THE SCOTTS MIRACLE-GRO
COMPANY
AMENDED AND RESTATED
2006 LONG-TERM INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AWARD
AGREEMENT FOR EMPLOYEES
NONQUALIFIED STOCK OPTION
GRANTED
TO MARK R. BAKER ON OCTOBER 8, 2008
The Scotts
Miracle-Gro Company (“Company”) believes that its
business interests are best served by ensuring that you have an
opportunity to share in the Company’s business success. To
this end, the Company adopted The Scotts Miracle-Gro Company
Amended and Restated 2006 Long-Term Incentive Plan
(“Plan”) through which key employees, like you, may
acquire (or share in the appreciation of) common shares, without
par value, of the Company (“Shares”). Capitalized terms
that are not defined in this Award Agreement have the same meanings
as in the Plan.
This Award
Agreement describes the type of Award that you have been granted
and the terms and conditions of your Award. To ensure you fully
understand these terms and conditions, you should:
- Read the Plan
and this Award Agreement carefully; and
- Contact
[Title] at [Telephone Number] if you have any questions about your
Award. Or, you may send a written inquiry to the address shown
below:
The Scotts
Miracle-Gro Company
Attention: [Title]
14111 Scottslawn Road
Marysville, Ohio 43041
Also, no later
than [Date 30 Days After Grant Date], you must return a signed copy
of this Award Agreement to:
[Third Party
Administrator]
Attention: [TPA Contact’s Name]
[TPA Contact’s Address]
The Company
intends that this Award not be considered to provide for
“deferred compensation” under Section 409A of the
Code and that this Award Agreement be so administered and
construed. You agree that the Company may modify this Award
Agreement, without any further consideration, to fulfill this
intent, even if those modifications change the terms of your Award
and reduce its value or potential value.
1.
DESCRIPTION OF YOUR NONQUALIFIED STOCK OPTION
You have been
granted a Nonqualified Stock Option (“NSO”) to purchase
[Number of Common Shares] Shares at an exercise price of $[Exercise
Price] for each Share (“Exercise Price”) on or before
October 7, 2018 (“Expiration Date”), subject to
the terms and conditions of the Plan and this Award Agreement. The
Grant Date of the NSO is October 8, 2008.
2. LIMITS ON
EXERCISING YOUR NSO
(a) Normally,
your NSO will vest (and become exercisable) on September 30,
2011 (the “Vesting Date”) but only if you are actively
employed by the Company or any Subsidiary or Affiliate on the
Vesting Date and all other conditions described in this Award
Agreement and the Plan are met. This does not mean that you must
exercise your NSO on this date; this is merely the first date that
you may do so. However, except as described below, your NSO will
expire to the extent it is not exercised on or before the
Expiration Date.
There are some
special situations in which your NSO may vest earlier. These are
described in Sections 4(a) and 4(c) of this Award
Agreement.
(b) At any
one time, you may not exercise your NSO to buy fewer than 100
Shares (or, if less, the number of Shares underlying the vested
portion of your NSO). Also, you may never exercise your NSO to
purchase a fractional Share. Any fractional Share shall be redeemed
for cash equal to the Fair Market Value of such fractional
Share.
(a) After
your NSO vests, you may exercise the NSO by completing an Exercise
Notice. A copy of this Exercise Notice is attached to this Award
Agreement. Also, a copy of this Exercise Notice and a description
of the procedures that you must follow to exercise your NSO are
available from [Third Party Administrator] at [TPA Telephone
Number] or at the address given above.
(b) You may
use one of three methods to exercise your NSO and to pay any taxes
related to that exercise. You will decide on the method at the time
of exercise.
CASHLESS
EXERCISE AND SELL: If you elect this alternative, you will be
deemed to have simultaneously exercised the NSO and to have sold
the Shares underlying the portion of the NSO you exercised. When
the transaction is complete, you will receive cash (but no Shares)
equal to the difference between the aggregate Fair Market Value of
the Shares deemed to have been acquired through the exercise minus
the aggregate Exercise Price and related taxes.
COMBINATION
EXERCISE: If you elect this alternative, you will be deemed to have
simultaneously exercised the NSO and to have sold a number of those
Shares with a Fair Market Value equal to the aggregate Exercise
Price and related taxes. When the transaction is complete, the
balance of the Shares subject to the portion of the NSO you
exercised will be transferred to you.
2
EXERCISE AND
HOLD: If you elect this alternative, you must pay the full Exercise
Price plus related taxes (in cash, a cash equivalent or in Shares
having a Fair Market Value equal to the Exercise Price and which
you have owned for at least six months before the exercise date).
When the transaction is complete, you will receive the number of
Shares purchased.
If you do not
elect one of these methods, the Company will apply the Cashless
Exercise and Sell method described above.
4. GENERAL
TERMS AND CONDITIONS
(a) YOU
MAY FORFEIT YOUR NSO IF YOU TERMINATE . Normally, you may
exercise your NSO after it vests and before the Expiration Date.
However, your NSO may be cancelled earlier than the Expiration Date
if you Terminate. For purposes of this Award Agreement,
“Terminate” (or any form thereof) means cessation of
the employee-employer relationship between you and the Company and
all Affiliates and Subsidiaries for any reason.
(i) If you are
Terminated for Cause, the portion of your NSO that has not been
exercised will be forfeited (whether or not then vested) on the
date you Terminate; or
(ii) If you die or
you Terminate due to your Disability (as defined below), your NSO
will become fully vested and expire on the Expiration Date. For
purposes of this Award Agreement, “Disability” means
your inability to perform your normal duties for a period of at
least six months due to a physical or mental infirmity;
or
(iii) If you
Terminate after reaching either (A) age 55 and completing at
least 10 years of employment with the Company, its Affiliates
and/or its Subsidiaries or (B) age 62 regardless of your years
of service, your NSO will become fully vested and expire on the
Expiration Date; or
(iv) If you
Terminate for any other reason, the unvested portion of your NSO
will be forfeited immediately and the vested portion of your NSO
will expire on the earlier of the Expiration Date or 90 days
after you Terminate.
Note, it is
your responsibility to keep track of when your NSO
expires.
(b) YOU
WILL FORFEIT YOUR NSO IF YOU ENGAGE IN CONDUCT THAT IS HARMFUL TO
THE COMPANY (OR ANY AFFILIATE OR SUBSIDIARY) . You will forfeit
your NSO and must return to the Company all Shares and other
amounts you have received through the Plan if, without the
Company’s written consent, you do any of the following within
180 days before and 730 days after you
Terminate:
(i) You serve (or
agree to ser
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