EXHIBIT (10)(t)
CALLOWAY'S NURSERY, INC.
PROFIT IMPROVEMENT BONUS PLAN
FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2002
I. PURPOSE
The purpose of this Profit Improvement Bonus Plan is to provide an
incentive to the management of Calloway's Nursery, Inc (the "Company")
to maximize the performance of the Company. Bonuses will be paid for
Improvements in Pre Tax Net Profit, as defined below.
II. DEFINITIONS
Bonus Period - The Inventory Period for which the Bonus Pool is
determined.
Bonus Pool - The amount of bonus earned by the Company's management for
achieving Profit Improvement.
Entire Fiscal Year - the entire period of Fiscal 2002, from October 1,
2001 through September 30, 2002.
First Inventory Period - includes the financial period of October 1,
2001 through December 31, 2001 (also the first quarter of the Fiscal
Year).
Fiscal 2001 - the fiscal period starting on October 1, 2000 and ending
on September 30, 2001.
Fiscal 2002 - the fiscal period starting on October 1, 2001 and ending
on September 30, 2002.
Improvement - the amount that Pre Tax Net Profit increases, or Pre Tax
Net Loss decreases, for a period compared to the corresponding period
in the prior Fiscal Year.
Period Completion - occurs upon issuance of the Press Release
announcing the Financial Results of Calloway's Nursery, Inc. as of and
for the First Inventory Period, Second Inventory Period, and/or Entire
Fiscal Year, as applicable.
Participant - an individual who is eligible to receive a share of the
Bonus Pool. The participants in the Plan are those who hold the
following positions in the Company:
o President
o Vice President, Operations
o Vice President, Corporate Development
o Vice President, Chief Financial Officer
Pre Tax Net Profit - is the sum of Income from Continuing Operations
before Income Taxes plus Bonus Expense (i.e., Bonus Expense is not
recorded as an expense for the purpose of computing Bonuses). A Pre Tax
Net Loss occurs when the amount is a negative amount (less than zero).
Second Inventory Period - includes the financial period of January 1,
2002 through June 30, 2002 (the Second and Third Quarters of the
Company's Fiscal Year).
Third Inventory Period - includes the financial period of July 1, 2002
through September 30, 2002 (the Fourth Quarter of the Company's Fiscal
Year).
III. BONUS POOL AND BONUS PAYMENT
A. A pool will be created (the "Bonus Pool") to be shared by all
Participants.
B. The Bonus Pool will be equal to 12% of the Improvement in Pre-Tax
Net Profit for each Inventory Period in Fiscal 2002 over the
Pre-Tax Net Profit for the comparable Inventory Period in Fiscal
2001.
C. The Bonus Pool will be paid in the following manner:
o Upon Period Completion of the First Inventory Period;
o Upon Period Completion of the Second Inventory Period; and
o Upon Period Completion of the Third Inventory Period.
D. Bonuses for a Bonus Period will be awarded to each participant on
the basis of a fraction multiplied by the amount of the Bonus
Pool. The numerator of the fraction is the salary of the
participant in effect on the last day of that Bonus Period and the
denominator of the fraction is the total of the annual salaries of
all participants in effect on the last day of that Bonus Period.
E. Example - First Inventory Period
<Table>
<Caption>
Fiscal Year Fiscal Year Improvement
2002 2001
----------- ----------- -----------
Sales
Gross Profit
Total Expenses (except Bonus Expenses)
Pre Tax Net Profit (Loss)
Bonus Pool (12%)
</Table>
F. Example - Second Inventory Period
<Table>
<Caption>
Fiscal Year Fiscal Year Improvement
2002 2001
----------- ----------- -----------
Sales
Gross Profit
Total Expenses (except Bonus Expenses)
Pre Tax Net Profit (Loss)
Bonus Pool (12%)
</Table>
G. Example - Third Inventory Period
<Table>
<Caption>
Fiscal Year Fiscal Year Improvement
2002 2001
----------- ----------- -----------
Sales
Gross Profit
Total Expenses (except Bonus Expenses)
Pre Tax Net Profit (Loss)
Bonus Pool (12%)
</Table>
IV. ADDITIONAL BONUS POOL
A. An Additional Bonus Pool may be computed upon completion of the
independent audit of the Company's fiscal year end financial
statements. The Additional Bonus Pool shall be as follows:
B. To the extent that Pre-Tax Net Profit exceeds TWO TIMES (2X) the
Pre-Tax Net Profit for the Prior Fiscal Year, the Additional Bonus
Pool shall be and additional 10% of such excess for a total of
20%.
C. To the extent that Pre-Tax Net Profit exceeds TWO AND ONE-HALF
TIMES (2.5X) the Pre-Tax Net Profit for the Prior Fiscal Year, the
Additional Bonus Pool shall be an additional 10% of such excess
for a total of 30%.
D. Example:
<Table>
<Caption>
Fiscal Year Fiscal Year Improvement
2002 2001
----------- ----------- -----------
Pre Tax Net Profit
Bonus Pool per Section III. Above
2x Prior Year Pre Tax Net Profit
2.5x Prior Year Pre Tax Net Profit
Improvement between 2x and 2.5x
10% Pool on excess over 2x up to 2.5x
Improvement over 2.5x
10% Pool on excess over 2.5x
Total Additional Bonus Pool
Total Bonus Pools
</Table>
V. GENERAL PROVISIONS
A. No bonus will be paid in the event of termination of employment on
or prior to the end of such bonus Period, whether termination is
voluntary or involuntary, with cause or without cause.
B. In the event a participant serves less than a complete Bonus
Period:
C. A participant in the Plan who does not start the Bonus Period, and
therefore serves less than the full Bonus Period, will receive a
bonus for the portion of the Bonus Period the participant does
serve. For example, a participant who starts on September 1st will
receive 30/92 of the bonus attributable to his fraction of the
Bonus Payment. The remaining 62/92 will be allocated to the other
participants on a pro rata basis in accordance with their
respective shares in the Bonus Payment.
D. In the event of any need for clarification as to any issues
related to the calculation and/or payment of any amounts relative
to this Bonus Plan, the judgment of Compensation Committee of the
Board of Directors shall prevail.