ex10-1.htm


    EXHIBIT
      10.1

     

    EMPLOYMENT
      AGREEMENT

     

    This
      Employment Agreement (the “Agreement”), dated as of November 12, 2007, (the
“Effective Date”) is by and between AeroGrow International, Inc., a Nevada
      corporation (the “Company”), and Jervis
      B. Perkins (“Employee”).

     

    In
      consideration of the promises and conditions contained herein, the parties
      hereto agree as follows:

     

    Section 1.  Employment.  The
      Company hereby agrees to employ Employee, and Employee hereby accepts employment
      by the Company upon the terms and subject to the conditions hereinafter set
      forth in this Agreement.  Employee’s employment with Company will commence
      on November 12, 2007.

     

    Section 2.  Duties
      During Contract Term.  Employee shall serve as the President
      and Chief Operating Officer of the Company.  Employee will report to
      the Chief Executive Officer of the Company.  Employee hereby agrees to
      perform such responsibilities and duties, and undertake such authorities, as
      are
      customarily performed and undertaken by executives holding positions similar
      to
      that assigned to Employee in similar businesses, as well as any other reasonable
      responsibilities, duties and authorities commensurate with Employee’s position
      assigned by the Company’s Board of Directors or by the Chief Executive Officer
      of the Company.  Chief Executive Officer Michael Bissonnette and
      Employee will confer within thirty (30) days following the Effective Date to
      determine performance expectations of Employee. Employee will perform his duties
      under this paragraph faithfully and to the reasonable best of his ability,
      will
      devote substantially all his working time and efforts to the business of the
      Company, and shall comply with all reasonable and lawful existing and future
      formal policies applicable to senior management level employees of the Company
      and to the Company's business.

     

    Section 3.  Term.  Unless
      Employee's employment hereunder is terminated earlier pursuant to Section 8
      of
      this Agreement, and unless this Agreement is amended or superseded by a new
      Agreement between the parties, the term of this Agreement shall begin on
      November 12, 2007 and shall expire on May 12, 2008 (the initial “Contract
      Term”), provided that upon the expiration of the initial Contract Term, the
      Employee's employment hereunder shall continue for additional consecutive
      extension terms of one (1) year each until either party gives notice of
      termination to the other at least thirty (30) days prior to end of the current
      term.  The initial Contract Term and any extension thereof are
      referred to as the Contract Term.  Should this Agreement be renewed
      for a subsequent term, Employee will be provided with relocation assistance
      and
      an auto allowance, the terms of which will be agreed to by the parties in a
      separate written agreement.

     

    Section
      4.  Place
      of Employment and Transition Period.  During the initial
      Contract Term of this Agreement, Employee will commute to Company’s facilities
      in Boulder, Colorado.  During the initial Contract Term, Employee will
      meet with Company-appointed transition team bi-weekly (in person and/or by
      conference call), or more frequently as may be requested by Employee or Company,
      to ensure a successful transition.  During the initial Contract Term,
      senior advisors Ed Krakauer, Jack Walker, and such others as may be appointed
      by
      the Company, will make themselves reasonably available to consult with Employee
      for ongoing support, consultation, advice, and strategy.

     

    During
      the initial Contract Term,
      Employee will be physically present at Company’s facilities in Boulder, Colorado
      five days per week, subject to the following exceptions: 1) Employee may perform
      work away from the Boulder facilities as requested by the Company or as
      reasonably necessitated by Company business needs, 2) Employee may be absent
      from the Boulder facilities due to illness or injury and on days he takes paid
      vacation (in accordance with the paid time off policies of the Company), and
      3)
      Employee may be absent from the Boulder facilities for all holidays on which
      the
      facility is closed.  During the initial Contract Term, the Company
      shall pay Employee’s reasonably incurred commuting expenses, including airline
      travel between Employee’s home and Colorado (via coach class airline ticket),
      rental housing or hotel charges, and rental cars or car
      service.  Additionally, during the initial Contract Term, Company
      shall pay the cost of flying Employee to his home (via coach class airline
      ticket) weekly.  At the request of Employee, Company shall pay the
      cost of flying Employee’s spouse to Colorado (via coach class airline ticket)
      and rental car or car service for any week, but not more frequently than once
      every two week period unless agreed to by the Company.

     

    In
      lieu of renting automobiles for
      the dates during which he is in Colorado, Employee may obtain an automobile
      by
      lease or purchase.  In the event employee elects to lease or purchase
      an automobile during the Contract Term, Employee shall not be entitled to
      further rental car reimbursements but shall be entitled to an automobile
      allowance in the amount of one thousand dollars ($1,000.00) per
      month.  Executive shall be solely responsible for the procurement of
      such vehicle and for payment of all expenses regarding the operation, insurance
      and maintenance of the said vehicle.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 5.  Compensation
      and Benefits.  In consideration for the services of the
      Employee hereunder, the Company will compensate Employee as
      follows:

     

    (a)
Base
      Salary.  Beginning on the Effective Date, Employee shall
      be entitled to receive a base salary of $250,000 per annum, payable in
      accordance with the Company’s normal payroll procedures and subject to
      applicable tax withholding.  Such base salary shall be payable in periodic
      installments in accordance with the terms of the Company's regular payroll
      practices in effect from the time during the term of this Agreement, but in
      no
      event less frequently than once each month.  Employee’s base salary
      may be increased from time to time in the discretion of the Chief Executive
      Officer and/or Board of Directors, but in no event will Employee’s base salary
      in effect from time to time be reduced.

     

    (b)
      Bonus.  Employee shall receive an
      annual cash bonus in an amount not less than 2.0% of the EBITDA of the Company
      as determined by the Company’s annual financial statements.  For the
      fiscal year 2007, this bonus shall be pro-rated for the portion of such annual
      period covered under this Agreement.  Such bonus shall be payable in a
      single lump sum payment not later than one hundred and twenty (120) days after
      the end of the each of the Company’s fiscal year.  In order to be
      eligible for receipt of this bonus, Employee must be employed by Company on
      the
      last day of the fiscal year for which the bonus is payable.

     

    (c)
      Benefits.  Employee shall be
      entitled to participate in and receive benefits under any and all employee
      benefit plans and programs which are from time to time generally made available
      to the employees of the Company, subject to approval and grant by the Governance
      Committee of the Board with respect to programs calling for such approvals
      or
      grants and consistent with plan terms.

     

    (d)
      Equity Compensation.  Employee shall be
      eligible to participate in the 2005 Equity Compensation Plan, and any successor
      plan providing for compensation in the form of restricted or unrestricted stock,
      stock options and other equity-related compensation provided by the Company
      to
      its employees.

     

    (i)
      The initial grant of the Stock
      Options to be granted pursuant to the Company’s 2005 Equity Compensation Plan
      shall be granted on February 1, 2008 (regardless of whether Employee is employed
      by Company on that date) and shall not be less than 33,334 options to purchase
      the common stock of the Company.  The exercise price of such options
      shall be the price of the Company’s stock at market close on the date of the
      grant.  These options shall: (i) fully vest on the date granted; (ii)
      shall not expire in less than five (5) years from the date of grant, unless
      Employee ceases to be employed by Company, in which case such options will
      expire pursuant to the terms of the Company’s 2005 Equity Compensation Plan and
      the Stock Option Agreement relating to such shares; and (iii) shall be subject
      to other standard terms and conditions under the 2005 Equity Compensation
      Plan.  Employee agrees that the foregoing options shall be subject to
      the lockup provisions as required by the Company's investment bankers in
      conjunction with a private placement offering conducted during February,
      2006.  In the event Employee’s employment terminates before the
      anticipated date that these options are to grant and vest, such options will
      be
      granted and immediately vest as of the date of employment
      separation.

     

    (ii)
      Unless Employee is terminated by
      the Company for Cause on or before August 1, 2008, a second grant of Stock
      Options shall be granted pursuant to the Company’s 2005 Equity Compensation Plan
      on August 1, 2008 and shall not be less than 33,334 options to purchase the
      common stock of the Company.  The exercise price of such options shall
      be the price of the Company’s stock at market close on the date of the
      grant.  These options shall: (i) fully vest on the date granted; (ii)
      shall not expire in less than five (5) years from the date of grant, unless
      Employee ceases to be employed by Company, in which case such options will
      expire pursuant to the terms of the Company’s 2005 Equity Compensation Plan and
      the Stock Option Agreement relating to such shares; and (iii) shall be subject
      to other standard terms and conditions under the 2005 Equity Compensation
      Plan.  Employee agrees that the foregoing options shall be subject to
      the lockup provisions as required by the Company's investment bankers in
      conjunction with a private placement offering conducted during February, 2006.
      In the event Employee’s employment terminates before the anticipated date that
      these options are to grant and vest, such options will be granted and
      immediately vest as of the date of employment separation.

     

     
(iii)
      Should this Agreement be
      renewed for a subsequent Contract Term, a subsequent grant of stock options
      to
      be granted pursuant to the Company’s 2005 Equity Compensation Plan shall be
      granted on August 1, 2008 and shall not be less than 133,336 options to purchase
      the common stock of the Company.  The exercise price of such options
      shall be the price of the Company’s stock at market close on the date of the
      grant.  These options shall: (i) vest according to the schedule set
      forth below; (ii) shall not expire in less than five (5) years from the date
      of
      grant, unless Employee ceases to be employed by Company, in which case such
      options will expire pursuant to the terms of the Company’s 2005 Equity
      Compensation Plan and the Stock Option Agreement relating to such shares; and
      (iii) shall be subject to other standard terms and conditions under the 2005
      Equity Compensation Plan.  Employee agrees that the foregoing options
      shall be subject to the lockup provisions as required by the Company's
      investment bankers in conjunction with a private placement offering conducted
      during February, 2006.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Vesting
      Schedule:

     

    
      	
              ·  

            	
              33,334
                stock options on February 1, 2009

            


    

     

    
      	
              ·  

            	
              33,334
                stock options on August 1, 2009

            


    

     

    
      	
              ·  

            	
              33,334
                stock options on February 1, 2010

            


    

     

    
      	
              ·  

            	
              33,334
                stock options on August 1, 2010

            


    

     

    In
      the
      event of a Change in Control, as that term is defined in the 2005 Equity
      Compensation Plan, or if Employee’s employment is terminated by the Company
      without Cause after May 12, 2008 but before the anticipated date that these
      options set forth in Section 5(d)(iii) are to vest, all unvested options that
      are scheduled to vest within one year after Employee’s separation of employment
      will immediately vest as of the date of employment separation.  In the
      event Employee’s employment is terminated in any manner other than by the
      Company without Cause after May 12, 2008, but before the anticipated date that
      these options set forth in Section 5(d)(iii) are to vest, no unvested options
      will vest.  In the event Employee is offered and accepts the position
      of Chief Executive Officer, all options set forth in this Agreement that have
      not yet vested will become null and void, and Employee’s right to further
      options will be defined in a separate Agreement.

     

    Section 6.  Potential
      Succession To Chief Executive Officer Position.  On or before
      the expiration of the initial Contract Term, Company will notify Employee of
      whether the Agreement and Employee’s employment will be renewed for a subsequent
      Contract Term.  If Employee is offered a subsequent Contract Term, he
      may be offered employment in his current position of President and Chief
      Operating Officer under the terms and conditions set forth in this Agreement
      or
      as Chief Executive Officer of Company.  The decision of whether to
      renew Employee’s Agreement for a subsequent Contract Term, and whether Employee
      should be retained in current position or offered the Chief Executive Officer
      position, is committed to the sole and absolute discretion of the Board of
      Directors of the Company.  Should Employee be offered the Chief
      Executive Officer position, the terms and conditions of his employment in that
      position will be set forth in a separate Agreement with will supersede this
      Agreement.  Such terms and conditions shall be in all respects at
      least as favorable as the terms and conditions set forth in this
      Agreement.

     

    Section 7.  Expenses.  It
      is acknowledged that Employee, in connection with the services to be performed
      by him pursuant to the terms of this Agreement, will be required to make
      payments for travel, entertainment of business associates and similar
      expenses.  The Company will pay or reimburse Employee for all
      reasonable expenses incurred by Employee in the performance of his duties
      hereunder within fifteen days from date Employee or his representative submits
      a
      request for such reimbursement.  Employee will comply with such budget
      limitations and approval and reporting requirements with respect to expenses
      as
      the Company may establish from time to time.

     

    Section 8.  Termination.

     

    (a)
For
      Cause.  The Company may terminate the Employee's
      employment under this Agreement at any time for Cause.  “Cause” is
      defined as (i) a material act of dishonesty by Employee in connection with
      his responsibilities as an Employee, (ii) conviction of, or plea of
nolo contendere to, a felony, (iii) gross misconduct, or
      (iv) continued substantial violation of his employment duties after
      Employee has received a written demand for performance from the Company which
      specifically sets forth the factual basis for the Company’s belief that Employee
      has not substantially performed his duties.

    


    (b)
Without
      Cause by
      Company.  The Company may terminate the Employee's
      employment under this Agreement at any time without Cause.  If the
      Company breaches any term of this Agreement and fails to cure such breach within
      thirty (30) days of notice of such breach from the Employee, and if Employee
      terminates his employment with the Company within thirty (30) days after the
      period for the cure of the breach by the Company expires, the Company shall
      be
      deemed to have terminated the Employee's employment hereunder without
      Cause.  If the Company terminates the Employee’s employment in
      accordance with this paragraph, and Employee has been employed by Company for
      less than six months, the Employee shall be entitled to continuation in payment
      of his Base Salary for six months following the date of termination;
      additionally, Employee will be entitled to a pro-rated portion of the bonus
      described in paragraph 5(b) above and to continued coverage under the health
      and
      welfare employee benefit plans and programs described in paragraph 5(c) at
      active executive levels and costs for six months following the date of
      termination.  If the Company terminates the Employee’s employment in
      accordance with this paragraph, and Employee has been employed by Company for
      six months or longer, the Employee shall be entitled to continuation in payment
      of his Base Salary for twelve months following the date of termination;
      additionally, Employee will be entitled to a pro-rated portion of the bonus
      described in paragraph 5(b) above and to continued coverage under the health
      and
      welfare employee benefit plans and programs described in paragraph 5(c) at
      active executive levels and costs for twelve months following the date of
      termination.  Payment of all salary continuation and pro-rated bonus
      payments described in this paragraph are contingent on (i) Employee’s compliance
      with restrictive covenants provided in Section 9 of this Agreement and (ii)
      Employee’s execution of a release of all claims arising from his employment with
      the Company, in such form as may then be used by the Company respecting
      termination of employees.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    In
      the
      event the Company determines that any severance or termination payments provided
      for in this Agreement or otherwise payable to Employee constitute “parachute
      payments” within the meaning of Section 280G of the Internal Revenue Code of
      1986, as amended (the “Code”) and; (A) but for this paragraph, would be subject
      to the excise tax imposed by Section 4999 of the Code (or any corresponding
      provisions of state income tax law); and; (B) reduction of such payments to
      the
      amount necessary to avoid the application of such excise tax would result in
      Employee retaining an amount that is greater than the amount he would retain
      if
      such payments were made without such reduction but after the application of
      such
      tax; then such payments shall be delivered as to such lesser extent which would
      result in no portion of such payments being subject to excise tax under Section
      4999 of the Code.  Any determination required under this paragraph
      shall be made by the Company’s accountants, whose determination shall be
      conclusive and binding upon the Employee and the Company for all
      purposes.  For purposes of making the calculations required by this
      paragraph, the Company’s accountants may make reasonable assumptions and
      approximations concerning applicable taxes and may rely on reasonable, good
      faith interpretations concerning the application of Sections 280G and 4999
      of
      the Code.  The Company and Employee shall furnish to the accountants
      such information and documents as the accountants may reasonably request in
      order to make a determination under this paragraph.  The Company shall
      bear all costs the accountants may reasonably incur in connection with any
      calculations contemplated by this paragraph.  In the event this
      paragraph applies, then unless otherwise agreed by the parties, lump sum
      payments shall be reduced before periodic payments reduced to the extent
      necessary to avoid imposition of such excise taxes.

     

    Notwithstanding
      the foregoing, in
      the event that the timing of any of the payments or benefits described in this
      Agreement would cause Employee to incur adverse tax consequences due to
      application of Section 409A of the Code or the regulations thereunder, the
      parties agree to negotiate in good faith the revision of the timing of such
      payments and/or benefits to avoid such adverse tax consequences, but in no
      event
      shall such payments and/or benefits be reduced.

     

    (c)
Without
      Cause by
      Employee.  The Employee may terminate the Employee's
      employment under this Agreement at any time after the initial Contract Term
      without Cause upon giving at least thirty (30) day’s advance written
      notice.  If the Employee terminates the Employee’s employment in
      accordance with this paragraph, the Employee shall be entitled to continuation
      in payment of his Base Salary until the end of the month following said notice.
      Notwithstanding any other provision of this Agreement, in the event
      Employee is offered a subsequent Contract Term following the initial Contract
      Term set forth in Section 3 above and declines such offer, Employee will not
      be
      entitled to any benefits after his separation of employment (including
      additional stock options, bonuses, and salary continuation) other than those
      set
      forth in (i) this Paragraph 8(c).

     

    (d)
Non-Renewal
      Deemed
      Termination.  The timely notice by the Company under
      Section 3 of this Agreement not to renew the Contract Term for a subsequent
      term
      shall be deemed a termination without Cause by the Company under this
      Agreement.

     

    (e)
Termination
      Upon
      Death Or Disability.  This Employment Agreement shall
      terminate immediately upon the death of Employee or, at the discretion of the
      Board of Directors of the Company, upon Employee becoming disabled such that
      Employee becomes qualified for Long Term Disability Benefits.

     

    (f)
Accrued
      Compensation
      and Benefits.  In all cases of Employee’s termination of
      employment, the Company shall, within 90 days following Employee’s separation of
      employment, pay to Employee (or, in the case of Employee’s death, his surviving
      spouse, if any, otherwise his estate) any earned but unpaid salary, bonus and
      other compensation together with reimbursement for unpaid expenses approved
      by
      the Company.   In addition, Employee shall be entitled to benefit
      continuation and conversion rights as required by law or as permitted by the
      Company’s employee benefit plans and programs described in paragraph
      5(c).

     

    Section
      9.  Restrictive Covenants.

     

    (a) Confidential
      Data.  The Employee will hold in a fiduciary capacity
      and will not reveal, communicate or divulge during the period of his employment
      by the Company or thereafter, any information, knowledge or data to any person,
      firm or corporation other than the Company or persons, firms or corporations
      designated by the Company, which relates to the names of the customers,
      finances, technical data concerning products or services, or any other secret
      or
      confidential information, knowledge or data of the Company or of any firm owned
      by the Company, which was learned through or as a result of employment by the
      Company.

     

    (b)
Covenant
      Not to
      Compete.  In consideration for the
      benefits provided in this Agreement and his employment with Company, during
      the
      term of this agreement, and for twelve (12) months after the termination of
      this
      Agreement, whichever is later, the Employee shall not, within the United States,
      either directly or indirectly, own, have a proprietary interest of any kind
      in,
      be employed by, or serve as a consultant to or in any other capacity for any
      firm which is in the primary business of providing aeroponics products or
      businesses, or which is otherwise engaged in a business that is competitive
      with
      that conducted by the Company.  Notwithstanding the foregoing, the
      Employee may invest in the securities of any corporation whose shares are listed
      on a national securities exchange or registered under the Securities Exchange
      Act of 1934 (the “Exchange Act”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)
Ownership
      of
      Inventions.  Every invention and
      improvement conceived, invented or developed by the Employee during the term
      of
      his employment hereunder relating to products or services to be manufactured,
      sold, used or in the process of development by the Company or by any parent
      or
      affiliate of the Company during such period of employment, or which may be
      sold
      or used in competition with any such product shall be considered work for hire
      and become the exclusive property of the Company, its successors and assigns.
      Employee agrees to execute such assignments, instruments or other documents
      as
      the Company or its counsel may request to implement this paragraph.

     

    (d)
Solicitation
      of
      Employees.  The Employee and any entity controlled by
      him or with which he is associated (as the terms “control” and “associate” are
      defined in the Exchange Act) shall not, during the Contract Term and for a
      period of twenty-four (24) months after the termination of this Agreement,
      directly or indirectly solicit, interfere with, offer to hire, or induce any
      person who is or was an officer or employee of the Company or any affiliate
      (as
      the term "affiliate" is defined in the Exchange Act) (other than secretarial
      personnel) to discontinue his or her relationship with the Company or an
      affiliate of the Company, in order to accept employment by, or enter into a
      business relationship with, any other entity or person.  The
      restrictions contained in this paragraph 9(d) shall not apply to officers or
      employees of the Company or its affiliates who periods of employment did not
      overlap with the periods of employment of Employee.

     

    (e)
Return
      of
      Property.  Upon termination of employment, and at the
      request of the Company, the Employee agrees to promptly deliver to the Company
      all Company or affiliate memoranda, notes, records, reports, manuals, drawings,
      designs, computer files in any media, and any other documents (including
      extracts and copies thereof) relating to the Company or its affiliates, and
      all
      other property of the Company.  Upon termination, the Employee shall
      cease to use all such materials and information set forth under this Section
      9(e).

     

    (f) Representations.  The
      Employee represents and warrants to the Company that he has full power and
      authority to enter into this Agreement and perform his duties hereunder, and
      that he has no outstanding agreement, whether oral or written or any obligation
      that is or may be in conflict with any of the provisions of this Agreement
      or
      that would preclude Employee from complying with the provisions of this
      Agreement and that  the performance of his denies shall not result in
      a breach of, or constitute a default under, any agreement, whether oral or
      written, including, without limitation, any restrictive covenant or
      confidentiality agreement, to which he is a party or by which he may be
      bound.  Employee further represents and warrants that he has not
      misappropriated any confidential information and/or trade secrets of any third
      party that he intends to use in the performance of his duties under this
      Agreement.

     

    (g)
      Reformation.  If any court shall determine
      that the duration or scope of any restriction contained in this Section 9 is
      unenforceable, it is the intention of the parties that the provisions set forth
      herein shall not be terminated but shall be deemed restricted, amended, and/or
      reformed to the extent necessary to render it valid and
      enforceable.

     

    (h)
Reasonable
      Restrictions.  Employee acknowledges and agrees that the
      provisions of this Section 9 are reasonable and necessary protections of the
      immediate and substantial interests of the Company, that any violation of these
      restrictions may cause substantial injury to the Company for which the Company
      has no adequate legal remedy, and that the Company would not have entered into
      this Employment Agreement with Employee without the additional consideration
      offered by Employee in binding himself to the provisions of this Section
      9.  In the event of a breach or threatened breach by Employee of any
      provision of this Section 9, the Company shall be entitled to seek a temporary
      restraining order and preliminary and/or permanent injunction restraining
      Employee from such breach or threatened breach; provided, however, that nothing
      herein contained shall be construed to preclude the Company from pursuing any
      other available remedy for such breach or threatened breach in addition to,
      or
      in lieu of, such injunctive relief.

     

    (i)
Forum
      for Injunctive
      Relief.  Notwithstanding any arbitration agreements
      between Employee and Company, Employee and Company irrevocably consent to
      personal jurisdiction in the state courts of Colorado, as well as the United
      States District Court for the District of Colorado, for any matter arising
      out
      of or associated with any of the provisions contained in this Section 9 of
      this
      Agreement, including its subparts, including but not limited to any action
      seeking to enforce any of the provisions contained in this Section 9 of this
      Agreement.  Employee further agrees that venue for any action arising
      out of or associated with any of the provisions contained in this Section 9
      of
      this Agreement, including its subparts (including but not limited to common
      law
      claims or claims under the Uniform Trade Secrets Act or claims under the
      Computer Fraud and Abuse Act, the Lanham Act, the Stored Communications Act
      or
      any similar statutes) shall lie exclusively in the state courts of Colorado
      covering Boulder County and in the United States District Court for the District
      of Colorado, regardless of where Employee resides or performs duties for
      Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section 10.  Arbitration.

     

    The
      parties agree that any claim,
      controversy or dispute that may arise directly or indirectly in connection
      with
      Employee’s employment or the termination of Employee’s employment, and involving
      the Company, and/or any employee(s), Director(s), officer(s), or agent(s) of
      it,
      whether arising in contract, statute, tort, fraud, misrepresentation,
      discrimination, common law or any other legal theory, including, but not limited
      to disputes relating to the making, performance or interpretation of this
      Employment Agreement; and claims or other disputes arising under any federal
      or
      state employment statutes including, without limitation, Title VII of the Civil
      Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
      Discrimination in Employment Act of 1967; as amended; 42 U.S.C. § 1981, § 1981a,
§ 1983, § 1985, or § 1988; the Family and Medical Act of 1993; the Americans
      with Disabilities Act of 1990, as amended; the Rehabilitation Act of 1973,
      as
      amended; the Fair Labor Standards Act of 1938, as amended; the Worker Adjustment
      and Retraining Notification Act; the Employee Retirement Income Security Act
      of
      1974, as amended (“ERISA”); the Colorado Anti-Discrimination Act; or any other
      similar federal, state or local law or regulation, whenever brought, shall
      be
      resolved by arbitration.  If, however, any party would otherwise be
      legally required to exhaust administrative remedies to obtain legal relief,
      that
      party can and must exhaust such administrative remedies prior to pursuing
      arbitration.  The only claims between the parties that are not subject
      to arbitration are claims for workers’ compensation or unemployment compensation
      benefits, claims for injunctive relief, or other claims specifically exempted
      from arbitration by this or any subsequent agreement between Employee and
      Company, including but not limited to those claims referenced in Section 9
      above.  By signing this Agreement, Employee voluntarily, knowingly and
      intelligently waives any right Employee may otherwise have to seek remedies
      with
      a court or other forums, including the right to a jury trial.  Company
      also hereby voluntarily, knowingly, and intelligently waives any right it might
      otherwise have to seek remedies against Employee in court or other
      forums.  The Federal Arbitration Act, 9 U.S.C. §§ 1-16 (“FAA”) shall
      govern the arbitrability of all claims, provided that they are arbitrable under
      the FAA, as it may be amended from time to time.  In the event the FAA
      does not apply, the Colorado Uniform Arbitration Act shall apply.

     

    A
      single
      arbitrator engaged in the practice of law shall conduct the arbitration under
      the National Rules For The Resolution Of Employment Disputes of the American
      Arbitration Association (“AAA”) in effect at the time of the arbitration, unless
      otherwise agreed to by the parties.  Other than as set forth in this
      Employment Agreement, the arbitrator shall have no authority to add to, detract
      from, change, amend, or modify existing law.  All arbitration
      proceedings will be confidential.  The prevailing party in any
      arbitration shall be entitled to receive reasonable attorney fees and costs
      (to
      include the fees of the arbitrator) to the extent such fees and costs are
      otherwise provided for by the statute or common law that forms the basis for
      the
      claims being arbitrated.  The arbitrator’s decision and award shall be
      final and binding as to all claims that were or could have been raised in the
      arbitration, and judgment upon the award rendered by the arbitrator may be
      entered by any court of competent jurisdiction.  If any party to this
      Employment Agreement files a judicial or administrative action asserting claims
      subject to this arbitration provision, and another party successfully stays
      such
      action and/or compels arbitration of such claims, the party filing the initial
      court action shall pay the other party’s costs and expenses incurred in seeking
      the stay and/or compelling arbitration, including reasonable attorney fees
      not
      to exceed Twenty-Five Thousand Dollars ($25,000.00).  Any arbitration
      under this Section 10 of this Agreement shall take place within 50 miles of
      Boulder, Colorado.

     

    Section 11.  General.

     

    (a)
      Notices.  all notices and other
      communications hereunder will be in writing or by written telecommunication,
      and
      will be deemed to have been duly given if delivered personally or if mailed
      by
      certified mail, return receipt requested, or by facsimile, to the relevant
      address set forth below, or to such other address as the recipient of such
      notice or communication will have specified to the other party hereto in
      accordance with this Agreement:

     

    If
      to Employer, to:

     

    AeroGrow
      International,
      Inc.

    900
      28th Street, Suite
      201

    Boulder,
      Co 80303

    Fax:  303-444-0406

     

           
          If to Employee, to:

     

    Jervis
      B. Perkins

    1750
      Parliament Court

    Lake
      Forest, IL 60045

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)
      Withholding.  All payments required
      to be made by Employer under this Agreement to Employee will be subject to
      the
      withholding of such amounts, if any, relating to federal, state and local taxes
      as may be required by law.

     

            
        (c) Severability.  If
      any provision of this Agreement is held to be illegal, invalid or unenforceable,
      such provision will be fully severable and this Agreement will be construed
      and
      enforced as if such illegal, invalid or unenforceable provision never comprised
      a part hereof; and the remaining provisions hereof will remain in full force
      and
      effect and will not be affected by the illegal, invalid or unenforceable
      provision or by its severance herefrom.  Furthermore, in lieu of such
      illegal, invalid or unenforceable provision, there will be added automatically
      as part of this Agreement a provision as similar in its terms to such illegal,
      invalid or unenforceable provision as may be possible and be legal, valid and
      enforceable.

     

               
      (d) Waivers.  No delay or omission
      by either party hereto in exercising any right, power or privilege hereunder
      will impair such right, power or privilege, nor will any single or partial
      exercise of any such right, power or privilege preclude any further exercise
      thereof or the exercise of any other right, power or privilege.

     

            
         (e)
Counterparts.  This Agreement may
      be executed in multiple counterparts, each of which will be deemed an original,
      and all of which together will constitute one and the same
      instrument.

     

    (f)
      Captions.  The captions in this
      Agreement are for convenience of reference only and will not limit or otherwise
      affect any of the terms or provisions hereof

     

              
       (g) Reference to
      Agreement.  Use of the words “herein,”
“hereof,” “hereto” and the like in this Agreement refer to this Agreement
      only
      as a whole and not to any particular subsection or provision of this Agreement,
      unless otherwise noted.

     

              
       (h) Binding Agreement.  This
      Agreement will be binding upon and inure to the benefit of the parties and
      will
      be enforceable by the personal representatives and heirs of Employee and the
      successors of the Company.  If Employee dies while any amounts would
      still be payable to him hereunder, such amounts will be paid to Employee’s
      estate.  This Agreement is not otherwise assignable by
      Employee.

     

               
      (i) Entire Agreement.  This
      Agreement contains the entire understanding of the parties, supersedes all
      prior
      agreements and understandings relating to the subject matter hereof and may
      not
      be amended except by a written instrument hereafter signed by each of the
      parties hereto.

     

               
      (j) Governing Law.  This Agreement
      and the performance hereof will be construed and governed in accordance with
      the
      laws of the State of Colorado, without regard to its choice of law
      principles.

     

    EXECUTED
      as of the date first above
      written.

     

     

     

    
      	
              AEROGROW
                INTERNATIONAL, INC.

            
	 	
               

            	
               

            
	
              By:

            	
               

            	
               /s/
                Michael Bissonnette

            
	
              Its:

            	
               

            	
              Chief
                Executive Officer

            
	
               

              EMPLOYEE:

            
	
               

              By:

            	 	
              /s/
                Jervis B. Perkins

            
	
               

            	 	
              Jervis
                B. Perkins