It is the policy of AEROCENTURY CORP. (the "Company") to conduct its affairs in accordance with all applicable laws, rules and regulations of the jurisdictions in which it does business. This Code of Business Conduct and Ethics ("Code") applies to the Company's employees, officers and non-employee directors. This Code is the Company's "code of ethics" as defined in Item 406 of Regulation S-K. This Code is designed to promote:
AEROCENTURY has established standards for behavior that affects the Company, and employees, officers and directors must comply with those standards. The Company promotes ethical behavior and encourages employees to talk to supervisors, managers, the AEROCENTURY Compliance Team, or other appropriate personnel when in doubt about the best course of action in a particular situation. Non-employee directors are encouraged to talk to AEROCENTURY'S General Counsel or outside legal counsel in such situations. Anyone aware of a situation that he or she believes may violate or lead to a violation of this Code should follow the guidelines under "Compliance and Reporting" below.
The Code covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide you. Specific Company policies and procedures provide details pertinent to many of the provisions of the Code. Although there can be no better course of action than to apply common sense and sound judgment, do not hesitate to use the resources available whenever it is necessary to seek clarification.
Certain provisions of this Code require you to act, or refrain from acting, unless prior approval is received from the appropriate person. Employees requesting approval pursuant to this Code should request such approval in writing from the General Counsel. Approvals relating to executive officers and directors must be obtained from the Company's Board of Directors. All other approvals may be granted by the General Counsel, or such officer's designee.
Other provisions of this Code require you to act, or refrain from acting, in a particular manner and do not permit exceptions based on obtaining an approval. Waiver of those provisions relating to executive officers and directors may only be granted by the Company's Board of Directors, and waivers relating to executive officers and directors must be promptly disclosed to shareholders. All other waivers may be granted by the General Counsel, or such officer's designee. Changes in this Code may only be made by the Board of Directors and must be promptly disclosed to shareholders.
A conflict of interest arises when your personal interests interfere with your ability to act in the best interests of the Company.1 Employees must discharge their responsibilities on the basis of what is in the best interest of the Company independent of personal consideration or relationships. Non-employee directors must discharge their fiduciary duties as directors of the Company.
Employees should disclose any potential conflicts of interest to the General Counsel or such officer's designees, who can advise the employee as to whether or not the Company believes a conflict of interest exists. An employee should also disclose potential conflicts of interest involving the employee's spouse, siblings, parents, in-laws, and children. Non-employee directors may discuss any concerns with the General Counsel or outside legal counsel.
Fair competition laws, including the U.S. antitrust rules, limit what AEROCENTURY can do with another company and what AEROCENTURY can do on its own. Generally, the laws are designed to prohibit agreements or actions that reduce competition and harm consumers. You may not enter into agreements or discussions with competitors that have the effect of fixing or controlling prices, dividing and allocating markets or territories, or boycotting suppliers or customers. U.S. and foreign antitrust laws also apply to imports and exports.
Use of Company funds or other Company property for illegal, unethical or otherwise improper purposes is prohibited. The purpose of business entertainment and gifts in a commercial setting is to create goodwill and a sound working relationship, not to gain personal advantage with customers or suppliers.
Employees may not accept loans from any person or entities having or seeking business with the Company. Directors and officers may not receive loans from the Company, nor may the Company arrange for any loan.
Bribes and Kickbacks
The use of Company funds, facilities or property for any illegal or unethical purpose is strictly prohibited; provided, that certain facilitating payments discussed in "Doing Business Internationally" are permitted.
AEROCENTURY is committed to the highest business conduct standards wherever it operates. AEROCENTURY observes these standards worldwide, even at the risk of losing business. While no one can anticipate all the situations that may present challenges to AEROCENTURY employees doing business in the worldwide marketplace, the following guidelines always apply:
The laws governing AEROCENTURY's business in foreign countries are extensive and complex, and may be different from those in the United States.
Facilitating Payments to Low-Level Non-U.S. Govermental Employees and Officials for Non-Discretionary Action
AEROCENTURY is committed to complying with the laws of the countries where it operates. In some countries, a very limited category of small payments to facilitate or expedite routine nondiscretionary governmental actions may be permitted as exceptions to antibribery laws, including the U.S. Foreign Corrupt Practices Act ("FCPA"). The requirements pertaining to such payments are complex. AEROCENTURY employees engaged in international business activities must obtain prior approval of the Board of Directors before making any such payment.
These "facilitating payments" to non-U.S. governmental officials are distinguished from payments made to influence a discretionary decision or to cause violation of, or an act in conflict with, the interests of an individual's employer, which are strictly prohibited.
No political contributions are to be made using AEROCENTURY funds or assets to any political party, political campaign, political candidate or public official in the United States or any foreign country, unless the contribution is lawful and expressly authorized in writing. In addition, you may not make a political contribution on behalf of AEROCENTURY, or with the appearance that such contribution is being made on behalf of AEROCENTURY, unless expressly authorized in writing. A "contribution" is any direct or indirect payment, distribution, loan, advance, deposit, or gift of money, services or anything of value in connection with an election or to an organization or group formed to support or defend a referendum or ballot issue.
Employees must obtain prior approval to hire outside counsel or a public affairs firm to contact government officials regarding legislation, regulatory policy, or rule making. This includes grassroots lobbying contacts.
You are responsible for the accuracy of your records, time sheets and reports. Accurate information is essential to AEROCENTURY's ability to meet legal and regulatory obligations and to compete effectively. The records and books of account of AEROCENTURY must meet the highest standards and accurately reflect the true nature of the transactions they record. Destruction of any records, books of account or other documents except in accordance with AEROCENTURY's document retention policy is strictly prohibited.
You must not create false or misleading documents or accounting, financial or electronic records for any purpose relating to AEROCENTURY, and no one may direct an employee to do so. For example, expense reports must accurately document expenses actually incurred in accordance with AEROCENTURY policies. You must not obtain or create "false" invoices or other misleading documentation or invent or use fictitious entities, sales, purchases, services, loans or other financial arrangements for any purpose relating to AEROCENTURY. Employees are also responsible for accurately reporting time worked.
No undisclosed or unrecorded account or fund may be established for any purpose. No false or misleading entries may be made in the Company's books or records for any reason. No disbursement of corporate funds or other corporate property may be made without adequate supporting documentation or for any purpose other than as described in the documents. All employees must comply with generally accepted accounting principles and the Company's internal controls at all times.
You must promptly notify counsel of any government investigation or inquiries from government agencies concerning AEROCENTURY. You may not destroy any record, books of account, or other documents relating to AEROCENTURY except in accordance with the Company's document retention policy. If you are aware of a government investigation or inquiry you may not destroy any record, books of account, or other documents relating to AEROCENTURY unless advised by the General Counsel or the officer's designee, that you may continue to follow the Company's normal document retention policy.
You must not obstruct the collection of information, data or records relating to AEROCENTURY. The Company provides information to the government that it is entitled to during an inspection, investigation, or request for information. You must not lie to government investigators or making misleading statements in any investigation relating to AEROCENTURY. You must not attempt to cause any employee to fail to provide accurate information to government investigators.
The agencies that regulate its business include the Federal Aviation Administration, plus many other federal, provincial, state and local agencies. The Company and its employees must comply with the regulatory requirements of these agencies. Employees are expected to take an active role by being knowledgeable about all applicable laws and regulations, attending trainings and requesting information. Employees are encouraged to immediately report regulatory violations, suspected regulatory violations, or potentially harmful or dangerous conditions to a supervisor or the General Counsel.
Employees, officers and directors who have access to the Company's confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business.
Inside information is material information about a publicly traded company that is not known by the public. Information is deemed "material" if it could affect the market price of a security or if a reasonable investor would attach importance to the information in deciding whether to buy, sell or hold a security. Inside information typically relates to financial conditions, such as progress toward achieving revenue and earnings targets or projections of future earnings or losses of the Company. Inside information also includes changes in strategy regarding a proposed merger, acquisition or tender offer, new products or services, contract awards and other similar information. Inside information is not limited to information about AEROCENTURY. It also includes material non-public information about others, including the Company's customers, suppliers, and competitors.
Insider trading is prohibited by law. It occurs when an individual with material, non-public information trades securities or communicates such information to others who trade. The person who trades or "tips" information violates the law if he or she has a duty or relationship of trust and confidence not to use the information.
Trading or helping others trade while aware of inside information has serious legal consequences, even if the Insider does not receive any personal financial benefit. Insiders may also have an obligation to take appropriate steps to prevent insider trading by others.
Any employee who violates the provisions of this Code will be subject to disciplinary action, up to and including termination. Willful disregard of criminal statutes underlying this Code may require the Company to refer such violation for criminal prosecution or civil action.
Reporting Procedures and Other Inquiries
Questions regarding the policies in this Code may be directed to the General Counsel. Managers and supervisors are also resources who can provide timely advice and guidance to employees on ethics and compliance concerns. Any employee having knowledge of, or questions or concerns about, an actual or possible violation of the provisions of this Code is encouraged to promptly report the matter to his or her immediate supervisor or to a member of the Compliance Team. The names and contact information for the members of the Compliance Team are set out below. Directors are encouraged to discuss any issues or concerns with the General Counsel or outside legal counsel to the Company.
If you have concerns relating to AEROCENTURY's accounting, internal controls or auditing matters, you may also confidentially, and anonymously if you desire, submit the information to the Company's Audit Committee of the Directors, attention Thomas Orr by email at firstname.lastname@example.org, by mail at 33 Bonnie Banks Way, San Rafael, CA 94901 or by telephone (415) 457-4627. When submitting concerns, you are asked to provide as much detailed information as possible. Providing detailed, rather than general, information will assist us in effectively investigating complaints. This is particularly important when you submit a complaint on an anonymous basis, since we will be unable to contact you with requests for additional information or clarification.
We are providing these anonymous reporting procedures so that you may disclose genuine concerns without feeling threatened. Employees who choose to identify themselves when submitting a report may be contacted in order to gain additional information.
All conversations, calls and reports made under this policy in good faith will be taken seriously.
Policy Prohibiting Unlawful Retaliation or Discrimination
Neither the Company nor any of its employees may discharge, demote, suspend, threaten, harass or in any manner discriminate against any employee in the terms and conditions of employment based upon any lawful actions of such employee who in good faith:
This policy applies in any instance where such information or assistance provided to, or the investigation is conducted by, a federal regulatory or law enforcement agency, any member or committee of Congress, or any person with supervisory authority over the employee or the authority to investigate misconduct relating to potential securities violations by the Company or its employees. For purposes of this policy, a "Fraud Law" is a violation of federal criminal law involving:
President and Chairman: Neal D. Crispin
Sr. Vice President, Finance: Toni M. Perazzo
General Counsel: Christopher Tigno
Chair, Audit Committee of the Board of Directors: Thomas W. Orr
Outside Legal Counsel: William Sherman, Morrison & Foerster
This document is not an employment contract between AEROCENTURY and its employees, nor does it modify their employment relationship with the Company.
This Code is intended to clarify your existing obligation for proper conduct. The standards and the supporting policies and procedures may change from time to time in the Company's discretion. You are responsible for knowing and complying with the current laws, regulations, standards, policies and procedures that apply to the Company's work.
1 A conflict of interest can occur when an individual's private interest interferes in any way--or even appears to interfere--with the interest of the corporation as a whole. A conflict situation can arise when an employer, officer or director takes actions or his interests that may make it difficult to perform his or her company work objectively and effectively. Conflicts of interest also arise when an employee, officer or director, or a member of his or her family, receives improper personal benefits as a result of his or her position in the company.
Table of Contents
Approvals and Waivers
Conflicts of Interest
Gifts, Gratuities, Entertainment
Doing Business Internationally
Political Contributions and Lobbying
Accuracy of Reports, Records and Accounts
Insider Trading; Communications with Third Parties
Compliance and Reporting