<PAGE>   1
                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement"), made this ______ day of
____________, is entered into by CML Group, Inc., a corporation with its
principal place of business at 524 Main Street, Acton, MA (the "CML"), Facsimile
Number 978-263-2178, Smith & Hawken, Ltd., a wholly-owned subsidiary of CML,
with its principal place of business at 117 E. Strawberry Drive, Mill Valley, CA
(the "Company") Facsimile Number _______________, and David McCreight, residing
at ____________________________, CA ______ (the "Employee"), Facsimile Number
_________________.

         The Company desires to continue to employ the Employee, and the
Employee desires to continue to be employed by the Company. In consideration of
the mutual covenants and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the parties agree as follows:

1.       TERM OF EMPLOYMENT. The Company hereby agrees to continue to employ the
Employee, and the Employee hereby accepts continued employment with the Company,
upon the terms set forth in this Agreement, commencing on April 1, 1998 (the
"Commencement Date") and continuing hereunder until a termination in accordance
with the provisions of Section 4 (the "Employment Period").

2.       TITLE; CAPACITY.

3        2.1      The Employee shall serve as Senior Vice President and General
Merchandise Manager of the Company and be subject to the supervision of the
President and Chief Executive Officer of the Company. He shall have such
authority as is consistent with his service as Senior Vice President and General
Merchandise Manager.

4        The Employee hereby agrees to continue employment with the Company and
serve as Senior Vice President and General Merchandise Manager and perform the
duties and responsibilities of such positions and such other duties and
responsibilities, consistent with his position as Senior Vice President and
General Merchandise Manager of the Company, as the President and Chief Executive
Officer of the Company shall from time to time reasonably assign to him.

5        2.2      The Employee shall continue to be based at the Company's
headquarters in Mill Valley, California, or such other place or places within
the San Francisco metropolitan area in which the headquarters is located,
without his prior consent. The Employee agrees to devote his entire business
time, attention and energies to the business and interests of the Company during
the Employment Period.



                                       1
<PAGE>   2

6.       COMPENSATION AND BENEFITS.

7        3.1      SALARY. Effective April 1, 1998, the Company shall pay the
Employee, in monthly installments, an annual base salary of $200,000 during the
Employment Period ("Annual Base Salary"). Such salary shall be reviewed annually
by the Board of Directors of CML (the "Board") at the beginning of each fiscal
year of the Company, beginning with the fiscal year commencing August 1, 1999.

8        3.2      BONUSES. Set forth in Sections 3.2 and 3.3.2 are the terms of
the cash and option bonuses for which the Employee is eligible, based on (i) an
objective formula, and (ii) discretionary criteria, which may be awarded to the
Employee for the Company's fiscal year ending July 31, 1998 (the "98 Bonuses").
In addition, the Company, CML, and the Employee shall work together, in good
faith, beginning as soon as practicable after the Company's financial goals for
the fiscal year ending July 31, 1999 have been determined, to establish the
terms of bonuses, based on concepts set forth on SCHEDULE A (to be completed by
the parties as soon as practicable), for which the Employee will be eligible,
based on the performance of the Employee and the Company, during the Company's
fiscal year ending July 31, 1999 (the "99 Bonuses"). The terms of the 99 Bonuses
will be set forth in a written instrument signed by all parties to this
Agreement.

9                 3.2.1    FORMULA BONUS. The Company shall pay the Employee a
cash bonus for the Company's fiscal year ending July 31, 1998 ("FY 98"), if the
Employee is employed on July 31, 1998, equal to the largest amount for which he
qualifies under the provisions of the attached SCHEDULE B. "EBIT" as used in
this Agreement, and in any Schedules to this Agreement, means the Company's
Earnings Before Interest and Taxes as determined in accordance with generally
accepted accounting principles by the Company's independent accountants;
provided that in determining EBIT the bonuses that would otherwise have been
payable to the Employee and to Kathleen Tierney and Kevin Shahan under the bonus
program set forth on SCHEDULE C, which is no longer in effect, shall be included
as a compensation expense in determining FY 98 EBIT and not the bonuses payable
under Sections 3.2.1 and 3.2.2.

10                3.2.2    DISCRETIONARY BONUS. The Company may, in the sole
discretion of the Board, pay the Employee a discretionary bonus of up to 12.5%
of Annual Base Salary. In determining the amount of the discretionary bonus, if
any, to be paid under this provision, the Board will consider those factors it
deems appropriate, including, without limitation, the extent of Employee's
attainment of those operational and organizational goals set forth in SCHEDULE D
annexed hereto

11                3.2.3    BONUS PAYMENT. Employee must be employed by the
Company on July 31, 1998 in order to receive any bonus and any bonus will be
paid 



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<PAGE>   3

within 30 days following the completion of the FY 98 audit by the Company's
independent accountants.

12       3.3      OPTIONS.

13                3.3.1    IMMEDIATE OPTION GRANT. Upon execution of this
Agreement, Employee will be granted an option to purchase 75,000 shares of
common stock of CML with an exercise price equal to the closing price of CML's
common stock on the New York Stock Exchange (the "Fair Market Value") on the
date of grant. Such option will vest as to 50% of the shares covered thereby on
the date of grant, an additional 25% on April 1, 1999, if he is then still
employed by the Company, and the remaining 25% on April 1, 2000, if he is then
still employed by the Company. The option shall be subject to such other
provisions as are set forth in the stock option agreements attached hereto as
APPENDIX I.

14                3.3.2    PERFORMANCE OPTION.

15                         (a)      FORMULA GRANT. After completion of the audit
of CML's financial statements for FY 98, the Company will grant to the Employee
an option to purchase the largest number of shares of common stock of CML for
which he qualifies in accordance with the provisions of the attached SCHEDULE E,
provided that he is then employed by the Company.

16                         (b)      DISCRETIONARY GRANT. After the end of FY 98,
the Company may, in the sole discretion of the Board, grant Employee an option
to purchase up to an additional 25,000 shares of CML common stock. In
determining whether to grant any such additional options, the Board will
consider those factors it deems appropriate, including, without limitation, the
extent of Employee's attainment of those operational and organizational goals
set forth on the attached SCHEDULE D.

17                         (c)      GRANT PROCESS. Options to be granted to the
Employee pursuant to this Section 3.3.2. shall be granted promptly after
completion of the FY 98 audit by the Company's independent accountants. Such
options will be exercisable at Fair Market Value on the date of grant and will
vest as to 50% of the shares covered thereby on the date of grant, an additional
25% on July 31, 1999, if the Employee is then still employed by the Company and
the remaining 25% on July 31, 2000, if the Employee is then still employed by
the Company. The option will be subject to such other provisions as are set
forth in the stock option agreements attached hereto as APPENDIX I. To the
extent consistent with the law, the Company will grant options intended to
qualify as incentive stock options to the Employee under this Section 3.

18       3.4      SALE BONUS. In the event that, during the Employment Period
(or within 90 days thereafter if Employee is terminated without Cause under
Section 4.3), CML sells the Company, either (i) CML ceases to own at least 50%
of the equity of



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<PAGE>   4
the Company (except as a result of CML's "spinoff" of the Company into a
separate publicly traded corporation where the shareholders of the Company and
CML immediately after the spinoff are substantially the same) or (ii) all or
substantially all of the assets of the Company are no longer owned by the
Company (each hereinafter referred to as a "Sale"), the Company agrees to pay
the Employee a bonus ("Sale Bonus") calculated as a percentage of the "Net
Consideration" received in connection with the Sale. The Sale Bonus shall be
calculated as follows:

                  (a)      If the Net Consideration is $50 Million or less, the
                           Sale Bonus is Zero ($0).

                  (b)      If the Net Consideration is greater than $50 Million
                           but less than or equal to $70 Million the Sale Bonus
                           shall equal three-eighths of one percent (3/8%) of
                           the amount by which the Net Consideration exceeds $50
                           Million.

                  (c)      If the Net Consideration is greater than $70 Million,
                           the Sale Bonus shall be equal to (i) $75,000, plus
                           (ii) five-eighths of one percent (5/8%) of the amount
                           by which the Net Consideration exceeds $70 Million.

The Sale Bonus will be paid in twelve (12) equal monthly installments over the
12-month period following receipt of the Net Consideration, PROVIDED, HOWEVER,
that in the event the Employee's employment with the Company is terminated for
death or disability pursuant to Section 4.2, or the Employee is terminated
without Cause under Section 4.3, the balance of the Sale Bonus shall be paid to
the Employee in a lump-sum at the time of such termination.

         The term "Net Consideration" means the fair market value on the date of
the consummation of the Sale of all consideration in the form of cash or
securities received by CML or the Company in connection with the Sale, less (i)
all fees and expenses incurred in connection with the Sale, and (ii) any
liabilities of the Company not assumed in the Sale and any expenses incurred in
the settlement of such liabilities. If any portion of the Net Consideration is
other than cash, then for the purpose of computing any Sale Bonus payable to the
Employee, the Net Consideration shall be valued as follows: (i) publicly traded
securities shall be valued at the average of their closing prices (as reported
in the Wall Street Journal) for the twenty (20) trading days prior to the
consummation of the Sale; (ii) any other consideration such as straight or
convertible debt securities or obligations, or installment sale notes,
unmarketable securities or other securities shall be valued at the fair market
value thereof as determined in good faith by CML. In the event of any
acquisition of Company assets,



                                       4
<PAGE>   5

the face amount of debt assumed by the acquiring party shall be valued at the
time of the sale and included as part of the Net Consideration. Any Sale Bonus
calculated on amounts paid into escrow will be payable at the time or times such
amounts are released from such escrow. If the payment of any portion of the Net
Consideration is contingent on any future event, that portion of the Net
Consideration will be calculated and payable if and when such contingent payment
is made.

         3.5      BENEFITS. The Employee shall be entitled to participate in all
other benefit programs that the Company provides to its employees, if any, to
the extent that Employee's position, tenure, salary, age, health and other
qualifications make him eligible to participate.
 
         3.6      REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all reasonable travel, entertainment and other expenses incurred or
paid by the Employee in connection with, or related to, the performance of his
duties, responsibilities or services under this Agreement, upon presentation by
the Employee of documentation, expense statements, vouchers and/or such other
supporting information as the Company may request, PROVIDED, HOWEVER, that the
amount available for such travel, entertainment and other expenses may be fixed
in advance by the Board, consistent with past practice.

1.       EMPLOYMENT TERMINATION. The employment of the Employee by the Company
pursuant to this Agreement shall terminate upon the occurrence of any of the
following:

2        4.1      At the election of the Board, for Cause, immediately upon
written notice by the Board to the Employee. For the purposes of this Section
4.1, Cause for termination shall be deemed to exist upon (a) a good faith
finding by the Board of a material failure of the Employee to perform his
assigned duties for the Company, which will not be based solely on the Company's
failure to meet its budget, (a "Material Failure"), dishonesty, gross negligence
or misconduct, or (b) the conviction of the Employee of, or the entry of a
pleading of guilty or nolo contendere by the Employee to, any crime involving
moral turpitude or any felony; provided that any termination based on a Material
Failure can only occur after the Employee has received a written notice
identifying such Material Failure (whether or not such Material Failure existed
prior to the notice but was not the subject of a notice) and giving him at least
thirty (30) days within which to correct such Material Failure (the "Warning")
and such correction has not occurred within such thirty (30) days period, and;
provided further that only one Warning will be required under this Agreement and
thereafter, even if correction occurred after the Warning, the Employee may be
terminated without any further



                                       5
<PAGE>   6
Warning, if the Board determines that any previously identified Material Failure
has recurred after such 30-day period.

3        4.2      Thirty days after the death or disability of the Employee. As
used in this Agreement, the term "disability" shall mean the inability of the
Employee, due to a physical or mental disability, for a period of ninety (90)
days, whether or not consecutive, during any 360-day period to perform the
services contemplated under this Agreement. A determination of disability shall
be made by a physician satisfactory to both the Employee and the Company,
PROVIDED THAT if the Employee and the Company do not agree on a physician, the
Employee and the Company shall each select a physician and these two together
shall select a third physician, whose determination as to disability shall be
binding on all parties;

4        4.3      At the election of the Company, without Cause, or, at the
election of the Employee, upon written notice to the other parties to this
Agreement.

5.       EFFECT OF TERMINATION.

6        5.1      TERMINATION FOR CAUSE OR UPON EMPLOYEE'S ELECTION TO
TERMINATE. In the event the Employee's employment is terminated for cause
pursuant to Section 4.1 or at the Employee's election under Section 4.3, the
Company shall pay to the Employee the compensation and benefits otherwise
payable to him under Section 3 through the last day of his actual employment by
the Company including any payment due to Employee under the terms of any Formula
Bonus provision in effect for the fiscal year of the Company ended prior to the
Employee's last day of employment.

7        5.2      TERMINATION FOR DEATH OR DISABILITY. If the Employee's
employment is terminated by death or because of disability pursuant to Section
4.2, the Company shall pay to the estate of the Employee or to the Employee, as
the case may be, the compensation which would otherwise be payable to the
Employee up to the end of the month in which the termination of his employment
because of death or disability occurs and any payment due to Employee under the
terms of any Formula Bonus provision in effect for the fiscal year of the
Company ended prior to the Employee's last day of employment.

8        5.3      TERMINATION OTHER THAN FOR CAUSE, OR UPON DEATH OR DISABILITY.
If the Employee's employment is terminated by the Company other than on account
of Cause, Death or Disability, then the Employee will receive: (i) all
compensation and benefits payable to him under Section 3 of this Agreement,
through the end of the month in which his employment terminates, (ii) monthly
payments of 1/12 of his Annual Base Salary at the rate he is being paid at the
time of such termination, for fifteen (15) months following the end of the month
in which or with which such termination occurs, (iii) a fraction of any bonus he
would have received after the end of 



                                       6
<PAGE>   7

the fiscal year in which such termination occurs, under any formula bonus
program in which he is participating at the time of such termination, determined
by multiplying the amount he would have received by a fraction, the numerator of
which is the number of full or partial months of the fiscal year in which he was
employed and the denominator of which is 12, and (iv) any payment due to
Employee under the terms of any Formula Bonus provision in effect for the fiscal
year of the Company ended prior to the Employee's last day of employment.

9        5.4      SURVIVAL. The provisions of Sections 3.4, 5, 6 and 7 shall
survive the termination of this Agreement.

10.      NON-SOLICITATION.

11       (a)      During the Employment Period, and for a period of fifteen (15)
months after the termination thereof, the Employee will not directly or
indirectly:

12                (i)      recruit, solicit or induce, or attempt to induce, any
employee or employees of the Company to terminate their employment with, or
otherwise cease their relationship with, the Company; or

13                (ii)     solicit, divert or take away, or attempt to divert or
to take away, the Company's relationship with vendors or suppliers, or with
customers with which the Company has a contract, which were contacted, solicited
or served by the Employee while employed by the Company.

14       (b)      If any restriction set forth in this Section 6 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

15       (c)      The restrictions contained in this Section 6 are necessary for
the protection of the business and goodwill of the Company and are considered by
the Employee to be reasonable for such purpose. The Employee agrees that any
breach of this Section 6 may cause the Company substantial and irrevocable
damage and therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right to seek
specific performance and injunctive relief.

16.      PROPRIETARY INFORMATION AND DEVELOPMENTS.

17       7.1      PROPRIETARY INFORMATION.

18                (a)      Employee agrees that all information and know-how,
whether or not in writing, of a private, secret or confidential nature
concerning the Company's business or financial affairs (collectively,
"Proprietary Information") is and shall be the exclusive property of the
Company. By way of illustration, but not



                                       7
<PAGE>   8
limitation, Proprietary Information may include inventions, products, processes,
methods, techniques, formulas, compositions, compounds, projects, developments,
plans, research data, clinical data, financial data, personnel data, computer
programs, and customer and supplier lists. Except as required by law, Employee
will not disclose any Proprietary Information to others outside the Company or,
use the same, for any unauthorized purposes without written approval by an
officer of CML, either during or after his employment, unless and until such
Proprietary Information has become public knowledge without fault by the
Employee.

19                (b)      Employee agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, laboratory notebooks, program
listings, or other written, photographic, or other tangible material containing
Proprietary Information, whether created by the Employee or others, which shall
come into his custody or possession, shall be and are the exclusive property of
the Company to be used by the Employee only in the performance of his duties for
the Company.

20                (c)      Employee agrees that his obligation not to disclose
or use information, know-how and records of the types set forth in paragraphs
(a) and (b) above, also extends to such types of information, know-how, records
and tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to the Employee in the course of the Company's business unless such
information, know-how, records or tangible property is in the public domain.

         7.2      DEVELOPMENTS.

                  (a)      Employee will make full and prompt disclosure to the
Company of all inventions, improvements, discoveries, methods, developments,
software, and works of authorship, whether patentable or not, which are created,
made, conceived or reduced to practice by the Employee or under his direction or
jointly with others during his employment by the Company, whether or not during
normal working hours or on the premises of the Company (all of which are
collectively referred to in this Agreement as "Developments").

                  (b)      Employee agrees to assign and does hereby assign to
the Company (or any person or entity designated by the Company) all his right,
title and interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications. However, this Section 7(b)
shall not apply to Developments which do not relate to the present or planned
business or research and development of the Company and which are made and
conceived by the Employee not during normal working hours, not on the Company's
premises and not using the Company's tools, devices, equipment or Proprietary
Information.



                                       8
<PAGE>   9

                  (c)      Employee agrees to cooperate fully with the Company,
both during and after his employment with the Company, with respect to the
procurement, maintenance and enforcement of copyrights and patents (both in the
United States and foreign countries) relating to Developments. Employee shall
sign all papers, including, without limitation, copyright applications, patent
applications, declarations, oaths, formal assignments, assignment of priority
rights, and powers of attorney, which the Company may reasonably deem necessary
or desirable in order to protect its rights and interests in any Development.

         7.3      OTHER AGREEMENTS. Employee hereby represents that he is not
bound by the terms of any agreement with any previous employer (other than any
other company which was a subsidiary of CML) or other party to refrain from
using or disclosing any trade secret or confidential or proprietary information
in the course of his employment with the Company or to refrain from competing,
directly or indirectly, with the business of such previous employer or any other
party. Employee further represents that his performance of all the terms of this
Agreement and as an employee of the Company does not and will not breach any
agreement to keep in confidence proprietary information, knowledge or data
acquired by him in confidence or in trust prior to his employment with the
Company.

1.       NOTICES. All notices required or permitted under this Agreement shall
be in writing and shall be deemed effective upon (a) personal delivery, or (b)
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other parties at the addresses shown above, or
at such other address or addresses as any party shall designate to the others in
accordance with this Section 8, or (c) sending by facsimile to the other parties
at the facsimile numbers shown above, or at such other number or numbers as any
party shall designate to the others in accordance with this Section 8.

2.       PRONOUNS. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular forms of nouns and pronouns shall include the plural, and vice
versa.

3.       ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.

4.       AMENDMENT. This Agreement may be amended or modified only by a written
instrument executed by both the Company, CML and the Employee.

5.       GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the Commonwealth of Massachusetts.



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<PAGE>   10
6.       SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company or CML may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Employee are personal and shall not be assigned by him.

7.       MISCELLANEOUS.

8        a.       No delay or omission by the Company, CML or Employee in
exercising any right under this Agreement shall operate as a waiver of that or
any other right. A waiver or consent given by the Company, CML or Employee on
any one occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.

9        b.       The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.

10       c.       In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.

11       IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.



CML GROUP, INC.                             SMITH & HAWKEN, LTD.


By:_________________________                By:________________________________

Title:_______________________               Title:_____________________________


                                            EMPLOYEE


                                            -----------------------------------
                                            David McCreight



                                      10
<PAGE>   11

                                   SCHEDULE B

                               FY 98 Formula Bonus


                                   FY 98 EBIT

<TABLE>
<CAPTION>
       Equal To or                                                   FY 98
      Greater Than                        Less Than               Formula Bonus
      ------------                        ---------               -------------
       <S>                                <C>                        <C>    

       $        0                         $3,200,000                 $20,000
       $3,200,000                         $3,730,000                 $28,575
       $3,730,000                         $4,200,000                 $50,000
       $4,200,000                                                    $75,000

</TABLE>




                                       11
<PAGE>   12

                                   SCHEDULE D

                   FY 98 Operational and Organizational Goals


1.       Lower Company Returns in FY'98 from 8.52% of gross sales in FY'97.

2.       Assort Catalogs and Stores with seasonally appropriate and quality
         merchandise that is unique and priced competitively.

3.       Develop a liquidation strategy for each channel.

4.       Develop a Visual Merchandising Strategy: including Organization and
         Process for Execution of strategy.

5.       Develop a Merchandising and Inventory Planning Team that is positioned
         for major revenue growth in the next 2 years.





                                       12
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                                   SCHEDULE E

                    FY 98 Performance Options - Formula Grant

                                   FY 98 EBIT

<TABLE>
<CAPTION>

       Equal To or                                                 FY 98
      Greater Than                  Less Than                Formula Option For:
      ------------                  ---------                -------------------
       <S>                          <C>                         <C>          

       $        0                   $3,730,000                  10,000 shares
       $3,730,000                   $4,200,000                  20,000 shares
       $4,200,000                                               33,333 shares

</TABLE>


                                       13