marubeni.

Prior to market open on October 24, 2019, Marubeni, Marubeni Aviation Corporation and MHC filed an amendment to their Schedule 13D disclosing that Marubeni had decided to pursue a potential acquisition of all of the Company common shares it did not already own, and that Marubeni had requested and obtained access to initial due diligence materials from the Company, engaged financial and legal advisers, and conducted preliminary discussions with the Company regarding the hypothetical terms of a strategic transaction. The Schedule 13D amendment also indicated that Marubeni expected that it would pursue a transaction with the Company only as part of a consortium with one or more other companies. The amendment to the Schedule 13D also disclosed that the Standstill Waiver was delivered on October 23, 2019.

After the Schedule 13D amendment was filed and prior to market open on October 24, 2019, the Company issued a press release announcing that the Board of Directors was evaluating strategic alternatives, which may include a sale of the Company, and that the Company had received preliminary non-binding expressions of interest from multiple third parties regarding a potential transaction involving the Company and was engaged in preliminary discussions relating thereto.

Later that day, the Marubeni Consortium, Party A and Party B were provided a draft merger agreement. The draft merger agreement provided, among other things, that (i) the Company would be able to pay a regular quarterly dividend of up to $0.32 per common share between signing and closing (which was an increase from the $0.30 per common share dividend that was paid in the previous quarter and which would be the highest dividend that the Company had paid since the fourth quarter of 2007); (ii) the acquirers would be required to use reasonable best efforts to take all actions and do all things necessary, proper or advisable to obtain required regulatory approvals; (iii) the Board of Directors would be permitted to change its recommendation that shareholders vote in favor of the adoption and approval of the merger agreement and the statutory merger agreement and the transactions thereby, including the merger, in the event of a superior proposal (as defined in the draft merger agreement) or an intervening event (as defined in the draft merger agreement); and (iv) the termination fee (as defined in the draft merger agreement) would be equal to 2.0% of the Company’s equity value at the transaction price. The Company requested that the Marubeni Consortium, Party A and Party B provide revised drafts of the merger agreement to the Company the next week.

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From October 24, 2019 to October 31, 2019, certain Company officers and Citi received in-bound requests for information and preliminary inquiries regarding a strategic transaction from seven separate financial sponsors. The Transaction Committee and representatives of Citi discussed the response that Citi should deliver to each third party. At the direction of the Transaction Committee, representatives of Citi delivered the same message to each of these parties that the Company would welcome their participation in a process if they were in a position to offer a price that was at a premium to the Company’s book value per share. Representatives of Citi informed each of these parties that the Company would provide preliminary due diligence information and that if their price was at a premium to book value per share, the Company would include such parties in the process and provide additional due diligence information, subject to entering into a confidentiality agreement. After further discussions, none of the third parties pursued a transaction or made a proposal.

On October 26, 2019, the Marubeni Consortium submitted a written, non-binding indication of interest for the acquisition of the Company. The Marubeni Consortium provided an indicative price of $30.00 per share in cash. The non-binding indication of interest was not subject to a financing contingency, but it was subject to the completion of due diligence and confirmation from the credit rating agencies that the Company would maintain its investment grade rating following consummation of the merger. The non-binding indication of interest indicated that Marubeni would provide a commitment to vote its shares in favor of a transaction between the Company and the Marubeni Consortium. The Marubeni Consortium also requested exclusivity until November 11, 2019 and provided the Company with a draft exclusivity agreement.

On October 27, 2019, the members of the Transaction Committee and the Company Directors were provided with the following materials for a meeting of the Transaction Committee and a meeting of the Board of Directors to be held on October 27, 2019 and October 28, 2019, respectively: an update on the status of each of the bids and a presentation from Citi on the potential strategic transactions.

On October 27, 2019, the Transaction Committee met telephonically, with certain Company officers and representatives of Skadden and Citi participating, to discuss the status of discussions with each of the potential bidders and next steps with each party and timing for the process. Representatives of Citi provided the Transaction Committee with a presentation on process containing a preview of Citi’s preliminary financial analysis of each of the indications of interest to be provided at the next meeting of the Board of Directors. The Transaction Committee discussed that Party A had reiterated its request for expense reimbursement, but the Transaction Committee determined not to agree to expense reimbursement. The Transaction Committee also determined that the Company would not grant exclusivity to the Marubeni Consortium. At the request of the Transaction Committee, Citi subsequently delivered these messages to Party A and the Marubeni Consortium.

On October 28, 2019, the Board of Directors met in person for a regularly scheduled quarterly Board of Directors meeting. At this meeting, the Company Directors met, with certain Company officers and representatives of Skadden and Citi participating, to discuss the status of discussions with each of the potential bidders and next steps with each party and timing for the process, including the Marubeni Consortium’s non-binding indication of interest. The Marubeni Directors did not participate in the portions of the Board of Directors meeting relating to the foregoing agenda items. Representatives of Citi provided the Company Directors with a presentation on process and Citi’s preliminary financial analysis of each of the bids. The Company Directors and representatives of Citi discussed the process that would result in the highest price reasonably attainable for the Company’s shareholders, and that each bidder would be requested to provide its best and final offer and proposed final draft of the merger agreement no later than November 4, 2019. At the request of Party B, after representatives of Citi and Skadden were excused from the meeting, the chief executive officer of Party B met with the Company Directors to discuss Party B’s background and rationale for a transaction with the Company and to discuss Party B’s indication of interest in further detail.

Promptly following this meeting, at the request of the Company Directors, representatives of Citi contacted each of the Marubeni Consortium, Party A and Party B and requested that each party provide its best and final offer and draft merger agreement no later than November 4, 2019.

On October 30, 2019, Party B’s legal counsel delivered a revised draft of the merger agreement to representatives of Skadden. The revised draft provided the following with respect to certain significant issues: (i) Party B requested additional information about the Company’s ability to continue to pay a regular quarterly dividend of up to $0.32 per common share between signing and closing; (ii) the parties would be required to use their reasonable best efforts to obtain regulatory approvals, except that Party B would not be required to take any

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actions relating to regulatory approvals that would be reasonably likely to have a material adverse effect on the Company; (iii) Party B accepted that the Board of Directors would be able to change its recommendation that shareholders vote in favor of the adoption and approval of the merger agreement and the statutory merger agreement and the transactions contemplated thereby, including the merger, in the event of a superior proposal or an intervening event; and (iv) Party B deleted the 2.0% amount of the termination fee without offering a counterproposal.

On October 31, 2019, at the request of Party A, the Company granted a limited waiver of the confidentiality agreement to Party A in order to allow Party A to share certain information about the transaction with members of Party A’s respective limited partners in order to support its financing of a potential transaction.

On October 31, 2019, Clifford Chance US LLP, the Marubeni Consortium’s legal counsel (“Clifford Chance”), delivered a revised draft of the merger agreement with the Marubeni Consortium to representatives of Skadden. The revised draft provided the following with respect to certain significant issues: (i) the Marubeni Consortium accepted that the Company could continue to pay a regular quarterly dividend of up to $0.32 per common share between signing and closing; (ii) the parties would be required to use their reasonable best efforts to obtain regulatory approvals, except that MM Air Limited (“Parent”) would not be required to take any actions that would reasonably be expected to adversely affect the business, operations, financial results or profitability of the surviving company and its affiliates (including Parent and its affiliates) to any material extent; (iii) the Marubeni Consortium accepted that the Board of Directors would be able to change its recommendation that shareholders vote in favor of the adoption and approval of the merger agreement and the statutory merger agreement and the transactions contemplated thereby, including the merger, in the event of a superior proposal, but removed the Board of Directors’ ability to change its recommendation upon the occurrence of an intervening event; and (iv) the termination fee would be equal to 3.5% of the Company’s equity value at the transaction price.

On November 2, 2019, representatives of Skadden delivered a revised draft of the merger agreement and a draft of the Company Disclosure Letter to each of Clifford Chance and Party B’s legal counsel. The revised drafts delivered to both parties (i) provided that the Company could continue to pay a regular quarterly dividend of up to $0.32 per common share between signing and closing; (ii) reinserted that the acquirer would be required to use reasonable best efforts to take all actions and do all things necessary, proper or advisable to obtain required regulatory approvals; (iii) provided that the Board of Directors would be able to change its recommendation that shareholders vote in favor of the adoption and approval of the merger agreement and the statutory merger agreement and the transactions contemplated thereby, including the merger, in the event of an intervening event; and (iv) provided that the termination fee would be equal to 2.5% of the Company’s equity value at the transaction price.

On November 4, 2019, each of the Marubeni Consortium, Party A and Party B delivered to the Company a revised draft of the merger agreement and a written proposal with its best and final offer for an acquisition of the Company.

Party A provided a revised price indication of $29.00 per share in cash (the “November 4 Party A Proposal”), and requested a voting and support agreement with Marubeni to confirm that Marubeni would vote its shares in support of a deal with Party A.

Party B provided a revised price indication of $31.00 per share in cash (the “November 4 Party B Proposal”). Party B confirmed that it would not require a voting and support agreement with Marubeni in connection with the transaction, but that the termination fee would be payable in the event that the Company’s shareholders do not approve the merger agreement for any reason. Party B also stated that it was prepared to finalize negotiations and announce a transaction within the next 24 hours if the Company granted exclusivity through 5:00 pm on November 6, 2019. The revised draft merger agreement provided by Party B provided the following with respect to certain significant issues: (i) accepted that the Company could continue to pay a regular quarterly dividend of up to $0.32 per common share between signing and closing; (ii) accepted that the acquirer would be required to use reasonable best efforts to take all actions and do all things necessary, proper or advisable to obtain required regulatory approvals; and (iii) provided that the termination fee would be equal to 3.0% of the Company’s equity value at the transaction price. Party B had previously agreed that the Board of Directors would be able to change its recommendation in the event of an intervening event.

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Representatives of the Marubeni Consortium provided a revised price indication of $32.00 per share in cash (the “November 4 Marubeni Consortium Proposal” and, together with the November 4 Party A Proposal and the November 4 Party B Proposal, the “November 4 Proposals”). Representatives of the Marubeni Consortium also confirmed that the Marubeni Consortium would be able to negotiate and announce a transaction within the next 24 hours. The revised draft merger agreement provided by the Marubeni Consortium provided the following with respect to certain significant issues: (i) Parent would be required to use reasonable best efforts to obtain regulatory approvals, except that Parent would not be required to take any actions that would reasonably be expected to adversely affect the business, operations, financial results or profitability of the surviving company and its affiliates (including Parent and its affiliates) to any material extent; (ii) the Marubeni Consortium accepted that the Board of Directors would be able to change its recommendation that the shareholders vote in favor of the adoption and approval of the merger agreement and the statutory merger agreement and the transactions contemplated thereby, including the merger, in the event of an intervening event; and (iii) the termination fee would be equal to 3.5% of the Company’s equity value at the transaction price. The Marubeni Consortium had previously agreed that the Company could continue to pay a regular quarterly dividend of up to $0.32 per common share between signing and closing.

At the direction of the Company Directors, representatives of Citi had asked each bidder to confirm that they had submitted their best and final price offer. The Marubeni Consortium and Party A each confirmed that they had submitted their highest price. Party B confirmed that its best and final offer was $31.00 per share; however, Party B’s advisors speculated that Party B might be willing to offer not more than $31.50 if necessary in order to be selected as the winning bidder. Representatives of Citi updated the Company Directors on these discussions and the status of each of the bids.

Representatives of Skadden proposed to Clifford Chance to revise the regulatory efforts standard to provide that (x) the parties would be required to use their reasonable best efforts to obtain regulatory approvals, except that Parent would not be required to take any actions that would reasonably be expected to result in a material adverse effect on the business, operations or financial results of the surviving company and its affiliates (including Parent and its affiliates) and (y) Parent and Merger Sub would be required to take any action or accept any condition or restriction required by the Committee on Foreign Investment in the United States (“CFIUS”) in connection with the transaction. Clifford Chance informed Skadden that the Marubeni Consortium accepted those further revisions later that day.

On November 4, 2019, the Company Directors were provided with the following materials for a Board of Directors meeting to be held later that day: a presentation from Citi regarding an update on the status of the bids.

Later that day, the Board of Directors (other than the Marubeni Directors) met, with certain Company officers and representatives of Skadden and Citi participating, to discuss the November 4 Proposals and finalizing negotiations with the bidders. The Marubeni Directors did not participate in the Board of Directors meeting in light of the foregoing agenda items. Representatives of Citi provided an update and discussed with the Company Directors the best and final bids that were received earlier in the day from each of Party A, Party B and the Marubeni Consortium. The Company Directors determined to continue negotiations with the Marubeni Consortium and Party B to finalize the terms of a potential transaction with each party so that the Company Directors could be in a position to consider the proposed transactions at a Board of Directors meeting the next day and approve one of the transactions. The Company Directors determined that Party A’s bid and other transaction terms were less favorable to the Company and its shareholders than the higher bids received from the Marubeni Consortium and Party B, and therefore the Company should focus its efforts on finalizing the draft agreements with the Marubeni Consortium and Party B over the next 24 hours. The Company Directors also discussed the speculation that Party B might be willing to offer not more than $31.50 if necessary in order to be selected as the winning bidder, and discussed that they would be receptive to a higher offer if one of the parties were to increase its offer.

Later in the day on November 4, 2019, representatives of Skadden delivered a revised draft of the merger agreement and Company Disclosure Letter to each of Clifford Chance and legal counsel to Party B. The revised draft of the merger agreement provided to the Marubeni Consortium and Party B provided that the termination fee would be equal to 3.0% of the Company’s equity value. Additionally, the revised draft provided that the termination fee would be payable only in the event that (i) the Company terminates the merger agreement prior to receipt of the Company shareholder approval in order to enter into a definitive written agreement providing for a superior proposal, (ii) Parent terminates the Merger Agreement prior to the Company’s shareholder meeting,

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in the event an adverse recommendation change shall have occurred or (iii) in certain circumstances if an alternative proposal shall have been made by a third party and not publicly withdrawn prior to the Company shareholders meeting, the merger agreement is terminated because Company shareholder approval was not obtained and within twelve months after such termination, the Company enters into an alternative proposal and such alternative proposal is consummated or an alternative proposal is consummated, and not if the Company’s shareholders do not approve the merger agreement for any other reason (as Party B had requested).

At the direction of the Company Directors, the Company’s officers had deferred discussions with all of the bidders regarding management compensation arrangements until after receipt of the final bids. On November 4, 2019, after receipt of the final November 4 Proposals, certain Company officers met with representatives of the Marubeni Consortium to discuss certain compensation arrangements for periods up to and including the closing if the Company were to enter into a transaction with the Marubeni Consortium. Also on November 4, 2019, after receipt of the final November 4 Proposals, certain Company officers had a discussion with representatives of Party B regarding certain compensation arrangements for periods up to and including the closing if the Company were to enter into a transaction with Party B. Representatives of Skadden participated in these discussions between the Company officers and each of the Marubeni Consortium and Party B. However, no agreements were reached or commitments made regarding compensation arrangements for periods after closing of a transaction.

On November 4, 2019, the Company Directors were provided with the following materials for a Board of Directors meeting to be held on November 5, 2019: a presentation from Citi regarding its financial analysis; a draft of the Citi fairness opinion; a draft summary of the reasons for the merger; a summary of the terms of the draft merger agreement; drafts of the merger agreement and Company disclosure letter; and draft resolutions approving the transactions.

On November 5, 2019, representatives of Skadden and Clifford Chance exchanged several drafts of the merger agreement and Company Disclosure Letter over the course of the day, along with other transaction documents. The Marubeni Consortium accepted that the termination fee would be equal to 3.0% of the Company’s equity value based on the transaction price. Additionally, representatives of Party B’s legal counsel provided a response to representatives of Skadden on the open points in the draft merger agreement, including Party B’s willingness to drop its request for payment of a termination fee in the event that the Company’s shareholders did not approve the transaction for any reason, and that Party B was willing to revert to the prior provision that the termination fee would be payable only in the event that the Company’s shareholders do not approve the merger agreement in certain specified circumstances, as described above and reflected in the previous draft of the merger agreement, provided that the Company reimburse Party B’s expenses of up to $5 million in the event that the Company’s shareholders did not approve the transaction but the termination fee was not payable. Skadden and Party B’s legal counsel also exchanged drafts of the equity commitment letter.

Later in the day on November 5, 2019, the Board of Directors (other than the Marubeni Directors) met at the New York City offices of Skadden, with certain Company officers and representatives of Skadden and Citi participating, to discuss the final updates on the bids and to consider approval of a transaction. The Marubeni Directors did not participate in the Board of Directors meeting in light of the foregoing agenda items. Representatives of Skadden updated the Company Directors on the directors’ fiduciary duties. Representatives of Citi discussed the status of the final bids. Representatives of Citi then reviewed with the Company Directors their financial analysis relating to the fairness to the holders of Company common shares (other than Parent and its affiliates) of the Merger Consideration to be received in the proposed merger by such holders, and Citi then rendered to the Board of Directors (other than the Marubeni Directors) an oral opinion, confirmed by delivery of a written opinion, dated November 5, 2019, to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi as set forth in its written opinion, the Merger Consideration was fair, from a financial point of view, to the holders of Company common shares (other than Parent and its affiliates). For more information, see the section entitled “Special Factors—Opinion of Citigroup Global Markets Inc.” beginning on page 31.

Representatives of Skadden and the Company Directors then discussed certain reasons for the merger, including both positive and negative factors, that the Company Directors and Transaction Committee had considered and discussed at prior meetings. Representatives of Skadden then reviewed certain key terms of the draft merger agreement, including that the consummation of the merger was subject to certain customary closing conditions, including the receipt of certain required regulatory approvals and the approval of the Company’s

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shareholders by a majority of the votes cast at a shareholders meeting. The Company Directors then considered whether each of the Marubeni Consortium, Party A and Party B had submitted its best and final offer as requested. The Company Directors discussed the final terms of the transaction offered by each of the bidders, including that the Marubeni Consortium had offered the highest price.

After further discussion, the Board of Directors unanimously (other than the Marubeni Directors) (i) determined to approve the transaction with the Marubeni Consortium, (ii) determined that the Merger Consideration constitutes fair value for each Company common share in accordance with the Bermuda Companies Act, (iii) determined that the terms of the merger agreement, the statutory merger agreement, and the transactions contemplated thereby, including the merger, are fair to and in the best interests of the Company, (iv) approved and declared advisable the execution, delivery and performance of the merger agreement and the statutory merger agreement and the transactions contemplated thereby, including the merger, and (v) determined to recommend that the Company’s shareholders vote in favor of the adoption and approval of the merger agreement and the statutory merger agreement and the transactions contemplated thereby, including the merger, at the Company shareholders meeting.

After the Board of Directors meeting, the Company, Parent, Merger Sub and their respective affiliates entered into the Merger Agreement and various ancillary documents. Before market open in the U.S. on November 6, 2019, the Company, Marubeni and Mizuho Leasing each issued a press release announcing the entry into the Merger Agreement.

Purpose and Reasons of the Company for the Merger; Position of the Company as to Fairness of the Merger; Recommendation of the Board of Directors

The Board of Directors believes, based on its consideration of the factors relating to the substantive and procedural fairness described below, that the Merger Agreement, the Statutory Merger Agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, the Company. The Company’s purpose and reasons for undertaking the merger at this time are to enable shareholders to realize the value of their investment in the Company in cash at a favorable price.

Recommendation of Our Board of Directors

The Board of Directors unanimously (other than the Marubeni Directors) recommends that you vote “FOR” the Merger Proposal.

For purposes of Section 106(2)(b)(i) of the Bermuda Companies Act, the Board of Directors considers $32.00, without interest and less any applicable withholding taxes, to be fair value for each issued and outstanding common share.

Reasons of the Company for the Merger

On November 5, 2019, the Board of Directors adopted resolutions by unanimous vote of the Board of Directors (other than the Marubeni Directors) at a meeting duly called at which a quorum of directors was present (i) determining that the Merger Consideration constitutes fair value for each common share in accordance with the Bermuda Companies Act, (ii) determining that the terms of the Merger Agreement and the Statutory Merger Agreement and the transactions contemplated thereby, including the merger, are fair to and in the best interests of Aircastle, (iii) approving and declaring advisable the execution, delivery and performance of the Merger Agreement and the Statutory Merger Agreement and the consummation of the transactions contemplated thereby, including the merger, and (iv) subject to the right of the Board of Directors to change its recommendation in certain circumstances, recommending that Aircastle’s shareholders vote in favor of the Merger Proposal at a duly held meeting of such shareholders for such purpose.

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In evaluating the Merger Agreement and the Statutory Merger Agreement and the transactions contemplated thereby, including the merger, the Company Directors consulted with Aircastle’s senior management, outside counsel and independent financial advisors. In recommending that Aircastle’s shareholders vote their common shares in favor of the Merger Proposal, the Company Directors also considered the following potentially positive factors, which are not intended to be exhaustive and are not presented in any relative order of importance:

• The belief of the Company Directors, after a thorough review of, and based on the Company Directors’ knowledge of, Aircastle’s current and historical financial condition, results of operations, prospects, business strategy, competitive position, industry trends, long-term strategic goals and opportunities, properties and assets, including the potential impact of those factors on the trading price of Aircastle’s common shares, and discussions with Aircastle’s senior management and outside financial and legal advisors, that the value to be provided to Aircastle’s shareholders pursuant to the Merger Agreement and the Statutory Merger Agreement is substantially more favorable to Aircastle’s shareholders than the potential value that might reasonably be expected to result from remaining an independent public company or entering into other strategic transactions such as other business combinations, acquisitions, dispositions, internal restructurings, joint ventures or minority investments.

• The current and historical market prices of the Company’s common shares, including the fact that the per-share Merger Consideration constituted a premium of:

• approximately 48% over the volume weighted average share price of the common shares during the 90 days ended October 23, 2019, the last trading day before Aircastle’s public announcement that Aircastle was evaluating strategic alternatives;

• approximately 34% over the closing share price on October 23, 2019, the last trading day before Aircastle’s public announcement that Aircastle was evaluating strategic alternatives;

• approximately 43% over the volume weighted average share price of the common shares during the 90 days ended November 4, 2019, the last trading day before the Merger Agreement was signed;

• approximately 17% over the closing share price on November 4, 2019, the last trading day before the Merger Agreement was signed; and

• approximately 117% of the Company’s book value per share as of September 30, 2019.

• The fact that, prior to the announcement of the entry into the Merger Agreement, Aircastle’s common shares had not traded at a price higher than the per-share Merger Consideration of $32.00 since November 2, 2007.

• The fact that the recent trading prices of Aircastle’s common shares may have reflected market expectations of an announcement of a potential strategic transaction involving Aircastle, and that absent such announcement the price of Aircastle’s common shares would likely decline materially.

• The fact that the Company Directors and Aircastle’s senior management, in coordination with Aircastle’s independent legal and financial advisors, implemented a robust sale process designed to obtain the highest price reasonably attainable, including by publicly announcing that the Company was evaluating strategic alternatives, which may include a potential sale of the Company, conducting discussions with four potential counterparties to gauge their interest in a potential transaction, responding to inquiries from seven additional parties after publicly announcing that the Company was evaluating strategic alternatives, and requiring each of the three parties (including Parent and two other parties) that continued to participate in the sale process to submit their “best and final” proposals at the conclusion of the sale process.

• The potential risks to Aircastle of remaining as an independent public company, including risks and uncertainties relating to:

• successfully implementing Aircastle’s growth plans and achieving its financial projections in light of the uncertainties associated with executing on Aircastle’s business strategy, including risks and uncertainties in the U.S. and global economy generally and the aviation leasing industry specifically and risks related to the current stage of the economic cycle and macroeconomic challenges that could result in a market downturn in the coming months or years;

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• the increasing importance of operational scale and financial resources in maintaining efficiency and remaining competitive in the aircraft leasing industry; and

• the “risk factors” set forth in Aircastle’s Form 10-K for the fiscal year ended December 31, 2018 and Form 10-Q for the fiscal quarter ended June 30, 2019.

• The financial analyses of Citi, financial advisor to Aircastle in connection with the merger, and the oral opinion rendered by Citi to the Board of Directors (other than the Marubeni Directors), which was confirmed by delivery of a written opinion, dated November 5, 2019, to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi as set forth in its written opinion, the Merger Consideration was fair, from a financial point of view, to the holders of Company common shares (other than Parent and its affiliates). For more information, see the section entitled “Special Factors—Opinion of Citigroup Global Markets Inc.” beginning on page 31.

• The fact that the consideration consists solely of cash, which will provide certainty of value and liquidity to Aircastle’s shareholders, while eliminating long-term business and execution risk.

• Based on their review of Aircastle’s strategic alternatives, the sale process overseen by the Company Directors and undertaken by Aircastle management and the Company’s financial advisor and the negotiations conducted, including that the Merger Agreement was the product of extensive, arm’s-length negotiations in a competitive sale process, and taking into account the advice of the Company’s financial and legal advisors, the Company Directors’ belief that the $32.00 per-share Merger Consideration was the highest price per share that Parent was willing to pay and was the best price reasonably attainable for Aircastle’s shareholders, that the proposed transaction had a relatively high degree of certainty of consummation and that the terms and conditions of the Merger Agreement were the most favorable to Aircastle and its shareholders to which Parent would be willing to agree.

• The availability of appraisal rights to Aircastle’s shareholders who do not vote in favor of the Merger Proposal, which rights provide eligible shareholders with the opportunity to have the Bermuda Court determine the fair value of their shares.

• The Company Directors’ view that, despite the termination fee payable to Parent under certain circumstances, the terms of the Merger Agreement would be unlikely to deter third parties from making an unsolicited superior proposal, and that Aircastle may terminate the Merger Agreement in order to enter into an alternative acquisition agreement that the Board of Directors determines to be a superior proposal, subject to certain conditions.

• The other terms of the Merger Agreement, including:

• The fact that Aircastle will be permitted to continue to pay a quarterly dividend of up to $0.32 per share between signing and closing under the Merger Agreement (which was an increase from the $0.30 per common share dividend that was paid in the previous quarter before entering into the Merger Agreement and which would be the highest dividend that the Company had paid since the fourth quarter of 2007);

• The belief that the termination fee of $73,500,000, or approximately 3.0% of the aggregate equity value of the transaction or approximately 1.0% of the aggregate enterprise value of the transaction, is reasonable in light of, among other things, the benefits of the merger to Aircastle’s shareholders, the typical size of such fees in similar transactions and the likelihood that a fee of such size would not be preclusive or unreasonably restrictive of other offers;

• The limited termination rights available to Parent;

• The obligation of Parent to use its reasonable best efforts to take all actions and do all things necessary, proper or advisable to obtain applicable antitrust and other regulatory approvals, except that, other than any action or accept any condition or restriction that may be required by CFIUS, Parent is not required to take any action that would reasonably be expected to result in a material adverse effect on the business, operations or financial results of the Company and its affiliates (including Parent and its affiliates);

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• The inclusion of provisions that permit the Board of Directors, under certain circumstances and subject to certain conditions, to withdraw, qualify or modify its recommendation that Aircastle’s shareholders approve and adopt the Merger Agreement due to an intervening event or a superior proposal; and

• The other terms and conditions of the Merger Agreement, as discussed in the section entitled “The Merger Agreement” beginning on page 64, which the Company Directors, after consulting with the Company’s legal advisor, considered to be reasonable.

The Company Directors also considered a number of factors that are discussed below relating to the procedural safeguards that it believes were and are present to ensure the fairness of the merger. The Company Directors believe these factors support its determinations and recommendations and provide assurance of the procedural fairness of the merger to the Company’s shareholders who are unaffiliated with Parent and its affiliates:

• the Merger Proposal must be approved by the affirmative vote of a majority of the votes cast at the special general meeting at which a quorum is present, and that over 70% of the issued and outstanding common shares of the Company are owned by shareholders not affiliated with the Marubeni Consortium;

• the fact that the Marubeni Directors did not participate in any meetings of the Board of Directors relating to a potential strategic transaction from the beginning of the process in August 2019 and did not participate in any of the Board of Directors’ discussions or deliberations related thereto;

• the authority granted to the Transaction Committee by the Company Directors to (i) review, consider and evaluate the strategic transactions and make recommendations to the Board of Directors with respect thereto, (ii) oversee the negotiations of expressions of interest in respect of the strategic transactions and any definitive documentation related thereto, (iii) provide direction and guidance to certain Company officers on the conduct of the process for the evaluation of any strategic transactions and (iv) waive the Marubeni Standstill in connection with the strategic transactions if the Transaction Committee determined that such waiver is advisable and in the best interests of the Company (provided that, the Transaction Committee did not have the authority to approve any binding definitive agreement for a strategic transaction on behalf of the Company);

• the Transaction Committee consists solely of independent and disinterested directors. The members of the Transaction Committee (i) are not employees of the Company or any of its subsidiaries, (ii) are not affiliated with Parent or its affiliates, and (iii) have no financial interest in the merger that is different from that of the Company’s unaffiliated shareholders, other than as discussed below under the heading “Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 43;

• the Transaction Committee and the Company Directors held numerous meetings and met regularly to discuss and evaluate the indications of interest delivered by several parties, including the Marubeni Consortium, as discussed in more detail in the section entitled “Special Factors—Background of the Merger” beginning on page 16, and each member of the Transaction Committee and each of the Company Directors was actively engaged in the process on a regular basis;

• the opinion, dated November 5, 2019, of Citi to the Board of Directors as described above and as more fully described in the section entitled “Special Factors—Opinion of Citigroup Global Markets Inc.” beginning on page 31; and

• the recognition by the Transaction Committee and the Company Directors that they had no obligation to recommend the approval of the merger or any other transaction.

The Company Directors also considered and balanced against the potentially positive factors a number of uncertainties, risks and other potentially negative factors in its deliberations concerning the merger and the other transactions contemplated by the Merger Agreement and the Statutory Merger Agreement, which are not intended to be exhaustive and are not presented in any relative order of importance:

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• The fact that the Company’s shareholders (other than MHC and Parent) will have no ongoing equity participation in the Company following the merger, and that such shareholders would forgo the opportunity to participate in the potential future earnings or growth of the Company, if any.

• The fact that receipt of the all-cash Merger Consideration would be taxable to Aircastle’s shareholders that are treated as U.S. holders for U.S. federal income tax purposes.

• The fact that, under specified circumstances, Aircastle may be required to pay fees and expenses in the event the Merger Agreement is terminated and the effect this could have on Aircastle.

• The fact that, while Aircastle expects the merger to be consummated if the Merger Proposal is approved by Aircastle’s shareholders, there can be no assurance that all conditions to the parties’ obligations to consummate the merger, including the receipt of regulatory approvals, will be satisfied on a timely basis, or at all.

• The significant costs involved in connection with entering into and completing the merger and the substantial time and effort of management required to consummate the merger, which could disrupt Aircastle’s business operations.

• The fact that the announcement and pendency of the merger, or the failure to complete the merger, may cause substantial harm to Aircastle’s relationships with its employees (including making it more difficult to attract and retain key personnel and the possible loss of key management and other personnel), vendors and customers.

• The restrictions in the Merger Agreement on Aircastle’s ability to actively solicit competing bids to acquire it and to entertain other acquisition proposals unless certain conditions are satisfied.

• The restrictions on Aircastle’s conduct of business prior to completion of the merger, which could delay or prevent Aircastle from undertaking business opportunities that may arise or taking other actions with respect to its operations during the pendency of the merger, whether or not the merger is completed.

The Company Directors were also aware of the fact that certain of Aircastle’s directors and executive officers may have interests in the merger that may be deemed to be different from, or in addition to, those of Aircastle’s shareholders. The Company Directors were made aware of and considered these interests; for more information about such interests, see below under the heading “Special Factors—Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 43.

After taking into account all of the factors set forth above, as well as others, the Company Directors concluded that the potential benefits of the merger to Aircastle and its shareholders outweighed the risks, uncertainties, restrictions and potentially negative factors associated with the merger.

The foregoing discussion of factors considered by the Company Directors is not intended to be exhaustive, but summarizes the material factors considered by the Company Directors, including the substantive and procedural factors considered by the Company Directors discussed above. In light of the variety of factors considered in connection with their evaluation of the merger, the Company Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching their determinations and recommendations. Moreover, each Company Director applied his or her own personal business judgment to the process and may have given different weight to different factors. The Company Directors did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support their ultimate determinations. The Company Directors based their recommendations on the totality of the information presented, including thorough discussions with, and questioning of, Aircastle’s senior management and outside financial advisor and counsel. It should be noted that this explanation of the reasoning of the Company Directors and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in “Cautionary Statement Concerning Forward-Looking Information” beginning on page 58.

Opinion of Citigroup Global Markets Inc.

Aircastle retained Citi as its exclusive financial advisor in connection with a possible transaction involving Aircastle. In connection with Citi’s engagement, Aircastle requested that Citi evaluate the fairness, from a financial point of view, to the holders of Company common shares (other than Parent and its affiliates) of the

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Merger Consideration to be received in the proposed merger by such holders pursuant to the terms and subject to the conditions set forth in the Merger Agreement. On November 5, 2019, at a meeting of the Board of Directors (other than the Marubeni Directors) held to evaluate the proposed merger and at which the Merger Agreement was approved, Citi rendered to the Board of Directors (other than the Marubeni Directors) an oral opinion, confirmed by delivery of a written opinion, dated November 5, 2019, to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi as set forth in its written opinion, the Merger Consideration was fair, from a financial point of view, to the holders of Company common shares (other than Parent and its affiliates).

The full text of Citi’s written opinion, dated November 5, 2019, to the Board of Directors, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi in rendering its opinion, is attached to this proxy statement as Annex C and is incorporated herein by reference in its entirety. The summary of Citi’s opinion set forth below is qualified in its entirety by reference to the full text of Citi’s opinion. Citi’s opinion was rendered to the Board of Directors (in its capacity as such) in connection with its evaluation of the proposed merger and was limited to the fairness, from a financial point of view, as of the date of the opinion, to the holders of Company common shares (other than Parent and its affiliates) of the Merger Consideration. Citi’s opinion did not address any other aspects or implications of the proposed merger or the Merger Agreement. Citi’s opinion is not intended to be and does not constitute a recommendation to any shareholder as to how such shareholder should vote or act on any matters relating to the proposed merger or otherwise.

In arriving at its opinion, Citi:

• reviewed the Merger Agreement;

• held discussions with certain senior officers, directors and other representatives and advisors of Aircastle concerning the business, operations and prospects of Aircastle;

• examined certain publicly available business and financial information relating to Aircastle as well as certain financial forecasts and other information and data relating to Aircastle which were provided to or discussed with Citi by the management of Aircastle;

• reviewed the financial terms of the proposed merger as set forth in the Merger Agreement in relation to, among other things, current and historical market prices and trading volumes of Company common shares, the historical and projected earnings and other operating data of Aircastle, and the net book value, capitalization and financial condition of Aircastle;

• analyzed certain financial, stock market and other publicly available information relating to the businesses of other companies whose operations Citi considered relevant in evaluating those of Aircastle;

• in connection with Citi’s engagement and at the direction of Aircastle, Citi was requested to approach, and held discussions with, selected third parties to solicit indications of interest in a possible acquisition of Aircastle; and

• conducted such other analyses and examinations and considered such other information and financial, economic and market criteria as Citi deemed appropriate in arriving at its opinion.

The issuance of Citi’s opinion was authorized by Citi’s fairness opinion committee.

In rendering its opinion, Citi assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with Citi and upon the assurances of the management of Aircastle that they were not aware of any relevant information that was omitted or that remained undisclosed to Citi. With respect to financial forecasts and other information and data relating to Aircastle provided to or otherwise reviewed by or discussed with Citi, Citi was advised by the management of Aircastle that such forecasts and other information and data were reasonably prepared on bases reflecting the best then-currently available estimates and judgments of the management of Aircastle as to the future financial performance of Aircastle.

Citi assumed, with the consent of the Board of Directors, that the proposed merger will be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or

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agreement and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the proposed merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on Aircastle or the merger. Citi did not make and was not provided with an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of Aircastle (other than certain third-party aircraft appraisals provided to Citi by the management of Aircastle) nor did Citi make any physical inspection of the properties or assets of Aircastle. Citi expressed no view as to, and its opinion did not address, the underlying business decision of Aircastle to effect the merger, the relative merits of the proposed merger as compared to any alternative business strategies that may have existed for Aircastle or the effect of any other transaction in which Aircastle might have engaged. Citi also expressed no view as to, and Citi’s opinion did not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation to any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the Merger Consideration or otherwise. Citi’s opinion was necessarily based upon information available to Citi, and financial, stock market and other conditions and circumstances existing, as of the date of its opinion. Although subsequent developments may affect Citi’s opinion, Citi has no obligation to update, revise or reaffirm its opinion.

In preparing its opinion, Citi performed a variety of financial and comparative analyses, including those described below. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. Citi arrived at its opinion based on the results of all analyses undertaken by it and factors assessed as a whole, and it did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion.

The estimates used by Citi for purposes of its analyses and the valuation ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by such analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold or acquired. Accordingly, the estimates used in, and the results derived from, Citi’s analyses are inherently subject to substantial uncertainty.

Citi was not requested to, and it did not, recommend or determine the specific consideration payable in the merger. The type and amount of consideration payable in the proposed merger was determined through negotiations between Aircastle, on the one hand, and Marubeni and Mizuho Leasing, affiliates of Parent, on the other hand, and Aircastle’s decision to enter into the Merger Agreement was solely that of the Board of Directors. Citi’s opinion was only one of many factors considered by the Board of Directors in its evaluation of the merger and should not be viewed as determinative of the views of the Board of Directors or the management of Aircastle with respect to the proposed merger, Merger Consideration or any other aspect of the transactions contemplated by the Merger Agreement.

Financial Analyses

The following is a summary of the material financial analyses prepared and reviewed with the Board of Directors in connection with the rendering of Citi’s opinion, dated November 5, 2019, to the Board of Directors. The summary set forth below does not purport to be a complete description of the financial analyses performed by, and underlying the opinion of, Citi, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Citi. Certain financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary as the tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the financial analyses, could create a misleading or incomplete view of such financial analyses. Future results may be different from those described and such differences may be material. Financial data utilized for Aircastle in the financial analyses described below, to the extent based on internal financial forecasts and estimates of management, were based on certain financial forecasts and other information and data relating to Aircastle provided to or discussed with Citi and approved for Citi’s use by Aircastle and as further summarized in the section entitled “Special Factors— Projected Financial Information” beginning on page 42, and which are referred to collectively as the “Aircastle Projections.” In addition, the

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approximate implied equity value per share ranges reflected in the summaries of the financial analyses described below were rounded to the nearest $0.10, except the 52–week trading range and the net asset value per share.

Selected Companies Analysis

Citi reviewed certain financial information and public market multiples for the following publicly traded corporations in the aircraft leasing industry.

• AerCap Holdings N.V.

• Air Lease Corporation

Citi also reviewed and considered financial information and public market multiples for BOC Aviation Limited (“BOC”) and Fly Leasing Limited (“Fly Leasing”). Citi excluded such information with respect to BOC in part because BOC is controlled by Bank of China, a Chinese state-owned-enterprise, and listed on The Stock Exchange of Hong Kong. Citi excluded such information with respect to Fly Leasing in part because Fly Leasing is a publicly traded vehicle that is externally managed.

Although none of the selected companies listed above is directly comparable to Aircastle, the companies included were chosen because they have operations that, for purposes of Citi’s analysis and based on its experience and professional judgment, may be considered similar to certain operations of Aircastle based on business sector participation, operational characteristics and financial metrics. The quantitative information used in this analysis, to the extent that it is based on market data, was based on market data as of November 4, 2019.

For each of the selected companies, Citi calculated and reviewed, among other information, price as a multiple of (i) calendar years 2019 and 2020 estimated pre-tax income; (ii) calendar years 2019 and 2020 estimated earnings per share; and (iii) book value as of June 30, 2019, the then most recent publicly disclosed book value for such selected companies. The results of this review were as follows:

	Price / Pre-Tax Income				Price / Earnings per Share				Price / Book Value
	2019E		2020E		2019E		2020E
AerCap Holdings N.V.		6.4x		7.1x		7.4x		7.9x		0.89x
Air Lease Corporation		7.1x		5.5x		9.0x		7.2x		0.96x

Financial data for the selected companies were based on public filings, publicly available Wall Street research analysts’ estimates and other publicly available information.

Based on its professional judgment and experience, and taking into consideration the observed multiples for the selected companies, Citi identified illustrative ranges of multiples of (i) price to book value of 0.89x to 0.96x, (ii) price to calendar year 2020 estimated pre-tax income of 5.5x to 7.1x and (iii) price to calendar year 2020 estimated earnings of 7.2x to 7.9x. Citi then multiplied those ranges by (i) Aircastle’s book value per share as of September 30, 2019 of $27.31, (ii) Aircastle’s estimated pre-tax income per share for calendar year 2020 of $2.57, as provided by Aircastle management and (iii) Aircastle’s estimated earnings per share for calendar year 2020 of $2.40, as provided by Aircastle management, respectively. This analysis indicated the following implied ranges of per share equity values, which Citi compared to the Merger Consideration of $32.00 per Company common share:

Price / Book Value	Price / Pre-Tax Income	Price / Earnings
$24.40 - $26.30	$14.20 - $18.20	$17.30 - $19.10

Discounted Dividends Analysis

Citi performed a dividend discount analysis of Aircastle to calculate implied equity values per share of Company common shares based on estimated present values of (i) the dividends distributable by Aircastle during the period from October 1, 2019 through December 31, 2023 based on the Aircastle Projections and (ii) illustrative terminal values for Aircastle as of December 31, 2023. The amount of dividends distributable by Aircastle during the projection period reflected the assumption that all excess capital would be distributed to shareholders, with excess capital calculated on the basis that Aircastle’s gross debt to equity would equal 2.5x. Citi calculated a range of illustrative terminal values for Aircastle as of December 31, 2023 by applying a range of price to book value exit multiples of 0.8x to 1.0x, which Citi selected based on its professional judgment and

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experience and the information observed for the selected companies as described above under “Opinion of Citigroup Global Markets Inc.—Selected Companies Analysis”, as well as similar information for Aircastle, to Aircastle’s estimated book value as of December 31, 2023 as reflected in the Aircastle Projections. Citi calculated estimated present values of the dividends distributable by Aircastle during the projection period and illustrative terminal values using discount rates ranging from 8.1% to 9.4%. This range of discount rates was selected by Citi based upon an analysis of Aircastle’s cost of equity, which Citi performed utilizing the capital asset pricing model with inputs that Citi determined were relevant based on publicly available data and Citi’s professional judgment. The analysis implied an equity value per share for the Company common shares of $22.70 to $29.00, which Citi compared to the Merger Consideration of $32.00 per Company common share.

Other Information

Citi noted that the 52-week trading range, equity research analyst price targets, implied premia and net asset value per share analyses below with respect to Aircastle are not valuation methodologies and were presented for reference only.

52–Week Trading Range

Citi reviewed the historical intra-day share prices of Company common shares for the 52-week period ended October 23, 2019, the day prior to Aircastle’s announcement that its Board of Directors was evaluating strategic alternatives, including a potential sale of the Company, and Marubeni’s announcement it had decided to pursue a potential acquisition of all of the Company common shares it does not already own, as well as for the period from October 23, 2019 through November 4, 2019. Citi noted that the low and high intra-day share prices during the 52-week period ended October 23, 2019 were $15.75 and $23.86 per Company common share, respectively, and during the period from October 23, 2019 through November 4, 2019, were $23.86 and $27.74 per Company common share, respectively.

Equity Research Analyst Price Targets

Citi reviewed the most recent publicly available research analysts’ one-year forward price targets for the Company common shares prepared and published by selected research analysts. Citi noted that, as of October 23, 2019, the day prior to Aircastle’s announcement that its Board of Directors was evaluating strategic alternatives, including a potential sale of the Company, and Marubeni’s announcement it had decided to pursue a potential acquisition of all of the Company common shares it does not already own, such price targets ranged from $18.00 to $26.00. Citi also noted that this range of price targets, discounted to November 4, 2019 at a mid-point cost of equity of 8.8%, was $16.90 to $24.00.

Implied Premia Paid

For the years 2014 through 2019 (as of November 4, 2019), Citi calculated, using publicly available information, the median, 25^th percentile, and 75^th percentile one-day unaffected stock price premia paid for types of acquisition transactions with an equity value between $1.0 to $3.0 billion that Citi deemed appropriate in its professional judgment. The analysis indicated a median, 25^th percentile and 75^th percentile one-day unaffected stock price premia of 27%, 17% and 47%, respectively. Based on the foregoing review and it professional judgment and experience, Citi applied a premia reference range of 20% to 30% to closing share prices of Aircastle’s common shares on October 23, 2019, the day prior to Aircastle’s announcement that its Board of Directors was evaluating strategic alternatives, including a potential sale of the Company, and Marubeni’s announcement that it had decided to pursue a potential acquisition of all of the Company common shares it does not already own, of $23.86 and on August 6, 2019, the day Aircastle announced its financial results for the quarter ended June 30, 2019, of $19.73. This analysis indicated an illustrative range of prices per Company common share of $28.60 to $31.00, based on the closing share prices of Aircastle’s common shares on October 23, 2019, and $23.70 to $25.60 based on the closing share prices of Aircastle’s common shares on August 6, 2019.

Net Asset Value per Share

Citi reviewed two third party appraisals for maintenance-adjusted current market value, as of June 30, 2019. Citi observed an average implied net asset value per Company common share of $11.64.

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Other Presentations by Citi

In addition to the presentation made to the Board of Directors (other than the Marubeni Directors) on November 5, 2019, the date on which Citi delivered its fairness opinion, as described above, Citi made one other written and oral presentation to the Board of Directors (other than the Marubeni Directors) that is materially related to the transactions contemplated by the Merger Agreement on October 28, 2019, which is referred to as the preliminary Citi presentation. Copies of the preliminary Citi presentation and the November 5, 2019 Citi presentation have been attached as exhibits to the Schedule 13E-3 filed with the SEC with respect to the proposed merger. These written presentations will be available for any interested shareholder of Aircastle to inspect and copy at Aircastle’s offices during regular business hours.

None of these other written and oral presentations by Citi, alone or together, constitutes an opinion of Citi with respect to the Merger Consideration. The information contained in the preliminary Citi presentation is substantially similar to the information provided in Citi’s written presentation to the Board of Directors (other than the Marubeni Directors) on November 5, 2019.

Each of the analyses performed in the preliminary Citi presentation was subject to further updating and subject to the final analyses presented to the Board of Directors (other than the Marubeni Directors) on November 5, 2019 by Citi. Each of these analyses was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Citi as of, the dates on which Citi performed such analyses. Accordingly, the results of the financial analyses may have differed due to changes in those conditions and other information, and the preliminary Citi presentation did not contain all of the financial analyses included in the November 5, 2019 presentation.

Miscellaneous

Aircastle has agreed to pay Citi for its services in connection with the merger an aggregate fee of approximately $28.1 million, $3 million of which became payable upon delivery of Citi’s opinion to the Board of Directors, and the remainder of which is payable contingent upon the consummation of the proposed merger. In addition, Aircastle agreed to reimburse Citi for expenses incurred by Citi in performing its services, and to indemnify Citi and related parties against certain liabilities, including liabilities under federal securities laws, arising out of Citi’s engagement.

As the Board of Directors (other than the Marubeni Directors) also was aware, Citi and its affiliates in the past have provided, currently are providing and in the future may provide certain investment banking services to Marubeni and Mizuho Leasing, affiliates of Parent, and their respective affiliates unrelated to the proposed merger, for which services Citi and such affiliates have received and expect to receive compensation, including, without limitation, during the two-year period prior to the date of Citi’s opinion, having acted as co-manager and/or joint bookrunner in connection with certain bond offerings of, and as lender to, Marubeni and Mizuho Financial Group, Inc., an affiliate of Mizuho Leasing. For the services described above for Marubeni and Mizuho Leasing, Citi and its affiliates received, during the two-year period prior to the date of Citi’s opinion, aggregate fees of approximately $2.3 million. Other than for the services described above, during the two-year period prior to the date of Citi’s opinion, Citi and its affiliates have not provided investment banking services to Aircastle for which Citi and its affiliates received fees. In the ordinary course of Citi’s business, Citi and its affiliates may actively trade or hold the securities of Aircastle, Parent, Marubeni and Mizuho Leasing and their respective affiliates for Citi’s own account or for the account of Citi’s customers and, accordingly, may at any time hold a long or short position in such securities. In addition, Citi and its affiliates (including Citigroup Inc. and its affiliates) may maintain relationships with Aircastle, Parent, Marubeni, Mizuho Leasing and their respective affiliates.

Aircastle selected Citi as a financial advisor in connection with the merger based on Citi’s reputation, experience and familiarity with Aircastle and its business. Citi is an internationally recognized investment banking firm that regularly engages in the valuation of businesses and their securities in connection with mergers and acquisitions and other purposes.

Purposes and Reasons of Parent and Merger Sub for the Merger

Under the SEC’s rules governing “going-private” transactions, including Rule 13e-3 under the Exchange Act, each of the Marubeni Shareholders, Parent and Merger Sub (collectively, the “Filing Persons”) is an “affiliate” of the Company and is required because of its affiliate status to disclose among other things its purpose for the merger, its

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reasons for structuring the transaction as proposed and any alternative structure that it considered, and its reasons for pursuing the merger at this time. Each of the Filing Persons is making the statements included in this part of the proxy statement solely for the purpose of complying with the requirements of Rule 13e-3 and other rules under the Exchange Act. None of the Filing Persons is making any recommendation to any shareholder of the Company as to how that shareholder should vote on the Merger Proposal, and the Filing Persons’ views as described in this part of the proxy statement should not be so construed as such a recommendation.

For the Filing Persons, the purpose of the merger is to acquire all of the common shares not already owned by the Marubeni Shareholders. When the merger is completed, all of the Company’s common shares will be owned by MHC (which is Marubeni’s indirect subsidiary) and Parent.

The structure of the transaction (including the merger) was proposed by the Company in the “auction draft” of a merger agreement that the Company furnished to Marubeni. The Filing Persons determined that structuring the transaction as a merger in the way the Company proposed is efficient and appropriate because (i) it will enable the Filing Persons to acquire all of the outstanding common shares that the Marubeni Shareholders do not already own, at the same time, (ii) it allows the shareholders of the Company that are not affiliated with the Marubeni Shareholders or the other Filing Persons (the “Unaffiliated Shareholders”) to immediately realize the value of their investment in the Company through their receipt of the $32.00 per share Merger Consideration and (iii) it is consistent with recent precedent transactions involving NYSE-listed companies organized under Bermuda law. Because the transaction structure is consistent with the objectives of Marubeni and the other Filing Persons and with market practice, Marubeni and the other Filing Persons did not pursue or propose an alternative transaction structure.

The Filing Persons decided to pursue the merger at this time after learning that third parties had indicated an interest in acquiring the Company and after the Company advised Marubeni that the Board of Directors (other than the Marubeni Directors, who did not participate in any of the Board of Directors’ deliberations regarding the merger) was willing to consider and explore those indications of interest and to waive the contractual “standstill” provisions that otherwise would have prohibited Marubeni from making a takeover proposal or publicly announcing an interest in making a takeover proposal. Marubeni publicly announced its interest in making a takeover proposal in a Schedule 13D amendment that it filed with the SEC prior to market open on the day after the Company delivered the Standstill Waiver. The transaction contemplated by the Merger Agreement will allow the Marubeni Shareholders to retain their existing shareholding in the Company and to increase it. The Marubeni Shareholders prefer that outcome to an outcome in which an unaffiliated third party would acquire all of the equity of the Company, including the common shares held by the Marubeni Shareholders.

In deciding to pursue the merger, the Filing Persons considered and took into account various risks and other factors that potentially could adversely affect them. These included the possibility that the merger could result in the loss of key employees of the Company or otherwise disrupt the Company’s business operations. The Filing Persons also considered that their respective directors, officers and other employees would expend considerable time and effort in negotiating, implementing and completing the merger, and in doing so their time would be diverted from other important business opportunities and operational matters. The Filing Persons recognized that they will incur significant transaction costs and expenses in connection with the merger, regardless of whether the merger is completed. There is a risk that the merger may not be completed despite the Filing Persons’ efforts, including in the event that the requisite shareholder approval is not obtained.

The Filing Persons believe that after the merger is consummated, the Company should have greater operating flexibility and more efficient access to capital, which should support the Company’s long-term growth and profitability. If that happens, the Filing Persons (and not the Unaffiliated Shareholders) will benefit from any resulting increase in the value of the Company.

The Filing Persons believe that the merger will benefit the Unaffiliated Shareholders by allowing the Unaffiliated Shareholders to immediately receive the Merger Consideration of $32.00 per share in cash, representing a premium of approximately 48% over the volume-weighted average share price of the common shares during the 90 days ended October 23, 2019, the last trading day before the Company’s public announcement that the Company was evaluating strategic alternatives; approximately 34% over the closing share price of the common shares on October 23, 2019, the last trading day before the Company’s public announcement that the Company was evaluating strategic alternatives; and approximately 43% over the

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volume-weighted average share price of the common shares during the 90 days ended November 4, 2019, the last trading day before the Merger Agreement was signed. Conversely, as a result of the merger the Unaffiliated Shareholders will no longer have an opportunity to participate in any future benefits associated with the ownership of the common shares, including the receipt of any dividends paid by the Company and participation in any potential appreciation in the trading price of the common shares beyond the per-share Merger Consideration. The Unaffiliated Shareholders’ receipt of cash in exchange for their common shares pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes to the Unaffiliated Shareholders who are U.S. holders.

Position of the Marubeni Shareholders, Parent and Merger Sub as to Fairness of the Merger

Under the SEC’s rules governing “going-private” transactions, including Rule 13e-3 under the Exchange Act, each of the Filing Persons is an “affiliate” of the Company and accordingly each of the Filing Persons is required to disclose its belief as to the fairness of the merger to the Company’s “unaffiliated security holders,” which in this case means the Unaffiliated Shareholders. Each of the Filing Persons is making the statements included in this part of the proxy statement solely for the purpose of complying with the requirements of Rule 13e-3 and other rules under the Exchange Act. None of the Filing Persons is making any recommendation to any shareholder of the Company as to how that shareholder should vote on the Merger Proposal, and the Filing Persons’ views as to the fairness of the merger should not be construed as a recommendation to any Unaffiliated Shareholder as to how the Unaffiliated Shareholder should vote on the Merger Proposal.

None of the Filing Persons participated in the deliberations of the Board of Directors regarding, or received advice from the Company’s legal or financial advisors as to, the fairness of the merger or the Board of Directors’ evaluation of indications of interest and more definitive proposals from the Filing Persons or from third parties. The Marubeni Directors recused themselves from all such discussions. In negotiating the terms of the merger the Filing Persons sought to acquire the Company on terms as favorable as possible for the Filing Persons. In the negotiations between the Company and the Filing Persons with respect to the merger, the non-Marubeni Directors represented the interests of the Unaffiliated Shareholders. None of the Filing Persons undertook any independent evaluation of the fairness of the merger or the Merger Consideration. Marubeni and the other Filing Persons neither requested nor obtained any opinion or analysis with respect to the fairness of the merger or the Merger Consideration to the Unaffiliated Shareholders.

Each of the Filing Persons believes that the merger is substantively fair to the Unaffiliated Shareholders based on the following factors:

• Pursuant to the Merger Agreement the Unaffiliated Shareholders will immediately receive the Merger Consideration of $32.00 per share in cash, representing a premium over the prices at which the common shares have traded in the past: approximately 48% over the volume-weighted average share price of the common shares during the 90 days ended October 23, 2019, the last trading day before the Company’s public announcement that the Company was evaluating strategic alternatives; approximately 34% over the closing share price of the common shares on October 23, 2019, the last trading day before the Company’s public announcement that the Company was evaluating strategic alternatives; and approximately 43% over the volume weighted average share price of the common shares during the 90 days ended November 4, 2019, the last trading day before the Merger Agreement was signed.

• Before entering into the Merger Agreement, the Company publicly announced that it was exploring strategic alternatives that may include a sale of the Company and entertained competing proposals from other parties.

• Notwithstanding the fact that Citi’s fairness opinion was rendered to the Board of Directors solely for its use and was not delivered to any of the Filing Persons and that none of them is entitled to rely on it, the fact that the Board of Directors received an opinion of Citi, dated November 5, 2019, to the effect that, as of the date of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Citi in preparing its opinion, the Merger Consideration of $32.00 per share was fair, from a financial point of view, to the holders of Company common shares (other than Parent and its affiliates) (in other words, to the Unaffiliated Shareholders).

• The Merger Consideration is payable to the Unaffiliated Shareholders entirely in cash, allowing them to receive a value for all of their common shares that is certain.

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• The merger will eliminate the Unaffiliated Shareholders’ exposure to the various risks and uncertainties related to continued ownership of the Company’s common shares, which include among others:

• exposure to market, economic and other risks that arise from owning shares in a public company;

• any potential decline in the market prices of the common shares that might result from a general economic slowdown, including the impacts on the Company of possible declines in demand from customers and possible financial difficulties experienced by the Company’s customers; in this regard, the Filing Persons noted that some of the Company’s customers have been publicly reported to be in potential financial difficulties;

• other fluctuations in the value of the common shares based on general economic, business and industry conditions throughout the world (bearing in mind that the Company’s business is international);

• potential volatility in the price of the common shares as a result of future developments beyond the Company’s control, including government or regulatory action, and changes in tax laws, interest rates and general market conditions;

• potential impacts on the price and trading volumes of the common shares caused by analyst recommendations and expectations and market sentiment; and

• the other risk factors disclosed in the Company’s most recent filings on Form 10-K and Form 10-Q.

• Parent’s and Merger Sub’s obligations to complete the merger and pay the Merger Consideration pursuant to the Merger Agreement are not conditioned on their obtaining financing.

• Marubeni and Mizuho Leasing have severally (and not jointly) guaranteed the Guaranteed Obligations (as defined in “Special Factors—Limited Guaranty” beginning on page 52) of Parent under the Merger Agreement, including Parent’s obligation to fund the Merger Consideration that is payable to the Unaffiliated Shareholders.

In addition to the factors listed above, in determining that the merger is substantively fair to the Unaffiliated Shareholders, the Filing Persons noted that the Merger Consideration represented a multiple of approximately 1.17x the Company’s book value per common share at September 30, 2019 and that this multiple generally fell within or exceeded the range of book value multiples observed by the Filing Persons in publicly disclosed transactions involving other aircraft finance companies. Except as described above, net book value was not calculated or considered by the Filing Persons in making their fairness determinations.

In their consideration of the fairness of the merger, the Filing Persons were provided access to certain third-party appraisals of aircraft owned by the Company. The Filing Persons did not find it practicable to, and did not, appraise the assets of the Company to determine the liquidation value per common share for the Unaffiliated Shareholders because (i) the Filing Persons believed that liquidation sales generally result in proceeds that are substantially less than in sales of a going concern; (ii) they believed that it was impracticable to determine a liquidation value given the significant execution risk involved in any liquidation; (iii) they considered the Company to be a viable going concern; and (iv) the Company will continue to operate its business following the merger. None of the Filing Persons sought to establish a pre-merger going concern value for the Company’s common shares to determine the fairness of the Merger Consideration to the Unaffiliated Shareholders because following the merger the Company likely will have a different capital structure. However, to the extent that the pre-merger going concern value was reflected in the NYSE closing price of $23.86 per common share on October 23, 2019, the last trading day before the Company announced that it was exploring strategic alternatives that may include a sale of the Company and Marubeni announced its interest in making a takeover proposal, the Merger Consideration of $32.00 per share represents a premium to the going concern value of the Company.

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Each of the Filing Persons believes that the merger is procedurally fair to the Unaffiliated Shareholders based on the following factors:

• Under the Shareholder Agreement among the Company and the Marubeni Shareholders, Marubeni and certain of its affiliates are subject to various restrictions on their ability to influence or control the Board of Directors, including by certain “standstill” provisions. These contractual restrictions required Marubeni to obtain the approval of the non-Marubeni Directors before making or publicly announcing a proposal for a change-of-control transaction. Because of these provisions, the non-Marubeni Directors had the authority to pursue, or to decline to pursue, negotiations with Marubeni over a sale of the Company.

• None of the Filing Persons or their affiliates participated in the deliberative process of, or the conclusions reached by, the Board of Directors or the Transaction Committee that it established or the negotiating positions of the Board of Directors or the Transaction Committee. The Marubeni Directors were not members of the Transaction Committee, did not participate in its deliberations and recused themselves from all proceedings of the Board of Directors in respect of the buyout proposals received from Marubeni and others. The non-Marubeni Directors controlled the Company’s responses to and negotiations with the Filing Persons in the time leading to the Merger Agreement.

• The Board of Directors was advised by internationally recognized financial and legal advisors, each of which has extensive experience in transactions similar to the merger.

• The merger is not conditioned on any financing being obtained by the Filing Persons, which increases the likelihood that the merger will be consummated and that the Unaffiliated Shareholders will receive the Merger Consideration.

• At the Company’s request, the Marubeni Shareholders entered into a Voting and Support Agreement pursuant to which they are required to vote all the common shares that they beneficially own in favor of the merger; this obligation will apply even if the Filing Persons no longer wish to consummate the merger, which increases the likelihood that the merger will be consummated and that the Unaffiliated Shareholders will receive the Merger Consideration.

• The Merger Agreement allows the Board of Directors, subject to specific limitations and requirements set forth in the Merger Agreement, to consider and respond to unsolicited third-party acquisition proposals and to furnish confidential information to, and engage in discussions or negotiations with, the person or parties making such acquisition proposals prior to the time that the Company’s common shareholders approve the Merger Agreement.

• The Merger Agreement allows the Board of Directors, subject to specific limitations and requirements set forth in the Merger Agreement, to terminate the Merger Agreement in order to enter into an agreement for a transaction that the Board of Directors determines to be superior to the merger, subject to the Company’s paying a termination fee of $73,500,000 (approximately 3.0% of the equity value of the Company implied by the terms of the merger).

• The Merger Agreement allows the Board of Directors, subject to specific limitations and requirements set forth in the Merger Agreement, to withdraw or change its recommendation that the Company’s common shareholders approve the Merger Agreement under circumstances not involving a proposal for an alternative transaction to the merger.

• The Board of Directors (other than the Marubeni Directors, who were not present) unanimously determined that the Merger Consideration constitutes fair value for each common share.

• The merger is conditioned upon receipt of the affirmative votes of a majority of the votes cast by holders of the Company’s outstanding common shares.

• Unaffiliated Shareholders who do not vote for the merger and who comply with certain procedural requirements will be entitled, after completion of the merger, to exercise statutory appraisal rights under Bermuda law.

In determining that the merger is procedurally fair to the Unaffiliated Shareholders, the Filing Persons noted that the merger is not conditioned on any particular vote by the Unaffiliated Shareholders (for example, the

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merger is not conditioned on the affirmative vote of a majority of the common shares held by Unaffiliated Shareholders). In considering this point the Filing Persons took into account the fact that they beneficially own an aggregate of approximately 28.8% of the outstanding common shares and accordingly the Unaffiliated Shareholders control more than double the voting power of the Filing Persons.

None of the Filing Persons is aware of any firm offer for a merger or asset sale of the Company having been made during the past two years.

The foregoing discussion of the information and factors considered by each of the Filing Persons in connection with the fairness of the merger is not intended to be exhaustive, but the Filing Persons believe that it includes all material factors considered by each of them. None of the Filing Persons found it practicable to, and they did not, quantify or otherwise attach relative weights to the foregoing factors in reaching their conclusion as to the fairness of the merger. Rather, the fairness determinations were made by the Filing Persons after considering all the factors as a whole. The sequence in which the factors described above are presented is not intended to reflect their relative importance. Each of the Filing Persons believes that these factors provide a reasonable basis upon which to form its belief that the merger is fair to the Unaffiliated Shareholders. This belief should not, however, be construed as a recommendation to any Unaffiliated Shareholder to vote in favor of the Merger Proposal. As noted above, none of the Filing Persons is making any recommendation as to how the Unaffiliated Shareholders should vote their common shares on the Merger Proposal.

Plans for the Company After the Merger

Marubeni and Parent expect that after the completion of the merger, the Company will continue to operate in a manner that is substantially similar to the manner in which the Company currently operates. Marubeni and Parent have advised the Company that they do not have any current intentions, plans or proposals to cause the Company to engage in any of the following:

• an extraordinary corporate transaction following consummation of the merger, such as a merger, reorganization or liquidation,

• a relocation of any material operations or a sale or transfer of a material amount of assets, or

• any other material change in the Company’s business.

Marubeni and Parent expect, however, that (i) they may cause the Company to optimize its corporate structure after the consummation of the merger in order to address changes in the Company’s tax profile resulting from the merger and (ii) after the merger, to the extent that doing so will not cause the loss of investment grade ratings for the Company’s debt obligations, they will explore and may cause the Company to implement changes that will enhance the Company’s access to capital and lower its cost of capital. Marubeni and Parent further expect that after the consummation of the merger, they will continuously and carefully monitor the Company’s business operations, prospects and financial condition, and depending on their observations they may consider initiating changes to the Company’s business model, capital structure, capitalization, operations, business, properties and personnel (including, possibly, by means of one or more extraordinary transactions), if they decide that doing so is appropriate.

Certain Effects of the Merger

If the Company’s shareholders adopt the Merger Proposal, and if the other conditions to the closing of the merger are either satisfied or waived, Merger Sub will be merged with and into the Company with the Company as the surviving company. If the merger is completed, all of Aircastle’s equity interests will be owned by MHC (which is Marubeni’s indirect subsidiary) and Parent. None of the Company’s current shareholders (except for MHC and its affiliates) will have any ownership interest in, or be a shareholder of, the Company after the completion of the merger. As a result, our current shareholders (other than MHC and its affiliates) will no longer benefit from any increase in Aircastle’s value or bear the risk of any decrease in Aircastle’s value. Following the merger, only MHC, Parent and their affiliates will benefit from any increase in our value and also will bear the risk of any decrease in our value.

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Upon the consummation of the merger:

• each issued and outstanding common share held by the shareholders (other than common shares held by Parent, Merger Sub, the Company or any wholly-owned subsidiary thereof, or by MHC) immediately prior to the effective time of the merger will automatically be cancelled and cease to exist, and will be converted into and will represent solely the right to receive the Merger Consideration;

• each PSU, RSU and restricted share award will become fully vested, assuming the achievement, if applicable, of performance metrics at the maximum level of performance, and be canceled in exchange for the right to receive a single lump sum cash payment, without interest, equal to (A) the Merger Consideration, less (B) any applicable taxes required to be withheld.

Parent anticipates that the Company’s executive officers as of the effective time of the merger will continue as the initial executive officers of the Company following the merger.

Projected Financial Information

The Company does not as a matter of course make public financial projections as to future revenues, earnings or other results given, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, in connection with their consideration of the merger, certain forward-looking financial information provided by the Company’s management and reviewed by the Company Directors was provided to Citi and Parent. We have included financial projections in this proxy statement based on this financial information to give Aircastle’s shareholders access to certain nonpublic information considered by Parent, the Company Directors and Citi for purposes of considering and evaluating the merger, and because the financial projections were utilized by Citi in connection with the financial analyses performed and in rendering the fairness opinion but not to influence the decision of shareholders whether to vote for or against the Merger Proposal. The inclusion of this information should not be regarded as a reliable prediction of future results.

The financial projections are subjective in many respects. Although presented with numerical specificity, the financial projections reflect and are based on numerous assumptions and estimates with respect to industry performance, general business, economic, political, market and financial conditions, competitive uncertainties, and other matters, all of which are difficult to predict and beyond the Company’s control. As a result, there can be no assurance that these financial projections will be realized or that actual results will not be significantly higher or lower than projected. The financial projections are forward-looking statements and should be read with caution. See “Cautionary Statement Concerning Forward-Looking Information” beginning on page 58. The financial projections cover multiple years and such information by its nature becomes less reliable with each successive year. In addition, the financial projections will be affected by the Company’s ability to achieve strategic goals, objectives and targets over the applicable periods. The financial projections also reflect assumptions as to certain business matters that are subject to change.

The financial projections were prepared to assist the Company Directors in evaluating the merger and not with a view toward public disclosure or toward complying with U.S. generally accepted accounting principles (“U.S. GAAP”), the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial projections. The Company’s independent registered public accounting firm has not examined or compiled any of the financial projections, expressed any conclusion or provided any form of assurance with respect to the financial projections and, accordingly, assumes no responsibility for them. The financial projections do not take into account any circumstances or events occurring after the date they were prepared. The financial projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding the Company contained in the Company’s public filings with the SEC.

Readers of this proxy statement are cautioned not to place undue reliance on the specific portions of the financial projections set forth below. No one has made or makes any representation to any shareholder regarding the information included in these financial projections.

The financial projections do not take into account any circumstances or events occurring after the date they were prepared, including the transactions contemplated by the Merger Agreement. Further, the financial projections do not take into account the effect of any failure of the merger to occur and should not be viewed as accurate or continuing in that context. Except as may be required by applicable securities laws, the Company

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does not intend to update, or otherwise revise, the financial projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error.

For the foregoing reasons, as well as the bases and assumptions on which the financial projections were compiled, the inclusion of specific portions of the financial projections in this proxy statement should not be regarded as an indication that such projections are an accurate prediction of future events, and they should not be relied on as such.

The following is a summary of the financial projections (in millions):

	2019E			2020E			2021E			2022E			2023E
Revenues		911			911			995			1,114			1,194
Net Income		164			184			212			265			278
Stock comp		13			14			15			16			17
MTM of Undesignated Swaps		5			—			—			—			—
All Other		8			—			—			—			—
Adjusted Net Income(1)		189			197			227			280			295
Capital Expenditures		(1,269	)		(1,400	)		(1,700	)		(1,700	)		(1,700	)
Cash Flow from Operations		538			626			673			763			799

(1) Management believes that Adjusted Net Income (“ANI”), when viewed in conjunction with Aircastle’s results under U.S. GAAP and the above reconciliation, provides useful information about operating and period-over-period performance and additional information that is useful for evaluating the underlying operating performance of Aircastle’s business without regard to periodic reporting elements related to interest rate derivative accounting, changes related to refinancing activity and non-cash share-based payment expense.

In October 2019, management, as part of its annual planning process, presented the 2020 plan to the Board of Directors, consisting of updated financial projections for the Company for the remainder of 2019 and financial projections for the years 2020 through 2023. For the remainder of 2019, the Company’s plan calls for net income of $164 million, $1.3 billion in investments, cash flow from operations of $538 million and adjusted net income of $189 million.

The 2020-2023 plan calls for the increase in total revenues, net income and adjusted net income based on aircraft capital investments of $1.4 billion in 2020 and $1.7 billion in each of 2021 to 2023 (inclusive of the Company’s E2 aircraft commitments). Cash flow from operations is forecasted to grow from $626 million in 2020 to $799 million in 2023. The 2020-2023 plan assumes that air traffic will continue to grow at historic levels and investment yields will continue to have downward pressure as the competition for investments increases. The 2020-2023 plan does not contemplate any major disruptions in the aviation sector as discussed in the “risk factors” set forth in Aircastle’s Form 10-K for the fiscal year ended December 31, 2018 and Form 10-Q for the fiscal quarter ended June 30, 2019.

Interests of the Company’s Directors and Executive Officers in the Merger

In considering the recommendations of the Board of Directors with respect to the Merger Proposal, you should be aware that, aside from their interests as shareholders of the Company, the Company’s directors and executive officers have interests in the merger that are different from, or in addition to, those of other shareholders of the Company generally. In particular, the Marubeni Directors currently serve on the board of or are otherwise employed by Parent or the Marubeni Shareholders, which currently own a portion of the Company’s common shares and following the merger will own (both separately and, together with Mizuho Leasing, indirectly through Parent) all of the Company’s common shares. The Marubeni Directors did not participate in the deliberations of the Board of Directors regarding the acquisition proposals submitted by Marubeni or by other parties or in the Board of Directors’ decision to approve the Merger Agreement. Interests of executive officers and directors (other than the Marubeni Directors) that may be different from or in addition to the interests of the Company’s shareholders include:

• the Company’s executive officers hold unvested PSUs and restricted share awards that will become fully vested (assuming the achievement, if applicable, of performance metrics at the maximum level of performance) and canceled in exchange for the right to receive the Merger Consideration;

• the Company’s directors hold unvested director restricted cash awards that will become fully vested and payable upon completion of the merger;

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• the Company’s executive officers have entered into individual agreements that provide for certain severance protections upon a qualifying termination;

• the Company’s executive officers may receive restricted cash awards in 2020 and pro-rated annual bonus payments, in each case in connection with the merger;

• the Company’s executive officers may enter into arrangements with Parent prior to or following the closing;

• the Company’s executive officers as of the effective time of the merger are expected to become the initial executive officers of the surviving corporation; and

• the Company’s directors and executive officers are entitled to continued indemnification and insurance coverage under the Merger Agreement, and the Company’s directors and certain executive officers are entitled to continued indemnification and insurance coverage under indemnification agreements.

The Board of Directors was aware of the different or additional interests described herein and considered those interests along with other matters in recommending and/or approving, as applicable, the Merger Agreement and the transactions contemplated thereby, including the merger.

Treatment of Company Equity Awards and Director Restricted Cash Awards

All of the Company’s executive officers hold PSUs and restricted share awards, and all of the Company’s non-employee and non-Marubeni Directors hold director restricted cash awards. Upon completion of the merger, these awards will be treated as follows: (i) each outstanding PSU and restricted share award will become fully vested, assuming the achievement, if applicable, of performance metrics at the maximum level of performance, and be canceled in exchange for the right to receive a single lump sum cash payment, without interest, equal to (A) the Merger Consideration, less (B) any applicable taxes required to be withheld and (ii) each director restricted cash award will become full vested and payable. All such payments will be made by the surviving corporation, without interest, on or as soon as practicable following the effective time of the merger, and in no event later than five business days following the effective time of the merger.

The table below sets forth the estimated value of unvested PSUs, restricted share awards and director restricted cash awards held as of January 6, 2020, the last practicable date prior to the date of this proxy statement, by the Company’s executive officers and non-employee and non-Marubeni Directors, based on the Merger Consideration. Depending on when the merger is completed, certain outstanding equity awards shown in the table below may become vested in accordance with their terms without regard to the merger.

Name	Aggregate Value of Unvested Director Restricted Cash Awards ($)		Aggregate Number of Unvested Restricted Share Awards (#)(1)(2)		Aggregate Value of Unvested Restricted Share Awards ($)		Aggregate Number of Unvested PSUs (#)(1)(3)		Aggregate Value of Unvested PSUs ($)		Total Value of Unvested Equity Awards ($)
Non-Employee Directors
Ronald W. Allen	$	135,000		—		—		—		—	$	135,000
Giovanni Bisignani	$	135,000		—		—		—		—	$	135,000
Michael J. Cave	$	135,000		—		—		—		—	$	135,000
Douglas A. Hacker	$	135,000		—		—		—		—	$	135,000
Jun Horie(4)		—		—		—		—		—		—
Takashi Kurihara(4)		—		—		—		—		—		—
Ronald L. Merriman	$	135,000		—		—		—		—	$	135,000
Agnes Mura	$	135,000		—		—		—		—	$	135,000
Charles W. Pollard	$	135,000		—		—		—		—	$	135,000
Takayuki Sakakida(4)		—		—		—		—		—		—
Peter V. Ueberroth	$	135,000		—		—		—		—	$	135,000
Executive Officers(5)
Michael J. Inglese		—		92,848	$	2,971,136		689,422	$	22,061,504	$	25,032,640
Aaron A. Dahlke		—		24,347	$	779,104		155,684	$	4,981,888	$	5,760,992
Christopher L. Beers		—		42,426	$	1,357,632		272,294	$	8,713,408	$	10,071,040

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Name	Aggregate Value of Unvested Director Restricted Cash Awards ($)		Aggregate Number of Unvested Restricted Share Awards (#)(1)(2)		Aggregate Value of Unvested Restricted Share Awards ($)		Aggregate Number of Unvested PSUs (#)(1)(3)		Aggregate Value of Unvested PSUs ($)		Total Value of Unvested Equity Awards ($)
Roy Chandran		—		24,950	$	798,400		150,584	$	4,818,688	$	5,617,088
Other Executive Officers as a Group(6)		—		35,307	$	1,129,824		178,545	$	5,713,440	$	6,843,264

(1) As described in greater detail below in “—280G Mitigation Actions” beginning on page 49, effective as of December 24, 2019, the Company accelerated the vesting and payment of certain PSUs and the vesting of certain restricted share awards held by Messrs. Inglese, Dahlke, Beers, Chandran, Schreiner and Winter, provided that upon certain terminations of employment prior to the earlier of the consummation of the merger or the termination of the Merger Agreement, the executive officer must repay to the Company the gross amount of the accelerated awards. Due to these repayment provisions, these accelerated PSUs and restricted share awards are treated as unvested for purposes of this table, with complete vesting (i.e., lapse of the repayment provisions) to occur for purposes of this table upon the consummation of the merger.

(2) Reflects the number of unvested restricted share awards held by the Company’s executive officers. Although the last tranches of the 2017 restricted share awards vested in accordance with their terms on January 1, 2020, the number of unvested restricted share awards shown in the table for Messrs. Inglese, Dahlke, Beers and Chandran includes the last tranche of the 2017 restricted share awards due to the application of the repayment provisions described in greater detail below in “—280G Mitigation Actions” beginning on page 49.

(3) Reflects the number of shares underlying unvested PSUs held by the Company’s executive officers assuming the achievement of the performance metrics at the maximum level of performance, except for the 2017 PSUs, which are shown based on estimated actual performance. Although the 2017 PSUs vested in accordance with their terms on December 31, 2019, the number of unvested PSUs shown in the table for Messrs. Inglese, Dahlke, Beers, Chandran and Schreiner includes the 2017 PSUs due to the application of the repayment provisions described in greater detail below in “—280G Mitigation Actions” beginning on page 49.

(4) The Company’s Marubeni Directors, Messrs. Horie, Kurihara and Sakakida, are not separately compensated by the Company for their board or committee service and do not hold any unvested director restricted cash awards.

(5) Michael L. Kriedberg retired on January 1, 2020 and is not entitled to any payments or benefits in connection with the merger.

(6) Includes James C. Connelly, Joseph Schreiner and Douglas C. Winter.

Grants of Restricted Cash Awards in 2020

The Company has reserved the right to make, in 2020, a restricted cash award in lieu of its annual PSU grants for 2020, with the recipients (including the Company’s executive officers) and target grant date value of such restricted cash awards determined in the ordinary course of business and consistent with past practice; provided that (i) the recipients of such restricted cash awards shall be limited to individuals who were granted PSUs in 2019, (ii) the cash amount of such award shall not exceed one-third of the target grant date value of the PSUs granted in 2019, and (iii) any such award will provide (A) that such award will vest on January 1, 2021 subject to the recipient’s continued employment through such date and (B) for double trigger vesting upon a termination of employment by the Company without cause or by the recipient for good reason (as defined in the Merger Agreement and summarized below) prior to the vesting date. Parent and the Company have also agreed to cooperate in good faith to develop a new long-term incentive program to be adopted by the Company beginning in 2020, that may, with the consent of each recipient, supersede and replace these restricted cash awards.

For purposes of the restricted cash awards granted in lieu of the annual PSU grants for 2020, “good reason” has the meaning set forth in any individual employment or other agreement with the Company, provided that if any such agreement does not define “good reason” or any similar term, “good reason” means, in summary: (i) a 10% reduction in the employee’s total target compensation (i.e., base salary and target bonus) or (ii) the relocation of the employee’s principal location of employment to a location outside a 20 mile radius from its current location.

In addition, the Company has reserved the right to make all applicable determinations in the ordinary course of business consistent with past practice with respect to the payment of annual bonuses in respect of 2019. Specifically, the Company may pay out the cash portion of the annual bonuses in respect of 2019 to bonus-eligible employees (including the Company’s executive officers) in the ordinary course of business consistent with past practice (but in any event prior to the effective time); provided that the equity-based portion of the annual bonuses that would normally be paid in the form of a time-based equity award to such bonus-eligible employees (including the Company’s executive officers) must be paid in the form of a restricted cash award that will vest and be paid no earlier than 18 months following the grant date and will be subject to

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the same double-trigger termination protections applicable to the annual time-based equity awards granted by the Company in the ordinary course of business consistent with past practice. The actual time-based vesting schedule of such restricted cash awards will be determined by the Company following reasonable consultation with Parent at the time of grant.

As of the date of this proxy statement, the Compensation Committee of the Board of Directors has not yet determined the total value of the restricted cash awards that may be granted to the Company’s executive officers in 2020. However, the following table includes an estimate of the restricted cash awards that may be granted to the Company’s executive officers in the first quarter of 2020, subject to approval by the Compensation Committee of the Board of Directors.

Name	Restricted Cash Awards In Lieu of PSUs ($)(1)		Restricted Cash Awards In Lieu of Restricted Share Awards ($)(2)		Total Value Restricted Cash Awards ($)
Michael J. Inglese	$	825,000	$	675,000	$	1,500,000
Aaron A. Dahlke	$	200,000	$	200,000	$	400,000
Christopher L. Beers	$	333,333	$	250,000	$	583,333
Roy Chandran	$	200,000	$	200,000	$	400,000
Other Executive Officers as a Group	$	449,333	$	337,000	$	786,333

(1) Reflects an estimate of the restricted cash awards that may be granted in lieu of the 2020 PSUs, assuming an award amount equal to one-third of the target grant date value of the 2019 PSUs granted to each of the Company’s executive officers.

(2) Reflects an estimate of the restricted cash awards that may be granted in lieu of the 2020 restricted share awards, assuming the achievement of target level performance for the annual bonuses in respect to 2019.

Employment Agreements with Executive Officers

The Company, through its subsidiary Aircastle Advisor LLC, has entered into employment agreements with each of the Company’s executive officers other than Mr. Connelly. The merger will constitute a “change in control” for purposes of the employment agreements. Under the employment agreements:

• if the employment of such executive officer is terminated by the Company without cause or by the executive officer with “good reason” (as defined in the employment agreements and summarized below) in each case within 120 days prior to or within two years following a “change in control” (as defined in the employment agreement and which includes this transaction), and if he signs a general release of claims and complies with the covenants described below, then he will be entitled to: (i) an amount equal to two times the sum of the base salary and target annual cash bonus for the year of termination, payable in a lump sum; (ii) a pro-rata target annual cash bonus for the year of termination, payable in a lump sum; and (iii) reimbursement of Consolidated Omnibus Budget Reconciliation Act (“COBRA”) premiums for up to twelve months;

• if any amounts to be paid to such executive officer would constitute “parachute payments” subject to the excise tax imposed under Section 4999 of the Internal Revenue Code, the amount will be reduced to the extent necessary to avoid the excise tax, but only if such reduction results in a higher after-tax payment to him; and

• each executive officer covenants not to compete with the Company for six months following termination of his employment for any reason, not to solicit the employees of the Company and not to solicit the clients or customers of the Company for competing business, in each case, for a period of twelve months following termination.

For purposes of the employment agreements, “good reason” means, in summary: (i) the failure by the Company to pay any portion of the executive officer’s base compensation within ten days of the date such compensation is due, (ii) the relocation of the executive officer’s principal location of employment to a location outside a twenty mile radius from Stamford, Connecticut, (iii) any material diminution of the executive officer’s duties, responsibilities or authorities under the employment agreement, (iv) any breach by the Company of any of its material obligations to the executive officer or (v) any failure of the Company to obtain the assumption in writing of its obligations under the employment agreement by any successor to the Company’s business.

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Each of the employment agreements were amended effective as of December 19, 2019 to provide that any grants of restricted cash awards in lieu of the annual PSU grants for 2020 and the equity-based portion of the annual bonuses in respect of 2019, as described in greater detail above in “—Grants of Restricted Cash Awards in 2020” beginning on page 45, will not constitute a good reason event for purposes of the employment agreements or for any other purpose. In addition, the employment agreement amendments provided for the accelerated vesting and payment in 2019 of certain equity awards and incentive compensation payments, subject to specified repayment provisions in the event of certain terminations of employment, as described in greater detail below in “—280G Mitigation Actions” beginning on page 49.

Change in Control Letter with Mr. Connelly

The Company, through its subsidiary Aircastle Advisor LLC, has entered into a change in control letter agreement with Mr. Connelly. The merger will constitute a “change in control” for purposes of the change in control letter agreement. The letter agreement with Mr. Connelly provides as follows:

• if Mr. Connelly’s employment is terminated without cause or with “good reason” (as defined in the change in control letter and summarized below) in each case within 120 days prior to or within one year following a “change in control” (as defined in the change in control letter agreement and which includes this transaction), and if he signs a general release of claims and complies with the covenants described below, then he will be entitled to: (i) an amount equal to the sum of his base salary and target annual cash bonus for the year of termination, payable in a lump sum; (ii) a pro-rata annual bonus for the year of termination based on actual performance for such year; and (iii) reimbursement of COBRA premiums for up to twelve months;

• if any amounts to be paid to Mr. Connelly would not be deductible by the Company due to Section 280G of the Internal Revenue Code, the amounts will be reduced to the extent necessary to make such payments deductible; and

• Mr. Connelly covenants not to compete with the Company and not to solicit the clients or customers of the Company for competing business, in each case, for six months following termination of his employment for any reason and will not solicit the employees of the Company for a period of twelve months following termination.

For purposes of the change in control letter agreement, “good reason” means, in summary: (i) the failure by the Company to pay any material portion of Mr. Connelly’s base salary within ten days of the date such base salary is due, (ii) the relocation of Mr. Connelly’s principal location of employment to a location outside a twenty mile radius from Stamford, Connecticut, (iii) any material diminution of Mr. Connelly’s duties, responsibilities or authorities or (iv) any breach by the Company of any of its material obligations to Mr. Connelly.

The table below sets forth the amounts that would be payable to each of the Company’s executive officers pursuant to the individual agreements with each executive officer described above assuming that the consummation of the merger occurred on January 6, 2020, the last practicable date prior to the date of this proxy statement, and the employment of each of the Company’s executive officers was terminated by the Company without cause or the executive officer for good reason, in each case immediately following the effective time of the merger.

Name	Cash Severance ($)(1)		Pro-Rata Cash Bonus ($)(2)		COBRA Premiums ($)(3)		Total Severance Payments and Benefits ($)
Michael J. Inglese	$	2,700,000	$	11,096	$	56,972	$	2,768,068
Aaron A. Dahlke	$	1,600,000	$	6,575	$	56,972	$	1,663,547
Christopher L. Beers	$	2,000,000	$	8,219	$	56,972	$	2,065,191
Roy Chandran	$	1,600,000	$	6,575	$	56,972	$	1,663,547
Other Executive Officers as a Group	$	3,689,500	$	15,682	$	170,916	$	3,876,098

(1) Reflects (i) for Messrs. Inglese, Dahlke, Beers, Chandran, Schreiner and Winter, an amount equal to two times the sum of the base salary and target annual cash bonus for the year of termination, payable in a lump sum and (ii) for Mr. Connelly, an amount equal to the sum of his base salary and target annual cash bonus for the year of termination, payable in a lump sum.

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(2) Reflects a pro-rata target annual cash bonus for the year of termination, payable in a lump sum.

(3) Reflects the value of reimbursement of COBRA premiums for up to twelve months.

Employee Retention Program

In connection with entering into the Merger Agreement, the Company has reserved the right to establish a cash-based retention program not to exceed $15 million in the aggregate in order to promote employee retention and to incentivize efforts to consummate the merger. The participants receiving individual retention or incentive awards pursuant to the retention program (which may include the Company’s executive officers) and the size of each individual retention or incentive award will be determined by the Company following reasonable consultation with Parent. The retention program may provide for the payment of individual retention or incentive awards to employees no earlier than the effective time and no later than 12 months following the effective time, subject to the participant’s continued employment through the applicable payment date, provided that the retention program may provide for accelerated payment upon a termination of employment by the Company without cause of by the employee for “good reason” (as defined in the Merger Agreement and summarized below) prior to the applicable payment date. Any retention or incentive awards paid pursuant to the retention program will be separate from, and in addition to, any severance payments and benefits due to the recipient under any individual employment agreement or change in control letter with the Company or any Company-sponsored severance plan, and such severance payments and benefits will not reduce the $15 million pool available for awards under the retention program.

For purposes of the employee retention program, “good reason” has the meaning set forth in any individual employment or other agreement with the Company, provided that if any such agreement does not define “good reason” or any similar term, “good reason” means, in summary: (i) a 10% reduction in the employee’s total target compensation (i.e., base salary and target bonus) or (ii) the relocation of the employee’s principal location of employment to a location outside a twenty (20) mile radius from its current location.

The Company has determined that no retention or incentive awards will be awarded to the Company’s executive officers under the employee retention program.

Pro-Rated Annual Bonus Payments

The Company has the reserved the right to pay, immediately prior to the effective time, a pro-rated annual bonus under its annual bonus plans in respect of the year in which the effective time occurs, which will be based on the greater of target and actual performance through the effective time and will be payable solely in the form of cash.

The table below sets forth the amount of the pro-rated annual bonus that would be payable to each of the Company’s executive officers assuming that the consummation of the merger occurred on January 6, 2020, the last practicable date prior to the date of this proxy statement, but only to the extent such payment would not be duplicative of any pro-rata annual bonus payable for the year of termination based on actual performance for such year that would be paid upon a qualifying termination pursuant to the executive officer’s employment agreement or change in control letter agreement, as applicable.

Name	Pro-Rated Annual Bonus Pursuant to the Merger Agreement ($)(1)
Michael J. Inglese	$	22,192
Aaron A. Dahlke	$	9,863
Christopher L. Beers	$	12,329
Roy Chandran	$	9,863
Other Executive Officers as a Group	$	21,205

(1) Reflects a pro-rated annual bonus (both the cash portion and the equity-based portion) for the year in which the closing occurs based on the greater of target and actual performance through the effective time (shown based on target performance for purposes of this table).

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280G Mitigation Actions

In connection with the merger, the Company reserved the right to take certain actions, following reasonable consultation with Parent, to reduce the amount of any potential “parachute payments” subject to the excise tax imposed under Section 4999 of the Internal Revenue Code (including amounts payable to the Company’s executive officers), including (i) accelerating the vesting and payment of certain equity and restricted cash awards and the payment of certain incentive compensation payments into 2019, (ii) obtaining third party valuations of restrictive covenant provisions and (iii) entering into or amending existing employment or other agreements to provide for an aggregate amount of tax gross-up payments that do not exceed $5 million in the aggregate, provided that all other reasonable tax-planning actions described above must be taken first to reduce the amount of the applicable excise taxes before any tax gross-up payment may be provided.

Effective as of December 24, 2019, the Company accelerated the vesting and payment of certain PSUs and the vesting of certain restricted share awards held by the Company’s executive officers in the amounts set forth in the table below, provided that, as set forth in the employment agreement amendments, if the executive officer is terminated for cause or resigns without “good reason” (as defined in the executive officer’s employment agreement and summarized above) prior to the earlier of the consummation of the merger or the termination of the Merger Agreement, the executive officer must repay to the Company the gross amount of the accelerated awards. In addition, if the Merger Agreement terminates and thereafter the executive officer is terminated for cause or resigns without good reason prior to the scheduled vesting date of such accelerated awards, the executive officer must repay to the Company the net amount of the accelerated awards that would not otherwise have vested in the ordinary course as of the executive officer’s termination date. Finally, if the Merger Agreement terminates and the Compensation Committee of the Board of Directors determines following the completion of the original performance period that the number of accelerated PSUs exceed the number of such awards that would otherwise have vested in the ordinary course based on actual performance through the last day of the applicable performance period, then the executive officer must repay the net amount of such excess over the number of awards that would have vested in the ordinary course based on actual performance at the end of the applicable performance period. Effective as of December 24, 2019, the Company also accelerated the payment of the 2019 target annual cash bonuses payable to the Company’s executive officers in the amounts set forth in the table below.

Name	Aggregate Number of Unvested Equity Awards Accelerated (#)(1)		Aggregate Value of Unvested Equity Awards Accelerated ($)		Accelerated 2019 Target Annual Cash Bonuses ($)(2)
Michael J. Inglese		564,592	$	18,055,652	$	675,000
Aaron A. Dahlke		127,926	$	4,091,073	$	400,000
Christopher L. Beers		189,959	$	6,074,889	$	500,000
Roy Chandran		101,167	$	3,235,321	$	400,000
Other Executive Officers as a Group		39,498	$	1,263,146	$	785,000

(1) With respect to the 2017 PSUs, which were accelerated and paid based on estimated performance as of the payment date, any difference between the amounts accelerated and paid in 2019 and the amounts earned based on actual performance for the applicable performance period will be trued-up and paid to the executive officer (or repaid by the executive officer, if applicable) on the normal payment date for such PSUs in 2020.

(2) With respect to the 2019 annual cash bonuses, which were accelerated and paid based on the target level of performance, any difference between the amounts accelerated and paid in 2019 and the amounts earned based on actual performance for 2019 will be trued-up and paid to the executive officer (or repaid by the executive officer, if applicable) on the normal payment date for annual cash bonuses in 2020.

Except as described above, the Company has determined that no other actions will be taken and no other amounts (including any tax-gross up payments) will be paid to the Company’s executive officers in connection with the excise tax imposed under Section 4999 of the Internal Revenue Code on any affected individuals.

Benefits Continuation Pursuant to the Merger Agreement

For the one-year period beginning at the effective time of the merger, Parent has agreed to provide each employee of the Company or any subsidiary of the Company who remains employed following the effective time (including each of the Company’s executive officers who remains employed following the effective time) with (i) a base salary or hourly wage rate that is at least equal to the base salary or hourly wage rate provided to such

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employee immediately prior to the effective time; (ii) short- and long-term incentive compensation opportunities that are no less favorable in the aggregate than the short- and long-term incentive compensation opportunities in effect for such employee immediately prior to the effective time; (iii) employee benefits that are no less favorable in the aggregate than the employee benefits provided to such employee immediately prior to the effective time; and (iv) severance benefits that are no less favorable than the severance benefits to which such employee would have been entitled with respect to such termination under the severance policies, practices and guidelines of the Company or, if greater, the severance benefits provided to similarly situated employees of Parent.

Agreements with Parent

Prior to or following the closing, certain executive officers of the Company may discuss or enter into agreements with Parent or any of its affiliates regarding employment with, or the right to purchase or participate in the equity of, Parent or one or more of its affiliates. As of the date of this proxy statement, no new employment or compensation arrangements between such persons and Parent or the surviving corporation for post-closing periods have been discussed, negotiated or established.

Indemnification and Insurance

Pursuant to the terms of the Merger Agreement, following the effective time of the merger, the Company’s current and former directors and officers will be entitled to certain ongoing rights of indemnification and to coverage under directors’ and officers’ liability insurance policies. For a description of such ongoing indemnification and insurance obligations, refer to the section entitled “The Merger Agreement—Other Covenants and Agreements—Directors’ and Officers’ Indemnification” beginning on page 75.

Merger Related Compensation

This section sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for each named executive officer of the Company that is based on or otherwise relates to the merger. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules, and in this section we use such term to describe the merger related compensation payable to the Company’s named executive officers. The “golden parachute” compensation payable to these individuals is subject to a non-binding advisory vote of the Company’s shareholders.

The following table sets forth the amount of payments and benefits that each named executive officer would receive in connection with the merger. For purposes of quantifying these potential payments and benefits for the table below, the following assumptions were used:

• the consummation of the merger occurred on January 6, 2020;

• the employment of each named executive officer was terminated by the Company without cause or the named executive officer for good reason, in each case immediately following the effective time of the merger; and

• the value of a share of the Company’s common stock of $32, which is equal to the Merger Consideration.

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Golden Parachute Compensation

Name	Cash ($)(1)		Equity ($)(2)		Perquisites/ Benefits ($)(3)		Total ($)
Michael J. Inglese	$	2,722,192	$	25,032,640	$	56,972	$	27,811,804
Aaron A. Dahlke	$	1,609,863	$	5,760,992	$	56,972	$	7,427,827
Michael L. Kriedberg(4)		—		—		—		—
Christopher L. Beers	$	2,012,329	$	10,071,040	$	56,972	$	12,140,341
Roy Chandran	$	1,609,863	$	5,617,088	$	56,972	$	7,283,923

(1) Amounts reported represent (i) the value of two times the sum of the named executive officer’s base salary and target annual cash bonus for the year of termination and (ii) the value of a pro-rated annual bonus (both the cash portion and the equity-based portion) payable based on the greater of target and actual performance through the effective time (shown based on target performance for purposes of this table) provided in accordance with the terms of the Merger Agreement (but not, to avoid the duplication of benefits, the pro-rata target annual cash bonus for the year of termination provided pursuant to the employment agreements). Set forth below are the values of the cash payments that the Company’s named executive officers are expected to receive in connection with the merger:

Name	Cash Severance ($)		Pro-Rated Annual Bonus Pursuant to the Merger Agreement ($)		Total ($)
Michael J. Inglese	$	2,700,000	$	22,192	$	2,722,192
Aaron A. Dahlke	$	1,600,000	$	9,863	$	1,609,863
Michael L. Kriedberg		—		—		—
Christopher L. Beers	$	2,000,000	$