EMPLOYMENT AGREEMENT
For and in consideration of the commitments set forth herein, ▇▇▇▇ ▇▇▇▇▇▇▇
("Employee") and AeroCentury Corp. (the "Company") agree as follows:
1. Position and Duties
(a) The Company agrees to employ the Employee and Employee agrees to be
employed by the Company in the capacity of Chairman of the Board and President
in the event any of the following occur: (1) the Company terminates the
Management Agreement currently in effect between the Company and JetFleet
Management Corp. ("JMC") (hereinafter "the Management Agreement"); or (2) there
is a "Change in Control" (as defined below) in the Company. Employee's
employment with the Company shall begin on the date of the termination of the
Management Agreement, or the date that the Change in Control is completed
(hereinafter "Effective Date of Employment"). Employee shall be given such
duties, responsibilities and authorities as are appropriate to his position.
Employee shall have the option, at his sole discretion, to decline employment if
(i) there is a Change in Control or (ii) the termination of the Management
Agreement described in clause (1) above is not in connection with the
acquisition of JMC by the Company. However, if Employee declines employment
following a given Change in Control, he shall not forfeit his employment rights
with respect to any subsequent Change in Control.
"Change in Control" shall mean the occurrence of any of the following
events, after the date on which this Agreement is executed:
(i) Any person or entity other than ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is or
becomes the beneficial owner, directly or indirectly, of
securities of the company representing 25% or more of the
combined voting power of the Company's then-outstanding
securities other than in connection with the issuance of
additional securities by the Company for capital-raising
purposes;
(ii) There occurs a merger or consolidation of the Company with
any other corporation or entity, other than 1) a merger or
consolidation which would result in the voting securities
of the Company's outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving
entity) more than 85% of the combined voting power of the
voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation
or 2) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no person or entity acquires more than 85% or more of
the combined voting power of the Company's then outstanding
securities; or
(iii) The Company sells or disposes of substantially all or a
significant portion of its assets in a series of
transactions not recommended by JMC. For purposes of this
subsection, a sale of a "significant portion" of the assets
of the Company shall mean a sale or other disposition in a
single transaction or a series of related transactions of
25% or more of the assets (based on fair market value) of
the Company.
(b) Initial Term. The Company agrees to continue the Employee's
employment, and the Employee agrees to remain in employment with the Company,
from the Effective Date of Employment, until the earliest of:
(1) December 31, 2007; or
(2) The date of the Employee's death or when the Employee's
employment terminates pursuant to Section 4 below.
2. Compensation and Expense Reimbursement
(a) Base Salary. During the term of employment under this Agreement,
the Company agrees to pay the Employee as compensation for services a Base
Salary at the annual rate of $250,000, or at such higher salary rate that was
payable immediately prior to the Effective Date of Employment under Employee's
Employment Agreement with JMC ("JMC Agreement"), a copy of which is attached
hereto as Exhibit A. Such salary shall be payable in accordance with the
standard payroll procedures of the Company.
(b) Expense Reimbursements. The Company shall reimburse Employee for
reasonable travel and other business expenses incurred by Employee in the
performance of his duties hereunder.
(c) Signing Bonus. Upon effectiveness of Employee's employment with the
Company under Section 1(a), the Company shall pay Employee a one-time cash bonus
of $500,000
3. Benefits.
During the term of employment under this Agreement, the Employee shall be
eligible to participate in the employee benefit plans and executive compensation
and fringe benefit programs maintained by the Company, including (without
limitation) savings, pension or profit-sharing plans, deferred compensation
plans, stock option, incentive or other bonus plans, life, disability, health,
accident and other insurance programs, paid vacations, automobile and similar
plans or programs, subject in each case to the generally applicable terms and
conditions of the plan or program in question and to the discretion and
determinations of any person, committee or entity administering such plan or
program.
4. Term of Agreement
The Term of this Agreement, and the term of Employee's employment with the
Company, shall be the period beginning on the Effective Date of Employment and
ending on December 31, 2007, unless terminated earlier as set forth below:
(a) Termination By The Company for Cause. The Company may terminate
Employee's employment at any time, for Cause by giving Employee immediately
effective written notice. For all purposes under this Agreement, "Cause" shall
mean (1) a willful failure by the Employee to substantially perform the
Employee's duties under this Agreement, other than a failure resulting from the
Employee's complete or partial incapacity due to physical or mental illness or
impairment, (2) a willful act by the Employee that constitutes gross misconduct
and that is materially injurious to the Company, (3) a willful breach by the
Employee of a material provision of this Agreement or (4) a material and willful
violation of a federal or state law or regulation applicable to the business of
the Company that is materially and demonstrably injurious to the Company. No
act, or failure to act, by the Employee shall be considered "willful" unless
committed without good faith and without a reasonable belief that the act or
omission was in the Company's best interest.
However, if such Cause is reasonably curable, the Company shall not terminate
the Employee's employment hereunder unless the Company first gives written
notice of its intention to terminate and of the grounds for such termination,
and the Employee has not, within sixty (60) days following receipt of notice,
cured such Cause.
(b) Termination By The Company for Disability. The Company may
terminate the Employee's employment for Disability by giving the Employee thirty
(30) days prior written notice. For all purposes under this Agreement,
"Disability" shall mean that the Employee, at the time the notice is given, has
been unable to perform the Employee's duties under this Agreement for a period
of not less than twelve (12) consecutive months as a result of the Employee's
incapacity due to physical or mental illness. In the event that the Employee
resumes the performance of substantially all of the Employee's duties under this
Agreement before the termination of the Employee's employment under this Section
becomes effective, the notice of termination shall automatically be deemed to
have been revoked.
(c) Termination By Either Party Without Cause. This Agreement, and the
employment relationship, may be terminated by either party without cause upon
ninety (90) days written notice to the other. Except as otherwise agreed in
writing or as otherwise provided in this Agreement, upon termination neither the
Company nor Employee shall have any further obligation to each other by way of
compensation or otherwise.
Absent a termination as set forth above, this Agreement, and Crispin's
employment hereunder, shall terminate automatically on December 31, 2007. Any
agreement to extend the Term of this Agreement must be set forth in a written
instrument signed by the Company and Employee.
5. Termination Payments
(a) Termination prior to December 31, 2007: If the Company terminates
Employee's employment prior to December 31, 2007, for any reason other than
Cause or Disability, if Employee or his representative executes a Settlement
Agreement and General Release in a form satisfactory to the Company, then
Employee shall be entitled to receive the following payments and benefits:
(1) The Company shall provide Employee with a continuation of
the health, insurance and medical benefits available to Employee under Paragraph
4 above, for a period through December 31, 2007.
(2) An additional lump sum severance payment of $1,500,000.
(c) Termination for Cause or Disability or by Employee. In no event
shall any termination payments be due and payable under this Section 5 to
Employee with respect to any (i) termination of Employee by the Company for
Cause or Disability or (ii) termination by Employee of his employment with the
Company.
6. Reserved.
7. Arbitration
Any and all claims or controversies between Employee and the Company, including
but not limited to (1) those involving the construction or application of any of
the terms, provisions, or conditions of this Agreement; (2) all contract or tort
claims of any kind; and (3) any claim based on any federal, state or local law,
statute, regulation or ordinance, including claims for unlawful discrimination
or harassment, shall be settled by arbitration in accordance with the then
applicable Employment Dispute Resolution rules of Judicial Arbitration and
Mediation Service (JAMS). Judgment on the award rendered by the arbitrator(s)
may be entered by any court having jurisdiction thereof. The location of the
arbitration shall be San Francisco, California. Unless the parties mutually
agree otherwise, the arbitrator shall be selected from a panel provided by the
JAMS. The parties expressly incorporate the provisions of California Code of
Civil Procedure ss. 1283.05 permitting discovery into this Agreement.
The Company shall pay the arbitration fee and the fees of the arbitrator. Each
party shall pay for its own costs and attorneys' fees, if any. However, if any
party prevails on a statutory claim which affords the prevailing party
attorneys' fees, the arbitrator may award reasonable attorneys' fees and costs
to the prevailing party.
EMPLOYEE AND COMPANY UNDERSTAND AND AGREE THAT THIS AGREEMENT TO ARBITRATE
CONSTITUTES A WAIVER OF THE RIGHT TO A TRIAL BY JURY OF ANY MATTERS COVERED BY
THE ARBITRATION AGREEMENT.
8. Severability
In the event that any of the provisions of this Agreement shall be held to be
invalid or unenforceable in whole or in part, those provisions to the extent
enforceable and all other provisions shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable parts had not been included
in this Agreement. In the event that any provision relating to the time period
of restriction shall be declared by a court of competent jurisdiction to exceed
the maximum time period such court deems reasonable and enforceable, then the
time period of restriction deemed reasonable and enforceable by the court shall
become and shall thereafter be the maximum time period.
9. Agreement Read and Understood
Employee acknowledges that he has carefully read the terms of this Agreement,
that he has had an opportunity to consult with a representative of his own
choosing regarding this Agreement, that he understands the terms of this
Agreement, and that he is entering this agreement of his own free will.
10. Complete Agreement, Modification
This Agreement is the complete agreement between the parties on the subjects
contained herein and supersedes all previous correspondence, promises,
representations, and agreements, if any, either written or oral. No provision of
this Agreement may be modified except by a written document signed both by the
Company and Employee.
11. Miscellaneous
(a) Condition to Effectiveness. The effectiveness of this Agreement is
subject to and conditioned upon the approval by the Board of Directors of the
Company and the specific approval of the "independent" directors of the Company,
as may be required under applicable federal and state law, or by the exchange
rules applicable to the Company as a corporation listed on the American Stock
Exchange or its successor entity.
(b) Waiver. No provision of this Agreement shall be modified, waived,
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Employee and by an authorized officer of the Company
(other than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver or any other condition or provision or of the same
condition or provision at another time.
(c) Choice of Law. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
California.
(d) Employment Taxes. All payments made pursuant to this Agreement
shall be subject to withholding of applicable taxes.
12. Successors.
(a) Company's Successors. The Company shall require any successor (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's business
and/or assets, by an agreement in substance and form satisfactory to the
Employee, to assume this Agreement and to agree expressly to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform it in the absence of a succession. The Company's failure to
obtain such agreement prior to the effectiveness of a succession shall be a
breach of this Agreement and shall entitle the Employee to all of the
compensation and benefits to which the Employee would have been entitled
hereunder if the Company had involuntarily terminated the Employee's employment
without Cause or Disability, on the date when such succession becomes effective.
For all purposes under this Agreement, the term "Company" shall include any
successor to the Company's business and/or assets that executes and delivers the
assumption agreement described in this Subsection (a) or that becomes bound by
this Agreement by operation of law.
(b) No Assignment of Benefits. The rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment, either
by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this subsection (b) shall be void.
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13. Post-Employment Consulting
In the event the Company deems it desirable to obtain post-employment consulting
services from Employee, not less than six months prior to the expiration of this
Agreement, Company and Employee shall enter into negotiations for a consulting
agreement on terms mutually agreeable to Company and Employee.
Dated: April 24, 2003 ___________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Dated: April 24, 2003 AER0CENTURY CORP.
By: ___________________________
Its: ___________________________