Exhibit 10.3

 

THE SCOTTS COMPANY LLC

EXECUTIVE RETENTION AGREEMENT

 

THIS EXECUTIVE RETENTION AGREEMENT (this “Agreement”) is made between The Scotts
Company LLC (the “Company”) and Ms. Denise S. Stump (the “Executive”) effective
as of August 22, 2018 (the “Effective Date”).

 

WITNESSETH:

 

WHEREAS, the Executive is employed by the Company as Executive Vice President,
Global Human Resources & Chief Ethics Officer; and

 

WHEREAS, the Company recognizes the valuable past services performed by the
Executive and has determined that it is in the best interests of the Company to
retain the services of the Executive; and

 

WHEREAS, the Company recognizes that the Executive is currently retirement
eligible, and has determined that it is in the best interest of the Company to
provide certainty with respect to the timing of Executive’s planned retirement
and to provide for an orderly transition of her current duties to a successor;
and

 

WHEREAS, in order to retain the services of the Executive, the Company desires
to provide the Executive with the opportunity to receive retention benefits
under this Agreement (the “Retention Benefits”).

 

AGREEMENT:

 

NOW THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Executive hereby agree as follows:

 

1.       Application of the Executive Severance Plan and Participation
Agreement. The Executive previously accepted designation as a participant in the
Company’s Executive Severance Plan (the “ESP”) and agreed to be eligible for
severance benefits under the ESP and the related Participation Agreement that
she executed effective September 1, 2017 (the “Participation Agreement”). This
Agreement is subordinate to the ESP and Participation Agreement. As such, the
Executive shall continue to be a participant in the ESP, and the payment of any
severance benefits to the Executive shall be governed only by the ESP and the
Executive’s Participation Agreement. If the Executive satisfies the conditions
under this Agreement, the payment of Retention Benefits to the Executive shall
become governed by this Agreement to the extent that this Agreement is
inconsistent with the ESP and Participation Agreement. Except as otherwise
defined in this Agreement, any undefined capitalized term shall have the same
meaning as provided under the ESP or the Executive Participation Agreement, as
applicable.

 

 

 

2.       Conditions of Payment Under This Agreement. The Company shall pay
Retention Benefits under this Agreement only if either of the following
conditions are satisfied:

 

(a)       The Executive’s employment with the Company terminates due to
Retirement, as defined herein, or

 

(b)       The Executive’s employment with the Company terminates at any time due
to Disability (even if the Executive is not eligible for Retirement under this
Agreement).

 

For purposes of this Agreement, “Retirement” means that the Executive has (i)
voluntarily terminated employment with the Company on or after December 31,
2020, and (ii) provided written notice to the Company of her intent to so
terminate her employment no earlier than 12 months before her Effective Date of
Termination. Also for purposes of this Agreement, “Disability” means a condition
for which the Executive qualifies for benefits under The Scotts Miracle-Gro
Company’s Long-Term Disability Plan or another long-term disability plan
sponsored by the Company.

 

If the Executive’s employment with the Company terminates for any reason other
than Retirement or Disability, as defined in the paragraph above, the Executive
shall not receive Retention Benefits under this Agreement. However, the
Executive may be entitled to receive severance benefits pursuant to the ESP and
her Participation Agreement, depending on the circumstances surrounding her
termination.

 

3.       Amount and Timing of Retention Benefits. If either of the conditions of
this Agreement have been satisfied, the amount of Retention Benefits that the
Executive shall receive shall be equivalent to the severance benefits the
Executive would receive in the event of an involuntary termination without
Cause, as set forth under the ESP and Participation Agreement in effect on the
Effective Date. The Retention Benefits shall be paid at the same time as
provided under the ESP and the Executive’s current Participation Agreement.
Notwithstanding the foregoing, if the Company believes that the Executive’s
Participation Agreement qualifies for an exemption to Code Section 409A, but the
Retention Benefits under this Agreement could be considered “deferred
compensation” that is not exempt from Code Section 409A, then consistent with
the ESP, the Company may impose a 6-month delay in payment of Retention Benefits
if the Executive is a “specified employee” under Code Section 409A. Once the
Executive becomes entitled to Retention Benefits under this Agreement, she will
cease to be a participant in the ESP and will no longer be eligible to receive
severance benefits under the ESP and her Participation Agreement.

 

4.       Tax Withholding. The Company has the right to deduct, in connection
with the payment of any Retention Benefits under this Agreement, amounts that
are sufficient to satisfy any federal, state, local, or other taxes that are
required by law to be withheld and to require any payments necessary to enable
the Company to satisfy its withholding obligations.

 

 

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5.       Acknowledgments and Acceptances.

 

(a)       The Executive hereby acknowledges that any Retention Benefits paid to
her under this Agreement must be repaid, and all future payments, if any, will
cease, in the event that she breaches any of the Post-Employment Obligations,
unless the Executive has requested in writing and the Company has provided
written consent not to enforce such Post-Employment Obligations in advance of
any breach of the Post-Employment Obligations.

 

(b)       The Executive hereby acknowledges that the Company shall provide a
Release to her on or shortly after her Effective Date of Termination, and that
the Company will not be required to pay any Retention Benefits under this
Agreement unless the Executive executes the Release during the time period
permitted by applicable law and as required under the ESP.

 

(c)       The Executive hereby accepts the terms of this Agreement, and the
terms of the ESP and her Participation Agreement to the extent that this
Agreement does not supersede and replace the terms of the ESP and her
Participation Agreement. The Executive also acknowledges that she has carefully
reviewed the terms of the ESP, her Participation Agreement, and this Agreement,
accepts the authority of the Board and the Committee under Article 4 of the ESP
and agrees that nothing in this Agreement shall confer any employment rights or
restrict the right of the Company to terminate her employment at any time, for
any reason and with or without notice or cause. The Executive also acknowledges
that the Company has not provided any financial or tax advice with respect to
this Agreement or made any representations or warranties with respect to the tax
or financial aspects of this Agreement. The Executive acknowledges that she has
had the opportunity to consult with her own tax and financial planning advisors
about this Agreement.

 

(d)       Upon execution of this Agreement, the Executive understands that the
terms of the ESP and her Participation Agreement will continue to be binding
unless and until the conditions of payment under this Agreement are satisfied.
The Executive understands that if she becomes eligible for the payment of
Retention Benefits under this Agreement, she will cease to be a participant in
the ESP and no longer be eligible for benefits under the ESP and her
Participation Agreement. The Executive also understands that if her termination
of employment with the Company is not the result of Retirement or Disability but
is of such a nature as to make her eligible for severance benefits under the ESP
and her Participation Agreement, the Executive will no longer be eligible for,
and the Company will have no obligation to pay to her, Retention Benefits under
this Agreement.

 

6.       Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the legatees, distributees, and personal representatives of the
Executive and the successors of the Company.

 

7.       Amendment and Termination. This Agreement may be amended or terminated
only by a written agreement signed by the Company and the Executive.
Notwithstanding the foregoing, the Company may amend or terminate this Agreement
at any time if, pursuant to legislative, judicial, or regulatory action,
continuation of the Agreement would (i) cause benefits to be taxable to the
Executive before actual receipt, or (ii) result in significant financial
penalties or other significantly detrimental ramifications to the Company (other
than the financial impact of paying severance benefits).

 

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8.       Governing Law. This Agreement shall be governed and construed in
accordance with ERISA, and in the event that any reference shall be made to
State law, the laws of the State of Ohio shall apply, without regard to its
conflicts of law provisions.

 

9.       Code Section 409A. The Code Section 409A compliance terms of the ESP
are hereby incorporated into this Agreement. Accordingly, it is the Company’s
intent that Retention Benefits under this Agreement are paid in a manner either
to comply with Code Section 409A or with an exception to Code Section 409A
(including the “short-term deferral” exception to Code Section 409A). If any
amount payable under this Agreement would cause or would result in a violation
of Code Section 409A, then such provision shall be interpreted or reformed in
the manner necessary to achieve compliance with Code Section 409A, including but
not limited to, the imposition of a six (6) month delay in payment to the
Executive if she is a “specified employee” (as defined in Code Section 409A)
following her Effective Date of Termination. All payments to be made upon a
termination of employment under this Plan may only be made upon a “separation
from service” under Code Section 409A. In no event may the Executive, directly
or indirectly, designate the calendar year of a payment and where payment may
occur in one year or the next, it shall be made in the second year. Each payment
under this Agreement shall be treated as a separate identified payment for
purposes of Code Section 409A.

 

If the Executive is a specified employee (as defined in Treasury Regulation
Section 1.409A-1(i)), any such payment that is subject to Code Section 409A and
that is scheduled to be paid within six months after such separation from
service shall accrue without interest and shall be paid on the first regularly
scheduled payroll date on or after the first day of the seventh month beginning
after the date of the Executive’s separation from service or, if earlier, within
fifteen (15) days after the appointment of the personal representative or
executor of the Executive’s estate following the Executive’s death.

 

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IN WITNESS WHEREOF, the Executive has signed this Agreement and the Company has
caused this Agreement to be signed by its duly authorized officer, effective as
of the date first set forth above.

 

  THE SCOTTS COMPANY LLC               By /s/ James Hagedorn               James
Hagedorn         Chairman and CEO           EXECUTIVE               By /s/
Denise S. Stump               Denise S. Stump

 

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