Exhibit 10.1
Employment Agreement for
Christopher Nagel
The Scotts Miracle-Gro Company
October 1, 2006

 

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Contents

         
Article 1. Term of Employment
    1  
 
       
Article 2. Definitions
    2  
 
       
Article 3. Position and Responsibilities
    5  
 
       
Article 4. Standard of Care
    5  
 
       
Article 5. Compensation
    5  
 
       
Article 6. Expenses
    6  
 
       
Article 7. Employment Terminations
    7  
 
       
Article 8. Assignment
    11  
 
       
Article 9. Notice and Dispute Resolution
    12  
 
       
Article 10. Confidentiality, Noncompetition, and Nonsolicitation
    12  
 
       
Article 11. Miscellaneous
    12  
 
       
Article 12. Governing Law
    14  
 
       
Article 13. Indemnification
    14  

 

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The Scotts Miracle-Gro Company
Employment Agreement for Christopher Nagel
     This EMPLOYMENT AGREEMENT is made, entered into, and is effective as of
this first day of October 2006 (herein referred to as the “Effective Date”), by
and between The Scotts Miracle-Gro Company (“Company”), an Ohio corporation and
Christopher Nagel (“Executive”).
     WHEREAS, the Company and the Executive intend that the Executive shall
serve the Company as Executive Vice President—North America Consumer Business.
     WHEREAS, the Executive possesses considerable experience and an intimate
knowledge of the business, and, as such, the Executive has demonstrated unique
qualifications to act in an executive capacity for the Company.
     WHEREAS, the Company is desirous of assuring the employment of the
Executive in the above stated capacity, and the Executive is desirous of such
assurance.
     WHEREAS, the Company and Executive desire to enter into an agreement
embodying the terms of such employment.
     NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
Article 1. Term of Employment
     The Company hereby agrees to employ the Executive and the Executive agrees
to serve the Company, in accordance with the terms and conditions set forth
herein, for an initial period of three (3) years commencing as of the Effective
Date; subject, however, to earlier termination as expressly provided herein.
     The initial three (3) year period of employment shall be extended for one
(1) additional year at the end of the initial three (3) year term and then again
after each successive year thereafter. However, either party may terminate this
Agreement at the end of the initial three (3) year period, or at the end of any
successive one (1) year term thereafter, by giving the other party written
notice of intent not to renew delivered at least sixty (60) days prior to the
end of such initial period or successive term.
     In the event such notice of intent not to renew is properly delivered, this
Agreement automatically shall expire at the end of the initial period or
successive term then in progress.
     Notwithstanding the foregoing, if at any time during the initial term of
the Agreement, or successive term, a Change in Control of the Company occurs,
then this Agreement shall become immediately irrevocable for two (2) years
beyond the month in which the effective date of such Change in Control occurs.

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Article 2. Definitions

  2.1   “Agreement” means this Employment Agreement for Christopher Nagel.    
2.2   “Annual Bonus Award” means the annual bonus to be paid to the Executive in
accordance with the Company’s annual bonus program as described in Section 5.2
herein.     2.3   “Award Period” means the performance period applicable to
Long-Term Incentive Awards granted under the Company’s long-term incentive plan.
    2.4   “Base Salary” means the salary of record paid to the Executive as
annual salary, pursuant to Section 5.1, excluding amounts received under
incentive or other bonus plans, whether or not deferred.     2.5   “Beneficiary”
means the individuals or entities designated or deemed designated by the
Executive pursuant to Section 11.6 herein.     2.6   “Board” or “Board of
Directors” means the Board of Directors of the Company.     2.7   “Cause” means
the Executive’s:

  (a)   Continued failure to substantially perform his duties with the Company,
after a written demand for substantial performance is delivered to the Executive
that specifically identifies the manner in which the Company believes that the
Executive has failed to substantially perform his duties, and after the
Executive has failed to resume substantial performance of his duties on a
continuous basis within thirty (30) calendar days of receiving such demand; or  
  (b)   Conviction of a felony; or     (c)   Engagement in illegal conduct, an
act of dishonesty, or other similar conduct, that in the Committee’s sole
discretion, which shall be exercised in good faith, is injurious to the Company;
or     (d)   Material breach of any provision of this Agreement; provided,
however, that the Executive’s willful and material breach of Article 4 shall not
constitute “Cause” unless the Executive has first been provided with written
notice detailing such breach and a thirty (30) day period to cure such breach;
or     (e)   Breach of the Company’s code of business conduct or ethics as
determined in good faith by the Committee; or     (f)   A violation of the
Company’s insider-trading policies; or     (g)   Material breach of his
fiduciary duties to the Company.

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      For purposes of determining Cause, no act or omission by the Executive
shall be considered “willful” unless it is done or omitted in bad faith or
without reasonable belief that the Executive’s action or omission was in the
best interests of the Company. Any act or failure to act based upon:
(a) authority given pursuant to a resolution duly adopted by the Board; or
(b) advice of counsel for the Company, shall be conclusively presumed to be done
or omitted to be done by the Executive in good faith and in the best interests
of the Company.     2.8   “Change in Control” means the occurrence of any of the
following events after the Effective Date of this Agreement:

  (a)   Any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
other than the Company, subsidiaries of the Company, an employee benefit plan
sponsored by the Company, or Hagedorn Partnership, L.P. or its successor or any
party related to Hagedorn Partnership, L.P. (as determined by the Board of
Directors) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of more than thirty percent (30%) of
the combined voting stock of the Company;     (b)   The shareholders of the
Company adopt or approve a definitive agreement or series of related agreements
for the merger or other business consolidation with another person and,
immediately after giving effect to the merger or consolidation, (i) less than
fifty percent (50%) of the total voting power of the outstanding voting stock of
the surviving or resulting person is then “beneficially owned” (within the
meaning of Rule l3d-3 under the Exchange Act) in the aggregate by (x) the
stockholders of the Company immediately prior to such merger or consolidation,
or (y) if a record date has been set to determine the stockholders of the
Company entitled to vote with respect to such merger or consolidation, the
stockholders of the Company as of such record date and (ii) any “person” or
“group” (as defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) has
become the direct or indirect “beneficial owner” (as defined in Rule l3d-3 under
the Exchange Act) of more than fifty percent (50%) of the voting power of the
voting stock of the surviving or resulting person;     (c)   The Company, either
individually or in conjunction with one or more of its subsidiaries, sells,
assigns, conveys, transfers, leases or otherwise disposes of, or the
subsidiaries sell, assign, convey, transfer, lease or otherwise dispose of, all
or substantially all of the properties and assets of the Company and the
subsidiaries, taken as a whole (either in one transaction or a series of related
transactions), to any person (other than the Company or a wholly owned
subsidiary);

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  (d)   For any reason, Hagedorn Partnership, L.P. or its successor or any party
related to Hagedorn Partnership, L.P. (as determined by the Board of Directors)
becomes the beneficial owner, as defined above, directly or indirectly, of
securities of the Company representing more than forty-nine percent of the
combined voting power of the Company’s then-outstanding voting securities; or  
  (e)   The adoption or authorization by the shareholders of the Company of a
plan providing for the liquidation or dissolution of the Company.

  2.9   “Code” means the U.S. Internal Revenue Code of 1986, as amended from
time to time. For purposes of this Agreement, references to sections of the Code
shall be deemed to include references to any applicable regulations thereunder
and any successor or similar provision.     2.10   “Committee” means the
Compensation and Organization Committee of the Board or a subcommittee thereof,
or any other committee designated by the Board to administer this Agreement. The
members of the Committee shall be appointed from time to time by and shall serve
at the discretion of the Board. If the Committee does not exist or cannot
function for any reason, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee.     2.11   “Company” means The
Scotts Miracle-Gro Company, an Ohio corporation, or any successor company
thereto as provided in Section 8.1 herein.     2.12   “Director” means any
individual who is a member of the Board of Directors of the Company.     2.13  
“Disability” or “Disabled” means for all purposes of this Agreement, a
consecutive period of ninety (90) days during which the Executive is unable to
perform his duties.     2.14   “Effective Date” means October 1, 2006.     2.15
  “Effective Date of Termination” means the date on which a termination of the
Executive’s employment occurs.     2.16   “Executive” means Christopher Nagel.  
  2.17   “Good Reason” means:

  (a)   A material reduction in the Executive’s duties or responsibilities as
compared to other comparable senior executives of the Company is effected by the
Committee and/or the Chairman & Chief Executive Officer of the Company and such
material reduction is made without the Executive’s written consent (without
regard to whether or not any change is made to the Executive’s title); and    
(b)   A material reduction in the Executive’s pay or benefits as compared to
other comparable senior executives of the Company.

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  2.18   “Long-Term Incentive Award” means the Long-Term Incentive Award to be
paid to the Executive in accordance with the Company’s long-term incentive plan
as described in Section 5.3 herein.     2.19   “Notice of Termination” means a
written notice which shall indicate the specific termination provision in this
Agreement relied upon, and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provisions so indicated.

Article 3. Position and Responsibilities
     During the term of this Agreement, the Executive agrees to serve as
Executive Vice President—North America Consumer Business. In his capacity as
Executive Vice President, the Executive shall report directly to the Chairman &
Chief Executive Officer of the Company, and shall perform duties and
responsibilities of an Executive Vice President and other duties and
responsibilities as the Chairman & Chief Executive Officer may assign him during
the term of this Agreement.
Article 4. Standard of Care
     During the term of this Agreement, the Executive agrees to devote his full
time, attention, and energies to the Company’s business and shall not be engaged
in any other business activity, whether or not such business activity is pursued
for gain, profit, or other pecuniary advantage unless such business activity is
approved in writing by the Board or Committee, provided, however, that board
positions with nonprofit or philanthropic organizations which do not interfere
with the Executive’s performance of his duties and responsibilities shall not
require Board or Committee Board approval. The Executive covenants, warrants,
and represents that he shall:

  (a)   Devote his full and best efforts to the fulfillment of his employment
obligations; and     (b)   Adhere to the Company’s code of business conduct or
ethics as determined by the Board or Committee and exercise the highest
standards of conduct in the performance of his duties.

Article 5. Compensation
     As remuneration for all services to be rendered by the Executive during the
term of this Agreement, and as consideration for complying with the covenants
herein, the Company shall pay and provide to the Executive the following.
     5.1 Base Salary. The Company shall pay the Executive a Base Salary in the
amount of four hundred and fifty thousand dollars ($450,000.00) per year. This
Base Salary shall be paid to the Executive in equal installments throughout the
year, consistent with the normal payroll practices of the Company. The Base
Salary shall be reviewed at least annually following the Effective Date of this
Agreement, while this Agreement is in force, to ascertain whether, in the
judgment of the Committee, such Base Salary should be modified. If modified, the
Base Salary as stated above shall, likewise, be modified for all purposes of
this Agreement.

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     5.2 Annual Bonus. Executive shall be eligible to receive in addition to his
Base Salary an annual incentive compensation award (“Annual Bonus Award”) for
services rendered during such fiscal year. The amount of the Annual Bonus Award,
if any, with respect to any fiscal year shall be based upon performance targets
and award levels determined by the Committee in its sole discretion, in
accordance with the Company’s annual incentive compensation plan as in effect
for executives from time to time.
     5.3 Long-Term Incentives. Executive shall be eligible to receive, in
addition to his Base Salary and Annual Bonus Award, a Long-Term Incentive Award
for services rendered during an Award Period established by the Committee. The
amount of the Long-Term Incentive Award, if any, with respect to any Award
Period shall be based upon performance targets and award levels determined by
the Committee in its sole discretion, in accordance with the Company’s long-term
incentive compensation plan as in effect for executives from time to time.
     5.4 Retirement Benefits. During the term of this Agreement, and as
otherwise provided within the provisions of each of the respective plans, the
Company shall provide to the Executive all retirements benefits to which other
executives and employees of the Company are entitled to receive, subject to the
eligibility requirements and other provisions of such arrangements as applicable
to executives of the Company generally.
     5.5 Employee Benefits. During the term of this Agreement, and as otherwise
provided within the provisions of each of the respective plans, the Company
shall provide to the Executive all benefits to which other executives and
employees of the Company are entitled to receive, subject to the eligibility
requirements and other provisions of such arrangements as applicable to
executives of the Company generally. Such benefits shall include, but shall not
be limited to, life insurance, comprehensive health and major medical insurance,
dental insurance, prescription drug insurance, vision insurance, and short-term
and long-term disability. The Executive shall likewise participate in any
additional benefit as may be established during the term of this Agreement, by
standard written policy of the Company.
     5.6 Perquisites. The Company shall provide to the Executive on an annual
basis an automobile allowance of twelve thousand ($12,000.00) dollars. This
allowance shall be paid to the Executive in equal installments throughout the
year, consistent with the normal payroll practices of the Company. Additionally,
the Company shall provide on an annual basis to the Executive with either a four
thousand dollar ($4,000) amount to be used in lieu of the provision of personal
financial planning, or will provide personal financial planning up to a cost or
value of such amount. The value of such services or such amount will be added to
the Executive’s taxable income. Some or all of such value or amount may be tax
deductible by the Executive, but the Company makes no tax representation
relating thereto.
Article 6. Expenses
     Upon presentation of appropriate documentation, the Company shall pay, or
reimburse the Executive for all ordinary and necessary expenses, in a reasonable
amount, which the Executive incurs in performing his duties under this Agreement
including, but not limited to, travel, entertainment, professional dues and
subscriptions, and all dues, fees, and expenses associated with membership in
various professional, business, and civic associations and societies in which
the Executive’s participation is in the best interest of the Company, as
determined by the Committee in its sole discretion.

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Article 7. Employment Terminations
     7.1 Termination Due to Death. In the event the Executive’s employment is
terminated while this Agreement is in force by reason of death, the Company’s
obligations under this Agreement shall immediately expire.
     Notwithstanding the foregoing, the Company shall be obligated to pay to the
Executive the following:

  (a)   Base Salary through the Effective Date of Termination;     (b)   A
prorated Annual Bonus Award based on the Executive’s target bonus opportunity
established for the year in which termination of employment occurs. The prorated
amount shall be determined as a function of time within the year that has
elapsed prior to the Executive’s Effective Date of Termination;     (c)  
Accrued but unused vacation pay through the Effective Date of Termination; and  
  (d)   All other rights and benefits the Executive is vested in, pursuant to
other plans and programs of the Company.

     The benefits described in Sections 7.1(a), (b), and (c) shall be paid in
cash to the Executive’s Beneficiary in a single lump sum as soon as practicable
following the Effective Date of Termination in order to avoid penalties and
excise taxes under the requirements Section Code 409A. All other payments due to
the Executive upon termination of employment shall be paid in accordance with
the terms of such applicable plans or programs. The Company and the Executive
thereafter shall have no further obligations under this Agreement.
     7.2 Termination Due to Disability. In the event that the Executive becomes
Disabled during the term of this Agreement and is, therefore, unable to perform
his duties herein for more than ninety (90) consecutive calendar days during any
period of twelve (12) consecutive months, the Company shall have the right to
terminate the Executive’s active employment as provided in this Agreement.
However, the Committee shall deliver written notice to the Executive of the
Company’s intent to terminate for Disability at least thirty (30) calendar days
prior to the Effective Date of Termination.
     Disability shall be determined by the Committee upon receipt of and in
reliance on competent medical advice from one (1) or more individuals, selected
by the Committee, who are qualified to give such professional medical advice.
     A termination for Disability shall become effective upon the end of the
thirty (30) day notice period. Upon the Effective Date of Termination, the
Company’s obligations under this Agreement shall immediately expire.

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     Notwithstanding the foregoing, the Company shall be obligated to pay to the
Executive the following:

  (a)   Base Salary through the Effective Date of Termination (subject to an
offset for any disability payments that the Executive receives during this
period);     (b)   A prorated Annual Bonus Award based on the Executive’s target
bonus opportunity established for the year in which termination of employment
occurs. The prorated amount shall be determined as a function of time within the
year that has elapsed prior to the Executive’s Effective Date of Termination;  
  (c)   Accrued but unused vacation pay through the Effective Date of
Termination; and     (d)   All other rights and benefits the Executive is vested
in, pursuant to other plans and programs of the Company.

     The benefits described in Sections 7.2(a), (b), and (c) shall be paid in
cash to the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination in order to avoid penalties and excise taxes under
the requirements of Section Code 409A. All other payments due to the Executive
upon termination of employment shall be paid in accordance with the terms of
such applicable plans or programs. The Company and the Executive thereafter
shall have no further obligations under this Agreement.
     7.3 Voluntary Termination by the Executive. The Executive may terminate
this Agreement at any time by giving the Committee written notice of his intent
to terminate, delivered at least sixty (60) calendar days prior to the Effective
Date of Termination. The termination automatically shall become effective upon
the expiration of the sixty (60) day notice period. Notwithstanding the
foregoing, the Company may waive the sixty (60) day notice period; however, the
Executive shall be entitled to receive all elements of compensation described in
Sections 5.1 through 5.6 for the sixty (60) day notice period, subject to the
eligibility and participation requirements of any employee benefit plan.
     Upon the Effective Date of Termination, following the expiration of the
sixty (60) day notice period, the Company shall pay the Executive his accrued
and unpaid Base Salary and accrued but unused vacation pay, at the rate then in
effect, through the Effective Date of Termination, plus all other benefits to
which the Executive has a vested right at that time (for this purpose, the
Executive shall not be entitled to any Annual Bonus Award with respect to the
fiscal year in which voluntary termination under this Section 7.3 occurs or any
Long-Term Incentive Award for the Award Period then in progress). With the
exception of the covenants referenced in Article 10, herein (which shall survive
such termination), the Company and the Executive thereafter shall have no
further obligations under this Agreement.

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     7.4 Termination by the Company without Cause or by the Executive with Good
Reason unrelated to a Change in Control of the Company. At all times during the
term of this Agreement, the Committee may terminate the Executive’s employment
for reasons other than death, Disability, or for Cause, by providing to the
Executive a Notice of Termination, at least sixty (60) calendar days prior to
the Effective Date of Termination. Such Notice of Termination shall be
irrevocable absent express, mutual consent of the parties. Additionally, the
Executive may terminate employment with the Company for Good Reason by providing
the Company with a Notice of Termination at least sixty (60) calendar days prior
to the Effective Date of Termination. The Notice of Termination must set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
such Good Reason termination. The Company shall have thirty (30) days to cure
such Company action following receipt of the Notice of Termination. The Company
shall have one (1) cure period for each reason that allows an Executive to
terminate his employment for Good Reason.
     Subject to the Executive signing a waiver of all claims, upon the Effective
Date of Termination, following the expiration of the sixty (60) day notice
period, the Company shall pay and provide to the Executive:

  (a)   An amount equal to the Executive’s accrued and unpaid Base Salary and
accrued but unused vacation pay through the Effective Date of Termination;    
(b)   An amount equal to two (2) times the Executive’s annual Base Salary, at
the Base Salary rate in effect on the Effective Date of Termination;     (c)  
An amount equal to one (1) times the Executive’s targeted Annual Bonus Award, at
the targeted Annual Bonus Award in effect on the Effective Date of Termination;
    (d)   At the exact same cost to the Executive, and at the same coverage
level as in effect as of the Executive’s Effective Date of Termination (subject
to changes in coverage levels applicable to all employees generally), a
continuation of the Executive’s (and the Executive’s eligible dependents’)
health insurance coverage for twelve (12) months from the Effective Date of
Termination. The applicable COBRA health insurance benefit continuation period
shall begin coincident with the beginning of this benefit continuation period;  
      The providing of these health insurance benefits by the Company shall be
discontinued prior to the end of the twelve (12) month continuation period to
the extent that the Executive becomes covered under the health insurance
coverage of a subsequent employer which does not contain any exclusion or
limitation with respect to any preexisting condition of the Executive or the
Executive’s eligible dependents. For purposes of enforcing this offset
provision, the Executive shall have a duty to inform the Company as to the terms
and conditions of any subsequent employment and the corresponding benefits
earned from such employment. The Executive shall provide, or cause to provide,
to the Company in writing correct, complete, and timely information concerning
the same; and     (e)   All other benefits to which the Executive has a vested
right at the time, according to the provisions of the governing plan or program.

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     Payment of the benefits described in Sections 7.4(a) and (c) shall be paid
to the Executive in a single lump sum as soon as practicable following the
Effective Date of Termination in order to avoid penalties and excise taxes under
the requirements of Code Section 409A. The benefits described in Section 7.4(b)
shall be paid in cash to the Executive in equal monthly installments over a
twenty-four (24) month period. All other payments due to the Executive upon
termination of employment shall be paid in accordance with the terms of such
applicable plans or program. With the exception of the covenants referenced in
Article 10 (which shall survive such termination), the Company and the Executive
thereafter shall have no further obligations under this Agreement.
     7.5 Termination for Cause. Nothing in this Agreement shall be construed to
prevent the Committee from terminating the Executive’s employment under this
Agreement for Cause.
     In the event this Agreement is terminated by the Committee for Cause, the
Company shall pay the Executive his Base Salary and accrued vacation pay through
the Effective Date of Termination, and the Executive shall immediately
thereafter forfeit all rights and benefits (other than vested benefits) he would
otherwise have been entitled to receive under this Agreement. The Company and
the Executive thereafter shall have no further obligations under this Agreement
with the exception of the covenants referenced in Article 10 herein (which shall
survive such termination).
     7.6 Termination by the Company without Cause or by the Executive with Good
Reason subsequent to a Change in Control of the Company. If within two (2) years
following the Change in Control of the Company, the Company terminates the
Executive’s employment for any reason other than death, Disability, Retirement,
or Cause or the Executive terminates employment for Good Reason, subject to the
Executive signing a waiver of all claims, the Company shall pay and provide to
the Executive:

  (a)   An amount equal to the Executive’s accrued and unpaid Base Salary and
accrued but unused vacation pay through the Effective Date of Termination;    
(b)   An amount equal to two (2) times the Executive’s annual Base Salary, at
the Base Salary amount in effect on the Effective Date of Termination;     (c)  
An amount equal to two (2) times the Executive’s targeted Annual Bonus Award, at
the targeted Annual Bonus Award in effect on the Effective Date of Termination;
    (d)   An amount that is equal to a prorated Annual Bonus Award based on the
Executive’s target bonus opportunity established for the fiscal year in which
termination of employment occurs. The prorated amount shall be determined as a
function of time within the fiscal year that has elapsed prior to the
Executive’s Effective Date of Termination;

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  (e)   At the exact same cost to the Executive, and at the same coverage level
as in effect as of the Executive’s Effective Date of Termination (subject to
changes in coverage levels applicable to all employees generally), a
continuation of the Executive’s (and the Executive’s eligible dependents’)
health insurance coverage for twenty four (24) months from the Effective Date of
Termination. The applicable COBRA health insurance benefit continuation period
shall begin coincident with the beginning of this benefit continuation period;  
      The providing of these health insurance benefits by the Company shall be
discontinued prior to the end of the twenty four (24) month continuation period
to the extent that the Executive becomes covered under the health insurance
coverage of a subsequent employer which does not contain any exclusion or
limitation with respect to any preexisting condition of the Executive or the
Executive’s eligible dependents. For purposes of enforcing this offset
provision, the Executive shall have a duty to inform the Company as to the terms
and conditions of any subsequent employment and the corresponding benefits
earned from such employment. The Executive shall provide, or cause to provide,
to the Company in writing correct, complete, and timely information concerning
the same; and     (f)   All other benefits to which the Executive has a vested
right at the time, according to the provisions of the governing plan or program.

     Payment of the benefits described in Sections 7.6(a), (b), (c), and
(d) shall be paid to the Executive in a single lump sum as soon as practicable
following the Effective Date of Termination in order to avoid penalties and
excise taxes under the requirements of Code Section 409A. All other payments due
to the Executive upon termination of employment shall be paid in accordance with
the terms of such applicable plans or program. With the exception of the
covenants referenced in Article 10 (which shall survive such termination), the
Company and the Executive thereafter shall have no further obligations under
this Agreement.
Article 8. Assignment
     8.1 Assignment by Company. This Agreement may and shall be assigned or
transferred to, and shall be binding upon and shall inure to the benefit of any
successor company. Any such successor company shall be deemed substituted for
all purposes of the “Company” under the terms of this Agreement. Notwithstanding
such assignment, the Company shall remain, with such successor company, jointly
and severally liable for all its obligations hereunder.
     Failure of the Company to obtain the agreement of any successor company to
be bound by the terms of this Agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement, and shall immediately entitle
the Executive to benefits from the Company in the same amount and on the same
terms as the Executive would be entitled to receive in the event of a
termination of employment without Cause as provided in Section 7.4. Except as
herein provided, this Agreement may not otherwise be assigned by the Company.

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     8.2 Assignment by Executive. This Agreement shall inure to the benefit of
and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. If the Executive dies while any amount would still be payable to him
hereunder had he continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement, to the
Executive’s Beneficiary. If the Executive has not named a Beneficiary, then such
amounts shall be paid to the Executive’s estate.
Article 9. Notice and Dispute Resolution
     9.1 Notice. Any notices, requests, demands, or other communications
provided by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Company or, in the case of the Company, at its principal
offices.
     9.2 Dispute Resolution. With the exception of a dispute relating to any
violation of a restrictive covenant as referenced in Article 10 of this
Agreement, any dispute or controversy arising under or in connection with this
Agreement shall be settled by arbitration. The arbitration shall be conducted
before a panel of three (3) arbitrators sitting in a location selected by the
Executive within fifty (50) miles from the location of his job with the Company
and in accordance with the rules of the American Arbitration Association then in
effect. The decision of the arbitrators shall be binding on both the Company and
Executive. Judgment may be entered on the award of the arbitrators in any court
having jurisdiction. Payment of any expenses for such arbitration, including the
legal fees and expenses incurred by Executive, shall be determined by the
arbitrator in their decision.
Article 10. Confidentiality, Noncompetition, and Nonsolicitation
     This Agreement shall not supersede or nullify in any way the Employee
Confidentiality, Noncompetition, Nonsolicitation Agreement executed by the
Executive on April 14, 2005 and again on subsequent dates. The Employee
Confidentiality, Noncompetition, Nonsolicitation Agreement shall remain in full
force and effect and any requirements of such agreement shall be incorporated by
reference into this Agreement.
Article 11. Miscellaneous
     11.1 Entire Agreement. This Agreement supersedes any prior agreements or
understandings, oral or written, between the parties hereto or between the
Executive and the Company, with respect to the subject matter hereof, and
constitutes the entire agreement of the parties with respect thereto.
     11.2 Amendment or Modification. This Agreement shall not be varied,
altered, modified, canceled, changed, or in any way amended except by mutual
agreement of the parties in a written instrument executed by the parties hereto
or their legal representatives. Notwithstanding the foregoing, the Committee may
amend the Agreement, to take effect retroactively or otherwise, as deemed
necessary or advisable for the purpose of conforming the Agreement to any
present or future law relating to Agreements of this or similar nature
(including, but not limited to, Code Section 409A), and to the administrative
regulations and rulings promulgated thereunder.
     11.3 Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect.

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     11.4 Counterparts. This Agreement may be executed in one (1) or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
     11.5 Tax Withholding. The Company may withhold from any benefits payable
under this Agreement all federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.
     11.6 Beneficiaries. Any payments or benefits hereunder due to the Executive
at the time of his death shall nonetheless be paid or provided and the Executive
may designate one or more individuals or entities as the primary and/or
contingent Beneficiaries of any amounts to be received under this Agreement.
Such designation must be in the form of a signed writing acceptable to the
Committee. The Executive may make or change such designation at any time.
     11.7 Payment Obligation Absolute. All amounts payable by the Company
hereunder shall be paid without notice or demand. Subject to the covenants set
forth in Article 10 and Section 7.4(e), each and every payment made hereunder by
the Company shall be final, and the Company shall not seek to recover all or any
part of such payment from the Executive or from whomsoever may be entitled
thereto, for any reasons whatsoever.
     The restrictive covenants referenced in Article 10 are independent of any
other contractual obligations in this Agreement or otherwise owed by the Company
to the Executive. Except as provided in this paragraph, the existence of any
claim or cause of action by Executive against the Company, whether based on this
Agreement or otherwise, shall not create a defense to the enforcement by the
Company of any restrictive covenant contained herein.
     Except as provided in Section 7.4(e), the Executive shall not be obligated
to seek other employment in mitigation of the amounts payable or arrangements
made under any provision of this Agreement, and the obtaining of any such other
employment shall in no event effect any reduction of the Company’s obligations
to make the payments and arrangements required to be made under this Agreement.
     11.8 Contractual Rights to Benefits. Subject to approval by the Committee,
this Agreement establishes and vests in the Executive a contractual right to the
benefits to which he is entitled hereunder. However, nothing herein contained
shall require or be deemed to require, or prohibit or be deemed to prohibit, the
Company to segregate, earmark, or otherwise set aside any funds or other assets,
in trust or otherwise, to provide for any payments to be made or required
hereunder.
     11.9 Specific Performance. The Executive acknowledges that the obligations
undertaken by him pursuant to this Agreement are unique and that the Company
will likely have no adequate remedy at law if the Executive shall fail to
perform any of his obligations hereunder. The Executive therefore confirms that
the Company’s right to specific performance of the terms of this Agreement is
essential to protect the rights and interests of the Company. Accordingly, in
addition to any other remedies that the Company may have at law or in equity,
the Company shall have the right to have all obligations, covenants, agreements,
and other provisions of this Agreement specifically performed by the Executive
and the Company shall have the right to obtain preliminary injunctive relief to
secure specific performance and to prevent a breach or contemplated breach of
this Agreement by the Executive.

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     11.10 Voiding of Agreement Provision. If any provision under this Agreement
causes an amount to be considered deferred under Code Section 409A and as such
become subject to income tax, excise tax, or penalties under the Code prior to
the time such amount is paid to the Executive, such amount shall be deemed null
and void with respect to such amount deferred and the Committee may amend or
modify this Agreement in order to accomplish the objectives of the Agreement
without causing early taxation of such amounts and without the Company incurring
additional cost or liability.
Article 12. Governing Law
     To the extent not preempted by federal law, the provisions of this
Agreement shall be construed and enforced in accordance with the laws of the
state of Ohio, excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of the Agreement to the
substantive law of another jurisdiction.
Article 13. Indemnification
     The Company hereby covenants and agrees to indemnify and hold harmless the
Executive against and in respect to any and all actions, suits, proceedings,
claims, demands, judgments, costs, expenses, losses, and damages resulting from
the Executive’s performance of his duties and obligations under the terms of
this Agreement; provided however, the Executive acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company or its shareholders, and with respect to a criminal action or
proceeding, the Executive had no reasonable cause to believe his conduct was
unlawful.

              Executive:
 
                  Christopher Nagel
 
       
 
  Date:    
 
       
 
            The Scotts Miracle-Gro Company
 
                  Representative of the Board of Directors
 
       
 
  Date:    
 
       

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