INCORPORATION OF PLAN AND DEFINITIONS.
This Award Agreement and your NSO are granted pursuant to and in accordance with The Scotts Miracle-Gro Company Long-Term Incentive Plan as amended and restated January 17, 2013 (the “Plan”). All provisions of the Plan are incorporated herein by reference, and your NSO is subject to the terms of the Plan. To the extent there is a conflict between this Award Agreement and the Plan, the Plan will govern.
Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Plan.
General Vesting. If your employment continues from the Grant Date until the [__] anniversary of the Grant Date, in this case [Date] (the “Vesting Date”), your NSO
Accelerated Vesting. Under the following circumstances, the NSO described in this Award Agreement will vest earlier than the Vesting Date:
If you Terminate because of your death or because you become Disabled (as defined below), your NSO described in this Award Agreement will become fully vested and expire on the Expiration Date. For purposes of this Award Agreement, “Disabled” means (A) you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, (B) you are, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees of your employer, or (C) you are determined to be totally disabled by the Social Security Administration or Railroad Retirement Board;
If you Terminate for a reason other than Cause after reaching age [Number] and completing at least [Number] years of employment with the Company, its Affiliates and/or its Subsidiaries, your NSO described in this Award Agreement will become fully vested and expire on the Expiration Date;
If you Terminate due to an involuntary Termination by the Company without Cause no earlier than [Number] days before the Vesting Date, your Termination will be deemed to have occurred on the Vesting Date such that your NSO described in this Award Agreement will be deemed to become 100% vested and expire on the Expiration Date.
If there is a Change in Control, your NSO may vest earlier. See the Plan for further details.
Cause. For purposes of this Award Agreement, “Cause” means that Grantee has:
willfully and materially breached the terms of any employment agreement between the Grantee and the Company;
engaged in willful misconduct that has materially injured the business of the Company or any Subsidiary or Affiliate;
willfully committed a material act of fraud or material breach of the Grantee’s duty of loyalty to the Company or any Subsidiary or Affiliate;
willfully and continually failed to attempt in good faith to perform the Grantee’s duties hereunder (other than any such failure resulting from the Grantee’s incapacity due to physical or mental illness), after written notice has been delivered to the Grantee by the Company, which notice specifically identifies the manner in which the Grantee has not attempted in good faith to perform his duties; or
been convicted, or plead guilty or nolo contendere for the commission of an act or acts constituting a felony under the laws of the United States or any state thereof.
EXERCISING YOUR NSO.
After your NSO vests, you may exercise the NSO at any time prior to the Expiration Date. To exercise the NSO you must complete an Exercise Notice on the form provided by the Company, which is available from Third Party Administrator. At any one time, you must exercise your NSO to buy no fewer than [Number] Shares, or, you must exercise the balance of your NSO if the value is less than [Number] Shares.
You may use one of the following 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. If you do not elect one of these methods, the Company will apply the Broker-Assisted Cashless Exercise and Sell method described below:
BROKER-ASSISTED 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) from the broker 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 for taxes that are required to be withheld on account of the exercise. 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.
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.
General Expiration Rules. In general, your NSO will expire on the Expiration Date.
Forfeiture Rules. In the following instances, your NSO will expire and you will forfeit your NSO prior to the Expiration Date:
If you Terminate before the Vesting Date, except as provided in Section 3 above, you will forfeit your NSO in its entirety;
If you engage in “Conduct That Is Harmful To The Company” (as described below), you will forfeit your NSO and must return to the Company all Shares and other amounts you have received through the Plan or this Award Agreement if, without the Company’s written consent, you do any of the following within [Number] days before and [Number] days after you Terminate:
You breach any confidentiality, nondisclosure, and/or noncompetition obligations under any agreement or plan with the Company or any Affiliate or Subsidiary;
You fail or refuse to consult with, supply information to or otherwise cooperate with the Company or any Affiliate or Subsidiary after having been requested to do so;
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;
You fail to return all property (other than personal property), including vehicles, computer or other equipment or electronic devices, 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 provided to you in the course of your employment with the Company or any Affiliate or Subsidiary; or
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.
If you Terminate for Cause after the Vesting Date, the portion of your NSO that has not been exercised will be forfeited (whether or not then vested) on the date you Terminate; or
If you Terminate for any other reason after the Vesting Date, the portion of your NSO that is vested but has not been exercised will expire on the earlier of the Expiration Date or [Number] days after you Terminate.
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
You must return a signed copy of this Award Agreement to the address given above before [Date].
Date signed: ________________________
[Name of Company representative]
[Title of Company representative]