This excerpt taken from the SMG DEF 14A filed Dec 20, 2007.
Executive Retirement Plans and Deferred Compensation Benefits (long-term compensation element)
The Scotts Company LLC Executive Retirement Plan (the ERP) is a non-qualified deferred compensation plan. The ERP provides executives, including the NEOs, the ability to defer compensation above the Internal Revenue Service (IRS) limits applicable to The Scotts Company LLC Retirement Savings Plan (the RSP), a qualified 401(k) plan. The ERP is an unfunded plan and is subject to the claims of the Companys general creditors. The ERP consists of three parts:
The Company matching contributions and Base Retirement Contributions to the ERP are based on the same contribution formulae used for the RSP. The Company matches the Compensation Deferral at 100% for the first 3% of pay that is contributed to the ERP and 50% for the next 2% of pay contributed to the ERP.
The Company also makes a Base Retirement Contribution in an amount equal to 2% of eligible earnings for all eligible associates, whether or not they make deferral elections to the ERP. This amount increases to 4% once an associates annual earnings reach 50% of the Social Security (FICA) wage base. Base Retirement Contributions are only made to the ERP once an executive exceeds the maximum allowable pay under the RSP.
Participant account balances in the ERP are invested in a Company stock fund and other mutual fund investments that are generally consistent with the investment alternatives permitted with respect to the RSP. Accordingly, there were no above-market or preferential earnings on investments associated with the ERP for any of the NEOs for the 2007 fiscal year.
The Scotts Company LLC Excess Benefit Plan (the Excess Pension Plan) is an unfunded plan that provides benefits which cannot be provided under The Scotts Company LLC Associates Pension Plan (the Associates Pension Plan) due to IRS limits. The Associates Pension Plan was frozen effective December 31, 1997 and, therefore, no service is earned after that date under the Excess Pension Plan for participating executives.