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MARKETING AGREEMENT | 6 Months Ended
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Apr. 01, 2023
Marketing Agreement [Abstract] |
MARKETING AGREEMENT | MARKETING AGREEMENT The Scotts Company LLC (“Scotts LLC”) is the exclusive agent of Monsanto Company, a subsidiary of Bayer AG (“Monsanto”), for the marketing and distribution of certain of Monsanto’s consumer Roundup® branded products in the United States and certain other specified countries. The annual commission payable under the Third Amended and Restated Exclusive Agency and Marketing Agreement (the “Third Restated Agreement”) is equal to 50% of the actual earnings before interest and income taxes of Monsanto’s consumer Roundup® business for each program year in the markets covered by the Third Restated Agreement (“Program EBIT”). The Third Restated Agreement also requires the Company to make annual payments of $18.0 to Monsanto as a contribution against the overall expenses of its consumer Roundup® business, subject to reduction pursuant to the Third Restated Agreement for any program year in which the Program EBIT does not equal or exceed $36.0. Unless Monsanto terminates the Third Restated Agreement due to an event of default by the Company, termination rights under the Third Restated Agreement include the following: •The Company may terminate the Third Restated Agreement upon the insolvency or bankruptcy of Monsanto; •Monsanto may terminate the Third Restated Agreement in the event that Monsanto decides to decommission the permits, licenses and registrations needed for, and the trademarks, trade names, packages, copyrights and designs used in, the sale of the Roundup® products in the lawn and garden market (a “Brand Decommissioning Termination”); and •Each party may terminate the Third Restated Agreement if Program EBIT falls below $50.0 and, in such case, no termination fee would be payable to either party. The termination fee structure requires Monsanto to pay a termination fee to the Company in an amount equal to (i) $375.0 upon a Brand Decommissioning Termination, and (ii) the greater of $175.0 or four times an amount equal to the average of the Program EBIT for the three program years before the year of termination, minus $186.4, if Monsanto or its successor terminates the Third Restated Agreement as a result of a Roundup Sale or Change of Control of Monsanto (each, as defined in the Third Restated Agreement). The elements of the net commission and reimbursements earned under the Third Restated Agreement and included in the “Net sales” line in the Condensed Consolidated Statements of Operations are as follows:
| Three Months Ended |  | Six Months Ended
| April 1, 2023 |  | April 2, 2022 |  | April 1, 2023 |  | April 2, 2022
Gross commission | $ | 48.9 |  |  | $ | 46.7 |  |  | $ | 58.5 |  |  | $ | 52.4 |
Contribution expenses | (4.5) |  |  | (4.5) |  |  | (9.0) |  |  | (9.0) |
Net commission | 44.4 |  |  | 42.2 |  |  | 49.5 |  |  | 43.4 |
Reimbursements associated with Roundup® marketing agreement | 27.2 |  |  | 22.0 |  |  | 42.4 |  |  | 41.6 |
Total net sales associated with Roundup® marketing agreement | $ | 71.6 |  |  | $ | 64.2 |  |  | $ | 91.9 |  |  | $ | 85.0 |

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- Definition Marketing Agreement [Abstract] + References No definition available. + Details
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- Definition Additional information and disclosure related to the exclusive agency agreement of the entity for certain products. + References No definition available. + Details
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