EXHIBIT 10(P)
EMPLOYMENT AGREEMENT, DATED AS OF MAY 19, 1995, BETWEEN THE SCOTTS
COMPANY AND ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of May 19, 1995,
by and between The Scotts Company, an Ohio corporation (the "Company"), and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Employee").
WHEREAS, the Company and ▇▇▇▇▇'▇ Miracle-Gro Products, Inc., a New
Jersey corporation ("Miracle-Gro"), have entered into an Agreement and Plan of
Merger (the "Merger Agreement"), dated as of January 26, 1995, and amended as
of May 1, 1995;
WHEREAS, in connection with the transactions contemplated by the
Merger Agreement and in recognition of the Employee's experience and
abilities, the Company desires to assure itself of the employment of the
Employee in accordance with the terms and conditions provided herein; and
WHEREAS, the Company has entered into an Agreement Containing
Consent Order and an Agreement to Hold Separate (collectively, the "Consent
Order") with the Federal Trade Commission; and
WHEREAS, the Employee wishes to perform services for the Company
in accordance with the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the premises and the
respective covenants and agreements of the parties herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Employee, and
the Employee hereby agrees to perform services for the Company, in
the terms and conditions set forth herein.
2. TERM. This Agreement is for the three-year period (the "Term")
commencing at the earliest time permissible that does not conflict
with the Consent Order (the "Effective Time") and terminating on the
third anniversary of the Effective Time, or upon the Employee's
earlier death, disability or other termination of employment
pursuant to Section 7 hereof; PROVIDED, HOWEVER, that commencing on
the second anniversary of the Effective Time and each anniversary
thereafter the Term shall automatically be extended for one
additional year beyond its otherwise scheduled expiration unless,
not later than 30 days prior to any such anniversary, either party
hereto shall have notified the other party hereto in writing that
such extension shall not take effect.
3. POSITIONS. During the Term, the Employee shall serve as a Senior
Vice President of the Company and Manager of the Company's Consumer
Garden Group.
4. DUTIES AND REPORTING RELATIONSHIP.
(a) During the Term, the Employee shall, on a full time basis, use
his skills and render services to the best of his abilities in
supervising and conducting the operations of the Company;
PROVIDED, HOWEVER, that, subject to Section 10 hereof, the
foregoing shall not prevent the Employee from devoting a
portion of his time and efforts to his personal business
affairs so long as they do not materially interfere with the
performance of his duties hereunder. The Employee shall report
directly to the Chief Executive Officer of the Company.
(b) The Employee will be permitted to serve on the boards of other
for-profit and not-for-profit organizations so long as such
activities do not materially interfere with the performance of
his duties hereunder.
5. PLACE OF PERFORMANCE. The Employee shall primarily perform his
duties and conduct his business at the offices of the Company,
located in Marysville, Ohio, except for required travel on the
Company's business.
6. COMPENSATION AND RELATED MATTERS.
(a) ANNUAL BASE SALARY. Commending on the Effective Time, the
Company shall pay to the Employee an annual base salary (the
"Base Salary") at a rate not less than $200,000, such salary to
be paid in conformity with the Company's payroll policies
relating to its senior executive officers. The Base Salary may,
from time to time, be increased, subject to and in accordance
with the performance review procedures for senior executive
officers of the Company; PROVIDED, HOWEVER, if the Employee's
Base Salary is increased, it shall not thereafter be decreased
during the Term.
(b) EXECUTIVE BENEFIT PLANS. During the Term, the Employee shall be
entitled to participate in those incentive plans, programs and
arrangements which are available to other senior executive
officers of the Company (the "Benefit Plans"), including, but
not limited to, (i) annual and long-term bonus plans (payments
in any given year with respect thereto, collectively, the
"Bonus") and (ii) stock option and other equity-based
compensation plans now or hereinafter in effect. The Employee
shall be provided benefits under the Benefit Plans
substantially equivalent (in the aggregate) to the benefits
provided to other senior executive officers of the Company and
on substantially similar terms and conditions as such benefits
are provided to other senior executive officers of the Company.
(c) PENSION AND WELFARE BENEFITS. During the Term, the Employee
shall be eligible to participate in the pension and retirement
plans (the "Pension Plans") provided to other senior executive
officers of the Company (including, without limitation, the
Company's Pension Plan and the Company's Excess Benefit Plan),
and participate fully in all health benefits, insurance
programs and other similar employee welfare benefit
arrangements available to other senior executive officers of
the Company and shall be provided benefits under such plans and
arrangements substantially equivalent (in the aggregate) to the
benefits provided to other senior executive officers of the
Company and on substantially similar terms and conditions as
such benefits are provided to other senior executive officers
of the Company. All service with Miracle-Gro accrued by the
Employee during his employment therewith shall be preserved and
maintained for eligibility and vesting purposes under the
Pension Plans.
(d) STOCK OPTIONS. Effective as of the date hereof, the Company
shall grant to the Employee a non-qualified stock option (the
"Option") to acquire 24,000 of the Company's common shares
without par value ("Common Stock"), pursuant to the terms and
conditions of the Company's 1992 Long Term Incentive Plan, or
any successor or replacement plan thereto (the "Plan"), and
pursuant to a stock option agreement which shall provide terms
and conditions no less favorable to the Employee than any stock
option agreement entered into by and between the Company and
its other senior executive officers.
(e) FRINGE BENEFITS AND PERQUISITES. During the Term, the Company
shall provide to the Employee all of the fringe benefits and
perquisites that are provided to other senior executive
officers of the Company, and the Employee shall be entitled to
receive any other fringe benefits or perquisites that become
available to other senior executive officers of the Company
subsequent to the Effective Time. Without limiting the
generality of the foregoing, the Company shall provide the
Employee with the following benefits during the Term: (i) paid
vacation, paid holidays and sick leave in accordance with the
Company's standard policies for its senior executive officers,
which policies shall provide the Employee with benefits no less
favorable (in the aggregate) than those provided to other
senior executive officers of the Company; (ii) an automobile
allowance no less than any such allowance provided to any other
senior executive officer of the Company; (iii) reimbursement
for living accommodations in the general Marysville, Ohio
vicinity, for a period of eighteen months following the
Effective Time, while conducting the Company's business at such
location, substantially equivalent to accommodations provided
to any other senior executive officer of the Company and
reasonably satisfactory to the Employee; (iv) reimbursement for
reasonable travel expenses (whether business or personal travel
or otherwise), for a period of eighteen months following the
Effective Time, associated with the Employee's travel by and
between Marysville, Ohio, New York, New York and Vermont
(whether by commercial aircraft, the Employee's personal
aircraft or otherwise, but in any case limited to the cost of
undiscounted commercial airline travel);
(f) BUSINESS EXPENSES. The Employee will be reimbursed for all
ordinary and necessary business expenses incurred by him in
connection with his employment (including without limitation,
expenses for travel and entertainment incurred in conducting or
promoting business for the Company) upon submission by the
Employee of receipts and other documentation in accordance with
the Company's normal reimbursement procedures.
7. TERMINATION. The Employee's employment hereunder may be terminated
without breach of this Agreement only under the following circumstances:
(a) DEATH. The Employee's employment hereunder shall terminate upon
his death.
(b) DISABILITY. If, as a result of the Employee's incapacity due to
physical or mental illness, the Employee shall have been absent
from his duties hereunder for the entire period of six
consecutive months, and within thirty (30) days after written
Notice of Termination (as defined in paragraph (e) below) is
given, shall not have returned to the performance of his duties
hereunder, the Company may terminate the Employee's employment
hereunder for "Disability."
(c) CAUSE. The Company may terminate the Employee's employment
hereunder for "Cause." For purposes of this Agreement, the
Company shall have "Cause" to terminate the Employee's
employment hereunder (i) upon the Employee's conviction for the
commission of an act or acts constituting a felony under the
laws of the United States or any state thereof, or (ii) upon
the Employee's willful and continued failure to substantially
perform his duties hereunder (other than any such failure
resulting from the Employee's incapacity due to physical or
mental illness), after written notice has been delivered to the
Employee by the Company, which notice specifically identifies
the manner in which the Employee has not substantially
performed his duties, and the Employee's failure to
substantially perform his duties is not cured within ten
business days after notice of such failure has been given to
the Employee. For purposes of this Section 7(c), no act, or
failure to act, on the Employee's part shall be deemed
"willful" unless done, or omitted to be done, by the Employee
not in good faith and without reasonable belief that the
Employee's act, or failure to act, was in the best interest of
the Company.
(d) TERMINATION BY THE EMPLOYEE. The Employee may terminate his
employment hereunder for "Good Reason." "Good Reason" for
termination by the Employee of the Employee's employment shall
mean the occurrence (without the Employee's express written
consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act
or failure to act described in paragraph (i), (v), (vi), or
(vii) below, such act or failure to act is corrected prior to
the Date of Termination specified in the Notice of Termination
given in respect thereof:
(i) the assignment to the Employee of any duties inconsistent
with the Employee's status as a senior executive officer
of the Company or a substantial adverse alternation in the
nature or status of the Employee's responsibilities;
(ii) a reduction by the Company of the Base Salary as in effect
on the date hereof or as the same may be increased from
time to time;
(iii)the relocation of the Company's principal executive
offices to a location that is either (i) more than 30
miles from Marysville, Ohio or (ii) outside of the New
York City metropolitan area;
(iv) the failure by the Company, without the Employee's
consent, to pay to the Employee any portion of the
Employee's current compensation, or to pay to the Employee
any portion of an installment of deferred compensation
under any deferred compensation program of the Company,
within seven (7) days of the date such compensation is
due;
(v) the failure by the Company to continue in effect any
compensation or benefit plan in which the Employee is
entitled to participate which is material to the
Employee's total compensation, unless an equitable
arrangement has been made with respect to such plan, or
the failure by the Company to continue the Employee's
participation therein (or in such substitute or
alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits
provided and the level of the Employee's participation
relative to other participants;
(vi) the failure by the Company to continue to provide the
Employee with benefits substantially similar to those
enjoyed by the Employee under any of the Company's
pension, life insurance, medical, health and accident, or
disability plans in which the Employee is entitled to
participate, the taking of any action by the Company which
would directly or indirectly materially reduce any of such
benefits or deprive the Employee of any material fringe
benefit or perquisite enjoyed by the Employee, or the
failure by the Company to provide the Employee with the
number of paid vacation days to which the Employee is
entitled pursuant to this Agreement; or
(vii)any purported termination of the Employee's employment
which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph (e) below; for
purposes of this Agreement, no such purported termination
shall be effective.
The Employee's right to terminate the Employee's employment
for Good Reason shall not be affected by the Employee's incapacity due to
physical or mental illness. The Employee's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
(e) NOTICE OF TERMINATION. Any termination of the Employee's
employment by the Company or by the Employee (other than
termination under Section 7(a) hereof) shall be communicated by
written Notice of Termination to the other party hereto in
accordance with Section 12 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice that
shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so
indicated. Further, a Notice of Termination for Cause is
required to include a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board (after
reasonable notice to the Employee and an opportunity for the
Employee, together with the Employee's counsel, to be heard
before the Board) finding that, in the good faith opinion of
the Board, the Employee was guilty of conduct set forth in the
definition of Cause herein, and specifying the particulars
thereof.
(f) DATE OF TERMINATION. "Date of Termination" shall mean (i) if
the Employee's employment is terminated by his death, the date
of his death, (ii) if the Employee's employment is terminated
pursuant to paragraph (b) above, thirty (30) days after Notice
of Termination is given (provided that the Employee shall not
have returned to the performance of his duties on a full-time
basis during such thirty (30) day period), and (iii) if the
Employee's employment is terminated pursuant to paragraph (c)
or (d) above, the date specified in the Notice of Termination;
PROVIDED, HOWEVER, that if within thirty (30) days after any
Notice of Termination is given the party receiving such Notice
of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be
the date on which the dispute is finally determined. If within
fifteen (15) days after any Notice of Termination is given, or,
if later, prior to the Date of Termination (as determined
without regard to this Section 7(f)), the party receiving such
Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally resolved,
either by mutual written agreement of the parties or by a final
judgment, order or decree of a court of competent jurisdiction
(which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected);
provided further that the Date of Termination shall be extended
by a notice of dispute only if such notice is given in good
faith and the party giving such notice pursues the resolution
of such dispute with reasonable diligence.
(g) COMPENSATION DURING DISPUTE. If a purported termination occurs
during the term of this Agreement, and such termination is
disputed in accordance with Section 7(f) hereof, the Company
shall continue to pay the Employee the full compensation in
effect when the notice giving rise to the dispute was given
(including, but not limited to, Base Salary) and continue the
Employee as a participant in all compensation, benefit and
insurance plans in which the Employee was participating when
the notice giving rise to the dispute was given, until the
dispute is finally resolved. Amounts paid under this Section
7(g) are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.
8. COMPENSATION UPON TERMINATION OR DURING DISABILITY
(a) DISABILITY OR DEATH. During any period that the Employee fails to
perform his duties hereunder as a result of incapacity due to
physical or mental illness, the Employee shall continue to receive
his full Base Salary, as well as other applicable employee benefits
provided to other senior executives of the Company, until his
employment is terminated pursuant to Section 7(b) hereof. In the
event the Employee's employment is terminated pursuant to Section
7(a) or 7(b) hereof, then as soon as practicable thereafter, the
Company shall pay the Employee or the Employee's Beneficiary (as
defined in Section 11(b) hereof), as the case may be, (i) all unpaid
amounts, if any, to which the Employee was entitled as of the Date
of Termination under Section 6(a) hereof and (ii) all unpaid amounts
to which the Employee was then entitled under the Benefit Plans, the
Pension Plans and any other unpaid employee benefits, perquisites or
other reimbursements (the amounts set forth in clauses (i) and (ii)
above being hereinafter referred to as the "Accrued Obligation").
(b) TERMINATION FOR CAUSE; VOLUNTARY TERMINATION WITHOUT GOOD REASON. If
the Employee's employment is terminated by the Company for Cause or
by the Employee other than for Good Reason, then the Company shall
pay all Accrued Obligations to the Employee and the Company shall
have no further obligations to the Employee under this Agreement.
(c) TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON. If (i) the
Company shall terminate the Employee's employment, other than for
Disability or for Cause, or (ii) the Employee shall terminate his
employment for Good Reason, then:
(1) the Company shall pay to the Employee, within ten (10) days
after the Date of Termination, the Accrued Obligations;
(2) the Company shall pay to the Employee, within ten (10) days
after the Date of Termination, a lump sum amount in cash equal
to three (3) multiplied by the sum of (i) the Employee's Base
Salary as in effect immediately prior to the circumstances
giving rise to the Notice of Termination plus (ii) the highest
annual Bonus paid to the Employee in respect of the three years
preceding the Date of Termination;
(3) to the extent permitted under the terms and conditions of each
applicable plan or arrangement, the Company shall pay to the
Employee a lump sum payment, in cash, within ten (10) days
after the Date of Termination, equal to the Employee's accrued
benefits (or the actuarial equivalent if applicable) as of the
Date of Termination under the Pension Plans and the Benefit
Plans, In addition, to the extent permitted under the terms and
conditions of each applicable plan or arrangement, for purposes
of computing the benefits payable to the Employee under the
Pension Plans and Benefit Plans in which the Employee
participated as of the Date of Termination, the Employee shall
be treated as if he had continued in employment for three (3)
years following the Date of Termination; and
(4) for a period of three (3) years following the Date of
Termination the Company shall pay all costs and expenses
associated with the continuation of coverage of the Employee
(as contemplated under Section 4980B of the Internal Revenue
Code of 1986, as amended) under applicable medical, disability
and life insurance plans as existed immediately prior to the
circumstances giving rise to the Notice of Termination;
PROVIDED, HOWEVER, that such coverage shall be reduced to the
extent that the Employee obtains similar coverage paid by a
subsequent employer.
9. NON-DISCLOSURE. The parties hereto agree, recognize and acknowledge that
during the Term the Employee shall obtain knowledge of confidential
information regarding the business and affairs of the Company. It is
therefore agreed that the Employee will respect and protect the
confidentiality of all confidential information pertaining to the
Company, and will not (i) without the prior written consent of the
Company, (ii) unless required in the course of the Employee's employment
hereunder, or (iii) unless required by applicable law, rules, regulations
or court, governmental or regulatory authority order or decree, disclose
in any fashion such confidential information to any person (other than a
person who is a director of, or who is employed by, the Company or any
subsidiary or who is engaged to render services to the Company or any
subsidiary) at any time during the Term.
10. COVENANT NOT TO COMPETE. (a) Employee hereby agrees that for a period of
three (3) years following the termination of this Agreement (other than a
termination of the Employee's employment (i) by the Employee for Good
Reason, or (ii) by the Company other than for Cause or Disability) (the
"Restricted Period") the Employee shall not, directly or indirectly,
whether acting individually or through any person, firm, corporation,
business or any other entity:
(i) engage in, or have any interest in any person, firm, corporation,
business or other entity (as an officer, director, employee, agent,
stockholder or other security holder, creditor, consultant or
otherwise) that engages in any business activity where any aspect of
the business of the Company is conducted, or planned to be
conducted, at any time during the Restricted Period, which business
activity is the same as, similar to or competitive with the Company
as the same may be conducted from time to time;
(ii) interfere with any contractual relationship that may exist from time
to time of the business of the Company, including, but not limited
to, any contractual relationship with any director, officer,
employee, or sales agent, or supplier of the Company; or
(iii)solicit, induce or influence, or seek to induce or influence, any
person who currently is, or from time to time may be, engaged in or
employed by the Company (as an officer, director, employee, agent or
independent contractor) to terminate his or her employment or
engagement by the Company.
(b) Notwithstanding anything to the contrary contained herein,
Employee, directly or indirectly, may own publicly traded stock
constituting not more than three percent (3%) of the
outstanding shares of such class of stock of any corporation
if, and as long as, Employee is not an officer, director,
employee or agent of, or consultant or advisor to, or has any
other relationship or agreement with such corporation.
(c) Employee acknowledges that the non-competition provisions
contained in this Agreement are reasonable and necessary, in
view of the nature of the Company and his knowledge thereof, in
order to protect the legitimate interests of the Company.
11. SUCCESSORS; BINDING AGREEMENT.
(a) The Company shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by
agreement in form and substance reasonably satisfactory to the
Employee, to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior
to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Employee to compensation from
the Company in the same amount and on the same terms as he would be
entitled to hereunder if he terminated his employment for Good
Reason, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed
the Date of Termination. As used in the Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid that executes and delivers the
agreement provided for in this Section 11 or that otherwise becomes
bound by all the terms and provisions of this Agreement by operation
of law.
(b) This Agreement and all rights of the Employee hereunder shall inure
to the benefit of and be enforceable by the Employee's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devises and legatees. If the Employee should die while
any amounts would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement
to the Employee's devisee, legatee, or other designee or, if there
be no such designee, to the Employee's estate (any of which is
referred to herein as a "Beneficiary").
12. NOTICE. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company:
The Scotts Company
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
If to the Employee:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
13. MISCELLANEOUS. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Employee and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with,
any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party
which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the state of Ohio without regard to its conflicts
of law principles.
14. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect. To the extent that any of the provisions
hereof are inconsistent with the provisions of the Consent Order, the
provisions of the Consent Order shall govern in all respects.
15. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together
will constitute one and the same instrument.
16. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and
supersedes any and all other prior agreements, promises, covenants,
arrangements, communications representations or warranties, whether oral
or written, by any officer, employee or representative of any party
hereto; and any prior agreement of the parties hereto in respect of the
subject matter contained herein is hereby terminated and cancelled.
IN WITNESS WHEREOF, the parties here executed this Agreement as of
the date and year first above written.
THE SCOTTS COMPANY
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ___________________________
Title: __________________________
EMPLOYEE
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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