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STOCK OPTION AGREEMENT
(Non-Qualified Stock Option)
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THIS AGREEMENT is made to be effective as of ___________ (the "Grant
Date") by and between The Scotts Company, an Ohio corporation (the "Company"),
and _____________ (the "Optionee"), pursuant to the Company's 1996 Stock Option
Plan (the "Plan").
1. Grant of Option. The Company hereby grants to the Optionee an option
(the "Option") to purchase ________ Common Shares of the Company, subject to
adjustment as provided in Section 5.3 of the Plan. The Option is granted under
the Plan and is not intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended.
2. Terms and Conditions of the Option. The purchase price (the "Option
Price") to be paid by the Optionee to the Company upon the exercise of the
Option shall be $______ per share, subject to adjustment as provided in Section
5.3 of the Plan. The Option may be exercised on or after ____________ with
respect to 100% of the Common Shares subject to the Option. The Option shall in
no event be exercisable after the expiration of ten years from the Grant Date
(the "Expiration Date"). Subject to the other provisions of this Agreement and
to the provisions of the Plan, if the Option becomes exercisable as to certain
Common Shares, it shall remain exercisable as to those Common Shares until the
Expiration Date. The Option is subject to all the terms of the Plan.
3. Exercise. To the extent that any portion of this Option is
exercisable, that portion of such Option may be exercised in whole or in part by
delivering to Xxxxxxx Xxxxx a written notice of exercise, signed by the Optionee
or, in the event of the death of or permitted assignment by 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 by the tender,
by actual delivery or by attestation, of free and clear Common Shares already
owned by the Optionee, in accordance with Section 6.4 of the Plan. The Optionee
may elect pursuant to Section 10.4 of the Plan (i) to have Common Shares
otherwise issuable under the Plan withheld by the Company or (ii) to deliver to
the Company free and clear Common Shares already owned by the Optionee,
sufficient to pay all or part of the Optionee's estimated total federal, state
and local tax obligations associated with the exercise of the Option.
4. Change in Control Provisions. In the event of a Change in Control
(as defined in the Plan), the Option may be surrendered in exchange for the
payment to the Optionee of cash in an amount equal to the excess of the Change
in Control Price (as defined in the Plan) over the Option Price. Such surrender
must occur within the period described in Section 8.1 of the Plan.
Notwithstanding the foregoing, if the Compensation and Organization Committee of
the Board of Directors determines prior to the occurrence of the Change in
Control that the Optionee will receive a new award (or have the Option honored
or assumed) in a manner which satisfies the provisions of Section 8.2 of the
Plan, no cash payment will be made in respect of the Option as a result of a
Change in Control. If any cash payment with respect to the Option would result
in the Optionee's incurring potential liability under Section 16(b) of the
Securities Exchange Act of 1934, the cash payment will not occur unless and
until such cash payment can be made without subjecting the Optionee to such
potential liability.
5. Nontransferability of the Option. The Option may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution; provided that the
Optionee may transfer the Option to a revocable inter vivos trust as to which
the Optionee is the settlor or to a Permissible Transferee (as defined in the
Plan). Any transferee of the Option shall remain subject to all of the terms and
conditions applicable to the Option. The Option may not be retransferred by a
Permissible Transferee except by will or by the laws of descent and distribution
and then only to another Permissible Transferee.
6. Exercise After Termination of Employment. In the event of the
termination of the Optionee's employment by reason of Retirement (as defined in
the Plan), Disability (as defined in the Plan), or death, the Option may
thereafter be exercised in full for a period of five years, subject to the
stated term of the Option. In the event of the Optionee's termination of
employment for Cause (as defined in the Plan), the Option shall be forfeited. In
the event of the Optionee's termination of employment for any reason other than
Retirement, Disability, death, or for Cause, the Option shall be exercisable, to
the extent exercisable at the date of termination of employment, for a period of
90 days, subject to the stated term of the Option. The exercisability of the
Option is also subject to the limitations of Section 7.5 of the Plan.
7. Restrictions on Transfer of Common Shares. Anything contained in
this Agreement or elsewhere to the contrary notwithstanding, the Option shall
not be exercisable for the purchase of any Common Shares subject thereto except:
(i) Common
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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 or
foreign jurisdiction applicable to such exercise and purchase have been
satisfied. If any Common Shares subject to the Option 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
the proposed 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. Any share
certificate issued to evidence Common Shares as to which the Option has been
exercised may bear such legends and statements as the Company shall deem
advisable to ensure compliance with applicable federal, state and foreign laws
and regulations. Nothing contained in this Agreement or elsewhere shall be
construed to require the Company to take any action whatsoever to make the
Option exercisable or to make transferable any Common Shares purchased and
issued upon the exercise of the Option.
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 Option until the date of issuance and
delivery of a certificate to the Optionee evidencing such Common Shares.
9. General. All terms and conditions of the Plan applicable to the
Option 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 Plan, the Plan shall be
deemed controlling. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio. 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
the provisions of this Agreement shall be binding upon any party hereto unless
contained in a writing signed by the affected party. 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, effective as of the date first written above.
COMPANY:
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The Scotts Company, an Ohio corporation
By:
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G. Xxxxxx Xxxxx
Executive Vice President, General Counsel
OPTIONEE:
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Signature of Optionee
SSN:
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