EXHIBIT 10(n)
Stock Option Agreement, dated as of March 5, 1996,
between The Scotts Company and Xxxx X. Xxxxx
STOCK OPTION AGREEMENT
(NON-QUALIFIED STOCK OPTIONS)
THIS AGREEMENT is made to be effective as of March 5, 1996, by and
between The Scotts Company, an Ohio corporation (the "Company"), and Xxxx X.
Xxxxx (the "Optionee").
WITNESSETH:
WHEREAS, the Board of Directors of The Scotts Company, a Delaware
corporation ("Scotts Delaware"), adopted The Scotts Company 1992 Long Term
Incentive Plan (the "Plan") on November 11, 1992; and
WHEREAS, the stockholders of Scotts Delaware, upon the recommendation of
the Board of Directors of Scotts Delaware, approved the Plan at the Annual
Meeting of Stockholders of Scotts Delaware held on February 25, 1993; and
WHEREAS, pursuant to Section 2.04(a) of the Agreement of Merger, dated as
of August 16, 1994, between Scotts Delaware and the Company, the Company
assumed the Plan and all of the obligations of Scotts Delaware thereunder
effective as of September 20, 1994, the effective date of the merger of
Scotts Delaware with and into the Company; and
WHEREAS, the Board of Directors of the Company adopted The Scotts Company
1996 Stock Option Plan (the "1996 Plan") on February 12, 1996; and
WHEREAS, the shareholders of the Company, approved the 1996 Plan at the
Annual Meeting of Shareholders of the Company held on April 9, 1996; and
WHEREAS, the 1992 Plan and the 1996 Plan are hereinafter sometimes
referred to collectively as "the Plans"; and
WHEREAS, pursuant to the provisions of the Plans, the Board of Directors
of the Company has appointed a Compensation and Organization Committee (the
"Committee") to administer the Plans and the Committee has determined that
options to acquire common shares, without par value (the "Common Shares"), of
the Company should be granted to the Optionee under the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto make
the following agreements, intending to be legally bound thereby:
1. GRANT OF OPTIONS. The Company hereby grants to the Optionee three
options (the "Options") to purchase a total of 100,000 Common Shares of the
Company. The first option shall cover 60,000 Common Shares and be granted
under the 1992 Plan, while the second and third options shall cover 20,000
Common Shares each and be granted under the 1996 Plan. The Options are not
intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. TERMS AND CONDITIONS OF THE OPTIONS.
(A) OPTION PRICE. The purchase price (the "Option Price") to be
paid by the Optionee to the Company upon the exercise of the Options shall be:
- 60,000 @ $17.125 per share (granted under the 1992 Plan),
- 20,000 @ $18.00 per share (granted under the 1996 Plan),
- 20,000 @ $22.00 per share (granted under the 1996 Plan).
The purchase price is subject to adjustment as provided in Section 3.
(B) EXERCISE OF THE OPTIONS. The Options may be exercised
immediately.
The grant of the Options shall not confer upon the Optionee any right to
continue in the employment of the Company nor limit in any way the right of
the Company to terminate the employment of the Optionee at any time in
accordance with law and the Company's governing corporate documents.
(C) OPTION TERM. The Options shall in no event be exercisable
after the expiration of ten years from the date of this Agreement.
(D) METHOD OF EXERCISE. To the extent that any portion of these
Options is exercisable, that portion of such Option may be exercised in whole
or in part by delivering to the Committee in the care of the General Counsel
or the Director, Legal Affairs of the Company, a written notice of exercise,
signed by the Optionee or, in the event of the death of the Optionee, by such
other person as is entitled to exercise the Option. The notice of exercise
shall state the number of full Common Shares in respect of which the Option
is being exercised. Payment for all such Common Shares shall be made to the
Company at the time the Option is exercised. The Option Price may be paid in
cash (including check, bank draft or money order) in U.S. dollars, or with
the consent of the Committee, by the transfer by the Optionee to the Company
of free and clear Common Shares already owned by the Optionee having a Fair
Market Value (as that term is defined in the Plans) on the exercise date
equal to the Option Price, or by a combination of cash and Common Shares
already owned by the Optionee equal in the aggregate to the Option Price for
the Common Shares being purchased. After payment in full for the Common
Shares to be purchased upon exercise of the Option has been
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made, the Company shall take all such action as is necessary to deliver
appropriate share certificates evidencing the Common Shares purchased upon
the exercise of the Option to the Optionee as promptly thereafter as is
reasonably practicable.
(E) SATISFACTION OF TAXES AND TAX WITHHOLDING REQUIREMENTS. The
Company has the right to withhold, or require the Optionee to remit to the
Company, an amount sufficient to satisfy any applicable federal, state or
local withholding tax requirements. The Committee may permit the Optionee to
elect (i) to have Common Shares otherwise issuable under the Plans withheld
by the Company or (ii) to deliver to the Company free and clear Common Shares
already owned by the Optionee having a Fair Market Value (as that term is
defined in the Plans) on the exercise date sufficient to pay all or part of
the Optionee's estimated total federal, state and local tax obligations.
3. ADJUSTMENTS AND CHANGES IN THE COMMON SHARES. In the event of any
share dividend or share split, recapitalization (including, without
limitation, the payment of an extraordinary dividend), merger, consolidation,
combination, spin-off, distribution of assets to shareholders, exchange of
shares, or other similar corporate change, appropriate adjustments shall be
made by the Committee in the number of Common Shares and Option Price
applicable to the Options to reflect such change.
4. CHANGE IN CONTROL PROVISIONS. In the event of a Change in Control
(as defined in the Plans), the Options shall be canceled in exchange for the
payment to the Optionee of cash in an amount equal to the excess of the
highest price paid (or offered) for Common Shares of the Company during the
preceding 30 day period over the exercise price for such Options.
Notwithstanding the foregoing, if the Committee determines that the Optionee
will receive a new award (or have the Options honored in a manner which
preserves their value and eliminates the risk that the value of the Options
will be forfeited due to involuntary termination), no cash payment will be
made as a result of a Change in Control. If any cash payment with respect to
the Options would result in the Optionee's incurring potential liability
under Section 16(b) of the Securities Exchange Act of 1934, the cash payment
will be deferred until the first time at which such cash payment may be made
without subjecting the Optionee to such potential liability under Section 16
(b) by reason of such cash payment.
5. NONTRANSFERABILITY OF THE OPTIONS. The Options may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. The Options may not
be exercised during the lifetime of the Optionee except by the Optionee.
6. EXERCISE AFTER TERMINATION OF EMPLOYMENT.
(A) In the event of the termination of the Optionee's employment by
reason of retirement, Disability (as that term is defined in the Plans), or
death, the
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Options may thereafter be exercised in full for a period of five years,
subject to the stated term of the Options.
(B) In the event of the Optionee's termination of employment for
cause, the Options shall be forfeited.
(C) In the event of the Optionee's termination of employment for
any reason other than retirement, Disability, death or for cause, the Options
shall be exercisable, to the extent exercisable at the date of termination of
employment, for a period of 30 days, subject to the stated term of the
Options.
7. RESTRICTIONS OF TRANSFER OF COMMON SHARES. Anything contained in
this Agreement or elsewhere to the contrary notwithstanding:
(A) The Options shall not be exercisable for the purchase of any
Common Shares subject thereto except for:
(i) Common Shares subject thereto which at the time of such
exercise and purchase are registered under the Securities Act of 1933, as
amended (the "1933 Act");
(ii) Common Shares subject thereto which at the time of such
exercise and purchase are exempt or are the subject matter of an exempt
transaction or are registered by description, by coordination or by
qualification, or at such time are the subject matter of a transaction which
has been registered by description, all in accordance with Chapter 1707 of
the Ohio Revised Code, as amended; and
(iii) Common Shares subject thereto in respect of which the
laws of any state applicable to such exercise and purchase have been
satisfied.
(B) If any Common Shares subject to the Options are sold or issued
upon the exercise thereof to a person who (at the time of such exercise or
thereafter) is an affiliate of the Company for purposes of Rule 144
promulgated under the 1933 Act, then upon such sale and issuance:
(i) such Common Shares shall not be transferable by the holder
thereof, and neither the Company nor its transfer agent or registrar, if any,
shall be required to register or otherwise to give effect to any transfer
thereof and may prevent any such transfer, unless the Company shall have
received an opinion from its counsel to the effect that any such transfer
would not violate the 1933 Act; and
(ii) the Company may cause each share certificate evidencing
such Common Shares to bear a legend reflecting the applicable restrictions on
the transfer thereof.
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(C) Any share certificate issued to evidence Common Shares as to
which the Options have been exercised may bear such legends and statements as
the Company shall deem advisable to ensure compliance with applicable federal
and state laws and regulations.
(D) Nothing contained in this Agreement or elsewhere shall be
construed to require the Company to take any action whatsoever to make the
Options exercisable or to make transferable any Common Shares purchased and
issued upon the exercise of the Options.
(8) RIGHTS OF THE OPTIONEE AS A SHAREHOLDER. The Optionee shall have no
rights or privileges as a shareholder of the Company with respect to any
Common Shares of the Company covered by the Options until the date of
issuance and delivery of a certificate to the Optionee evidencing such Common
Shares.
(9) PLANS AS CONTROLLING. All terms and conditions of the Plans
applicable to the Options which are not set forth in this Agreement shall be
deemed incorporated herein by reference. In the event that any term or
condition of this Agreement is inconsistent with the terms and conditions of
the Plans, the Plans shall be deemed controlling.
(10) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
(11) RIGHTS AND REMEDIES CUMULATIVE. All rights and remedies of the
Company and of the Optionee enumerated in this Agreement shall be cumulative
and, except as expressly provided otherwise in this Agreement, none shall
exclude any other rights or remedies allowed by law or in equity, and each of
said rights or remedies may be exercised and enforced concurrently.
(12) CAPTIONS. The captions contained in this Agreement are included
only for convenience or reference and do not define, limit, explain or modify
this Agreement or its interpretation, construction or meaning and are in no
way to be construed as a part of this Agreement.
(13) SEVERABILITY. If any provision of this Agreement or the application
of any provision hereof to any person or any circumstance shall be determined
to be invalid or unenforceable, then such determination shall not affect any
other provision of this Agreement or the application of such provision to any
other person or circumstance, all of which other provisions shall remain in
full force and effect, and it is the intention of each party to this
Agreement that if any provision of this Agreement is susceptible of two or
more constructions, one of which would render the provision enforceable and
the other or others of which would render the provision unenforceable, then
the provision shall have the meaning which renders it enforceable.
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(14) NUMBER AND GENDER. When used in this Agreement, the number and
gender of each pronoun shall be construed to be such number and gender as the
context, circumstances or its antecedent may require.
(15) ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the Company and the Optionee in respect of the subject matter of this
Agreement, and this Agreement supersedes all prior and contemporaneous
agreements between the parties hereto in connection with the subject matter
of this Agreement. No change, termination or attempted waiver of any of the
provisions of this Agreement shall be binding upon any party hereto unless
contained in a writing signed by the party to be charged.
(16) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns (including successive, as
well as immediate, successors and assigns) of the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed to be effective as of the date first written above.
COMPANY:
The Scotts Company,
an Ohio corporation
By: /s/ XXXX X. XXXXXX
-----------------------------------
Xxxx X. Xxxxxx
Its:
----------------------------------
Executive Vice President
OPTIONEE:
Xxxx X. Xxxxx
/s/ XXXX X. XXXXX
-----------------------------------
Signature of Optionee
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
SSN: ###-##-####
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