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 [Grantee’s Name] ON [Grant Date]
The Scotts
Miracle-Gro Company (the “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 (the
“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:
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Read the Plan, this Award Agreement
and the Plan Prospectus, as supplemented, carefully; and
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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:
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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]
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 U.S.
$[Exercise Price] for each Share (“Exercise Price”) on
or before [Day Prior to Tenth Anniversary of Grant Date] (the
“Expiration Date”), subject to the terms and conditions
of the Plan and this Award Agreement. The Grant Date of the NSO is
[Grant Date].
2. LIMITS ON
EXERCISING YOUR NSO
(a) Normally,
your NSO will vest (and become exercisable) on [Third Anniversary
of Grant Date] (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(b) 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.
2
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.
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.
(c) Before
choosing an exercise method, you should read the Plan Prospectus,
as supplemented, to ensure you understand the income tax effect of
exercising your NSO.
(d) If you do
not elect one of the methods set forth in Section 3(b) above, the
Company will apply the Cashless Exercise and Sell method described
in Section 3(b).
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, to the extent permitted by law, 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 the date of notification of the 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.
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(b)
CHANGE IN CONTROL . Normally, your NSO will vest only in the
circumstances described in Sections 2(a) and 4(a) of this Award
Agreement. However, if there is a Change in Control, your NSO may
vest earlier. You should read the Plan carefully to ensure that you
understand how this may happen.
(c) NO
RIGHT TO EMPLOYMENT . Your NSO award is a voluntary,
discretionary bonus being made on a one-time basis and it does not
constitute a commitment to make any future awards. This Award and
any payments made hereunder will not be considered salary or other
compensation for purposes of any severance pay or similar
allowance, except as otherwise required by law. Nothing in this
Award Agreement will give you any right to continue employment with
the Company or any Subsidiary or Affiliate, as the case may be, or
interfere in any way with the right of the Company or a Subsidiary
or an Affiliate to terminate your employment.
(d) DATA
PRIVACY . Information about you and your participation in the
Plan, including, but not limited to, your name, home address and
telephone number, date of birth, social insurance number, salary,
nationality, job title, any shares of stock or directorships held
in the Company, details of your NSO or other entitlement to shares
of stock awarded, cancelled, exercised, vested, unvested or
outstanding in your favor, may be collected, recorded, held, used
and disclosed for any purpose related to the administration and
management of the Plan and in order to satisfy legal and regulatory
requirements. You understand that the Company will keep your
personal data in accordance with the rules set forth by Law
No. 78-17, dated January 6, 1978, related to
“softwa
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