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Exhibit 10(r)
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Letter Agreement between the Registrant and G. Xxxxxx Xxxxx
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April 10, 1997
Mr. G. Xxxxxx Xxxxx
00 Xxxx xx Xxxxx
Xxx Xxxxxx, XX 00000
Dear Rob:
I am pleased to extend an offer of employment as Sr. Vice President, General
Counsel of The Scotts Company, reporting to me. As we have discussed, reporting
to you will be the legal department and associated staff.
Base Salary and Executive Incentive Plan
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Your initial annual base salary is $228,000 with a target bonus under the
Executive Incentive Plan of 40% of salary. Your fiscal 1997 bonus will be
guaranteed at $38,000, assuming that you commence employment on May 1, 1997
(five months' prorated bonus at 40%). Your fiscal 1998 bonus will be guaranteed
at a minimum of $64,000.
Stock Options
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In addition, as a key member of the Executive Team, your initial grant of stock
options is 70,000 which will be priced at the closing "asked" price on the day
you officially join the company. These stock options will vest 1/3 upon joining
the company, 1/3 after your first year, and 1/3 after two years of employment.
You will receive a separate option agreement.
Car Allowance
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Scotts provides its executives with a car allowance of $7,000/year (this will be
reviewed in 1997). In accordance with IRS regulations, the value of this car
allowance will be reflected in your W-2. It is our understanding that you may
deduct that part of this value which is for business purposes.
Club Initiation and Membership
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Upon acceptance of this agreement, a $50,000 club initiation fee will be paid to
you. On an annual basis, up to $7,500 for club membership will be reimbursed to
you upon submission of appropriate receipts.
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G. Xxxxxx Xxxxx
April 10, 1997
Page 2
Personal Financial Planning
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Personal financial planning is also provided through Ayco Corporation. The value
of this confidential service is similarly added to your W-2. Some or all of this
value may be tax deductible.
Termination
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If your employment is terminated by the Company without Cause, as a result of
your death or Disability, or as a result of a Change of Control, the Company
shall pay you (i) your full base salary at the annual base rate in effect
immediately prior to the Date of Termination for a period of twenty-four (24)
months after the Date of Termination and (ii) incentive compensation for a
period of twenty-four (24) months after the Date of Termination equal to the
greater of your target percentage in effect at the Date of Termination or the
amount of your last actual bonus. If your employment is terminated during the
Company's 1997 fiscal year for any reason which would entitle you to receive the
payments provided for in the immediately preceding sentence, the amount of
incentive compensation which you shall be deemed to have earned for the purpose
of calculating the payments owed to you upon termination shall be the sum of
$92,000.
The initial grant of options in the option grant in this offer will continue to
vest and you will be allowed to exercise such options following your last
termination payment.
Starting Date
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This letter assumes you will take up your new duties May 1, 1997.
Benefit Programs
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You are eligible for inclusion in Scotts comprehensive benefit programs.
Specific booklets describing the following benefits are included with this
letter: Medical Coverage, Dental Coverage, Profit Sharing, Pension, Excess
Benefit Plan, Group Universal Life, Long Term Disability Coverage and
Supplemental Long Term Disability Coverage. The Scotts medical plan contains a
pre-existing condition clause which does not cover for any condition on which
treatment was provided during the three months preceding employment. This
restriction becomes inoperative at the earlier of a period of three consecutive
months without treatment or 12 months of employment.
This offer is contingent upon satisfactory completion of the mandatory drug
screen required of all Xxxxx associates, which can be completed after your
arrival.
* * *
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G. Xxxxxx Xxxxx
April 10, 1997
Page 3
Rob, I and the Company take great pleasure in extending you this offer. Your
addition to the company will solidify our team effort to drive the business
forward. As a key player in our executive team, all of us at Scotts will extend
our resources in support of your efforts. We truly look forward to your joining
the Scotts family.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Chairman, President and
Chief Executive Officer
/cls
Enclosures
ACCEPTANCE:
/s/ G. Xxxxxx Xxxxx 4/10/97
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G. Xxxxxx Xxxxx Date
