Shareholders’ Equity and Share Based Payment

In January 2006, the board of directors (the “Board”) and shareholders managed by affiliates of Fortress Investment Group LLC (the "Fortress Shareholders") adopted the Aircastle Investment Limited 2005 Equity and Incentive Plan, and the Board and the Fortress Shareholders approved an amendment to and restatement thereof on July 20, 2006 (as so amended and restated, the “2005 Plan”).

On March 14, 2014 (the “effective date”), the Board of Directors adopted the Aircastle Limited 2014 Omnibus Incentive Plan (the “2014 Plan”). The “2014 Plan” was approved by shareholders at the Company’s 2014 Annual General Meeting of Shareholders on May 22, 2014. The 2014 Plan replaced the 2005 Plan.

The purposes of the 2014 Plan are to provide an additional incentive to selected officers, employees, non-employee directors, independent contractors, and consultants of the Company or its affiliates whose contributions are essential to the growth and success of the business of the Company and its affiliates, to strengthen the commitment of such persons to the Company and its affiliates, motivate such persons to faithfully and diligently perform their responsibilities and attract and retain competent and dedicated persons whose efforts will result in the long-term growth and profitability of the Company and its affiliates. To accomplish such purposes, the 2014 Plan provides that the Company may grant options, share appreciation rights, restricted shares, restricted share units, share bonuses, other share-based awards, cash awards or any combination of the foregoing. The 2014 Plan provides that grantees of restricted common shares will have all of the rights of shareholders, including the right to receive dividends, other than the right to sell, transfer, assign or otherwise dispose of the shares until the lapse of the restricted period. Generally, the restricted common shares vest over three or five year periods based on continued service and are being expensed on a straight line basis over the requisite service period of the awards. The terms of the grants provide for accelerated vesting under certain circumstances, including termination without cause following a change of control.

The maximum number of Common Shares reserved for issuance under the 2014 Plan is 2,500,000 Common Shares, which includes 713,540 Common Shares remaining under the 2005 Plan which became available for reuse following the adoption of the 2014 Plan. Awards outstanding under the 2005 Plan in the amount of 572,977 will continue to vest subject to the terms and conditions of the 2005 Plan and the applicable awards agreements which are included in the below table.

A summary of the fair value of non-vested shares for the years ended December 31, 2012, 2013 and 2014 is as follows:



Non vested Shares	Shares (in 000’s)		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2012	942.8		$	10.44
Granted	241.0		13.26
Canceled	(110.8	)	10.56
Vested	(511.8	)	10.28
Non-vested at December 31, 2012	561.2		12.21
Granted	457.5		13.98
Canceled	(1.5	)	13.11
Vested	(322.5	)	11.96
Non-vested at December 31, 2013	694.7		13.49
Granted	341.1		18.80
Canceled	(69.1	)	15.89
Vested	(345.4	)	13.47
Non-vested at December 31, 2014	621.3		$	16.15

The fair value of the restricted common shares granted in 2012, 2013 and 2014 were determined based upon the market price of the shares at the grant date.

The total unrecognized compensation cost, adjusted for estimated forfeitures, related to all non-vested shares as of December 31, 2014, in the amount of $6,035, is expected to be recognized over a weighted average period of 2.53 years.

On October 31, 2014, our Board of Directors authorized the repurchase of $100,000 of the Company's common shares.

On February 18, 2015, the Company, Marubeni and a subsidiary of Marubeni entered into an amendment and restatement of the Shareholder Agreement, which (1) modified the terms of the Shareholder Agreement to immediately permit acquisitions by Marubeni and its affiliates of voting securities of the Company in the secondary market pursuant to a Rule 10b5-1 plan that would result in Marubeni and its affiliates collectively holding more than 21.0% but no more than 27.5% of the voting power of the Company and (2) extended the term of the standstill provision of the Shareholder Agreement by 18 months to January 2025.