EXHIBIT 10(y)
XXXXX XXXXXXXX
PRESIDENT AND CHIEF EXECUTIVE OFFICER
December 20, 2001
Dear Xxx:
This letter is intended to memorialize the agreements we have reached
regarding your continued employment with The Scotts Company (the "Company"). We
have agreed as follows:
1. You agree to continue in your present position as Executive
Vice President - North America until the earlier of:
(a) September 30, 2002 (or such other date as you and the
Company may hereafter mutually agree);
(b) The date the Company terminates your employment
without Cause (as that term is defined in the
Company's 1996 Stock Option Plan);
(c) The date of your death or total disability; or
(d) The effective date of a Change in Control (as that
term is defined in the Company's 1996 Stock Option
Plan).
Each of the dates set forth above is hereinafter referred to
as the "Termination Date."
2. On or before September 30, 2002, the Company will, at its sole
discretion, offer you one of the following options:
(a) Continued employment in your current position beyond
September 30, 2002 (defined as an "Offer of Continued
Employment"); or
(b) Termination of your employment.
In the event the Company makes an Offer of Continued
Employment, you may elect to accept or decline such offer. If
you accept such offer, your eligibility to receive the
termination benefits set forth herein shall be extended to
such date as you and the Company agree, or the date upon which
the Company terminates your employment without Cause.
In the event you decline the Offer of Continued Employment,
you will be expected to retire on September 30, 2002, and you
will be entitled to receive the termination benefits set forth
herein. Assuming you retire on September 30, 2002, you will be
eligible for a pay out under the 2002 Executive Annual
Incentive Plan, but you will not be eligible for any further
stock option grants.
3. On the Termination Date, you will be entitled to receive the
following benefits:
(a) A severance payment (payable in 12 equal monthly
installments, beginning on the 25th day of the month
following the Termination Date) equal to your current
annual salary plus your target bonus in effect at the
Termination Date (less required tax withholding).
(b) Medical and dental coverage equal to that in effect
at the Termination Date will be provided by the
Company at no charge to you during the 12 months you
are receiving the severance payments set forth in
paragraph 3(a) above. Thereafter, you will be
entitled to continue to participate in the Company's
group medical and dental plans under COBRA until your
65th birthday. The Company shall make a lump sum
payment to you on the date of the last monthly
severance payment equal to the amount necessary to
pay the premiums for group medical and dental
coverage through your 65th birthday, grossed up for
taxes. An example of the calculations used to
determine the amount of this lump sum payment is
attached to this letter as Exhibit A.
After you reach your 65th birthday, you will be
entitled to participate in the Xxxxx'x Retiree
(Medical) Plan, which designates Medicare, as the
primary medical program for post age 65.
(c) You presently have 82,000 options to purchase common
shares of the Company that have vested and 47,000
options that have not vested. On the Termination
Date, you shall be considered to have retired from
the Company. As a result, all of your then
outstanding options shall vest and may thereafter be
exercised in accordance with the terms and conditions
of the Company's 1996 Stock Option Plan which states
that you will have five years from the Termination
Date (September 30, 2002), or the end of the Option
term, which ever is the shorter period.
4. I am certain you understand that the agreements set forth in
this letter do not apply should you voluntarily terminate your
employment with the Company prior to September 30, 2002, or
should the Company terminate your employment for Cause.
5. Should you die or become totally disabled following the
Termination Date but before the payments due you under
paragraphs 3(a) and 3(b) above have been made to you, any
remaining payments shall be made to you (or your beneficiary,
as applicable) within 90 days of your death or total
disability.
6. This agreement is subject to final approval by Xxxxxx' Board
of Directors. I expect to ask for the Board's approval at its
next meeting in January 2002.
Two copies of this letter are enclosed. Please indicate your agreement
with the terms set forth herein by executing one copy of this letter and
returning it to me. The second copy is for your records.
Bob, I am pleased that we could reach agreement on the matters set
forth above and I look forward to working with you for the balance of the fiscal
year.
Very truly yours,
The Scotts Company
By: /s/ XXXXX XXXXXXXX
-------------------------------------
Xxxxx Xxxxxxxx
President and Chief Executive Officer
Dear Xxx:
I agree that this letter sets forth the agreements you and I have
reached regarding my continued employment with the Company.
/s/ X. XXXXXX XXXXXXX
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Dated: December __, 2001 X. Xxxxxx Xxxxxxx
EXHIBIT A
CALCULATION OF LUMP SUM PAYMENT
1. Assume retirement from the Company on September 30, 2002 at age 59.
2. Assume the Company pays for medical and dental coverage through
September 30, 2002.
3. Assume eligibility for Medicare at age 65 beginning November 1, 2007.
Calculation of 61 months of COBRA payments, grossed up for tax purposes and
payable to Xx. Xxxxxxx in a lump sum on September 25, 2003:
Xx. Xxxxxxx'x applicable COBRA rate today:....................... $ 632.74
Times 61 months.................................................. $ 38,597.14
Gross up for taxes (times 1.65).................................. $ 25,088.14
Lump sum due..................................................... $ 63,685.28
