EX-10.1
2
exhibit1.htm
EX-10.1
SEPARATION AGREEMENT
AND RELEASE OF ALL CLAIMS
NOTICE: READ BEFORE YOU SIGN!
This agreement contains a RELEASE. We advise that you consult an ATTORNEY.
THIS SEPARATION AGREEMENT AND RELEASE OF ALL CLAIMS (“Agreement”) is made and entered
into by and between Xxxx X. Xxxxx (“Employee”) and The Scotts Company LLC (“Company”) and shall be
fully effective upon execution by both parties (the “Effective Date”);
WHEREAS, Employee will cease to be employed on October 28, 2010 (the “Termination Date”) and
the provisions of this Agreement relating to Employee’s resignations will be effective immediately
upon his execution of this Agreement;
WHEREAS, Employee and Company wish to enter into an agreement, superseding all prior
agreements, providing for an orderly separation of Employee’s employment with Company and any/all
other positions held with the Board and/or the Company’s affiliates, and providing for severance
pay and additional consideration for Employee to which Employee is not otherwise entitled;
NOW THEREFORE, in exchange for and in consideration of the promises and covenants contained
herein, along with other good and valuable consideration, the receipt of which is expressly
acknowledged hereby, the parties agree as follows:
| 1. | | Prior Employment Agreement. Employee acknowledges that the parties are parties to an
Employment Agreement dated October 1, 2008, including any and all amendments and attachments
to same (the “Prior Employment Agreement”). This Agreement supersedes the Prior Employment
Agreement and any and all other agreements, with the following exceptions: |
| | (A) | | Except as provided in Section 1(B), Employee remains bound by the
obligations referenced in Article 10 of the Prior Employment Agreement, including but
not limited to the “Employee Confidentiality, Noncompetition, Nonsolicitation
Agreement” that Employee signed on September 29, 2008 and all supplemental Lists of
Competitors incorporated into this agreement. |
| | (B) | | The Parties agree that the Company will not enforce the provisions of Section
5(a) or 5(b) of the Employee Confidentiality, Noncompetition, Nonsolicitation
Agreement against the Employee if Employee is offered and accepts employment as
President, Chief Operating Officer and/or Chief Executive Officer of Lowes Companies,
Inc., The Home Depot, Inc. or Wal-Mart Stores, Inc. All other provisions of the
Confidentiality, Noncompetition, Nonsolicitation Agreement, including without
limitation the provisions relating to Confidential Information, Intellectual Property,
and Non-solicitation, remain in full force and effect. |
| | (C) | | All written award agreements other than the specific award agreement
referenced in Section 4 and the modifications noted in Section 4. |
| 2. | | Benefits pursuant to the Prior Employment Agreement. Employee acknowledges and
agrees that his separation from employment is a voluntary resignation and is without “Good
Reason,” as defined in the Prior Employment Agreement. Immediately upon execution of this
Agreement by Employee, Employee acknowledges his resignation of employment with the Company,
the Board of Directors and any other positions he may hold with the Company and any of the
Company’s affiliates. Specifically, Employee’s act of signing this Agreement is an effective
tender of his resignation as a member of the Board to the Chairman of the Board of Directors
for the Scotts-Miracle Gro Company; an effective resignation from his current position as
President and Chief Operating Officer of the Company; and an effective resignation from any
other offices, directorships or committee memberships he may hold with the Company or any of
its subsidiaries or affiliates. Such resignations shall be effective as of the Termination
Date. |
| 3. | | Severance Benefits. As consideration for the promises exchanged in this Agreement,
the Company agrees to provide Employee with the following Severance Benefits: |
| | (A) | | Cash Severance. Company will provide Employee with Severance Pay in
the gross amount of five million and twenty-five thousand dollars and no cents
($5,025,000.00) in a lump sum payment, which is in excess of any amounts to which
Employee is entitled absent this Agreement. Such payment will be made within thirty
days of the Effective Date. The Severance Benefits shall be subject to withholding
and deductions required by federal, state, and local taxing authorities. Except as
specifically provided in this Agreement, the Severance Benefits described in this
Agreement shall be the only amounts paid by or on behalf of the Company and no
interest on this amount shall be paid. Employee acknowledges the receipt of all wages
and other compensation or benefits to which Employee is entitled as a result of
Employee’s employment with Company through the Termination Date other than the vested
benefits payable pursuant to the terms of employee benefits and similar plans
maintained by the Company or its affiliates; and, |
| | (B) | | Accelerated Vesting. As further consideration for the promises
exchanged in this Agreement, the Company agrees to modify the vesting schedules for
the stock option awards granted to Employee dated October 8, 2008. Specifically,
Employee was awarded 103,700 stock options pursuant to a Nonqualified Stock Option
Award Agreement dated October 8, 2008 (the “Stock Options”). The Stock Options
contained a normal vesting date of September 30, 2011. The parties hereby agree that
the vesting date for the Stock Options will be changed to October 28, 2010 and will
remain exercisable as provided under the original award agreement. |
| 4. | | Acknowledgment of Xxxxxxx Xxxxxxx Policy. Employee acknowledges that he remains
bound by the Company’s Xxxxxxx Xxxxxxx Policy and will exercise the options described in
Section 4 in a manner consistent with his obligations to the Company under this policy. |
| 5. | | Release of Claims. Employee, on behalf of Employee and Employee’s spouse, personal
representatives, administrators, minor children, heirs, assigns, wards, agents, and all other
persons claiming by or through Employee, does hereby forever release and discharge Company and
its respective officers, directors, shareholders, agents, employees, affiliates, subsidiaries,
divisions, predecessors, successors, and assigns (the “Released Parties”) from any and all
charges, claims, demands, judgments, causes of action, damages, expenses, costs, and
liabilities of any kind whatsoever. Employee expressly acknowledges that the claims released
by this Section include all rights and claims relating to Employee’s employment with Company
and the termination thereof, including without limitation any claims Employee may have under
the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as
amended, the Equal Pay Act, the Americans with Disabilities Act, the Employee Retirement
Income Security Act of 1974 (ERISA), the Worker Adjustment Retraining and Notification (WARN)
Act, Ohio Revised Code Chapter 4112, Family and Medical Leave Act and any other federal,
state, or local laws or regulations governing employment relationships. This release
specifically and without limitation includes a release and waiver of any claims for employment
discrimination, wrongful discharge, breach of contract, or promissory estoppel, and extends to
all claims of every nature and kind, whether known or unknown, suspected or unsuspected,
presently existing or resulting from or attributable to any act or omission of the Released
Parties occurring prior to the execution of this Agreement. The release contained herein does
not apply to any claim or to rights or claims first arising after the Effective Date of this
Agreement, does not apply to any claims for unemployment compensation or workers compensation
benefits, and does not apply to any rights that Employee has as a terminated employee pursuant
to the Company’s employee benefit plans (as defined in section 3(3) of ERISA). |
| 6. | | Right to Participate in Charge. Nothing in this Agreement shall be construed to
mean that Employee may not file a charge with a governmental agency, or participate in any
investigation of a charge conducted by any governmental agency. Employee nevertheless
understands and agrees that because of the waiver and release, he freely provides by signing
this Agreement, he cannot obtain any monetary relief or recovery from the Released Parties in
any proceeding. |
| 7. | | Knowing and Voluntary Act. Employee acknowledges and agrees that the release set
forth above is a general release. Employee, having been encouraged to and having had the
opportunity to be advised by counsel, expressly waives all claims for damages which exist as
of this date, but of which Employee does not now know or suspect to exist, whether through
ignorance, oversight, error, negligence, or otherwise, and which, if known would materially
affect Employee’s decision to enter into this Agreement. Employee further agrees that
Employee accepts the Severance Benefits as a complete compromise of matters involving disputed
issues of law and fact and assumes the risk that the facts and law may be other than Employee
believes. Employee further acknowledges and agrees that all the terms of this Agreement shall
be in all respects effective and not subject to termination or rescission by reason of any
such differences in the facts or law, and that Employee provides this release voluntarily and
with full knowledge and understanding of the terms hereof. Acknowledging the
complexities of this agreement, the tax implications of the terms and the implication of the
agreement on the Employee’s future conduct with respect to the exercise and vesting of options
and trading opportunities, Employee acknowledges and agrees that the Company has specifically
advised him to seek legal counsel and that he had ample opportunity to consult with an
attorney before entering into this Agreement. |
| 8. | | Non-disparagement. Employee agrees that Employee will not make any statement,
whether oral or written, to any third party that Employee could reasonably foresee would cause
harm to the personal or professional reputation of the Released Parties. The Company agrees
that it will not make any statement, whether oral or written, to any third party that the
Company could reasonably foresee would cause harm to the personal or professional reputation
of the Employee. In the event that the Employee is asked about the reason for his termination
from employment with the Company, he will say “I resigned to pursue other opportunities,” or
words to that effect. The Company agrees that in the event it is asked about the reason for
Employee’s termination from employment, it will respond that “in light of Xx. Xxxxxxxx’x
decision to remain CEO, Xxxx X. Xxxxx has resigned as the Company’s President and Chief
Operating Officer and as a Class III member of the Board of Directors of the Company,
effective October 28, 2010” or words to that effect. For the purposes of this Section alone,
the “Company” shall mean the Company’s executive officers and the Senior Vice President of
Investor Relations and Corporate Affairs. |
| 9. | | No Admission of Liability. Neither this Agreement, nor any term contained herein,
may be construed as, or may be used as, an admission on the part of either party of any fault,
wrongdoing, or liability whatsoever. |
| 10. | | Survivorship. Should Employee die or become totally disabled following the
Termination Date but before the payments due Employee under Section 1 above have been made,
any remaining payments shall be made to Employee (or Employee’s designated beneficiary, as
applicable). |
| 11. | | Return of Property. Employee agrees to return all Company property remaining in
Employee’s possession or control, including without limitation any and all equipment,
documents in whatever form including electronic documents, credit cards, hardware, software,
source code, data, keys or access cards, files, or records on or before the November 8, 2010.
The following sentence notwithstanding, once the Company has copied and deleted all Company
information, software and data from Employee’s lap top computer, iPad and BlackBerry, the
Company shall return those hardware items to Employee for him to keep. |
| 12. | | Cooperation with Litigation. In exchange for the consideration paid to the Employee
pursuant to this Agreement, the Employee agrees to cooperate fully with the Company and it
affiliates in any lawsuit filed, or reasonably anticipated to be filed, or any government or
law enforcement investigation concerning matters that occurred during the tenure of Employee’s
employment with the Company which the Company reasonably believes requires the Employee’s
assistance. Employee agrees to provide full and accurate information with respect to the
same. Employee further agrees not to assist any party in maintaining any lawsuit against the
Company, any of its affiliates, or any of their officers, directors or employees and not to
provide any information to anyone concerning any of these parties, unless compelled to do so
by valid subpoena or other court order, and in such case only after first notifying the
Company sufficiently in advance of complying with such subpoena or court order to reasonably
allow the Company an opportunity to object to same. Should the Company, including the Board
of Directors, and any Company affiliates require Employee’s cooperation pursuant to this
Section 12, Employee shall be reimbursed for reasonable travel expenses and other reasonable
out of pocket expenses incurred in complying with this Section. Otherwise, the Employee
agrees that this Agreement includes sufficient consideration for the Employee’s compliance
with this Section. |
| 13. | | Choice of Law. The validity, construction and interpretation of this Agreement shall
be governed by the laws of the State of Ohio. |
| 14. | | Execution in Parts. This Agreement may be executed in multiple counterparts, each of
which shall constitute an original, and all of which shall constitute a single Agreement. |
| 15. | | No Waiver of Terms. Failure to insist upon strict compliance with any of the terms,
covenants, or conditions of this Agreement shall not be deemed a waiver of any such term,
covenant, or condition, nor shall any failure at any one time or more times be deemed a waiver
or relinquishment at any other time or times of any right under this Agreement. |
| 16. | | Modifications. No modification or amendment of this Agreement shall be effective
unless the same is in a writing duly executed by all the parties hereto. |
| 17. | | Assignment. Company may assign, in whole or in part, its rights and obligations
under this Agreement, and the rights of Company hereunder shall inure to the benefit of, and
the obligations of Company hereunder shall be binding upon, its successors and assigns.
Employee’s rights and obligations hereunder may not be assigned. |
| 18. | | Entire Agreement. Except as otherwise set forth herein, this Agreement sets forth
the entire Agreement between Company and Employee and supersedes and replaces any and all
prior or contemporaneous representations or agreements, whether oral or written, relating to
the subject matter hereof. |
| 19. | | Method of Acceptance. To accept, Employee must sign this Agreement. Employee shall
deliver a signed and dated copy hereof to Xxxxxx Xxxxx in Company’s Human Resources
Department, 00000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxx 00000. |
IN WITNESS WHEREOF, EACH OF THE UNDERSIGNED, HAVING RECEIVED ALL THE ADVICE DEEMED
NECESSARY, AND HAVING CAREFULLY READ AND UNDERSTOOD THIS AGREEMENT, DOES HEREBY
SIGN AND ACCEPT THIS AGREEMENT AS OF THE DATE SET FORTH BELOW.
| | | |
| 10/28/10
| | /s/ Xxxx X. Xxxxx
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| Date
| | Xxxx X. Xxxxx
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| 11/3/10
| | THE SCOTTS COMPANY LLC
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| Date
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By: /s/ Xxxxxx X. Xxxxx
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| | | Its: Executive Vice President,
Global Human Resources
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