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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT made as of May 22, 2002 by and between MERCURY AIR GROUP,
INC., a Delaware corporation having its principal offices at 5456 McConnell
Avenue, Los Angeles, California 90066 (hereinafter referred to as "Mercury"),
and Mr. Wayne J. Lovett, residing at 5908 Finecrest, Rancho Palos Verdes,
California 90066 (hereinafter referred to as "Lovett").

                              W I T N E S S E T H:

      WHEREAS, Lovett has been employed as Executive Vice President, Corporate
Secretary and General Counsel of Mercury since May 2001; and

      WHEREAS, Mercury's Board of Directors (the "Board of Directors") would
like to continue Lovett's role as Executive Vice President, Corporate Secretary
and General Counsel on the terms and conditions set forth in this Agreement; and

      WHEREAS, Lovett wishes to accept these positions on the terms and
conditions set forth in this Agreement.

      NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties agree as follows:

      First:       Employment

      (a) Employment. Mercury hereby confirms and agrees that Lovett will be
appointed by the Board of Directors of Mercury to continue serving as an
Executive Vice President, Corporate Secretary and General Counsel of Mercury. In
his capacity as Executive Vice President, Corporate Secretary and General
Counsel of Mercury, Lovett shall continue to report directly to Mercury's Chief
Executive Officer.

      (b) Lovett's Acceptance. Lovett hereby accepts his appointments as
Executive Vice President, Corporate Secretary and General Counsel of Mercury.

      Second:      Term

      Subject to the provisions governing termination as hereinafter provided,
the term of this Agreement shall begin on the date hereof and shall terminate
three years thereafter. If Lovett is then employed by Mercury, on each
successive anniversary date, the term of this Agreement shall be automatically
extended for one additional year such that the remaining term of the Agreement
shall then be one (1) year; provided, however, that upon written notice given by
either party at least thirty (30) days prior to the next automatic extension,
the automatic extension right may be terminated.


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      Third:       Compensation

      (a) Base Compensation. For all services rendered by Lovett under this
Agreement, Mercury shall pay Lovett a salary of $179,000 per year, payable in
semi-monthly installments in accordance with Mercury's standard payroll
practices. From time to time, the salary payable to Lovett may be adjusted at
the sole discretion of the Compensation Committee of the Board of Directors (the
"Compensation Committee"). Lovett's annual salary, as from time to time adjusted
by the Compensation Committee, is hereinafter referred to as "Base
Compensation".

      (b) Bonus Plans. The Board of Directors may, at its discretion, establish
a bonus plan for Lovett.

      Fourth:      Extent of Services

      Lovett shall devote his entire time, attention and energies to the
business of Mercury (and its various subsidiaries) and shall not during the term
of this Agreement be engaged in any other business activity whether or not such
business activity is pursued for gain, profit or other pecuniary advantage; but
this shall not be construed as preventing Lovett from investing his assets in
companies or other entities in such form or manner as will not require any
services on the part of Lovett in the operation of the affairs of such companies
or entities in which such investments are made, and, with respect to companies
or other entities which are competitors of Mercury, where Lovett's investment
does not represent in excess of five percent (5%) of the outstanding equity of
such company or entity.

      Fifth:       Working Facilities

      Lovett shall be furnished with a private office and other facilities and
services reasonably suitable to his position and adequate for the performance of
his duties. Lovett shall be employed at the principal offices of Mercury located
in Los Angeles, California and shall travel to the extent necessary to fulfill
his duties in his discretion.

      Sixth:       Disclosure of Information

      (a) Generally. The parties acknowledge that Mercury and its affiliates
(individually and collectively, the "Companies"), have developed and intend to
continue the development of and to formulate, acquire and use commercially
valuable technical and non-technical information, design and specification
documents, concepts, technology, know-how, improvements, proposals, patent
applications, techniques, marketing plans, strategies, forecasts, inventions
(not limited by the definition of an invention contained in the United States
Patent Laws), Trade Secrets (as defined in Sec. 3426.1(d) of the Uniform Trade
Secrets Act) and processes which are considered proprietary by the Companies,
particularly including, without limitation, customer and supplier lists, books
and records, computer programs, pricing information and business plans
(collectively, the "Proprietary Information"). It is necessary for the Companies
to protect the Proprietary Information by patents or copyrights or by holding it
secret and confidential.



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      (b) Access to Proprietary Information. The parties acknowledge that Lovett
has access to the Proprietary Information and that the disclosure or misuse of
such Proprietary Information could irreparably damage the Companies and/or their
respective clients or customers.

      (c) Nondisclosure to others. Except as directed by Mercury in writing or
verbally, Lovett shall not at any time during or after the Term disclose any
Proprietary Information to any person whatsoever, examine or make copies of any
reports or other documents, papers, memoranda or extracts for use other than in
connection with his duties with Mercury or utilize for his own benefit or for
the benefit of any other party any such Proprietary Information and will use
reasonable diligence to maintain the confidential, secret or proprietary
character of all Proprietary Information.

      (d) Survivability. Lovett acknowledges that his obligations hereunder
shall continue beyond the Term with respect to any Proprietary Information (as
defined in Article Sixth, paragraph (a) hereof) which came into his possession
during the Term.

      Seventh:     Expenses

      Lovett is authorized to incur reasonable expenses for promoting the
business of Mercury, including expenses for entertainment, travel and similar
items but only in accordance with the policies of the Board of Directors of
Mercury's Chief Executive Officer, as from time to time adopted. Mercury will
reimburse Lovett for all such reasonable expenses upon the presentation by
Lovett, from time to time, of an itemized account and documentation of such
expenditures in sufficient detail to allow Mercury to claim an income tax
deduction for each paid item, if such item is deductible.

      Eighth:      Fringe Benefits

      (a) Participating in General Plans. Lovett shall have such employee
benefits (including medical insurance, life insurance, 401(k) and disability
insurance plans) as Mercury shall from time-to-time establish, promulgate or
keep in effect for the benefit of its management level employees. Such benefits
will include company paid medical insurance for Lovett and his family under
Mercury's medical insurance plans. Lovett shall be required to comply with, and
be entitled to benefits only in accordance with, the terms and conditions of
such plans. Nothing contained in this paragraph (a) of Article Eighth, however,
shall be construed to require Mercury to establish any life, disability or
medical insurance plans not in existence on the date hereof, to continue any
plans in existence on the date hereof, to prevent Mercury from modifying and/or
terminating any of the plans in existence on the date hereof or otherwise
require Mercury to take special steps to insure the eligibility of Lovett or his
dependents under the provisions of such plans, and no such act or omission shall
be deemed to affect this Agreement or to require modification of the
compensation, additional benefit or other provisions contained herein.

      (b) Stock Options. Lovett shall be entitled to the grant of stock options
          as from time to time determined in the sole discretion of the Board of
          Directors.



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      (c) 2002 Management Stock Purchase Plan.

          (i) By virtue of his eligibility to participate in the 2002 Management
      Stock Purchase Plan, Lovett may purchase from CFK Partners, an Illinois
      general partnership, up to 31,896 unregistered shares of the common stock
      of Mercury, $0.01 par value, at a price of $7.50 per share (the "Purchase
      Price"), such purchase to be funded by Mercury.

          (ii) In the event Lovett voluntarily leaves the full-time employment
      of Mercury or any of its subsidiaries or related companies for any reason
      whatsoever without the prior consent of Mercury, or in the event Lovett's
      employment is terminated with or without "cause", as defined in Article 9
      hereof (except pursuant to Article 11(a) of the Employment Agreement or as
      set forth below), or in the event Lovett dies or becomes disabled
      (hereinafter the "Date of Discharge"), Lovett or his estate shall be
      obligated to repay the sums provided by Mercury hereunder, provided,
      however, that, in connection with Lovett's employment with Mercury,
      Lovett's obligations hereunder shall be forgiven by the percentage equal
      to the product of (i) 10% and (ii) the number of years from the date
      hereof to the Date of Discharge, with the number of years calculated on a
      March 1st fiscal year (so that if, for example, the Date of Discharge is
      April 1, 2004, the number of years calculated hereunder shall be 2).
      Lovett shall receive 10% of the original amount of stock purchased on the
      anniversary date of the Employment Agreement's execution and will be fully
      vested and eligible to vote those shares. Lovett shall have no obligation
      to repay Mercury if he remains employed by Mercury after March 1, 2012.
      Mercury shall be granted a secured interest as a creditor of Lovett in the
      event Lovett defaults in his obligation to Mercury as herein set forth and
      Mercury will designate an escrow to hold the shares underlying the
      remaining debt obligation. In the event Lovett terminates his employment
      pursuant to Article 11(a) of the Employment Agreement or is terminated by
      Mercury for any reason following an event set forth in Article 11(a) of
      his Employment Agreement, Lovett shall have no further obligation to repay
      Mercury all or any portion of the Purchase Price. While Lovett has any
      obligation to Mercury hereunder, Lovett shall be obligated to comply with
      directions of the Board of Directors of Mercury with respect to the voting
      of those shares held in escrow purchased by Lovett hereunder.

      (d) Vacation. Lovett shall be entitled each year to a vacation of four (4)
weeks, during which time his compensation shall be paid in full.

      Ninth:       Mercury's Right to Terminate For Cause

      (a) Cause. Mercury may at any time during the term of this Agreement
discharge Lovett for "cause." The term "cause" is defined herein as Lovett's (i)
misappropriation of corporate funds, fraud, embezzlement or other illegal
conduct to the detriment of Mercury, (ii) negligence in the execution of his
material assigned duties or Lovett's voluntary abandonment of his job for any
reason other than disability; (iii) refusal or failure, after not less than 20
days written notice that such refusal or failure would constitute a default
hereunder, to carry out any reasonable and material direction from the Board of
Directors given to him in writing; (iv) conviction of a felony; (v) material
breach or violation of the terms of this Agreement, which breach or violation
shall not have been fully cured (as determined by the Board of Directors acting
in good faith) by Lovett within 20 days after receipt of written notice of the
same from the Board of Directors; (vi) Lovett's death or



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disability (except that, in the event of Lovett's disability, Mercury shall, at
Lovett's request, prior to discharge, grant Lovett a leave of absence of up to
six months or such longer period of time as may be required by law); or (vii)
Lovett's engagement in drug or alcohol abuse. Lovett shall be terminated only
following a finding of "cause" in a resolution adopted by majority vote of the
Board of Directors of Mercury.

      (b) No Rights Following Cause Termination. Following a termination of
Lovett's employment with Mercury "for cause" pursuant to paragraph (a) of this
Article Ninth: (i) all rights and liabilities of the parties hereto shall cease
and this Agreement shall be terminated (subject to the continuing obligations of
Lovett pursuant to Article Sixth and Twelfth hereof); and (ii) Lovett shall not
be entitled to receive any severance benefits, salary, other benefits or
compensation of any kind (except for health insurance continuation as required
by COBRA, salary accrued through the date of termination and accrued vacation
pay as required by law) either as consideration for his employment or in
connection with the termination of his employment. In the event that Lovett
asserts that his voluntary termination was actually a constructive termination,
Mercury shall be entitled to assert as "cause" for such termination any grounds
present at the time of such termination which the Board of Directors could have
asserted as "cause" if called upon to terminate Lovett.

      Tenth:       Termination Without Cause

      (a) Rights Following Termination Without Cause. Should Lovett be
discharged by Mercury at any time during the term of this Agreement except as
provided in Article Ninth, Mercury hereby agrees to pay Lovett within thirty
(30) days from such discharge the lesser of one year's Base Compensation or the
Base Compensation that would otherwise be paid to him over the remaining term of
this Agreement, with a minimum of six (6) months base compensation.

      (b) No Additional Rights. Except as set forth above in paragraph (a) of
this Article Tenth following a termination of Lovett's employment by Mercury
other that pursuant to Article Ninth above and Article Eleventh below: (i) all
rights and liabilities of the parties hereto shall cease and this Agreement
shall be terminated (subject to the continuing obligations of Lovett pursuant to
Articles Sixth and Twelfth); and (ii) Lovett shall not be entitled to receive
any severance benefits, salary, other benefits or compensation of any kind
(except for health insurance continuation as required by COBRA and accrued
vacation pay as required by law) either as consideration for his employment or
in connection with the termination of his employment.

      Eleventh:    Right to Voluntary Termination by Lovett

      (a) Conditions for Termination by Lovett. In the event that:

          (i) Any "person" other than CFK Partners or an affiliate of CFK
      Partners is or becomes a "beneficial" owner, "directly or indirectly", of
      stock of Mercury representing 50% or more of the total voting power of
      Mercury's then outstanding stock, without the written consent of the Board
      of Directors of Mercury; or



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          (ii) Mercury is acquired by another entity through the purchase of
      substantially all of its assets, the purchase of all of its outstanding
      voting securities or a combination thereof, without the consent of the
      Board of Directors of Mercury; or

          (iii) Mercury is merged with another entity, consolidated with another
      entity or reorganized in a manner in which any "person" other than CFK
      Partners or an affiliate of CFK Partners is or becomes a "beneficial"
      owner, "directly or indirectly", of stock of the surviving entity
      representing 50% or more of the total voting power of the surviving
      entity's then outstanding stock, without the consent of the Board of
      Directors of Mercury; or

          (iv) During any period of one, two or three consecutive years,
      individuals who at the beginning of any such period constitute the
      directors of Mercury cease for any reason to constitute at least a
      majority thereof unless the election, or the nomination or election by
      Mercury's stockholders, of each new director of Mercury was approved by a
      vote of at lease two-thirds of such directors of Mercury then still in
      office who were directors of Mercury at the beginning of any such period;

      then, if following any of the events set forth in clauses (i), (ii),
(iii) or (iv), Lovett's duties are substantially altered or Lovett is demoted
for cause, Lovett shall have the right and option to voluntarily terminate this
Agreement upon written notice to Mercury. All terms used in quotations in
clauses (i) and (iii) shall have the meanings assigned to such terms in Section
13 of the Securities Exchange Act of 1934 and the rules, regulations, releases
and no-action letters of the Securities and Exchange Commission promulgated
thereunder or interpreting any of the same. For purposes of clauses (i) and
(iii), the term "affiliate" shall have the meaning assigned to such term in Rule
144 promulgated by the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and the releases and no-action letters interpreting the
same.

      (b) Rights Following Voluntary Termination After a Change of Control.
Following any voluntary termination of employment by Lovett pursuant to
paragraph (a) of this Article Eleventh, Lovett shall be entitled to be paid by
Mercury within thirty (30) days of such termination by Lovett, the lesser of one
year's Base Compensation or the entire balance of his Base Compensation
remaining to be paid to Lovett over the full remaining term of this Agreement.

      (c) No Additional Rights. Except as set forth above in paragraph (b) of
this Article Eleventh, following a voluntary termination of Lovett's employment
with Mercury pursuant to paragraph (a) of this Article Eleventh: (i) all rights
and liabilities of the parties hereto shall cease and this Agreement shall be
terminated (subject to the continuing obligations of Lovett pursuant to Articles
Sixth and Twelfth); and (ii) Lovett shall not be entitled to receive any
severance benefits, salary, other benefits or compensation of any kind (except
for health insurance continuation as required by COBRA and accrued vacation pay
as required by law) either as consideration for his employment or in connection
with the termination of his employment.

      Twelfth:     Restrictive Covenant

      Lovett covenants and agrees that during the period commencing with the
date hereof and ending six (6) months from the date Lovett's employment with
Mercury is terminated for "cause" or by reason of Lovett's voluntary termination
of employment from Mercury (the "Non-Compete Period"), Lovett will not compete
or attempt to compete with or become associated with any business which competes
with the Companies' government contracts, cargo, commercial aviation, fuel
sales, fixed base operations, or any business activities of the Companies
existing on or developed subsequent to the date hereof. Lovett covenants and
agrees that he will not, without the prior written consent of Mercury during the
Non-Compete Period: (a) solicit any customer of the Companies; (b) solicit any
contracts which were either being solicited by, or which were under



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contract with, the Companies by performing or causing to be performed any work
which was either being solicited by, or which was under contract with, Mercury;
or (c) induce any sales, operating, technical or other personnel of the
Companies to leave the service, employ or business of the Companies. Lovett
agrees that he will not violate this Article Eleventh: (a) directly or
indirectly; (b) in any capacity, either individually or as a member of any firm;
(c) as an officer, director, stockholder, partner or Lovett of any business; or
(d) through or with any persons, relatives (either through blood or marriage),
firms, corporations or individuals controlled by or associated with him (each
and every such method of violation referred to in clauses (a) through (d) shall
hereinafter be referred to as an "indirect violation"). Lovett further agrees
that doing or causing to be done any of the actions prohibited in this Article
Eleventh by means of an indirect violation shall constitute a violation of this
Article Eleventh as though violated by Lovett, subject to all of the remedies to
Mercury provided for herein and as otherwise provided by law.

      Thirteenth:  Arbitration; Governing Law.

      Any controversy or claim arising out of, or relating to this Agreement or
the breach thereof, shall be settled by binding arbitration in the City of Los
Angeles pursuant to the laws of the State of California in accordance with the
rules then obtaining of the America Arbitration Association, and judgments upon
the award rendered my be entered in any court having jurisdiction thereof. This
Agreement shall be governed by and construed in accordance with the substantive
laws of the State of California. The arbitrators shall have the power in their
discretion to award attorneys' fees and other legal costs and expenses to the
prevailing party in connection with any arbitration.

      Fourteenth:  Notices

      Any notice required or permitted to be given under this Agreement shall be
sufficient if in writing and sent by certified mail to his residence, in the
case of Lovett, or to its principal office, in the case of Mercury.

      Fifteenth:   Waiver of Breach

      The waiver by Mercury of a breach of any provision of this Agreement by
Lovett shall not operate or be construed as a waiver of any subsequent breach by
Lovett.

      Sixteenth:   Assignment

      The rights and obligations of Mercury under this Agreement shall inure to
the benefit of and shall be binding upon the successors and assigns of Mercury.

      Seventeenth: Entire Agreement; Written Amendment

      This instrument contains the entire agreement of the parties with respect
to the subject matter hereof. This Agreement may only be amended, modified,
extended or discharged and the provisions of this Agreement may only be waived
by an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.



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      Eighteenth:  Equitable Relief; Partial Enforcement

      Mercury and Lovett have agreed that violation or breach of Articles Sixth
and Eleventh will result in irreparable injury to the Companies and shall
entitle the Companies to equitable relief in addition to any other remedies
provided at law. Mercury and Lovett have further agreed in the event that only a
portion of Articles Sixth or Eleventh shall be deemed enforceable or valid that
portion of such Articles as shall be enforceable or valid shall be enforced.
Mercury and Lovett have further agreed that the court making a determination of
the validity or enforceability of such Articles shall have the power and
authority to rewrite the restrictions contained in such Articles to include the
maximum portion of the restrictions included within such Articles as are
enforceable, valid and consistent with the intent of the parties as expressed in
such Articles.

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

                                          MERCURY AIR GROUP, INC.



                                          By:  /s Joseph A. Czyzyk
                                          --------------------------------------
                                          Its: Chief Executive Officer



                                          /s/ Wayne J. Lovett
                                          --------------------------------------
                                          Wayne J. Lovett



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