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This excerpt taken from the SMG DEF 14A filed Dec 20, 2007. Footnote
to Column (f) of Non-Qualified Deferred Compensation
Table
This amount represents the account balance for each NEO as of
the end of the 2007 fiscal year. Distributions from the ERP
generally begin after 6 months have elapsed from when a
participant terminates employment (although the participant may
specify a later date) and normally are paid in either a lump sum
or in annual installments over no more than 9 years,
whichever the participant has elected. Distributions from the
Company stock fund are always made in the form of whole common
shares and the value of fractional common shares is distributed
in cash. Distributions from one of the mutual fund investments
are made in cash equal to the number of mutual fund shares
credited to the participant multiplied by the market value of
those mutual fund shares.
The Company and Scotts LLC have entered into certain agreements
and maintain certain plans that may provide compensation to the
NEOs in the event of a termination of employment or a change in
control of the Company.
Employment Agreements: As of the end of the
2007 fiscal year, Mr. Hagedorn was the only NEO party to an
employment agreement. However, Scotts LLC entered into
employment agreements with Mr. Evans, Mr. Sanders and
Ms. Stump effective as of October 1, 2007.
Mr. Sanders had a prior agreement that expired on
September 30, 2007. The terms of the employment agreements
with Mr. Hagedorn, Mr. Evans, Mr. Sanders and
Ms. Stump are described below under the caption
“Employment Agreements and Termination of Employment and
Change-in-Control
Arrangements.” Under the terms of their respective
employment agreements, each NEO may be eligible for severance
and continued compensation and benefit eligibility as summarized
in the table below. For purposes of this disclosure, the
employment agreements for Mr. Evans, Mr. Sanders and
Ms. Stump are treated as if they were in effect on the last
day of the 2007 fiscal year.
The specific obligations to each of Mr. Hagedorn,
Mr. Evans, Mr. Sanders and Ms. Stump are detailed
in separate tables.
Equity-Based Compensation Plans: As previously
mentioned, grants of NSOs and restricted stock are typically
subject to three-year, time-based vesting. However, our
equity-based compensation plans generally provide for
accelerated vesting or forfeiture in certain situations, as
indicated in the following table. These acceleration and
forfeiture provisions apply to all participants under the
equity-based compensation plans.
Retirement: A voluntary termination after a
participant reaches age 62, or reaches age 55 with
10 years of service.
Disability: A participant’s inability to
perform his or her normal duties for a period of 6 months due to
a physical or mental infirmity.
Upon a change in control of the Company, outstanding options and
SARs will be cancelled, unless (a) the Compensation and
Organization Committee determines prior to the change in control
that immediately after the change in control, the options and
SARs will be honored or assumed, or new awards with
substantially equivalent value substituted or (b) the NEO
exercises, with the permission of the Compensation and
Organization Committee, the NEO’s outstanding options and
SARs within 15 days of the date of the change in control.
For each cancelled option or SAR, an NEO will receive cash in
the amount of, or common shares having a fair market value equal
to, the difference between the change in control price per
common share and the exercise price per share associated with
the cancelled option or SAR.
The following table describes the approximate payments that
would be made to Mr. Hagedorn pursuant to his employment
agreement or other plans or individual award agreements in the
event of his termination of employment under the circumstances
described below or in the event of a change in control of the
Company, assuming such termination of employment or change in
control took place on September 30, 2007, the last day of
the 2007 fiscal year. Please see the Outstanding Equity Awards
at Fiscal Year-End Table on page 40 for further information
concerning the outstanding NSOs, SARs and shares of restricted
stock held by Mr. Hagedorn as of September 30, 2007.
Mr. Hagedorn’s employment agreement is described below
under the caption “Employment Agreements and Termination of
Employment and
Change-in-Control
Arrangements.” In the event of voluntary termination of
employment, early retirement, normal retirement or a termination
for cause, Mr. Hagedorn would receive the value of his
accrued benefits under each of the Associates’ Pension
Plan, the Excess Pension Plan, the RSP and the ERP (the amounts
of which would be the same as those reflected below in the
applicable line items within “Benefits and
Perquisites”), but not additional severance payments.
Unless noted otherwise, the agreements and plans that give rise
to the termination of employment and change in control
obligations of the Company are as discussed above.
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