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
EXHIBIT 10.7(f)(iii)
NONQUALIFIED STOCK OPTION AWARD AGREEMENT FOR EMPLOYEES
NONQUALIFIED STOCK OPTION GRANTED
TO XXXX X. XXXXX ON OCTOBER 8, 2008
TO XXXX X. XXXXX 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:
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]
Attention: [TPA Contact’s Name]
[TPA Contact’s Address]
[TPA Telephone Number]
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.
3. EXERCISING YOUR NSO
(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.
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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 serve) as an officer, director, manager, consultant or
employee of any proprietorship, partnership, corporation or other entity or become the owner
of a business or a member of a partnership, limited liability company or other
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entity that competes with any portion of the Company’s (or any Affiliate’s or
Subsidiary’s) business with which you have been involved any time within five years before
your Termination or render any service (including, without limitation, advertising or
business consulting) to entities that compete with any portion of the Company’s (or any
Affiliate’s or Subsidiary’s) business with which you have been involved any time within five
years before your Termination;
(ii) You refuse or fail to consult with, supply information to or otherwise cooperate
with the Company or any Affiliate or Subsidiary after having been requested to do so;
(iii) You deliberately engage in any action that the Company concludes has caused
substantial harm to the interests of the Company or any Affiliate or Subsidiary;
(iv) On your own behalf or on behalf of any other person, partnership, association,
corporation, limited liability company or other entity, you solicit or in any manner attempt
to influence or induce any employee of the Company or any Affiliate or Subsidiary to leave
the Company’s or any Affiliate’s or Subsidiary’s employment or use or disclose to any
person, partnership, association, corporation, limited liability company or other entity any
information obtained while an employee of the Company or any Affiliate or Subsidiary
concerning the names and addresses of the Company’s or any Affiliate’s or Subsidiary’s
employees;
(v) You disclose confidential and proprietary information relating to the Company’s or
any Affiliate’s or Subsidiary’s business affairs (“Trade Secrets”), including technical
information, product information and formulae, processes, business and marketing plans,
strategies, customer information and other information concerning the Company’s or any
Affiliate’s or Subsidiary’s products, promotions, development, financing, expansion plans,
business policies and practices, salaries and benefits and other forms of information
considered by the Company or any Affiliate or Subsidiary to be proprietary and confidential
and in the nature of Trade Secrets;
(vi) You fail to return all property (other than personal property), including keys,
notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes,
disks, cards, surveys, maps, logs, machines, technical data, formulae or any other tangible
property or document and any and all copies, duplicates or reproductions that you have
produced or received or have otherwise been submitted to you in the course of your
employment with the Company or any Affiliate or Subsidiary; or
(vii) You engaged in conduct that the Committee reasonably concludes would have given
rise to a Termination for Cause had it been discovered before you Terminated.
(c) 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.
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(d) AMENDMENT AND TERMINATION. Subject to the terms of the Plan, the Company may amend or
terminate this Award Agreement or the Plan at any time.
(e) RIGHTS BEFORE YOUR NSO IS EXERCISED. You may not vote, or receive any dividends
associated with, the Shares underlying your NSO before your NSO is exercised with respect to such
Shares.
(f) BENEFICIARY DESIGNATION. You may name a beneficiary or beneficiaries to receive or to
exercise the vested portion of your NSO that is unexercised when you die. This may be done only on
the attached Beneficiary Designation Form and by following the rules described in that Form. The
Beneficiary Designation Form need not be completed now and is not required as a condition of
receiving your Award. If you die without completing a Beneficiary Designation Form or if you do not
complete that Form correctly, your beneficiary will be your surviving spouse or, if you do not have
a surviving spouse, your estate.
(g) TRANSFERRING YOUR NSO. Normally your NSO may not be transferred to another person.
However, you may complete a Beneficiary Designation Form to name the person who may exercise your
NSO if you die before the Expiration Date. Also, the Committee may allow you to place your NSO into
a trust established for your benefit or for the benefit of your family. Contact [Third Party
Administrator] at [TPA Telephone Number] or at the address given above if you are interested in
doing this.
(h) GOVERNING LAW. This Award Agreement shall be governed by the laws of the State of Ohio,
excluding any conflicts or choice of law rule or principle that might otherwise refer construction
or interpretation of the Plan to the substantive law of another jurisdiction.
(i) OTHER AGREEMENTS. Your NSO will be subject to the terms of any other written agreements
between you and the Company or any Affiliate or Subsidiary to the extent that those other
agreements do not directly conflict with the terms of the Plan or this Award Agreement.
(j) ADJUSTMENTS TO YOUR NSO. Subject to the terms of the Plan, your NSO will be adjusted, if
appropriate, to reflect any change to the Company’s capital structure (e.g., the number of Shares
underlying your NSO and the Exercise Price will be adjusted to reflect a stock split).
(k) OTHER TERMS AND CONDITIONS. Your NSO is subject to more rules described in the Plan. You
should read the Plan carefully to ensure you fully understand all the terms and conditions of the
grant of the NSO made to you under this Award Agreement.
5. YOUR ACKNOWLEDGMENT OF AWARD CONDITIONS
By signing below, you acknowledge and agree that:
(a) A copy of the Plan has been made available to you;
(b) You understand and accept the terms and conditions of your NSO;
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(c) You will consent (on your own behalf and on behalf of your beneficiaries and transferees
and without any further consideration) to any necessary change to your NSO or this Award Agreement
to comply with any law and to avoid paying penalties under Section 409A of the Code, even if those
changes affect the terms of your NSO and reduce its value or potential value; and
(d) You must return a signed copy of this Award Agreement to the address given above before
[Date 30 Days After Grant Date].
Xxxx X. Xxxxx
|
THE SCOTTS MIRACLE-GRO COMPANY | |
BY: /s/
Xxxx X. Xxxxx
|
BY: /s/ Xxxxxx X. Xxxxx | |
Date
signed: 10/30/08
|
[Name of Company representative] | |
| [Title of Company representative] | ||
| Date signed: 10/20/08 | ||
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NONQUALIFIED STOCK OPTION EXERCISE NOTICE
FOR NONQUALIFIED STOCK OPTION GRANTED
TO XXXX X. XXXXX ON OCTOBER 8, 2008
FOR NONQUALIFIED STOCK OPTION GRANTED
TO XXXX X. XXXXX ON OCTOBER 8, 2008
Additional copies of this Nonqualified Stock Option Exercise Notice (“Exercise Notice”) (and any
further information you may need about this Exercise Notice or exercising your NSO) are available
from [Third Party Administrator] at the address given below.
By completing this Exercise Notice and returning it to [Third Party Administrator] at the address
given below, I elect to exercise all or a portion of the NSO and to purchase the Shares described
below. Capitalized terms not defined in this Exercise Notice have the same meanings as in the Plan
and applicable Award Agreement.
NOTE: You must complete a separate Exercise Notice for each NSO being exercised (e.g., if
you are simultaneously exercising an NSO to purchase 200 Shares granted on January 1, 2008
and an NSO to purchase 100 Shares granted on January 1, 2009 under a separate award
agreement, you must complete two Exercise Notices, one for each NSO being exercised).
NSO TO BE EXERCISED AND SHARES TO BE PURCHASED: This Exercise Notice relates to the following NSO
and number of Shares (fill in the blanks):
Grant Date of NSO: October 8, 2008
Number of Shares Being Purchased:
EXERCISE PRICE: The aggregate Exercise Price due is $ .
NOTE: This amount must equal the product of [Exercise Price] multiplied by the number of
Shares being purchased.
PAYMENT OF EXERCISE PRICE: I have decided to pay the Exercise Price and any related taxes by (check
one):
NOTE: These methods are described in the applicable Award Agreement.
___ Cashless Exercise and Sell.
___ Combination Exercise.
___ Exercise and Hold.
NOTE:
| • | If you select the Exercise and Hold method, you must follow the procedures described in the Award Agreement to pay the Exercise Price and the taxes related to this exercise. You should contact [Third Party Administrator] at the address given below to find out the amount of taxes due. | ||
| • | If you select either the Cashless Exercise and Sell method or the Combination Exercise method, you should contact [Third Party Administrator] at the address given below to be sure you understand how your choice of payment will affect the number of Shares you will receive. |
YOUR ACKNOWLEDGMENT
By signing below, you acknowledge and agree that:
| • | You fully understand the effect (including the investment effect) of exercising your NSO and buying Shares and understand that there is no guarantee that the value of these Shares will appreciate or will not depreciate; | ||
| • | This Exercise Notice will have no effect if it is not returned to [Third Party Administrator] at the address given below before the NSO expires, as specified in the Award Agreement under which the NSO was granted; and | ||
| • | The Shares you are buying by completing and returning this Exercise Notice will be issued to you as soon as administratively practicable. You will not have any rights as a shareholder of the Company until the Shares are issued. |
Xxxx X. Xxxxx
(signature)
Date signed:
A signed copy of this Exercise Notice must be received at the following address no later than the
date the NSO expires, as specified in the Award Agreement under which the NSO was granted:
[Third Party Administrator]
Attention: [TPA Contact’s Name]
[TPA Contact’s Address]
Attention: [TPA Contact’s Name]
[TPA Contact’s Address]
[TPA Telephone Number]
*****
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ACKNOWLEDGEMENT OF RECEIPT
A signed copy of the Nonqualified Stock Option Exercise Notice was received on:
.
Xxxx X. Xxxxx:
___
Has effectively exercised the portion of the NSO described in this Exercise Notice; or
___
Has not effectively exercised the portion of the NSO described in this Exercise Notice
because:
describe deficiency
The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan Committee
By: |
||||
Date: |
||||
Note: Keep a copy of this Exercise Notice as part of the Plan’s permanent records.
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