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Committee meets formally twice per year, and more often if needed. Each meeting includes an executive session, with no member of management present. The Compensation Committee's charter is available on the Company's web site(www.willislease.com).

        The Compensation Committee retains compensation consultants from time to time to evaluate executive compensation levels and advise on specific programs; the consultants report directly to the Compensation Committee. For the past threefour years, the Compensation Committee has retained Smith Compensation Consulting to advise on various compensation issues. Smith Compensation Consulting has no other contract or business relationship with Willis Lease.

Compensation Philosophy and Objectives

        The objectives of our compensation programs are to attract and retain high performing executives, to provide a substantial link between the company's performance and executive pay, and to provide stockholders with a superior rate of return. It is the Compensation Committee's philosophy to link the named executive officers' compensation to corporate performance. The individual elements of compensation are targeted at different areas. Base salaries should be sufficiently competitive to attract and retain highly capable executives; annual incentive bonuses are intended to reward meeting budgeted earnings goals each year; long-term incentives, now primarily in the form of grants of restricted stock, are intended to align executive and stockholder interest, reward long term growth of revenues and earnings, and provide an incentive for key executives to stay with the organization over the long term.

        ItThe base salary, annual incentive compensation and long-term incentive compensation of the named executive officers are determined in part by the Compensation Committee reviewing data on prevailing compensation practices of comparable companies with whom we compete for executive talent and evaluating such information in connection with our corporate goals and compensation practices. The Compensation Committee considers various sources of data when determining executive compensation levels, including compensation data from a sampling of public companies and public compensation surveys.

        However, it is difficult to determine a precise peer group because the vast majority of the Company's direct competitors are business units within much larger corporations such as General Electric, United Technologies and Bank of Tokyo Mitsubishi such that the heads of the leasing divisions do not appear in proxy statements as Named Executive Officers—therefore, the Compensation Committee makes its decisions based primarily on its understanding of compensation practices in the aviation services and leasing markets, generally, and for companies of comparable size. Accordingly, with the help of Smith Compensation Consulting, the Company has developed information on executive pay practices in (i) public financial services and leasing companies similarand (ii) other public companies headquartered in size toNorthern California which are representative of the market in which the Company primarily using surveys including, "Watson Wyatt Data Services Top Management Compensation Report" published annually by Watson Wyatt Worldwide.

        The 2008 Watson Wyatt survey (last used by our consultant to compare top executive compensation at the Company) included data on 17,900 executives in over 2,500 organizations. The Watson Wyatt survey was used primarily to compare base salaries and annual incentive compensation levels. The comparison groups from which Watson Wyatt survey data was drawn included industrial companies with sales revenues from $50 to $200 million, all industrial companies with sales under $1 billion, and financial institutions with assets under $2 billion. Since the organizations included were most comparable to the business of the Company, the Smith Consulting analysis focused primarily on the third group—financial companies with assets under $2 billion. The companies included in this third grouping were:

•

Amalgamated Bank of Chicago

•

American Bank

•

Bank of Blue Valley

•

Bankers' Bank

•

Educational Employees Credit Union—Ft Worth

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Elevations Credit Union

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Federal Reserve Bank of Boston

•

First Bank Holding Company, Colorado

•

Liberty Bank

•

National Chiropractic Malpractice Insurance Company

•

SAC Federal Credit Union

•

The Bank of Tampa

•

Thrivent Financial for Lutherans

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United Bankers Bank

•

University Federal Credit Union

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        The individual elementscompetes for talent. For fiscal year 2010, the sample of compensation are targeted at different areas. Base salaries are sufficiently competitive to attract and retain highly capable executives; annual incentive bonuses are intended to reward meeting budgeted earnings goals each year; long-term incentives, now primarily in the form of grants of restricted stock, are intended to align executive and stockholder interest, reward long term growth of revenues and earnings, and provide an incentive for key executives to stay with the organization over the long term.

        Our intention is to provide total compensation opportunity targeted at the 75th percentile of prevailing market compensation, and to pay that level of compensation only when the Company's financial goals are achieved or exceeded. At the timecompanies consisted of the Smith Consulting review, the base salaries of Company executives compared to the 75^th percentile of the financial institutions peer group as follows (Mr. Crews, our COO, was hired on July 29, 2009. His base salary is identical to that of his predecessor):following companies:

        Smith Consulting also comparedIn selecting the public companies for inclusion in the sample, the following factors were considered: industry, geographic location, net revenues, market capitalization, and whether the company may compete against us for executive talent. These companies ranged in annual incentive bonus opportunityrevenue from approximately $33 million to $1.75 billion (median of $388 million) and market capitalization from approximately $112 million to $2.5 billion (median of $787 million).

        In addition to gathering data specific to the survey groupings,above listed companies, the Compensation Committee also reviewed public surveys of compensation practices, including surveys conducted by Watson Wyatt Worldwide, Towers Perrin, and Mercer.

        Our general guideline is to determine whetherprovide a total compensation opportunity which is reasonable in the Company's target bonuses (the amount intended to be paid when budget and other organizational goals are met) were reasonable and competitive. The following table shows targeted bonus percentage for top Company positions and two industry groupings, expressed as a percentage of base salary:

        In order to account for the differences in bonuses actually paid among companies and as an additional data point, a comparison of the total annual cash compensation (assuming target bonuses) for the Named Executive Officers to the total annual cash compensation actually paid for the survey group was made as follows:

        At the time of the Smith Consulting study, the comparative annual cash compensation (salary and bonus) levels for the four executives above compared as follows to the survey data:

•

Chief Executive Officer: Mr. Willis' then base salary and target bonus totaled $1,236,250, or 93% of the 75^th percentile for the financial industry survey group.prevailing market. The Compensation Committee felt that Mr. Willis'does not seek to specifically benchmark compensation based upon the sample companies reviewed nor does the Compensation Committee employ any other formulaic process in making compensation decisions. Rather the Compensation Committee uses its subjective judgment based upon a review of all information, including an annual cash compensation should be targeted at 100%review for each officer of the peer group

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75^th percentile, given his many years of excellent leadershipresponsibility, contributions to our financial results and the Company's outstanding results.

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Chief Operating Officer: Mr. Crews' targeted annual cash compensation represented 86% of the survey group's 75^th percentile.our overall performance. The Compensation Committee considers the terms negotiated with Mr. Crews reasonablemakes a generalized assessment of these factors and this information is not weighted in light of the fact that his base salary was similar to that of his predecessor. Mr. Crews brings substantially greater experience in general, and in aviation finance in particular, than his predecessor. Although Mr. Crews' target annual bonus is 50% of his base salary, he also has an opportunity to earn up to 50% of his base salary based on his individual performance in the subjective evaluation of Mr. Willis. Also, Mr. Crews does not have the benefit of an employment contract which guarantees him a base salary for a defined term, or additional severance benefits payable upon the termination of his employment or a change of control of the Company.



•

Chief Financial Officer: While Mr. Forsyth's targeted annual cashany specific manner. Actual compensation was only 69% of the 75^th percentile, the Compensation Committee believed that this was appropriate given Mr. Forsyth's relatively short tenure and that this was his first position as a Chief Financial Officer.



•

Chief Legal Officer: Mr. Nord's targeted annual cash compensation was 78% of the peer group 75^th percentile. In the Compensation Committee's judgment, this was an unreasonably low level of compensation given Mr. Nord's experience and performance and the fact that he has management responsibilities that go beyond the legal function alone. The Compensation Committee's intention was to move Mr. Nord's compensation to a more competitive position over time.

        Because of the transition in Mr. Nunemaker's duties from COO to General Manager—Leasing, the Compensation Committee determined not to adjust his base salary.

        The total annual cash compensation (based on the actual bonuses paid) for the listed Named Executive Officers to (i) the total annual cash compensation actually paid for the survey group as well as to (ii) the Named Executive Officer's target total annual cash compensation (assuming target bonus) is set forth in the columns of the chart below.

        To compare long term incentives in the marketplace, Smith Consulting used data from a composite survey obtained through Watson Wyatt that blended long term incentive market data as reported by Towers Perrin, Mercer, and Watson Wyatt surveys. These surveys represent data collected from hundreds of companies in various industries, and thus provide a broad sample from which to determine competitive long-term incentive grants for executives. The composite data base shows the dollar value of typical long-term incentive grants as a percentage of base pay at the 25^th, 50^th, and 75^th percentiles at various salary levels. In its assessment, the Compensation Committee decided to focus on the 50^th percentile level in determining long-term incentive grants for Company executives. Since base salary levels were already targeted at the 75^th percentile, the result would produce total compensation targeted at approximately the 75^th percentile, on a blended basis.

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        The following table shows the survey data points used by the Compensation Committee in determining restricted stock grants for top Willis Lease executives:

These target values are general guidelines used by the Compensation Committee. Although the Compensation Committee models its grants on these guidelines, the actual grantspackages may vary based on the Compensation Committee's and Mr. Willis' subjective evaluation of each executive's performance and potential and the Company's overall financial position and performance.

Governance of Compensation Programs

        Our CEO, in conjunction with human resources, develops recommended annual salaries, incentive targets and long-term incentive compensation for the Named Executive Officers. UsingAfter reviewing the published survey and comparatorpeer group information described above under "Compensation Philosophy and Objectives,"Objectives" and based on competitivethe market information provided by the Compensation Committee's outside consultant, the Compensation Committee approvesdetermines in its subjective judgment the annual salaries, incentive targets and long-term incentive compensation for the Named Executive Officers.

        In 2006 and early 2007, with the advice of Smith Consulting, the Compensation Committee approved the terms of employment contracts negotiated with Mr. Forsyth as being consistent with current market for his position. The Compensation Committee also approved increases in Messrs. Willis' and Nord's base salaries. In Mr. Willis' case the increase represents the Compensation Committee's assessment of his performance and input from its consultant. In Mr. Nord's case the Compensation Committee considered Mr. Willis' recommendation and input from its consultant and increased his compensation over a two-year period because it believed that it was out of step with the market. Effective January 1, 2008 the Compensation Committee increased Mr. Willis' and Mr. Forsyth's base salary. The Compensation Committee decided to increase Mr. Willis' base salary in recognition of his continued outstanding performance in leading the organization and to bring it in line with the desired position (75^th percentile of market), taking into account the fact that in 2007 under Mr. Willis's leadership the Company's total revenue increased $16 million or 15%, lease portfolio assets increased $142 million or 23%, and earnings per diluted share increased $0.10 to $1.66. Mr. Forsyth's base salary was increased in recognition of his excellent performance, his growth in the CFO position, his increasing role as a part of the senior management team, and the relatively low position of his salary in the marketplace. Mr. Forsyth's base salary at his hire date of January 2007 was lower than market reflecting the fact that this was his first CFO position. In addition to increasing his salary to reflect his experience and growth in the role, the Compensation Committee took note that in addition to effectively managing the company's regular auditing and public reporting activities, he upgraded the staff of the accounting group in a majority of positions, successfully negotiated a new "warehouse" financing facility in conjunction with our WEST securitization and oversaw the implementation of a significant change in Company's accounting for maintenance reserves paid under its leases.

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        On December 16, 2008 the Compensation Committee approved a revised Employment Agreement for Mr. Willis which superseded his previous agreement entered into in 2000. Mr. Willis' employment agreement was amended and restated to update its terms since the prior employment agreement was entered into in 2000. In addition, in connection with such amendment and restatement, the bonus provisions were clarified such that it was made clear that there was no guaranteed minimum bonus.

        For the reasons discussed above, in 2009 the Compensation Committee approved the terms of employment negotiated with Mr. Crews as being consistent with current market for his position.

Elements of Compensation

        Each element of compensation has a different purpose, although in combination they are intended to make sure that Willis Lease has a competitive compensation package that attracts top talent and provides incentives that encourage a high level of short- and long-term performance for the benefit of stockholders.

The Compensation Committee looks at these elements both individually (to ensure that each element is achieving its objective) and collectively (to ensure that the total compensation package is competitive). In the Compensation Committee's view, all three of the primary compensation elements—salary, annual incentive bonus, and long term incentives through restricted stock grants—are balanced. In other words, the intention is to have each element paid at the 75^th percentile for high performers, not favoring any one element over the other. Thus, failure to achieve annual incentive goals in one year (or surpassing these goals) would not result in a Compensation Committee decision to increase (or reduce) other aspects of compensation.

Components of the total executive compensation package include:

        Base Salary:    Each officer's base salary is set on the basis of the Compensation Committee's assessment of salary levels in effect for comparable positions in the labor market, the officer's personal performance, and internal comparability considerations. The weight given these factors may vary from

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to employees rather than being limited to options as the prior plan required. In conjunction with the approval of the new incentive plan, the Compensation Committee shifted its primary type of long-term incentive grants from options to restricted stock. The Compensation Committee, after consulting with its compensation consultant, has used as a general guide a 1-to-3 ratio for restricted stock in comparison to options—a guideline of one share ofdetermined that the restricted stock is roughly equivalent to 3 options.the best vehicle for long-term executive incentives, instead of the stock options previously granted. In the Compensation Committee's judgment, restricted stock reduces the dilution of stockholders' interest by giving approximately the sameproviding similar value with only¹/3 of the number of shares as would be involved in an option grant. The introduction of the requirement to expense option awards for financial statement reporting purposes also makes restricted stock more attractive in both an absolute dollar sense and simplicity in calculating the accounting expense of the grants. The Compensation Committee also believes that restricted stock has a stronger retention value than do options which can expire without providing any incentive benefit. The current expectation is that restricted stock awards will be the primary form of long term incentives for our executives.

        Mr. Crews was awarded 10,000 sharesIn 2010, the Compensation Committee began its analysis of the value of long-term incentive grants of restricted stock in accordance with the termsto an executive by applying a multiplier of his employment offer letter. No other shares of restricted stock were grantedone to Named Executive Officers in 2009 because the December 2008 restricted stock grants were made as the long-term incentive for 2009 in accordance with the Compensation Committee's review of competitive grant practices in industry as described above.that executive's base salary. The Compensation Committee and Mr. Willis reviewed the long-term incentive guidelines discussed above andthen made a subjective overall assessment with respect to the executives (other than Mr. Willis) to determine the appropriate size of those restricted stock grants to such executives. The Compensation Committee made a similar subjective assessment with respect to Mr. Willis to determine the appropriate size of his restricted stock grants.

        Employee Stock Purchase Plan:    With the exception of the CEO, whose ownership level precludes his participation under IRS regulations, our Named Executive Officers, as well as all other eligible employees, may purchase Company shares at a discount under the Employee Stock Purchase Plan.

        Under the 1996 Employee Stock Purchase Plan (the "ESPP"(as amended, the "ESPP") 175,000250,000 shares of common stock have been reserved for issuance. Participants may purchase not more than 1,000 shares or $25,000 of common stock in any one calendar year. Each January 31 and July 31, shares of common stock are purchased with the employees' payroll deductions from the immediately preceding six months at a price per share of 85% of the lesser of the market price of the common stock on the purchase date or the market price of the common stock on the date of entry into an offering period. See Proposal 2 in this Proxy Statement for a detailed description of the ESPP and the proposed amendment thereto.

Executive Stock Ownership

        While the Company promotes share ownership by its executives, and encourages them to acquire shares through the ESPP (in which all eligible executives participate) and long-term stock incentives in

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the form of restricted stock and stock options, there are currently no specific guidelines for executive stock ownership or requirement for them to hold shares.

Deferred Compensation

        We maintained a Deferred Compensation Plan through September 19, 2007. That Plan permitted participating executives to defer payment of up to 80% of their base salaries and/or part or all of their bonuses. Mr. Willis was the only executive who elected to participate in the Deferred Compensation Plan. In 2006 he terminated his participation and in early 2007 withdrew the balance of his previous deferred compensation. As a result he has no accumulated deferrals. Because of the lack of utilization of the plan, it was terminated by the Board on September 19, 2007.

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Employment Agreements and Severance Payments

        Employment agreements have been entered into with Messrs. Willis, Forsyth, Nunemaker and Nord. In addition to providing for severance as described below, such agreements provide for base salary (subject to increase but not decrease unless part of a salary reduction program affecting all senior executive officers), bonus compensation (as described in the "Annual Incentive Compensation" section of the "Elements of Compensation" portion of the Compensation and Discussion Analysis) and certain benefits. As described in detail below, the employment contracts specify certain severance benefits to be paid in the event of an involuntary termination or termination after a change of control.termination. Consistent with our compensation philosophy, the Compensation Committee believes that the interests of stockholders are best served if the interests of senior management are aligned with those of the stockholders. To this end, we provide enhanced change of control severance benefits to certain of our executive officers to reduce any reluctance of the executive officers to pursue or support potential change in control transactions that would be beneficial to our stockholders. The agreement to pay such severance resulted from negotiations of employment terms with our Named Executive Officers. For further details, please refer to the section "Termination and Change in Control Payments" elsewhere in this proxy statement. The employment agreements also provide a nondisclosure and nonsolicitation of employees covenant for three years after termination of employment (except for Mr. Forsyth whose nonsolicitation covenant period is 2 years after termination of employment).

        Mr. Crews is employed pursuant to an offer letter which provides for aan initial annual base salary of $350,000 per year.year, subject to annual review. He participates in our annual incentive program with a target bonus opportunity of 50% of his base salary. In addition, he is eligible for a separate bonus of up to 50% of his base salary based on Mr. Willis' evaluation of his individual performance as recommended to the Compensation Committee. Mr. Crews also received an award of 10,000 restricted shares of company stock which vests in four equal annual installments, assuming continued employment. Mr. Crews' offer letter does not provide for severance benefits or other payments to be made to him upon a termination or change of control.

REPORT OF THE COMPENSATION COMMITTEE

        The Compensation Committee of the Board of Directors has submitted the following report for inclusion in this Proxy Statement:

        The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based on our review of and the discussions with management with respect to the Compensation Discussion and Analysis, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 20092010 for filing with the SEC.

        The foregoing report is provided by the following directors, who constitute the Compensation Committee:

COMPENSATION COMMITTEE

Hans Joerg Hunziker, Committee Chair as of January 1, 2011
Gérard Laviec, Committee Chair
Hans Joerg Hunziker prior to January 1, 2011
W. William Coon, Jr.
Robert T. Morris




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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION


        The Compensation Committee consists of the following four independent directors: Hans Joerg Hunziker (Chair as of January 1, 2011), Gérard Laviec (who was the Chair Hans Joerg Hunziker,prior to January 1, 2011), W. William Coon, Jr., and Robert T. Morris. None of our executive officers currently serves on our Compensation Committee. None of our executive officers is, or was during 2009,2010, serving as a director of or member of the compensation committee of another entity, one of whose executive officers serves, or served, as a director of or on our Compensation Committee.

        The following table sets forth certain information with respect to the compensation of our Chief Executive Officer, Chief Financial Officer, and the three most highly compensated executive officers other than the CEO and CFO based on total compensation for their services with us in all capacities.


SUMMARY COMPENSATION TABLE FOR FISCAL YEAR 20092010


Name and Principal Position (a)	Name and Principal Position (a)		Year (b)			Salary ($) (c)			Bonus ($) (d)			Stock Awards ($)(1) (e)			Option Grants ($) (f)			Non-Equity Incentive Plan Compensation ($)(4) (g)			Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (h)			All Other Compensation ($) (i)			Total ($) (j)			Name and Principal Position (a)		Year (b)			Salary ($) (c)			Bonus ($) (d)			Stock Awards ($)(1) (e)			Option Grants ($) (f)			Non-Equity Incentive Plan Compensation ($)(4) (g)			All Other Compensation ($) (i)			Total ($) (j)
Charles F. Willis, IV	Charles F. Willis, IV			2009			682,500			—			—			—			779,419			—			206,004	(5)		1,667,923		Charles F. Willis, IV			2010			750,750			—			703,824			—			460,524			619,016	(5)		2,534,114
	PRES., CEO			2008			682,500			—			1,976,075	(2)		—			1,275,475			—			113,439			4,047,489		CEO, President			2009			682,500			—			—			—			779,419			206,004			1,667,923
				2007			650,000			—			1,421,807			—			920,527			200,379			53,486			3,246,199					2008			682,500			—			1,976,075	(2)		—			1,275,475			113,439			4,047,489
Bradley S. Forsyth	Bradley S. Forsyth			2009			273,000			—			—			—			217,060			—			12,315	(6)		502,375		Bradley S. Forsyth			2010			284,667			—			143,495			—			104,772			12,315	(6)		545,249
	SVP, CFO			2008			260,000			—			638,454	(2)		45,200	(3)		291,537			—			8,002			1,243,193		CFO, SVP			2009			273,000			—			—			—			217,060			12,315			502,375
				2007			230,000			—			335,405			—			245,435			—			57,966	(7)		868,806					2008			260,000			—			638,454	(2)		45,200	(3)		291,537			8,002			1,243,193
Jesse V. Crews	Jesse V. Crews			2009			149,872			74,936			136,900			—			85,572			—			8,475	(8)		455,755		Jesse V. Crews			2010			350,000			—			174,999			—			107,348			15,065	(7)		647,412
	EVP, COO																													COO, EVP			2009			149,872			74,936			136,900			—			85,572			8,475			455,755
Donald A. Nunemaker	Donald A. Nunemaker			2009			297,275			—			—			—			169,745			—			28,733	(9)		495,753		Donald A. Nunemaker			2010			307,879			—			155,001			—			94,429			23,793	(8)		581,102
	EVP, GM-Leasing			2008			297,275			—			516,329	(2)		—			277,778			—			21,991			1,113,373		EVP, GM-Leasing			2009			297,275			—			—			—			169,745			28,733			495,753
				2007			297,275			—			216,921			—			210,500			—			24,287			748,983					2008			297,275			—			516,329	(2)		—			277,778			21,991			1,113,373
Thomas C. Nord	Thomas C. Nord			2009			290,000			—			—			—			195,591			—			15,065	(10)		500,656		Thomas C. Nord			2010			295,000			—			148,005			—			90,479			15,065	(9)		548,549
	SVP, GC, Secretary			2008			290,000			—			541,188	(2)		—			270,980			—			14,164			1,116,332		GC, SVP, Secretary			2009			290,000			—			—			—			195,591			15,065			500,656
				2007			265,000			—			422,898			—			187,646			—			13,527			889,071					2008			290,000			—			541,188	(2)		—			270,980			14,164			1,116,332

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(1)

The amounts in this column represent the grant date fair value of awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Amounts718 as discussed in Note 12—Stock-Based Compensation Plans—in our report filed on Form 10K for 2007the fiscal year 2010 filed with the Securities and 2008 have been recomputed under the same methodology in accordance with SEC rules.Exchange Commission.



(2)

As discussed above in "Long-term Incentive Compensation," restrictedRestricted stock grants were made to Named Executive Officers in December 2008 as the long-term incentive for 2009. Accordingly, no further grants of restricted stock were made to such Named Executive OfficersOfficer in 2009.



(3)

Grant date value of stock appreciation right granted in 2007, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 and in accordance with SEC rules.



(4)

Reflects cash bonuses paid to our Named Executive Officers pursuant to the annual incentive program. For a description of the program, see "Compensation of Executive Officers—Compensation Discussion & Analysis—Elements of Compensation—Annual Incentive Compensation" in this proxy statement.



(5)

Includes (i) a 401(k) matching contribution in the amount of $11,000, (ii) $4,815 for the allocated cost of Mr. Willis' participation in a group life, disability and accidental death and dismemberment policy that covers certain of the Company's executive officers, (iii) $8,282 for an individual accidental death and dismemberment policy for Mr. Willis,




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(iv) $18,161$269,813 for tax gross-upstax-related payments in respect of Mr. Willis' temporary relocation to the United Kingdom (including $7,142 for tax gross-ups and $262,671 for tax equalization payments), and the following perquisites:





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$535508 for personal use of a company car. This amount was calculated as a proration of total fuel costs and highway tolls (based on personal use as a percentage of total use).



•

$6,3009,688 for three club memberships to facilitate his role as a Company representative in the community. This amount is based on the actual cost to the Company.



•

$30,000 for financial, tax and estate planning services. This amount is based on the actual cost to the Company.




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•

$126,911284,910 in relocation benefits paid to or on behalf of Mr. Willis in connection with his temporary relocation to the United Kingdom. This amount is based on the actual cost to the Company.



•

In addition, Mr. Willis had guests accompany him on the Company's plane on business trips during 20092010 with no orde minimisminims incremental cost.costs.



(6)

Includes (i) a 401(k) matching contribution in the amount of $8,250 and (ii) $4,065 for the allocated cost of Mr. Forsyth's participation in a group life, disability, and accidental death and dismemberment policy that covers certain of the Company's executive officers.



(7)

Includes relocation reimbursement in the amount of $50,000 to assist with relocation to the Company's headquarters.



(8)

Includes (i) a 401(k) matching contribution in the amount of $4,410,$11,000, and (ii) $4,065 for the allocated cost of Mr.Crews'Mr. Crews' participation in a group life, disability, and accidental death and dismemberment policy that covers certain of the Company's executive officers.



(9)(8)

Includes (i) a 401(k) matching contribution in the amount of $11,000, (ii) $4,065 for the allocated cost of Mr. Nunemaker's participation in a group life, disability, and accidental death and dismemberment policy that covers certain of the Company's executive officers, and (iii) $8,728 for an individual accidental death and dismemberment policy for Mr. Nunemaker, and the following perquisites:



•

$670 for personal use of a company car. This amount was calculated as a proration of total fuel costs and highway tolls (based on personal use as a percentage of total use).



•

$4,270 for the actual cost of airfare for Mr. Nunemaker's spouse who accompanied him on a business trip. This amount is based on the actual cost to the Company.Nunemaker.



(10)(9)

Includes (i) a 401(k) matching contribution in the amount of $11,000, and (ii) $4,065 for the allocated cost of Mr.Nord'sMr. Nord's participation in a group life, disability, and accidental death and dismemberment policy that covers certain of the Company's executive officers.




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        The following table sets forth certain information with respect to the grant of non-equity incentive plan awards under our Annual Incentive Program.


GRANTS OF PLAN-BASED AWARDS
For Fiscal Years Ended 20092010


					Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)									Estimated Future Payouts Under Equity Incentive Plan Awards									All Other Stock Awards: Number of Shares of Stock or Units (#)(1) (i)			Grant Date Fair Value of Stock and Option Awards ($)(2) (m)							Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)									Estimated Future Payouts Under Equity Incentive Plan Awards									All Other Stock Awards: Number of Shares of Stock or Units (#)(2) (i)			Grant Date Fair Value of Stock and Option Awards ($)(3) (j)
Name (a)		Grant Date (b)			Threshold ($) (c)			Target ($) (d)			Maximum ($) (e)			Threshold (#) (f)			Target (#) (g)			Maximum (#) (h)										Grant Date (b)			Threshold* ($)(1) (c)			Target ($) (d)			Maximum ($) (e)			Threshold (#) (f)			Target (#) (g)			Maximum (#) (h)
Charles F. Willis, IV			—			—			682,500			—			—			—			—			—			—				—		$	375,375		$	750,750			—			—			—			—			—			—
			—			—			—			—			—			—			—			—			—				5-28-10			—			—			—			—			—			—			63,984		$	703,824
Bradley S. Forsyth			—			—			163,800			—			—			—			—			—			—				—		$	86,100		$	172,200			—			—			—			—			—			—
			—			—			—			—			—			—			—			—			—				5-28-10			—			—			—			—			—			—			13,045		$	143,495
Jesse V. Crews			—			—			350,000			—			—			—			—			—			—				—		$	87,500		$	175,000			—			—			—			—			—			—
			7-29-09			—			—			—			—			—			—			10,000		$	136,900				5-28-10			—			—			—			—			—			—			15,909		$	174,999
Donald A. Nunemaker			—			—			148,700			—			—			—			—			—			—				—		$	77,500		$	155,000			—			—			—			—			—			—
			—			—			—			—			—			—			—			—			—				5-28-10			—			—			—			—			—			—			14,091		$	155,001
Thomas C. Nord			—			—			145,000			—			—			—			—			—			—				—		$	74,000		$	148,000			—			—			—			—			—			—
			—			—			—			—			—			—			—			—			—				5-28-10			—			—			—			—			—			—			13,455		$	148,005

During 2009, no stock options were granted.

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(1)

Reflects the minimum amount of the target awards from the 20092010 annual incentive programs.programs, assuming the Company's achievement of 50% of the financial goal established by the Board (no annual incentive is paid if the Company achieves less than 50% of that goal). For additional information, please see "Annual Incentive Compensation" above.



(2)

Reflects the full amount of the target awards from the 2010 annual incentive programs, assuming the Company's achievement of 100% of the financial goal established by the Board. For additional information, please see "Annual Incentive Compensation" above.



(3)

The amounts in this column represent the grant date fair value of awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718.




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        The following table sets forth certain information with respect to the outstanding equity awards held by the named executive officersNamed Executive Officers at the end of 2009.2010.


OUTSTANDING EQUITY AWARDS AT FISCAL 20092010 YEAR-END


		Option Awards															Stock Awards																Option Awards									Stock Awards
Name (a)		Number of Securities Underlying Unexercised Options (#) Exercisable (b)			Number of Securities Underlying Unexercised Options (#) Unexercisable (c)(1)			Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)			Option Exercise Price($) (e)			Option Expiration Date (f)			Award Grant Date (g)			Number of Shares or Units of Stock That Have Not Vested (#) (h)(2)			Market Value of Shares or Units of Stock That Have Not Vested($) (i)			Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (j)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (k)				Number of Securities Underlying Unexercised Options (#) Exercisable (b)			Option Exercise Price($) (c)			Option Expiration Date (d)			Award Grant Date (e)			Number of Shares or Units of Stock That Have Not Vested (#) (f)(1)			Market Value of Shares or Units of Stock That Have Not Vested($) (g)
Charles F. Willis, IV			59,000			—						9.20			8/5/2015																			59,000			$9.20			8/5/2015			10/1/2007			22,962
			127,954			—						5.01			3/3/2013																			127,954			$5.01			3/3/2013			1/15/2008			38,752
			36,614			—						4.68			5/8/2012			10/1/2007			45,924													36,614			$4.68			5/8/2012			7/17/2008			8,832
			150,000			—						5.40			10/12/2011			1/15/2008			58,128													150,000			$5.40			10/12/2011			12/17/2008			58,500
			140,000			—						10.00			2/27/2011			7/17/2008			13,249													140,000			$10.00			2/27/2011			5/28/2010			63,984
			66,942			—						5.50			10/13/2010			12/17/2008			78,000
																																														193,030			$2,515,181
			580,510			—						6.78									195,301		$	2,929,515
Bradley S. Forsyth																																		—			—						10/1/2007			5,416
																																											1/15/2008			10,334
Bradley S. Forsyth																		10/1/2007			10,833
			—			—						—						1/15/2008			15,501																						7/17/2008			5,888
																		7/17/2008			8,832																						12/17/2008			18,720
																		12/17/2008			24,960																						5/28/2010			13,045
																					60,126		$	901,890																						53,403			$695,841
Jesse V. Crews																																		—			—						7/29/2009			7,500
			—			—						—						7/29/2009			10,000																						5/28/2010			15,909
																					10,000		$	150,000																						23,409			$305,019
Donald A. Nunemaker			28,000			—						9.20			8/5/2015																			28,000			$9.20			8/5/2015
			14,560			—						5.01			3/3/2013																			14,560			$5.01			3/3/2013
			35,440			—						5.01			3/3/2013																			35,440			$5.01			3/3/2013			10/1/2007			3,503
			26,106			—						4.68			5/8/2012																			26,106			$4.68			5/8/2012			1/15/2008			8,861
			50,544			—						4.68			5/8/2012																			50,544			$4.68			5/8/2012			12/17/2008			20,384
			3,287			—						5.40			10/12/2011			10/1/2007			7,006													18,917			$10.00			2/27/2011			5/28/2010			14,091
			31,713			—						5.40			10/12/2011			1/15/2008			13,292
			56,000			—						10.00			2/27/2011			12/17/2008			27,179																									46,839			$610,312
			245,650			—						6.58									47,477		$	712,155
Thomas C. Nord																		10/1/2007			13,659													22,000			$9.20			8/5/2015			10/1/2007			6,829
																		1/15/2008			12,966																						1/15/2008			8,644
			22,000			—						9.20			8/5/2015			7/17/2008			8,832																						7/17/2008			5,888
			28,600			—						5.07			8/7/2013			12/17/2008			19,885																						12/17/2008			14,913
																																											5/28/2010			13,455
			50,600			—						6.87									55,342		$	830,130
																																														49,729			$647,969

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(1)

Options vest in four equal annual installments on each anniversary of the grant date.



(2)

Shares of restricted stock granted on 10-1-2007, 1-15-2008, 7-17-200810/1/2007, 1/15/2008, 7/17/2008, 7/29/2009 and 7-29-20095/28/10 vest in four equal annual installments on each anniversary of the grant date. Shares of restricted stock granted 12-17-200812/17/2008 vest in five equal annual installments on each anniversary of the grant date.




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        The following table sets forth certain information with respect to options exercised by the named executive officerNamed Executive Officer and stock that vested during fiscal year 2009.2010.


OPTION EXERCISES AND STOCK VESTED
For Fiscal Year Ended 20092010


		Option Awards						Stock Awards							Option Awards						Stock Awards
Name of Executive Officer (a)		Number of Shares Acquired on Exercise (#) (b)			Value Realized on Exercise ($) (c)			Number of Shares Acquired on Vesting (#) (d)			Value Realized on Vesting ($) (e)				Number of Shares Acquired on Exercise (#) (b)			Value Realized on Exercise ($) (c)			Number of Shares Acquired on Vesting (#) (d)			Value Realized on Vesting ($) (e)
Charles F. Willis, IV			—			—			66,255		$	819,142				66,942		$	287,202			66,255		$	807,752
Bradley S. Forsyth			—			—			19,769		$	248,894				—			—			19,768		$	238,101
Jesse Crews			—			—			—			—
Jesse V. Crews																—			—			2,500		$	23,725
Donald A. Nunemaker			52,499		$	344,830			14,729		$	181,443				72,083		$	450,517			14,729		$	187,863
Thomas C. Nord			1,400		$	9,802			19,070		$	242,759				28,600		$	332,618			19,068		$	223,884

        We do not offer pension benefits and therefore have not included the Pension Benefits table.

Termination and Change in Control Payments

        Employment contracts for Messrs. Willis, Forsyth, Nunemaker and Nord specify certain severance benefits to be paid in the event of an involuntary"Involuntary Termination" (i.e., termination of employment by the Company without cause or resignation by the employee for good reason) and, in the case of Messrs. Forsyth, Nunemaker and Nord, specified severance benefits in the event of an Involuntary Termination within 18 months following a change of control.control (a "Change of Control Termination"). As discussed above, Mr. Crews is employed by the Company pursuant to an offer letter which does not provide for severance benefits or other payments to be made to him upon a termination or change of control.

        The maximum of these benefits payable to Mr. Willis would represent (i) three times his base salary, andplus (ii) a prorated portion of his annual incentives accrued during the year of termination, plus (iii) the average annual incentives he earned during the three years prior to his termination,Involuntary Termination, plus payment of unvested annual incentives due during the year of termination,(iv) distribution of unpaid deferred compensation, immediate vesting of all stock options and restricted stock, and continued coverage for three years under the Company's employee group benefit plans. Additionally, in the event Mr. Willis is terminated with less than the one year's notice required by his contract, he is entitled to a lump sum payment equal to his annual base salary prorated for the portion of the year for which he did not receive notice. Upon a change of control, Mr. Willis is entitled to immediate vesting of all stock options and restricted stock, whether or not his employment is terminated. In the event that Mr. Willis voluntarily retires, he is entitled to purchase or assume the lease for his company car, to continued payment for his club memberships and financial planning services in accordance with his contract, and to continued coverage under the Company's employee group benefit plans for one year following his retirement.

        The maximum of these severance benefits payable to Mr. Forsyth would represent (i) one year of his base salary for termination without causean Involuntary Termination or 18 months salary uponfor a changeChange of control,Control Termination, plus (ii) payment of any vested annual incentives due as of his termination for an Involuntary Termination or Change of Control Termination, plus (iii) only in the case of a change in control,Change of Control Termination the average annual incentives he earned during the two years prior to his termination, plus payment of unvested annual incentives due during the year of termination. In addition, he is entitled to immediate vesting of all stock options and restricted stock scheduled to vest during the two years following the termination date, and continued coverage for one year under the Company's employee group benefit plans.plans for one year following an Involuntary Termination, or for 18 months following a Change of Control Termination. Additionally, in the event Mr. Forsyth is




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terminated with less than the one year's notice required by his contract, he is entitled to a lump sum payment equal to one year of his annual base salary.

        The maximum of these severance benefits payable to Mr. Nunemaker would represent (i) one year of his base salary for termination without causean Involuntary Termination or 18 months base salary uponfor a change in control,Change of Control Termination, plus (ii) a prorated portion of his annual incentives accrued during the year of termination for an Involuntary Termination or Change of Control Termination, plus (iii) in case of a change in control,an Involuntary Termination, the average annual incentive he earned during the two years prior to his termination, or in case of a Change of Control Termination, one and one half times the average annual incentives earned during the two years prior to his termination upon a change of control, plus a prorated portion of his annual incentives due during the year of termination. In addition, he is entitled to immediate vesting of all stock options and restricted stock, and continued coverage for one year under the Company's employee group benefit plans for one year following an Involuntary Termination, or for 18 months iffollowing a changeChange of control.Control Termination. Additionally, in the event Mr. Nunemaker is terminated with less than the six months' notice required by his contract, he is entitled to a lump sum payment equal to six months' of his annual base salary.

        The maximum of these severance benefits payable to Mr. Nord would represent (i) six months of his base salary for termination without causean Involuntary Termination or one year's salary uponfor a changeChange of Control Termination, plus (ii) payment of any vested annual incentives due as of his termination for an Involuntary Termination or Change of Control Termination, plus (iii) only in control, plus, inthe case of a change in control,Change of Control Termination, the average annual incentive he earned during the two years prior to his termination,




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plus payment of annual incentives due during the year of termination. In addition, he is entitled to immediate vesting of all stock options and restricted stock scheduled to vest during the two years following the termination date, and continued coverage for six months under the Company's employee group benefit plans.plans for six months following an Involuntary Termination, or for one year following a Change of Control Termination. Additionally, in the event Mr. Nord is terminated with less than the six months' notice required by his contract, he is entitled to a lump sum payment equal to six months' of his annual base salary.

        However, if any of these payments or benefits would constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986 (the "Code"), as amended, and would be subject to the Excise Tax imposed by Section 4999 of the Code, the contract stipulates that payments to Messrs. Willis, Forsyth, Nunemaker and Nord will be reduced to an amount equal to the larger of the amount the executive would receive if their payment were reduced to a level that would not trigger the "parachute payment" excise tax, or the full payment subject to the excise tax.

        IfOther than as described above, if a named executive officer ceases to be employed by us because of his resignation or retirement (other than for reasons constituting a constructive termination under their employment agreements), no severance payments are owed by us.




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        The following table shows potential payments to our Named Executive Officers under existing contracts for termination without cause or in connection with(i) an Involuntary Termination, and (ii) a change in controlChange of Control Termination, in each case, on December 31, 2009.2010.


Potential Payments on Involuntary Termination orand Change of Control Termination


		Willis						Forsyth						Crews						Nunemaker						Nord							Willis						Forsyth						Crews						Nunemaker						Nord
		Termination			Change			Termination			Change			Termination			Change			Termination			Change			Termination			Change				Termination			Change			Termination			Change			Termination			Change			Termination			Change			Termination			Change
Severance payment		$	5,510,400		$	5,510,400		$	705,300		$	841,800			—			—		$	690,100		$	960,900		$	519,300		$	664,300			$	2,252,250		$	2,252,250		$	287,000		$	430,500			—			—		$	310,000		$	465,000		$	148,000		$	296,000
In lieu of notice			682,500			682,500			273,000			273,000			—			—			148,700			148,700			145,000			145,000
Payment In lieu of notice																																		750,750			750,750			287,000			287,000			—			—			155,000			155,000			148,000			148,000
Annual incentives																																		3,435,945			3,435,945			104,772			359,071		$	107,348		$	107,348			318,191			430,071			90,479			323,765
Accelerated Vesting of Restricted Stock Awards(1)			2,929,500			2,929,500			593,000			593,000			—			—			712,200			712,200			572,000			572,000				2,515,181			2,515,181			529,552			529,552			—			—			610,312			610,312			495,544			495,544
Accrued Vacation and Sick Pay			105,100			105,100			40,500			40,500			11,400			11,400			29,700			29,700			44,700			44,700				115,500			115,500			39,800			39,800			26,900			26,900			41,100			41,100			45,600			45,600
Continued Coverage under all group plans			127,500			127,500			14,400			21,600			—			—			31,200			46,810			7,300			14,600				124,500			124,500			25,700			38,550			—			—			28,700			43,050			5,500			11,000
Club Memberships			22,500			22,500			—			—			—			—			—			—			—			—				23,400			23,400			—			—			—			—			—			—			—			—
Financial/Tax/Estate Planning			90,000			90,000			—			—			—			—			5,000			5,000			—			—				90,000			90,000			—			—			—			—			5,000			5,000			—			—
																				��
Total Severance Payment		$	9,467,500		$	9,467,500		$	1,626,200		$	1,769,900		$	11,400		$	11,400		$	1,616,900		$	1,903,310		$	1,288,300		$	1,440,600			$	9,307,526	(2)	$	9,307,526	(2)	$	1,273,824		$	1,684,473		$	134,248		$	134,248		$	1,468,303		$	1,749,533		$	933,123		$	1,319,909

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(1)

The value of the unvested restricted stock awards as of December 31, 20092010 was set forth in the Outstanding Equity Awards at Fiscal 20092010 Year-End table and based on the Company's closing stock price on December 31, 20092010 of $15.00.$13.03. These values would be the same for both a termination without causean Involuntary Termination and a changeChange of control.Control Termination. The additional aggregate value of equity vesting acceleration as of December 31, 20092010 for both an Involuntary Termination and a terminationChange of employment without cause as well as a change of controlControl Termination for Messrs. Forsyth and Nord is limited to awards vesting in the two years following termination.



(2)

No adjustment in these numbers was made to reflect any reduction that would have been made so that payments would not trigger a parachute payment excise tax. However if an Involuntary Termination or Change of Control Termination occurred on December 31, 2010, such a reduction would likely have been necessary.

Director Compensation

        Our outside, independent (non-employee) directors are compensated by a combination of an annual cash retainer, and restricted stock, with additional stipends for the Chairs of the Audit and the Compensation Committees. In addition, new non-employee directors are granted 5,000 shares of restricted Company stock on their appointment.

        The Company does not provide additional compensation to executives who serve on the Board.

        In March 2009, based on an analysis of market levels for board compensation in companies the size of Willis Lease conducted by Smith Compensation Consulting, the Board voted to adopt a new schedule for independent director compensation, to be effective January 1, 2009. The total fee was increased to $97,000 per year, one-half payable in cash and one-half in the form of an award of restricted stock based on the closing price of the Company's shares on the date of the Annual Meeting of Stockholders. The Chair of the Audit Committee continues to receive a $10,000 stipend and the Compensation Chair receives a $5,000 stipend. Additionally, in December 2009, the Board voted to increase director compensation by 5% for 2010.




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        The following table summarizes compensation by individual non-employee director for 2009.2010.


DIRECTOR COMPENSATION
For Fiscal Year Ended 20092010


Name (a)		Fees Earned or Paid in Cash ($) (b)			Stock Awards ($)(1) (c)			Option Awards ($) (d)			Non-Equity Incentive Plan Compensation ($) (e)			Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f)			All Other Compensation ($) (g)			Total ($) (h)				Fees Earned or Paid in Cash ($) (b)			Stock Awards ($)(1) (c)			Option Awards ($) (d)			Non-Equity Incentive Plan Compensation ($) (e)			Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f)			All Other Compensation ($) (g)			Total ($) (h)
Gérard Laviec(2)			84,219			48,502			—			—			—			—			132,721			$	86,340		$	50,929			—			—			—			—		$	137,269
Hans Joerg Hunziker(2)			53,585			48,502			—			—			—			6,500	(3)		108,587			$	59,240		$	50,929			—			—			—		$	60,200	(3)	$	170,369
W. William Coon, Jr.			48,500			48,502			—			—			—			—			97,002			$	50,925		$	50,929			—			—			—			—		$	101,854
Robert T. Morris			58,500			48,502			—			—			—			—			107,002			$	60,925		$	50,929			—			—			—			—		$	111,854
Austin C. Willis			48,500			48,502			—			—			—			—			97,002			$	50,925		$	50,929			—			—			—			—		$	101,854

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(1)

The amounts in this column represent the grant date fair value of awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718.



(2)

In recognition of the adverse effects of European exchange rates against the U.S. dollar, the Compensation Committee agreed to allow the compensation of European directors to be adjusted based on the rate in effect on their first election to the Board, effective January 1, 2008. This adjustment is paid in cash.



(3)

Payment under the Independent Contractor Agreement described below under "Certain Relationships and Related Transactions."

        The unvested restricted stock held by each director is as follows: Mr. Laviec, 3,644;4,327; Mr. Hunziker, 3,644;4,327; Mr. Coon, 6,144;5,577; Mr. Morris, 6,144;5,577; Mr. Willis, 7,394.6,827. Under the 2007 Plan each non-employee Board member received a restricted stock grant of 5,000 shares of common stock when they first become a non-employee Board member. In addition each individual who is to continue to serve as an independent director wasis granted $48,500approximately $50,925 worth of restricted stock based on the market price of our common stock on the date of the Company's Annual Meeting of Stockholders. Each 5,000 share initial restricted stock grant vests in a series of four successive equal annual installments over the recipient's period of continued service as a Board member measured from the grant date. Each $48,500approximate $50,925 value annual restricted stock grant vests in one installment on the recipients' completion of one year of Board service measured from the grant date.


PROPOSAL 2
AMENDMENT AND RESTATEMENT OF THE EMPLOYEE STOCK PURCHASE PLANADVISORY VOTE ON EXECUTIVE COMPENSATION


        The Company'srecently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), enables our stockholders are being askedto vote to approve, on an amendment and restatement toadvisory (nonbinding) basis, the ESPP that will increase the maximum numbercompensation of shares of common stock authorized for issuance over the term of the ESPP from 175,000 to 250,000 and extend the term of the ESPP until the last business day of July 2020.our named executive officers as disclosed in this proxy statement in accordance with SEC rules.

        The ESPP is intendedAs described in detail under the heading "Executive Compensation—Compensation Discussion and Analysis," our executive compensation philosophy and programs are designed to provide employeesfoster a performance-oriented culture that aligns our executive officers' interests with those of our stockholders. Please read the Company with additional incentives by permitting them to acquire a proprietary interest"Compensation Discussion and Analysis" in the Company throughproxy statement for details about our executive compensation programs, including information about the purchasefiscal year 2010 compensation of the Company's common stock. The ESPP was initially adopted by the Company's Board of Directors on June 20, 1996 and such adoption was subsequently approved by the Company's stockholders. It was amended and restated as of August 1, 1998. It was again amended and restated as of August 1, 2004, and such amendment and restatement was subsequently approved by the Company's stockholders.our named executive officers.




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        OfWe are asking our stockholders to indicate their support for the 175,000 shares currently authorized under the ESPP, 143,033 shares have been issuedcompensation arrangements with our named executive officers as of April 21, 2010. If approved, the proposed authorized share increase will assure that a sufficient reserve of common stock is available under the ESPP to attract and retain the services of key individuals essential to the Company's long-term growth and success.

        The amendment and restatement to the ESPP was adopted by the Board as of April 21, 2010. The following is a summary of the principal features of the ESPP, as most recently amended. However, the summary does not purport to be a complete description of all the provisions of the ESPP. A copy of the actual plan document is attached todescribed in this Proxy Statement as Exhibit A.

Administration

        The Administration of the ESPP is overseen by the Compensation Committee of the Board of Directors. The committee has full power to interpret the ESPP and, subject to the express terms of the ESPP, to establish the terms of offerings under the ESPP. The decisions of the committee are final and binding on all participants.

Eligibility

        All Employees of the Company (including officers and directors), who work more than twenty hours per week and more than five months in any calendar year (unless otherwise required by local law), and who commenced employment with the Company on or before the first day of the applicable Offering Period (as defined below), will be eligible to participate in the ESPP. However, an employee will not be eligible to participate if,proxy statement. This proposal, commonly known as a result of participating, that employee would hold five percent or more of"say-on-pay" proposal, gives our stockholders the total combined voting power or value of all classes of stock of the Company or of any subsidiary. Further, no employee's rightopportunity to purchase common stock under the ESPP may accrue at a rate which exceeds $25,000 per year of the fair market value of stock. Approximately 60 employees currently would be eligible to participate in the ESPP as of April 21, 2010.

Offerings Under the ESPP

        Eligible employees of the Company may elect to participate in the ESPP by giving notice to the Company and instructing the Company to withhold a specified percentage of the employee's salary during successive month periods. Generally, the periods run for up to twenty four months and each period is referred to as an "Offering Period." Each Offering Period is broken down into four Purchase Intervals of six months running from the first business day of August to the last business day of January, and the first business day of February to the last business day of July. An eligible employee may authorize a salary deduction of any whole percentage, up to ten percent, of his base, straight-time, gross earnings. An employee's salary deductions may be reduced to zero, without his or her consent, at any time during an Offering Period, to comply with the limitations contained in the ESPP or under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").

Purchase Price and Shares Purchased

        On the last business day of a Purchase Interval, the withheld salary will be used to purchase common stock at a price equal to 85% of the fair market value of the common stockexpress their views on either the first day or the last day of the Offering Period, whichever price is less (the "Purchase Price"). For this purpose, fair market value is the closing sales price reported on the NASDAQ or, in the absence of reported sales on the relevant date, the closing sales price on the immediately preceding date on which sales were reported. If, on the last day of a Purchase Interval, the number of shares of common stock to be purchased by all participants exceeds the number of shares available for purchase during the Purchase Interval, the Company will make a pro rata allocation of the shares remaining available for




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purchase. The maximum number of shares purchasable by a participant on the last business day of a Purchase Interval is 500 shares.

Withdrawal/Termination of Participation

        Shares will be purchased automatically on the last day of the Purchase Interval for a participating employee who remains an eligible participant. Participation ends automatically upon an employee's termination of employment with the Company for any reason, including retirement or death. During any Purchase Interval, an employee may withdraw from participation in the ESPP at any time prior to the end of any Purchase Interval, or may during the Offering Period decrease the rate of salary deductions. Upon a participant's termination or withdrawal from the ESPP, all accumulated payroll deductions for the participant made prior to termination, are returned, without interest, and no shares are purchased for that employee's account.

Shares Subject to the ESPP

        The maximum number of shares of common stock which may be purchased by employees under the ESPP, if approved, will be 250,000 shares (of which 143,033 shares have been issued pursuant to the ESPP as of April 21, 2010), subject to adjustments for stock splits, stock dividends and similar transactions. The shares may be authorized but unissued shares of common stock, issued shares held in or acquired for the Company's treasury, or shares reacquired by the Company upon purchase in the open market. The closing price of a share of common stock on March 22, 2002 was $15.19.

Amendment and Termination of the ESPP

        The ESPP may be amended or terminated by the Board of Directors in any respect, except that no amendment shall be effective without stockholder approval if the amendment would, among other things, increase the aggregate number of shares of common stock which may be issued under the ESPP, and no termination, modification or amendment of the ESPP may, with respect to the Offering Period in which the termination, modification or amendment occurs, adversely affect the rights of an employee then participating in the ESPP without the employee's consent.

Federal Income Tax Consequences

        The following general summary describes the typical U.S. federal income tax consequences of the ESPP based upon provisions of the Code as in effect on the date hereof, current regulations promulgated and proposed thereunder, and existing public and private administrative rulings of the Internal Revenue Service, all of which are subject to change (possibly with retroactive effect).our named executive officers' compensation. This summaryvote is not intended to be a complete analysis and discussionaddress any specific item of compensation, but rather the federal income tax treatmentoverall compensation of the ESPP, and does not discuss gift or estate taxes or the income tax laws of any municipality, state, or foreign country.

        The ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code. An employee will not recognize income upon electing to participate in the ESPP or upon purchasing shares under the ESPP. If the employee does not dispose of shares for at lease two years from the beginning of the Offering Period in which the shares were purchased, or in the event of his or her death (whenever occurring), the employee will realize ordinary income upon the disposition (including by sale, gift or death) in an amount equal to the lesser of: (i) the excess of the fair market value of the shares at the time of disposition over their Purchase Price; or (ii) the excess of the fair market value of the shares on the first day of the Offering Period over their Purchase Price. Any additional gain will be taxed as long-term capital gain. If the fair market value of the shares at the time of their disposition is below the Purchase Price, the employee will not recognize any ordinary income, and any loss will be a long-term capital loss. The Company will not have a deductible expense as a result of the purchase of stock under the ESPP, unless there is a "disqualifying" disposition, as described in the next paragraph.




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        If shares purchased under the ESPP are sold by an employee within two years after the beginning of the Offering Period in which the shares were purchased, then that sale constitutes a "disqualifying" disposition in which the employee will realize (1) ordinary income in an amount equal to the excess of the fair market value of the shares on the date of purchase (i.e., the last day of the Offering Period) over the Purchase Price, and (2) a capital gain or loss equal to the difference between: (i) the amount received for the shares; and (ii) the sum of the Purchase Price and the amount of ordinary income recognized. If the disqualifying disposition occurs more than one year after the date of purchase, any capital gain or loss will be long-term; otherwise it will be short-term. If an employee recognizes ordinary income as a result of a disqualifying disposition, the Company will be entitled to a corresponding deduction. To the extent required under the Code and Internal Revenue Service guidance, the Company will withhold income and employment taxes with respect to purchases and dispositions of shares under the ESPP.

Plan Benefits Table

        No purchase rights have been granted, and no shares have been issued, on the basis of the 75,000 share increase, which is the subject of this proposal. Participation in the ESPP is within the discretion of the eligible employees. Because benefits under the ESPP will depend on employees' elections to participate and the fair market value of the Company's common stock at various future dates, it is not possible to determine the benefits that will be received byour named executive officers and other employees if the share increase is approved byphilosophy, policies and practices described in this proxy statement. Accordingly, we are asking our stockholders to vote "FOR" the stockholders. Mr. Willis andfollowing resolution to be presented at the non-employee directors are not eligible to participate inAnnual Meeting:

"RESOLVED, that the ESPP. The table below reflectsCompany's stockholders approve, on an advisory basis, the numbercompensation of shares and the dollar value of shares purchased by named executive officers, as disclosed in the executive group, non-executive director group and non-executive officer employee group duringCompany's Proxy Statement for the 2009 fiscal year:

Name and Position		Dollar Value(1) ($)			Number (#)
Charles F. Willis, IV President, CEO		$	—			—
Bradley S. Forsyth SVP, CFO		$	11,825			1,000
Jesse Crews EVP, COO		$	—			—
Donald A. Nunemaker EVP, GM-Leasing		$	11,825			1,000
Thomas C. Nord SVP, General Counsel, Secretary		$	11,825			1,000
Executive Group		$	35,475			3,000
Non-Executive Director Group		$	—			—
Non-Executive Officer Employee Group		$	153,448			13,203

---

(1)

The price per share purchase was determined as described above2010 Annual Meeting of $9.20 (January 31, 2009 purchase) and $14.45 (July 31, 2009 purchase).

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENT AND RESTATEMENT OF THE ESPP.




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PROPOSAL 3
APPROVAL OF THE COMPANY'S PERFORMANCE-BASED COMPENSATION POLICY FOR
PURPOSES OF SECTION 162(M) OF THE INTERNAL REVENUE CODE


        Under section 162(m)Stockholders pursuant to the compensation disclosure rules of the Internal Revenue CodeSecurities and Exchange Commission, including the Compensation Discussion and Analysis, the 2010 Summary Compensation Table and the other related tables and disclosure."

        This "say-on-pay" vote is advisory, and therefore is not binding on the Company, the Compensation Committee or our board of 1986, in order for compensation in excessdirectors. Our board of $1,000,000 paid indirectors and our Compensation Committee value the opinions of our stockholders, and to the extent there is any year to any "covered employee" (as defined by section 162(m) ofsignificant vote against the Code—currently, "covered employee" is defined as a company's chiefnamed executive officer or any of such company's three other most highly compensated executive officers namedcompensation as disclosed in thethis proxy statement, not including the chief financial officer) to be deductible by the Company, such compensation must qualify as "performance-based." The Compensation Committee has adopted the following performance-based compensation policy (the "Policy") under which annual bonuses for covered employees (as they may be constituted from time to time,we will consider our stockholders' concerns and including persons who may become covered employees between the time of grant and payment of the award) would be performance-based for purposes of exemption from the limitations of Section 162(m). The Policy was adopted by the Board subject to stockholder approval, as of April 21, 2010. The following is a summary of the principal features of the Policy. This summary does not purport to be a complete description of all of the provisions of the Policy. A copy of the actual Policy is attached to this Proxy Statement as Exhibit B.

Employees Covered by the Policy

        The Policy applies to any "Covered Executive Officer," the definition of which is consistent with a "covered employee" under Section 162(m) of the Code described above. As of April 22, 2010, four employees would be covered by the Policy.

Establishment of Performance Measures

        Under the Policy, each year the Compensation Committee will establish one or more performance goals (or alternative performance goals) for a specified "Performance Period"evaluate whether any actions are appropriate to be attained for awards of incentive compensation to Covered Executive Officers intended to comply with the performance-based exception on or before the latest date permitted by Section 162(m) (in the case of annual incentive compensation, within ninety days after the beginning of each year).address those concerns.

Eligible Performance Measures and Methods of Calculation and Adjustments

        Unless otherwise approved pursuant to a stockholder vote, performance goals for incentive awards (other than options) will be based upon any one or more of the following objective measures ("Performance Measures"): (i) earnings (either in the aggregate or on a per-share basis, and either on a pre- or a post-tax basis); (ii) net income (either on a pre- or a post-tax basis); (iii) operating income (either on a pre- or a post-tax basis); (iv) operating profit (either on a pre- or a post-tax basis); (v) cash flow (either on a pre- or a post-tax basis); (vi) stockholder returns (including return on assets, investments, equity, or gross sales, and either on a pre- or post-tax basis); (vii) return measures (including return on assets, equity, or sales, and either on a pre- or a post-tax basis); (viii) earnings before or after either, or any combination of, interest, taxes, depreciation or amortization (EBITDA); (ix) gross revenues; (x) common stock share price (including growth measures and total stockholder return or attainment by the shares of a specified value for a specified period of time); (xi) reductions in expense levels in each case, where applicable, determined either on a Company-wide basis or in respect of any one or more business units; (xii) market share; (xiii) annual net income to common stock; (xiv) earnings per share; (xv) annual cash flow provided by operations; (xvi) changes in annual revenues; (xvii) strategic business criteria, consisting of one or more objectives based on meeting specified revenue, market penetration, geographic business expansion goals, objectively identified project milestones, cost targets, and goals relating to acquisitions or divestitures; (xviii) sales; (xix) costs; (xx) results of customer satisfaction surveys; (xxi) service reliability; (xxii) operating and




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maintenance cost management; and/or (xxiii) achievement of business or operational goals such as market share and/or business development.

        The Compensation Committee may, on the date of grant of an annual incentive award intended to comply with the Performance-Based Exception, and in the case of other grants, at any time, provide that the formula for such incentive award may include or exclude items to measure specific objectives, such as losses from discontinued operations, extraordinary gains or losses, the cumulative effect of accounting changes, acquisitions or divestitures, foreign exchange impacts and any unusual, nonrecurring gain or loss.

        The levels of performance required with respect to Performance Measures may be expressed in absolute or relative levels and may be based upon a set increase, set positive result, maintenance of the status quo, set decrease or set negative result. Performance Measures may differ for annual incentive awards to different Covered Executive Officers. The Compensation Committee shall specify the weighting (which may be the same or different for multiple objectives) to be given to each Performance Measure for purposes of determining the final amount payable with respect to any such annual incentive award. Any one or more of the Performance Measures may apply to the Covered Executive Officer, a department, or function within the Company; and may apply either alone or relative to the performance of other businesses or individuals (including industry or general market indices).

Limitations and Reductions of Awards Under the Policy

        In no event will the amount of an incentive compensation award for any Performance Period to any Covered Executive Officer be a dollar amount exceeding $4 million. Additionally, the Compensation Committee may, in its discretion, reduce the amount of an incentive compensation award payable to a Covered Executive Officer notwithstanding the attainment of any performance goal.

Amendment and Termination of the Policy

        The Compensation Committee may at any time terminate, suspend, amend or modify the Policy except that stockholder approval is required for any amendment or modification to the Policy that would be required by Section 162(m) of the Code.

Plan Benefits Table

        Benefits under this Policy depend on performance and are therefore not yet determinable. The amounts that the Covered Executive Officers earned under the non-equity incentive compensation plan for 2009 are set forth in the Summary Compensation Table for Fiscal Year 2009 under the column (g) labeled "Non-Equity Incentive Plan Compensation."

Stockholder Approval

        The Policy shall only become effective if the stockholders vote in favor of it. If the stockholders do not approve the Policy, the Compensation Committee will take the vote into account in making future decisions on compensation policies for Covered Executive Officers.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE COMPANY'S PERFORMANCE-BASEDRESOLUTION ABOVE, RELATING TO THE COMPENSATION POLICY FOR PURPOSES OF SECTION 162(M)OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE INTERNAL REVENUE CODE.SECURITIES AND EXCHANGE COMMISSION.


PROPOSAL 3
ADVISORY VOTE ON THE FREQUENCY OF
FUTURE ADVISORY VOTING ON EXECUTIVE COMPENSATION


        As a result of the Dodd-Frank Act, publicly-traded companies are required to hold an initial advisory stockholder vote to determine the future frequency of advisory votes on executive compensation, as well as periodic subsequent votes to confirm that frequency. Advisory votes on executive compensation may be held every one, two or three years under the Dodd-Frank Act. The Board is recommending an advisory vote every three years. This is because the Company's executive compensation programs are designed to drive long-term stockholder value; therefore the Company believes that holding an advisory vote on executive compensation every three years is sufficient and appropriate to assess whether these programs are appropriately motivating employees and driving stockholder value. If we were to hold such votes more frequently, we believe the potential for substantial changes in compensation programs as a result of those votes could interfere with the incentives being provided to executive officers to maximize long-term stockholder value. Corporate results could also be affected because the potential for more frequent changes in approach may result in a lack of focus on aligning compensation with longer-term Company strategies. In addition, due to the periodic volatility in our industry, the economy and in the stock markets, we believe a vote every three years will allow our stockholders to gain a more meaningful perspective on our compensation plans and programs than would occur with more frequent votes. Similar to the vote on executive compensation, this proposal is also an advisory vote and is not binding on the Company. However, the Company values the opinions expressed by our stockholders, and will consider the outcome of the votes both on executive compensation itself and on the frequency of votes when making future decisions on the frequency of such votes.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE OPTION OF "EVERY THREE YEARS" FOR FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION.




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REPORT OF THE AUDIT COMMITTEE


        The Audit Committee of the Board of Directors (the "Audit Committee") oversees our accounting function, internal controls and financial reporting process on behalf of the Board of Directors. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and operates pursuant to the Audit Committee Charter which is available on the Company's website (www.willislease.com).

        The Audit Committee reviews our financial reporting process on behalf of the Board. Management has primary responsibility for establishing and maintaining adequate internal financial controls, for preparing the financial statements and for the public reporting process. KPMG LLP ("KPMG"), the Company's independent auditor for 2009,2010, is responsible for expressing opinions on the conformity of the Company's audited financial statements with generally accepted accounting principles and on the Company's internal control over financial reporting.

        In this context, the Audit Committee has reviewed and discussed with management and KPMG the audited financial statements for the year ended December 31, 20092010 and KPMG's evaluation of the Company's internal control over financial reporting. The Audit Committee has discussed with KPMG the matters that are required to be discussed by Statement on Auditing Standards No. 114,61, as amended (AICPA,Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.(Communication with Audit Committees). KPMG has provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the Audit Committee concerning independence, and the Audit Committee has discussed with KPMG that firm's independence. The Audit Committee has concluded that KPMG's provision of audit and non-audit services to the Company is compatible with KPMG's independence.

        Based on the review and discussions referred to above, the Audit Committee recommended to our Board that the audited financial statements for the year ended December 31, 20092010 be included in our Annual Report on Form 10-K for 20092010 for filing with the SEC. This report is provided by the following independent directors, who comprise the Audit Committee:

Robert T. Morris, Audit Committee Chairman
W. William Coon, Jr.
Gérard Laviec


PROPOSAL 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM


        The Audit Committee has appointed the firm of KPMG LLP ("KPMG") to audit our 20102011 financial statements, and KPMG also served in this capacity in 2009.2010. Although not required by the Company's Bylaws or otherwise, the Audit Committee and the Board of Directors believe it appropriate, as a matter of good corporate practice, to request that the stockholders ratify the appointment of KPMG as the Company's independent registered public accounting firm for fiscal 2010.year 2011. If the stockholders do not so ratify, the Audit Committee will reconsider the appointment and may retain KPMG or another firm without re-submitting the matter to the Company's stockholders. Even if the stockholders vote on an advisory basis in favor of the appointment, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and the stockholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM.




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Fees Billed to Willis Lease by KPMG LLP

        For the 20092010 and 20082009 fiscal years, fees for services provided by KPMG LLP to us were as follows(3):follows:

		2009			2008
A. Audit Fees(1)		$	646,721		$	573,612
B. Audit Related Fees(2)			—			31,300
		$	646,721		$	604,912

		2010			2009
Audit Fees(1)		$	664,455		$	646,721
Audit Related Fees			—			—
Tax fees			—			—
All other fees(2)			89,768			—
		$	754,223		$	646,721

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(1)

Audit fees billed to us by KPMG during the 20092010 and 20082009 fiscal years include the audit of our annual financial statements and quarterly reviews of financial statements included in our quarterly reports on Form 10-Q.



(2)

AmountsFees billed under Audit-related fees for 2008 areto us by KPMG during 2010 for professional services rendered in issuing a comfort letter in connection with the WEST 2008 offering memorandum associated with the 2008 series WEST term notes.



(3)

providing international tax consulting services. There were no tax or other fees paid to KPMG in 2009 or 2008.billed during 2009.

        All fees described above were approved by the Audit Committee.

        The Audit Committee requires that any services to be provided by our auditors must be approved in advance by the Audit Committee. If approval is required before the Committee can act, a single member of the Committee can approve an engagement, subject to ratification by the Committee at its next meeting. All services were pre-approved by the Committee or its Chair.

        KPMG will be at our Annual Meeting. They will have the opportunity to make a statement, if they desire to do so. They will be available to respond to appropriate questions from stockholders.


EQUITY COMPENSATION PLAN INFORMATION


        The following table outlines our Equity Compensation Plan Information as of December 31, 2009. The information below relates to our Employee Stock Purchase Plan, the 1996 Stock Option Plan which terminated June 19, 2006 and the 2007 Incentive Stock Plan.

Plan Category			Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)			Weighted-average exercise price of outstanding options, warrants and rights (b)			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c)
Plans Not Approved by Stockholders
None				n/a			n/a			n/a
Plans Approved by Stockholders
Employee Stock Purchase Plan				—			n/a			42,368	(1)
1996 Stock Option/Stock Issuance Plan*				1,019,788		$	6.68			—
2007 Stock Incentive Plan				—			n/a			1,174,961
	Total			1,019,788		$	6.68			1,217,329

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*

Plan expired



(1)

This number is based on the 175,000 shares authorized for issuance under the ESPP.




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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


        As required by NASDAQ rules, all material discretionary transactions between us and our Directors, executive officers or known principal stockholders (or their respective affiliates) must be approved by the Audit Committee. The Audit Committee does not intend to approve any such transactions unless it believes that they are on terms no less favorable to us than could be obtained from unaffiliated third parties. On June 18, 2009, the Board adopted a formal policy governing the disclosure and approval of related party transactions. That policy is available on the Company's web site (www.willislease.com).

        Gavarnie Holding, LLC, a Delaware limited liability company ("Gavarnie") owned by Charles F. Willis, IV, purchased the stock of Aloha Island Air, Inc., a Delaware Corporation, ("Island Air") from Aloha AirGroup, Inc. ("Aloha") on May 11, 2004. Charles F. Willis, IV is the President, CEO and Chairman of our Board of Directors.Directors and owns approximately 30% of our common stock. As of December 31, 2010, Island Air leases fourthree DeHaviland DHC-8-100 aircraft and twofour spare engines from us. InThe aircraft and engines on lease to Island Air have a net book value of $3.8 million at December 31, 2010. Beginning in 2006 in responseIsland Air experienced cash flow difficulties, which affected their payments to us due to a fare war commenced by a competitor, Island Air requested a reduction in lease rent payments.their dependence on tourism which has suffered from the current economic environment as well as volatile fuel prices. The Board of Directors subsequently approved 14 months of lease rent deferrals totaling $784,000. All deferralswhich were accounted for as a reduction in lease revenue in the applicable period.periods. Because of the question regarding collectability of amounts due under these leases, lease rent revenue for these leases have been recorded on a cash basis until such time as collectability becomes reasonably assured. After taking into account the deferred amounts, Island Air owes us $1.5$2.8 million in overdue rent related to February - December 2009.rent. We hold letters of credit for $368,000$0.2 million which may be used to partially offset our claims against Island Air.




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        Due to their dependence on tourism Hawaiian carriers have suffered from the current economic environment more than other airlines. As a result,In October 2010, Island Air is experiencing cash flow difficulties, which is affecting their payments to us. We are in continuing discussionspurchased one airframe from us, generating a net gain of $0.4 million. Effective January 2, 2011 we converted the operating leases with Island Air to restructurea finance lease, with a principal amount of $7.0 million, under which they have resumed monthly payments. This transaction will increase operating income by $3.2 million which will be recognized over the leases infive year term of the finance lease. We are also discussing a way that will enableprogram for them to pay their obligations on a current basis and paycommence payments of the deferred amounts over time. Due to concern regarding Island Air's ability to meet lease return conditions and after reviewingunder the maintenance status and condition of the leased assets, the Company recordedprevious operating leases on a reduction in the carrying value of these assets of $0.8 million in the second quarter of 2008. Since that time, Island Air has addressed the maintenance condition of the leased assets. Including the 2008 write down, the aircraft and enginesreduced basis. This program is dependent on lease to Island Air have a net book value of $4.1 million at December 31, 2009. Island Air is returning one airframe to us which will reduce our asset exposure.their obtaining substantially similar concessions from their other major creditors.

        We have entered into a Consignment Agreement dated January 22, 2008,several consignment agreements with J.T. Power, LLC ("J.T. Power"), an entity whose majority member,shareholder, Austin Willis, is the son of our President and Chief Executive Officer, and directly and indirectly, a stockholdershareholder of ours as well as a Director of the Company. Of those consignment agreements, four are currently outstanding. According to the terms of the first of those outstanding agreements, the Consignment Agreement dated January 22, 2008, J.T. Power is responsible to market and sell parts from the teardown of three engines with a book value of $4.2 million. During the year ended December 31, 2009,2010, sales of consigned parts under this agreement were $0.05 million.$45,100. Under this agreement, J.T. Power provides a minimum guarantee of net consignment proceeds of $3.3 million by January 22, 2012. Based on current estimated consignment proceeds, J.T. Power would be obligated to pay $0.8 million under the guarantee in January 2012. On November 17, 2008, we entered into aanother Consignment Agreement with J.T. Power in which they are responsible to market and sell parts from the teardown of one engine with a book value of $1.0 million. During the year ended December 31, 2009,2010, sales of consigned parts under this agreement were $0.5 million.$24,900. On February 25, 2009, we entered into aanother Consignment Agreement with J.T. Power in which they are responsible to market and sell parts from the teardown of one engine with a book value of $133,400. During the year ended December 31, 2009,2010, sales of consigned parts under this agreement were $0.1 million.$4,100. On July 31, 2009, we entered into aanother Consignment Agreement with J.T. Power in which they are responsible to market and sell parts from the teardown of one engine with a book value of $0.5 million. During the year ended December 31, 2009,2010, sales of consigned parts under this agreement were $0.01$0.2 million. On July 27, 2006, we also entered into an Aircraft Engine Agency Agreement with J.T. Power, in which we will, on a non-exclusive basis, provide engine lease opportunities with respect to available spare engines at J.T. Power. J.T. Power will pay us a fee based on a percentage of the rent collected by J.T. Power for the duration of the lease including renewals thereof. We earned no revenue during the year ended December 31, 20092010 under this program.




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        The Company has entered into an Independent Contractor Agreement dated September 9, 2009 with Hans Joerg Hunziker, a member of our Board of Directors. Under this Agreement, Mr. Hunziker will provideprovided services in connection with the identification and qualification of potential investors in our equity securities. The board has determined that, notwithstanding this limited assignment, Mr. Hunziker remains an independent director.

        Under a Time Sharing Agreement dated as of March 1, 2005 between During 2010, the Company and Charles F. Willis, Mr. Willis has the ability to lease the Company's Canadair Challenger aircraft from time to time for his personal use on an as needed as available basis. During 2007 he leased the aircraft for a total of 5.7 hours and paid the Company $12,150 for expensesincurred $60,200 in consulting fees related to the operation of the aircraft. During 2008 he did not lease the aircraft from the Company. During 2009 he leased the aircraft for a total of 3.3 hours and paid the Company $5,598 for expenses related to the operation of the aircraft.this Agreement. This Agreement expired, by its terms, on October 31, 2010.


STOCKHOLDER PROPOSALS


        Stockholder proposals intended to be considered at the 20112012 Annual Meeting of Stockholders must, under Rule 14a-8 of the Securities Exchange Act of 1934, be received by us no later than December 31, 2009.2011. Your proposal(s) must be mailed to our executive offices, 773 San Marin Drive, Suite 2215, Novato, California 94998, Attention: Corporate Secretary. Your proposal(s) may be included in next year's proxy statement if they comply with certain rules and regulations promulgated by the Securities and Exchange Commission.

        Alternatively, under our Bylaws, a proposal or nomination that you do not seek to include in our proxy statement pursuant to Rule 14a-8 may be submitted in writing to our Corporate Secretary for the 20112012 Annual Meeting of Stockholders not less than 90 days prior to the first anniversary of the preceding year's annual meeting, unless the date of the 20112012 Annual Meeting of Stockholders is




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advanced by more than 30 days or delayed (other than as a result of adjournment) by more than 60 days from the anniversary of the 20102011 Annual Meeting. For our 20112012 Annual Meeting of Stockholders, this means that of your proposal(s) or nomination(s) must be submitted no later than February 19, 201118, 2012 (which is 90 calendar days before the anniversary of the 20102011 Annual Meeting). If the date of our 20112012 Annual Meeting of Stockholders is advanced by more than 30 days or delayed (other than as a result of adjournment) by more than 60 days from the anniversary of our 20102011 Annual Meeting, you must submit any such proposal or nomination no later than the close of business on the later of the 90th day prior to the 20112012 Annual Meeting of Stockholders or the 10th day following the day on which public announcement of the date of such meeting is first made. Your submission must include certain specified information concerning the proposal or nominee, as the case may be, and information as to your ownership of our common stock.




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STOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS


        We are sending only one copy of our annual report and proxy statement to stockholders who share the same last name and address unless they have notified us that they want to continue receiving multiple copies. If you would like to have additional copies of our annual report and/or proxy statement mailed to you, or you would like to opt out of this practice for future mailings, please either contact us at 415-408-4700 or submit your request to Willis Lease Finance Corporation, attention Assistant Secretary, 773 San Marin Drive, Suite 2215, Novato, CA 94998. We will promptly send additional copies of the annual report and/or proxy statement upon receipt of such request. You may also contact us as described above if you received multiple copies of the annual meeting materials and would prefer to receive a single copy in the future.


OTHER MATTERS


        Our management does not know of any matters to be presented at the 20102011 Annual Meeting of Stockholders other than those set forth herein and in the Notice accompanying this proxy statement.

		By Order of the Board of Directors,
		Charles F. Willis, IV Chairman of the Board

Date: April 30, 2010




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Exhibit A
Willis Lease Finance Corporation Employee Stock Purchase Plan


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WILLIS LEASE FINANCE CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
As Amended and Restated Effective May 20, 2010


ARTICLE I—PURPOSE OF THE PLAN AND DEFINITIONS


        1.1   This Employee Stock Purchase Plan is intended to promote the interests of Willis Lease Finance Corporation by providing eligible employees with the opportunity to purchase shares of the Corporation's common stock through participation in a payroll-deduction based employee stock purchase plan designed to qualify under Section 423 of the Code.

        1.2   Capitalized terms herein shall have the meanings assigned to such terms in the attached Appendix.


ARTICLE II—ADMINISTRATION OF THE PLAN


        2.1.  The Plan Administrator shall have full authority to interpret and construe any provision of the Plan and to adopt such rules and regulations for administering the Plan as it may deem necessary in order to comply with the requirements of Code Section 423. Decisions of the Plan Administrator shall be final and binding on all parties having an interest in the Plan.


ARTICLE III—STOCK SUBJECT TO PLAN


        3.1.  The stock purchasable under the Plan shall be shares of authorized but unissued or reacquired Common Stock, including shares of Common Stock purchased on the open market. The maximum number of shares of Common Stock which may be issued over the term of the Plan shall not exceed 250,000 shares.

        3.2.  If any change is made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, appropriate adjustments shall be made to: (i) the maximum number and class of securities issuable under the Plan; (ii) the maximum number and class of securities purchasable per Participant on any one Purchase Date and (iii) the number and class of securities and the price per share in effect under each outstanding purchase right in order to prevent the dilution or enlargement of benefits thereunder.


ARTICLE IV—OFFERING PERIODS


        4.1.  Shares of Common Stock shall be offered for purchase under the Plan through a series of successive Offering Periods until such time as: (i) the maximum number of shares of Common Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated.

        4.2.  Each Offering Period shall be of such duration (not to exceed twenty-four months) as determined by the Plan Administrator. The next Offering Period shall commence on the first business day in August 2010, and subsequent Offering Periods shall commence as designated by the Plan Administrator.

        4.3.  Each Offering Period shall be comprised of a series of one or more successive Purchase Intervals. Purchase Intervals shall run from the first business day in February each year to the last business day in July of the same year and from the first business day in August each year to the last business day in January of the following year.

        4.4.  If the Fair Market Value per share of Common Stock on any Purchase Date within an Offering Period be less than the Fair Market Value per share of Common Stock on the start date of that Offering Period, then that Offering Period shall automatically terminate immediately after the




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purchase of shares of Common Stock on such Purchase Date. A new Offering Period shall commence on the next business day following such Purchase Date. The new Offering Period shall have a duration of twenty four months, unless a shorter duration is established by the Plan Administrator within ten business days following the start date of that Offering Period.


ARTICLE V—ELIGIBILITY


        5.1.  Each individual who is an Eligible Employee at the beginning of an Offering Period may enter that Offering Period at such time or at the beginning of a subsequent Purchase Interval within that Offering Period, provided he or she remains an Eligible Employee.

        5.2.  Each individual who first becomes an Eligible Employee after the start date of an Offering Period may enter that Offering Period on the first day of any subsequent Purchase Interval within that Offering Period.

        5.3.  The date an individual enters an Offering Period shall be designated his or her Entry Date for purposes of that Offering Period.

        5.4.  To participate in the Plan for a particular Offering Period, an Eligible Employee must complete the enrollment forms prescribed by the Plan Administrator (including a stock purchase agreement and a payroll deduction authorization) and file such forms with the Plan Administrator (or its designate) on or before his or her scheduled Entry Date.


ARTICLE VI—PAYROLL DEDUCTIONS


        6.1.  The payroll deduction authorized by the Participant for purposes of acquiring shares of Common Stock during an Offering Period may be any multiple of one percent of the Base Salary paid to the Participant during each Purchase Interval within that Offering Period, up to a maximum of ten percent. The deduction rate so authorized shall continue in effect throughout the Offering Period. The rate may be changed as provided below:

        a.     The Participant may, at any time during the Offering Period, reduce his or her rate of payroll deduction to become effective as soon as possible after filing the appropriate form with the Plan Administrator. The Participant may not, however, effect more than one such reduction per Purchase Interval.

        b.     The Participant may, prior to the commencement of any new Purchase Interval within an Offering Period, increase the rate of his or her payroll deduction by filing the appropriate form with the Plan Administrator. The new rate (which may not exceed the ten percent maximum) shall become effective on the start date of the first Purchase Interval following the filing of such form.

        6.2.  Payroll deductions shall begin on the first payday following the Participant's Entry Date and shall (unless sooner terminated or reduced by the Participant) continue through the payday ending with or immediately prior to the last day of that Offering Period. The amounts so collected shall be credited to the Participant's account under the Plan, but no interest shall be paid on the balance from time to time in such account. The amounts collected from the Participant shall not be held in any segregated account or trust fund and may be commingled with the general assets of the Corporation and used for general corporate purposes.

        6.3.  Payroll deductions shall automatically cease upon the termination of the Participant's purchase right in accordance with the provisions of the Plan.

        6.4.  The Participant's acquisition of Common Stock under the Plan on any Purchase Date shall neither limit nor require the Participant's acquisition of Common Stock on any subsequent Purchase Date, whether within the same or a different Offering Period.




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ARTICLE VII—PURCHASE RIGHTS


        7.1.  A Participant shall be granted a separate purchase right for each Offering Period in which he or she participates. The purchase right shall be granted on the Participant's Entry Date and shall provide the Participant with the right to purchase shares of Common Stock, in a series of successive installments over the remainder of such Offering Period, upon the terms set forth below. The Participant shall execute a stock purchase agreement embodying such terms and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable.

        Under no circumstances shall purchase rights be granted under the Plan to any Eligible Employee if such individual would, immediately after the grant, own (within the meaning of Code Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Corporation or any Corporate Affiliate.

        7.2.  Each purchase right shall be automatically exercised in installments on each successive Purchase Date within the Offering Period, and shares of Common Stock shall accordingly be purchased on behalf of each Participant (other than Participants whose payroll deductions have previously been refunded pursuant to the termination of purchase right provisions of Section 7.6 below). The purchase shall be effected by applying the Participant's payroll deductions for the Purchase Interval ending on such Purchase Date to the purchase of whole shares of Common Stock as provided below.

        7.3.  The purchase price per share at which Common Stock will be purchased on the Participant's behalf on each Purchase Date within the Offering Period shall not be less than eighty-five percent of thelower of (i) the Fair Market Value per share of Common Stock on the Participant's Entry Date into that Offering Period or (ii) the Fair Market Value per share of Common Stock on that Purchase Date.

        7.4.  The number of shares of Common Stock purchasable by a Participant on each Purchase Date during the Offering Period shall be the number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions during the Purchase Interval ending with that Purchase Date by the purchase price in effect for the Participant for that Purchase Date. However, the maximum number of shares of Common Stock purchasable per Participant on any one Purchase Date shall not exceed five hundred shares, as adjusted pursuant to Section 3.2. of this Plan.

        7.5.  Any payroll deductions not applied to the purchase of shares of Common Stock on any Purchase Date because they are insufficient to purchase a whole share of Common Stock shall be held for the purchase of Common Stock on the next Purchase Date. However, any payroll deductions not applied to the purchase of Common Stock by reason of the limitation on the maximum number of shares purchasable by the Participant on the Purchase Date shall be promptly refunded.

        7.6.  The following provisions shall govern the termination of outstanding purchase rights:

        a.     A Participant may, at any time prior to the next scheduled Purchase Date in the Offering Period, terminate his or her outstanding purchase right by filing the appropriate form with the Plan Administrator (or its designate), and no further payroll deductions shall be collected from the Participant with respect to the terminated purchase right. Any payroll deductions collected during the Purchase Interval in which such termination occurs shall be immediately refunded to the Participant.

        b.     The termination of such purchase right shall be irrevocable, and the Participant may not subsequently rejoin the Offering Period for which the terminated purchase right was granted. In order to resume participation in any subsequent Offering Period, such individual must re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms).

        c.     If the Participant ceases to be an Eligible Employee for any reason (including death, disability or change in status) while his or her purchase right remains outstanding, then that




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purchase right shall immediately terminate, and all of the Participant's payroll deductions for the Purchase Interval in which the purchase right so terminates shall be immediately refunded. However, if the Participant ceases to remain in active service by reason of an approved unpaid leave of absence, then the Participant shall have the right, exercisable up until the last business day of the Purchase Interval in which such leave commences, to (a) withdraw all the payroll deductions collected to date on his or her behalf for that Purchase Interval or (b) have such funds held for the purchase of shares on his or her behalf on the next scheduled Purchase Date. In no event shall any further payroll deductions be collected on the Participant's behalf during such leave. On the Participant's return to active service, his or her payroll deductions under the Plan shall automatically resume at the rate in effect at the time the leave began, unless the Participant reduces such contributions or withdraws from the Plan prior to his or her return.

        7.7.  Each outstanding purchase right shall automatically be exercised, immediately prior to the effective date of any Corporate Transaction, by applying the payroll deductions of each Participant for the Purchase Interval in which such Corporate Transaction occurs to the purchase of whole shares of Common Stock at a purchase price per share not less than eighty-five percent of the lower of (i) the Fair Market Value per share of Common Stock on the Participant's Entry Date into the Offering Period in which such Corporate Transaction occurs or (ii) the Fair Market Value per share of Common Stock immediately prior to the effective date of such Corporate Transaction. The applicable limitation on the number of shares of Common Stock purchasable per Participant shall continue to apply to any such purchase.

        The Corporation shall use its best efforts to provide at least ten days prior written notice of the occurrence of any Corporate Transaction, and Participants shall, following the receipt of such notice, have the right to terminate their outstanding purchase rights prior to the effective date of the Corporate Transaction and receive a refund of their accumulated payroll deductions.

        7.8.  If the total number of shares of Common Stock to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of shares then available for issuance under the Plan, the Plan Administrator shall make a pro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll deductions of each Participant, to the extent in excess of the aggregate purchase price payable for the Common Stock pro-rated to such individual, shall be refunded.

        7.9.  The purchase right shall be exercisable only by the Participant and shall not be assignable or transferable by the Participant.

        7.10.  A Participant shall have no stockholder rights with respect to the shares subject to his or her outstanding purchase right until shares are purchased on the Participant's behalf in accordance with the provisions of the Plan and the Participant has become a holder of record of the purchased shares.


ARTICLE VIII—ACCRUAL LIMITATIONS


        8.1.  No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any purchase right outstanding under this Plan if and to the extent such accrual, when aggregated with (i) rights to purchase Common Stock accrued under any other purchase right granted under this Plan and (ii) similar rights accrued under other employee stock purchase plans (within the meaning of Code Section 423) of the Corporation or any Corporate Affiliate, would otherwise permit such Participant to purchase more than Twenty-Five Thousand Dollars ($25,000) worth of stock of the Corporation or any Corporate Affiliate (determined on the basis of the Fair Market Value per share on the date or dates such rights are granted) for each calendar year such rights are at any time outstanding.




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        8.2.  For purposes of applying such accrual limitations to the purchase rights granted under the Plan, the following provisions shall be in effect:

        a.     The right to acquire Common Stock under each outstanding purchase right shall accrue in a series of installments on each successive Purchase Date during the Offering Period on which such right remains outstanding.

        b.     No right to acquire Common Stock under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Common Stock under one or more other purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000) worth of Common Stock (determined on the basis of the Fair Market Value per share on the date or dates of grant) for each calendar year such rights were at any time outstanding.

        8.3.  If by reason of such accrual limitations, any purchase right of a Participant does not accrue for a particular Purchase Interval, then the payroll deductions which the Participant made during that Purchase Interval with respect to such purchase right shall be promptly refunded.

        8.4.  If there is any conflict between the provisions of this Article and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article shall be controlling.


ARTICLE IX—EFFECTIVE DATE AND TERM OF THE PLAN


        9.1.  The Plan was initially adopted by the Board on June 20, 1996, amended and restated on August 1, 1998, further amended and restated as of August 1, 2004, and further amended and restated as of May 20, 2010, provided no purchase rights granted under the Plan shall be exercised, and no shares of Common Stock shall be issued hereunder beyond those 175,000 authorized as of August 1, 2004, until (i) the Plan shall have been approved by the stockholders of the Corporation and (ii) the Corporation shall have complied with all applicable requirements the Securities Act of 1933, all applicable listing requirements of the NASDAQ National Market or any stock exchange on which the Common Stock is listed for trading and all other applicable requirements established by law or regulation.

        9.2.  Unless sooner terminated by the Board, the Plan shall terminate on the earliest of (i) the last business day in July 2020, (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan or (iii) the date on which all purchase rights are exercised in connection with a Corporate Transaction. No further purchase rights shall be granted or exercised, and no further payroll deductions shall be collected, under the Plan following such termination.


ARTICLE X—AMENDMENT OF THE PLAN


        10.1.  The Board may alter, amend, suspend or discontinue the Plan at any time to become effective immediately following the close of any Purchase Interval.

        10.2.  In no event may the Board effect any of the following amendments or revisions to the Plan without the approval of the Corporation's stockholders: (i) increase the number of shares of Common Stock issuable under the Plan or the maximum number of shares purchasable per Participant on any one Purchase Date, except for permissible adjustments pursuant to Section 3.2.; (ii) alter the purchase price formula so as to reduce the purchase price payable for the shares of Common Stock purchasable under the Plan or (iii) materially increase the benefits accruing to Participants under the Plan or materially modify the requirements for eligibility to participate in the Plan.




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ARTICLE XI—GENERAL PROVISIONS


        11.1.  All costs and expenses incurred in the administration of the Plan shall be paid by the Corporation.

        11.2.  Nothing in the Plan shall confer upon the Participant any right to continue in the employ of the Corporation or any Corporate Affiliate for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Corporate Affiliate employing such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such person's employment at any time for any reason, with or without cause.

        11.3.  The provisions of the Plan shall be governed by the laws of the State of California without resort to that State's conflict-of-laws rules.

Schedule A
Corporations Participating in
Employee Stock Purchase Plan
As of August 1, 2010

Willis Lease Finance Corporation


APPENDIX


        The following definitions shall be in effect under the Plan:

        A.    Base Salary shall mean the (i) regular base salary paid to a Participant by one or more Participating Companies during such individual's period of participation in one or more Offering Periods under the Plan plus (ii) any pre-tax contributions made by the Participant to any Code Section 401(k) salary deferral plan or any Code Section 125 cafeteria benefit program now or hereafter established by the Corporation or any Corporate Affiliate. The following items of compensation shallnot be included in Base Salary: (i) all overtime payments, bonuses, commissions (other than those functioning as base salary equivalents), profit-sharing distributions and other incentive-type payments and (ii) any and all contributions (other than Code Section 401(k) or Code Section 125 contributions) made on the Participant's behalf by the Corporation or any Corporate Affiliate under any employee benefit or welfare plan now or hereafter established.

        B.    Board shall mean the Corporation's Board of Directors.

        C.    Code shall mean the Internal Revenue Code of 1986, as amended.

        D.    Common Stock shall mean the Corporation's common stock.

        E.    Corporate Affiliate shall mean any parent or subsidiary corporation of the Corporation (as determined in accordance with Code Section 424), whether now existing or subsequently established.

        F.     Corporate Transaction shall mean either of the following stockholder-approved transactions to which the Corporation is a party:

          (i)  a merger or consolidation in which securities possessing more than fifty percent of the total combined voting power of the Corporation's outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or

         (ii)  the sale, transfer or other disposition of all or substantially all of the assets of the Corporation in complete liquidation or dissolution of the Corporation.




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        G.    Corporation shall mean Willis Lease Finance Corporation, a California corporation, and any corporate successor to all or substantially all of the assets or voting stock of Willis Lease Finance Corporation which shall by appropriate action adopt the Plan.

        H.    Effective Time shall mean the time at which the Board adopts the Plan in accordance with applicable law. Any Corporate Affiliate which becomes a Participating Corporation after such Effective Time shall designate a subsequent Effective Time with respect to its Participants.

        I.     Eligible Employee shall mean any person who is employed by a Participating Corporation on a basis under which he or she is regularly expected to render more than twenty hours of service per week for more than five months per calendar year for earnings considered wages under Code Section 3401(a).

        J.     Entry Date shall mean the date an Eligible Employee first commences participation in the Offering Period in effect under the Plan. The earliest Entry Date under the Plan shall be the Effective Time.

        K.    Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

          (i)  If the Common Stock is at the time traded on the NASDAQ National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the NASDAQ National Market or any successor system. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

         (ii)  If the Common Stock is at the time listed on any stock exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the stock exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

        L.    Participant shall mean any Eligible Employee of a Participating Corporation who is actively participating in the Plan.

        M.   Participating Corporation shall mean the Corporation and such Corporate Affiliate or Affiliates as may be authorized from time to time by the Board to extend the benefits of the Plan to their Eligible Employees. The Participating Corporations in the Plan as of the Effective Time are listed in attached Schedule A.

        N.    Plan shall mean the Corporation's Employee Stock Purchase Plan, as set forth in this document and as amended or restated from time to time.

        O.    Plan Administrator shall mean the Compensation Committee of the Corporation's Board of Directors.

        P.     Purchase Date shall mean the last business day of each Purchase Interval. The initial Purchase Date of this Amended and Restated Plan shall be the last business day of July 2010.

        Q.    Purchase Interval shall mean each successive six month period within the Offering Period at the end of which there shall be purchased shares of Common Stock on behalf of each Participant.

        R.    Offering Period shall mean a twenty-four month period, unless the Plan Administrator shall establish a shorter term, consisting of successive Purchase Intervals. An Offering Period may be terminated early as provided in this Plan.




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Exhibit B
Willis Lease Finance Corporation Performance-Based Compensation Policy


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WILLIS LEASE FINANCE CORPORATION
PERFORMANCE-BASED COMPENSATION POLICY


        1.    Purpose.    The purpose of the Willis Lease Finance Corporation (the "Company') Performance-Based Compensation Policy (the "Policy") is to establish one or more performance goals for payment of incentive compensation other than stock options and the maximum amount of such incentive compensation that may be paid to certain executive officers. It is the intention of the Compensation Committee (the "Committee") of the Board of Directors of the Company (the "Board") that incentive compensation awarded to each Covered Executive Officer (as defined below) be deductible by the Company for federal income tax purposes in accordance with Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), any regulations promulgated thereunder, and any rulings published by the Internal Revenue Service related thereto (the "Regulations").

        2.    Covered Executive Officers.    This Policy applies to any individual (a "Covered Executive Officer") who on the last day of the taxable year is (a) the principal executive officer of the Company or is acting in such capacity, or (b) an executive officer and whose name and total compensation for the taxable year is required to be disclosed in the Company's proxy statement delivered to stockholders pursuant to Section 14(a) of the Securities Exchange Act of 1934 (the "Exchange Act") by reason of the individual being among the Company's three highest compensated executive officers for the taxable year (other than by reason of being the principal executive officer or principal financial officer). Whether an individual is the principal executive officer, or among the three highest compensated executive officers other than the principal executive officer or principal financial officer shall be determined pursuant to the executive compensation disclosure rules under the Exchange Act. To the extent "covered employee" under Section 162(m) of the Code (including, without limitation, by subsequent interpretation or amendment) includes additional individuals with respect to the Company, such additional individuals shall also be Covered Executive Officers for purposes of this Policy.

        3.    Compliance with Section 162(m) of the Code.    All incentive awards granted to Covered Executive Officers may comply with the exclusion for performance-based compensation within the meaning of Section 162(m) of the Code ("Performance-Based Exception"),provided that to the extent Section 162(m) of the Code requires periodic stockholder approval of performance measures, such approval shall not be required for the continuation of the Policy or as a condition to grant any incentive award hereunder after such approval is required. In addition, if changes are made to Section 162(m) of the Code to permit flexibility with respect to the annual incentive awards available under the Policy, the Committee may, subject to this policy, make any adjustments to such incentive awards as it deems appropriate. An incentive compensation award to a Covered Executive Officer may be paid in the form of cash, stock, restricted share rights, or restricted stock, or any combination thereof. Payment of an incentive compensation award to a Covered Executive Officer will be contingent upon the attainment of the performance goal or goals for the calendar year, commencing January 1 and ending December 31 (a "Performance Period") for such Covered Executive Officer by the Committee as provided herein. The Committee shall retain the discretion to reduce the incentive compensation award payable to a Covered Executive Officer, notwithstanding attainment of any performance goal.

        The Committee shall establish in writing one or more performance goals to be attained (which performance goals may be stated as alternative performance goals) for each Covered Executive Officer for a Performance Period on or before the latest date permitted under Section 162(m) of the Code or the Regulations.

        Unless and until the Board proposes for stockholder vote and stockholders approve a change in the general performance measures set forth in this Section, for incentive awards (other than options) designed to qualify for the Performance-Based Exception, the objective Performance Measure(s) shall be chosen from among the following ("Performance Measures"):




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(i)

Earnings (either in the aggregate or on a per-share basis);



(ii)

Net income;



(iii)

Operating income;



(iv)

Operating profit;



(v)

Cash flow;



(vi)

Stockholder returns (including return on assets, investments, equity, or gross sales);



(vii)

Return measures (including return on assets, equity, or sales);



(viii)

Earnings before or after either, or any combination of, interest, taxes, depreciation or amortization (EBITDA);



(ix)

Gross revenues;



(x)

Common Stock share price (including growth measures and total stockholder return or attainment by the Shares of a specified value for a specified period of time);



(xi)

Reductions in expense levels in each case, where applicable, determined either on a Company-wide basis or in respect of any one or more business units;



(xii)

Market share;



(xiii)

Annual net income to common stock;



(xiv)

Earnings per share;



(xv)

Annual cash flow provided by operations;



(xvi)

Changes in annual revenues;



(xvii)

Strategic business criteria, consisting of one or more objectives based on meeting specified revenue, market penetration, geographic business expansion goals, objectively identified project milestones, cost targets, and goals relating to acquisitions or divestitures;



(xviii)

Sales;



(xix)

Costs;



(xx)

Results of customer satisfaction surveys;



(xxi)

Service reliability;



(xxii)

Operating and maintenance cost management; and/or



(xxiii)

Achievement of business or operational goals such as market share and/or business development;

provided that subsections (i) through (vii) may be measured on a pre- or post-tax basis; andprovided further that the Board may, on the date of grant of an annual incentive award intended to comply with the Performance-Based Exception, and in the case of other grants, at any time, provide that the formula for such Stock Award may include or exclude items to measure specific objectives, such as losses from discontinued operations, extraordinary gains or losses, the cumulative effect of accounting changes, acquisitions or divestitures, foreign exchange impacts and any unusual, nonrecurring gain or loss. For annual incentive awards intended to comply with the Performance-Based Exception, the Board shall set the Performance Measures within the time period prescribed by Section 162(m) of the Code. The levels of performance required with respect to Performance Measures may be expressed in absolute or relative levels and may be based upon a set increase, set positive result, maintenance of the




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status quo, set decrease or set negative result. Performance Measures may differ for annual incentive awards to different Participants. The Board shall specify the weighting (which may be the same or different for multiple objectives) to be given to each performance objective for purposes of determining the final amount payable with respect to any such annual incentive award. Any one or more of the Performance Measures may apply to the Covered Executive Officer, a department, unit, division or function within the Company or any one or more Affiliates; and may apply either alone or relative to the performance of other businesses or individuals (including industry or general market indices).

        The maximum amount of an incentive compensation award for any Performance Period to any Covered Executive Officer shall be a dollar amount not to exceed four million dollars.

        4.    Applicability of Certain Provisions of the 2007 Stock Incentive Compensation Plan to incentive compensation awards.    An incentive compensation award paid in stock, restricted share rights, or restricted stock pursuant to this Policy shall be governed by the provisions (other than provisions with respect to the computation of such award) of the Company's 2007 Stock Incentive Compensation Plan.

        5.    Effective Date; Amendment and Termination.    Subject to approval by the stockholders of the Company, this Policy shall be effective as of January 1, 2010. No incentive compensation award shall be paid pursuant to this Policy unless this Policy has been approved by the stockholders of the Company. The Committee may at any time terminate, suspend, amend or modify this Policy except that stockholder approval shall be required for any amendment or modification to this Policy that, in the opinion of counsel, would be required by Section 162(m) of the Code or the Regulations.29, 2011




0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14475 WILLIS LEASE FINANCE CORPORATION 20102011 Annual Meeting of Stockholders May 20, 201018, 2011 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Charles F. Willis, IV, Thomas C. Nord and Bradley S. Forsyth, and each of them, as Proxies of the undersigned, with full power of substitution, and hereby authorizes them to represent and to vote, as designated on the reverse, all of the shares of Common Stock of WILLIS LEASE FINANCE CORPORATION held of record by the undersigned on March 22, 2010,21, 2011, at the 20102011 Annual Meeting of Stockholders of the Company to be held on May 20, 201018, 2011 or at any adjournment thereof. The Board of Directors recommends a vote FOR THE NOMINEES listed in Proposal 1, FOR Proposal 2, a vote of 3 Years in Proposal 3, and FOR Proposals 2, 3 andProposal 4. This proxy will be voted in accordance with the choices specified by the undersigned on the other side of this proxy. IF NO INSTRUCTIONS TO THE CONTRARY ARE INDICATED HEREIN, THIS PROXY WILL BE TREATED AS A GRANT OF AUTHORITY TO VOTE FOR THE ELECTION OF THE NOMINEES FOR CLASS IIII OF THE BOARD OF DIRECTORS NAMED ON THE OTHER SIDE HEREOF, FOR PROPOSALS 2 3 AND 4, FOR “3 YEARS” FOR PROPOSAL 3, AND ON ANY OTHER MATTERS TO BE VOTED WHICH ARE PROPERLY BROUGHT BEFORE THE ANNUAL MEETING. PLEASE COMPLETE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. (Continued and to be signed on the reverse side)

 




 

ANNUAL MEETING OF STOCKHOLDERS OF WILLIS LEASE FINANCE CORPORATION May 20, 201018, 2011 IMPORTANT NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting and proxy statement are available at http://materials.proxyvote.com/970646 Please sign, date and mail your proxy card in the envelope provided as soon as possible. Signature of Stockholder Date: Signature of Stockholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder must sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. 1. Election of Directors: O Charles F. Willis, IV O Hans Joerg HunzikerRobert T. Morris W. William Coon, Jr. 2. To approve the amendment and restatementAdvisory vote on executive compensation. 3. Advisory vote on frequency of the Company's Employee Stock Purchase Plan (the "ESPP") to increase the maximum number of shares of common stock authorized for issuance over the term of the ESPP from 175,000 to 250,000 shares and extend the term of the ESPP until the last business day of July 2020. 3. To approve the Company's Performance-Based Compensation Policy for purposes of Section 162(m) of the Internal Revenue Code.vote on executive compensation. 4 To ratify the appointment of KPMG LLCLLP as the Company's independent registered public accounting firm. 5. In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the meeting or any adjournment thereof. FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES NOMINEES: THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”FOR THE ELECTIONNOMINEES LISTED IN PROPOSAL 1, FOR PROPOSAL 2, A VOTE OF DIRECTORS3 YEARS IN PROPOSAL 3, AND “FOR” PROPOSALS 2, 3 ANDFOR PROPOSAL 4. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x Please detach along perforated line and mail in the envelope provided. 20230030300000000000 4 05201020230403000000000000 6 051811 FOR ALL EXCEPT (See instructions below)) INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN 2 years 1 year ABSTAIN 3 years