WILLIS LEASE FINANCE CORPORATION
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
To our Stockholders:
You are cordially invited to attend the 20162022 Annual Meeting of Stockholders of WILLIS LEASE FINANCE CORPORATION (the “Annual Meeting”) which, again in response to current public health guidance regarding the COVID-19 pandemic and for the safety of participants, will be held virtually via live webcast at our executive offices at 773 San Marin Drive, Suite 2215, Novato, California, 94998 at 2:12:00 p.m. local time, Eastern Time, on Thursday,Wednesday, May 26, 2016. Directions25, 2022.
The platform for the virtual Annual Meeting includes functionality that affords validated stockholders the same meeting participation rights and opportunities they would have at an in-person meeting. Instructions to attendaccess and log into the virtual Annual Meeting are provided below and, once admitted, stockholders may view reference materials, submit questions, and vote their shares by following the instructions that will be available on the Annual Meeting where you may vote in person, can be found on our website: www.willislease.com (see “Investors”).
website.
In addition to any other business that may properly come before the meetingAnnual Meeting or any adjournment or postponement thereof, stockholders will be asked to:
elect two Class III Directors to serve until the following proposals are to be voted on at2025 Annual Meeting of Stockholders, specifically: Charles F. Willis, IV and Hans Joerg Hunziker. The Board of Directors recommends that you vote FOR this proposal; and
cast an advisory vote ratifying the Annual Meeting:appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for fiscal year ending December 31, 2022. The Board of Directors recommends that you vote FOR this proposal.
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| | The election of two Class III Directors to serve until the 2019 Annual Meeting of Stockholders, specifically: Charles F. Willis, IV and Hans Joerg Hunziker. The Board of Directors recommends that you vote FOR this proposal.
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| | The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm. The Board of Directors recommends that you vote FOR this proposal.
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The Board of Directors has fixed the close of business on April 1, 20168, 2022 as the record date for determining those stockholders who will be entitled to notice of and to vote at the meeting. The stock transfer books will not be closed between the record date and the date of the meeting. A quorum comprising the holders of the majority of the outstanding shares of our common stock on the record date must be present or represented for the transaction of business at the 2016 Annual Meeting of Stockholders.Meeting. Accordingly, it is important that your shares be represented at the meeting.
Access and Log-in Instructions for Virtual Annual Meeting
Register prior to the Annual Meeting at www.proxydocs.com/WFLCWHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE AS PROMPTLY AS POSSIBLE using your unique 12- or 16-digit control number included on your proxy card or on the instructions that accompany your proxy materials. You will be able to attend the Annual Meeting by following the instructions that will be emailed to you upon completion of such registration. Online access to the Annual Meeting will open at 11 a.m., Eastern Time, to ensureallow time for you to log-in prior to the start of the live audio webcast of the Annual Meeting at 12 p.m., Eastern Time.
If you are unable to locate your proxy materials containing your 12- or 16-digit control number and cannot log-in as a validated stockholder, you may opt to participate in the Annual Meeting as a “guest,” in which case you will be able to hear the audio webcast but will not be able to utilize the question, voting or other functions noted above.
How Beneficial Owners May Participate in the Virtual Annual Meeting
If your shares are registered in the name of your bank, broker or other nominee, you are the “beneficial owner” of those shares and those shares are considered as held in “street name.” If you are a beneficial owner, to vote or ask questions at the virtual Annual Meeting, you must first obtain a valid legal proxy from your bank, broker or other nominee and then register in advance to attend the Annual Meeting. Follow the instructions from your bank, broker or other nominee included with the proxy materials that you are provided, or contact your bank, broker or other nominee to request a legal proxy form.
After obtaining a valid legal proxy from your bank, broker or other nominee, to register to vote or ask questions at the virtual Annual Meeting, you must submit proof of your legal proxy reflecting the number of your shares along with your name and email address to DMSsupport@mediantonline.com.
Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on May 24, 2022. You will receive a confirmation of your registration by email after we receive your registration materials.
Voting Methods
BEFORE the Annual Meeting:
Vote by Internet: Go to www.proxydocs.com/WLFC until 11:59 p.m. Eastern Time on May 24, 2022.
Vote by Phone: Call toll-free 1-866-994-5580 until 11:59 p.m. Eastern Time on May 24, 2022.
Vote by Mail: Complete, sign and date the proxy card/voting instruction card and return it in the postage-paid envelope that is enclosed with your proxy materials.
DURING the Annual Meeting:
Vote by Internet: Go to www.proxydocs.com/WLFC and vote during the Annual Meeting by entering the 12- or 16-digit control number included in your proxy materials and following the instructions on the Annual Meeting website.
It remains very important that your shares will beare represented and voted at the 2016 Annual MeetingMeeting. We therefore strongly encourage you to vote in advance of Stockholders.the Annual Meeting. You may revoke your proxy at any time prior to the time it is voted.voted at the Annual Meeting. Returning the proxy card does not deprive you of your right to virtually attend the meeting and to vote your shares at the virtual Annual Meeting.
The proxy material is beingProxy materials were mailed to you on or about April 29, 2016.22, 2022. Please read the proxy materialmaterials carefully. Your vote is important, and we appreciate your cooperation in considering and acting on the matters presented.
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| By Order of the Board of Directors, |
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Dean M. Poulakidas |
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Senior Vice President, General Counsel and |
Corporate Secretary | and Corporate Secretary
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April 27, 201622, 2022 | |
WILLIS LEASE FINANCE CORPORATION
PROXY STATEMENT
TABLE OF CONTENTS
You should read this entire proxy
statement carefully prior to returning your proxy
2022 WLFC Proxy Statement | 1 |
PROXY STATEMENT
FOR
2016 ANNUAL MEETING OF STOCKHOLDERS
OF
WILLIS LEASE FINANCE CORPORATION
To Be Held on May 26, 2016
SOLICITATION AND VOTING OF PROXIES
General
This proxy statement is furnished in connection with the solicitation by the Board of Directors (also referred to as the “Board”, “Directors”, or, individually, “Director”) of WILLIS LEASE FINANCE CORPORATION (“we,” “us,” “our,” “Willis Lease” or the “Company”) for proxies to be voted at the 2016our 2022 Annual Meeting of Stockholders (the “Annual Meeting”), which will be held virtually via live webcast at 2:12:00 p.m. local time, Eastern Time, on Thursday,Wednesday, May 26, 2016 at our executive offices, located at 773 San Marin Drive, Suite 2215, Novato, California 94998,25, 2022. Register prior to the Annual Meeting, or at any adjournments or postponements thereof, for the purposes set forth in the accompanying Notice of 2016 Annual Meeting, at www.proxydocs.com/WFLC using your unique 12- or 16-digit control number included on your proxy card or on the instructions that accompany your proxy materials. You will be able to attend the Annual Meeting by following the instructions that will be emailed to you upon completion of Stockholders.
such registration.
This proxy statement is being mailed to stockholders on or about April 29, 2016.22, 2022. Our 20152021 Annual Report is being mailed to stockholders concurrently with this proxy statement. You should not regard the 2015 Annual Report as proxy soliciting material or as a communication by means of which any solicitation of proxies is to be made.
Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting to be held on May 26, 2016:25, 2022:
The Proxy Statement, Proxy Card and the 2015 Annual Report
On Form 10-K for the fiscal year ended December 31, 2021
are also available free of charge at
https://materials.proxyvote.com/970646.
www.investorrelations.com/WLFC.
Voting
The close of business on April 1, 20168, 2022 is the record date for determining whether you, in your capacity as a stockholder, are entitled to notice of and to vote at the 2016 Annual Meeting of Stockholders.Meeting. As of that date, we had 7,368,6546,659,468 shares of common stock, $0.01 par value, issued and outstanding. All of the shares of our common stock outstanding on the record date are expected to be entitled to vote at the 2016 Annual Meeting of Stockholders.Meeting. If you are entitled to vote at the meeting, you will have one vote for each share of common stock you hold with regard to each matter to be voted upon.
The required quorum for the meeting is a majority of the outstanding shares of common stock eligible to be voted on the matters to be considered at the meeting.
Shares of our common stock represented by proxies which are properly executed and returned to us on the accompanying proxy card will be voted at the 2016 Annual Meeting of Stockholders in accordance with the instructions marked on the proxy card. If you do not mark any instructions on the proxy card, your shares represented by the proxy card will be voted for the election of the Board’s nominees as Class III Directors and in favor of Proposal 2. In the election for two Directors (Proposal 1), the nominees for Class III Directors receiving the
highest number of affirmative votes will be elected. The affirmative vote of a majority of the shares voted in person or by proxy at the 20162022 Annual Meeting is required for the adoptionapproval of Proposal 2.
If a properly signed proxy or ballot indicates that you abstain from voting or that your shares are not to be voted on a particular proposal (or “withhold” your vote for a director nominee), your shares will not be counted as having been voted on that proposal, although your shares will be counted as being in attendance at the meeting for purposes of determining the presence of a quorum. Broker non‑votes (i.e., shares held by brokers or nominees, as to which instructions have not been received from beneficial owners or persons entitled to vote, that the broker or nominee does not have discretionary power to vote on a particular matter) are counted towards a quorum, but are not counted for purposes of the proposals in determining whether a matter has been approved by a majority of the shares represented in person or by proxy and entitled to vote.
A broker or other nominee will not have discretion to vote your shares on any “non-routine” matters, absent instructions from you. “Non-routine” matters include all proposals, including the election of Directors, except for Proposal 2. Accordingly, we encourage you to provide voting instructions to your broker or other nominee whether or not you plan to participate in the meeting.
Our management does not know of any matters to be presented at the 2016 Annual Meeting of Stockholders other than those set forth in this proxy statement and in the Notice accompanying this proxy statement. If other matters should properly come before the meeting, the proxy holders will vote on such matters in accordance with their best judgment.
2 | 2022 WLFC Proxy Statement |
We encourage stockholders to vote in advance of the Annual Meeting, even if they plan to access the Annual Meeting virtually. In order to vote in advance, proxies submitted by internet or telephone must be received by 11:59 p.m., Eastern Time, on May 24, 2022. Stockholders can vote during the Annual Meeting, using the internet. Beneficial holders who wish to vote during the Annual Meeting must obtain a valid legal proxy from their broker, bank or other nominee prior to the date of the Annual Meeting and then register in advance no later 5:00 p.m., Eastern Time, on May 24, 2022. Voting by a stockholder during the Annual Meeting will replace any previous votes.
Revocability of Proxies
If you give aStockholders of record may revoke their proxy in the form accompanying this proxy statement, you have the right to revoke it at any time before it is votedthe polls close by submitting a later-dated proxy card, by voting using the internet at the meeting. You mayAnnual Meeting, by delivering an instrument of revocation to our Corporate Secretary before the Annual Meeting, or by voting again using the internet or by telephone before the cut-off time. Your latest internet or telephone proxy is the one that will be counted. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to revoke youra proxy, by:
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| | filing an instrument of revocation with our Corporate Secretary;
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| | presenting at or prior to the meeting a duly executed proxy bearing a later date; or
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| | attending the meeting and electing to vote in person.
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you must contact that firm to revoke any prior voting instructions.
Solicitation
This solicitation is made by our Board of Directors on our behalf. The Company will cover the entire cost of preparing, assembling and mailing the Notice of 2016 Annual Meeting, of Stockholders, this proxy statement and the enclosed proxy card, and of soliciting proxies.proxies, will be paid by us. Proxies will be solicited principally through the use of the mails,mail services, but we may solicit proxies personally or by telephone, electronic mail or special letter by our officers and our regular employees for no additional compensation. We have retained American Stock Transfer & Trust and BroadridgeMediant Communications LLC to aid in the solicitation at an estimated cost to us of approximately $16,100$15,000 plus out-of-pocket expenses.
INFORMATION ABOUT THE BOARD OF DIRECTORS
AND THE COMMITTEES OF THE BOARD
Board of Directors
Our Bylaws authorize us to have fiveseven Directors. At the present time, the Board consists of five Directors who are divided into three classes, one Director in Class I and two Directors in each of Class II and Class III. One class is elected each year for a three‑three year term. Hans Joerg Hunziker, Robert J. Keady and Robert T. Morris areRae Ann McKeating qualify as independent Directors, as defined in the NASDAQNasdaq listing standards.
Our business, property and affairs are managed under the direction of the Board. Directors are kept informed of our business through discussions with our Executive Chairman and Chief Executive Officer (“CEO”) and our other officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees. The Board held a total of eightnine meetings during the fiscal year ended December 31, 2015.2021. Each incumbent Director attended at least 75% of the aggregate of (i) the total number of meetings of the Board, and (ii) the total number of meetings held by all Committeescommittees of the Board on which that Director served.
Communications with the Board
You may communicate with the Board of Directors by sending a letter to: Board of Directors, Willis Lease Finance Corporation, c/o Office of the Corporate Secretary, 773 San Marin Drive,60 East Sir Francis Drake Boulevard, Suite 2215, Novato, California 94998.209, Larkspur, CA 94939. Our Office of the Corporate Secretary will receive your correspondence and forward it to the Board of Directors or to any individual Director or Directors to whom your communication is directed, unless the communication is unduly hostile, threatening, illegal, does not reasonably relate to us or our business, or is similarly inappropriate. The Office of the Corporate Secretary has the authority to discard any inappropriate communications or to take other appropriate actions with respect to any such inappropriate communications.
Attendance at the Annual Meeting of Stockholders
Chairman Charles F. Willis, IV and Director Robert T. Morris attended the 2015Although we do not have a formal policy regarding attendance by members of our Board of Directors at our Annual Meeting of Stockholders. Our otherStockholders, we encourage, but do not require, Directors did not attend, and we have no policy requiring Board members to attendattend. All of our annual meeting.Directors participated in our 2021 Annual Meeting of Stockholders.
2022 WLFC Proxy Statement | 3 |
Committees of the Board
The Board of Directors has an Audit Committee and a Compensation Committee, both currently comprised solely of independent Directors,directors as defined by the NASDAQNasdaq listing standards (the “Audit Committee” and the “Compensation Committee”, respectively).
The Board does not have a nominating committee or committee performing the functions of such a committee. The Board has determined that the function of a nominating committee is adequately fulfilled by the independent Directors. As there is no such established committee, the Company has no nominating committee charter. The full Board of Directors participates in the consideration of any Director nominee.
Although we have not formally set any specific minimum qualifications that Director nominees must possess, we look for candidates with appropriate experience in aviation and leasing, a strong professional background, and a general understanding of marketing, finance and other disciplines related to the success of a company in our industry. AndAlso, although not part of any formal policy, our goal is a balanced and diverse Board, with members whose skills, background and experience are complementary and, together, cover the spectrum of areas that impact our business. Our Directors are generally nominated by our management or other Directors, and each nominee is evaluated based on the above qualifications and in the context of the Board as a whole. While we do not normally engage professional search firms or other third parties in connection with our Board nomination process, we may do so in the future.
As we do not have a history of stockholder nominations of Directors, we do not have a formal policy regarding stockholder nominees to the Board. Under our bylaws, stockholders wishing to nominate a candidate for Director must give notice to our Corporate Secretary no later than the close of business on the 90th day prior to the first anniversary of our preceding year’s annual meeting. If the annual meeting is more than 30 days before or 60 days after such anniversary date, the notice must be delivered no later than the 90th day prior to such annual meeting or the 10th day following the day on which we publicly announce the annual meeting date. The notice should set forth: (i) the name, age, business address and residence address of the nominee; (ii) the principal occupation or employment of the nominee; (iii) the class and number of our shares beneficially owned by the nominee; (iv) a description of all arrangements or understandings between the stockholder and the nominee and any other person(s) pursuant to which the nomination is made by the stockholder; and (v) any other information relating to the nominee that is required to be disclosed in proxy statements for the election of Directors pursuant to Regulation 14A under the Securities Exchange Act of 1934. Nominees proposed by stockholders will be evaluated in the same manner as those proposed by management or existing Directors.
The Audit Committee oversees our accounting function, internal controls and financial reporting process on behalf of the Board. The NASDAQ’s listing rules require that our Audit Committee be composed of at least three
independent Directors. The Audit Committee meets with our financial management and our independent registered public accounting firm to review our financial statements and filings, the audit and matters arising from them, and financial reporting procedures, including any significant judgments made in preparation of the financial statements. The Nasdaq’s listing rules require that our Audit Committee be composed of at least three independent Directors, who currently consists ofare: Directors Robert T. Morris (Chair), Hans Joerg Hunziker (Chair), Rae Ann McKeating and Robert J. Keady. All members of the Audit Committee are able to read and understand financial statements. Mr. MorrisHunziker also qualifies as an audit committee financial expert, as defined by the SEC, and is financially sophisticated as required by the NASDAQNasdaq listing standards. The Audit Committee held foursix meetings during the 20152021 fiscal year. The Audit Committee’s charter is available on the Company’s web sitewebsite (www.willislease.com).
The Compensation Committee reviews and approves our compensation arrangements for executive officers and administers the Company’s 20072021 Incentive Stock Plan amended and restated with the approval of the Shareholders at the 2015 Annual Meeting (the “2007 IncentiveCompany’s Employee Stock Plan”).Purchase Plan. The Compensation Committee currently consists of the Board’s independent Directors: Directors Hans Joerg HunzikerRae Ann McKeating (Chair), Robert J. Keady and Robert T. Morris.Hans Joerg Hunziker. The Compensation Committee held fiveeight meetings during the 2015 fiscal year. For additional details, see “Compensation of Executive Officers — Compensation Discussion and Analysis” elsewhere in this proxy statement.2021. The Compensation Committee’s charter is available on the Company’s web sitewebsite (www.willislease.com).
The Board of Directors may also establish a committee of independent Directors, as defined by the NASDAQNasdaq listing standards, to address specific strategic issues from time to time. In 2015, such a committee was established to review and oversee the Company’s modified “Dutch Auction” tender offer, which resultedtime, including as it did in the Company’s repurchase of 643,821 shares of the Company’s common stock. 2021.
4 | 2022 WLFC Proxy Statement |
Board Leadership Structure
Our Company is led by its founder, Charles F. Willis, IV, who serves asthe Company’s founder and Executive Chairman of the Board, and ChiefAustin Willis, the Company’s CEO. This approach of splitting the Executive Officer. This approachChairman and CEO roles is commonly utilized by public companies in the United States and we believe it has beenwill be effective for our Company as well. Serving in both these rolesPrior to serving as Executive Chairman of the Board, Mr. Charles Willis served as Chairman and Chief Executive Officer since the Company was founded, which has allowed Mr. Charles Willis to be seen by participants in the aviation industry and by our customers, business partners, investors and other stakeholders as providing strong leadership for our Company and in our industry. Prior to serving as the Company’s CEO, Mr. Austin Willis served as the Company’s Senior Vice President, Corporate Development which gave him extensive knowledge of the Company and its business lines and prepared him for the role of CEO. The Board believes that his combined role isthe separation of the roles of Executive Chairman and CEO are the optimal structure for us and our stockholders because it enables decisive leadership, ensures clear accountability and enhances our ability to consistently communicate our message and strategy to all of our stakeholders. Moreover, Mr.Messrs. Charles Willis possessesand Austin Willis possess detailed and in‑depth knowledge of the issues, opportunities and challenges facing us and our business and, therefore, isare best positioned to develop agendas that focus the Board’s time and attention on the most critical matters, while minimizing the potential for confusion or duplication of efforts.matters. We recognize that different board leadership structures may be appropriate for companies in different situations and at different times, and we believe that no one structure is suitable for all companies. WeWhile we believe that our current Board leadership structure is optimal for us, because it demonstratesdemonstrating to our employees, suppliers, customers and other stakeholders that Willis Lease is under strong leadership, with a single person settingthis may change in the tone and having primary responsibility for managing our operations.future.
We have not appointed an independent Board chairman or lead independent Director, as we believe that the members of our Board and the two standing Board Committeescommittees consisting of entirely independent Directors provide an appropriate level of oversight. In this regard, the Audit Committee oversees the accounting and financial reporting processes, as well as risk, legal and compliance matters. The Compensation Committee oversees the compensation of our Executive Chairman and Chief Executive Officer,CEO and, upon the recommendation of the CEO, the compensation of the other Named Executive Officers (“NEOs”). Each of these Committeescommittees is led by a chairperson other than the Executive Chairman andor CEO and, as discussed in more detail in this proxy statement, the entire Board of Directors is actively involved in overseeing our risk management. The entire Board monitors or, as appropriate, the independent Directors monitorsmonitor matters such as the composition of the Board and its committees, Board performance and “best practices” in corporate governance. Our independent Directors also conduct meetings in executive session. These meetings are typically held in conjunction with Board meetings. In 20152021, three Board meetings included an independent Directors’ session. This allows Directors to speak candidly on any matters of interest without the Chief Executive OfficerChairman, CEO or
other managersmanagement members present. We believe this framework strikes a sound balance with appropriate oversight and that appointing an independent Board chairman would not improve the performance of the Board in a material way.
The Board’s Role in Risk Oversight
It is management’s responsibility to manage risk and bring to the Board’s attention the most material risks to the Company. Our Board, including through the Audit Committee and Compensation Committee, each of which are comprised solely of independent Directors, regularly reviews various areas of significant risk to the Company, and advises and directs management on the scope and implementation of policies, strategic initiatives and other actions designed to mitigate various types of risks. Specific examples of risks primarily overseen by the full Board include competition risks, industry risks, economic risks, interest rate risks, liquidity risks, business operations risks and risks related to acquisitions and dispositions. Our Audit Committee regularly reviews with management and theour independent auditors significant financial risk exposures and the processes management has implemented to monitor, control and report such exposures. Specific examples of risks primarily overseen by the Audit Committee include risks related to the preparation of Willis Lease’s financial statements, disclosure controls and procedures, internal controls and procedures required by the Sarbanes‑Oxley Act of 2002 and the Dodd‑Frank Wall Street Reform and Consumer Protection Act, accounting, financial and auditing risks, treasury risks (insurance, credit and debt), risks posed by significant litigation matters, data security risks and risks associated with proposed affiliate transactions,transactions. Our Audit Committee also oversees compliance with other applicable laws and compliance withregulations, as well as the Company’s Standards of Ethical Conduct Policy and other applicable laws and regulations.Policy. Any reports received on the Company’s whistleblower hotline are submitted to the Chair of the Audit Committee. The Compensation Committee reviews and evaluates risks related to the attraction and retention of talent, risks associated with management succession planning, and risks related to the design of compensation programs established by the Compensation Committee for our executive officers. The Compensation Committee has determined in its reasonable business judgment that our compensation policies and practices for all employees, including executive officers, do not create risks that are reasonably likely to have a material adverse effect on the Company.
2022 WLFC Proxy Statement | 5 |
Director Compensation
For details regarding Director compensation, see “Compensation Tables — Director Compensation” elsewhere in this proxy statement.
Biographical Information
| | | | | | | Director
Since | | Age* |
| | Director | | | | |
| | Since | | Age* | | |
Class I Director Whose Term Expires at the 2017 Annual Meeting: | | | | | | |
Robert T. Morris | | 2006 | | 67 | | |
Class II Directors Whose Terms Expire at the 2018 Annual Meeting: | | | | | | |
Class I Director Whose Term Expires at the 2023 Annual Meeting: | | | | | |
Rae Ann McKeating | | | 2020 | | 69 |
Class II Directors Whose Term Expires at the 2024 Annual Meeting: | | | | | |
Austin C. Willis | | 2008 | | 35 | | | 2008 | | 41 |
Robert J. Keady | | 2015 | | 65 | | | 2015 | | 71 |
Class III Directors Whose Terms Expire at the 2019 Annual Meeting
(provided they are re-elected at the 2016 Annual Meeting): | | | | | | |
Class III Directors Whose Term Expires at the 2025 Annual Meeting (provided they are re-elected at the 2022 Annual Meeting): | | | | | |
Charles F. Willis, IV | | 1985 | | 67 | | | 1985 | | 73 |
Hans Joerg Hunziker | | 2006 | | 66 | | | 2006 | | 72 |
* | Age as of April 8, 2022. |
*AgeBoard Diversity
The following Board Diversity Matrix provides information on the diversity of our Board as of April 1, 2016.8, 2022.
TOTAL NUMBER OF DIRECTORS: 5 | FEMALE | MALE | NON-BINARY | DID NOT DISCLOSE GENDER |
Part I: Gender Identity | | | | |
Directors | 1 | 4 | — | — |
Part II: Demographic Background | | | | |
African American or Black | — | — | — | — |
Alaskan Native or Native American | — | — | — | — |
Asian | — | — | — | — |
Hispanic or Latinx | — | — | — | — |
Native Hawaiian or Pacific Islander | — | — | — | — |
White | 1 | 4 | — | — |
Two or More Races or Ethnicities | — | — | — | — |
LGBTQ+ | — | — | — | — |
Did Not Disclose Demographic Background | — | — | — | — |
of our common stock; (ii) each Director; (iii) each officer listed in the Summary Compensation Table; and (iv) all Directors and Executive Officers as a group. Unless specified below, the mailing address for each individual, officer or directorDirector is c/o Corporate Secretary, Willis Lease Finance Corporation, 773 San Marin Drive,60 East Sir Francis Drake Boulevard, Suite 2215, Novato,209, Larkspur, CA 94998.94939. As of April 15, 20168, 2022, we had 7,347,0756,659,468 shares of common stock, $0.01 par value, issued and outstanding.
| | | | | |
| | Common stock(1) | |
| | Number of | | Percentage | |
Name and Address of Beneficial Owner | | Shares | | of Class | |
Charles F. Willis, IV | | 2,841,899 | (2) | 38.68 | % |
Austin C. Willis | | 106,222 | (3) | 1.45 | % |
Judith M. Webber | | 43,745 | | * | |
Donald A. Nunemaker | | 39,091 | | * | |
Dean M. Poulakidas | | 34,499 | | * | |
Hans Joerg Hunziker | | 19,045 | | * | |
Bradley S. Forsyth | | 17,344 | | * | |
Robert J. Keady | | 14,110 | | * | |
Robert T. Morris | | 11,569 | | * | |
All Directors and Executive Officers as a group (10 persons) | | 3,127,524 | | 42.57 | % |
Dimensional Fund Advisors Inc. | | 740,225 | (4) | 10.08 | % |
Rutabaga Capital Management LLC | | 643,814 | (5) | 8.76 | % |
M3F, Inc. | | 463,478 | (6) | 6.31 | % |
| | Common stock(1) | |
Name and Address of Beneficial Owner | | Number of Shares | | Percentage of Class | |
Charles F. Willis, IV | | | 3,085,545 | | (2) | | | 46.33 | % |
Austin C. Willis | | | 779,642 | | (3) | | | 11.71 | % |
Dean M. Poulakidas | | | 112,517 | | | | | 1.69 | % |
Scott B. Flaherty | | | 96,739 | | | | | 1.45 | % |
Brian R. Hole | | | 96,469 | | | | | 1.45 | % |
Robert J. Keady | | | 28,779 | | | | | * | |
Hans Joerg Hunziker | | | 22,494 | | | | * | |
Rae Ann McKeating | | | 10,250 | | | | * | |
| | | | | | | | | |
All Directors, nominees and Executive Officers as a group (8 persons) | | | 3,613,532 | | | | | 54.26 | % |
| | | | | | | | | |
CFW Partners, L.P. | | | 2,134,148 | | (2)(3) | | | 32.05 | % |
Dimensional Fund Advisors LP | | | 499,637 | | (4) | | | 7.50 | % |
M3 Partners, LP | | | 427,450 | | (5) | | | 6.42 | % |
* | Less than one percent of our outstanding common stock. |
(1) | Exceptas indicated in the footnotes to this table, the stockholders named in the table are known to us to have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable. With respect to restricted stock, individuals have voting power or are expected to have voting power within 60 days of April 8, 2022, but not investment power before such restricted stock vests. Of the shares listed above for Messrs. Charles Willis, Austin Willis, Poulakidas, Hole, Flaherty, Keady, Hunziker and Ms. McKeating, 235,866 shares, 31,252 shares, 31,252 shares, 44,106 shares, 31,252 shares, 3,000 shares, 3,000 shares, and 6,750 shares, respectively, are unvested shares of restricted stock over which the respective stockholder has voting power but not investment power. |
*Less than one percent of our outstanding common stock.
(1)Except as indicated in the footnotes to this table, the stockholders named in the table are known to us to have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable. The number of shares beneficially owned includes common stock of which such individual has the right to acquire beneficial ownership either currently or within 60 days after April 15, 2016, including, but not limited to, upon the exercise of an option.
(2)Includes 2,134,148 shares held by CFW Partners, L.P., a California limited partnership, of which Charles F. Willis, IV, holds a one percent (1%) interest as sole general partner and an eighty percent (80%) interest as a limited partner. A trust for the benefit of Austin C. Willis holds the remaining nineteen percent (19%) interest as a limited partner. Also includes (i) 6,338 shares held under an account in the name of Charles F. Willis, V for which Mr. Willis is the custodian; (ii) 1,176 shares held under an account in the name of Charlotte Montresor Willis; and (iii) 700,237 shares held by Mr. Willis in his individual capacity.
(3)50,000 shares pledged.
(4)Based on Schedule 13G filed by Dimensional Fund Advisors LP with the Securities and Exchange Commission on February 9, 2016. Dimensional Fund Advisors LP mailing address is Palisades West, Building One, 6300 Bee Cave Rd., Austin, TX 78746.
(5)Based on Schedule 13G filed by Rutabaga Capital Management with the Securities and Exchange Commission on February 9, 2016. Rutabaga Capital Management mailing address is 64 Broad Street, 3rd Floor, and Boston, MA 02109.
(6)Based on Schedule 13F filed by M3F, Inc. with the Securities and Exchange Commission on January 29, 2016. M3F, Inc.(2) | Includes 2,134,148 shares held by CFW Partners, L.P., a California limited partnership (“CFW Partners”), of which Charles F. Willis, IV, holds a one percent (1%) interest as sole general partner and an seventy percent (70%) interest as a limited partner. Austin C. Willis holds nineteen percent (19%) interest as a limited partner and the remaining ten percent (10%) ownership interest is held by the 2019 Willis Family Trust of which Austin Willis is trustee. Also includes (i) 8,712 shares held under an account in the name of Charlotte Montressor Willis, (ii) 584 shares held under an account in the name of Wilder Grace Willis 2016 Trust, and (iii) 942,101 shares held by Mr. Charles Willis in his individual capacity. Of the total number of shares of which Mr. Charles Willis is deemed to have beneficial ownership, he has (i) sole voting power over 942,101 shares, (ii) sole dispositive power over 706,235 shares, (iii) shared voting power over 2,143,444 shares, and (iv) shared dispositive power over 1,907,578 shares. |
(3) | Consistsof (i) Mr. Austin Willis’ 19% interest as a limited partner of CFW Partners which equates to 405,488 shares, (ii) 94,682 shares held by Mr. Austin Willis in his individual capacity, (iii) the following shares held by trusts over which Mr. Austin Willis is a trustee: (a) 8,692 shares held under an account in the name of Charles F. Willis V 2016 Trust, (b) 5,275 shares held under an account in the name of Charles F. Willis V 2019 Trust, (c) 4,013 shares held under an account in the name of Wilder Grace Willis 2019 Trust, (d) 4,013 shares held under an account in the name of Rooster A. Willis 2019 Trust, (e) 246,715 shares held under an account in the name of 2019 Willis Family Trust, of which 213,415 shares are held by CFW Partners, (f) 584 shares held under an account in the name of Justin Y. Brown 2014 Trust, (g) 484 shares held under an account in the name of Phoebe W. Brown 2014 Trust, (h) 4,013 shares held under an account in the name of Justin Y. Brown 2019 Trust, and (i) 4,013 shares held under an account in the name of Phoebe W. Brown 2019 Trust; and (iv) 1,670 shares held under an account in the name of Austin C. Willis Irrevocable Trust, whose trustee is Mary Willis. Of the total number of shares of which Mr. Austin Willis is deemed to have beneficial ownership, he has (i) sole voting power over 118,747 shares, (ii) sole dispositive power over 87,495 shares, (iii) shared voting power over 660,895 shares, and (iv) shared dispositive power over 0 shares. |
(4) | Based on Schedule 13G/A filed by Dimensional Fund Advisors LP with the SEC on February 18, 2022. According to its Schedule 13G/A, Dimensional Fund Advisors LP reported having sole voting power over 496,249 shares and sole dispositive power over 499,637 shares. Dimensional Fund Advisors LP’s mailing address is Building One, 6300 Bee Cave Rd., Austin, TX 78746. |
(5) | Based on Schedule 13G filed by M3 Partners, LP with the SEC on February 14, 2022. According to its Schedule 13G, M3 Partners, LP reported having shared voting power over 427,450 shares and shared dispositive power over 427,450 shares. M3 Partners, LP's mailing address is 10 Exchange Place, Suite 510, Salt Lake City, UT 84111. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our Directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and our other equity securities. Directors, executive officers and holders of more than ten percent of our common stock are required by Securities and Exchange Commission regulation to furnish us with copies of all Section 16(a) reports they file.
Based solely upon review of the copies of such reports furnished to us and written representations from our officers and Directors for the fiscal year ended December 31, 2015, we believe that during the fiscal year ended December 31, 2015 and through April 15, 2016, our Directors, executive officers and holders of more than ten percent of our common stock complied with all applicable Section 16(a) filing requirements.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes the material elements of our compensation program for Named Executive Officers. The Compensation Committee oversees the design and administration of our executive compensation programs. The Compensation Committee is currently comprised of three independent Directors: Hans Joerg Hunziker (Chair), Robert J. Keady and Robert T. Morris. The Compensation Committee meets formally at least twice per year, and more often if needed. Each meeting agenda 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).
2015 Performance Overview
In 2015 the Company saw record revenues driven through improvements in our global sales force, portfolio utilization, maintenance reserve management and trading volume. Highlights of our 2015 financial and operational performance include:
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| | Total revenues grew 14.5% to $199.6 million in 2015, fueled by higher portfolio utilization, our growing lease portfolio and higher spare parts and equipment sales.
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| | Average utilization improved to 87% for 2015 from 83% in 2014. Utilization at year-end was 90% compared to 79% a year ago.
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| | The owned lease portfolio grew 5.3% in 2015 to $1.123 billion from $1.066 billion a year ago, with $171 million in acquisitions compared to acquisitions of $112 million in 2014.
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| | Tangible book value per share increased 7.2% to $27.86 at December 31, 2015, compared to $25.99 a year ago.
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| | Cash provided by operating activities increased during 2015 to $109.1 million or 74.0% from $62.7 million during 2014.
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We feel each of the above items contributed to our superior return to our shareholders, with 11% annualized return over the prior three years and 9% annualized return over the prior five year period (both ending December 31, 2015).
Results from Our Stockholder Advisory Vote
The Compensation Committee carefully considers feedback from the Company’s stockholders regarding the Company’s executive compensation program, including the results of the stockholders’ advisory vote on executive compensation at the 2014 annual meeting which was approved by more than 85% of the votes cast. In accordance
with the preference which received the most votes cast at the 2011 annual meeting among the alternatives regarding the frequency of future advisory votes on executive compensation, the Board decided that future advisory votes on executive compensation would be submitted to stockholders every three years. Stockholders will next have an advisory vote on executive compensation as well as a vote on the preferred frequency of future advisory votes on executive compensation at the 2017 annual meeting of stockholders. Stockholders are invited to express their views to the Board regarding executive compensation as well as other matters as described in this proxy statement under the heading “Communications with the Board”.
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 addressed differently. Base salaries should be sufficiently competitive to attract and retain highly capable executives; annual incentive bonuses are intended to reward meeting or exceedingbudgeted earnings and other established 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.
The charts below show that a significant portion of our CEO’s and slightly less than half of our other Named Executive Officers’ target total direct compensation (current salary, target annual cash incentives, and the three-year average long‑term equity award values) is variable, “at‑risk” or focused on long‑term results (“at‑risk” actual compensation as a percentage of total actual direct compensation is lower due to the limited bonus payments made in 2015). “At‑risk” pay is tied to the achievement of corporate and individual performance or share price performance.
Compensation Committee Process for Establishing Pay
The Compensation Committee retains compensation consultants from time to time to evaluate executive compensation levels and advise on specific programs. Those compensation consultants report directly to the Compensation Committee. During 2015, the Compensation Committee retained Pearl Meyer to advise on various compensation issues. Pearl Meyer has provided the Compensation Committee information regarding its independence as an advisor, including the fact that it has no other contract or business relationship with Willis Lease, and the Compensation Committee took that information into account in concluding that there was no conflict of interest within the meaning of Rule 10C‑1 under the Securities Exchange Act of 1934 affecting Pearl Meyer’s independence.
The 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 of publicly held companies 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. Other direct competitors are internationally based, where compensation programs are not comparable due to the fact that components of compensation are often driven by the cultural norms and local tax implications. In 2014, the Compensation Committee, with the assistance of Pearl Meyer, reviewed the approach to identify companies for compensation comparison (“2014 Comparator Companies”) to supplement the Committee’s understanding of compensation policies and practices of aviation leasing and finance competitors. In selecting the public companies for inclusion as 2014 Comparator Companies, the following factors were considered: a more analogous range of annual revenues ($30 million to $600 million), business operation (leasing, distribution, or support services), and location. The approved 2014 Comparator Companies include:
| | | AeroVironment, Inc.
| Infinera Corporation
| Nuverra Environmental Solutions, Inc.
| Air Transport Services Group, Inc.
| KVH Industries Inc.
| P.A.M. Transportation Services, Inc.
| CAI International Inc.
| LMI Aerospace Inc.
| Patriot Transportation Holding, Inc.
| Consumer Portfolio Services, Inc.
| Marlin Business Services Corp.
| Regional Management Corp.
| Electro Rent Corporation
| McGrath Rentcorp
| SIFCO Industries Inc.
| Erickson Incorporated
| Medallion Financial Corp.
| Spartan Motors Inc.
| General Finance Corporation
| Mitcham Industries Inc.
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| Heartland Express, Inc.
| Mobile Mini, Inc.
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In 2015, Pearl Meyer evaluated our group of 2014 Comparator Companies and presented a revised group to the Committee for consideration and approval. The Compensation Committee approved the exclusion of three previously selected comparators due to size, specifically: Heartland Express, Inc.; Infinera Corporation; and Mitcham Industries Inc. The Compensation Committee also approved the addition of three new comparitors, including: Neff Corp.; On Deck Capital, Inc.; and NewStar Financial, Inc.
Our general guideline is to provide a total compensation opportunity that is reasonable. The Compensation Committee 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 review for each officer of his or her level of responsibility, contributions to our financial results and our overall performance. The Compensation Committee makes a generalized assessment of these factors and this information is not weighted in any specific manner. Actual compensation packages may vary based on the Compensation Committee’s and Mr. Willis’ subjective evaluation of each executive’s performance and potential as well as the Company’s overall financial position and performance.
Governance of Compensation Programs
Our Chief Executive Officer, in conjunction with our human resources department, develops recommended annual salaries, incentive targets and long‑term incentive compensation for the Named Executive Officers. After reviewing the survey and peer group information described above under “Compensation Philosophy and Objectives” and the market information provided by the Compensation Committee’s outside consultant, the Compensation Committee determines in its subjective judgment the annual salaries, incentive targets and long‑term incentive compensation for the Named Executive Officers.
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). Components of the total executive compensation package, the details of which are discussed below, generally include (i) base salary, (ii) annual incentive compensation in the form of cash bonuses, (iii) long‑term incentive compensation in the form of restricted stock, (iv) participation in the Company’s employee stock purchase plan and other employee benefit plans and programs, and (v) in some cases, severance payments to be made upon an employment termination or change of control of the Company.
The Compensation Committee’s subjective determinations for 2015 compensation took special note of Named Executive Officers’ contribution to the transactions and other strategic initiatives set forth in the “2015 Performance Overview” above.
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 considerations of any special internal responsibilities. Specifically, as the Company is different in some respects from the other industrial and financial companies in the survey samples, and as to some degree responsibilities of the Company’s executive officers differ from those in typical companies, the Compensation Committee gives some consideration to internal responsibilities when determining salaries. The weight given to these various factors may vary from individual to individual.
Base salaries are reviewed annually each year after updated peer company salary information becomes available, and adjustments are made in accordance with the factors described above. Base salary increases depend in part on market competitiveness, time in position, individual performance and growth during the year, and expected future performance. In 2015, the Compensation Committee approved an increase of 10% to Mr. Nunemaker’s base salary, as part of the Compensation Committee’s approved incentive to retain Mr. Nunemaker as President through March 31, 2016. There were no increases in base salaries for the other executive officers in 2015.
Annual Incentive Compensation: Target bonus percentages for each of the Named Executive Officers started with the target bonus percentage set forth in their respective employment agreements, which percentages were determined in part by compensation negotiations at hire and in part by evaluating target incentive levels in the prevailing market. (See “Compensation Philosophy and Objectives”.) The employment agreement for Messrs. Willis, Forsyth, and Poulakidas provide for target bonus percentages of 100%, 60%, and 50%, respectively. Mr. Nunemaker’s target bonus percentage has fluctuated over the course of his employment with the Company depending on his position at the time. As another part of the Compensation Committee’s approved incentives to retain Mr. Nunemaker as President through March 31, 2016, his target bonus opportunity was increased from 85% of his salary to 100% beginning in 2015, and he was paid a retention bonus of $100,000 with another $100,000 to be paid upon the completion of his service as President through March 31, 2016. Ms. Webber’s target bonus percentage was 30%.
The Company established a Company‑wide bonus plan for 2015 based on an aggressive overall return on equity goal. The 2015 bonus pool was to be determined based on return on equity and then 50% of such pool was to be allocated in proportion to target bonuses and the other 50% of the pool was to be allocated based on individual contributions. No bonuses would have been paid under the plan if the threshold pre‑tax return on equity of 5% was not achieved.
Because of the performance of the Company as reflected above, the Compensation Committee approved bonuses for the 2015 year based on the Company’s 2015 bonus plan and on their subjective judgment after receiving input regarding executive performance and recommendations from the Chief Executive Officer with respect to executives other than the Chief Executive Officer. Based upon the CEO’s recommendations and other reports from management about each such individual’s contribution to the Company’s performance during 2015, the Compensation Committee made the ultimate determination in their subjective judgment as to the recipients and the amounts of such annual incentive bonuses. The Compensation Committee considered numerous quantitative and
qualitative factors in a subjective manner, including:
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| | Bottom-line achievement on net income before taxes and return on equity;
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2022 WLFC Proxy Statement | ·
| | Level of portfolio utilization and applicable lease rate factors;11
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| | Management focus on growing the Company and successfully pursuing growth;
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| | Securing financing to enable targeted growth;
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| | Salesforce and leadership development and focus on attractive markets;
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| | General economic and market conditions;
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| | Maintenance of customer, vendor and joint venture relationships; and
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Long‑term Incentive Compensation:EXECUTIVE CO To reward executives for the long‑term growth in the value of the Company’s shares, the Compensation Committee also makes long‑term incentive grants annually. Grants of restricted stock awarded to officers, including all NEOs, are based primarily on competitive grant practices as determined by the Compensation Committee. Also, as explained above, each element of compensation is determined separately and therefore other forms of compensation paid to the Named Executive Officers do not directly influence the amount of long‑term incentive compensation that the Company awards.MPENSATION
The 2007 Incentive Stock Plan provides the flexibility to grant a variety of types of equity awards to provide long‑term incentives to employees. The Compensation Committee’s primary type of long‑term incentive grants is restricted stock. The Compensation Committee, after consulting with its compensation consultants, has determined that restricted stock is 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 providing similar value with an estimate of only 1/3 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.
The Compensation Committee approved a grant of restricted stock to Mr. Willis in 2015, that was part of a grant it had approved in 2014 and that was contingent on stockholder approval of amendments to the 2007 Incentive Stock Plan. The Compensation Committee approved this grant in 2014 as the result of Mr. Willis achieving the objectives set out for him as CEO up to that time. On July 1, 2015, after Stockholders approved the amendments to the 2007 Incentive Stock Plan, Mr. Willis was granted 125,000 restricted shares which will vest in three equal annual installments beginning one year from the date of grant. No other executive officer was issued a long-term incentive grant in 2015.
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 (as amended, the “ESPP”) 250,000 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.
Perquisites and Other Personal Benefits: The Company provides its NEOs with limited perquisites and other personal benefits in addition to those provided to other employees, including additional life insurance, financial tax planning, personal use of company cars, travel expenses, and spousal travel under limited circumstances. The Company also provided Mr. Willis with relocation assistance in connection with his moves to the United Kingdom and Florida. The costs of the perquisites and personal benefits for the NEOs for the fiscal year ended December 31, 2015 are included in the “2015 Summary Compensation Table” in this Proxy Statement.
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 may participate) and long‑term stock incentives in the form of restricted stock, there are currently no specific guidelines for executive stock ownership or requirements for them to hold shares. Including restricted stock awards, the ownership levels of the Named Executive Officers generally exceed significantly the typical ownership guidelines established in the marketplace. For example, our Chairman and CEO, Charles F. Willis, IV, directly owns stock worth more than 10 times his salary, well in excess of typical market guidelines.
Employment Agreements and Severance Payments
Employment agreements have been entered into with Messrs. Willis, Forsyth, Nunemaker and Poulakidas. 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 Discussion and 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. 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 non‑solicitation of employees covenant for three years after termination of employment (except for Mr. Forsyth whose non‑solicitation covenant period is two years after termination of employment). None of the Named Executive Officers are eligible for a tax gross‑up of any parachute excise tax in the event of a change in control.
Ms. Webber was employed pursuant to an offer letter which provided for an annual base salary. She also qualified to participate in our annual incentive program with a target bonus opportunity of 30% of her base salary. Ms. Webber was not entitled to any severance benefits or other payments to be made to her upon a termination or change of control.
Impact of Accounting and Tax Treatments of a Particular Form of Compensation
The accounting and tax treatment of the elements of our compensation program is one factor considered in the design of the compensation program. Under Section 162(m) of the Internal Revenue Code of 1986, as amended, the federal income tax deduction for certain types of compensation paid to the chief executive officer and the three other most highly compensated executive officers of publicly held companies (other than the principal financial officer) is limited to $1 million per officer per fiscal year unless such compensation meets certain requirements. The principal requirement is that such compensation must qualify as “performance‑based.”
The Compensation Committee considers the impact of this rule when developing and implementing our executive compensation program. However, the Compensation Committee also believes that it is important to preserve flexibility in administering compensation programs in a manner designed to promote varying corporate goals. Accordingly, the Board has not adopted a policy that all compensation must qualify as deductible under Section 162(m). Amounts paid under any of our compensation programs, including salaries, annual incentive awards, performance awards and grants of restricted stock units, may not qualify as performance‑based compensation that is excluded from the limitation on deductibility. In addition, due to the ambiguities and uncertainties as to the application and interpretation of Section 162(m), no assurance can be given that compensation even if intended by the Compensation Committee to satisfy the requirements for deductibility under Section 162(m) would, in fact, do so.
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, 2015 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
Robert J. Keady
Robert T. Morris
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of the following three independent Directors: Hans Joerg Hunziker (Chair), Robert J. Keady and Robert T. Morris. None of our executive officers currently serves on our Compensation Committee. None of our executive officers is, or was during 2015, 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 threetwo most highly compensated Executive Officersexecutive officers other than the CEO and CFOour Chief Executive Officer (the “NEOs”), based on total compensation for their services with us in all capacities. Summary Compensation Table for Fiscal Year 2021 SUMMARY COMPENSATION TABLE FOR FISCAL YEAR 2015
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Equity | | | | | | | | | | | | | | | | | | Incentive | | | | | | | | | | | | | | Stock | | Option | | Plan | | All Other | | | | Name and | | | | Salary | | Bonus | | Awards | | Grants | | Compensation | | Compensation | | Total | | Principal Position | | Year | | ($) | | ($) | | ($)(1) | | ($) | | ($) | | ($) | | ($) | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | Charles F. Willis, IV, | | 2015 | | 950,000 | | 815,000 | | 2,306,250 | | — | | — | | 325,036 | (2) | 4,396,286 | | Chief Executive | | 2014 | | 931,250 | | — | | 1,963,000 | | — | | — | | 690,359 | | 3,584,609 | | Officer | | 2013 | | 875,000 | | 400,000 | | 936,000 | | — | | — | | 773,044 | | 2,984,044 | | | | | | | | | | | | | | | | | | | | Donald A. Nunemaker, | | 2015 | | 456,875 | | 508,000 | | — | | — | | — | | 23,295 | (3) | 988,170 | | President | | 2014 | | 412,500 | | — | | 405,200 | | — | | — | | 22,978 | | 840,678 | | | | 2013 | | 375,000 | | 100,000 | | 216,000 | | — | | — | | 38,131 | | 729,131 | | | | | | | | | | | | | | | | | | | | Bradley S. Forsyth, | | 2015 | | 327,215 | | 130,000 | | — | | — | | — | | 15,896 | (4) | 473,111 | | Senior Vice President | | 2014 | | 361,250 | | 18,000 | | 202,600 | | — | | — | | 15,245 | | 597,095 | | and Chief Financial | | 2013 | | 320,000 | | 60,000 | | 72,000 | | — | | — | | 11,773 | | 463,773 | | Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dean M. Poulakidas, | | 2015 | | 360,000 | | 154,000 | | — | | — | | — | | 17,209 | (5) | 531,209 | | Senior Vice President | | 2014 | | 397,500 | | 20,000 | | 405,200 | | — | | — | | 24,994 | | 847,694 | | General Counsel and | | 2013 | | 300,000 | | 60,000 | | 216,000 | | — | | — | | 11,674 | | 587,674 | | Corporate Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Judith M. Webber, | | 2015 | | 256,800 | | 66,000 | | — | | — | | — | | 12,129 | (6) | 334,929 | | Senior Vice President | | 2014 | | 248,425 | | — | | — | | — | | — | | 11,925 | | 260,350 | | Technical Services | | 2013 | | 223,300 | | 25,000 | | 72,000 | | — | | — | | 13,484 | | 333,784 | |
Name and Principal Position | | Year | | Salary ($) | | | Bonus ($)(6) | | | Stock Awards ($)(1) | | | Option Grants ($) | | | Non-Equity Incentive Plan Compensation ($) | | | All Other Compensation ($) | | | | Total ($) | | Charles F. Willis, IV | | 2021 | | | 1,097,000 | | | | — | | | | 10,306,048 | | | | | — | | | | — | | | 416,556 | (2) | | | | | 11,819,604 | | Executive Chairman | | 2020 | | | 971,250 | | | | — | | | | 4,746,960 | | | | | — | | | | 3,262,234 | | | 306,225 | | | | | | 9,286,669 | | Austin C. Willis | | 2021 | | | 375,000 | | | | — | | | | 1,451,437 | | | | | — | | | | — | | | 54,563 | (3) | | | | | 1,881,000 | | Chief Executive Officer (7) | | 2020 | | | 264,000 | | | | — | | | | 662,076 | | | | | — | | | | 512,637 | | | 47,773 | | | | | | 1,486,486 | | Brian R. Hole | | 2021 | | | 453,000 | | | | — | | | | 2,047,074 | | | | | — | | | | — | | | 85,922 | (4) | | | | | 2,585,996 | | President | | 2020 | | | 348,600 | | | | — | | | | 933,777 | | | | | — | | | | 1,150,753 | | | 34,065 | | | | | | 2,467,195 | | Scott B. Flaherty | | 2021 | | | 435,000 | | | | — | | | | 1,451,437 | | | | | — | | | | — | | | 61,929 | (5) | | | | | 1,948,366 | | Senior Vice President and Chief Financial Officer | | 2020 | | | 312,900 | | | | — | | | | 662,076 | | | | | — | | | | 607,591 | | | 51,862 | | | | | | 1,634,429 | |
(1) | (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 as discussed in Note 13 - Stock-Based Compensation Plans - in our annual report on Form 10-K for the fiscal year 2021 filed with the SEC. For 2021, the grant date fair value represents restricted stock awards granted in 2022, subject to time-based vesting conditions, due to achievement of 2021 performance goals as well as awards granted in 2021 subject to time-based vesting conditions.
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For 2021, the grant date fair value represents the following: For Mr. Charles Willis, the grant date fair value includes $6,403,600 of time-based vesting awards granted in 2021 and $3,902,448 of awards computedthat will be granted in accordance2022 based on the outcome of 2021 performance conditions. For Mr. Austin Willis, the grant date fair value includes $907,148 of time-based vesting awards granted in 2021 and $544,289 of awards that will be granted in 2022 based on the outcome of 2021 performance conditions. For Mr. Hole, the grant date fair value includes $1,279,421 of time-based vesting awards granted in 2021 and $767,653 of awards that will be granted in 2022 based on the outcome of 2021 performance conditions. For Mr. Flaherty, the grant date fair value includes $907,148 of time-based vesting awards granted in 2021 and $544,289 of awards that will be granted in 2022 based on the outcome of 2021 performance conditions See “2022 Equity Awards” below for more information about those awards. For 2020, the grant date fair value represents the following: For Mr. Charles Willis, the grant date fair value includes $2,850,000 of time-based vesting awards granted in 2020 and $1,896,960 of awards that were granted in 2021 based on the outcome of 2020 performance conditions. For Mr. Austin Willis, the grant date fair value includes $397,500 of time-based vesting awards granted in 2020 and $264,576 of awards that were granted in 2021 based on the outcome of 2020 performance conditions. For Mr. Hole, the grant date fair value includes $560,625 of time-based vesting awards granted in 2021 and $373,152 of awards that were granted in 2021 based on the outcome of 2020 performance conditions. For Mr. Flaherty, the grant date fair value includes $397,500 of time-based vesting awards granted in 2021 and $264,576 of awards that were granted in 2021 based on the outcome of 2020 performance conditions. See “2021 Equity Awards” below for more information about those awards. (2) | Includes (i) a 401(k)matching contribution in the amount of $13,000, (ii) $12,360 for the allocated cost of Mr. Charles Willis’ participation in a group life, disability and accidental death and dismemberment policy that covers certain of the Company’s executive officers, and the following perquisites: |
$7,551 for spousal travel. This amount is based on the actual cost to the Company. $21,177 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). $73,837 moving reimbursement benefits paid to or on behalf of Mr. Charles Willis in connection with Financial Accounting Standards Board Accounting Standards Codification Topic 718 as discussed in Note 12 – Stock-Based Compensation Plans - in our report filedhis relocation to the United Kingdom. $179,832 for membership dues associated with a club membership and personal use of such membership. 12 | 2022 WLFC Proxy Statement |
$33,384 for personal use of the Company's plane (based on Form 10Kthe Standard Industry Fair Level ("SIFL") rate which is determined by calculating for each leg of a trip the fiscal year 2015 filed withIRS multiplier for 0-500 miles, 501-1500 miles and 1500+ miles at a rate of 0.3385, 0.2581 and 0.2481, respectively, multiplied by the Securitiesnumber of nautical miles, multiplied by the aircraft multiple at a rate of 400% and Exchange Commission. (2)Includes (i) a 401(k) matching contributionthen adding the terminal charge in the amount of $12,000 (ii) $3,126 for$61.88, then multiplying the allocated costtotal amount by the number 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) $7,478 for an individual accidental death and dismemberment policy for Mr. Willis, (iv) $2,568 United Kingdom insurance for spouse, (v) $2,860passengers).
$75,415 for tax gross-ups andreimbursements with respect to the following perquisites:items listed above. | ·
| | $32,370 for spousal travel. This amount is based on the actual cost to the Company.
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| | $841for 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).
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| | $30,000 for financial, tax and estate planning services. This amount is based on the actual cost to the Company.
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| | $180,317 moving reimbursements benefits paid to or on behalf of Mr. Willis in connection with his relocation to the United Kingdom. This amount is based on the actual cost to the Company.
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| | $53,476 moving reimbursements benefits paid on behalf of Mr. Willis in connection with his relocation to Florida. This amount is based on the actual cost to the Company.
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| | In addition, Mr. Willis had guests accompany him on the Company’s plane on business trips during 2015 with no or de minimis incremental costs.
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| (3) | | Includes (i) a 401(k) matching contribution in the amount of $12,000,$9,750, (ii) $2,971$1,080 for the allocated cost of Mr. Nunemaker’sAustin Willis’ participation in a group life, disability, and accidental death and dismemberment policy that covers certain of the Company’s executive officers, (iii) $7,916$36,151 for an individualpersonal use of the Company's plane (based on the SIFL rate which is determined by calculating for each leg of a trip the IRS multiplier for 0-500 miles, 501-1500 miles and 1500+ miles at a rate of 0.3385, 0.2581 and 0.2481, respectively, multiplied by the number of nautical miles, multiplied by the aircraft multiple at a rate of 400% and then adding the terminal charge in the amount of $61.88, then multiplying the total amount by the number of passengers), and (iv) $7,582 for tax reimbursements with respect to the foregoing items. |
(4) | Includes (i) a 401(k) matching contribution in the amount of $9,750, (ii) $1,305 for the allocated cost of Mr. Hole’s participation in a group life, disability, and accidental death and dismemberment policy for Mr. Nunemaker; and (iv) $408that covers certain of the Company’s executive officers, (iii) $10,590 for personal use of a company car which was calculated as a proration of total fuel costs and highway tolls (based on personal use as a percentage of total use)., (iv) $945 for personal use of a Company club membership (based on personal usage), (v) $43,604 for moving reimbursement benefits, and (vi) $19,728 for tax reimbursements with respect to the foregoing items. |
(5) | (4)
| | Includes (i) a 401(k) matching contribution in the amount of $9,755,$13,000, (ii) $2,519$1,253 for the allocated cost of Mr. Forsyth’sFlaherty's participation in a group life, disability, and accidental death and dismemberment policy that covers certain of the Company’sCompany's executive officers, (iii) $9,873 for personal use of a company car which was calculated as a proration of total fuel costs and (iii) $3,622 travel bonus.highway tolls (based on personal use as a percentage of total use), (iv) $33,591 for membership dues associated with a club membership and personal use of such membership, (v) $2,584 for use of the Company's plane (based on the SIFL rate which is determined by calculating for each leg of a trip the IRS multiplier for 0-500 miles, 501-1500 miles and 1500+ miles at a rate of 0.3385, 0.2581 and 0.2481, respectively, multiplied by the number of nautical miles, multiplied by the aircraft multiple at a rate of 400% and then adding the terminal charge in the amount of $61.88, then multiplying the total amount by the number of passengers), (vi) $354 for gym membership dues and (vii) $1,274 for tax reimbursements with respect to the foregoing items. |
(6) | (5)
| | Includes (i) a 401(k) matching contribution inIn the amount of $9,000, (ii) $2,481 for2021 calendar year, no cash bonus was earned by the allocated cost of Mr. Poulakidas’ participation in a group life, disability, and accidental death and dismemberment policy that covers certain ofNEOs under the Company’s executive officers, and (iii) $5,728 travel bonus.2021 Incentive Plan.
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(7) | (6)The table reflects Mr. Austin Willis’ compensation as stated in his previous employment agreement as Senior Vice President, Corporate Development.
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2021 Incentive Plan The Compensation Committee established an incentive plan for 2021 based upon both the performance of the Company’s various business areas in relation to applicable bonus performance metrics and the Company’s actual pre-bonus, pre-tax income. The bonus pool was established at 15% of pre-bonus, pre-tax earnings. Under the incentive plan, participants were entitled to 70% based on the achievement of Company and relevant business performance targets and to 30% based on an assessment of each individual’s contributions. Participation in the incentive pool is based upon a NEO’s target bonus amount (which was 100%, 50%, 85% and 50% of the annual base salary of Messrs. Charles Willis, Austin Willis, Hole and Flaherty, respectively) as a percentage of the aggregate target bonus amount of the Company’s employee base and the overall incentive pool. No cash incentives would be paid under the plan if the Company did not achieve either 70% of budgeted full year pre-bonus, pre-tax income of $18.19 million or $2.0 million of first half of the year earnings before tax. In the 2021 calendar year, no cash bonus was earned by the NEOs under the 2021 Incentive Plan. 2021 Equity Awards The Compensation Committee established an equity award grant structure which awards a combination of time-based vesting restricted stock and target performance shares. Each NEO was eligible to be granted a range of performance shares based on achievement of a minimum, target or maximum goal. For the awards to be issued in early 2021, the Committee determined that the performance shares for the NEOs would be based on liquidity (defined as non-restricted cash plus revolving credit facility availability) as of December 31, 2020. If the Company’s liquidity for fiscal year 2020 achieved $45 million, $60 million or $75 million, each NEO would receive 57%, 100% or 143% of their target number of related performance shares. Our liquidity as of December 31, 2020 exceeded $75 million. 2022 WLFC Proxy Statement | | Includes (i) a 401(k) matching contribution in the amount of $10,272, and (ii) $1,857 for the allocated cost of Ms. Webber’s participation in a group life, disability, and accidental death and dismemberment policy that covers certain of the Company’s executive officers. Ms. Webber ceased to be an officer February 2015 but continued to provide technical services through 2015.13
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GRANTS OF PLAN‑BASED AWARDS
For Fiscal Year Ended 2015The performance shares related to the achievement of liquidity targets are subject to additional vesting over a one year period. As a result of the Company’s performance, the Compensation Committee determined the maximum number of performance shares had been earned and formally issued them, subject to vesting conditions, on April 1, 2021:
| | | | | | | | | | | | | All Other | | Grant Date | | | | | | Stock Awards: | | Fair Value of | | | | | | Number of Shares | | Stock and | | | | | | of Stock or | | Option | | | | Grant | | Units | | Awards | | Name | | Date | | (#)(1) | | ($)(2) | | (a) | | (b) | | (c) | | (d) | | Charles F. Willis, IV | | 7/1/2015 | | 125,000 | | | $2,306,250.00 | | | | | | | | | | | Donald A. Nunemaker | | | | — | | | — | | | | | | | | | | | Bradley S. Forsyth | | | | — | | | — | | | | | | | | | | | Dean M. Poulakidas | | | | — | | | — | | | | | | | | | | | Judith M. Webber | | | | — | | | — | |
Executive | | Restricted Stock | | Target Performance Shares | | Earned Performance Shares | | Total Restricted Shares Granted on April 1, 2021 | Charles F. Willis, IV | | 44,000 | | | 54,000 | | | 108,000 | | | 120,000(1) | Austin C. Willis | | 5,200 | | | 8,000 | | | 16,000 | | | 21,200 | Brian R. Hole | | 7,500 | | | 11,200 | | | 22,400 | | | 29,900 | Scott B. Flaherty | | 5,200 | | | 8,000 | | | 16,000 | | | 21,200 |
(1) | Although Mr. Charles Willis was contractually entitled to receive 152,000 shares on April 1, 2021, he agreed to reduce his number of shares granted to 120,000 in order to allow more shares to be available for grant to employees under the 2021 Incentive Plan. Subsequently, on November 10, 2021, the Compensation Committee approved the grant of 32,000 shares to Mr. Charles Willis after ratification of the 2021 Incentive Plan. |
(1)Reflects2022 Equity Awards
The Compensation Committee established an equity award grant structure which awards a combination of time-based vesting restricted stock and target performance shares. Each NEO was eligible to be granted a range of performance shares based on achievement of a minimum, target or maximum goal. For the awards grantedto be issued in 2015. For additional information, please see “Compensationearly 2021, the Committee determined that the performance shares for the NEOs would be based on liquidity (defined as non-restricted cash plus revolving credit facility availability) as of Executive Officers—Long-Term Incentive Compensation” above. (2)The amounts in this column representDecember 31, 2021. If the grant date fair valueCompany’s liquidity for fiscal year 2021 achieved $45 million, $60 million or $75 million, each NEO would receive 57%, 100% or 143% of awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718.
The following table sets forth certain information with respectperformance shares related to the outstanding equity awards held byachievement of liquidity targets are subject to additional vesting over a one year period. As a result of the Named Executive Officers atCompany’s performance, the endCompensation Committee determined the maximum number of 2015.performance shares had been earned and formally issued them, subject to vesting conditions, on April 1, 2022: Executive | | Restricted Stock | | Target Performance Shares | | Earned Performance Shares | | Total Restricted Shares Granted on April 1, 2022 | Charles F. Willis, IV | | 44,000 | | 54,000 | | 108,000 | | 152,000 | Austin C. Willis | | 8,480 | | | 8,904 | | | 12,720 | | | 21,200 | Brian R. Hole | | 11,960 | | | 12,558 | | | 17,940 | | | 29,900 | Scott B. Flaherty | | 8,480 | | | 8,904 | | | 12,720 | | | 21,200 |
14 | 2022 WLFC Proxy Statement |
OUTSTANDING EQUITY AWARDS AT FISCAL 2015 YEAR‑ENDOutstanding Equity Awards at Fiscal 2021 Year‑End
| | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | Number of | | | | | | | | | Number of | | Market | | | | Securities | | | | | | | | | Shares or | | Value of | | | | Underlying | | | | | | | | | Units of | | Shares or | | | | Unexercised | | | | | | | | | Stock That | | Units of | | | | Options | | Option | | Option | | Award | | Have Not | | Stock That | | | | (#) | | Exercise | | Expiration | | Grant | | Vested | | Have Not | | Name | | Exercisable | | Price($) | | Date | | Date | | (#) | | Vested($) | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | Charles F. Willis, IV | | — | | | — | | — | | 2/3/2012 | | 17,500 | (1) | | | | | | | | | | | | | 11/28/2012 | | 15,000 | (1) | | | | | | | | | | | | | 4/9/2013 | | 32,500 | (1) | | | | | | | | | | | | | 10/1/2014 | | 50,000 | (2) | | | | | | | | | | | | | 7/1/2015 | | 125,000 | (2) | | | | | | | | | | | | | | | 240,000 | | $ | 4,824,000 | | | | | | | | | | | | | | | | | | Donald A. Nunemaker | | — | | | — | | — | | 2/3/2012 | | 6,250 | (1) | | | | | | | | | | | | | 11/28/2012 | | 3,750 | (1) | | | | | | | | | | | | | 4/9/2013 | | 7,500 | (1) | | | | | | | | | | | | | 10/1/2014 | | 13,333 | (2) | | | | | | | | | | | | | | | 30,833 | | $ | 619,743 | | | | | | | | | | | | | | | | | | Bradley S. Forsyth | | — | | | — | | — | | 2/3/2012 | | 5,000 | (1) | | | | | | | | | | | | | 11/28/2012 | | 3,750 | (1) | | | | | | | | | | | | | 4/9/2013 | | 2,500 | (1) | | | | | | | | | | | | | 10/1/2014 | | 6,666 | (2) | | | | | | | | | | | | | | | 17,916 | | $ | 360,112 | | | | | | | | | | | | | | | | | | Dean M. Poulakidas | | — | | | — | | — | | 4/9/2013 | | 7,500 | (1) | | | | | | | | | | | | | 10/1/2014 | | 13,333 | (2) | | | | | | | | | | | | | | | 20,833 | | $ | 418,743 | | | | | | | | | | | | | | | | | | Judith M. Webber | | — | | | — | | — | | 2/3/2012 | | 1,750 | (1) | | | | | | | | | | | | | 4/9/2013 | | 2,500 | (1) | | | | | | | | | | | | | | | 4,250 | | $ | 85,425 | |
| | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Award Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | Charles F. Willis, IV | — | | — | | — | | | 4/1/2019 | 46,000 | | (1) | | $ | 1,731,900 | | — | | $ | — | | | — | | — | | — | | | 4/1/2020 | 65,333 | | (1) | | $ | 2,459,787 | | — | | $ | — | | | — | | — | | — | | | 4/1/2021 | 91,200 | | (2) | | $ | 3,433,680 | | — | | $ | — | | | — | | — | | — | | | 4/1/2021 | 28,800 | | (1)(3) | | $ | 1,084,320 | | — | | $ | — | | | — | | — | | — | | | 11/10/2021 | 32,000 | | (3) | | $ | 1,204,800 | | — | | $ | — | | | — | | — | | — | | | 4/1/2022 | — | | (2) | | $ | — | | 91,200 | | $ | 3,433,680 | | | — | | — | | — | | | 4/1/2022 | — | | (1) | | $ | — | | 60,800 | | $ | 2,289,120 | | Austin C. Willis | — | | — | | — | | | 4/1/2019 | 6,000 | | (1) | | $ | 225,900 | | — | | $ | — | | | — | | — | | — | | | 4/1/2020 | 3,466 | | (1) | | $ | 130,495 | | — | | $ | — | | | — | | — | | — | | | 4/1/2020 | 5,333 | | (1) | | $ | 200,878 | | — | | $ | — | | | — | | — | | — | | | 4/1/2021 | 12,720 | | (2) | | $ | 478,908 | | — | | $ | — | | | — | | — | | — | | | 4/1/2021 | 8,480 | | (1) | | $ | 319,272 | | — | | $ | — | | | — | | — | | — | | | 4/1/2022 | — | | (2) | | $ | — | | 12,720 | | $ | 478,908 | | | — | | — | | — | | | 4/1/2022 | — | | (1) | | $ | — | | 8,480 | | $ | 319,272 | | Brian R. Hole | — | | — | | — | | | 4/1/2019 | 8,499 | | (1) | | $ | 319,987 | | — | | $ | — | | | — | | — | | — | | | 4/1/2020 | 5,000 | | (1) | | $ | 188,250 | | — | | $ | — | | | — | | — | | — | | | 4/1/2020 | 7,466 | | (1) | | $ | 281,095 | | — | | $ | — | | | — | | — | | — | | | 4/1/2021 | 17,940 | | (2) | | $ | 675,441 | | — | | $ | — | | | — | | — | | — | | | 4/1/2021 | 11,960 | | (1) | | $ | 450,294 | | — | | $ | — | | | — | | — | | — | | | 4/1/2022 | — | | (2) | | $ | — | | 17,940 | | $ | 675,441 | | | — | | — | | — | | | 4/1/2022 | — | | (1) | | $ | — | | 11,960 | | $ | 450,294 | | Scott B. Flaherty | — | | — | | — | | | 4/1/2019 | 6,000 | | (1) | | $ | 225,900 | | — | | $ | — | | | — | | — | | — | | | 4/1/2020 | 3,466 | | (1) | | $ | 130,495 | | — | | $ | — | | | — | | — | | — | | | 4/1/2020 | 5,333 | | (1) | | $ | 200,878 | | — | | $ | — | | | — | | — | | — | | | 4/1/2021 | 12,720 | | (2) | | $ | 478,908 | | — | | $ | — | | | — | | — | | — | | | 4/1/2021 | 8,480 | | (1) | | $ | 319,272 | | — | | $ | — | | | — | | — | | — | | | 4/1/2022 | — | | (2) | | $ | — | | 12,720 | | $ | 478,908 | | | — | | — | | — | | | 4/1/2022 | — | | (1) | | $ | — | | 8,480 | | $ | 319,272 | |
(1) | (1)Shares of restricted stock vest in four equal annual installments on each anniversary of the grant date.
(2)Shares of restricted stock vest in three equal annual installments on each anniversary of the grant date. The number listed reflects the remaining number of shares to vest over the remaining period.
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(2) | Shares of restricted stock vest on the one year anniversary of the grant date. |
(3) | Although Mr. Charles Willis was contractually entitled to receive 60,800 shares on April 1, 2021, he agreed to reduce his number of shares granted to 28,800 in order to allow more shares to be available for grant to employees under the 2021 Incentive Plan. Subsequently, the Compensation Committee approved the grant of 32,000 shares to Mr. Charles Willis after ratification of the 2021 Incentive Plan. These 32,000 shares of restricted stock vest in two equal installments on each anniversary of the grant date. The following table sets forth certain information with respect to options exercised by the Named Executive Officer and stock that vested during fiscal year 2015.
OPTION EXERCISES AND STOCK VESTED
For Fiscal Year Ended 2015
| | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | Number of Shares | | | | | Number of Shares | | | | | | | Acquired on | | Value Realized on | | Acquired on | | Value Realized | | | | Exercise | | Exercise | | Vesting | | on Vesting | | Name of Executive Officer | | (#) | | ($)(1) | | (#) | | ($)(2) | | (a) | | (b) | | (c) | | (d) | | (e) | | Charles F. Willis, IV | | 49,000 | | $ | 800,170 | | 104,082 | | $ | 1,971,043 | | Donald A. Nunemaker | | — | | | — | | 31,439 | | $ | 560,455 | | Bradley S. Forsyth | | — | | | — | | 21,214 | | $ | 377,856 | | Dean M. Poulakidas | | — | | | — | | 12,917 | | $ | 216,097 | | Judith M. Webber | | — | | | — | | 8,625 | | $ | 157,199 | |
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| | The amount was calculated based on the difference between the market price of the Company’s common stock on the date of exercise and the exercise price.
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2022 WLFC Proxy Statement | (2)
| | The amount was calculated based on the market value of the Company’s common stock on the vesting date.15
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Termination and Change in Control Payments
Employment Agreements and Severance Payments Employment agreements have been entered into with Messrs. Charles Willis, Austin Willis, Hole and Flaherty. These 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 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. Employment contracts for Messrs. Charles Willis, Nunemaker, Forsyth, PoulakidasAustin Willis, Hole and HoleFlaherty specify certain severance benefits to be paid in the event of an “Involuntary Termination” (i.e.(i.e., termination of employment by the Company without cause or resignation by the employee for good reason) and, in the case of Messrs. Nunemaker, Forsyth, PoulakidasHole and Hole,Flaherty, specified severance benefits in the event of an Involuntary Termination within 18 months following a change of control (a “Change of Control Termination”). As discussed above, Ms. Webber was employed by the Company pursuant to an offer letter which did not provide for severance benefits or other payments to be made to her upon a termination or change of control. The maximum of these severance benefits payable to Mr. Charles Willis would represent (i) three times his base salary, plus (ii) a prorated portion of his annual incentives accrued during the year of termination, plus (iii) three times the average annual incentives he earned during the three years prior to his Involuntary Termination, plus (iv) distribution(iii) a prorated portion of unpaid deferred compensation,his annual incentives accrued during the year of termination, plus (iv) immediate vesting of all outstanding stock options and restricted stock, continued payment for three years for club memberships and financial, tax and estate planning, andplus (v) continued coverage for three years under the Company’s employee group benefit plans.plans, plus (vi) continued payment for three years for club memberships (if any), plus (vii) the right to purchase company car or to assume the lease. Additionally, in the event Mr. Charles 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. Charles Willis is entitled to immediate vesting of all stock options and restricted stock, whether or not his employment is terminated.stock. In the event that Mr. Charles 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,(if any) 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. NunemakerAustin Willis would represent (i) one year oftwo times his base salary, for an Involuntary Termination or 18 monthsplus (ii) any unpaid base salary for a Change of Control Termination, plus (ii)and a prorated portion of his annual incentives accrued during the year of termination, for an Involuntary Termination or Change of Control Termination,and accrued vacation and sick pay, plus (iii) in case of an Involuntary Termination,two times the average annual incentives he earned during the two years prior to his termination,Involuntary Termination (or the greater of (A) one year or (B) the target bonus for such year, “doubled” in the case of a Changequalifying termination that occurs prior to two annual incentive bonuses being paid to Mr. Austin Willis), plus (iv) distribution of Control Termination, one and one half times the average annual incentives earnedunpaid deferred compensation, accelerated vesting of restricted stock scheduled to vest during the two years prior to his termination. In addition, he is entitled to immediate vesting of all stock options and restricted stock,following the termination date and continued coverage for two years under the Company’s employee group benefit plans for one year following an Involuntary Termination, or for 18 months following a Change of Control Termination.plans. Additionally, in the event Mr. NunemakerAustin Willis 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 Upon a change of these severance benefits payable tocontrol, Mr. Forsyth would represent (i) one year of his base salary for an Involuntary Termination or 18 months base salary for a Change 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 the case of a Change of Control Termination the average annual incentives he earned during the two years prior to his termination. In addition, heAustin Willis 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 under the Company’s employee group benefit 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 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. Poulakidas would represent (i) six months of his base salary for an Involuntary Termination or one year’s salary for a Change 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 the case of a Change of Control Termination, the average annual incentives he earned during the two years prior to his 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 under the Company’s employee group benefit plans for six months following an Involuntary Termination, or for one year following a Change of Control Termination. Additionally, in the event Mr. Poulakidas 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.
bonus awards. The maximum of these severance benefits payable to Mr. Hole would represent (i) six months of his base salary for an Involuntary Termination or one year’s salary for a Change 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 the case of a Change of Control Termination, the average annual incentives he earned during the two years prior to his 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 under the Company’s employee group benefit plans for six months following an Involuntary Termination, or for one year following a Change of Control Termination. Additionally, in the event Mr. Hole 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. Flaherty would represent (i) six months of his base salary for an Involuntary Termination or one year’s base salary for a Change 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 the case of a Change of Control Termination, the average annual incentives he earned during the two years prior to his 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 under the Company’s employee group benefit plans for six months following an Involuntary Termination, or for one year following a Change of Control Termination. Additionally, in the event Mr. Flaherty is terminated with less than the six month’s notice required by his contract, he is entitled to a lump sum payment equal to six months of his annual base salary. If any of these payments or benefits would constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code, as amended, and would be subject to the Excise Tax imposed by Section 4999 of the Internal 16 | 2022 WLFC Proxy Statement |
Revenue Code, the employment contracts of each of Messrs. Charles Willis, Nunemaker, Forsyth, PoulakidasAustin Willis, Hole and HoleFlaherty stipulate that payments to each of them will be reduced, to the extent necessary, so that no portion of the payments would be subject to the Excise Tax. This reduction shall only occur if the after‑after‑tax net present value of the payments, as so reduced, is greater than or equal to the after‑after‑tax present value of such payments without such reduction. Other than as described above, if a Named Executive OfficerNEO ceases to be employed by us because of his or her resignation or retirement (other than for reasons constituting a constructive termination under his or her employment agreement), no severance payments are owed by us. The following table shows potential payments to our Named Executive Officers under existing contracts for (i) an Involuntary Termination, and (ii) Change of Control Termination, in each case, on December 31, 2015.
Potential Payments on Involuntary Termination or
Change of Control Termination
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Willis | | Nunemaker (3) | | Forsyth (4) | | Poulakidas | | Webber (5) | | | Termination | | Change | | Termination | | Change | | Termination | | Change | | Termination | | Change | | Termination | | Change | Severance payment | | $ | 2,850,000 | | $ | 2,850,000 | | $ | 467,500 | | $ | 701,250 | | $ | 375,000 | | $ | 562,500 | | $ | 180,000 | | $ | 360,000 | | | — | | | — | In lieu of notice | | | 950,000 | | | 950,000 | | | 233,750 | | | 233,750 | | | 375,000 | | | 375,000 | | | 180,000 | | | 180,000 | | | — | | | — | Annual incentives | | | 2,090,000 | | | 2,090,000 | | | 470,500 | | | 539,250 | | | 130,000 | | | 169,000 | | | 154,000 | | | 194,000 | | | 66,000 | | | 66,000 | Accelerated Vesting of Restricted Stock Awards(1) | | | 4,824,000 | | | 4,824,000 | | | 619,743 | | | 619,743 | | | 360,112 | | | 360,112 | | | 418,743 | | | 418,743 | | | — | | | — | Accrued Vacation and Sick Pay | | | 164,400 | | | 164,400 | | | 80,900 | | | 80,900 | | | 42,000 | | | 42,000 | | | 55,300 | | | 55,300 | | | 43,100 | | | 43,100 | Continued Coverage under all group plans | | | 124,638 | | | 124,638 | | | 29,021 | | | 43,531 | | | 27,305 | | | 40,958 | | | 5,553 | | | 11,105 | | | — | | | — | Club Memberships | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Financial/Tax/Estate Planning | | | 90,000 | | | 90,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total Severance Payment | | $ | 11,093,038 | | $ | 11,093,038 | (2) | $ | 1,901,414 | | $ | 2,218,424 | (2) | $ | 1,309,417 | | $ | 1,549,570 | (2) | $ | 993,596 | | $ | 1,219,148 | | $ | 109,100 | | $ | 109,100 |
| (1)
| | The value of the unvested restricted stock awards as of December 31, 2015 was set forth in the Outstanding Equity Awards at Fiscal 2015 Year-End table and based on the Company's closing stock price on December 31, 2015 of $20.10. These values would be the same for both an Involuntary Termination and a Change of Control Termination. The additional aggregate value of equity vesting acceleration as of December 31, 2015 for both an Involuntary Termination and a Change of Control Termination for Mr. Forsyth and Mr. Poulakidas is limited to awards vesting in the two years following termination.
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| (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 a Change of Control Termination occurred on December 31, 2015, such a reduction may have been necessary.
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| (3)
| | Mr. Nunemaker retired as President of the Company on March 31, 2016 and upon retirement he received immediate vesting of his unvested restricted stock awards (24,583 shares), payment of $100,000 retention bonus and unused accrued vacation.
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| (4)
| | Mr. Forsyth resigned from the Company February 18, 2016 and upon his resignation he received his unpaid accrued vacation in the amount of $40,512 and 80 hours of accrued sick leave of $14,423.
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| (5)
| | Ms. Webber retired from the Company in January 2015, but remained with the Company until January 15, 2016 and upon her final day she received her unpaid accrued vacation in the amount of $34,568. An independent contract agreement was entered into with Ms. Webber on January 12, 2016 for the period January 16, 2016 to January 15, 2017. The agreement provides for Ms. Webber to receive compensation of $1,000 per full day of services payable monthly in arrears. In addition, in the event specific services don’t require travel and/or less than a day of elapsed time, Ms. Webber shall be entitled to receive $100 per hour payable monthly in arrears.
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Director Compensation The following table summarizes compensation for 2021 by individual non‑employee directornon-employee Directors. Director Compensation for 2015. DIRECTOR COMPENSATION
For Fiscal Year Ended 20152021
Name | | Fees Earned or Paid in Cash ($)(1) | | | Stock Awards ($)(2) | | | Option Awards ($) | | | All Other Compensation ($) | | | Total ($) | | Hans Joerg Hunziker(3) | | $ | 147,340 | | | $ | 118,950 | | | | — | | | | — | | | $ | 266,290 | | Robert J. Keady | | $ | 148,584 | | | $ | 118,950 | | | | — | | | | — | | | $ | 267,534 | | Rae Ann McKeating | | $ | 148,584 | | | $ | 118,950 | | | | — | | | | — | | | $ | 267,534 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change in | | | | | | | | | | | | | | | | | | | | Pension Value | | | | | | | | | | | | | | | | | | | | and | | | | | | | | | | | | | | | | | | | | Nonqualified | | | | | | | | | | Fees Earned | | | | | | | Non-Equity | | Deferred | | | | | | | | | | or Paid | | Stock | | Option | | Incentive Plan | | Compensation | | All Other | | | | | | | in Cash | | Awards | | Awards | | Compensation | | Earnings | | Compensation | | Total | | Name | | ($) | | ($)(2) | | ($) | | ($) | | ($) | | ($) | | ($) | | (a) | | (b)(1) | | (c) | | (d) | | (e) | | (f) | | (g)(3) | | (h) | | Hans Joerg Hunziker(3) | | $ | 140,417 | | $ | 75,090 | | — | | — | | — | | | — | | $ | 215,507 | | Robert J. Keady | | | 68,819 | | | 181,640 | | — | | — | | — | | | — | | | 250,459 | | Robert T. Morris | | | 92,575 | | | 75,090 | | — | | — | | — | | | — | | | 167,665 | | Austin C. Willis | | | 75,075 | | | 75,090 | | — | | — | | — | | | — | | | 150,165 | |
| (1) | | Each directorMr. Hunziker, Mr. Keady and Ms. McKeating received quarterly payments of $18,769$21,271 for the first, second, third and fourth quarters of 2021 ($75,07585,084 for the year). For services as chair of the Audit Committee and Compensation Committee, respectively, Mr. Morris andrespectfully, Mr. Hunziker
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receiveand Ms. McKeating received an additional $4,375 quarterly payment ($17,500 for the year). Mr. Keady became a director in February 2015 and therefore his firstalso received an additional $4,375 quarterly payment was $12,513.($17,500 for the year) for his services as chair of independent committees of the Board. Mr. Hunziker, Mr. Keady and Ms. McKeating each also received additional payments totaling $46,000 for service on an independent committee established by the Board of Directors to review and negotiate a proposal from our Chief Executive Officer and other parties to acquire the Company pursuant to a merger.
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| (2) | | 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. |
| (3) | | In recognition of the adverse effects of European exchange rates against the U.S. dollar, theThe Compensation Committee agreed to allow the compensation of European directorsDirectors to be adjusted based on the U.S. dollar exchange rate in effect on their first election to the Board, effective January 1, 2008. Effective January 1, 2020, the restricted stock portion of the compensation of European Directors will no longer be adjusted and the cash portion of their compensation will be adjusted based on the U.S. dollar exchange rate as of December 31st for the prior year. This adjustment is paidtotaled $(1,244) in cash.2021.
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The unvested restricted stock held by each director isnon-employee Director was as follows:follows as of December 31, 2021: Mr. Hunziker, 5,776;3,000; Ms. McKeating 6,750; Mr. Keady, 9,110; Mr. Morris, 5,776; and Mr. Willis, 5,776. Under3,000. Beginning in 2019, it has been the 2007 Incentive Stock PlanBoard’s policy that each non-employee Board member received a restricted stock grant of 5,000 shares of common stock when first becoming a non-employee Board member. In addition, each individualDirector who is to continue to serve as an independent directorDirector is granted annually 3,000 shares of restricted stock worth approximatelyunder the same dollar amount as the annual cash retainer 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.2021 Incentive Plan. Each annual restricted stock grant based on the cash annual retainer amounts vests in one installment on the recipients’ completion of one year of Board service, measured from the grant date. 2022 WLFC Proxy Statement | 17 |
REPORT OF THE AUDITAUDIT 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 NASDAQNasdaq listing standards and operates pursuant to the Audit Committee Charter which is available on the Company’s website (www.willislease.com). Charter. 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. KPMGGrant Thornton LLP (“KPMG”Grant Thornton”), the Company’s independent registered public accounting firm for 2015,2021, 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 KPMGGrant Thornton the audited financial statements for the year ended December 31, 20152021 and KPMG’sGrant Thornton’s evaluation of the Company’s internal control over financial reporting. The Audit Committee has discussed with KPMGGrant Thornton the matters that are required to be discussed by Statement on Auditing Standards No. 16, as amended (Communication with Audit Committees). KPMG hasthe applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission. Grant Thornton 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 KPMGGrant Thornton that firm’s independence. The Audit Committee has concluded that KPMG’sGrant Thornton’s provision of audit and non‑audit services to the Company is compatible with KPMG’sGrant Thornton’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, 20152021 be included in our Annual Report on Form 10‑K for 20152021 for filing with the SEC.Securities and Exchange Commission. This report is provided by the following independent Directors, who comprise the Audit Committee: Robert T. Morris, Committee Chair
Hans Joerg Hunziker, Committee Chair | | Robert J. Keady Rae Ann McKeating | |
18 | 2022 WLFC Proxy Statement |
PROPOSAL 2 2: ADVISORY VOTE ON RATIFICATION OF THE APPOINTMENT OF KPMGGRANT THORNTON LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed the firm of KPMGGrant Thornton to audit our 20162022 financial statements, and KPMG also served in this capacity in 2015.statements. 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 theWillis Lease’s stockholders ratify, on an advisory basis, the appointment of KPMGGrant Thornton as the Company’s independent registered public accounting firm for the fiscal year 2016.ending December 31, 2022. If the stockholders do not so ratify, the Audit Committee will reconsider the appointment and may retain KPMGGrant Thornton or another firm without re‑submittingre-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 theits stockholders. Dismissal of KPMG, LLP (“KPMG”). On January 4, 2021, the Audit Committee of the Board of Directors approved the dismissal of KPMG as the Company’s independent registered public accounting firm, effective upon the issuance by KPMG of its reports on the consolidated financial statements as of and for the years ended December 31, 2020 and 2019, respectively, as well as the effectiveness of internal control over financial reporting as of December 31, 2020. KPMG previously audited the Company’s consolidated financial statements for the fiscal years ended December 31, 2019 and December 31, 2020. KPMG’s reports on the consolidated financial statements of the Company for the fiscal years ended December 31, 2019 and December 31, 2020 did not contain an adverse opinion nor a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years ended December 31, 2019 and December 31, 2020, and the subsequent interim period through March 15, 2021, the effective date of KPMG’s dismissal, the Company had no disagreement with KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of KPMG, would have caused KPMG to make a reference to the subject matter of the disagreements in connection with its reports on the consolidated financial statements for the fiscal years ended December 31, 2019 and December 31, 2020. Also, there were no “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K. Engagement of Grant Thornton. On January 4, 2021, the Audit Committee of the Board of Directors approved the engagement of Grant Thornton, as the Company’s independent registered public accounting firm for the Company’s fiscal year ending December 31, 2021. The engagement of Grant Thornton was ratified by the shareholders at the 2020 annual meeting. During the fiscal years ended December 31, 2019 and December 31, 2020, neither the Company nor anyone on its behalf has consulted with Grant Thornton regarding: (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was provided to the Company that Grant Thornton concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMGGRANT THORNTON LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. 2022 WLFC Proxy Statement | 19 |
Fees Billed to Willis Lease by Grant Thornton and KPMG For the 20152021 and 20142020 fiscal years, fees for services provided by Grant Thornton and KPMG LLP, respectively, to us were as follows: | | | | | | | | | | 2015 | | 2014 | | Audit Fees(1) | | $ | 1,095,997 | | $ | 926,654 | | Audit Related Fees | | | 132,635 | | | 272,142 | | Tax Fees(2) | | | 43,640 | | | 72,256 | | | | $ | 1,272,272 | | $ | 1,271,052 | |
| | 2021 | | | 2020 | | Audit Fees (1) | | $ | 794,464 | | | $ | 1,490,540 | | Audit Related Fees(2) | | | 50,000 | | | | 150,000 | | Tax Fees (3) | | | — | | | | 43,458 | | | | $ | 844,464 | | | $ | 1,683,998 | |
| (1) | | Audit fees billed to us by KPMG during the 2015 and 2014 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.10-Q and our statutory audits. |
| (2) | Audit related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under Audit Fees. These services include accounting consultations in connection with acquisitions and divestitures and consultations concerning financial accounting. |
(3) | Fees billed to us by KPMG during 2015 and 2014Tax fees consist of fees for professional services rendered in providing international tax consulting services and tax compliance services.
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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. Our independent auditors, KPMG,Grant Thornton will be at ourattend the Annual Meeting. They will have the opportunity to make a statement, if they desire to do so. They will also be available to respond to appropriate questions from stockholders.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS From January 1, 2021 to the present, there have been no transactions, and there are currently no proposed transactions, in which the amount involved exceeds $120,000 to which we or any of our subsidiaries was (or is to be) a party and in which any Director, executive officer, holder of more than 5% of our capital stock, or any immediate family member of or person sharing the household with any of these individuals, had (or will have) a direct or indirect material interest, except as set forth below and for payments set forth under Item 11 above. On December 2, 2021, in a transaction approved by an independent committee, as well as the Audit Committee, of the Board of Directors, the Company purchased 60,000 shares of its common stock directly from the Company’s Chief Executive Officer (“CEO”), Charles F. Willis. The agreed and paid price per share was $35.43, which represented a 2% discount to the volume weighted average price on December 2, 2021. On October 1, 2021, the Board’s Independent Directors approved the payment of $0.2 million to the Company’s CEO, Charles F. Willis, for membership dues associated with a club membership and personal use of such membership. On November 11, 2021, in a transaction approved by the Independent Compensation Committee, the Company purchased a tender owned by the Company’s CEO for $0.5 million that was used in support of its’ marine vessel. As required by NASDAQNasdaq 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, Austin C. Willis, the son of our Executive Chairman, served as an executive officer of the Company during 2021, being our Senior Vice President, Corporate Development. Mr. Austin Willis has been serving as the Company’s CEO since April 1, 2022. He received total compensation of $1,881,000 for 2021, calculated in the same manner as in the Summary Compensation Table of this Proxy. His total compensation includes salary, cash incentive awards, stock awards and other compensation. 20 | 2022 WLFC Proxy Statement |
Policies and Procedures for Related-Party Transactions The Board has 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)website (www.willislease.com). On May 25, 2011, we entered into an agreement with Mitsui & Co., Ltd. Under that policy, the Audit Committee reviews the material facts of all covered transactions that may require prior approval of or ratification by the Audit Committee. A “covered transaction” includes, but is not limited to, participateany financial transaction, arrangement or relationship or any series of similar transactions, arrangements or relationships including indebtedness and guarantees of indebtedness in which (a) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (b) the Company is a joint venture formedparticipant, and (c) any related person has or will have a direct or indirect interest (other than solely as a Dublin-based Irishresult of being a Director or a less than 10 percent beneficial owner of another entity). This might include, but is not limited to, lease transactions, sale or purchase transactions, creditor/debtor transactions, guarantees or charitable contributions. The following includes types of transactions with related parties which have been pre-approved by the Audit Committee and therefore are not subject to Audit Committee review and approval, even if the amount exceeds $120,000:
Transactions involving competitive bids; Any transaction with another company — Willis Mitsui &at which a related person's only relationship is as an employee (other than an executive officer), Director or beneficial owner of less than 10% of that company's shares, if the aggregate amount involved does not exceed the greater of $1,000,000 and 2% of that company's total annual revenues; Any charitable contribution, grant or endowment by the Company Engine Support Limited (“WMES”) forto a charitable organization, foundation or university at which a related party’s only relationship is as an employee or Director if the purposeaggregate does not exceed the greater of acquiring$100,000 and leasing jet engines. Each partner holds2% of the charitable organizations’ total annual receipts; Any transaction involving a fifty percentrelated party made on the same or similar terms available to all Company employees; Any transaction where the related person's interest arises solely from the ownership of the Company's common stock and all holders of the Company's common stock received the same benefit on a pro rata basis, such as the receipt of dividends; or Any employment by the Company of an executive officer of the Company if: The related compensation is required to be reported in the joint venture. Our investment in the joint venture is $27.3 million as of December 31, 2015. “Other revenue” on the Consolidated Statement of Income includes management fees earned of $1.7 million, $2.0 million and $1.6 million for the years ended December 31, 2015, 2014 and 2013, respectively, related to the servicing of engines for the WMES lease portfolio. Prior to 2014, the Company leased equipment to an airline owned by our CEO and Chairman. The Company received lease payments from the airline and recorded revenue totaling $2.1 million in the year ended December 31, 2013. Our CEO and Chairman no longer owns the airline. In connection with the 2013 sale of its stock to an unrelated third party, the airline prepaid a note to us at a 45% discount of $0.4 million, similar to reductions received by other large creditors. The Company subsequently sold four engines and three aircraft, which had an aggregate net book value of $3.4 million, to the third party for $4.9 million. The $4.9 million in sale proceeds were included in 2013 revenue as follows: Gain on Sale $0.8 million (netCompany's proxy statement under Item 402 of the asset’s $3.4 million net book value), Maintenance Reserve Revenue $0.4 million, Lease Rent Revenue $0.4 millionSecurities and Other Revenue $0.3 million.
J.T. Power, LLCExchange Commission's (“J.T. Power”SEC's”): In its ordinary course compensation disclosure requirements (generally applicable to “named executive officers”) and the compensation has been approved by the Compensation Committee or Board or if the executive officer is not an immediate family member of business, the Company has used a number of consignment vendors to sell engine parts. Prior to 2014, the Company consigned equipment for part-out to J.T. Power, an entity owned by Austin Willis, the son of our CEO and Chairman, and directly and indirectly, a shareholder and aanother executive officer or Director of the Company. SalesCompany, the related compensation would be reported in the Company's proxy statement under Item 402 of consigned parts under the Consignment agreements were $22,200 forSEC's compensation disclosure requirements if the year ended December 31, 2013.executive officer was a “named executive officer”, and the Company's Compensation Committee or Board approved such compensation; or
On November 6, 2013, the Company purchased certain assets of J.T. Power for $5.6 million. A net cash payment of $4.5 million was made to fund the transaction, after deducting amounts owed to the Company, including $0.7 million related to the minimum guarantee remaining under the note and cash received of $0.4 million. Of the $4.5 million cash payment, $1.2 million wasAny compensation paid to various creditors and $3.3 million was paida Director if the compensation is required to be reported in the shareholders of J.T. Power.
As partCompany's proxy statement under Item 402 of the acquisition of certain assets of J.T. Power, we launched Willis Aeronautical Services, Inc., a wholly-owned subsidiary, whose primary focusSEC's compensation disclosure requirements and the compensation is approved by the sale of aircraft engine parts and materials through the acquisitionBoard or consignment from third parties of aircraft and engines.Audit Committee.
STOCKHOLDER PROPOSALS Stockholder proposals intended to be considered at the 20172023 Annual Meeting of Stockholders must, under Rule 14a‑814a-8 of the Securities Exchange Act of 1934, be received by us no later than December 30, 2016.23, 2022. Your proposal(s) must be mailed to our executive offices 773 San Marin Drive,at 60 East Sir Francis Drake Boulevard, Suite 2215, Novato, California 94998,209, Larkspur, CA 94939, 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‑814a-8 may be submitted in writing to our Corporate Secretary for the 20172023 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 20172023 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 the 20162022 Annual Meeting. For our 20172023 Annual Meeting of Stockholders, this means that your proposal(s) or nomination(s) must be submitted no later than February 25, 201724, 2023 (which is 90 calendar days before the anniversary of the 20162022 Annual Meeting). If the date of our 20172023 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 20162022 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 20172023 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, as required by our bylaws, and information as to your ownership of our common stock. 2022 WLFC Proxy Statement | 21 |
STOCKHOLDERS SHARING THE SAMESAME 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 AssistantCorporate Secretary, 773 San Marin Drive,60 East Sir Francis Drake Boulevard, Suite 2215, Novato,209, Larkspur, CA 94998.94939. We will promptly send additional copies of the annual report and/or proxy statement upon receipt of such request. Also, if you received multiple copies of the annual meeting materials and would prefer to receive a single copy in the future, following receipt of such request, we will ensure that change for future mailings of annual meeting materials. OTHER MATTERS Our management does not know of any matters to be presented at the 2016 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 | | Executive Chairman of the Board |
MEETING OF STOCKHOLDERS OF WILLIS LEASE FINANCE THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. (Continued and to be signed on the reverse side) 14475 1.1 WILLIS LEASE FINANCE CORPORATION 2018 Annual Meeting of Stockholders May 24, 2018 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Brian R. Hole and Dean M. Poulakidas, 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 April 2, 2018, at the 2018 Annual Meeting of Stockholders of the Company to be held on May 24, 2018 or at any adjournment thereof. The Board of Directors recommends a vote FOR THE NOMINEES listed in Proposal 1, and FOR Proposals 2 and 3. 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 II OF THE BOARD OF DIRECTORS NAMED ON THE OTHER SIDE HEREOF, FOR PROPOSALS 2 AND 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 22 | 2022 WLFC Proxy Statement |
TableYOUR VOTE IS IMPORTANT! PLEASE VOTE BY: Willis Lease Finance Corporation Annual Meeting of ContentsStockholders For Stockholders of record as of April 08, 2022 TIME: Wednesday, May 25, 2022 12:00 PM, Eastern Time PLACE: Annual Meeting to be held live via the Internet - please visit www.proxydocs.com/WLFC for more details. This proxy is being solicited on behalf of the Board of Directors The undersigned hereby appoints Charles F. Willis, IV and Dean M. Poulakidas (the "Named Proxies"), and each or either of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of Willis Lease Finance Corporation which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED IDENTICAL TO THE BOARD OF DIRECTORS RECOMMENDATION. This proxy, when properly executed, will be voted in the manner directed herein. In their discretion, the Named Proxies are authorized to vote upon such other matters that may properly come before the meeting or any adjournment or postponement thereof. You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign (on the reverse side) and return this card. PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE P.O. BOX 8016, CARY, NC 27512-9903 INTERNET Go To: www.proxypush.com/WLFC • Cast your vote online • Have your Proxy Card ready • Follow the simple instructions to record your vote PHONE Call 1-866-994-5580 • Use any touch-tone telephone • Have your Proxy Card ready • Follow the simple recorded instructions MAIL • Mark, sign and date your Proxy Card • Fold and return your Proxy Card in the postage-paid envelope provided You must register to attend the meeting online and/or participate at www.proxydocs.com/WLFC
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| ANNUAL MEETING OF STOCKHOLDERS OF WILLIS LEASE FINANCE CORPORATION May 26, 2016 GO GREEN e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. IMPORTANT NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting and proxy statement are available at http://www.astproxyportal.com/ast/08515/Please sign, date and mail your proxy card in the envelope provided as soon as possible. Please detach along perforated line and mail in the envelope provided. 20230000000000000000 0 052616 THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x FOR AGAINST ABSTAIN 1. Election of Directors: FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES NOMINEES: O Charles F. Willis, IV O Hans Joerg Hunziker 2. To ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm. 3. 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 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: 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. 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.
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Willis Lease Finance Corporation Annual Meeting of Stockholders THE BOARD OF DIRECTORS RECOMMENDS A VOTE: FOR ON PROPOSALS 1 AND 2 PROPOSAL YOUR VOTE BOARD OF DIRECTORS RECOMMENDS 1. Election of two Class III Directors to serve until the 2025 Annual Meeting of Stockholders: FOR WITHHOLD 1.01 Charles F. Willis, IV #P2# #P2# FOR 1.02 Hans Joerg Hunziker #P3# #P3# FOR FOR AGAINST ABSTAIN 2. Cast an advisory vote ratifying the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for fiscal year ending December 31, 2022. #P4# #P4# #P4# FOR You must register to attend the meeting online and/or participate at www.proxydocs.com/WLFC Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy/Vote Form. Signature (and Title if applicable) Proposal Page – VIFL Date Signature (if held jointly) Date Please make your marks like this: X 
| WILLIS LEASE FINANCE CORPORATION 2016 Annual Meeting of Stockholders May 26, 2016 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Charles F. Willis, IV, Dean M. Poulakidas and Brian R. Hole, 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 April 1, 2016, at the 2016 Annual Meeting of Stockholders of the Company to be held on May 26, 2016 or at any adjournment thereof. The Board of Directors recommends a vote FOR THE NOMINEES listed in Proposal 1 and FOR Proposal 2. 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 III OF THE BOARD OF DIRECTORS NAMED ON THE OTHER SIDE HEREOF, FOR PROPOSAL 2, 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) 1.1 14475
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