exv10w19



 






Exhibit 10.19



On July 6, 2005, Wright Express Corporation (the “Company”) purchased put option contracts and
sold call option contracts, designed to be a costless collar, on the price of gasoline and diesel
fuel with J. Aron & Company (collectively, the “Contracts”). The Contracts have an aggregate
notional amount of approximately 24 million gallons of gasoline and diesel fuel and will expire on
a monthly basis during the first three quarters of 2007. The settlement of the Contracts is based
upon the U.S. Department of Energy’s weekly retail on-highway national US average diesel price and
the New York Mercantile Exchange nearby unleaded gasoline contracts for the month. The Contracts
lock in a weighted average floor price of approximately $2.29 per gallon and a weighted average
ceiling price of approximately $2.36 per gallon.



Following is the form of confirmation evidencing the purchase and sale by the Company of put and
call option contracts from and to J. Aron & Company, respectively, on the price of diesel fuel. The form of confirmation for the gasoline collar is filed as Exhibit 10.18 to this Form
10-Q.




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	To: WRIGHT EXPRESS CORPORATION
	Attention:                     
	 	 
	Broker: SALES DEPARTMENT
	Attention:                     
	 	 
	From: J. Aron & Company
	We are pleased to confirm the following Transaction with you.
	Contract Reference Number:

	 	                    
	Trade Date:

	 	                    
	Option Style:

	 	Asian
	 
	 	 
	Settlement:

	 	Cash Settled in USD
	 
	 	 
	Exercise:

	 	Automatic
	 
	 	 
	Effective Date:

	 	                    
	Termination Date:

	 	                    
	Determination Period(s):

	 	___Monthly Period(s) commencing with the Effective
	 

	 	Date and ending on the Termination Date
	 
	 	 
	Expiration Date(s):

	 	As displayed below.
	 
	 	 
	Payment Date(s):

	 	5 New York Business Day(s) after each Determination
	 

	 	Period via wire transfer of Federal Funds
	 
	 	 
	PART A:
	 	 
	 
	 	 
	Option Buyer:

	 	WRIGHT EXPRESS CORPORATION
	Option Seller:

	 	J. Aron & Company
	Commodity:

	 	DIESEL
	Premium:

	 	USD 0.00 per U.S. Gallon
	Total Quantity:

	 	                     U.S. Gallon(s)






	 	 	 	 	 	 	 	 	 	 	 
	Pricing Start	 	Pricing	 	Quantity	 	Strike	 	Expiration	 	Option Type
	Date	 	End Date	 	(U.S.Gallon(s))	 	 	 	Date	 	 
	 
	 	 	 	 	 	 	 	 	 	 





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	Floating Price:

	 	For each Determination Period, the
average of the E.I.A. Weekly Retail
On-Highway National U.S. Average
Diesel Price as reported by the
Department of Energy located at the
URL specified below or
at any successor URL.

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_on_

highway_diesel_prices/current/html/diesel.html
	 
	 	 
	 

	 	The data on the website is published
weekly and is updated every Monday
(or next business day) by the close
of business for the previous week.
	 
	 	 
	Payment Calculation (Put):
	 	 
	If for a Determination Period the Floating Price exceeds the Strike Price, the
Seller shall pay the Buyer an amount equal to the product of:
	I) The difference between the Floating Price and the Strike Price,
	and
	 	 
	II) The Quantity for a Determination Period.
	 
	 	 
	If the Strike Price is equal to or less than the Floating Price, no payment
shall be made.
	 
	 	 
	PART B:
	 	 
	 
	 	 
	Option Buyer:

	 	J. Aron & Company
	Option Seller:

	 	WRIGHT EXPRESS CORPORATION
	Commodity:

	 	DIESEL
	Premium:

	 	USD 0.00 per U.S. Gallon
	Total Quantity:

	 	                     U.S. Gallon(s)






	 	 	 	 	 	 	 	 	 	 	 
	Pricing Date	 	Pricing End	 	Quantity	 	Strike	 	Expiration	 	Option Type
	 	 	Date	 	(U.S.Gallon(s))	 	 	 	Date	 	 
	 
	 	 	 	 	 	 	 	 	 	 





      



      



	 	 	 
	Floating Price:

	 	For each Determination Period, the
average of the E.I.A. Weekly Retail
On-Highway National U.S. Average
Diesel Price as reported by the
Department of Energy located at the
URL specified below or at any






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	 	successor URL.
	 
	 	 
	 

	 	http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_

on_highway_diesel_prices/current/html/diesel.html
	 
	 	 
	 

	 	The data on the website is published
weekly and is updated every Monday (or
next business day) by the close of
business for the previous week.





If for a Determination Period the Floating Price exceeds the Strike Price, the
Seller shall pay the Buyer an amount equal to the product of:



I) The difference between the Floating Price and the Strike Price,



and



II) The Quantity for a Determination Period.



If the Floating Price is equal to or less than the Strike Price, no payment
shall be made.



Additional Provisions:

The Transaction terms will incorporate the 2000 Supplement to the 1993 ISDA
Commodity Derivatives Definitions and will specify the following as Market
Disruption Events: (i) Material Change in Formula, (ii) Material Change in
Content and (iii) Tax Disruption. Upon any of the foregoing Market Disruption
Events, the following Disruption Fallbacks will apply: (i) Negotiated Fallback
and (ii) Calculation Agent Determination.



Credit:

If, as of any business day, J. Aron & Company’s net mark-to-market position
with respect to this Transaction and any other Transactions entered into with
Counterparty, as determined by J. Aron & Company in a commercially reasonable
manner (such amount being referred to as J. Aron & Company’s “Net Exposure”)
exceeds USD                      (the excess of J. Aron & Company’s Net Exposure over
USD                      being referred to hereinafter as the “Excess Amount”), then
Counterparty shall provide Margin (defined below) to J. Aron & Company in an
amount equal to or greater than the Excess Amount. If, as of any business day,
the amount of Margin the held by J. Aron & Company is less than the Excess
Amount, Counterparty shall provide J. Aron & Company with Margin in an amount
that, when added to the Margin then held by J. Aron & Company, is equal to or
exceeds the Excess Amount. If, as of any business day, the aggregate amount of
Margin held by J. Aron & Company exceeds the Excess Amount by an amount equal
to or greater than USD0, J. Aron & Company shall, at the request of
Counterparty, return Margin to Counterparty in an amount such that, after
giving effect to any such return J. Aron & Company holds Margin in an amount at
least equal to the Excess Amount, provided that if such Net Exposure is less
than USD                     , J. Aron & Company shall return all Margin then held to
Counterparty should Counterparty request such return. Margin shall be provided
or returned by the close of business on the day of the receiving party’s
request if such request is made by 12:00 noon New York time on a New York
business day; otherwise Margin shall be provided or returned on the next


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New York business day. All deposits of Margin shall be rounded up to the nearest
integral multiple of USD500,000.00 and all returns of Margin shall be rounded
down to the nearest integral multiple of USD500,000.00. Margin shall mean (i)
cash, (ii) a Letter of Credit from a bank acceptable to J. Aron & Company and
in a form acceptable to J. Aron & Company.



Margin shall include any payments or other distributions received with respect
to the form of collateral deposited. For purposes of determining the amount of
Margin being held at any time, the amount of non-cash Margin shall equal its
then current fair market value as determined by J. Aron & Company in a
commercially reasonable manner; provided, however, that the value of a Letter
of Credit for the purpose of this Margin provision shall be equal to its face
value at the time of valuation unless it expires within twenty (20) days of the
day of valuation, in which case, if the expiration date is not on or later than
twelve (12) business days following the last payment date of any outstanding
Transaction, its value shall be zero (for purposes of this Margin provision)
and J. Aron & Company shall be entitled to draw down the Letter of Credit up to
its full face amount unless adequate substitute Margin has previously been
provided.



Counterparty hereby grants to J. Aron & Company a first priority security
interest in any and all Margin held by J. Aron & Company from time to time. J.
Aron & Company shall have the free and unrestricted right to use and dispose of
any and all Margin provided to it hereunder and may apply Margin on deposit
with it to satisfy the obligations of Counterparty as part of a liquidation
hereunder or otherwise. Calculation Agent: J. Aron & Company



Fallback Pricing:

If a reference price or a floating price is not published or otherwise
available as specified herein, or is published in error, the Calculation Agent
shall determine each relevant rate and amount (or method for determining the
same), and the day as of which a rate is determined or an amount calculated in
good faith and in a commercially reasonable manner.



Non-Performance:

In the event either party (the ''non-performing party’’) shall (i) default in
the payment or performance of any obligations to the other party under this
transaction or any other transaction between the parties, (ii) file a petition
or otherwise commence or authorize the commencement of a proceeding under any
bankruptcy or similar law for the protection of creditors or have any such
petition filed or proceeding commenced against it or its assets, (iii)
otherwise become bankrupt or insolvent, however evidenced, or (iv) be unable to
pay its debts as they fall due, : provided, however, that in the case of an
event described in clauses ii, iii and iv above, all transactions then
outstanding between the parties shall be automatically liquidated and
terminated if the relevant proceeding, bankruptcy or insolvency giving rise to
the event is governed by a system of law which does not contain express
provisions enabling close-out in the manner described below to take place after
the occurrence of the relevant event in the absence of automatic liquidation. A
settlement amount (as defined below) shall be calculated in a commercially
reasonable manner for each such liquidated and terminated transaction and be
payable by one party to the other. Settlement amount shall mean, with respect
to a transaction and the performing party, the losses and costs (or gain)
expressed in u.s. dollars, which such party incurs as a result of


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the liquidation, including losses and costs (or gains) based upon the then current
replacement value of such transaction together with, at the performing party’s
election but without duplication or limitation, all losses and costs which such
party incurs as a result of maintaining, terminating, obtaining or
re-establishing any hedge or related trading positions. The settlement amount
shall be due to or from the performing party as appropriate. The performing
party shall determine the settlement amount of each transaction as of the date
on which such termination occurs by reference to such futures, forward, swap
and options markets as it shall select in its reasonable judgment. In
calculating a settlement amount, the performing party shall discount to present
value (in any commercially reasonable manner based on London interbank rates
for the applicable period and currency) any amount which would be due at a
later date and shall add interest (at a rate determined in the same manner) to
any amount due prior to the date of the calculation.



The performing party shall set off (i) all such settlement amounts that are due
to the nonperforming party, plus any performance security (including margin)
then held by the performing party, plus any or all other amounts due to the
non-performing party hereunder, against (ii) all such settlement amounts that
are due to the performing party, plus any performance security (including
margin) then held by the non-performing party, plus any or all other amounts
due to the performing party hereunder, so that all such amounts shall be netted
to a single liquidated amount payable by one party to the other. The party with
the payment obligation shall pay such amount to the other party within one
business day of the liquidation.



The performing party’s rights under this section shall be in addition to, and
not in limitation or exclusion of, any other rights which the performing party
may have (whether by agreement, operation of law or otherwise). The
non-performing party shall indemnify and hold the performing party harmless
from all costs and expenses, including reasonable attorney fees, incurred in
the exercise of any remedies hereunder.



If a default occurs, the performing party may, without limitation on its rights
under this section, set off amounts which the non- performing party owes to it
against any amounts which it owes to the non-performing party (whether
hereunder, under a transaction or otherwise and whether or not then due).



Payment Netting:

If the premium and/or payment dates for this and any other swap or option
(each, a “Transaction”) entered into between the parties shall fall on the same
day and in the same currency, payments shall be made on a net basis so that the
party obligated to pay the larger aggregate amount shall pay the other party an
amount equal to the excess of the larger aggregate amount over the smaller
aggregate amount.



Law and Jurisdiction:

This transaction shall be governed by and construed in accordance with the laws
of the state of New York, without reference to conflicts of laws rules. The
parties hereby submit to the exclusive jurisdiction of the state and federal
courts located in New York City without recourse to arbitration.




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ISDA Master Agreement:

Upon execution of an ISDA Master Agreement, this confirmation shall constitute
a supplement to, form a part of and be subject to the ISDA Master Agreement,
this confirmation together with any other confirmations entered into by the
parties and together with the ISDA Master Agreement, if and when executed,
shall constitute a single agreement between the parties.



The definitions and provisions contained in the 2000 ISDA Definitions and the
1993 ISDA Commodity Derivatives Definitions (as supplemented by the 2000
Supplement) collectively (the “Definitions”), each as published by the
International Swaps and Derivatives Association, Inc. (“ISDA”), are
incorporated into this Confirmation. In the event of any inconsistency between
the Definitions and this Confirmation, this Confirmation will prevail. In the
event of any inconsistency between the 2000 ISDA Definitions and the 1993 ISDA
Commodity Derivatives Definitions (as supplemented by the 2000 Supplement), the
1993 ISDA Commodity Derivative Definitions (as supplemented by the 2000
Supplement) will prevail.



For the
sake of good order, please note that the terms of this transaction
shall be agreed solely between the parties and that any brokers
confirmation telex referencing the details of this transaction is for
informational purposes only.

Please confirm that the foregoing correctly sets forth the terms of
our agreement with respect to this transaction (Contract Reference
Number:          )
by signing this confirmation in the space provided below and
immediately returning a copy of the executed confirmation via
facsimile to the attention of Commodity Operations at:

New York: 1-212-493-9846 (J. Aron & Company)

London: 44-207-774-2135 (Goldman Sachs International)

Singapore: 65-6889-3515 (J. Aron & Company (Singapore) Pte.)

Regards,

J. Aron & Company

Signed on behalf of J. Aron & Company

By: /s/ Kathy Benini

Kathy Benini

Vice President

J. Aron & Company




Signed on behalf of WRIGHT EXPRESS CORPORATION

By: /s/ Greg Strzegowski

Name: Greg Strzegowski

Title: VP and Controller



 





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