Exhibit 10.1


 


AMENDED
AND RESTATED EMPLOYMENT
AGREEMENT


 


THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is dated as of December 1,
2008, by and between Willis Lease
Finance Corporation, a Delaware corporation (“Employer”),
and Charles F. Willis, IV (“Employee”).


 


RECITALS


 


WHEREAS, Employee is the Chairman of the Board,
President and Chief Executive Officer of Employer;


 


WHEREAS, Employee and Employer entered into
an employment agreement dated November 7, 2000 and desire to amend and
restate that agreement; and


 


WHEREAS, Employee acknowledges that he has had an
opportunity to consider this Agreement and consult with independent advisors of
his choosing with regard to the terms of this Agreement, and enters this
Agreement voluntarily and with a full understanding of its terms.


 


AGREEMENT


 


NOW, THEREFORE, in consideration of the foregoing
recitals and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Employer and Employee hereby
agree as follows:


 


1.                                       Employment. Employer hereby employs Employee and Employee hereby accepts
employment, upon the terms and conditions hereinafter set forth, as the
Chairman of the Board, President and Chief Executive Officer of Employer.


 


2.                                       Term.


 


(a)                                  The term of Employee’s employment under this
Agreement shall be for a two (2) year period commencing on or about December 1,
2008 and ending on June 30, 2010(as
may be extended hereunder, the “Employment Term”),
unless otherwise terminated pursuant to the terms hereof. Each full twelve
month period Employee is employed by Employer shall be referred to herein as an
“Employment Year.”


 


(b)                                 After the expiration of the initial
Employment Term, Employee’s employment will automatically renew for a period of
one year, each year, on the same terms and conditions as are set forth herein,
unless either party gives the other written notice of nonrenewal at least one
year prior to the end of the last applicable Employment Year..


 


(c)                                  Upon the occurrence of a Change in Control
this Agreement shall be automatically extended for a two year period commencing
on the date of the Change in Control event and ending  on
the second anniversary of the Change  in Control
event. “Change in Control” means the
occurrence of any of the  following
events; (i) any “person” (as such term is used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other than
Employee or an Affiliate (as defined in Section 13 below) of Employee, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Act), directly or indirectly,
of securities 


 

















 


of Employer representing at
least fifty percent (50%) of the total voting power represented by Employer’s
then outstanding voting securities; or (ii) the stockholders of Employer
approve a merger or consolidation of Employer with any other corporation, other
than a merger or consolidation which would result in the voting securities of
Employer outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty (50%) of the total voting power represented by
the voting securities of Employer or such surviving entity outstanding
immediately after such a merger or consolidation, or the stockholders of
Employer approve a plan of complete liquidation or dissolution of Employer or
an agreement for the sale or disposition by Employer of all or substantially
all of Employer’s assets, provided, however, that if such merger,
consolidation, liquidation, dissolution, sale or disposition does not
subsequently close, a Change in Control shall not be deemed to have occurred.


 


3.                                       Duties.


 


(a)                                  Employee shall exercise day to day
supervision of all of Employer’s activities and shall perform such duties as
are customarily associated with his title, consistent with the Bylaws of
Employer and as required by the Board of Directors (the “Board”). Employee
shall report to the Board.


 


(b)                                 Employee agrees to serve Employer faithfully
and to the best of his ability; to devote his full-time and attention, with
undivided loyalty, to the business and affairs of Employer, except during
reasonable vacation periods and periods of illness and incapacity; and to
perform such other duties as the Board may assign him that are consistent
with his title. Employee shall not
engage in any other business or job activity during the Employment Term without
Employer’s prior written consent. Notwithstanding the foregoing, Employee may
engage in civic and not-for-profit activities so long as such activities do not
materially interfere with Employee’s performance of his duties hereunder.


 


4.                                       Compensation. Employer agrees to provide as compensation
to Employee the following salary, bonus, and benefits in exchange for the
services described in Section 3 of this Agreement:


 


(a)                                  Base Salary. Employer agrees to pay to Employee during the Employment Term a base
salary in the amount of Six-Hundred, Eighty Two Thousand Five Hundred
Dollars ($682,500) per Employment Year, or such other amount as the Board shall
from time to time determine, such salary to be paid in accordance with the usual manner of payment of
executive salaries by Employer. The Board will review Employee’s base salary no
less than once annually, and shall have sole discretion to increase or decrease
(subject to the next sentence hereof) the base salary. Employee’s base salary
may only be decreased in connection with a salary reduction program approved by
the Board which affects all senior executive officers of Employer.


 


(b)                                 Bonus Compensation. In addition to Employee’s base salary,
Employee shall have a target annual bonus opportunity during the
Employer’s 2008 fiscal year and each year thereafter during the Employment Term
equal to 100% of his base salary for that year (the “Annual Bonus”).  The actual amount of Employee’s Annual Bonus
(if any) for each such year, which may be greater or lesser than the target
bonus for such year, shall be determined by the 


 


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Board or the Compensation Committee in its sole
discretion, taking into account the performance of the Company and Employee for
that particular year and applying considerations that are consistent with those
applied for determining annual bonuses for other executive officers of Employer.


 


5.                                       Benefits and Perquisites.


 


(a)                                  Benefits.  Employer shall provide
Employee such employment benefits as are generally available to senior
executive officers of Employer, including without limitation coverage under
medical, dental, vision, long term disability and life insurance plans,
if any.  In addition to the foregoing
description of benefits, Employer will continue to pay 100% of the cost of an
individual medical insurance policy comparable to the policy currently in
effect.  In addition to the long-term
disability policy provided to Company employees, the Employer will also
continue to pay 100% of the cost of Unum Life Insurance Company of America
Disability Income Policy (Policy No. LAR 399188) reflected in Exhibit B
or an individual long-term disability policy comparable to such policy.


 


(b)                                 Vacation and Sick Pay. Employee shall be eligible for vacation and
sick leave in accordance with the policies of Employer in effect from time to
time during the Employment Term. Employee shall be entitled to a period of
annual vacation time equal to four (4) weeks during each Employment Year,
to accrue pro rata during the course of the Employment Year. Subject to
Employer’s vacation accrual policies, all accrued and unused vacation
pay shall be paid to Employee in a lump sum payment on the date of Employee’s
termination of employment with Employer.


 


(c)                                  Perquisites. During the Employment Term, Employer shall also provide the following perquisites to Employee:


 


(i)                                     Use of an Employer provided car comparable to
that presently used by the Employee;


 


(ii)                                  Payment of dues for Employee’s membership in the
following clubs: San Francisco Yacht Club, the Olympic Club, and Villa
Taverna; and


 


(iii)                               Financial, tax, and estate planning
services with a value of a maximum of $30,000 per year.


 


(iv)                              Reimbursement of reasonable expenses incurred
in performing his duties under this Agreement (including, but not limited to,
expenses for entertainment, long-distance
telephone calls, lodging, meals and travel including first class air fare.)


 


(d)                                 Retirement. Upon Retirement (as defined below), Employee shall have the
right to purchase the Employer provided car referred to in Section 5(c)(i) above
at net book value or, if such car is leased, to assume the lease with the
consent of the Lessor. In addition, upon Retirement, the Employer will continue
to (1) pay the club dues listed in Section 5(c)(ii) above, (2) provide
the financial, tax and estate planning services listed in Section 5(c)(iii) above
payable against appropriate evidence of payment by Employee, and (3) provide
coverage under medical, long-term disability and life insurance plans described
in Section 5(a) above (or, to the extent 


 


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Employer is unable to maintain such coverage under one
or more such plans, reimburse Employee’s out-of-pocket costs in obtaining
similar coverage within 30 days after Employee furnishes invoices or other documentation
reasonably requested by Employer to substantiate such expenses were incurred,
but no reimbursements shall be made later than the end of the calendar year
such expenses were incurred by Employee) in each case for a period of one year
after the date of Employee’s Retirement. 
For purposes of this Agreement, “Retirement” means Employee’s voluntary
termination on a date after which Employee has reached the age of 55 and has
provided Employer with at least 10 years of service.


 


6.                                       Stock Options and Restricted Stock.


 


(a)                                  Employee shall be eligible for awards under
Employer’s 2007 Incentive Stock Plan (the “Plan”) on the same terms as are
generally available to senior executive officers of Employer and on terms which
are in accordance with comparative market practices. The parties agree that any
grant of stock options or restricted stock under the Plan or any similar plan is subject to the discretion of the
Board (or the Compensation Committee) based upon the duties of Employee’s
position, the extent to which Employee’s individual performance objectives and
Employer’s profitability objectives and other financial and non-financial
objectives were achieved during the applicable period and comparative market
practices.


 


(b)                                 All future stock options or restricted
stock granted to Employee shall immediately vest and become exercisable, if
applicable, in the event of a Change in
Control.


 


7.                                       Registration
Rights. With respect to any and all shares of common stock of the Employer
currently beneficially owned or hereafter acquired by the Employee, the
Employer shall grant to the Employee registration rights on the terms described
in Exhibit A.


 


8.                                       Termination/Nonrenewal by Employer. The employment of Employee may be
terminated by Employer or Employer may decide not to renew this Agreement for
any reason or no reason, with or without cause or justification, subject to the
following:


 


(a)                                  Termination for Cause. If Employee’s
employment is terminated by Employer for Cause (as defined below), Employer’s
total liability to Employee or his heirs shall be limited to payment of any due
but unpaid base salary and Annual Bonus and accrued vacation, and Employee
shall not be entitled to any further compensation or benefits provided under
this Agreement, including, without limitation, any severance payments. “Cause”
means (A) the Employee’s conviction of, plea of nolo contendere to, or
written admission of the commission of, a felony or crime involving fraud,
misrepresentation or dishonesty, (B) any act by Employee involving fraud,
misrepresentation, dishonesty or willful misconduct in the performance of his
duties as an employee or officer of the Company or its affiliates; or (C) Employee’s continuing or repeated failure or
refusal to perform his material obligations hereunder causing demonstrably
material harm to the business of Employer, after Employee shall have received
written notice from the Board stating the nature of such failure or refusal
and, if such failure or refusal is curable, then after Employee has been
afforded at least 30 days in which to cure such failure or refusal.


 


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(b)                                 Termination Without Cause. If Employee’s employment is terminated by
Employer without Cause, then in addition to the amounts set forth in Section 8(a) above, Employer shall either provide to
Employee at least 1 year’s notice of such termination or non-renewal, or in the
absence of such notice, subject to Section 10(c) below, provide a
lump-sum payment in an amount equal to one year of Employee’s base salary minus
the number of months notice provided to the Employee. In addition, Employee
will be paid the severance which is described in Section 10 below.


 


9.                                       Termination Nonrenewal by Employee. The employment of Employee may be
terminated by, with or without
cause or justification, subject to the following:


 


(a)                                  Voluntary Resignation. If Employee’s employment terminates by
reason of Employee’s voluntary resignation (and is not a resignation for Good
Reason, Employer’s total liability to Employee shall be limited to payment of
any due but unpaid base salary and Annual Bonus and accrued vacation,
and Employee shall not be entitled to any further compensation or benefits provided under this Agreement,
including, without limitation, any severance payments.


 


(b)                                 Resignation for Good Reason. If Employee’s employment terminates by
reason of Employee’s voluntary resignation for Good Reason, then in
addition to the amounts set forth in Section 8(a) above, subject to
the Employee signing and not revoking the Release, Employee will be paid the
severance which is described in Section 10 below. “Good Reason” means the
occurrence of any one or more of the following events, but only if Employee
notifies the Board or Compensation Committee in writing of the occurrence of
the event alleged to constitute Good Reason no later than 30 days after the
first occurrence of the event; the Company does not cure such event with 30
days after its receipt of Employee’s notice and Executive terminates his
employment no later than 60 days after the expiration of the cure period:  (i) a material reduction in Employees
base salary, other than such reduction that 
is in proportion to any salary reduction program approved by the Board
and that affects all executive officers of Employer, (ii) a material
diminution in  Employee’s positions,
title, duties and status or changing Employee’s reporting obligations so that
he no longer reports to the Board, (ii) requiring Employee to work at a
location more than 50 miles from the Employer’s current company headquarters,
or (iv) any willful and material
breach by Employer of its obligations pursuant under this Agreement.


 


10.                                Severance Payment.


 


(a)                                  Amount. In the event severance is payable hereunder, such severance shall be
in an amount equal to the aggregate of:


 


(i)                                     three times Employee’s base salary at the
time of termination, plus


 


(ii)                                  three times the average of the Annual
Bonuses paid to Employee during the three years prior to the year of
termination;


 


(iii)                               prorated Annual Bonus due for the year of termination, to the extent
the performance goals under the Plan are achieved;


 


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(iv)                              immediate vesting of all outstanding stock options
and/or restricted stock;


 


(v)                                 continued coverage under all benefit plans as
provided on the date hereof (e.g., medical, dental, disability and life insurance)
for a period of three years following the termination date (or, to the
extent Employer is unable to maintain such coverage under one or more such
plans, reimburse Employee’s actual expenses incurred in obtaining comparable
coverage within 30 days after Employee furnishes invoices or other
documentation reasonably requested by Employer to substantiate such expenses
were incurred, but no reimbursements shall be made later than the end of the
calendar year such expenses were incurred by Employee), plus


 


(vi)                              For
a period of three years following Employee’s termination Employer shall pay
Employee’s dues for membership in the clubs listed in Section 5(c)(ii) above;


 


(vii)                         For
a period of three years following Employee’s termination Employer shall pay for
the financial, tax and estate planning services listed in Section 5(c)(iii) above; and


 


(viii)                      Employee shall also have the right to purchase the  Employer provided car referred to in Section 5(c)(i) above
at net book value or to assume the lease with the consent of Lessor, if such
car is leased.


 


(b)                                 Payment. Subject to Section 10(c) below, the severance
amounts set forth in Sections 10(a)(i) and 10(a)(ii) above shall be
paid in a lump sum payment to Employee as soon as practicable, but in no event
shall such payments be paid later than March 15th of the year following
the year in which the Employee’s termination of employment occurs.  Any amount payable with respect to Section 10(a)(iii) above
will be paid at the time of payments to Participants under the applicable
Plan.  Amounts payable with respect to
Sections 10(a)(v), (vi) and (vii) will be paid annually against
appropriate evidence of payment by Employee.


 


(c)                                  Section 409A
Compliance.  Notwithstanding anything
in this Agreement to the contrary, if any payment or benefit to Employee under
this Agreement on account of the Employee’s termination of employment
constitutes a deferral of compensation subject to 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), such payment or benefit shall commence
when Employee has incurred a “Separation from Service” as defined under
Treasury Regulation § 1.409A-1(h)(1) without regard to the optional
alternative definitions thereunder.  If
at the time of Employee’s Separation from Service, Employee is a “specified
employee” within the meaning of Code Section 409A(a)(2)(B)(i), Employer
shall delay commencement of any such payment or benefit until six months after
Employee’s Separation from Service (the “409A Suspension Period”).  Within fourteen calendar days after the end
of the 409A Suspension Period, Employer shall pay to the Employee any payments
and benefits that Employer would otherwise have been required to provide
Employee under this Agreement but for the imposition of the 409A Suspension
Period.  Thereafter, Employee shall
receive any remaining payments and benefits due under this Agreement in
accordance with the terms of this Agreement (as if there had not been any
suspension period beforehand).


 


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(d)                                 Limitation
on Payments. If any payment or benefit Employee would receive from Employer
or otherwise (“Payment”) would (i) constitute
a “parachute payment” within the meaning of Code Section 280G, and (ii) but
for this sentence, be subject to the excise tax imposed by Section 4999 of
the Code (the “Excise Tax”), then such Payment
shall be reduced to the Reduced Amount. The “Reduced
Amount” shall be either (x) the largest portion of the Payment
that would result in no portion of the Payment being subject to the Excise Tax
or (y) the largest portion, up to and including the total, of the Payment,
whichever amount, after taking into account all applicable federal. state and
local employment taxes, income taxes, and the Excise Tax (all computed at the
highest applicable marginal rate), results in Employee’s receipt, on an
after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax. If a reduction
in payments or benefits constituting “parachute payments” is necessary so that
the Payment equals the Reduced Amount, reduction shall occur in the following
order unless Employee elects in writing a different order (provided,
however, that such election shall be subject to Employer approval if
made on or after the date on which the event that triggers the Payment occurs);
reduction of cash payments; cancellation of accelerated vesting of stock
awards; reduction of employee benefits;
and reduction of any amounts that would constitute a deferral of
compensation subject to Code Section 409A. In the event that acceleration
of vesting of stock award compensation is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of grant of
Employee’s stock awards unless Employee elects in writing a different order for
cancellation.


 


The accounting firm engaged by Employer for general
audit purposes as of the day prior to the effective date of the event that
triggers the Payment shall perform the foregoing calculations. If the
accounting firm so engaged by Employer is serving as accountant or auditor for
the individual, entity or group effecting the “change in ownership” as
described in Section 280G(b)(2)(A)(i) of the Code. Employer shall
appoint a nationally recognized accounting firm to make the determinations
required hereunder. Employer shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.


 


The accounting firm engaged to make the
determinations hereunder shall provide its calculations, together with detailed
supporting documentation, to Employer and Employee within fifteen (15) calendar
days after the date on which Employee’s right to a Payment is triggered (if
requested at that time by Employer or Employee) or such other time as requested
by Employer or Employee. If the accounting firm determines that no Excise Tax
is payable with respect to a Payment, either before or after the application of
the Reduced Amount, it shall furnish Employer and Employee with an opinion
reasonably acceptable to Employee that no Excise Tax will be imposed with
respect to such Payment. Any good faith determinations of the accounting firm
made hereunder shall be final, binding and conclusive upon Employer and
Employee.


 


11.                                Death/Disability.


 


(a)                                  In the event (during the Employment Term) of
Employee’s death, (i) this Agreement shall terminate, (ii) Employer
shall pay to Employee’s estate or his heirs any due but unpaid base
salary and Annual Bonus, accrued but unused vacation pay and  pro rated Annual Bonus for the period of
active employment during the year in which death occurs, and (iii) Employee’s
estate or his heirs shall not be entitled to any severance payments hereunder. In addition, all stock options and
restricted stock granted to Employee shall immediately vest and become
exercisable, if applicable, upon
Employee’s death. Employee’s estate shall have the right 


 


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to exercise such options for
the shorter of (i) two (2) years from the date of death, and (ii) the
term of the option.


 


(b)                                 In the event (during the Employment Term) of
Employee’s long term disability (as defined in Employee’s Group Disability
Plan) and the passing of the Elimination Period (as defined in Employee’s Group
Disability Plan), (i) this Agreement shall terminate, (ii) Employer
shall pay to Employee any unpaid base salary and prorated Annual Bonus  for the period of active employment during
the year in which such event occurs, and (iii) Employee shall not be entitled
to any severance payments hereunder. In addition, all stock options and
restricted stock granted to Employee shall immediately vest. Employee shall
have the right to exercise such options for the shorter of (i) two (2) years
from the date of disability, and (ii) the term of the option. In addition,
Employee shall have the right to purchase the company car referred to in Section 5(c)(i) at
net book value or assume the lease with the Lessor’s consent, if leased. The
Employer will pay the membership dues listed in Section 5(c)(ii) if
Employee’s membership continues, provide the financial, tax and estate planning
service listed in Section 5(c)(iii) in each case, against evidence of
payment by Employee, and provide coverage under medical, long-term disability
and like insurance plans described in Section 5(a) above, in each case for a period of three (3) years
from the date of disability (or, to the extent Employer is unable to
maintain such coverage under one or more such plans, reimburse Employee’s actual
expenses incurred in obtaining comparable coverage within 30 days after
Employee furnishes invoices or other documentation reasonably requested by
Employer to substantiate such expenses were incurred, but no reimbursements
shall be made later than the end
of the calendar year such expenses were incurred by Employee).


 


12.                                Maintenance of Confidentiality and Duty of
Loyalty.


 


(a)                                  General. Employee acknowledges that, pursuant to his employment with Employer,
he will necessarily have access to trade secrets and information that is
confidential and proprietary to Employer in connection with the performance of
his duties. In consideration for the disclosure to Employee of, and the grant
to Employee of access to such valuable and confidential information and in consideration
of his employment. Employee shall comply in all respects with the provisions of
this Section 11.


 


(b)                                 Nondisclosure. During the Employment Term and for a period
of three (3) years thereafter, Confidential and Proprietary Information of
Employer of which Employee gains knowledge during the Employment Term shall be
used by Employee only for the benefit of Employer, including in connection with Employee’s performance of
his employment duties, and Employee shall not, and shall not allow any other person
that gains access to such information in any manner to, without the prior
written consent of Employer, disclose, communicate, divulge or otherwise make
available, or use, any such information, other than for the immediate benefit
of Employer. For purposes of this Agreement, the term “Confidential
and Proprietary Information” means information not generally known
to the public and that is
proprietary to Employer and relates to Employer’s existing or reasonably
foreseeable business or operations, including but not limited to trade secrets,
business plans, advertising or public relations strategies, financial
information, budgets, personnel information, customer information and lists,
and information pertaining to research, development, manufacturing, engineering,
processing, product designs (whether or not patented or patentable), purchasing
and licensing, and which 


 


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may be embodied in reports
or other writings or in blue prints or in other tangible forms such as
equipment and models. Employee will refrain from any acts or omissions that
would jeopardize the confidentiality or reduce the value of any Employer
Confidential and Proprietary Information.


 


(c)                                  Covenant of Loyalty. During the Employment Term, Employee shall
not, on his own account or as an employee, agent, promoter, consultant,
partner, officer, director, or as a more than 1% shareholder of any other
person, firm, entity, partnership or corporation, own, operate, lease,
franchise, conduct, engage in, be connected with, have any interest in, or
assist any person or entity engaged in any business in the continental United
States that is in any way competitive with or similar to the business that is
conducted by Employer or is in the same general field or industry as Employer.
Without limiting the generality of the foregoing, Employee does hereby covenant
that he will not, during the Employment Term:


 


(i)                                     solicit, accept or receive any compensation
from any customer of Employer or any business competitive to that of Employer;


 


(ii)                                  contact, solicit or call upon any customer or
supplier of Employer on behalf of any person or entity other than Employer for
the purpose of selling, providing or performing any services of the type
normally provided or performed by Employer;


 


(iii)                               induce or attempt to induce any person or entity to curtail or cancel
any business or contracts which such person or entity has with Employer; or


 


(iv)                              induce or attempt to induce any person or entity to terminate, cancel
or breach any contract which such person or entity has with Employer, or
receive or accept any benefits from such termination, cancellation or breach.


 


(d)                                 No Solicitation. During the Employment Term and for a period
of three years thereafter, Employee agrees not to directly or indirectly
solicit, induce or attempt to solicit or induce any employee of Employer to
terminate his or her employment with Employer in order to become employed by
any other person or entity.


 


(e)                                  Injunctive Relief. Employee expressly agrees that the
covenants set forth in this Section 11 are reasonable and necessary to
protect Employer and its legitimate business interests, and to prevent the
unauthorized dissemination of Confidential and Proprietary Information to
competitors of Employer. Employee also agrees that Employer will be irreparably
harmed and that damages alone cannot adequately compensate Employer if there is
a violation of this Section 11 by Employee, and that injunctive relief
against Employee is essential for the protection of Employer. Therefore, in the
event of any such breach, it is agreed that, in addition to any other remedies
available. Employer shall be entitled as a matter of right to injunctive relief
in any court of competent jurisdiction, plus attorneys’ fees actually incurred
in seeking such relief. Furthermore, Employee agrees that Employer shall not be
required to post a bond or other collateral security with the coup if Employer
seeks injunctive relief. To the extent any provision of this Section 11 is
deemed unenforceable by virtue of its scope or limitation, Employee and
Employer agree that the scope and limitation provisions shall nevertheless be
enforceable to the 


 


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fullest extent permissible
under the laws and public policies applied in such jurisdiction where
enforcement is sought.


 


13.                                Name
Change. So long as (a) Employee
is the Chief Executive Officer of Employer, and (b) Employee or his
Affiliates own 10% or more of the outstanding common stock of Employer,
Employer will not change its name without the prior written consent of
Employee. This Section 12 shall be automatically rendered void in the
event of a Change in Control. “Affiliate” means a person that directly or
indirectly, through one or more intermediaries’ controls, is controlled by or
is under common control with the first mentioned person.


 


14.                                Notices. Any notice that either
party may wish or be required to give to the other party pursuant to this
Agreement shall be in writing and shall be either personally served or
deposited in the United States mail, registered or certified, and with proper
postage prepaid. Mailed notices to Employee shall be addressed to Employee at
the home address from which Employee most recently communicated to Employer in writing.
In the case of Employer, mailed notices shall be addressed to its corporate
headquarters, and all notices shall be directed to the attention of corporate
counsel. Notice given by personal service shall be deemed effective upon
service. Notice given by registered or certified mail shall be deemed effective
three (3) days after deposit in the mail.


 


15.                                Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their respective legal
representatives, and their successors and assigns. As used in this Agreement,
the term “successor” shall include any person, firm, corporation or other
business entity which at any time, whether by merger, purchase, consolidation,
or otherwise, acquired all or substantially all of the assets or business of
Employer. This Agreement shall be deemed to be willfully breached by Employer
if any such successor does not absolutely and unconditionally assume all of
Employer’s obligations under this Agreement and agree expressly to perform the
obligations in the same manner and to the same extent as Employer would be
required to perform such obligations in the absence of the succession. Employee
may not assign any of his duties hereunder and he may not assign any of his
rights hereunder without the written consent of Employer, which shall not be
unreasonably withheld.


 


16.                                Entire Agreement. This Agreement contains the entire
agreement of the parties and supersedes and replaces all prior agreements and
understandings between the parties relating to the subject matter hereof.


 


17.                                Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.


 


18.                                Arbitration. Any controversy or claim arising out of or relating to this Agreement, Employee’s employment with Employer
or any other relationship between the parties shall be finally settled by binding arbitration in the City and
County of San Francisco, California, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect.
The controversy or claim shall be submitted to three arbitrators, one of whom
shall be chosen by Employer, one of whom shall be chosen by Employee. and the
third of whom shall be chosen by the two arbitrators so selected. The party
desiring arbitration shall give written
notice 


 


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to the other party of its desire to arbitrate the
particular matter in question, naming the arbitrator selected by it. If the
other party shall fail within a period of 15 days after such notice shall have
been given to reply in writing naming the arbitrator selected by it, then the
party not in default may apply to the American Arbitration Association for the
appointment of the second arbitrator. If the two arbitrators chosen as above
shall fail within 15 days after their selection to agree upon a third
arbitrator, then either party may apply to the American Arbitration Association
for the appointment of an arbitrator to fill the place so remaining vacant. The
parties will have the right, subject to the discretion of the arbitrators, to
conduct discovery necessary to establish their claims and defenses.  The decision of any two of the arbitrators
shall give reasons for the decision and be final and binding upon the parties hereto and shall be delivered in
writing signed in triplicate by the concurring arbitrators to each of the
parties hereto. Employer shall pay the fees of the arbitrators so selected. The
other expenses incurred in connection with the arbitration shall be paid in
accordance with Section 19 below. Judgment on the award rendered by the arbitrators may be entered in
any court having jurisdiction.


 


19.                                Legal Fees And Expenses.


 


(a)                                  The
Employer shall pay the reasonable legal fees incurred by the Employee in
connection with the negotiation of this Agreement. Employer shall pay such
reimbursements within 30 days after Employee furnishes invoices or other
documentation reasonably requested by Employer to substantiate such expenses
were incurred, but no reimbursements shall be made later than the end of the
calendar year such expenses were incurred by Employee.  In
the event an action is brought to enforce any provision of this Agreement,
Employee’s legal fees and expenses shall be paid by Employer as incurred by
Employee, unless Employee brings a claim which is determined by the arbitrator
to be frivolous, in which case, Employee shall repay to Employer all amounts
advanced by Employer to Employee in connection with such claim within thirty
days of such determination.


 


20.                                Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or any other jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provisions had never been contained herein.


 


21.                                Amendments and Waivers. This Agreement may be modified only by a
written instrument duly executed by each party hereto. No breach of any
covenant, agreement, warranty or representation shall be deemed waived unless
expressly waived in writing by the party who might assert such breach. No
waiver of any right hereunder shall operate as a waiver of any other right or
of the same or a similar right on another occasion.


 


22.                                Counterparts. This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.


 


11

















 


23.                                Section Headings. The headings of each Section, subsection or
other subdivision of this Agreement are for reference only and shall not limit
or control the meaning thereof.


 


IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first above written.


 


 


	
   

  	
  “Employer”

  
	
   

  
	
   

  	
  WILLIS
  LEASE FINANCE CORPORATION

  
	
   

  
	
   

  	
  By:

  	
  /s/ Gerard Laviec

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Gerard Laviec

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chair, Compensation Committee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “Employee”

  
	
   

  	
   

  
	
   

  	
  /s/ Charles F. Willis IV

  
	
   

  	
  Charles
  F. Willis IV

  
					



 


12
















 


EXHIBIT A


Registration
Rights


 


(a)                                  Definitions.


 


(i)                                     Registration.    The terms “register”, “registered”, and “registration”
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended (the “Act”)
and the declaration or ordering of effectiveness of such registration
statement.


 


(ii)                                  Registrable
Securities.    The term “Registrable
Securities” means:   (1) shares of
Willis Lease Finance Corporation (the “Company”) common stock par value $0.01
owned by the Employee or any affiliate of Employee, (2) any shares of
common stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, any shares of stock
described in clause (1) of this subsection (ii) and (3) any
other common stock of the Company hereafter acquired by Employee or any
affiliate of Employee, and will be appropriately adjusted for any stock
dividends, splits, reverse splits, combinations, recapitalizations and the like
occurring after July 1, 2008.


 


(iii)                               Holder.    For purposes of this Exhibit, the term “Holder”
means Charles F. Willis (“Employee”), so long as Employee is the owner of
record of Registrable Securities.


 


(b)                                  Demand
Registration.


 


(i)                                     Request
by Holder.    If the Company receives
a written request from the Holder that the Company file a registration
statement under the Act covering the registration of Registrable Securities
pursuant to this Section (b), then the Company will use reasonable
commercial efforts to effect, within ninety (90) days of such request, the
registration under the Act of all Registrable Securities that Holder requests
to be registered, subject only to the limitations of this Exhibit.


 


(ii)                                  Underwriting.    Registrable Securities covered by this
demand registration will be distributed only by means of a firm commitment
offering underwritten by a managing underwriter or underwriters selected by
Holder and reasonably acceptable to the Company, provided that the managing
underwriter or underwriters must agree that no shares of Registrable Securities
will be sold to any purchaser in the underwriting if after such purchase, such
purchaser will own five percent (5%) or more of the issued and outstanding
common stock of the Company.  The right
of Holder to include its Registrable Securities in such registration will be
conditioned upon Holder’s participation in such underwriting and the inclusion
of Holder’s Registrable Securities in the underwriting to the extent provided
herein.  Holder will enter into an
underwriting agreement in customary form with the managing underwriter or
underwriters (including a market stand-off agreement of up to 180 days if
required by such underwriters).


 


A-1

















 


(iii)                               Maximum
Number of Demand Registrations.   
The Company will be obligated to effect no more than two (2) such
registrations pursuant to this Section (b), provided that the Company will
be relieved of its obligations to effect any registration if at any time Holder
will own less than five percent (5%) of the issued and outstanding capital
stock of the Company.  A registration
request as provided in this Section (b) will not count as one of the
demands to which Holder is entitled hereunder unless the registration statement
remains continuously effective until the earlier of (i) the completion of
any offering and disposition of all Registrable Securities included in the
registration statement and (ii) the expiration of ninety (90) days from
the date on which the registration statement first became effective under the
Act.


 


(iv)                              Deferral.    Notwithstanding
the foregoing, if the Company furnishes the Holder a certificate signed by an
authorized officer of the Company stating that in good faith judgment of the board
of directors, it would be materially detrimental to the Company and its
stockholders for such registration statement to be filed (other than any
detriment caused by the sale of Company common stock pursuant to such
registration statement), then the Company will have the right to defer such
filing for a period of not more than sixty (60) days after the receipt of the
request of the Holder.


 


(v)                                 Expenses.    All fees, costs and expenses incurred in
connection with any registration pursuant to this Exhibit (other than Section (c)),
including all federal and “Blue Sky” registration, filing and qualification
fees and expenses, printer’s fees and expenses, accounting fees (including in
connection with the delivery of any “comfort letter”), fees and disbursements
of counsel for the Company (including and in connection with the delivery of
any required legal opinion), and all fees, costs and expenses incurred in
connection with the performance of the Company’s obligations contained in this Exhibit (other
than Section (c)) will be borne by the Holder and the Holder agrees to pay
and reimburse any such fees, costs and expenses incurred by the Company within
three days of the presentation of an invoice therefor.


 


(vi)                              Qualification.    The
Company will not be required to effect a registration in any particular
jurisdiction in which the Company would be required to qualify to do business
where it is not then so qualified or to execute a general consent to service of
process in effecting such registration, qualification or compliance in any
jurisdiction where it is not then so subject to service of process.


 


(c)                                  Piggyback
Registration.


 


(i)                                     Piggyback
Right.  If, at any time, the Company
proposes or is required to register any of its common stock under the Act
(other than pursuant to registrations on such form or similar form(s) solely
for registration of securities in connection with an employee benefit plan or
dividend reinvestment plan) on a registration statement on Form S-1 or Form S-3
or an equivalent general registration form then in effect, the Company shall
give prompt written notice of its intention to do so to Holder.  Upon the written request of Holder, made
within fifteen (15) days following the


 


A-2

















 


receipt of any such
written notice (which request shall specify the maximum number of Registrable
Securities intended to be disposed of by Holder and the intended method of
distribution thereof), the Company, subject to Section (c)(iv), shall use
commercially reasonable efforts to cause all such Registrable Securities to be
included in the registration statement with the securities that the Company at
the time proposes to register to permit the sale or other disposition by the
Holder in accordance with the intended method of distribution thereof of the
Registrable Securities to be so registered. 
No registration of Registrable Securities effected under this Section (c) shall
relieve the Company of its obligations to effect Demand Registrations under Section (b).


 


(ii)                                  Right
to Terminate or Delay Registration. 
If, at any time after giving written notice of its intention to register
any Company common stock and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
equity securities, the Company will give written notice of such determination
to Holder and (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such abandoned registration, without prejudice, however, to the rights of
Holder under Section (b) and (ii) in the case of a determination
to delay such registration of its equity securities, shall be permitted to
delay the registration of such Registrable Securities for the same period as
the delay in registering such other equity securities.


 


(iii)                               Withdrawal.  Holder shall have the right to withdraw its
request for inclusion of its Registrable Securities in any registration
statement pursuant to this Section (c) by giving written notice to
the Company of its request to withdraw. 
Such request must be made in writing prior to the earlier of the
execution of the underwriting agreement or the execution of the custody
agreement with respect to such registration. 
Such withdrawal shall be irrevocable and, after making such withdrawal,
Holder shall no longer have any right to include Registrable Securities in the
registration as to which such withdrawal was made.


 


(iv)                              Priority.  If any registration pursuant to Section (c) involves
an underwritten offering that was proposed by the Company and the lead managing
underwriter of such offering shall advise the Company that, in its view, the
number of securities requested to be included in such registration exceeds the
number (the “Section (c) Sale Number”) that can be sold in an orderly
manner in such registration within a price range acceptable to the Company, the
Company shall include in such registration:


 


(A)                              first,
all common stock that the Company proposes to register for its own account; and


 


(B)                                second,
to the extent that the number of securities to be included pursuant to
clause (A) of this Section (c)(iv) is less than the Section (c) Sale
Number, the remaining shares to be included in such registration shall be
allocated to Holder.


 


A-3

















 


(d)                                  Obligations
of the Company.     Whenever required
to effect the registration of Registrable Securities under this Agreement the
Company will, as expeditiously as reasonably possible:


 


(i)            Registration Statement.    Prepare and file with the SEC within thirty
(30) days a request by Holder under Section (b) a registration
statement on the appropriate form for the registration of such Registrable
Securities which shall be selected by the Company and shall be reasonably
acceptable to Holder and use reasonable commercial efforts to cause such
registration statement to become effective within ninety (90) days of a request
by Holder under Section (b) and to remain continuously effective
until the earlier of (i) the completion of any offering and disposition of
Registrable Securities included in the registration statement and (ii) the
expiration of ninety (90) days from the date on which the registration
statement became effective under the Act; provided, however, that before filing
a registration statement or prospectus or any amendment, supplement to either
of them or any Issuer Free Writing Prospectus (as defined in Rule 433 of
the Act) related thereto, the Company will (A) provide counsel to Holder
with an adequate and appropriate opportunity to participate in the preparation
of the registration statement and each prospectus included in the registration
statement (and each amendment or supplement to it) and each Issuer Free Writing
Prospectus related thereto to be filed with the SEC, which documents will be
subject to the review of counsel to Holder and (B) notify counsel to
Holder and Holder of any stop order issued or threatened by the SEC and to take
all commercially reasonable action to prevent the entry of the stop order or to
remove it if entered.  With respect to
any registration under Section (b), the Company will not permit any
securities other than the Registrable Securities to be included in the
registration statement if such inclusion would cause any of the Registrable
Securities to be excluded from registration by the managing underwriter or
underwriters.


 


(ii)           Amendments and Supplements.    Prepare and file with the SEC such
amendments and supplements to such registration statement, the prospectus used
in connection with such registration statement, and any Issuer Free Writing
Prospectus related thereto as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities covered by such
registration statement.


 


(iii)          Prospectuses.    As soon as reasonably commercially
practical, furnish to the Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, any Issuer Free Writing Prospectus related thereto and other such
documents as they may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by them that are included in such
registration.


 


(iv)          Blue Sky.    Use its best efforts to register and
qualify the securities covered by such registration statement under such other
securities or “Blue Sky” laws of such jurisdictions as will be reasonably
requested by the Holder, provided that the Company will not be required in
connection therewith or as a condition thereto to qualify to do business in any
jurisdiction where it is not then so qualified or to file general


 


A-4

















 


consent to service
of process in any such states or jurisdictions where it is not then so subject
to service of process.


 


(v)           Other Approvals.    Use its commercially reasonable efforts to
obtain all other approvals, consents, exemptions or authorizations from those
governmental agencies or authorities at Holder’s sole cost and expense as may
be necessary to enable Holder to effect the disposition of any Registrable
Securities.


 


(vi)          Underwriting.    Enter into and perform its obligations
under an underwriting agreement in usual and customary form, with the managing
underwriter(s) of such offering. 
Holder will also enter into and perform its obligations under such an
agreement.


 


(vii)         Notification.    Notify Holder at any time when a prospectus
relating to Registrable Securities or any Issuer Free Writing Prospectus
related thereto is required to be delivered under the Act of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing and prepare and file with the SEC a supplement or amendment to
the registration statement, prospectus or Issuer Free Writing Prospectus
related thereto so that, as subsequently delivered to the purchasers of the
Registrable Securities, the registration statement, prospectus or Issuer Free
Writing Prospectus related thereto will not contain an untrue statement of
material fact or omit to state any material fact required to be stated in the
registration statement or necessary to make the statements therein not
misleading in light of the circumstances under which they were made; provided,
that prior to the filing of the supplement or amendment the Company will
furnish copies of the supplement or amendment to the Holder, underwriter and
counsel to Holder and will not file the supplement or amendment without prior
review of counsel to Holder.


 


(viii)        Inspection of Records.    Make available for inspection by Holder,
any managing underwriter participating in any disposition provided for in the
registration statement, counsel to Holder and any attorney, accountant or other
appraiser retained by any Holder or any managing underwriter (each, an “Inspector”),
all financial records, pertinent corporate documents and properties of the
Company and any of its subsidiaries as may be in existence at that time as will
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s and any subsidiaries’ officers,
directors and employees, and the independent certified public accountants of
the Company, to supply all information reasonably requested by any Inspector in
connection with the registration statement.


 


(ix)           Opinion, Comfort Letter and
Closing Certificates.    Furnish, as
the request of Holder, on the date that such Registrable Securities are
delivered to the underwriters for sale, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily


 


A-5

















 


given to
underwriters in an underwritten public offering and reasonably satisfactory to
the Holder, addressed to the underwriters and to the Holder, (ii) a “comfort”
letter dated as of such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering
and reasonably satisfactory to the Holder, addressed to the underwriters and to
the Holder, and (iii) officers’ certificates and such other customary
closing documents.


 


(x)                                   Listing
on Securities Exchange.    Use
commercially reasonable efforts to cause all Registrable Securities to be
listed on each securities exchange on which similar securities issued by the
Company are then listed, subject to the satisfaction of the applicable listing
requirements of the exchange.


 


(xi)                                Cooperation.    Reasonably cooperate with Holder and each
underwriter participating in the disposition of any Registrable Securities and
their respective counsel in connection with any filings required to be made
with any securities exchange or automated quotation system.


 


(e)                                  Restrictions
on Public Sale by the Company.    The
Company agrees not to effect any public sale or distribution of any of its
securities for its own account (except pursuant to registrations on Form S-4
or Form S-8 (or any successor form) under the Act) during the ten (10) days
prior to, and during the ninety (90) day period (or such shorter period as may
be permitted by the managing underwriter or underwriters) beginning on the
effective date of any registration statement in which Holder is participating
under Section (b).


 


(f)                                    Furnish
Information.    It will be a
condition precedent to the obligations of the Company to take any action
pursuant to Sections (b), (c) or (d) that the Holder will furnish to
the Company such information regarding itself, the Registrable Securities, and
the intended method of disposition of such securities as will be timely to
effect the Registration of its Registrable Securities.


 


(g)                                 Indemnification.    In the event that any Registrable
Securities are included in a registration statement under the Agreement:


 


(i)                                     By
the Company.    To the extent
permitted by law, the Company will indemnify and hold harmless Holder, the
partners, members, officer, directors and employees of Holder, any underwriter
(as determined in the Act) for Holder and each person, if any, who controls
Holder or any such underwriter within the meaning of the Act or the Securities
exchange Act of 1934, as amended (the “Exchange Act”), against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Act, the Exchange Act or other federal or state law, insofar
as such losses, claims, damages, or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a “Violation”):


 


A-6

















 


(A)   any untrue statement or alleged untrue
statement of a material fact contained in such registration statement,
including any preliminary prospectus, final prospectus or Issuer Free Writing
Prospectus related thereto, contained therein or any amendments or supplements,
thereto;


 


(B)   the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading; or


 


(C)    any Violation or alleged Violation by the
Company of the Act, the Exchange Act, any state or international securities law
or any rule or regulation promulgated under the Act, the Exchange Act or
any state securities law in connection with the offering covered by such
registration statement.


 


The Company will
reimburse each such Holder, partner, officer, director, employee, underwriter
or controlling person for any legal expenses reasonably incurred by them, as
incurred in connection with investigating any such loss, claim, damage,
liability or action; provided, however, that the indemnity
agreement contained in this Section (g) will not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, nor will the Company
be liable in any such case for any such loss, claim, damage, liability or
action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such Holder, partner,
officer, director, underwriter or controlling person of Holder.


 


(ii)                                  By
Holder.   In connection with any
registration under which Holder intends to make a disposition of Registrable
Securities, to the extent permitted by law, Holder will indemnify and hold
harmless the Company, each of its directors, each of its officers or employees
who have signed the registration statement, each person, if any, who controls
the Company within the meaning of the Act, any underwriter, any person who
controls the Company or any such underwriter within the meaning of the Act or
the Exchange Act, against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer, employee,
controlling person, or underwriter may become subject to under the Act, the
Exchange Act or federal or state law, insofar as such losses claims damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by Holder expressly for use in connection with such registration; and
Holder will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action: provided, however, that the indemnity
agreement contained in this Section (g) will not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder and, provided further,
that the


 


A-7

















 


liability of
Holder in this Section (g) will be limited to the amount of the net
proceeds received by Holder in the offering giving rise to such liability.


 


(iii)                               Notice.    Promptly after receipt by an indemnified
party under this Section (g) of the notice of the commencement of any
action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under
this Section (g), deliver to the indemnifying party a written notice of
the commencement thereof and the indemnifying party will have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying part similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party will have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if the
representation of such indemnified party by counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict
of interests between such indemnified party and any other party represented by
such counsel in such proceeding; provided that there may only be one such
counsel retained for all indemnified parties. 
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action will relieve such
indemnifying party of liability to the indemnified party under this Section (g) to
the extent the indemnifying party is prejudiced as a result thereof, but the
omission to do so to deliver written notice to the Indemnified Party will not
relieve it of any liability that it may have to any other Indemnified Party
under this Section (g).


 


(iv)                              Defect
Eliminated in Final Prospectus.  The foregoing
indemnity agreements of the Company and Holder are subject to the condition
that, insofar as they relate to any Violation made in a preliminary prospectus
or Issuer Free Writing Prospectus related thereto but eliminated or remedied in
the amended prospectus on file with the SEC at the time the registration
statement in question becomes effective or the amended prospectus filed with
the SEC pursuant to SEC Rule 424(b) (the “Final Prospectus”), such
indemnity agreement will not inure to the benefit of any person if a copy of
the Final Prospectus was timely furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Act.


 


(v)                                 Contribution.
   In order to provide for just and
equitable contribution to joint liability under the Act in any case in which
either (i) Holder exercising rights under this Agreement, or any
controlling person of any Holder, makes a claim for indemnification pursuant to
this Section (g) but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal of the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section (g) provides for indemnification in such case, or (ii) contribution
under the Act may be required on the part of Holder or any such controlling
person in circumstances for which indemnification is provided under this Section (g);
then, and in each such case, the Company and Holder will contribute to the
aggregate losses, claims, damages or liabilities to which they may subject
(after contribution from others) in such proportion as


 


A-8

















 


is appropriate to
reflect the relative fault of the Company and Holder in connection with the
actions, statements or omissions that resulted in such losses, claims, damages
or liabilities as well as any other relevant equitable considerations; so that
Holder is responsible for the portion represented by the percentage that the
public offering price of its Registrable Securities offered by and sold under
the registration statement bears to the public offering price of all securities
offered by and sold under such registration statement; provided, however,
that, in any such case no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person or entity who was not guilty
of such fraudulent misrepresentation. 
The relative faults of the Company and Holder will be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, was made by, or relates to information
supplied by, the Company or Holder, and the Company’s and Holder’s relative
intent, knowledge, access to information and opportunity to correct or prevent
that action.


 


(vi)                              Survival.    The obligations of the Company and Holder
under this Section (g) will survive until the second anniversary of
the completion of any offering of Registrable Securities in a registration
statement, regardless of the expiration of any statutes of limitations or
extensions of such statutes.


 


(h)                                 Rule 144;
Other Exemptions.   For so long as
the Company will have a class of securities registered under Section 12(b) or
12(g) of the Exchange Act, the Company covenants that it will file, on a
timely basis, any reports required to be filed by it under the Exchange Act and
the rules and regulations adopted by the SEC thereunder and keep all such
reports and public information current to the extent required by Rule 144
under the Act, and that it will take all further action as Holder may
reasonably request (including providing and keeping current any information
necessary to comply with Rule 144 under the Act and providing any written
of counsel to the Company reasonably requested), all to the extent required
from time to time to enable the Holder to sell Registrable Securities without
registration under the Act within the limitation of the exemptions provided by (a) Rule 144
under the Act, as the rules may be amended from time to time, or (b) any
other rules or regulations now existing or hereafter adopted by the
SEC.  At such time as the Company will
not have a class of securities registered under Section 12(b) or Section 12(g) of
the Exchange Act, the Company covenants that it will furnish or otherwise make
available any information required for the Holder to sell the Registrable
Securities under Rule 144A.  The
Company will, upon the request of any Holder, deliver to the Holder a written
certification of a duly authorized officer as to whether the Company has
complied with the requirements.


 


(i) Termination
of the Company’s Obligations.    The Company will have no obligations
pursuant to this Exhibit with respect to any Registrable Securities
proposed to be sold by a Holder in a registration pursuant to this Exhibit: (i) if
the Company has already effected two registrations pursuant to this Exhibit or
(ii) if, in the opinion of counsel to the Company, all such Registrable
Securities proposed to be sold by Holder may then be sold under Rule 144
which written opinion will be addressed and delivered to the Company’s transfer
agent (and a copy of which will be sent to Holder).  Employee may not assign its rights under this
Exhibit to any person other than an affiliate of Employee.


 


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