Document:

ex10-34.htm

    Exhibit
10.34

    

    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement (the “Agreement”), dated as of March 1, 2008, (the
“Effective Date”) is by and between AeroGrow International, Inc., a Nevada
corporation (the “Company”), and Jervis B. Perkins (“Executive”).

     

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

     

    Section 1.  Employment.  The
Company hereby agrees to employ Executive, and Executive hereby accepts
employment by the Company upon the terms and subject to the conditions
hereinafter set forth in this Agreement.  Executive’s employment with
Company pursuant to the terms of this Agreement will commence on March 1,
2008.

     

    Section 2.  Duties During Contract
Term.  Executive shall serve as the President and Chief
Executive Officer of the Company and shall be a member of the Board of Directors
of the Company.  Executive’s employment with the Company shall be at
the pleasure of the Board of Directors.  Executive 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 Executive in similar businesses, as well as any other
reasonable responsibilities, duties and authorities commensurate with
Executive’s position assigned by the Company’s Board of
Directors.  Executive 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
Executive's employment hereunder is terminated earlier pursuant to Section 8 of
this Agreement, the term of this Agreement shall begin on March 1, 2008 and
shall expire on March 1, 2009 (the initial “Contract Term”), provided that upon
the expiration of the initial Contract Term, the Executive'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.

     

    Section
4.  Place of
Employment.  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.  Until
June 1, 2008, 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, until June 1, 2008, 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.

    

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

     

    (a) Base
Salary.  Beginning on the Effective Date, Executive shall be
entitled to receive a base salary of $300,000 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.  Executive’s base salary may be increased from
time to time in the discretion of the Board of Directors and its Compensation
Committee, but in no event will Executive’s base salary in effect from time to
time be reduced.

     

    (b) Bonus.  Executive 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.  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 Company’s
fiscal year.  In order to be eligible for receipt of this bonus,
Executive must be employed by Company on the last day of the fiscal year for
which the bonus is payable.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Stock
Appreciation Bonus.  Executive shall
be eligible to receive an annual cash bonus based upon an increase in the stock
price of the Company.  This bonus shall be calculated two months after
the beginning of each new fiscal year, which fiscal year begins on April 1 (June
1; the “Calculation Date”) and shall be payable not later than one hundred and
twenty (120) days after the Calculation Date.  In order to be eligible
for receipt of this bonus, Executive must be employed by Company on the
Calculation Date.  This bonus shall be based on the average daily
stock price for the two months following the end of the fiscal year (April and
May), compared to the previous average daily stock price these same two months
(April and May) of the previous year.  The following schedule sets
forth the bonus amounts payable for increases in the Company’s stock
price:

     

    · Less than
33% increase – no bonus

     

    · 33% to
49% increase - $50,000 bonus

     

    · 50% to
99% increase - $100,000 bonus

     

    · 100% or
greater increase - $200,000 bonus

     

    (d) Benefits.  Executive 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.

     

    (e) Equity
Compensation.  Executive 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.  Unless Executive is terminated by the Company for Cause on
or before March 1, 2008, a grant of stock options to be granted pursuant to the
Company’s 2005 Equity Compensation Plan shall be granted on March 1, 2008 and
shall not be less than 216,666 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 Executive
ceases to be employed by Company, in which case such options will expire one (1)
year following Executive’s date of separation of employment, except that upon
Executive’s retirement, disability or death (as those terms are defined in the
Stock Option Agreement relating to such share), such options will expire three
(3) years following such event; and (iii) shall be subject to other standard
terms and conditions under the 2005 Equity Compensation Plan.  Under
no circumstances may Executive exercise the options described in this Agreement
more than five (5) years after the date they are granted.  Executive
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:

     

    
      	
              ·  

            	
              43,334
      stock options on March 1, 2008

            

    

     

    
      	
              ·  

            	
              43,333
      stock options on September 1, 2008

            

    

     

    
      	
              ·  

            	
              43,333
      stock options on March 1, 2009

            

    

     

    
      	
              ·  

            	
              43,333
      stock options on September 1, 2009

            

    

     

    
      	
              ·  

            	
              43,333
      stock options on March 1, 2010

            

    

     

    In the
event of a Change in Control, as that term is defined in the 2005 Equity
Compensation Plan, or if Executive’s employment is terminated by the Company
without Cause before the anticipated date that these options are to vest, all
unvested options that are scheduled to vest within one year after Executive’s
separation of employment will immediately vest as of the date of employment
separation.  In the event Executive’s employment is terminated in any
manner other than by the Company without Cause before the anticipated date that
these options are to vest, no unvested options will vest.

     

    (f) Automobile
Allowance.  Executive 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 6.  Relocation.  Executive’s
relocation referenced in Section 4 above will be covered by Company’s Relocation
Policy. Under the Policy, the Company agrees to reimburse Executive for expenses
directly related to relocation to a maximum benefit amount of
$50,000.00.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section 7.  Expenses.  It is
acknowledged that Executive, 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 Executive for all
reasonable expenses incurred by Executive in the performance of his duties
hereunder within fifteen days from date Executive or his representative submits
a request for such reimbursement.  Executive 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’s Board of Directors may terminate the
Executive's employment under this Agreement at any time for
Cause.  “Cause” is defined as (i) a material act of dishonesty by
Executive in connection with his responsibilities as an Executive,
(ii) conviction of, or plea of nolo contendere to, a felony,
(iii) gross misconduct, or (iv) continued substantial violation of his
employment duties after Executive has received a written demand for performance
from the Company’s Board of Directors which specifically sets forth the factual
basis for the Company’s belief that Executive has not substantially performed
his duties.

     

    (b) Without Cause by
Company.  The Company’s Board of Directors may terminate the
Executive'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
Executive, and if Executive 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 Executive's
employment hereunder without Cause.  If the Company terminates the
Executive’s employment in accordance with this paragraph, the Executive shall be
entitled to continuation in payment of his Base Salary for twelve months
following the date of termination; additionally, Executive 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(d) 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) Executive’s compliance with restrictive covenants provided in
Section 9 of this Agreement and (ii) Executive’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 Executive 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 Executive 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 Executive 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 Executive 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 Executive 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
Executive.  The Executive may terminate the Executive'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 Executive terminates the Executive’s employment in
accordance with this paragraph, the Executive shall be entitled to continuation
in payment of his Base Salary until the end of the month following said notice.

     

    (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 Executive or, at the discretion of the Board of
Directors of the Company, upon Executive becoming disabled such that Executive
becomes qualified for Long Term Disability Benefits.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f) Accrued
Compensation and Benefits.  In all cases of Executive’s
termination of employment, the Company shall, within 90 days following
Executive’s separation of employment, pay to Executive (or, in the case of
Executive’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, Executive 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(d).

     

    Section
9.  Restrictive
Covenants.

     

    (a) Confidential
Data.  The Executive 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 Executive 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 Executive 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 Executive 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. Executive 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 Executive 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 Executive.

     

    (e) Return of
Property.  Upon termination of employment, and at the request
of the Company, the Executive 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 Executive shall
cease to use all such materials and information set forth under this Section
9(e).

     

    (f) Representations.  The
Executive 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 Executive from complying with the provisions of this
Agreement and that  the performance of his duties 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.  Executive 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.  Executive 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 Executive without the additional consideration
offered by Executive in binding himself to the provisions of this Section
9.  In the event of a breach or threatened breach by Executive 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
Executive 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 Executive and Company, Executive 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.  Executive 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 Executive 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 Executive’s employment or the termination of
Executive’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
Executive 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 Executive and
Company, including but not limited to those claims referenced in Section 9
above.  By signing this Agreement, Executive voluntarily, knowingly
and intelligently waives any right Executive 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 Executive 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.

    6075 Longbow Dr., Suite
200

    Boulder, Co 80301

    Fax:  303-444-0406

     

    If to Executive, 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 Executive 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 Executive and the
successors of the Company.  If Executive dies while any amounts would
still be payable to him hereunder, such amounts will be paid to Executive’s
estate.  This Agreement is not otherwise assignable by
Executive.

     

                (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.  This Agreement specifically supersedes the November
9, 2007 Employment Agreement between Executive and Company.  All
unvested stock options described in the November 9, 2007 Employment Agreement
between Executive and Company are rendered null and void by this
Agreement.

     

                (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/
      W. Michael
      Bissonnette                 
      

            
	
              Its:

            	 
      	
              Chairman
      and CEO

            
	
              EXECUTIVE:

            
	
              By:

            	 
      	
               /s/
      Jervis B.
      Perkins                               
      

            
	 
      	 
      	
              Jervis
      B. Perkins2003 Nonqualified Stock Option Plan

 Exhibit 10.6 
 ENTRADE INC. 
 2003 NONQUALIFIED STOCK OPTION PLAN 
 1. Purpose. The purpose of the Entrade Inc. 2003 Nonqualified Stock Option Plan (the “Plan”) is to further the growth, development and
financial success of Entrade Inc. (the “Company”) and the subsidiaries of the Company by providing additional incentives to employees of the Company and the Company’s subsidiaries, which will enable them to participate directly in the
growth of the capital stock of the Company. The Company intends that the Plan will facilitate securing, retaining and motivating employees of high caliber and potential. To accomplish these purposes, the Plan provides a means whereby employees of
the Company or any subsidiary of the Company may receive stock options (“Options”) to purchase the Company’s Common Stock, no part value (the “Common Stock”). 
 2. Administration. 
 (a)
Composition of the Committee. The Plan shall be administered by a committee (the “Committee”), which shall be appointed by, and serve at the pleasure of, the Company’s Board of Directors (the “Board”). From time to time
the Board may increase or decrease the size of the Committee, appoint additional members thereof, remove members (with or without cause), appoint new members in substitution therefore, fill vacancies or remove all members of the Committee and
thereafter directly administer the Plan. The initial members of the Committee shall be the President of the Company and the members of the Compensation Committee of the Board of Directors; provided that, in the absence of any of them, the Chairman
of the Company and/or the Vice Chairman of the Company may act for either such officer. 
 (b) Authority of the Committee. The
Committee shall have full and final authority, in its sole discretion, to interpret the provisions of the Plan and to decide all questions of fact arising in its application; to determine the employees to whom Options shall be granted and the
amount, size, exercise price and other terms of each such grant; to determine the time when Options shall be granted; and to make all other determinations necessary or advisable for the administration of the Plan. All decisions, determinations and
interpretations of the Committee shall be final and binding on all optionees and all other holders of Options granted under the Plan. 
 (c) Authority of the Board. Notwithstanding anything to the contrary set forth in the Plan, all authority granted hereunder to the Committee may be exercised at any time and from time to time by the Board at its election. All
decisions, determinations and interpretations of the Board shall be final and binding on all optionees and all other holders of Options granted under the Plan. 
 3. Stock Subject to the Plan. Subject to Section 16 hereof, the shares that may be issued under the Plan shall not exceed the aggregate of 3,000,000 shares of Common Stock. Such shares may be authorized
and unissued shares or shares issued and subsequently reacquired by the Company. Except as otherwise provided herein, any shares subject to an Option that for any reason expires or is terminated unexercised as to such shares shall again be available
under the Plan. 

 4. Eligibility To Receive Options. Persons eligible to receive Options under the Plan shall be
limited to those employees of the Company or any subsidiary of the Company. 
 5. Types of Options. Grants may be made at any time and
from time to time by the Committee in the form of Options to purchase shares of Common Stock. Options granted hereunder shall be non-qualified stock options that are not intended to qualify as incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or any amendment or substitute thereto (“Nonqualified Stock Options”). 
 6. Option Agreements. Options for the purchase of Common Stock shall be evidenced by written agreements in such form no inconsistent with the Plan as the Committee shall approve from time to time. Options
granted hereunder may be evidenced by a single agreement or by multiple agreements, as determined by the Committee in its sole discretion. Each option agreement shall contain in substance the following terms and conditions: 
 (a) Type of Option. Each option agreement shall identify the Options represented thereby as Nonqualified Stock Options. 
 (b) Option Price. Each option agreement shall set forth the purchase price of the Common Stock purchasable upon the exercise of the Option
evidenced thereby. 
 (c) Exercise Term. Each option agreement shall state the period or periods of time within which the Option may
be exercised, in whole or in part, as determined by the Committee (including the date or dates upon which the Option or any portion thereof shall first becomes exercisable), provided that no Option shall be exercisable after ten years from the date
of grant thereof. The Committee shall have the power to permit an acceleration of previously established exercise terms, subject to the requirements set forth herein, upon such circumstances and subject to such terms and conditions as the Committee
deems appropriate. 
 7. Date of Grant. The date on which an Option shall be deemed to have been granted under the Plan shall be the
date of the Committee’s authorization of the Option or such later date as may be determined by the Committee at the time the Option is authorized. 
 8. Exercise and Payment for Shares. Options may be exercised in whole or in part, from time to time, by giving written notice of exercise to the Secretary of the Company, specifying the number of shares to be
purchased. The purchase price of the shares with respect to which an Option is exercised shall be payable in full with the notice of exercise in cash, Common Stock at fair market value, or a combination thereof, as the Committee may determine from
time to time and subject to such terms and conditions as may be prescribed by the Committee for such purpose. The Committee may also, in its discretion and subject to prior notification to the Company by an optionee, permit an optionee to enter into
an agreement with the Company’s transfer agent or a brokerage firm of national standing whereby the optionee will simultaneously exercise the Option and sell the shares acquired thereby through the Company’s transfer agent or such
brokerage firm and either the Company’s transfer agent or the brokerage firm executing the sale will remit to the Company from the proceeds of sale the exercise price of the shares as to which the Option has been exercised. 
  

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 9. Rights upon Termination of Employment. In the event that an optionee ceases to be an employee
of the Company or any subsidiary of the Company for any reason other than death, retirement, as hereinafter defined, or disability (within the meaning of Section 22(e)(3) of the Code or any substitute therefore), the optionee shall have the
right to exercise the Option during its term within a period of three months after such termination to the extent that the Option was exercisable at the time of termination, or within such other period, and subject to such terms and conditions, as
may be specified by the Committee. In the event that an optionee dies, retires or becomes disabled prior to the expiration of his Option and without having fully exercised his Option, the optionee or his successor shall have the right to exercise
the Option during its term within a period of one year after termination of employment due to death, retirement or disability to the extent that the Option was exercisable at the time of termination, or within such other period, and subject to such
terms and conditions, as may be specified by the Committee. As used in this Section 9, “retirement” means a separation from service by reason of an optionee’s retirement at or after his earliest permissible retirement date
pursuant to an in accordance with his employer’s established plan, policy or practice. 
 10. General Restrictions. Each Option
granted under the Plan shall be subject to the requirement that, if at any time the Committee shall determine that (i) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any securities
exchange or under any state or federal law, or (ii) the consent or approval of any government regulatory body, or (iii) the satisfaction of any tax payment or withholding obligation, or (iv) an agreement by the recipient of an Option
with respect to the disposition of shares of Common Stock is necessary or desirable as a condition of or in connection with the granting of such Option or the issuance or purchase of shares of Common Stock thereunder, such Option shall not be
consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee. 
 11. Rights of a Shareholder. The recipient of any Option under the Plan, unless otherwise provided by the Plan, shall have no rights as a
shareholder unless and until certificates for shares of Common Stock are issued and delivered to him. 
 12. Right to Terminate
Employment. Nothing contained in the Plan or in any option agreement entered into pursuant to the Plan shall confer upon an optionee the right to continue in the employment of the Company or any subsidiary of the Company or affect any right that
the Company or any subsidiary of the Company may have to terminate the employment of such optionee. 
 13. Withholding. Whenever the
Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the recipient to remit to the Company an amount sufficient to satisfy any federal, state or local withholding tax
requirements prior to the delivery of any certificate or certificates for such shares. If and to the extent authorized 

  

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by the Committee, in its sole discretion, an optionee may make an election, by means of a form of election to be prescribed by the Committee, to have shares
of Common Stock that are acquired upon exercise of an Option withheld by the Company or to tender other shares of Common Stock or other securities of the Company owned by the optionee to the Company at the time of exercise of an Option to pay the
amount of tax that would otherwise be required by law to be withheld by the Company as a result of any exercise of an Option. Any such election shall be irrevocable and shall be subject to termination by the Committee, in its sole discretion, at any
time. Any securities so withheld or tendered will be valued by the Committee as of the date of exercise. 
 14. Non-Assignability. No
Option under the Plan shall be assignable or transferable by the recipient thereof except by will or by the laws of descent and distribution or by such other means as the Committee may approve. During the life of the recipient, such Option shall be
exercisable only by such person or by such person’s guardian or legal representative. 
 15. Non-Uniform Determinations. The
Committee’s determinations under the Plan (including without limitation determinations of the persons to receive Options, the form, amount and timing of such grants, the terms and provisions of Options, and the agreements evidencing same) need
not be uniform and may be made selectively among persons who receive, or are eligible to receive, grants of Options under the Plan whether or not such persons are similarly situated. 
 16. Adjustments. 
 (a)
Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Option and the number of shares of Common Stock that have been authorized for
issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.

 (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, all outstanding
Options will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Committee. The Committee may, in the exercise of its discretion in such instance, declare that any Option shall terminate as of a
date fixed by the Committee and give each Option holder the right to exercise his Option as to all or any part of the shares of Common Stock covered by the Option, including shares as to which the Option would not otherwise be exercisable.

  

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 (c) Sale or Merger. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another corporation, the Committee, in the exercise of its sole discretion, may take such action as it deems desirable, including, but not limited to: (i) causing an Option to be
assumed or an equivalent option to be substituted by the successor corporation or a parent or subsidiary of such successor corporation, (ii) providing that each Option holder shall have the right to exercise his Option as to all of the shares
of Common Stock covered by the Option, including shares as to which the Option would not otherwise be exercisable, or (iii) declaring that an Option shall terminate at a date fixed by the Committee provided that the Option holder is given
notice and opportunity to exercise the then exercisable portion of his Option prior to such date. 
 17. Amendment. The Committee may
terminate or amend the Plan at any time, with respect to shares as to which Options have not been granted, subject to any required shareholder approval or any shareholder approval that the Board may deem to be advisable for any reason, such as for
the purpose of obtaining or retaining any statutory or regulatory benefits under tax, securities or other laws or satisfying any applicable stock exchange listing requirements. The Committee may be, without the consent of the holder of an Option,
alter or impair any Option previously granted under the Plan, except as specifically authorized herein. 
 18. Reservation of Shares.
The Company, during the term of the Plan, will at all times reserve and keep available such number of shares as shall be sufficient to satisfy the requirements of the Plan. Inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares hereunder, shall relieve the Company of any liability for the failure to issue or sell such shares as to which such
requisite authority shall not have been obtained. 
 19. Effect on Other Plans. Participation in the Plan shall not affect an
employee’s eligibility to participate in any other benefit or incentive plan of the Company or any subsidiary of the Company. Any Options granted pursuant to the Plan shall not be used in determining the benefits provided under any other plan
of the Company or any subsidiary of the Company unless specifically provided. 
 20. Duration of the Plan. The Plan shall remain in
effect until all Options granted under the Plan have been satisfied by the issuance of shares or have been cancelled unexercised, but not Option shall be granted more than ten years after the date the Plan is adopted by the Company. 
 21. Forfeiture. Notwithstanding anything to the contrary in the Plan, if the Committee finds, by a majority vote, after full consideration of the
facts presented on behalf of both the Company and any optionee, that the optionee has been engaged in fraud, embezzlement, theft or commission of a felony in the course of his employment or retention by the Company or any subsidiary of the Company
or that the optionee has willfully disclosed confidential information of the Company or any subsidiary of the Company and 

  

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that such disclosure materially damaged the Company or any subsidiary of the Company, the optionee shall forfeit all unexercised Options and all exercised
Options under which the Company has not yet delivered the certificates. The decision of the Committee in interpreting and applying the provisions of this Section 21 shall be final. No decision of the Committee, however, shall affect the
finality of the discharge or termination of such optionee by the Company or any subsidiary of the Company in any manner. 
 22. No
Prohibition on Corporate Action. No provision of the Plan shall be construed to prevent the Company or any officer or director thereof from taking any action deemed by the Company or such officer or director to be appropriate or in the
Company’s best interest, whether or not such action could have an adverse effect on the Plan or any Options granted hereunder, and no optionee or optionee’s estate, personal representative or beneficiary shall have any claim against the
Company or any officer or director thereof as a result of the taking of such action. 
 23. Indemnification. With respect to the
administration of the Plan, the Company shall indemnify each present and future member of the Committee and the Board against, and each member of the Committee and the Board shall be entitled without further action on his part to indemnity from the
Company for, all expenses (including the amount of judgments and the amount of approved settlements made with a view to the curtailment of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by him in connection
with or arising out of, any action, suit or proceeding in which he may be involved by reason of his being or having been a member of the Committee or the Board, whether or not he continues to be such member at the time of incurring such expenses;
provided, however, that such indemnity shall not include any expenses incurred by any such member of the Committee or the Board (i) in respect of matters as to which he shall be finally adjudged in any such action, suit or proceeding to have
been guilty of gross negligence or willful misconduct in the performance of his duty as such member of the Committee or the Board; or (ii) in respect of any matter in which any settlement is effected for an amount in excess of the amount
approved by the Company on the advice of its legal counsel; and provided further that no right of indemnification under the provisions set forth herein shall be available to or enforceable by any such member of the Committee or the Board unless,
within 60 days after institution of any such action, suit or proceeding, he shall have offered the Company in writing the opportunity to handle and defend same at its own expense. The foregoing right of indemnification shall inure to the benefit of
the heirs, executors or administrators of each such member of the Committee or the Board and shall be in addition to all other rights to which such member may be entitled as a matter of law, contract or otherwise. 
 24. Miscellaneous Provisions. 
 (a) Compliance with Plan Provisions. No optionee or other person shall have any right with respect to the Plan, the Common Stock reserved for issuance under the Plan or in any Option until a written option agreement shall have been
executed by the Company and the optionee and all the terms, conditions and provisions of the Plan and the Option applicable to such optionee (and each person claiming under or through him) have been met. 
  

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 (b) Approval of Counsel. In the discretion of the Committee, no shares of Common Stock, other
securities or property of the Company or other forms of payment shall be issued hereunder with respect to any Option unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state, local and
foreign legal, securities exchange and other applicable requirements. 
 (c) Effects of Acceptance of Option. By accepting any
Option or other benefit under the Plan, each optionee and each person claiming under or through him shall be conclusively deemed to have indicated his acceptance and ratification of, and consent to, any action taken under the Plan by the Company,
the Board and/or the Committee or its delegates. 
 (d) Construction. The masculine pronoun shall include the feminine and neuter, and
the singular shall include the plural, where the context so indicates. 
  

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