Exhibit 10.3





Exhibit 10.3




THE SCOTTS COMPANY LLC

EXECUTIVE RETIREMENT PLAN




As Amended and Restated as of January 1, 2011





 


 









 







THE SCOTTS COMPANY LLC

EXECUTIVE RETIREMENT PLAN

As Amended and Restated as of January 1, 2011




Table of Contents




	 	 	 	 	 
	I. NAME AND PURPOSE
	 	 	1	 
	 
	 	 	 	 
	II. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	III. PARTICIPANTS
	 	 	6	 
	 
	 	 	 	 
	IV. ACCOUNTS
	 	 	6	 
	 
	 	 	 	 
	V. METHOD OF DISTRIBUTION OF DEFERRED COMPENSATION
	 	 	12	 
	 
	 	 	 	 
	VI. ACCRUALS UNDER OTHER BENEFIT PLANS
	 	 	15	 
	 
	 	 	 	 
	VII. PARTICIPANT’S RIGHTS
	 	 	16	 
	 
	 	 	 	 
	VIII. NON-ALIENABILITY AND NONTRANSFERABILITY
	 	 	16	 
	 
	 	 	 	 
	IX. ADMINISTRATION AND STANDARD OF REVIEW
	 	 	16	 
	 
	 	 	 	 
	X. CLAIMS PROCEDURE
	 	 	17	 
	 
	 	 	 	 
	XI. AMENDMENT AND TERMINATION
	 	 	18	 
	 
	 	 	 	 
	XII. GENERAL PROVISIONS
	 	 	19	 
	 
	 	 	 	 
	XIII. UNFUNDED STATUS OF THE PLAN
	 	 	20	 







 


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THE SCOTTS COMPANY LLC

EXECUTIVE RETIREMENT PLAN

As Amended and Restated as of January 1, 2011





	I.	 	Name and Purpose






The Scotts Company LLC Executive Retirement Plan (formerly The Scotts Company Executive
Retirement Plan) provides Eligible Employees the opportunity to defer certain salary and
bonuses. The Plan supplements the benefits Eligible Employees accrue under The Scotts
Company LLC Retirement Savings Plan (formerly The Scotts Company Retirement Savings Plan).
The Plan is unfunded. It is intended that the Plan be exempt from the funding,
participation, vesting and fiduciary provisions of Title I of ERISA.




The Plan is subject to Code Section 409A. The provisions of the Plan apply to: (a) any
Participant who is receiving or accruing benefits on the Effective Date; (b) any individual
who becomes a Participant on or after the Effective Date; and (c) any Participant who
retires, becomes Disabled, dies or terminates employment in accordance with the Plan on or
after the Effective Date.




Effective with respect to calendar years beginning on or after January 1, 2009, and fiscal
years beginning on or after October 1, 2008, the Plan was revised to eliminate provisions
pertaining to bonuses earned under the Executive Management Incentive Plan in favor of
broader definitions of bonuses and Performance Awards.




	II.	 	Definitions






The following terms have the indicated meanings.




“Account” or “Accounts,” as applicable, means the separate Account or a subaccount
established for each Participant pursuant to Section IV of the Plan. A Participant’s
Account shall consist of an Incentive Deferral Account (effective January 1, 2009;
previously the Deferred Executive Management Incentive Pay Account), a Deferred Compensation
Account, a Matching Account, a Retirement Account (with respect to Employer allocations
under Section IV.D.(1) for Plan Years ended prior to January 1, 2011), a Transitional
Contributions Account and a Retention Award Account. Accounts are phantom accounts
maintained solely for bookkeeping purposes.




“Adjustments” means the credits to or debits from Accounts as provided in Section IV.




“Affiliate” means any business organization or legal entity that, directly or indirectly,
controls, is controlled by, or is under common control with, the Company. For purposes of
this definition, control (including the terms controlling, controlled by, and under common
control with) includes the possession, direct or indirect, of the power to vote 50% or more
of the voting equity securities, membership interests or other voting interests, or to
direct or cause the direction of the management and policies of, such
business organization or other legal entity, whether through the ownership of equity
securities, membership interests or other voting interests, by contract or otherwise.


 


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“Base Salary” means the portion of a Participants’ Compensation that constitutes salary and
amounts received in lieu of salary (including, but not limited to, paid time off, vacation
pay, salary continuation and short term disability benefits).




“Base Salary Deferral Election” means an Eligible Employee’s election, in a manner
prescribed by the Benefits Administrative Committee, to defer Base Salary pursuant to the
Plan.




“Beneficiary” means the person or persons designated in writing as such and filed with the
recordkeeper at any time by a Participant. Any such designation may be withdrawn or changed
in writing (without the consent of the Beneficiary), but only the last designation on file
with the recordkeeper shall be effective. Notwithstanding any contrary provision, a change
in the identity of the Beneficiary may not, and shall not, change the form and time of
payment previously elected by the Participant for distribution of his or her Account or the
applicable portion thereof.




“Benefits Administrative Committee” means: (a) the administrative committee appointed to
administer the tax qualified retirement plans which are sponsored by the Employer; or (b)
any person or entity to which the Benefits Administrative Committee delegates any of the
administrative or ministerial duties assigned to it under the Plan.




“Board” means the Board of Directors of the Corporation.




“Bonus Deferral Election” means, with respect to calendar or fiscal years beginning on or
after January 1, 2009, as applicable, a timely-made election to defer a bonus which does not
constitute a Performance Award pursuant to the Plan.




“Change of Control” means the occurrence of any of the following:




	 	(a)	 	Board Composition. Individuals who, as of July 1, 2008, constitute the
Board (the “Incumbent Board”) cease, within a 12-month period, for any reason (other
than death) to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to such date whose
appointment, election, or nomination for election by the Corporation’s shareholders,
was endorsed by at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent
Board; or






	 	(b)	 	Stock Acquisition. (A) One or more acquisitions, by any individual,
entity or group (within the meanings of Treasury Regulation Sections
1.409A-3(i)(5)(v)(B) and (vi)(D)) (a “Person”), of 30% or more of the then outstanding
voting securities of the Corporation (the “Outstanding Voting Securities”), during any
12-month period ending on the date of the most recent acquisition by that Person; or
(B) an acquisition that results in ownership by a Person of either (y) shares
representing more than 50% of the total fair market value of the Corporation’s
then outstanding stock (the “Outstanding




 


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Stock”)
or (z) shares representing
more than 50% of the then Outstanding Voting Securities; provided,
however, that for purposes of this paragraph (b), the following acquisitions
of shares of the Corporation shall not be taken into account in the determination of
whether a Change of Control has occurred: (1) any acquisition directly from the
Corporation; (2) any cash acquisition by the Corporation or an Affiliate; (3) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained
by the Corporation or an Affiliate; (4) an acquisition by a Person that prior to the
acquisition had already acquired more shares than necessary to satisfy the
applicable 30% or 50% threshold; or (5) any acquisition by the Hagedorn Partnership,
L.P. or any party related to the Hagedorn Partnership, L.P., as determined by the
Committee; or




	 	(c)	 	Business Combination. Consummation of a reorganization, merger or
consolidation of the Corporation (a “Business Combination”), in each case, that results
in either a change in ownership contemplated in subparagraph (B) of paragraph (b) above
or a change in the Incumbent Board contemplated by paragraph (a) above; or






	 	(d)	 	Sale or Disposition of Assets. One or more Persons acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition
by such Persons) assets from the Corporation that have a total gross fair market value
equal to more than 40% of the total gross fair market value of all of the assets of the
Corporation (without regard to liabilities of the Corporation or associated with such
assets) immediately before such acquisition or acquisitions; provided that such sale or
disposition is not to:






	 	(i)	 	a shareholder of the Corporation (immediately before the asset
transfer) in exchange for or with respect to the Corporation’s Outstanding
Stock;






	 	(ii)	 	an entity, 50% or more of the total value or voting power of
which is owned, directly or indirectly, by the Corporation;






	 	(iii)	 	a Person that owns, directly or indirectly, 50% or more of the
total value or voting power of the Corporation’s Outstanding Stock; or






	 	(iv)	 	an entity, at least 50% of the total value or voting power of
which is owned, directly or indirectly, by a Person described in paragraph
(d)(iii) above.






Except as otherwise specifically provided in paragraph (d)(i) above, a Person’s
status is determined immediately after the transfer.




“Code” or “IRC” means the Internal Revenue Code of 1986, as amended from time to time.




“Committee” means the Compensation and Organization Committee of the Board.


 


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“Company” means The Scotts Company, and, effective on and after March 18, 2005, Company
means The Scotts Company LLC.




“Company Stock Fund” means a fund similar to the Company stock fund existing under the
Qualified Plan which holds common stock of the Corporation and which shall be used as a
benchmark hereunder so long as a Company stock fund exists as an investment option under the
Qualified Plan. The Investment Committee shall have no responsibility for or discretion
over the use of such fund as a benchmark hereunder.




“Compensation” means, for the applicable Plan Year, compensation used to determine benefits
under and as defined under the Qualified Plan, without regard to the Pay Cap and before
deferrals under this Plan or any other non-qualified plan.




“Corporation” means The Scotts Miracle-Gro Company.




“Disabled” or “Disability” means that the Participant is, by reason of any medically
determinable physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of at least three months under an accident and health plan
covering employees of the Company or its Affiliates.




“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time.




“Effective Date” means January 1, 2005, unless otherwise specifically provided herein or
required by law. The Effective Date of an amendment or an amendment and restatement shall
be the date or dates indicated therein.




“Eligible Employee” has the meaning specified in Section III.




“Employee” means an individual employed as a common law employee of the Employer.




“Employer” or “Employers” means the Company and/or its Affiliates, as indicated by the
context.




“Executive Management Incentive Pay” means any bonus earned under the Executive Management
Incentive Plan with respect to calendar years beginning before January 1, 2009, or fiscal
years beginning before October 1, 2008, as applicable.




“Executive Management Incentive Pay Deferral Election” means, with respect to calendar years
beginning before January 1, 2009, or fiscal years beginning before October 1, 2008, as
applicable, an Eligible Employee’s election, in a manner prescribed by the Benefits
Administrative Committee, to defer Executive Management Incentive Pay pursuant to the Plan.




“Executive Management Incentive Plan” means The Scotts Company LLC Amended and Restated
Executive/Management Incentive Plan (known from and after November 5, 2008, as The Scotts
Company LLC Amended and Restated Executive Incentive Plan).


 


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“Investment Committee” means: (a) the Scotts Miracle-Gro Investment Committee appointed to
monitor all investment and related activities associated with the Outside Investment Funds;
or (b) any person or entity to which the Investment Committee delegates any of the
investment duties assigned to it under the Plan.




“Investment Fund” means the Company Stock Fund or one of the Outside Investment Funds used
as an earnings benchmark with respect to Participants’ Accounts.




“Outside Investment Fund” means an Investment Fund, other than the Company Stock Fund, which
has been designated by the Investment Committee as available to use as an earnings benchmark
with respect to Participants’ Accounts.




“Participant” has the meaning specified in Section III.




“Performance Award” means an annual bonus payable pursuant to a plan or program maintained
by an Employer which constitutes performance-based compensation under Treasury Regulation
Section 1.409A-1(e).




“Performance Award Deferral Election” means, with respect to calendar years beginning on or
after January 1, 2009, or fiscal years beginning on or after October 1, 2008, as applicable,
an Eligible Employee’s election to defer, in a manner prescribed by the Benefits
Administrative Committee, a Performance Award pursuant to the Plan.




“Plan” means The Scotts Company LLC Executive Retirement Plan, as reflected in this
document, as amended from time to time after the Effective Date.




“Plan Year” means the calendar year.




“Qualified Plan” means The Scotts Company LLC Retirement Savings Plan, and any amendments
thereto.




“Retention Award” means an award, allocable to a Participant’s Retention Award Account in
accordance with Section IV.D.(5). The designation of the Participants who receive a
Retention Award and the amount of each Retention Award shall be determined by the Committee
in its discretion. Each Retention Award shall be evidenced by a written agreement between
the Employer and the Participant. The written agreement shall set forth the terms and
conditions governing the Retention Award and shall be consistent with the applicable
provisions of the Plan.




“RSP Compensation” means compensation as defined under the Qualified Plan.




“Separation from Service” means a Participant’s termination of employment with the Company
and its Affiliates for any reason. A termination of employment will occur when the
Participant and the Company and its Affiliates reasonably anticipate that (i) no further
services will be performed by the Participant after a certain date or (ii) the level of bona
fide services which the Participant is expected to perform for the Company and its
Affiliates, as an employee or otherwise, as of a certain date is expected to permanently
decrease to a level equal to 20% or less of the average level of services performed by the
Participant



 


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during
the immediately preceding 36-month period (or the Participant’s entire
period of service if less than 36 months). Further, for purposes of the Plan, a termination
of employment is deemed to occur on the first date following six months after a Participant
is first on a military leave, sick leave or other bona fide leave of absence. Such
six-month period may be extended if the Participant retains a right to reemployment with the
Company or its Affiliates under applicable statute or contract. Notwithstanding the
foregoing, where a leave of absence is due to a medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than six months and where such impairment causes the
Participant to be unable to perform the duties of his or her position of employment or any
substantially similar position of employment with the Company, a 29-month period of absence
may be substituted for such six-month period. Whether there has been a termination of
employment will be determined by the Benefits Administrative Committee, taking into account
all of the facts and circumstances at the time of the termination of employment in
accordance with the guidelines described in Treasury Regulation Section 1.409-1(h).




“Statutory Limits” means the following:




	 	(a)	 	the maximum recognizable annual compensation under Code Section 401(a)(17) —
the “Pay Cap”;
	 
	 	(b)	 	the maximum annual additions under Code Section 415(c) — the “415 Limit”;
	 
	 	(c)	 	the deferral limit under Code Section 402(g) — the “Deferral Limit”; and
	 
	 	(d)	 	the limits on contributions for highly compensated employees under Code
Sections 401(k)(3) — the “ADP Test” — and 401(m)(2) — the “ACP Test.”






	III.	 	Participants






Each United States based vice president or more senior executive is an Eligible Employee and
may elect to participate in the Plan. Each Eligible Employee who elects to participate in
the Plan or for whom Employer contributions are credited in accordance with Section IV shall
be a Participant in the Plan. A Participant shall continue to participate in the Plan until
his or her status as a Participant is terminated by: (a) a complete distribution of his or
her Accounts pursuant to the terms of the Plan; (b) the termination of the Plan; or (c) a
written directive of the Company’s senior human resources officer. Furthermore, each such
Participant shall be deemed to be a “Specified Employee,” as defined in Code Section
409A(a)(2)(B)(i) and Treasury Regulation Section 1.409A-1(i).




	IV.	 	Accounts






	 	A.	 	Establishment of Accounts. The recordkeeper will establish an Account
for each Participant. A Participant’s Account shall consist of an Incentive Deferral
Account (effective January 1, 2009; previously a Deferred Executive Management
Incentive Pay Account), a Deferred Compensation Account, a
Matching Account, a Retirement Account (with respect to Employer allocations under
Section IV.D.(1) for Plan Years ended prior to January 1, 2011), a Transitional
Contributions Account and a Retention Award Account.




 


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	 	B.	 	Election of Participant to Defer Incentive Pay.






	 	(1)	 	An Eligible Employee may, at the discretion of the Committee,
and on such terms and conditions as it may specify, elect to have a percentage
of any Performance Award that may be awarded to him or her by the Employer for,
as applicable, (i) a Plan Year or (ii) a fiscal year ending in the following
Plan Year, allocated to his or her Incentive Deferral Account and paid on a
deferred basis pursuant to the terms of the Plan. To make an election with
respect to a Performance Award, an Eligible Employee must advise the Employer
of his or her election in writing or by filing an election electronically,
using procedures prescribed by the Benefits Administrative Committee. Such
elections must be made on or before the date prescribed by the Benefits
Administrative Committee, which shall be no later than December 31 of the
calendar year preceding, as applicable, (i) the Plan Year to which the
Performance Award relates or (ii) the Plan Year in which the fiscal year to
which the Performance Award relates ends. In no event may a deferral election
be made with respect to any portion of a Performance Award that is “readily
ascertainable,” i.e., both calculable and substantially certain to be paid at
the time of the election. Further, for such election to be effective, an
Eligible Employee must have provided services for the Employer continuously
from the beginning of the applicable performance period. Finally, deferral
elections made with respect to Performance Awards that become payable as a
result of death or Disability, or in the event of a Change of Control, without
regard to the satisfaction of the applicable performance criteria, do not
constitute performance-based compensation and shall not be effective unless
made by December 31 of the calendar year preceding the beginning of the
calendar or fiscal year to which such award relates.






	 	(2)	 	An Eligible Employee may, at the discretion of the Committee,
and on such terms and conditions as it may specify, elect to have a percentage
of any bonus (other than a Performance Award) allocated to his or her Incentive
Deferral Account and paid on a deferred basis pursuant to the terms of the
Plan. The Eligible Employee must advise the Employer of his or her election,
in writing or by filing an election electronically using procedures prescribed
by the Benefits Administrative Committee, on or before the date prescribed by
the Benefits Administrative Committee, which shall be no later than the date
described in (a), (b) or (c) below:






	 	(a)	 	Except as provided in (b) and (c) below, the
last date for filing a Bonus Deferral Election shall be December 31 of
the calendar year prior to the beginning of the Plan Year or fiscal
year in which any services related to the bonus will be performed.




 


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	 	(b)	 	This clause (b) applies to a bonus that would
be exempt from Code Section 409A as a “short term deferral” (absent an
election to defer the bonus). The last date for filing a Bonus
Deferral Election with respect to a bonus described in the preceding
sentence shall be the date that is 12 months before the date that the
Eligible Employee’s right to receive the bonus becomes nonforfeitable
(the “Vesting Date”), but only if the Bonus Deferral Election provides
for a distribution of the bonus and related Adjustments (i) on a
specified date that is at least five years after the Vesting Date or
(ii) on the later of the date on which Separation from Service occurs
or a specified date that is at least five years after the Vesting Date.
The preceding sentence notwithstanding, a bonus deferred under this
clause (b) and the related Adjustments shall be payable upon a Change
of Control if the Eligible Employee is an “affected Participant” (as
described in Section V.G. of the Plan).






	 	(c)	 	This clause (c) applies to a bonus if the right
to receive the bonus payment is forfeitable unless the Eligible
Employee continues to provide services to an Employer for a period of
at least 12 months after the date that the bonus opportunity is awarded
to the Eligible Employee (the “Award Date”). The last date for filing
a Bonus Deferral Election with respect to a bonus described in the
preceding sentence shall be the date that is both (i) not more than 29
days after the Award Date and (ii) at least 12 months before the
Vesting Date. Notwithstanding the two preceding sentences, if the
bonus becomes payable as a result of death or Disability or a Change of
Control, the Bonus Deferral Election shall not be effective unless it
was filed on or before the date prescribed in clause (a) above.






	 	(3)	 	Notwithstanding the preceding paragraph, prior to calendar
years beginning on or after January 1, 2009, or fiscal years beginning on or
after October 1, 2008, as applicable, for the Plan Year in which an Employee
first becomes a Participant in the Plan, an Eligible Employee may complete an
Executive Management Incentive Pay Deferral Election at any time within 30 days
following the date on which he or she first became a Participant in the Plan or
any plan which is required to be aggregated with the Plan under Treasury
Regulation Section 409A-1(c)(2). Such Executive Management Incentive Pay
Deferral Election shall apply only to Executive Management Incentive Pay paid
for services performed by the Eligible Employee after the date on which the
Executive Management Incentive Pay Deferral Election is received by the
recordkeeper. Notwithstanding any contrary Executive Management Incentive Pay
Deferral Election made by an Eligible Employee, such Executive Management
Incentive Pay Deferral Election shall apply to no more than an amount equal to
the total Executive Management Incentive Pay for the performance period
multiplied by the ratio of the number of
days remaining in the performance period after such Executive Management
Incentive Pay Deferral Election over the total number of days in the
performance period.




 


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	 	(4)	 	If an Executive Management Incentive Pay Deferral Election, a
Performance Award Deferral Election or a Bonus Deferral Election is submitted
to the recordkeeper in accordance with this Section IV.B., the Employer will
credit to the Participant’s Deferred Executive Management Incentive Pay Account
or Incentive Deferral Account, as applicable, the amount of any timely deferral
determined in accordance with this Section IV.B. All such deferral elections
(other than elections under Section IV.B.(3)) become irrevocable no later than
December 31 of the calendar year in which such deferral elections are made.






	 	C.	 	Election of Participant to Defer Compensation.






	 	(1)	 	Each Eligible Employee may, on such terms and conditions as the
Committee may specify, elect to have a percentage of his or her Base Salary
attributable to Compensation in excess of the Pay Cap, for all pay periods
commencing with the pay period in which the Participant’s RSP Compensation
first exceeds the Pay Cap, deferred and allocated to his or her Deferred
Compensation Account and paid pursuant to the terms of the Plan. To exercise
such election for any Plan Year, on or before the date prescribed by the
Benefits Administrative Committee (which shall be no later than December 31 of
the calendar year preceding the Plan Year in which the services relating to
such Base Salary are performed), the Eligible Employee must advise the Employer
of his or her election in writing or by filing an election electronically using
procedures prescribed by the Benefits Administrative Committee. Such Base
Salary Deferral Election shall apply only to Base Salary earned by and payable
to the Participant after the date on which the Base Salary Deferral Election is
received by the recordkeeper.






	 	(2)	 	Notwithstanding the preceding paragraph, for the Plan Year in
which an employee first becomes an Eligible Employee, such Eligible Employee
may complete a Base Salary Deferral Election at any time within 30 days
following the date on which he or she became an Eligible Employee. Such Base
Salary Deferral Election shall apply only to Base Salary attributable to
Compensation in excess of the Pay Cap earned by and payable to the Eligible
Employee after the date on which the Base Salary Deferral Election is received
by the recordkeeper. Such election shall apply for all pay periods commencing
with the pay period in which the Participant’s RSP Compensation first exceeds
the Pay Cap.




 


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	 	(3)	 	If a Base Salary Deferral Election is submitted to the
recordkeeper in accordance with this Section IV.C., the Employer will allocate
to the Participant’s Deferred Compensation Account the amount of Base Salary
determined in accordance with this Section IV.C. All Base Salary Deferral
Elections made under Section IV.C.(1) become irrevocable no later than
December 31 of the calendar year preceding the Plan Year to which a
Participant’s Base Salary Deferral Election relates. All Base Salary
Deferral Elections made under Section IV.C.(2) become irrevocable as of the
end of the applicable 30 day period.






	 	D.	 	Employer Contributions.






	 	(1)	 	Retirement Contribution. For each applicable pay
period ending prior to January 1, 2011, the Employer will allocate to each
Eligible Employee’s Retirement Account an amount equal to the Retirement
Contribution (as defined in the Qualified Plan) he or she would have received
under the Qualified Plan with respect to his or her compensation (as defined in
the Qualified Plan, but without regard to the Pay Cap), minus the Retirement
Contribution actually allocated under the Qualified Plan. No Retirement
Contributions will be allocated to Participants’ Accounts for Plan Years
beginning on or after January 1, 2011.






	 	(2)	 	Matching Contributions.






	 	(a)	 	For Plan Years ending prior to January 1, 2011,
the Employer shall credit matching contributions to the Matching
Account of each Participant who elects to defer Compensation (as
defined for such Plan Year) in accordance with Section IV.C. For each
pay period, the amount of such matching contribution credits will be
equal to the matching contributions that would have been made under the
Qualified Plan for the applicable plan year (assuming the Statutory
Limits were inapplicable) based on deferrals under Section IV.C. of
this Plan and the Compensation on which such deferrals are based.






	 	(b)	 	Effective for Plan Years beginning on or after
January 1, 2011, as soon as practicable after the end of each Plan
Year, the Employers shall make a matching contribution with respect to
each Participant who has made or caused to be made Base Salary and
Performance Award deferrals under the Plan for such Plan Year of the
Participant’s Compensation in excess of the Pay Cap. Such matching
contributions shall equal 150% of the first 4% of a Participant’s
Compensation deferred to the Plan in excess of the Pay Cap plus 50% of
the next 2% of a Participant’s Compensation deferred to the Plan in
excess of the Pay Cap. Matching contributions shall not exceed 7% of a
Participant’s Compensation in excess of the Pay Cap. Further, a
Participant whose RSP Compensation does not exceed the Pay Cap for the
applicable Plan Year shall receive a matching contribution on any
Performance Award deferred for such Plan Year equal to 150% of the
first 4%
of such deferral plus 50% of the next 2% of such deferral. Matching
contributions shall be allocated to a Participant’s Matching Account.




 


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	 	(3)	 	Transitional Contributions. No Transitional
Contributions (as defined in the Qualified Plan) shall be made to any
Participant’s Account for any Plan Year beginning on or after January 1, 2003.






	 	(4)	 	Retention Awards. The Employer shall allocate an
amount equal to the Participant’s Retention Award, if any, to the Participant’s
Retention Award Account.






	 	(5)	 	Calendar Year Performance Awards. Any calendar year
Performance Award deferred for the 2010 award cycle shall be treated as a 2010
deferral for purposes of the Plan. Calendar year Performance Awards deferred
for 2011 and future calendar year award cycles shall be taken into account in
the Plan Year in which any non-deferred portion of such Performance Award
would be paid.






	 	E.	 	Investment Funds. The Investment Committee may change or discontinue
the Investment Funds used as investment benchmarks under the Plan, other than the
Company Stock Fund, for the measure of appreciation or depreciation of previously
credited amounts.






	 	F.	 	Outside Investment Funds. Each Participant shall direct the portion of
future credits to, and the existing balance of, the Participant’s Account that is to be
treated as invested in one or more of the Outside Investment Funds. A Participant may
change his or her direction among the Outside Investment Funds as of any business day
by providing instructions in such manner as may be prescribed by the Benefits
Administrative Committee, subject to any applicable restrictions under an Outside
Investment Fund. If a Participant does not designate one or more of the Outside
Investment Funds, his or her Account will be treated as having been credited to the
Investment Fund designated by the Investment Committee from time to time as the default
fund under the Qualified Plan.






	 	G.	 	Company Stock Fund. Unless the Company Stock Fund is discontinued or
frozen as an investment option under the Qualified Plan, a Participant may direct that
all or a portion of future credits to the Participant’s Account be treated as invested
in the Company Stock Fund. A Participant’s direction to have amounts treated as
invested in the Company Stock Fund shall be irrevocable as to amounts so treated
pursuant to such direction (i.e., amounts treated as invested in the Company Stock Fund
cannot subsequently be treated as invested in an Outside Investment Fund). If the
Company stock fund is discontinued as an investment option under the Qualified Plan,
the Company Stock Fund will be discontinued under this Plan. If the Company stock fund
is merely frozen as an investment option under the Qualified Plan, the Company Stock
Fund will also be frozen under this Plan.




 


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	 	H.	 	Adjustment of Account Balances and Other Rules. As of each business
day, the recordkeeper shall credit or debit the balances in a Participant’s Accounts
with Adjustments that mirror the appreciation or depreciation experienced by the
Investment Funds against which such Participant’s Account is benchmarked. For this
purpose, appreciation shall include interest, dividends and other distributions which
would have been paid on such Investment Funds. Any such amounts shall be deemed to
have been reinvested in the applicable Investment Fund pursuant to procedures approved
by the Benefits Administrative Committee. The crediting or debiting of Adjustments
shall occur so long as there is a balance in the Participant’s Account, regardless of
whether such Participant has terminated employment with the Employer or has died. The
Benefits Administrative Committee may prescribe any reasonable method or procedure
regarding accounting for Adjustments.






The Benefits Administrative Committee may from time to time establish policies or
rules consistent with Code Section 409A and the regulations promulgated thereunder
to govern the manner and form in which Executive Management Incentive Pay Deferral
Elections, Performance Award Deferral Elections, Bonus Deferral Elections and Base
Salary Deferral Elections may be made as well as the manner in which the amount of
any deferral, contribution, credit or Adjustment is determined, made or allocated
under the Plan. Notwithstanding any contrary Plan provision, all contributions and
deferrals credited to a Participant’s Accounts shall be subject to the restrictions
described in Section XII.H. of the Plan.




	 	I.	 	FICA. Deferrals and Adjustments shall, to the extent required by law,
be taken into account as “wages” for purposes of the employment taxes imposed by the
Federal Insurance Contributions Act in accordance with regulations promulgated by the
Internal Revenue Service.






	V.	 	Method of Distribution of Deferred Compensation






	 	A.	 	Time of Distribution. Amounts credited to a Participant’s Accounts
(other than a Retention Award Account) with respect to which an effective distribution
election is or has been made shall be distributed to the Participant upon the earliest
to occur of: (a) the Participant’s Separation from Service, (b) the Participant’s
death, (c) the Participant’s Disability, or, where applicable, (d) a date certain
elected by the Participant. Notwithstanding the preceding, distributions applicable to
effective distribution elections made on or before December 30, 2008, will be
distributed in accordance with the distribution election, i.e., either upon Separation
from Service or the date specified in the distribution election. Effective for
calendar years beginning on or after January 1, 2009, or fiscal years beginning on or
after October 1, 2008, as applicable, a Participant shall elect a single time or event
of distribution with respect to any Base Salary Deferral Election (other than elections
made under Section IV.C.(2) in such calendar year), Performance Award Deferral Election
or Bonus Deferral Election made in the same calendar year, and shall deliver such time
or event of distribution election to the recordkeeper at the time the deferral
elections for the applicable calendar and
fiscal years are made. Such election shall also apply to any other credits to a
Participant’s Accounts (other than a Retention Award Account) for such Plan Year.
If no time or event of distribution election is made with respect to any such
deferral or credit, the portion of the Participant’s Accounts (other than a
Retention Award Account) relating thereto shall be distributed on the Participant’s
Separation from Service for any reason.




 


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Amounts credited to a Participant’s Retention Award Account shall be distributed in
accordance with the written agreement evidencing the Participant’s Retention Award.




Subject to the next sentence, all distributions shall be made or shall commence, as
applicable, within 90 days of the distribution event. Notwithstanding any contrary
provision, if the distribution event giving rise to the distribution or commencement
of distributions is a Participant’s Separation from Service, then the distribution
shall not be made or commence, as applicable, for six months following the date of
the Participant’s Separation from Service.




For any distribution subject to the six-month delay, (i) if such distribution is to
be made in a lump sum, then the distribution following the six-month delay shall be
equal to the Participant’s Account balance at the time of such distribution; and
(ii) if such distribution is to be made in annual installments, then the amount of
the first distribution shall be the aggregate amount of any installment that would
have been paid following the Participant’s Separation from Service if such six-month
delay were not applicable (or the Participant’s Account balance at the time of
payment, if less). Any amount distributable under (i) or (ii) above shall be paid
as of the first business day of the month next following the month in which such
six-month period ends.




	 	B.	 	Form of Distribution. Effective with respect to deferrals or credits
pertaining to calendar years beginning on or after January 1, 2009, or fiscal years
beginning on or after October 1, 2008, as applicable, amounts credited to a
Participant’s Account (other than the Retention Award Account) shall be distributed to
the Participant either in a single lump sum payment or in substantially equal annual
installments over a period of five, 10 or 15 years. Amounts credited to a
Participant’s Retention Award Account shall be distributed in accordance with the
written agreement between the Employer and the Participant evidencing the Participant’s
Retention Award. To the extent that an Account is distributed in installment payments,
the undisbursed portions of such Account shall continue to be credited with Adjustments
in accordance with the applicable provisions of Section IV.H. Effective for calendar
years beginning on or after January 1, 2009, or fiscal years beginning on or after
October 1, 2008, as applicable, a Participant shall elect one form of distribution with
respect to any Base Salary Deferral Election (other than elections made under Section
IV.C.(2) in such calendar year), Performance Award Deferral Election or Bonus Deferral
Election made in the same calendar year, and shall deliver such form of distribution
election to the recordkeeper at the time the deferral elections for the applicable
calendar or fiscal years are




 


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made,
or in the case of distributions from the Retention Award Account, in
accordance with the written agreement evidencing the Participant’s Retention Award.
Such election shall also apply to any other credits to a Participant’s Accounts
(other than a Retention Award Account) for such Plan Year. Distributions of amounts
benchmarked to Investment Funds other than the Company Stock Fund shall be made in
cash. Distributions of amounts benchmarked to the Company Stock Fund shall be
distributed in the greatest whole number of common shares of the Company (effective
on and after March 18, 2005, the greatest whole number of common shares of the
Corporation) that can be distributed based on the amount benchmarked to the Company
Stock Fund (after any applicable withholding), plus cash for any fractional share.
If no form of distribution is elected by the Participant, the Participant’s Accounts
(other than the Retention Award Account) shall be distributed in the form of a
single lump sum payment and the Retention Award Account shall be distributed in
accordance with the written agreement evidencing the Participant’s Retention Award.




	 	C.	 	Death Benefit. If a Participant dies (either before or after payment
of benefits have commenced under this Section V), his or her Account shall be paid to
the Beneficiary designated by the Participant. If there is no designated Beneficiary
or no designated Beneficiary surviving at a Participant’s death, payment of the
Participant’s Account shall be made to the Participant’s estate in a single lump sum
payment within 90 days after the Participant’s death. In the event of a Participant’s
death after distribution of his or her Account has begun, to the extent that there is a
surviving Beneficiary, payment of such Account shall continue in the form of
distribution in effect prior to the Participant’s death. If a Participant dies prior
to the commencement of distribution of his or her Account, his or her Beneficiary, if
any, shall receive distribution of such Account in the form of distribution previously
elected by the Participant. If a Beneficiary begins to receive any payment pursuant to
this Section V.C., but dies prior to the time that all amounts have been distributed,
any remaining amount shall be paid in a single lump sum payment to the estate of the
Beneficiary.






	 	D.	 	Taxes. In the event any taxes are required by law to be withheld or
paid from any payments made pursuant to the Plan, the recordkeeper shall deduct such
amounts from such payments and shall transmit or cause to be transmitted the withheld
amounts to the appropriate taxing authority.






	 	E.	 	Foreseeable Emergency Distributions. Prior to the date a Participant’s
Account becomes payable, the Benefits Administrative Committee, in its sole discretion,
may elect to distribute all or a portion of such Account in the event such Participant
requests a distribution due to an Unforeseeable Emergency, as described under Treasury
Regulation Section 1.409A-3(i)(3). Any distribution under this Section V.E. shall
comply with the Unforeseeable Emergency requirements of Code Section 409A and the
regulations promulgated thereunder, which are incorporated herein by reference. Any
distribution on account of an Unforeseeable Emergency shall not exceed the amount
required to satisfy the Unforeseeable Emergency, plus amounts necessary to pay taxes
reasonably anticipated as a result of such




 


14









 











distribution, after taking into account the extent
to which the Unforeseeable Emergency may be relieved through reimbursement or
compensation by insurance or otherwise, by liquidation of the Participant’s assets
(to the extent that such liquidation would not itself cause a severe financial
hardship) or by stopping deferrals under the Plan. The Participant’s request shall
state the nature of the severe financial hardship, the total amount requested to be
distributed from his or her Plan Accounts and the total amount of the actual expense
incurred or expected to be incurred on account of the Unforeseeable Emergency. A
Participant’s Retention Award Account, if any, is not eligible for distribution
under this Section V.E.




	 	F.	 	Small Benefit Distribution. This subsection shall apply to the
distribution of a Participant’s Accounts commencing on or after January 1, 2009. If
the value of the Participant’s Accounts (and all other nonqualified deferred
compensation plan benefits required to be combined with the Plan under Treasury
Regulation Section 1.409A-(1)(c)(2)) is not greater than the applicable dollar amount
under Code Section 402(g)(1)(B) at the time of distribution, then such benefit shall be
paid in the form of a single lump sum notwithstanding any contrary Plan provision. Any
such distribution is subject, if applicable, to the delay in payment rule relating to
Separation from Service events, as set forth in Section V.A. of the Plan.






	 	G.	 	Distributions in the Event of a Change of Control. Notwithstanding any
other provision of the Plan, an affected Participant shall receive all amounts due the
Participant hereunder in a lump sum as soon as practicable after a Change of Control,
and in all events within 30 days thereof. For purposes of this Section V.G., an
“affected Participant” is any Participant who is or was providing services: (i) to a
corporation at the time of a Change of Control relating to such corporation; (ii) to a
corporation which is liable for payments to the extent of the services provided to such
corporation by the Participant or for which there is a bona fide business purpose for
such corporation to be liable for such payments (other than avoidance of Federal income
tax); or (iii) to a corporation which is a majority shareholder of a corporation
identified in Section V.G.(i) or (ii) or any corporation in a chain of corporations in
which each corporation is a majority shareholder of another corporation in the chain,
ending in a corporation identified in Section V.G.(i) or (ii). This Section V.G. shall
not apply to a Participant’s Retention Award Account.






	VI.	 	Accruals under Other Benefit Plans






Amounts deferred under the Plan shall not be taken into account in calculating benefits or
contributions under any employee benefit plan maintained by the Employer, including, but not
limited to, any pension plan or retirement plan (qualified under Section 401(a) of the Code
or otherwise), the amount of life insurance payable under any life insurance plan or the
amount of any disability benefit payments payable under any disability plan, except to the
extent specifically provided in any such plan. Amounts deferred by a Participant under the
Plan shall be taken into account in determining credits or accruals under Sections IV.B., C.
and D. (other than IV.D.(1), if any).


 


15









 






	VII.	 	Participant’s Rights






Establishment of the Plan shall not be construed as giving any Participant the right to be
retained in the Employer’s service or employ or the right to receive any benefits not
specifically provided by the Plan. A Participant shall not have any interest in amounts
deferred, Employer allocations or Adjustments credited to his or her Account until such
Account is distributed in accordance with the Plan. All deferrals and all amounts held for
the Account of a Participant under the Plan shall remain the sole property of the Employer,
subject to the claims of its general creditors and available for its use for whatever
purposes desired. With respect to amounts deferred or otherwise held for the Account of a
Participant, the Participant is merely a general creditor of the Employer. The obligation
of the Employer hereunder is purely contractual and shall not be deemed to be or considered
funded or secured in any way.




	VIII.	 	Non-alienability and Nontransferability






Except to the extent required by law or as provided in Section XII.H., the rights of a
Participant to distributions as provided in the Plan shall not be assigned, transferred,
pledged or encumbered or be subject in any manner to alienation or anticipation unless
required under applicable law. No Participant may borrow against his or her Account. No
Account shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, whether
voluntary or involuntary, including, but not limited to, any liability which is for alimony
or other payments for the support of a spouse or former spouse, or for any other relative of
any Participant, unless specifically required by applicable law.




	IX.	 	Administration and Standard of Review






The Plan shall be administered by the Benefits Administrative Committee. The Benefits
Administrative Committee shall have authority to adopt rules and regulations for carrying
out the Plan and, in its sole and absolute discretion, to interpret, construe and implement
the provisions hereof. Subject to the provisions of Section X below, any decision or
interpretation of any provision of the Plan adopted by the Benefits Administrative Committee
shall be final and conclusive. The acts and decisions of the Benefits Administrative
Committee shall not be overturned and shall be binding on all individuals and parties unless
such acts and decisions are ruled by a court of competent jurisdiction to be arbitrary and
capricious. A Participant who is also a member of the Benefits Administrative Committee
shall not participate in any decision involving any request made by him or her or relating
in any way solely to his or her rights, duties and obligations as a Participant under the
Plan.


 


16









 






	X.	 	Claims Procedure






	 	A.	 	Filing Claims. Any Participant or Beneficiary entitled to benefits
under the Plan may file a claim for benefits with the Benefits Administrative Committee
(or its designee).






	 	B.	 	Notification to Claimant. If a claim is wholly or partially denied,
the Benefits Administrative Committee (or its designee) will furnish written or
electronic (in accordance with Department of Labor Regulations Section 2520.104b-1(c))
notification of the decision to the claimant within 90 days of receipt of the claim in
a manner calculated to be understood by the claimant. Such notification shall contain
the following information:






	 	(1)	 	the specific reason or reasons for the denial;






	 	(2)	 	specific reference to pertinent Plan provisions upon which the
denial is based;






	 	(3)	 	a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and






	 	(4)	 	a description of the Plan’s claims review procedures describing
the steps to be taken and the applicable time limits to submit claims for
review, including a statement of the claimant’s right to bring a civil action
under ERISA section 502(a) following an adverse benefit determination on
review.






If special circumstances require an extension of time for the Benefits
Administrative Committee (or its designee) to process the claim, the 90-day period
may be extended for an additional 90 days. Prior to the termination of the initial
90-day period, the claimant shall be furnished with a written or electronic notice
setting forth the reason for the extension. The notice shall indicate the special
circumstances requiring an extension of time and the date by which the Benefits
Administrative Committee (or its designee) expects to render the benefit
determination.




	 	C.	 	Review Procedure. A claimant or his or her authorized representative
may, with respect to any denied claim:






	 	(1)	 	request a full and fair review upon a written application filed
within 60 days after receipt by the claimant of written or electronic
notification of the denial of his or her claim;






	 	(2)	 	submit written comments, documents, records and other
information relating to the claim for benefits; and






	 	(3)	 	upon request, and free of charge, be provided reasonable access
to and copies of documents and records and other information relevant to the
claim for benefits.





 


17









 






Upon receipt of a timely, written application for review, the Benefits
Administrative Committee (or its designee) shall undertake a review, taking into
account all comments, documents, records and information submitted by the
claimant relating to the claim without regard to whether the information was
submitted or considered in the initial benefit determination. If the claimant (or
his or her duly authorized representative) fails to appeal the initial benefit
determination to the Benefits Administrative Committee (or its designee) in writing
within the prescribed period of time, then the Benefits Administrative Committee’s
(or its designee’s) adverse determination shall be final, binding and conclusive.




Any request or submission must be in writing and directed to the Benefits
Administrative Committee (or its designee). The Benefits Administrative Committee
(or its designee) will have the sole responsibility for the review of any denied
claim and will take all steps appropriate in the light of its findings.




	 	D.	 	Decision on Review. The Benefits Administrative Committee (or its
designee) will render a decision upon review no later than 60 days after receipt of the
request for review. If special circumstances (such as the need to hold a hearing on
any matter pertaining to the denied claim) warrant additional time, the decision will
be rendered as soon as possible, but not later than 120 days after receipt of the
request for review. Written notice specifying the circumstances requiring an extension
will be furnished to the claimant prior to the commencement of the extension. The
decision on review will be in writing and will include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, as well as
specific references to the pertinent provisions of the Plan on which the decision is
based. If the decision on review is not furnished to the claimant within the time
limits prescribed above, the claim will be deemed denied on review.






	XI.	 	Amendment and Termination






The Plan may, at any time and from time to time, be amended or modified by the Committee or
its delegate without the consent of any Participant or Beneficiary, provided that no such
amendment or modification may either accelerate the payment of the Participant’s Account or
delay such payment, resulting in a subsequent deferral of compensation. The Committee or
its delegate may also terminate and liquidate the Plan without the consent of the
Participant or Beneficiary. Any such liquidation and termination of the Plan shall be made
in accordance with the termination and liquidation requirements of and under the
circumstances described under Treasury Regulation Section 1.409A-3(j)(4)(ix). Any amendment
or termination of the Plan will become effective as to a Participant on the date established
by the Committee or its delegate. However, no amendment, modification or termination of the
Plan shall, without the consent of the Participant, adversely affect such Participant’s
rights with respect to amounts then credited to his or her Account. Actions may be taken by
the Committee or its delegate at any time and in any manner not prohibited by law.


 


18









 






	XII.	 	General Provisions






	 	A.	 	Controlling Law. Except to the extent superseded by federal law, the
laws of the State of Ohio shall be controlling in all matters relating to the Plan,
including construction and performance hereof.






	 	B.	 	Captions. The captions of Sections and paragraphs of the Plan are for
convenience of reference only and shall not control or affect the meaning or
construction of any of its provisions.






	 	C.	 	Facility of Payment. Any amounts payable hereunder to any person who
is under legal disability or who, in the judgment of the Benefits Administrative
Committee, is unable to properly manage his or her financial affairs, may be paid to
the legal representative of such person or may be applied for the benefit of such
person in any manner which the Benefits Administrative Committee may select. Any such
payment shall be deemed to be payment for such person’s Account and shall be a complete
discharge of all liability of the Employer with respect to the amount so paid.






	 	D.	 	Administrative Expenses. All expenses of administering the Plan shall
be borne by the Employer and no part thereof shall be charged against any Participant’s
Account or any amounts distributable hereunder.






	 	E.	 	Severability. Any provision of the Plan prohibited by the law of any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, without invalidating the remaining provisions hereof.






	 	F.	 	Personal Liability. Except as otherwise expressly provided herein, no
member of the Benefits Administrative Committee, and no officer, employee or agent of
the Employer, shall have any liability to any person, firm or corporation based on or
arising out of the Plan, except in the case of willful misconduct or fraud.






	 	G.	 	Amendment to Qualified Plan or Changes to Employer Contributions and
Participant Deferrals under Qualified Plan. Notwithstanding any contrary provision
in this Plan, with respect to any change or addition to, any deletion from or any
modification of (collectively, an “Amendment”) the underlying Qualified Plan or change
in the Company or Participant contributions and/or deferrals under the Qualified Plan
during any Plan Year (collectively, a “Contribution Change”), where such Amendment or
Contribution Change causes the Plan to be non-compliant with Code Section 409A and the
regulations promulgated thereunder (including, but not limited to, Treasury Regulation
Section 1.409A-2(a)(9)) or accelerates the payment of the Participant’s Account or
delays such payment, resulting in a subsequent deferral of compensation, such Amendment
and/or Contribution Change shall be disregarded with respect to Employer contributions,
Participant deferrals, Participants’ Accounts, Compensation, Executive Management
Incentive Pay Deferral Elections, Performance Award Deferral Elections or Bonus
Deferral Elections under or credited pursuant to the Plan or to
any form or time of payment applicable to Plan benefits to the extent that the same
either may cause the Plan to be or is itself non-compliant with Code Section 409A or
the regulations promulgated thereunder.




 


19









 











	 	H.	 	Right to Offset. If the Benefits Administrative Committee determines
that a Participant is, for any reason, indebted to the Company or its Affiliates, the
Benefits Administrative Committee and the Company may offset such indebtedness,
including any interest accruing thereon, against distributions otherwise due under the
Plan provided that:






	 	(1)	 	such debt is incurred in the ordinary course of the service
relationship between the Participant and the Company;






	 	(2)	 	in any taxable year of the Company, the entire amount of
reduction does not exceed $5,000; and






	 	(3)	 	the reduction is made at the same time and in the same amount
as the debt otherwise would have been due and collected from the Participant.






An election by the Company not to offset such indebtedness against distributions
otherwise due under the Plan will not constitute a waiver of the Company’s claim for
such indebtedness or obligation.




	XIII.	 	Unfunded Status of the Plan






Any and all payments made to any Participant pursuant to the Plan shall be made only from
the general assets of the Employers. All Accounts under the Plan shall be for bookkeeping
purposes only and shall not represent a claim against specific assets of the Employers.
Nothing contained in the Plan shall be deemed to create a trust of any kind or create any
fiduciary relationship. Notwithstanding the foregoing, the Employers may, in their
discretion and to the extent such funding would not trigger a tax on affected Participants
under Code Section 409A(b)(3), establish a trust to assist them in discharging all or a
portion of the benefits payable under the Plan. The assets of such trust shall remain, at
all times, the assets of the Employers subject to the claims of their creditors. Amounts
distributed from any such trust shall discharge the Company’s obligation with respect to the
benefits in question.


 


20









 





IN WITNESS WHEREOF, The Scotts Company LLC, through its duly authorized officer, has caused
the Plan document to be executed this 22 day of December, 2010, effective January 1, 2011, except
as otherwise specifically provided herein or required by law.



	 	 	 	 	 
	 	THE SCOTTS COMPANY LLC

 	 
	 	By:  	/s/ Denise Stump	 
	 	 	Name:  	Denise S. Stump 	 
	 	 	Title:  	Executive Vice President, Global Human
Resources