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EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made effective as of the
15th day of January, 1999 by and between AMERICAN VANGUARD CORPORATION, a
Delaware corporation ("American Vanguard") (referred to herein as "Employer"),
and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("Employee").
TERMS AND CONDITIONS
In consideration of the foregoing and of the mutual covenants contained
herein and other valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. Employment. Employer hereby agrees to employ Employee, and Employee
agrees to serve as an employee of Employer, during the Term of Employment, as
defined in Section 2.
2. Term of Employment. The Term of Employment-of the Employee shall
commence on January 15, 1999, and continued until January 15, 2003 (the "Term of
Employment").
3. Duties of Employee.
(a) Employee shall serve as President and Chief Executive Officer of
American Vanguard and AMVAC. Employee shall perform such duties, services and
responsibilities as are consistent with such positions. Employee's duties,
services and responsibilities will be determined by Employer's Board of
Directors ("Board of Directors") and will be performed under the overall
supervision of, and consistent with, the policies of the Board of Directors.
(b) During the Term of Employment, Employee shall devote such time,
attention, skill, energy and efforts as may be necessary for the faithful
performance of his duties hereunder. The foregoing shall not be construed to
prohibit Employee from devoting reasonable periods of time during normal
business hours to activities involving educational, charitable, professional or
other similar types of organizations, and membership on the board of directors
of other organizations so long as such organization or business is not a
"Competing Enterprise" (as defined in Section 7(c) below).
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4. Compensation.
(a) In consideration of the performance by Employee of Employee's
obligations hereunder during the Term of Employment, Employer will pay Employee
a minimum salary (the "Salary") at an annual rate as follows:
January 15, 1999 - 2000 $330,000
January 15, 2000 - 2001 $374,000
January 15, 2001 - 2002 $418,000
January 15, 2002 - 2003 2002 Salary plus a percentage increase equal to the
percentage increase in the Consumer Price Index - All
Urban Consumers - Los Angeles - Anaheim - Riverside
(1982-84=100) for calendar year 2002
Such salary shall be payable in accordance with the normal payroll practices of
Employer then in effect. The Salary, and any other form of compensation paid to
Employee hereunder, during the Term of Employment, shall be subject to all
applicable taxes required to be withheld by Employer pursuant to federal, state
and local law. Employee shall be solely responsible for income taxes imposed on
Employee by reasons of any cash or noncash compensation and benefits provided
hereunder.
(b) During the Term of Employment, Employee shall be reimbursed for
reasonable travel and other business-related expenses incurred in the
furtherance of the business of Employer, other than expenses incurred by
Employee in travelling between any residence of Employee and Employer's
headquarters facility. Reimbursement of approved expenses shall be made by
Employer upon submission by Employee of a statement itemizing the expenses
incurred or such other verification as Employer may reasonably request.
5. Employee Benefits.
(a) In addition to the payment of Salary as described above, during
the Term of Employment Employee shall be entitled to all rights and benefits for
which Employee may be eligible under any bonus, participation or additional
compensation plans, pension or profit-sharing plans, group life, medical,
health, dental and/or disability insurance, automobile allowance or other
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benefits Employer may, in its sole discretion, provide for Employee or its
employees generally.
(b) During the Term of Employment, Employee shall be entitled to
four business weeks of vacation time each year without loss of compensation. In
the event that Employee is unable to take the total amount of vacation time
authorized herein during any year, he shall be deemed to have waived the
entitlement for that year.
(c) If Employee should die during the Term of Employment, Employer
agrees to pay the designated beneficiary any amounts (including Salary) and
continue any benefits due Employee under this Agreement for a period of twelve
(12) months after the date of death.
(d) Employer hereby grants Employee, as of April 1, 1999, the right
and option to purchase, at the time or times and on other terms and conditions
as hereinafter set forth, 50,000 shares of common stock of Employer (the "Option
Shares"), for the exercise price equal to the closing trading price on the AMEX
on April 1, 1999 (the "Options").
(i) Subject to the provisions hereof, (a) 10,000 Option Shares
shall become exercisable on April 1, 1999, (b) 10,000 Option Shares shall become
exercisable on first anniversary of this Agreement, (c) 10,000 Option Shares
shall become exercisable on second anniversary of this Agreement, (d) 10,000
Option Shares shall become exercisable on third anniversary of this Agreement
and (e) the remaining 10,000 Option Shares shall become exercisable on the
fourth anniversary of this Agreement. All Option exercise privileges shall be
cumulative, so that any Option that has become exercisable, but that has not
been exercised, shall remain exercisable throughout the balance of the option
period, regardless of the additional exercise privileges becoming available
during such exercise period.
(ii) If Employee is terminated for "Cause" [as defined in
Section 6(c) below] or if that Agreement is terminated pursuant to its Section 6
(a) (v) or Section 6 (a) (vi) , all Options vested at such time must be
exercised within ninety (90) days after Employee ceases to be an employee of
Employer and Employee shall have no rights to any other options described in
this Agreement. If Employee is terminated without Cause, Employee shall have the
right to exercise his Options in accordance with the terms of subsection (d)
above. If Employee dies or suffers a "Disability" (as defined in the Agreement),
Employee, or his beneficiary, shall have the right to exercise
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all Options vested at the time of such event and all Options which become vested
within 12 months of such event but shall have no right to any other Options.
Notwithstanding any other terms of this Option, all options granted hereunder if
not exercised shall expire on January 15, 2008.
(iii) The Option granted hereunder may be exercised in whole or
in part, and may be exercised in part from time to time, except that no exercise
may be for less than 100 Option Shares. Exercise shall be accomplished by
delivery to Employer of a timely written notice of election to exercise,
specifying the number of full Option Shares to be purchased, which shall be
delivered to the principal office of Employer accompanied by payment of the
purchase price for the Option Shares with respect to which the Option is
exercised. The purchase price of the Option Shares shall be paid in cash,
certified check, bank cashier's check or wire transfer or a combination of any
of the above methods of payment. As soon as practicable after each exercise of
the option and compliance by Employee with all applicable conditions, Employer
shall mail or cause to be mailed to Employee, at the address specified by
Employee in the notice, a stock certificate or certificates registered in the
name of the Employee for the number of shares of common stock which Employee
shall be entitled to receive upon such exercise under the provisions of this
Agreement.
(iv) The Option and the rights and privileges associated
therewith shall not be transferred, assigned, pledged or hypothecated by
Employee otherwise than will or by the laws of descent and distribution. Upon
any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the
Option, or any right or privilege conferred thereby, contrary to the provisions
of this Agreement, or upon any attempted sale under the rights and privileges
conferred hereby, the Option including all rights and privileges thereunder
shall immediately become null and void.
(v) The Options shall have antidilution protection and the
vesting of all Options hereunder shall accelerate upon a "change of control," of
Employer (acquisition of more than 50% of Employer's common stock by a person or
persons acting as a group).
(vi) It is anticipated that a new option plan (or an amendment
to the existing plan) will be adopted by the Employer. At such time, the Options
under this Agreement, if requested by Employee, will be converted to options
under the new option plan.
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6. Termination.
(a) Except as otherwise provided in this Agreement herein and
subject to the provisions of Section 6(e) hereof, this Agreement shall terminate
upon the earliest to occur of the dates specified below:
(i) the close of business on the date of Employee's death;
(ii) the close of business on the day on which Employer delivers
to Employee a written notice of Employer's election to terminate his employment
for "Cause" (as hereinafter defined);
(iii) the close of business on the day on which Employer shall
have delivered to Employee a written notice of Employer's election to terminate
his employment, which notice shall be delivered not less than 120 days after
Employee suffers any physical or mental disability that would prevent him from
substantially performing his duties under the Agreement ("Disability");
(iv) the close of business on the day following the date on
which the Board of Directors shall have adopted a resolution terminating the
employment of Employee hereunder and such termination is not for death, cause or
Disability;
(v) the close of business on a date mutually agreed to in
writing by Employer and Employee which is prior to the end of the Term of
Employment; or
(vi) the close of business on a date not later than thirty (30)
days after delivery of written notice by Employee to Employer terminating this
Agreement.
(b) Any purported termination by Employer or by Employee pursuant to
Section 6(a) hereof shall be communicated by written "Notice of Termination" to
the other party. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which indicates the specific termination provision in this
Agreement relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of this Agreement under
the provision so indicated. For purposes of this Agreement, no such purported
termination shall be effective without delivery of such "Notice of Termination".
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(c) For purposes of this Agreement, termination of employment for
"Cause" shall mean termination based on:
(i) the intentional and continued failure of Employee to
substantially perform his duties pursuant to this Agreement after a written
demand by Employer identifying the manner in which it believes Employee has not
substantially performed his duties;
(ii) a determination by Employer's Board of Directors that a
material breach of this Agreement by Employee has occurred;
(iii) conviction in a criminal proceeding against Employee
involving a felony;
(iv) a determination by Employer's Board of Directors that
Employee has committed fraud, embezzlement, theft or business conduct against
Employer or conduct involving a third party, any of which significantly impairs
the reputation of, or ▇▇▇▇▇, Employer, its subsidiaries or affiliates;
(v) a determination by Employer's Board of Directors that
Employee has inflicted intentional wrongful damage to property of Employer; or
(vi) a determination by Employer's Board of Directors that
Employee has breached his fiduciary obligation to Employer or its subsidiaries.
(d) For purposes of this Agreement, the term "Disability" shall mean
the good faith determination by a majority of the Board of Directors of Employer
that Employee's physical or mental condition effectively prevents Employee from
fulfilling his responsibilities on a consistent basis for at least 120 days. In
arriving at such good faith determination the Board of Directors shall review
the current and future requirements of Employee's position and the then
operational state and needs of Employer's business and shall have the right but
not the obligation to seek opinions from medical professionals, including
Employee's physician (with whom Employee hereby grants his approval for the
Board to contact in making its determination). The parties agree that
determination of Employee's disability by the Board shall be conclusive.
(e) If this Agreement terminates because of Employee's death or
Disability, Employer will continue to pay Employee an amount equal to Employee's
Salary for a period of one (1) year
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after the date of termination. If this Agreement is (i) terminated by the mutual
consent of the parties, (ii) voluntarily terminated by Employee, or (iii)
terminated by Employer for Cause, Employer shall pay Employee any portion of the
Salary accrued hereunder on or prior to the date of termination but not paid. If
this Agreement is terminated by Employer without Cause, Employer shall pay
Employee an amount equal to Employee's Salary for the remaining term of this
Agreement in accordance with Employer's normal payroll schedule.
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7. Employee Covenants.
(a) Employee, during the term of this Agreement and thereafter, will
not, directly or indirectly (without Employer's prior written consent) , use for
himself, or use for or disclose to any party other than Employer or any
subsidiary or affiliate of Employer, any secret or confidential information or
data regarding the business of Employer or its subsidiaries and affiliates or
any secret or confidential information or data regarding the costs, uses,
methods, applications, customers (including their names and buying habits or
practices) , trade accounts or suppliers (and pertinent information respecting
transactions and prospective transactions therewith) of products made, produced
or sold by Employer or any of its subsidiaries or affiliates, or regarding its
marketing methods and related data or any secret or confidential apparatus,
process, system, manufacturing or other method at any time used, developed or
investigated by or for Employer or any of its subsidiaries or affiliates,
whether or not invented, developed, acquired, discovered or investigated by
Employee. At the termination of Employee's employment or at any other time
Employer may request, Employee shall promptly deliver to Employer all memoranda,
notes, records, plats, sketches, plans or other documents made, compiled by,
delivered to, or otherwise acquired by, Employee concerning costs, uses,
methods, designs, applications, purchasers or suppliers of products made or sold
by Employer or any subsidiary or affiliate of Employer or any secret or
confidential product, apparatus or process manufactured, used, developed,
acquired or investigated by Employer or any subsidiary or affiliate of Employer.
(b) Employee agrees that any and all inventions, discoveries,
improvements, processes, methods, designs, patents, copyrights and trademarks
made,, developed, discovered or acquired by him during the Term of Employment,
solely or jointly with others or otherwise and which relate to the business of
Employer and all knowledge possessed by Employee relating thereto (collectively,
the "Inventions") shall be fully and promptly disclosed to the Board of
Directors and to such person or persons as the Board of Directors shall direct
and shall be the sole and absolute property of Employer and Employer will be the
sole and absolute owner thereof. Employee agrees that he will at all times keep
all of the same secret from everyone except Employer and such persons as the
Board of Directors may from time to time direct. Employee shall, as requested by
Employer, at any time and from time to time, whether prior to or after the
expiration of the Term of Employment, execute and deliver to Employer any
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instruments deemed necessary by Employer to effect disclosure and assignment of
the Inventions to Employer or its designees and any patent applications (United
States or foreign) and renewals with respect thereto, including any other
instruments deemed necessary by Employer for the prosecution of patent
applications or the acquisition of letters patent. Employer hereby notifies
Employee that this Section 7(b) shall not apply to any invention which qualifies
fully under the provisions of Section 2870 of the California Labor Code.
(c) By and in consideration of Employer's entering into this
Agreement and the Salary and benefits to be provided by Employer hereunder, and
further in consideration of Employee's exposure to the proprietary information
of Employer, manner, including but not limited to holding the positions of
shareholder, director, officer, consultant, independent contractor, employee,
partner or investor, with any Competing Enterprise. For purposes of this
paragraph, the term "Competing Enterprise" shall mean any person, corporation,
partnership or other entity engaged in a business in the United States which is
in competition with any of the businesses of Employer or any of its subsidiaries
or affiliates (i) as of the date of commencement of this Agreement, or (ii)
during the Term of Employment. The prohibition of this clause (c) shall not be
deemed to prevent Employee from owning less that 5% of any class of securities
of an entity that has a class of equity securities registered under Section 12
of the Securities Exchange Act of 1934, as amended.
(d) During the term of this Agreement and for a period of four (4)
years thereafter, Employee shall not use any information obtained as a result of
his employment with Employer to interfere with Employer's relationship with, or
endeavor to entice away from Employer, any person who at any time during the
term of this Agreement was an employee or customer of Employer or otherwise had
a material business relationship with Employer. Notwithstanding the foregoing
provisions, nothing in this agreement is intended to be and shall ever be
construed as an agreement by Employee to refrain from fairly competing after the
termination of this agreement and using publicly accessible information to
solicit customers or other persons who had a material business relationship with
Employer.
(e) Employee agrees that any breach of the terms of this Section 7
would result in irreparable injury and damage to Employer for which Employer
would have no adequate remedy at law; Employee therefore also agrees that in the
event of said breach or any threat of breach, Employer shall be entitled to an
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immediate injunction and restraining order to prevent such breach and/or
threatened breach and/or continued breach by Employee and/or any and all persons
and/or entities acting for and/or with Employee, without having to prove
damages, in addition to any other remedies to which Employer may be entitled at
law or in equity; provided, however, that the prevailing party in any such
action brought by Employer pursuant to this Section 7(e) will be entitled to
recover from the other party all costs and expenses, including reasonable
attorney's fees and costs, incurred by the prevailing party in connection with
such action. The terms of this paragraph shall not prevent Employer from
pursuing other available remedies for any breach or threatened breach hereof,
including but not limited to the recovery of damages from Employee.
The provisions of this Section 7 shall survive any termination of this
Agreement, and the existence of any claim or cause of action by Employee against
Employer, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Employer of the covenants and
agreements of this Section 7.
8. Indemnification. Employer agrees to indemnify Employee as an officer
and/or director, as applicable, of Employer to the fullest extent permitted
under applicable California corporate law.
9. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been given (i) if
personally delivered, when so delivered, or (ii) if mailed, three (3) business
days after having been placed in the United States mail, registered or
certified, postage prepaid, addressed to the party to whom it is directed at the
address set forth below:
If to Employer:
American Vanguard Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Employee:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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10. Binding Effect/Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, personal representatives, estates, successors (including, without
limitation, by way of merger) and assigns. Notwithstanding the provisions or the
immediately preceding sentence, Employee shall not assign all or any portion of
this Agreement without the prior written consent of Employer.
11. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, between them as to such
subject matter. This Agreement may not be amended, nor may any provision hereof
be modified or waived, except by an instrument in writing duly signed by the
party to be charged.
12. Severability. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part, such
provisions or application shall to that extent be severable and shall not affect
other provisions or applications of this Agreement.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without reference
to the principles of conflict of laws.
14. Attorney's Fees. In the event of default hereunder, the defaulting
party shall be liable to the nondefaulting party for all expenses and costs
incurred by the nondefaulting party in protecting or enforcing its rights
hereunder, including, but not limited to, reasonable attorney's fees.
15. Modifications and Waivers. No provisions of this Agreement may be
modified, altered or amended except by an instrument in writing executed by the
parties hereto. No waiver by either party hereto of any breach by the other
party hereto of any provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions at the time
or at any prior or subsequent time.
16. Headings. The headings contained herein are solely for the purpose
of reference, are not part of this Agreement and shall not in any way affect the
meaning or interpretation of this Agreement.
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17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Employer has caused this Agreement to be executed
by the authority of its Board of Directors, and Employee has hereunto set his
hand, the day and year first above written.
EMPLOYER: AMERICAN VANGUARD CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
EMPLOYEE: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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