Document:

avd-ex1012_955.htm

Exhibit 10.12

 

        

AMERICAN VANGUARD CORPORATION 

 

RESTRICTED STOCK AGREEMENT 

 

THIS AGREEMENT is made as of November 13, 2020, between American Vanguard Corporation, a Delaware corporation (the “Company”) whose headquarters is located at 4695 MacArthur Court, Suite 1200, Newport Beach, CA 92660, and /$ParticipantName$/ (“Employee”), an individual. 

 

Whereas, the Company is permitted to make awards of restricted stock to its employees pursuant to the terms of the American Vanguard Corporation Amended and Restated 1994 Stock Incentive Plan (the “Stock Incentive Plan”); 

 

Whereas the Board of Directors of the Company, by written consent dated November 13, 2020, has approved an award of restricted stock to Employee, subject to the terms of the Stock Incentive Plan, and the Company and Employee desire to enter into an agreement pursuant to which the Company shall award /$AwardsGranted$/ shares of the Company’s Common Stock, par value $0.10 per share which is subject to the restrictions hereunder. All of such shares of common stock awarded hereunder to Employee are referred to herein as “Restricted Stock”. Certain definitions are set forth in paragraph 7 of this Agreement;

 

Now, therefore, in consideration for the mutual premises herein and for other good and valuable consideration, the parties hereto agree as follows: 

 

1. Award of Restricted Stock. 

 

(a) Subject to (i) the terms and conditions of the Stock Incentive Plan and (ii) the execution and delivery of this Agreement, the Company shall award to Employee and Employee shall receive /$AwardsGranted$/ shares of Restricted Stock. 

 

(b) In connection with the award of the Restricted Stock hereunder, Employee represents and warrants to the Company that: 

 

(i) The Restricted Stock to be acquired by Employee pursuant to this Agreement shall be acquired for Employee’s own account and not with a view to, or intention of, distribution thereof in violation of the 1933 Act, or any applicable state securities laws, and the Restricted Stock shall not be disposed of in contravention of the 1933 Act or any applicable state securities laws. 

 

(ii) Employee has had an opportunity to ask questions and receive answers concerning the terms and conditions of the offering of Restricted Stock and has had full access to such other relevant information concerning the Company as requested. 

 

(iii) This Agreement constitutes the legal, valid and binding obligation of Employee, enforceable in accordance with its terms, and the execution, delivery and performance of this Agreement by Employee do not and shall not conflict with, violate or cause a breach of any agreement, contract or instrument to which Employee is a party or any judgment, order or decree to which Employee is subject. 

 

(iv) Employee has not taken any action that constitutes a conflict with, violation or breach of, and the execution and delivery of this Agreement and the other agreements contemplated hereby will not conflict with, violate or cause a breach of, any noncompete, nonsolicitation or confidentiality agreement to which Employee is a party or by which Employee is bound. Employee agrees to notify the Company’s Board of Directors (the “Board”) of any matter which, to Employee’s knowledge, might reasonably be expected to violate or cause a breach of any such agreement. 

 

		
	
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(c) As an inducement to the Company to issue the Restricted Stock to Employee, as a condition thereto, Employee acknowledges and agrees that neither the issuance of the Restricted Stock to Employee nor any provision contained herein shall entitle Employee to remain in the employment of the Company and its Subsidiaries or affect the right of the Company to terminate Employee’s employment at any time. 

 

2. Vesting of Restricted Stock. One hundred percent (100%) of the Restricted Stock shall vest on the third anniversary of the date of award, that is, on May 13, 2023 (the “Vesting Date”), provided that Employee remains a full-time employee of the Company or an affiliate of the Company as of the Vesting Date.  

 

On the Vesting Date, the Employee may either (i) sell all or a portion of the shares, (ii) retain the shares in their account with the third party stock option administrator (which at the time of this award is Bank of America Merrill Lynch), or (iii) transfer the shares to a brokerage account or the transfer agent. 

 

3.  Forfeiture.  Except to the extent otherwise expressly provided to the contrary in section 4 below, if Employee ceases to be a full-time employee of the Company for any reason (including, without limitation, termination for cause, termination without cause, death, disability, retirement, or resignation for any reason) prior to the Vesting Date, then the unvested Restricted Stock shall be forfeited immediately. 

 

4. Change of Control. In the event of any Change of Control, whether the consideration therefor is cash, securities or a combination thereof, all Restricted Stock shall be deemed to have become fully vested immediately prior to the date of such Change of Control. 

  

5. Restrictions on Transfer. Employee shall not sell, transfer, assign, pledge or otherwise dispose of any interest in any shares of Restricted Stock prior to vesting thereof, other than (i) by will or the laws of descent and distribution or to an Employee’s family member by gift or a qualified domestic relations order as defined by the Internal Revenue Code, (ii) in connection with a Change of Control or (iii) as permitted by the Committee, as defined under the Stock Incentive Plan. All provisions of this Agreement shall in any event continue to apply to any shares of Restricted Stock transferred as permitted by this Section 5, and any transferee of any such shares of Restricted Stock shall be bound by all provisions of this Agreement as and to the same extent as the Employee; provided, that in any event such restrictions shall terminate upon a Change of Control except to the extent of any restrictions on transfer applicable to Restricted Stock of the surviving entity received in exchange for or upon conversion of Restricted Stock granted pursuant to this Agreement in connection with such Change of Control 

  

6. Definitions. 

 

“Board” means the Company’s Board of Directors. 

 

“Change of Control” means the occurrence of one of the following events: 

 

(a) the acquisition by any Person (as hereinafter defined) of 50% or more of the outstanding Common Stock of the Company (the “Outstanding Company Stock”), provided that, for purposes of this definition, the following acquisitions shall not constitute a Change of Control: (i) any acquisition by the Company, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Person that controls, is controlled by or is under common control with, the Company, or (iii) a Non-Qualifying Business Combination (as hereinafter defined); or 

 

(b) consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets or stock of another corporation (a “Business Combination”), in each case, unless, following such Business Combination, the Persons who had Beneficial Ownership (as hereinafter defined) of the Outstanding Company Stock immediately prior to such Business Combination have Beneficial Ownership immediately following the consummation of such Business Combination, directly or indirectly, of more than 50% of the combined voting power of the then 

 

		
	
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outstanding securities entitled to vote generally in the election of directors of the corporation resulting or surviving from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Stock (a Business Combination that satisfies this exception shall be deemed to be a “Non-Qualifying Business Combination”); or 

 

(c) individuals who, as of the effective date or such subsequent date as the Board may determine from time to time to be applicable for this Change of Control definition (the “Base Date”), constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that, for purposes of this definition, any individual who becomes a director subsequent to the Base Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, excluding, however any such individual who initially assumes office as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or 

 

(d) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. 

 

Notwithstanding the foregoing provisions of this definition, unless otherwise determined by the Board, no Change of Control shall be deemed to have occurred with respect to an Award if (i) a participant is a member of a group that first announces a proposal which, if successful, would result in a Change of Control and which proposal (including any modifications thereof) is ultimately successful, (ii) the participant acquires a two percent (2%) or more equity interest in the entity which ultimately acquires the Company pursuant to the transaction described in clause (i) above in this paragraph, or (iii) treatment of an event which is otherwise a Change of Control under this section with respect to such Award would result in violation of the rules relating to “nonqualified deferred compensation plans” under Section 409(A) of the Code.

 

For purposes of this definition of Change of Control “Person” means an individual, corporation, partnership, joint venture, trust, unincorporated organization, government agency (or agency or political subdivision thereof), group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) or any other entity, and “Beneficial Ownership” means beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act.      

 

“Restricted Stock” shall continue to be Restricted Stock in the hands of any holder other than Employee (except for the Company and except for transferees in a Change of Control), and except as otherwise provided herein, each such other holder of Restricted Stock shall succeed to all rights and obligations attributable to Employee as a holder of Restricted Stock hereunder. Restricted Stock shall also include shares of the Company’s capital stock issued with respect to Restricted Stock by way of a stock split, stock dividend or other recapitalization.  However, until fully vested, Restricted Stock shall not entitle the holder to either i) voting rights, or ii) cash dividends.

 

“1933 Act” means the Securities Act of 1933, as amended from time to time. 

 

“Subsidiary” means any corporation of which the Company owns securities having a majority of the ordinary voting power in electing the board of directors directly or through one or more subsidiaries. 

 

7. Notices. Any notice provided for in this Agreement must be in writing and must be either (i) personally delivered, (ii) mailed by first class mail (postage prepaid and return receipt requested), (iii) sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or (iv) sent via email in which case, acknowledgement of receipt shall constitute receipt. 

 

 

		
	
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To the Company: 

 

American Vanguard Corporation 

4695 MacArthur Court, Suite 1200 

Newport Beach, CA 92660 

Attn: Timothy J. Donnelly

CAO, General Counsel & Secretary 

TimD@amvac.com

To Employee: 

On file.

 

or such other address or to the attention of such other person as the recipient party shall have specified by  prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered or sent or, if mailed, five days after deposit in the U.S. mail. 

 

8. General Provisions. 

 

(a) Transfers in Violation of Agreement. Any transfer or attempted transfer of any Restricted Stock in violation of any provision of this Agreement shall be void, and the Company shall not record such transfer on its books or treat any purported transferee of such Restricted Stock as the owner of such stock for any purpose. 

 

(b) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

(c) Complete Agreement. This Agreement, taken together with the Stock Incentive Plan, embodies the complete agreement and understanding among the parties and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. 

 

(d) Counterparts/Facsimile. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.   Further, this Agreement may be executed manually and executed pages transmitted via facsimile, pdf file or through email confirmation sent by employee, in which case such facsimile, pdf file or email confirmation shall be deemed to be an original signature. 

 

(e) Successors and Assigns. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by Employee, the Company, and their respective successors and assigns (including subsequent holders of Restricted Stock); provided that the rights and obligations of Employee under this Agreement shall not be assignable except in connection with a permitted transfer of Restricted Stock hereunder. 

 

(f) Governing Law. THE VALIDITY, CONSTRUCTION, INTERPRETATION, ADMINISTRATION AND EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY THE SUBSTANTIVE LAWS, BUT NOT THE CHOICE OF LAW RULES, OF THE STATE OF DELAWARE. 

 

(g) Remedies. Each of the parties to this Agreement shall be entitled to enforce its rights under this Agreement specifically, to recover damages and costs (including reasonable attorney’s fees) caused by any 

 

		
	
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breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages would not be an adequate remedy for any breach of the provisions of this Agreement and that any party shall be entitled to specific performance and/or other injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions of this Agreement. 

 

(h) Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and the Employee. 

 

(i) Business Days. If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday or legal holiday in the state in which the Company’s chief Employee office is located, the time period shall be automatically extended to the business day immediately following such Saturday, Sunday or holiday. 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above. 

 

 

 

		
	
AMERICAN VANGUARD CORPORATION

	
 
	
 

	
 
	
 

	
By:
	
/s/ Timothy J. Donnelly

	
 
	
Timothy J. Donnelly

	
 
	
CAO, General Counsel and Secretary

	
 
	
 

	
 
	
 

	
 
	
 

	
EMPLOYEE

	
 
	
 

	
By:
	
 

	
 
	
As an Individual

	
 
	
 

	
 
	
 

	
Name:
	
/$ParticipantName$/

 

 

 

 

		
	
restricted stock agt111320
	
5avd-ex1014_954.htm

Exhibit 10.14

 

AMERICAN VANGUARD CORPORATION

AMENDED AND RESTATED STOCK INCENTIVE PLAN

PERFORMANCE-BASED RESTRICTED STOCK UNITS AWARD AGREEMENT

November 13, 2020

 

American Vanguard Corporation, a Delaware Corporation, (“Company”) hereby grants to /$ParticipantName$/ (“Grantee”), a Participant in the American Vanguard Corporation Amended and Restated Stock Incentive Plan, as amended from time-to-time (“Plan”), a Performance-Based Restricted Stock Units Award (“Award”) for Units (“Units”) representing shares of the common stock of the Company (“Stock”).  This agreement to grant Stock Units (“Award Agreement” or “Grant Agreement”) is made effective as of the 13th day of November, 2020 (“Grant Date”).  If Grantee is a Covered Employee, this Award is designated as a “Performance Compensation Award” and as such is granted pursuant to Article 11 of the Plan.

RECITALS

A.The Board of Directors of the Company (“Board”) has adopted the Plan as an incentive to retain employees, officers, and non-employee Directors of, and Consultants to, the Company and to enhance the ability of the Company to attract, retain and motivate individuals   upon whose judgment, interest and special effort the successful conduct of the Company’s operation is largely dependent.

B.Under the Plan, the Board has delegated its authority to administer the Plan to the Compensation Committee of the Board (“Committee”).

C.The Committee has approved the granting of Units to the Grantee pursuant to the Plan to provide an incentive to the Grantee to focus on the long-term growth of the Company.

D.The Committee, which consists of three outside directors, has established the performance goals set forth herein.

E.To the extent not specifically defined herein or in the Grantee’s employment agreement or comparable agreement, as amended from time to time (“Employment Agreement”), each of the capitalized terms used in this Award Agreement shall have the meaning set forth in the Plan unless a contrary meaning is set forth in the Employment Agreement.

In consideration of the mutual covenants and conditions hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Grantee agree as follows: 

1.  Grant of Units.  Subject to (i) the terms and conditions of the Stock Incentive Plan and (ii) the execution and delivery of this Agreement, the Company hereby grants to the Grantee a Performance-Based Restricted Stock Units Award for /$AwardsGranted$/ Units (“Granted Units”), representing the right to receive payment of the same number of shares of Stock, subject to the terms and conditions of this Award Agreement and the provisions of the Plan, which terms are incorporated herein by reference.

 

1

 

2.  Earning Units and Related Information.  

2.1Earning Units.  Subject to the terms and conditions set forth in this Grant Agreement, the Grantee shall be entitled to receive payment for the number of Units earned by the Grantee over the period that begins on October 1, 2020 and ends on March 31, 2023 (“Performance Measurement Period”). 

2.2Performance Goals: There shall be three performance goals, weighted as follows for purposes of determining the potential incentive units for each participant: an EBIT (earnings before interest and tax) goal weighted at fifty percent (50%), a Net Sales goal weighted at thirty (30%), and a Total Shareholder Return goal weighted at twenty percent (20%).

2.3EBIT Goal. The EBIT Goal shall mean the relative growth of the Company’s EBIT (earnings before interest and tax) for the Performance Measurement Period (as reported in the financial statements included in the Company’s Forms 10-Q and 10-K), as compared to the median growth of EBIT (computed in terms of compound annual growth) of a peer group (namely, the Crop Protection segments (or where the business is entirely dedicated to Crop Protection or where the peer group member does not disclose sufficiently granular segment information, the entirety) of Bayer/Monsanto, BASF, Corteva, Syngenta, Adama, Nufarm, FMC, United Phosphorus and Isagro, collectively, the “AgPeers Group”). The Company’s reported EBIT for the Performance Measurement Period, for purposes of determining performance goal attainment, shall be adjusted to factor out the effect of the adoption of any new accounting standards or other changes in accounting principles. Where segment information exists for peer group Company’s we will calculate peer group EBIT by taking crop protection sales as a percentage of total sales multiplied by the total reported EBIT. When no segment information is available or not applicable because the entire Company is designated as crop protection, then we will take total reported EBIT. To the extent information is not available with respect to partial fiscal years, the Company shall use its reasonable discretion to reach a calculation for performance of the AgPeers Group over the Performance Measurement Period.

2.4Net Sales Goal: The Net Sales Goal shall mean the relative growth of the Company’s net sales for the Performance Measurement Period (as reported in the financial statements included in the Company’s Forms 10-Q and 10-K) as compared to the median growth of net sales (computed in terms of compound annual growth) for the AgPeers Group.  The Company’s reported net sales for the Performance Measurement Period, for purposes of determining performance goal attainment, shall be adjusted to factor out the effect of the adoption of any new accounting standards or other changes in accounting principles.

2.5Total Shareholder Return Goal:  The Total Shareholder Return Goal shall mean the relative growth of the fair market value of the Company’s stock price over the course of the Performance Measurement Period as compared to that of (x) the Russell 2000 Index (“R2000 TSR”) and (y) the median fair market value of the common stock of the comparator companies identified in the Corporation’s 2020 Proxy Statement (“Comparator Group TSR”).

 

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2.6Calculation of Units Earned.  The number of Units earned hereunder shall equal the sum of: 

(a) the product of ((number of Granted Units) x (EBIT Performance Factor) x (0.5)) plus 

(b) the product of ((number of Granted Units) x (Net Sales Performance Factor) x (0.3)) plus 

(c) the product of ((number of Granted Units) x (TSR Performance Factor for R2000 TSR) x (0.1)) plus

(d) the product of ((number of Granted Units) x (TSR Performance Factor for Comparator Group TSR) x (0.1)).

2.7Performance Factors – EBIT and Net Sales Goals.  A performance factor (“Performance Factor”) for Units based on each of the EBIT and Net Sales Goals shall be calculated based upon the table set forth below, it being understood that the 100% Goal for both EBIT and Net Sales shall be the median growth for the AgPeers group for each measure:  

 

	
Table 1 - PERFORMANCE FACTORS – EBIT & Net Sales

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
% Goal Achieved
	
 
	
% Target Payout1
	
 
	
 
	
 

	
 
	
≥125%
	
 
	
200%
	
 
	
 
	
 

	
 
	
117.5%-124.9%
	
 
	
150%
	
 
	
 
	
 

	
 
	
110%-117.4%
	
 
	
125%
	
 
	
 
	
 

	
 
	
100%
	
 
	
100%
	
 
	
 
	
 

	
 
	
80%
	
 
	
50%
	
 
	
 
	
 

	
 
	
<80%
	
 
	
0%
	
 
	
 
	
 

 

 

Table 2 - PERFORMANCE FACTORS – TSR Goal

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
% Goal Achieved
	
 
	
% Target Payout2
	
 
	
 
	
 
	
 

	
 
	
≥80thpercentile
	
 
	
200%
	
 
	
 
	
 
	
 

	
 
	
60th percentile
	
 
	
150%
	
 
	
 
	
 
	
 

	
 
	
50th percentile
	
 
	
100%
	
 
	
 
	
 
	
 

	
 
	
40th percentile
	
 
	
75%
	
 
	
 
	
 
	
 

	
 
	
30th percentile

<30th percentile 
	
 
	
50%

0%
	
 
	
 
	
 
	
 

 

	
	 

	
1 
	
 For performance between 80% and 109.9% of Goal Achieved, the payout percentage is interpolated on a linear basis between points on the “% Target Payout” scale.

	
2 
	
 For performance between 30th percentile and 80th percentile of Goal Achieved, the payout percentage is interpolated on a linear basis between points on the “% Target Payout” scale.

 

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Note:  Tables 1 and 2 present performance factors where the peers’ median is a positive number.  In the event that the peers’ median is negative, and the Company’s performance is also negative, the % Target Payout column will be the inverse of that presented above; thus, for example, with respect to EBIT, the maximum target payout (200%) will apply where the Company achieves 80% or less than the median, the target payout (100%) will apply where the Company achieves the median, and the minimum target payout (50%) will apply where the Company achieves 125% of the median (and 0% if the Company achieves more than 125% of the median).  In the event that the peers’ median is negative, and the Company’s performance is positive, then the award shall be the maximum payout amount, subject to reduction by the Compensation Committee in its discretion.  

 

Any Units that are unearned as of the end of the Performance Measurement Period will be forfeited. The number of earned Units that will become vested shall be determined pursuant to paragraph 3 below. Whether the Performance Goals for the Performance Measurement Period have been achieved shall be determined by the Company or Committee, as applicable, pursuant to paragraph 2.8 below.

 

2.8Final Determination of Performance Goals Attained.  The Company, or the Committee with respect to grants to employees who are Covered Employees, shall be responsible for determining in good faith whether, and to what extent, the Performance Goals set forth in this Grant Agreement have been achieved. The Company, or the Committee, as applicable, may reasonably rely on information from, and representations by, individuals within the Company in making such determination and when made such determination shall be final and binding on the Grantee.  No payment shall be made hereunder until the Committee has determined that the performance goals and any other material terms have been satisfied.

3.Vesting of Earned Units. Subject to paragraph 4 below, the Units earned pursuant to paragraph 2.1 shall vest in their entirety on two and one-half years after the date of award, that is, on May 13, 2023.

4.  Termination of Employment. 

4.1General.  Subject to the provisions of paragraph 4.2 below, (a) if the Company terminates Grantee’s employment without Cause or Grantee’s employment is terminated due to death or disability prior to the Vesting Date, then Units shall vest on a pro-rated basis corresponding with Grantee’s actual service during the Performance Measurement Period; and (b) if Company terminates Grantee’s employment for Cause, or Grantee terminates employment with the Company voluntarily, any unvested Units will be canceled and forfeited as of the date of Grantee’s termination of employment.  In other words, except as otherwise expressly provided to the contrary in paragraphs 4.1 and 4.2, Grantee must be continuously employed by the Company through the Vesting Date in order to receive any payment with respect to the Units that are scheduled to vest on such Vesting Date.

4.2Change in Control.  In the event the Company terminates the Grantee’s employment without Cause (including, if applicable, a termination for Good Reason as defined in the Grantee’s Employment Agreement or similar document) within two (2) years following a 

 

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Change in Control, then all Units earned pursuant to paragraph 2.1 but unvested shall become immediately vested.  The Vesting Date for any such earned Units that vest pursuant to this paragraph 4.2 shall be the date of the Grantee’s termination of employment.

5.Time and Form of Payment.  Subject to the provisions of this Award Agreement and the Plan, as Units vest on the Vesting Dates set forth in paragraph 3, 4.1 or 4.2, as the case may be, the Company will deliver to the Grantee the same number of whole shares of Stock, rounded up or down.  Subject to paragraph 21, the Company shall deliver the vested shares (if any) within ninety (90) days of the applicable Vesting Date.

6.Nontransferability.  The Units granted by this Grant Agreement shall not be transferable by the Grantee or any other person claiming through the Grantee, either voluntarily or involuntarily, except by will or the laws of descent and distribution or as otherwise provided under Article 13 of the Plan.

7.Adjustments.  In the event of a stock dividend or in the event the Stock shall be changed into or exchanged for a different number or class of shares of stock of the Company or of another corporation, whether through reorganization, recapitalization, stock split-up, combination of shares, merger or consolidation, there shall be substituted for each such remaining share of Stock then subject to this Grant Agreement the number and class of shares of stock into which each outstanding share of Stock shall be so exchanged, all as set forth in Section 5.3 of the Plan.

8.Delivery of Shares.  No shares of Stock shall be delivered under this Award Agreement until: (i) the Units vest pursuant to paragraph 3, 4.1 or 4.2 above, as the case may be; (ii) approval of any governmental authority required in connection with the Award Agreement, or the issuance of shares thereunder, has been received by the Company; (iii) if required by the Committee, the Grantee has delivered to the Company documentation (in form and content acceptable to the Company in its sole and absolute discretion) to assist the Company in concluding that the issuance to the Grantee of any share of Stock under this Grant Agreement would not violate the Securities Act of 1933 or any other applicable federal or state securities laws or regulations; (iv) the Grantee has complied with paragraph 14 below of this Award Agreement in order for the proper provision for required tax withholdings to be made; and (v) the Grantee has executed and returned this Grant Agreement to the Company (which, in the case of a Grant Agreement provided to the Grantee in electronic format, requires that the Grantee click the “ACCEPT” button). This Grant Agreement must be executed by Grantee no later than, the earlier of (i) three (3) months from the Grant Date; or (ii) the date preceding the first Vesting Date described in paragraph 3 of this Grant Agreement.

9.Securities Act.  The Company shall not be required to deliver any shares of Stock pursuant to the vesting of Units if, in the opinion of counsel for the Company, such issuance would violate the Securities Act of 1933 or any other applicable federal or state securities laws or regulations. 

10.Voting and Other Stockholder Related Rights.  The Grantee will have no voting rights or any other rights as a stockholder of the Company (e.g., no rights to cash dividends) with 

 

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respect to unvested Units until the Units become vested and the Company issues shares of Stock to the Grantee.

11.Delivery of Documents and Notices.  Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Grant Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Grantee by the Company or an Affiliate, or upon deposit in the U.S. Post Office or foreign postal service, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the current address on file with the Company or at such other address as such party may designate in writing from time-to-time to the other party.

11.1Description of Electronic Delivery.  The Plan documents, which may include but do not necessarily include: the Plan, a grant notice, this Grant Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Grantee electronically. In addition, the Grantee may deliver electronically any grant notice and this Grant Agreement to the Company or to such third party involved in administering the Plan as the Company may designate from time-to-time.  Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

11.2Consent to Electronic Delivery.  The Grantee acknowledges that Grantee has read paragraph 11.1 and consents to the electronic delivery of the Plan documents and any grant notice.  The Grantee acknowledges that Grantee may receive from the Company a paper copy of any documents delivered electronically at no cost by contacting the Company by telephone or in writing.

12.Administration.  This Award Agreement is subject to the terms and conditions of the Plan and the Plan shall in all respects be administered by the Committee in accordance with the terms and provisions of the Plan.  The Committee shall have the sole and complete discretion with respect to all matters reserved to it by the Plan and decisions of the majority of the Committee with respect to the Plan and this Award Agreement shall be final and binding upon the Grantee and the Company.  In the event of any conflict between the terms and conditions of this Grant Agreement and the Plan, the provisions of the Plan shall control.

13.Continuation of Employment.  This Grant Agreement shall not be construed to confer upon the Grantee any right to continue employment with the Company and shall not limit the right of the Company, in its sole and absolute discretion, to terminate Grantee’s employment at any time.

14.Responsibility for Taxes and Withholdings. Regardless of any action the Company or the Grantee’s actual employer (“Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Grantee’s participation in the Plan and legally applicable to the Grantee (“Tax-Related Items”), 

 

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the Grantee acknowledges that the ultimate liability for all Tax-Related Items is and remains the Grantee’s responsibility and may exceed the amount actually withheld by the Company or the Employer.  The Grantee further acknowledges that the Company and/or the Employer: (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Units, including the grant of the Units, the vesting of Units, the conversion of the Units into shares or the receipt of an equivalent cash payment, the subsequent sale of any shares acquired at vesting and the receipt of any dividends and/or dividend equivalents; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Units to reduce or eliminate the Grantee’s liability for Tax-Related Items or achieve any particular tax result.  Further, if the Grantee has become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, the Grantee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

Prior to any relevant taxable or tax withholding event, as applicable, the Grantee shall pay, or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.  In this regard, pursuant to Article 17 of the Plan, if permissible under local law and unless otherwise provided by the Committee prior to the vesting of the shares, the Grantee authorizes the Company or the Employer, or their respective agents, to withhold all applicable Tax-Related Items in shares of Stock to be issued upon vesting/settlement of the Units.  Alternatively, or in addition, the Grantee authorizes the Company and/or the Employer, or their respective agents, at the Company’s discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:  (i) withholding from the Grantee’s wages or other cash compensation paid to the Grantee by the Company and/or the Employer; (ii) withholding from proceeds of the sale of shares of Stock acquired upon vesting/settlement of the Units either through a voluntary sale or through a mandatory sale arranged by the Company (on the Grantee’s behalf pursuant to this authorization); (iii) personal check or other cash equivalent acceptable to the Company; or (iv) any other means as determined appropriate by the Company or the Committee, including, without limitation, election by Grantee to forfeit a portion of the Vested shares on the vesting date as consideration for Tax-Related Items.  

The Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates.  If the obligation for Tax-Related Items is satisfied by withholding a number of shares of Stock as described herein, for tax purposes, the Grantee shall be deemed to have been issued the full number of shares of Stock subject to the Award, notwithstanding that a number of the shares of Stock are held back solely for the purpose of paying the Tax-Related Items due as a result of the Grantee’s participation in the Plan.  

Finally, the Grantee shall pay to the Company or to the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Grantee’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to issue or deliver shares or the proceeds of the sale of shares of Stock if the Grantee fails to comply with his or her obligation in connection with the Tax-Related Items. 

 

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15.Amendments.  Unless otherwise provided in the Plan or this Grant Agreement, this Grant Agreement may be amended only by a written agreement executed by the Company and the Grantee.

16.Integrated Agreement.  Any grant notice, this Grant Agreement and the Plan shall constitute the entire understanding and agreement of the Grantee and the Company with respect to the subject matter contained herein or therein and supersedes any prior agreements, understandings, restrictions, representations, or warranties between the Grantee and the Company with respect to such subject matter other than those as set forth or provided for herein or therein.  To the extent contemplated herein or therein, the provisions of any grant notice and this Grant Agreement shall survive any settlement of the Award and shall remain in full force and effect.

17.Severability.  If one or more of the provisions of this Grant Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Grant Agreement to be construed so as to foster the intent of this Grant Agreement and the Plan.

18.Counterparts.  Any grant notice and this Grant Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

19.Governing Law and Venue.  This Grant Agreement shall be interpreted and administered under the laws of the State of Delaware.  For purposes of litigating any dispute that arises under this grant or this Award, the parties hereby submit to and consent to the jurisdiction of the State of California, agree that such litigation shall be conducted in the courts of Orange County, California, or the federal courts for the United States for the District of California, where this grant is made and/or to be performed.

20.Other.  The Grantee represents that the Grantee has read and is familiar with the provisions of the Plan and this Grant Agreement, and hereby accepts the Award subject to all of their terms and conditions. 

21.Section 409A Compliance.  The Company believes, but does not and cannot warrant or guaranty, that the payments due pursuant to this Grant Agreement qualify for the short-term deferral exception to Section 409A of the Code as set forth in Treasury Regulation Section 1.409A-1(b)(4).  Notwithstanding anything to the contrary in this Grant Agreement, if the Company determines that neither the short-term deferral exception nor any other exception to Section 409A applies to the payments due pursuant to this Grant Agreement, to the extent any payments are due on the Grantee’s termination of employment, the term “termination of employment” shall mean “separation from service” as defined in Treasury Regulation Section 1.409A-1(h).  In addition, if Grantee is a “specified employee” (as defined in Treasury Regulation Section 1.409A-1(i)) and any payments due pursuant to this Award Agreement are payable on the Grantee’s “separation from service,” then such payments shall be paid on the first business day 

 

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following the expiration of the six month period following the Grantee’s “separation from service.”  This Grant Agreement shall be operated in compliance with Section 409A or an exception thereto and each provision of this Grant Agreement shall be interpreted, to the extent possible, to comply with Section 409A or to qualify for an applicable exception.  The Grantee remains solely responsible for any adverse tax consequences imposed upon the Grantee by Section 409A.  

22.Confidentiality.  The Grantee acknowledges and agrees that the terms of this Award Agreement are considered proprietary information of the Company.  The Grantee hereby agrees that Grantee shall maintain the confidentiality of these matters to the fullest extent permitted by law and shall not disclose them to any third party.  If the Grantee violates this confidentiality provision, without waiving any other remedy available, the Company may revoke this Award without further obligation or liability, and the Grantee may be subject to disciplinary action, up to and including the Company’s termination of the Grantee’s employment for Cause.

23.Appendix.  Notwithstanding any provisions in this Grant Agreement, the grant of the Units shall be subject to any special terms and conditions set forth in any appendix (or any appendices) to this Grant Agreement for the Grantee’s country (the “Appendix”).  Moreover, if the Grantee relocates to one of the countries included in the Appendix, the special terms and conditions for such country will apply to the Grantee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan.  The Appendix constitutes part of this Grant Agreement.

24.Imposition of Other Requirements.  The Company reserves the right to impose other requirements on the Grantee’s participation in the Plan, on the Units and on any shares of Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.  Further, the Award and profits under this Grant Agreement are subject to the Company’s compensation recovery policy or policies (and related Company practices) as such may be in effect from time-to-time, as a result of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and similar or related laws, rules and regulations.

 

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IN WITNESS WHEREOF, the Company has caused this Grant Agreement to be signed by its duly authorized representative and the Grantee has signed this Grant Agreement as of the date first written above.

 

	
AMERICAN VANGUARD CORPORATION

	
 
	
 

	
By:
	
/s/Timothy J. Donnelly

	
 
	
Timothy J. Donnelly

	
 
	
CAO, General Counsel & Secretary

 

	
GRANTEE

	
 
	
 

	
By:
	
 

	
 
	
/$ParticipantName$/

 

 

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