Document:

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                                                                    EXHIBIT 10.5

May 24, 2000

James D. McBride
218 28th Avenue
San Francisco, CA 94121

Dear Jim:

     This letter sets forth the substance of the separation agreement (the
"Agreement") between Willis Lease Finance Corporation (the "Company"), a
Delaware corporation, and you regarding your employment transition.

     1. LAST DAY OF FULL-TIME EMPLOYMENT. You acknowledge that the last day you
performed services as a full-time employee of the Company will be May 31, 2000,
and that you are not entitled, except as otherwise set forth in this Agreement,
to salary or benefits after that date. Your employment termination date will be
deemed to be May 31, 2000 (the "Separation Date").

     2. TERMINATION OF EMPLOYMENT AGREEMENT. That certain Employment Agreement
between you and the Company dated September 9, 1997 (the "Employment Agreement")
is hereby terminated effective as of the Separation Date.

     3. ACCRUED SALARY AND PAID TIME OFF. The Company agrees to pay you all
accrued salary and all accrued and unused vacation earned through the Separation
Date. Both you and the Company acknowledge that, subsequent to such payment, no
part of your salary in 1997, 1998, 1999 or 2000 was ever deferred or remains
payable to you, and that there is no agreement to defer payment of any future
salary to which you may be entitled.

     4. PAYMENTS TO ENSURE AVAILABILITY AS A CONSULTANT. The Company agrees
that, PROVIDED THAT you have executed this Agreement and the General Release
attached hereto as EXHIBIT A, and upon the Effective Date (as defined in
EXHIBIT A hereto), the Company will provide you with payments equivalent to
your current base salary for a period of nine months. These payments will be
made to you on the last business day of each month and will not be subject to
deductions except as required by law.

     5. BONUS. The Company agrees to pay you a bonus in an amount equal to 100%
of the pro rata bonus for the first six (6) months of 2000 as earned under the
Company's approved Profit Incentive Plan for executive officers for the year
2000 on the same date paid to the continuing executive officers of the Company,
but no later than August 31, 2000. The Company and you acknowledge that the plan
was approved on May 19, 2000.

     6. STOCK OPTIONS. The stock options granted to you during your employment
with the Company shall continue to vest for six months after the Separation Date
pursuant to the vesting schedule set forth in the governing plan documents.
Vested options must be exercised during the period from May 31, 2001 to June 30,
2001. In accordance with the governing plan documents, you may elect a cash-less
exercise of the vested options.

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     7. SERVICES AS A CONSULTANT. You agree that for a period of four (4)
months following the Separation Date, you will provide services as a
consultant to the Company at dates and times to be mutually agreed upon but in
no event to exceed fifty (50) hours per month. The Company agrees that your
compensation for such services shall be Ten Thousand Dollars ($10,000) per
month payable on the last business day of each month beginning June 30, 2000.
After the conclusion of the four month period, the consulting relationship
may continue at the request of the Company and your consent at an hourly rate
of Three Hundred Dollars ($300). During the period that you are providing
services as a consultant to the Company, the Company agrees to reimburse you
for reasonable, and properly documented, business expenses.

     8. ADDITIONAL COMPENSATION. The Company agrees to pay you an additional
amount, equivalent to your base salary for three (3) months, such payment to
be made beginning with the month of March, 2001, PROVIDED THAT you have made
reasonable efforts to make yourself available as a consultant at the dates
and times mutually agreed upon, and have cooperated with the transition to a
new Chief Financial Officer and the strategic partner project to the
reasonable satisfaction of the Company's Compensation Committee. In the
event that Bob Rau is no longer a member of the Compensation Committee or a
member of the Company's Board of Directors (the "Board"), then the Additional
Compensation shall no longer be subject to this proviso.

     9. CHANGE OF CONTROL. In the event of a Change of Control, as defined
below, the Company agrees that (a) all of your unvested stock options shall
immediately vest as of the effective date of the Change of Control, and (b) the
Company's monetary obligations to you under this Agreement shall become
immediately due and payable, including the Additional Compensation.

     For purposes of this section, "Change of Control" shall mean the
occurrence of any of the following events:

          (i) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities and Exchange Act of 1934, as amended) becomes the "beneficial
owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company's then outstanding voting securities
prior to May 31, 2001; or

          (ii) A change in the composition of the Board occurring prior to
May 31, 2001, as a result of which fewer than a majority of the directors are
Incumbent Directors (as defined below);

          (iii) The consummation of a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company 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
percent (50%) of the total voting power represented by the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation provided that the definitive agreement related to the
Change of Control provided for in this

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paragraph or the consummation of the Change of Control provided for in this
paragraph occurs prior to May 31, 2001; or

          (iv) The consummation of the sale or disposition by the Company of all
or substantially all the Company's assets, provided that the definitive
agreement related to the Change of Control provided for in this paragraph or the
consummation of the Change of Control provided for in this paragraph occurs
prior to May 31, 2001.

     For purposes of this section, "Incumbent Directors" shall mean directors
who either (i) are directors of the Company as of the date hereof, or (ii) are
elected, or nominated for election, to the Board with the affirmative votes of
at least the majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Company).

     10. CONTINUATION OF BENEFITS. The Company agrees to continue your medical,
dental and other benefits under the Company's current benefit plan for the
earlier of (a) one (1) year after the Separation Date, or (b) the date that you
commence employment with another employer provided that the employer offers
health care benefits (with the exception of self-employment).

     11. 401-K CONTRIBUTIONS. The Company agrees that it will continue to match
your 401-K contributions through the Separation Date in accordance with the
Company's benefits policy.

     12. OTHER COMPENSATION OR BENEFITS. You acknowledge that, except as
expressly provided in this Agreement, you will not receive any other
compensation, severance or benefits after the Separation Date.

     13. INDEMNIFICATION. The Company reaffirms its obligations under the
Company's existing directors and officers indemnification agreements and further
agrees that such obligations shall continue through the period that you are
providing services as a consultant to the Company and that to the extent you
incur legal fees in connection with such indemnity they will be reimbursed as
incurred.

     14. PRESS RELEASE. You and the Company will mutually agree to the contents
of any press release issued by the Company with respect to the separation of
your employment with the Company subject to any legal requirements that may
apply.

     15. CELL PHONE/LAPTOP. The Company agrees that you may keep the
cellular telephone and laptop computer provided to you during your
employment with the Company, PROVIDED THAT you assume the cell phone charges
and purge the laptop of all proprietary information of the Company or its
affiliates as of the Separation Date, with the following exceptions. Any cell
phone charges incurred in the performance of your services as a consultant to
the Company are reimbursable pursuant to Section 7 herein. Further, to the
extent that proprietary information of the Company maintained on your laptop
computer is essential to your performance of services as a consultant
hereunder, you may retain such information on the laptop, PROVIDED THAT such
information is purged from the laptop at the end of your consulting
relationship with the Company.

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     16. RETURN OF COMPANY PROPERTY. You acknowledge that by the Separation
Date, you returned to the Company all Company documents (and all copies thereof)
and other Company property (with the exception of the cell phone and laptop
computer) that you had in your possession at any time, including, but not
limited to, Company files, notes, drawings, records, business plans and
forecasts, financial information, specifications, computer-recorded information,
tangible property (including, but not limited to, computers), credit cards,
entry cards, identification badges and keys; and, any materials of any kind that
contain or embody any proprietary or confidential information of the Company
(and all reproductions thereof); PROVIDED, HOWEVER, that any such materials are
necessary to your providing services as a consultant hereunder may be returned
to the Company at the end of your consulting relationship with the Company.

     17. PROPRIETARY INFORMATION OBLIGATIONS. You agree to refrain from any
unauthorized use or disclosure of the Company's proprietary or confidential
information or materials that you had access to or became acquainted with during
the period you were employed by the Company, including but not limited to
information or plans regarding the Company's business plans and strategy,
financing plans, customer relationships, personnel, sales, marketing and
financial operations and methods, and other compilations of information, records
and specifications (collectively, "Proprietary Information"). You agree not to
disclose any of the Company's Proprietary Information, directly or indirectly,
to any person, firm, corporation, court, government agency, or other entity for
any reason or purpose whatsoever, except pursuant to an order of a court of
competent jurisdiction (with respect to which you agree to give the Company
prior notice of the existence of such order and cooperate in any attempt by the
Company not to disclose its Proprietary Information in response to the order),
or to make use of any such Proprietary Information for your own purposes or for
the benefit of any person, firm, corporation or other entity (except the
Company) under any circumstances, after the Separation Date. You acknowledge and
agree that all files, records, documents, computer-recorded or electronic
information and similar items relating to the business of the Company, whether
prepared by you or otherwise coming into your possession, remain the exclusive
property of the Company and that you have already or will immediately return
such materials to the Company and that no copies thereof have been kept by you.

     18. CONFIDENTIALITY. The provisions of this Agreement will be held in
strictest confidence by you and the Company and will not be publicized or
disclosed in any manner whatsoever; PROVIDED, HOWEVER, that; (a) you may
disclose this Agreement to your immediate family; (b) the parties may disclose
this Agreement in confidence to their respective attorneys, accountants,
auditors, tax preparers, and financial advisors; (c) the Company may disclose
this Agreement as necessary to fulfill standard or legally required corporate
reporting or disclosure requirements; (d) the parties may disclose this
Agreement insofar as such disclosure may be necessary to enforce its terms or as
otherwise required by law; and (e) certain aspects of this Agreement may be
disclosed to the extent the parties mutually agree to do so as part of the press
release referenced above.

     19. NON-DISPARAGEMENT. Both you and the Company agree not to disparage the
other party, and the other party's officers, directors, employees, shareholders
and agents, in any manner likely to be harmful to them or their business,
business reputation or personal reputation;

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PROVIDED THAT both you and the Company will respond accurately and fully to any
question, inquiry or request for information when required by legal process.

20. NON-COMPETITION. You agree that from the Separation Date through May 31,
2001 you will not, directly or indirectly, provide services on behalf of any
competing corporation, limited liability company, partnership, or other
competing entity or person, whether as an employee, consultant, independent
contractor, agent, sole proprietor, partner, joint venturer, corporate officer
or director; nor shall you acquire by reason of purchase the ownership of more
than one percent (1%) of the outstanding equity interest in any such competitive
entity. For purposes of this Section 20, a "competing" entity is any one of the
following companies or any of their parents or subsidiaries: Engine Lease
Finance, Kellstrom Industries Inc, Aviation Sales Inc and The Aegis Group. In
addition, a "competing entity" includes the engine leasing or spare parts sale
portion of any of the following companies: General Electric, Pratt and Whitney,
Rolls Royce, MTU, Volvo and CFMI. Subject to the foregoing, you may serve on
boards of directors of non-competing unaffiliated corporations, and may serve on
the boards of charitable organizations.

     21. TAX TREATMENT. You agree that you shall be personally responsible for
the payment of any and all taxes, which may be due on the payments under this
Agreement. You further acknowledge that the Company does not make and has not
made any representations regarding the taxability of the payments from the
Company to you, and you have not relied on any representations of the Company on
that subject.

     22. MISCELLANEOUS. This Agreement, including EXHIBIT A, constitutes the
complete, final and exclusive embodiment of the entire agreement between you
and the Company with regard to this subject matter. It is entered into
without reliance on any promise or representation, written or oral, other
than those expressly contained herein, and it supersedes any other such
promises, warranties or representations. This Agreement may not be modified
or amended except in a writing signed by both you and a duly authorized
officer of the Company. This Agreement will bind the heirs, personal
representatives, successors and assigns of both you and the Company, and
inure to the benefit of both you and the Company, their heirs, successors and
assigns. If any provision of this Agreement is determined to be invalid or
unenforceable, in whole or in part, this determination will not affect any
other provision of this Agreement and the provision in question will be
modified by the court so as to be rendered enforceable. If either party
brings an action to enforce the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees and costs. This Agreement
will be deemed to have been entered to reasonable attorneys' fees and costs.
This Agreement will be deemed to have been entered into and will be construed
and enforced in accordance with the laws of the State of California.

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     If this Agreement is acceptable to you, please sign below and on the
attached General Release, which is part of this Agreement, and return the
originals of both to me.

     I wish you good luck in your future endeavors.

                                  Sincerely,

                                  By: Charles F. Willis IV
                                     ---------------------------

EXHIBIT A

AGREED:

/s/ James D. McBride
----------------------------
    James D. McBride

Date: May 24, 2000
     -----------------------

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                                  EXHIBIT A

                               GENERAL RELEASE

     I, James D. McBride, agree to the terms in the foregoing letter
Agreement and also agree as follows:

     Except as otherwise set forth in the Agreement, I hereby release, acquit
and forever discharge the Company, its officers, directors, agents, servants,
employees, attorneys, shareholders, successors, assigns and affiliates, of
and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
execution date of this Agreement, including but not limited to; all such
claims and demands directly or indirectly arising out of or in any way
connected with my employment with the Company or the termination of that
employment; claims or demands related to salary, bonuses, commissions, stock,
stock options, or any other ownership interests in the Company, vacation pay,
fringe benefits, expense reimbursements, severance pay, or any other form of
compensation; claims pursuant to any federal, state or local law, statute, or
cause of action including, but not limited to, the federal Civil Rights Act
of 1964, as amended; the federal Americans with Disabilities Act of 1990; the
federal Age Discrimination in Employment Act of 1967, as amended ("ADEA");
the California Fair Employment and Housing Act, as amended; tort law;
contract law; wrongful discharge; discrimination; harassment; fraud;
defamation; emotional distress; and breach of the implied covenant of good
faith and fair dealing.

     I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph
hereof is in addition to anything of value to which I was already entitled. I
further acknowledge that I have been advised by this writing, as required by
the ADEA, that: (a) my waiver and release do not apply to any rights or
claims that may arise after the execution date of this Agreement; (b) I have
been advised hereby that I have the right to consult with an attorney prior
to executing this Agreement; (c) I have at least twenty-one (21) days to
consider this Agreement (although I may choose to voluntarily execute this
Agreement earlier); (d) I have (7) days following the execution of this
Agreement by the parties to revoke the Agreement; and (e) this Agreement will
not be effective until the date upon which the revocation period has expired,
which will be the eighth day after this Agreement is executed by me, provided
that the Company has also executed this Agreement by that date ("Effective
Date").

     I further acknowledge that the parties hereto arrived at an agreement in
principle on May 18, 2000, the terms of which are embodied in the foregoing
Agreement and this Release. I agree to waive the additional twenty-one
(21)-day period to review and consider the Agreement, to which I would
otherwise be entitled, and I agree that my twenty-one (21)-day period for
review will be deemed to have begun on April 28, 2000.

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     I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS. In giving this release, which includes claims which may be
unknown to me at present, I acknowledge that I have read and understand
Section 1542 of the California Civil Code which reads as follows: "A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor." I hereby
expressly waive and relinquish all rights and benefits under that section and
any law of any jurisdiction of similar effect with respect to my release of
any unknown or unsuspected claims I may have against the parties released
herein.

     I agree not to commence any proceeding in court against the Company in
connection with the matters released herein and that the only cause of action
I could have against the Company after the date hereof would be for a breach
of the foregoing Agreement or this Release or for matters arising after the
date hereof.

                                       By: /s/ James D. McBride
                                           -----------------------------

                                       Date: May 31, 2000
                                             ---------------------------<PAGE>

[GIBSON, DUNN & CRUTCHER LLP LETTERHEAD]

                                                                  EXHIBIT 10.6

                               August 10, 2000

WRITER'S DIRECT DIAL NUMBER                                 OUR FILE NUMBER
     (415) 393-8390                                          L 97785-00004

VIA FACSIMILE
-------------

Robert H. Rau
Post Office Box 8043
Rancho Santa Fe, CA 92067
Fax: (858) 759-8961

     Re: RESIGNATION

Dear Bob:

     This is to confirm our conversation today with respect to your
resignation from the Board of Willis Lease Finance Corporation ("Company"):

          1.  You will continue to be covered by the Company's director and
              officer insurance policy for actions relating to your service
              as a director and in addition you will continue to be
              indemnified by the Company for actions relating to your
              service as a director pursuant to your indemnification
              agreement dated November 14, 1998, previously provided to you.

          2.  A list of your stock options granted through June 15th is
              attached as Exhibit A. These options are vest in full
              immediately upon your resignation. You will have until
              December 31, 2001 to exercise these options.

          3.  Upon your resignation you shall not longer be an affiliate of
              the Company. Please note that you will be responsible for
              filing a Form 4 within 10 days of your resignation disclosing
              your change in status. A copy of Form 4 is attached as
              Exhibit B. Of course, you remain responsible for insuring that
              you do not trade

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GIBSON, DUNN & CRUTCHER LLP

Robert H. Rau
August 10, 2000
Page 2

              on, or tip anyone else about, inside information you received as
              a director of the Company.

          4.  As consideration for the other business opportunities that you
              passed up in order to make yourself available as a director of
              the Company during 2000 the Company will pay you the fees for
              the board and committee meetings it expects during the remainder
              of 2000. This would total $16,250,000. There are presently four
              board meetings scheduled for the remainder for the year
              (including last Friday's meeting which you were unable to attend
              because of the short notice). In addition we estimate these will
              be three audit committee meetings and three compensation committee
              meetings expected during the remainder of 2000. Exhibit C shows
              how this was calculated. Please note that half of your annual
              fee of $12,500 for the year 2000 has already been paid in stock
              shown in Exhibit A.

          5.  As compensation for the successful negotiation of the agreement
              with Jim McBride the Company will pay you $7,500.

     The Company has sent a check to you for the amounts in paragraphs 4 and
5 by overnight courier today.

     I have attached a press release for your review as Exhibit D describing
the circumstances of your resignation. Please initial this release and fax me
a copy.

     Finally, I attach as Exhibit E a simple resignation letter for your use.
Please fax this to me and to Jane Knapp at Willis.

                                       Very truly yours,

                                       /s/ Douglas D. Smith
                                       Douglas D. Smith

DDS/ip

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