EXHIBIT 10(c)
THIRD AMENDMENT
TO
EMPLOYMENT AGREEMENT
AND
COVENANT NOT TO COMPETE
THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT AND COVENANT NOT TO COMPETE (the
"Employment Agreement") by and between THE SCOTTS MIRACLE-GRO COMPANY (the
"Company"), THE SCOTTS COMPANY LLC (the "LLC"), previously known as THE SCOTTS
COMPANY, and ROBERT F. BERNSTOCK (the "Executive"), effective October 1, 2005,
and executed and agreed to on February 9, 2006.
WITNESSETH
WHEREAS, the Executive and the LLC entered into an Employment Agreement and
Covenant Not to Compete, effective as of October 1, 2004, which was executed on
September 16, 2004 (the "Employment Agreement");
WHEREAS, the LLC and the Executive subsequently entered into First and Second
Amendments to the Employment Agreement;
WHEREAS, subsequently, the Executive was assigned different responsibilities
with the LLC and also became an officer of the Company;
WHEREAS, the Company, the LLC and the Executive desire to modify the provisions
of the Employment Agreement to reflect Executive's new arrangement with the
Company and the LLC;
NOW, THEREFORE, in consideration of the premises and agreements of the parties
contained in this Third Amendment, and intending to be legally bound, the
Executive, the Company and the LLC agree that the Employment Agreement is hereby
amended as follows effective as of October 1, 2005.
1. PARAGRAPH 1 (a) IS HEREBY AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS:
1. Title and Duties
(a) General. The Executive agrees to continue in the employment of the LLC
on and after October 1, 2005, pursuant to the terms of this Employment
Agreement, as amended. The Executive's titles will be President and Chief
Operating Officer of The Scotts Company LLC ("LLC") effective October 1,
2005 and President of The Scotts Miracle-Gro Company ("Company") effective
December 9, 2005. The Executive's duties and responsibilities will be as
described in the Company's and the LLC's Bylaws (as in effect as of the
dates just given) and the Executive shall at all times report directly to
the Chief Executive Officer of the Company, or as otherwise agreed by the
Executive. The Executive will exercise due diligence and reasonable care
in the performance of the Executive's duties under this Employment
Agreement. During the Term of this Employment Agreement, a change in the
Executive's assignments or duties shall not
constitute "Constructive Termination", as defined in Paragraph 2(c), if,
in any given fiscal year, the Executive does not lose supervision or
reporting relationships over business functions or segments that have
generated one hundred million dollars or more of revenue in the prior
fiscal year, or which constitute a core business function of the Company.
2. PARAGRAPH 3 (a) IS HEREBY AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS:
3. Compensation
(a) Base Salary. Beginning October 1, 2005, and continuing for each year
during the Term hereof, the Executive will be paid an annualized base
salary of $660,000 ("Base Salary"), payable in accordance with the
Company's payroll guidelines, subject to applicable tax and benefit plan
withholding. Increases may be made to the Executive's Base Salary (in
accordance with the standard performance review procedures for senior
executive officers of the Company) at the discretion of the Compensation
and Organization Committee and approved by the Board of Directors based
upon the Executive's individual performance. Notwithstanding the
foregoing, if the Executive's Base Salary is increased, it shall not
thereafter be decreased during the Term of this Employment Agreement.
3. PARAGRAPH 3(d) IS HEREBY AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS:
(d) Benefit Plan Participation. The Executive shall be entitled to
participate in all of the Company's benefit programs for senior management
executives. The Executive shall participate in, and be eligible to receive
benefits under, any "employee welfare benefit plans" and "employee pension
benefit plans" (as such terms are defined in the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) and business travel
insurance plans and programs as shall apply to general and/or executive
employees of the Company; and shall be provided benefits under such plans
and agreements substantially equivalent (in the aggregate) to the benefits
provided to other senior executive officers of the Company and on
substantially similar terms and conditions as such benefits are provided
to other senior executive officers of the Company. Notwithstanding the
foregoing, the Executive is not eligible for participation in the
Company's pension plan. The Executive will participate, or be eligible to
participate where participation is voluntary, in any non-qualified
pension, supplemental executive retirement programs, deferred
compensation, and excess benefit plans sponsored by the Company and
available to any of the Company's senior management executives. During the
Term, the Company shall provide to the Executive all of the fringe
benefits and perquisites that are provided to other senior executive
officers of the Company, and the Executive shall be entitled to receive
any other fringe benefits or perquisites that become available to other
senior executive officers of the Company subsequent to the date of
execution of this Employment Agreement. Without limiting the generality of
the foregoing, the Company shall provide the Executive with the following
benefits during the Term: (i) paid vacation, paid holidays and sick leave
in accordance with the Company's standard policies for its senior
executive officers, which policies shall provide the Executive with
benefits no less favorable (in the aggregate) than those provided to any
other senior
executive officers of the Company; (ii) an automobile allowance of no more
than $2,000 annually; (iii) the Executive and, in some circumstances,
members of his immediate family shall receive use of one or more
Company-owned or leased and Company operated aircraft in accordance with
the Company's standard executive flight and travel policies, in any event
not to exceed more than thirty hours of personal use per year. The
Executive acknowledges that part of any such travel may constitute
additional taxable compensation of the Executive, but the Company makes no
tax representation relating thereto. The Executive shall be responsible
for all taxes related to such additional taxable compensation of the
Executive. In the event that the Executive shall attain the age of
fifty-five years while in the active employment of the Company, and
completes at least six years of full-time continuous employment with the
Company, the Company will extend active employee health care benefits
required to be available to the Executive for a limited period ("COBRA
Coverage") under Part Six of Title One of ERISA, until the Executive
attains the age of sixty-five years (or, in the event of the Executive's
death, would have attained the age of sixty-five years) or becomes
entitled to benefits under the Federal "Medicare Part A" program,
whichever shall first occur. The Executive will pay a premium for such
extended health care coverage. During the period in which COBRA Coverage
is statutorily required under ERISA, the Executive (or his spouse or
dependents in the event of his death) shall pay the COBRA premium then in
effect for those who elect COBRA Coverage under the Company's health plan
or plans. Thereafter, during the extended coverage period described in
this Paragraph 3(d), the Executive shall pay one hundred fifty percent of
such COBRA premium in effect from time to time for such coverage.
4. NEW PARAGRAPH7(m) IS ADDED TO READ AS FOLLOWS:
Regardless of any other provision, the parties agree that this Agreement
will be administered in a manner reasonably expected to avoid any
penalties under Section 409A of the Internal Revenue Code of 1986, as
amended.
THE SCOTTS MIRACLE-GRO COMPANY THE SCOTTS COMPANY LLC
BY: /s/ Denise S. Stump BY: /s/ Denise S. Stump
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Its: EVP, Global HR Its: EVP, Global HR
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AGREED AND ACCEPTED This
9th day of February 2006.
/s/ Robert F. Bernstock
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ROBERT F. BERNSTOCK