Document:

EX-10.4

 

EXHIBIT 10.4

PAYCHEX, INC.

2002 STOCK INCENTIVE PLAN

(as amended and restated effective October 12, 2005)

AMENDED AND RESTATED

2007 MASTER RESTRICTED STOCK AWARD AGREEMENT

     1. Grant of Restricted Stock. This Amended and Restated 2007 Master Restricted Stock
Award Agreement (this “Award Agreement”) sets forth the terms and conditions of the Restricted
Stock (the “Award”) granted to you by the Governance and Compensation Committee (the “Committee”)
of the Board of Directors of Paychex, Inc. (the “Company”) under the Company’s 2002 Stock Incentive
Plan, as amended and restated effective October 12, 2005 (the “Plan”), as described on your Award
Notice. Pursuant to its authority under the Plan to amend an outstanding award without the consent
of the holder of the award where the amendment does not adversely affect the rights of the holder
under the award, the Committee amended and restated the outstanding 2007 Master Restricted Stock
Award Agreement with this Award Agreement. The Award is subject to all of the provisions of the
Plan, which is hereby incorporated by reference and made a part of this Award Agreement. The
capitalized terms used in this Award Agreement are defined in the Plan.

     2. Restriction and Vesting.

          (a) Subject to the terms set forth in this Award Agreement and the Plan, unless earlier vested
under Section 2(b) of this Award Agreement, provided you are still a full-time employee of the
Company at that time, all of the Shares represented by the Award will vest on the fifth anniversary
of the date of grant set forth on your Award Notice (a “Vesting Date”).

          (b) Notwithstanding Section 2(a) of this Award Agreement, for the fiscal year 2007, if the
Company’s operating income, excluding interest on funds held for clients and stock-based
compensation expense equals or exceeds the target for fiscal 2007 and for each of the fiscal years
following fiscal 2007 of the Company, if the Company’s operating income, excluding interest on
funds held for clients (“Operating Income”), for such fiscal year equals or exceeds the following
target for such fiscal year, then, provided you are still a full-time employee of the Company at
that time, one-third of the total number of Shares represented by the Award shall vest upon the
confirmation by the Company of such fiscal year’s Operating Income (also a “Vesting Date”):

	 	 	 	 	 
	Fiscal Year	 	Target Operating Income
	2007
	 	$	631,088,000	 
	2008
	 	$	696,269,000	 
	2009
	 	$	800,709,000	 
	2010
	 	$	920,816,000	 

          (c) Except in the event of your death or Disability, if your employment terminates before a
Vesting Date for any reason, including, but not limited to, Retirement, then the unvested portion
of the Award shall be forfeited and cancelled immediately. If your employment terminates due to
death or Disability, your Award shall immediately become 100% vested.

     3. Book-Entry Registration. The Award initially will be evidenced by book-entry
registration only, without the issuance of a certificate representing the Shares underlying the
Award.

 

 

     4. Issuance of Shares. The Company shall, when that the conditions to vesting
specified in Section 2 of this Award Agreement are satisfied, issue a certificate or certificates
representing the Shares underlying the Award that have vested as promptly as practicable following
the Vesting Date of such Shares.

     5. Rights as a Stockholder. Except as otherwise provided by this Section, you will
have the rights of a stockholder with respect to the Shares underlying the Award, including, but
not limited to, the right to receive such cash dividends, if any, as may be declared on such Shares
from time to time and the right to vote (in person or by proxy) such Shares at any meeting of
stockholders of the Company. Notwithstanding the foregoing, the dividends paid on any unvested
Shares shall be retained by the Company and held in escrow, trust or similar manner, and shall only
be paid to you upon the vesting of the underlying Shares to which the dividends relate; upon the
forfeiture of any Shares represented by the Award, your right to the dividends paid on the
underlying Shares which are forfeited shall also be forfeited.

     6. Restrictions on Transfer of Shares. The Award, and the right to vote the Shares
underlying the Award and to receive dividends thereon, may not, except as otherwise provided in the
Plan, be sold, assigned, transferred, pledged or encumbered in any way prior to the vesting of such
Shares, whether by operation of law or otherwise, except by will or the laws of descent and
distribution. After a Vesting Date, the vested Shares may be issued during your lifetime only to
you, or after your death to your designated beneficiary, or, in the absence of such beneficiary, to
your duly qualified personal representative.

     7. Withholding. The grant and the vesting of the Award is conditioned upon your
making arrangements satisfactory to the Company for the payment to the Company of the amount of all
taxes required by any governmental authority to be withheld and paid over by the Company or any
Affiliate to the governmental authority on account of such grant or vesting. The payment of such
withholding taxes to the Company may be made (i) by you in cash or by check, (ii) subject to the
consent of the Company and in accordance with any guidelines established by the Committee, by you
directing the Company to retaining the number of the Shares that would otherwise be delivered to
you upon vesting that have an aggregate Fair Market Value (at the time retained by the Company)
equal to the amount of withholding taxes (using your minimum required tax withholding rate or such
other rate that the Company determines will not trigger a negative accounting impact to the
Company) required to be paid, or (iii) by the Company or any Affiliate withholding such taxes from
any other compensation owed to you by the Company or any Affiliate. Unless you make arrangements
prior to vesting to pay withholdings taxes in cash or by check, or to have such withholding taxes
withheld from other compensation owed to you by the Company or any Affiliate, then at the time of
vesting, the Company shall have the right to retain the number of the Shares that would otherwise
be delivered to you upon vesting that have an aggregate Fair Market Value (at the time retained by
the Company) equal to the amount of withholding taxes (using your minimum required tax withholding
rate or such other rate that the Company determines will not trigger a negative accounting impact
to the Company) required to be paid.

     8. Limitation of Rights. Neither the Plan, the granting of the Award, the Award
Notice nor this Award Agreement gives you any right to remain in the employment of the Company or
any Affiliate.

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     9. Rights of Company and Affiliates. This Award Agreement does not affect the right
of the Company or any Affiliate to take any corporate action whatsoever, including without
limitation its right to recapitalize, reorganize or make other changes in its capital structure or
business, merge or consolidate, issue bonds, notes, Shares or other securities, including preferred
stock, or options therefor, dissolve or liquidate, or sell or transfer any part of its assets or
business.

     10. Plan Controls. In the event of any conflict among the provisions of the Plan and
this Award Agreement, the provisions of the Plan will be controlling and determinative.

     11. Amendment. Except as otherwise provided by the Plan, the Company may only alter,
amend or terminate the Award with your consent.

     12. Governing Law. This Award Agreement shall be governed by and construed in
accordance with the laws of the State of New York, except as superseded by applicable federal law,
without giving effect to its conflicts of law provisions.

* * * * *

3EX-10.1

 

Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

     This Separation Agreement and General Release (“Agreement”) is entered into by and between
The Scotts Miracle-Gro Company (“Company”) and Christopher L. Nagel (“Executive”).

     WHEREAS, the Executive has served as Executive Vice President-North America Consumer
Business and in other roles for the Company.

     WHEREAS, the Executive’s employment has been governed by an Employment Agreement signed by
the Executive on November 10, 2006, and by the Company on November 13, 2006 (“Employment
Agreement”).

     WHEREAS, the Executive intends to resign his employment with the Company, which
resignation shall constitute a Voluntary Termination by the Executive within the meaning of
Article 7.3 of the Employment Agreement.

     NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
of the parties set forth in this Agreement, and of other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:

     1. Resignation of Employment. Effective July 18, 2007 (“Effective Date of
Termination”) the Executive hereby resigns his employment with the Company and resigns all other
positions he holds with or for the Company, its subsidiaries and related parties, including, but
not limited to, any position as an officer, director, member, trustee or any similar position.
The resignation is intended to constitute a Voluntary Termination by the Executive under Article
7.3 of the Employment Agreement. The Company hereby waives the sixty (60) day notice period and
the Executive waives any right to payments during such sixty (60) day notice period under
Article 7.3 of the Employment Agreement. The Executive will thereafter receive the following:

     (a) The Company will pay to the Executive a monthly amount on the first payroll date of
each month, in an amount equal to the Executive’s cost of health care coverage, if after
receiving a COBRA notification from the Company, Executive elects the Company’s group health
continuation coverage under COBRA pursuant to section 4980B of the Internal Revenue Code of
1986, as amended (the “Code”). These payments will commence on the Company’s first payroll date
following termination of his active employee coverage and will continue until the first to occur
of (1) eighteen (18) months after the Effective Date of Termination, (2) the date upon which the
Executive becomes covered under another employer health care plan, or (3) the date on which the
Executive ceases to be covered by the Company’s group health continuation coverage under COBRA.
The Executive will be solely responsible for electing COBRA coverage within the required time
period.

 

 

     (b) The Company shall pay the Executive within thirty (30) days of the Effective Date of
Termination the amount of One Million Four Hundred Thousand Dollars ($1,400,000.00) (prior to
withholding of applicable taxes), which represents the negotiated value of the Executive’s
unvested options as offset by certain other amounts. All unvested options, restricted stock,
stock appreciation rights or other rights held by the Executive as of the Effective Date of
Termination under the Company’s 2006 Long-Term Incentive Plan or under any other equity or
long-term incentive plan of the Company (a “Company Incentive Plan”) shall be forfeited, and the
Executive shall have no further interest therein. Any vested options held by the Executive shall
be governed by the relevant Company Incentive Plan and grant instrument. An accurate summary of
each of the Executive’s vested options under any Company Incentive Plan has been provided.

     (c) The Company will pay to the Executive any accrued but unpaid Base Salary, vacation and
automobile allowance as of the Effective Date of Termination and the Company will reimburse the
Executive for all incurred but unpaid business expenses as of the Effective Date of Termination
under the Company’s expense reimbursement policy.

     (d) The Executive shall not be entitled to any other severance or related payments under
any severance, separation or other benefit plan maintained by the Company (“Company Severance
Plans”), and shall also not be entitled to a bonus or other payment under the Company’s
Executive Management Incentive Plan for the current year.

     2. Confidentiality, Noncompetition and Nonsolicitation. This Agreement shall not
supersede or nullify in any way the Employee Confidentiality, Noncompetition, Nonsolicitation
Agreement executed by the Executive on August 7, 2006. The Employee Confidentiality,
Noncompetition, Nonsolicitation Agreement shall remain in full force and effect, and any
requirements of such agreement shall be incorporated by reference into this Agreement..

     3. Release. The Executive voluntarily and knowingly releases and discharges the
Company, its past, present and future parents, affiliates and subsidiaries, and its and their
past, present and future directors, officers, employees, agents, shareholders and
representatives (“Releasees”), from any and all claims, debts, suits or causes of action, known
or unknown, based upon any fact, circumstance, or event occurring or existing at or prior to the
Executive’s execution of this Agreement. This Release specifically includes, but is not limited
to, any claims or actions arising out of or during the Executive’s employment with the Company
or the termination of that employment, including any claim under Title VII of the Civil Rights
Act of 1964, the Americans with Disabilities Act, the Employee Retirement Income Security Act,
the Ohio Civil Rights Act, and any and all other federal, state or local laws, and any common
law claims now or hereafter recognized, as well as all claims for counsel fees and costs. This
Release is not intended to apply to rights or claims under the Age Discrimination in Employment
Act, to rights or claims that cannot be waived by private agreement under applicable law, to
statutory indemnification provisions and rights set forth in any applicable directors and
officers liability insurance policy, or to the Executive’s entitlement to any vested benefits he
has as of the Effective Date of Termination under the Company’s various employee benefits plans
or programs, including the Company’s Retirement

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Savings Plan or Executive Retirement Plan (“Company Benefit Plans”); provided, however,
that (a) Executive’s termination of employment and execution of this Agreement shall not be
deemed to accelerate vesting of any rights under the Company Benefit Plans; and (b) as set forth
in Section 1(d) of this Agreement, the Executive agrees and acknowledges that he has no right to
payment or benefits under any Company Severance Plan as a result of his termination of
employment or execution of this Agreement.

     4. Cooperation. The Executive specifically understands that in partial consideration
for the benefits received pursuant to this Agreement, which the Executive acknowledges are in
excess of any other benefits or compensation the Executive might otherwise be entitled to claim or
receive, the Executive may be requested by the Company to cooperate with the Company in the defense
or prosecution of one or more existing or future court actions, governmental investigations,
arbitrations, mediations or other legal or equitable proceedings which involve the Company, its
past and present affiliates and subsidiaries, and any of its and their employees, officers or
directors, and the Executive agrees to do so. This cooperation may include, but shall not be
limited to, the need for or availability for testimony in deposition, affidavit, trial, mediation
or arbitration, as well as preparation for that testimony. The Executive shall be available at the
Company’s reasonable request for any meetings or conferences the Company deems necessary in
preparation for the defense or prosecution of any such legal proceedings. The Company shall
reimburse the Executive for any actual costs and expenses reasonably incurred by the Executive
while his services are being utilized by the Company pursuant to this paragraph and will compensate
the Executive for any such service at the rate of Three Hundred Dollars ($300.00) per hour (but no
more than One Thousand Five Hundred Dollars ($1,500.00) per day).

     5. Nondisparagement. The Executive agrees not to disparage or otherwise comment
negatively about any Releasee, except to the extent that the Executive is required by applicable
law to testify. The Company agrees that in the event it receives an inquiry regarding the
Executive from a prospective employer of the Executive, it will advise the prospective employer
only of the Executive’s last position and dates of employment with the Company, and that the
Executive resigned on July 18, 2007.

     6. Breach of Agreement In addition to other remedies available to the Company under
this Agreement, if at any time the Executive materially breaches any provision of this Agreement or
if the Company, after the date of execution of this Agreement, discovers facts (a) that the Company
did not know prior to such date, and (b) that show that the Executive engaged during his term of
employment with the Company in activities that would constitute Cause as defined in the Employment
Agreement, the amount paid to the Executive pursuant to Section 1(b) of this Agreement shall be
forfeited, and the Company may recoup the gross amount of such payment, within two (2) years after
the Executive engages in such conduct or the conduct is first discovered by the Company. The
payment shall be made in such manner and on such terms and conditions as may be required by the
Company. The Company and the Executive agree that the monetary value of a material breach of this
Agreement by the Executive would be difficult to calculate. As a result, the Company and the
Executive agree that in the event of a material breach by the Executive, this section contains a
reasonable basis for estimating the damages from such breach. This section shall not foreclose the
Company from recovering additional damages from such breach if such additional damages are proven by the Company.

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     7. Confidentiality of Agreement. Except as required by law, the Executive agrees that
the terms, amount and fact of this Agreement shall be confidential and that he will not disclose
any information concerning this Agreement to anyone other than his immediate family members,
financial advisors and legal counsel.

     8. Tax Consequences. The Executive is solely responsible for the tax consequences of
this Agreement, including the application of section 409A of the Code. The Executive acknowledges
that he has consulted with his tax advisor with respect to the tax consequences of his stock
options and all compensation provided under this Agreement and the Company’s benefit plans. The
Company shall have no liability with respect to the tax consequences of his stock options or any
compensation provided under this Agreement or any benefit plans. The Company shall have the right
to determine in its sole discretion whether, and to what extent, any payments or benefits under
this Agreement are subject to withholding for income or other taxes or reporting to tax
authorities. In addition, payments and benefits under this Agreement
are not benefit-bearing (i.e., shall not be considered compensation) for purposes of any Company
Benefit Plan.

     9. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the state of Ohio, to the extent not preempted by federal law.

     10. Severability. If any part of this Agreement other than Section 3 is determined to
be invalid, illegal or otherwise unenforceable, the remaining provisions of this Agreement shall
not be affected and will remain in full force and effect.

     11. Acknowledgements. In signing this Agreement, the Executive acknowledges that:

     (a) The Company has not provided the Executive with any tax advice, and the Executive is
solely responsible for the tax consequences of compensation provided under this Agreement or
under any Company benefit plan.

     (b) The Executive has signed this Agreement voluntarily and knowingly in exchange for the
consideration described herein, which the Executive acknowledges is adequate and satisfactory and
beyond that to which the Executive is otherwise entitled.

     (c) The Executive is hereby advised to consult with an attorney before signing this
Agreement.

     (d) The Company has provided the Executive with a reasonable period of time in which to
consider the Agreement, and the Executive has signed on the date indicated below after concluding
that this Agreement is satisfactory.

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     (e) Neither the Company nor any of its agents, representatives, employees, or attorneys, have
made any representations to the Executive concerning the terms or effects of this Agreement other
than those contained herein.

     IN WITNESS WHEREOF, and intending to be bound hereby, the parties have executed this
Separation Agreement and General Release on the dates set forth below.

	 	 	 	 	 
	 	THE SCOTTS MIRACLE-GRO COMPANY

 	 
	July 18, 2007 	By:	/s/ Denise S. Stump
 	 
	 	Name:  	Denise S. Stump 	 
	 	Title:  	EVP, Global HR 	 	 
	 
	 	 	 
	 	 	 
	July 18, 2007 	 	/s/ Christopher L. Nagel
 	 
	 	 	Christopher L. Nagel 	 
	 	 	 
	 

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