EXHIBIT 10.7
UK FORM
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE SCOTTS MIRACLE-GRO COMPANY
2006 LONG-TERM INCENTIVE PLAN
AWARD AGREEMENT FOR UNITED KINGDOM EMPLOYEES
[FORM OF AWARD] AWARDED TO [GRANTEE’S NAME] ON [GRANT DATE]
The Scotts Miracle-Gro Company (“Company”) and its shareholders believe that
their 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 and its shareholders approved The Scotts Miracle-Gro Company 2006
Long-Term Incentive Plan (“Plan”) through which key employees, like you, may
acquire (or share in the appreciation of) common shares of the Company.
We cannot guarantee that the value of your Award (or the value of the common
shares you acquire through an Award) will increase. This is because the value of
the Company’s common shares is affected by many factors. However, the Company
believes that your efforts contribute to the value of the Company’s common
shares and that the Plan (and the Awards made through the Plan) is an
appropriate means of sharing with you the value of your contribution to the
Company’s business success.
This Award Agreement describes the type of Award that you have been granted and
the conditions that must be met before you may receive the value associated with
your Award. To ensure you fully understand these terms and conditions, you
should:

  •   Read the Plan and the Plan’s Prospectus, as supplemented, carefully to
ensure you understand how the Plan works;     •   Read this Award Agreement
carefully to ensure you understand the nature of your Award and what you must do
to earn it; and     •   Contact [Contact’s Name at Company], [Contact’s Title]
at [Telephone Number] if you have any questions about your Award. Or, you may
send a written inquiry to the address shown below:

The Scotts Miracle-Gro Company
Attention: [Contact’s Name at Company]
[Contact’s Title]
14111 Scottslawn Road
Marysville, Ohio 43041
You must return a signed copy of this Award Agreement no later than [___Days
Post Grant Date] to:
[Third Party Administrator]
Attention: [TPA Contact’s Name]
[Contact’s Address]
[TPA Telephone Number]

 

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If you do not do this, your Award will be forfeited and you will not be entitled
to receive anything on account of this Award.

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Description of Your Nonqualified Stock Options
You have been awarded Nonqualified Stock Options (or “NSOs”) to purchase [Number
Granted] common shares of the Company. You may purchase one of the Company’s
common shares for each NSO, but only if you pay $[Price] (“Exercise Price”) for
each common share you purchase, you exercise the NSOs on or before [Expiration
Date] (“Expiration Date”) and you meet the terms and conditions described in
this Award Agreement, the Plan and the Prospectus, as supplemented. You also
must arrange to pay any taxes due on exercise using one of the procedures
described later in this Award Agreement.
Limits on Exercising Your NSOs
Normally, your NSOs will vest (and become exercisable) on [Vesting Date] but
only if you are actively employed by the Company or any Subsidiary or Affiliate
(as defined in the Plan) on [Vesting Date] and all other conditions described in
this Award Agreement, the Plan and the Prospectus are met.
This does not mean that you must exercise your NSOs on this date; this is merely
the first date that you may do so. However, your NSOs will expire unless they
are exercised on or before the Expiration Date ([Expiration Date]).
There are some special situations in which your NSOs may vest earlier. These are
described later in this Award Agreement.
At any one time, you may not exercise NSOs to buy fewer than 100 common shares
of the Company (or, if smaller, the number of your outstanding vested NSOs).
Also, you may never exercise an NSO to purchase a fractional common share of the
Company; NSOs for fractional common shares will always be redeemed for cash.
Exercising Your NSOs
After they vest, you may exercise your NSOs 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 NSOs are available from [Third Party Administrator] at [TPA
Telephone Number] or at the address shown below.
You may use one of three methods to exercise your NSOs 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 NSOs and to have sold the common shares
underlying those NSOs. When the transaction is complete, you will receive cash
(but no common shares of the Company) equal to the difference between the
aggregate value of the common shares deemed to have been acquired through the
exercise minus the NSOs’ aggregate exercise price and related taxes.
Combination Exercise: If you elect this alternative, you will be deemed to have
simultaneously exercised the NSOs and to have sold a number of those common
shares with a value equal to the NSOs’ aggregate exercise price and related
taxes. When the transaction is complete, the balance of the common shares
subject to the NSOs 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 common shares of the
Company having a 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 one common share for each NSO exercised.
In this section, “taxes” include, without limitation, UK income tax and UK
primary class 1 (employee’s) national insurance contributions and the Company or
the Subsidiary or Affiliate which employes you will have the power and the right
to deduct or withhold, or require you to remit to the Company or the relevant
Subsidiary or Affiliate any amounts required to be withheld as a result of the
exercise of your NSOs.
Before choosing an exercise method, you should read the Prospectus Supplement
entitled “UK Tax Consequences” in the Prospectus to ensure you understand the
income tax effect of exercising your NSOs.
If you do not elect one of these methods, we will apply the Cashless Exercise
and Sell method described above.
Tax Treatment of Your NSOs
The tax treatment of your NSOs is discussed in the Supplement to the Plan’s
Prospectus entitled “UK Tax Consequences.”
*****
General Terms and Conditions
You May Forfeit Your NSOs if Your Employment Ends
Normally, you may exercise your NSOs after they vest and before the Expiration
Date ([Expiration Date]). However, your NSOs may be cancelled earlier than the
Expiration Date if you terminate employment before [Vesting Date].
[a] If your employment is terminated for “cause” (as defined in the Plan), the
NSOs will expire on the date your employment ends; or
[b] If your employment is terminated because of your [i] death or [ii]
disability (as defined in the Plan), the NSOs will expire on the earlier of the
Expiration Date or 12 months after you terminate; or
[c] If your employment is terminated for any reason other than “cause,” death or
disability, your NSOs 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 NSOs expire.
You May Forfeit Your NSOs if You Engage in Conduct That is Harmful to the
Company (or any Affiliate or Subsidiary)
You also will forfeit any outstanding NSOs and, to the extent permitted by law,
must return to the Company all common shares and all other amounts you have
received through the Plan if, without our

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consent, you do any of the following within 180 days before and 730 days after
terminating employment (as defined in the Plan) with the Company or any
Affiliate or Subsidiary:
[a] You serve (or agree to serve) as an officer, director, consultant or
employee of any proprietorship, partnership, corporation or other entity or
become the owner of a business or a member of a partnership 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 termination of
employment 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 termination of employment;
[b] 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;
[c] 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;
[d] On your own behalf or on behalf of any other person, partnership,
association, corporation 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 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;
[e] 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;
[f] 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
[g] You engaged in conduct that the Committee (as defined in the Plan)
reasonably concludes would have given rise to a termination for “cause” (as
defined in the Plan) had it been discovered before you terminated your
employment.
Your NSOs May Vest Earlier Than Described Above: Normally, your NSOs will vest
only in the circumstances described above. However, if there is a “Change in
Control” (as defined in the Plan), your NSOs may vest earlier. You should read
the Plan and the Prospectus, as supplemented, carefully to ensure that you
understand how this may happen.

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Employment Rights in respect of your NSOs: If you leave the employment of the
Company or any Subsidiary, you will not be entitled to compensation for any loss
of any right or benefit or prospective right or benefit in respect of your NSOs
which you might otherwise have enjoyed, whether such compensation is claimed by
way of damages for breach of contract or by way of compensation for loss of
office or otherwise under UK law.
Amendment/Termination: We may amend or terminate the Plan at any time.
Rights Before Your NSOs Are Exercised: You may not vote, or receive any
dividends associated with, the common shares underlying your NSOs.
Beneficiary Designation: You may name a beneficiary or beneficiaries to receive
or to exercise any vested NSOs that are unexercised when you die. This may be
done only on the attached Beneficiary Designation Form and by following the
rules described in that Form. For the purposes of this Award, beneficiaries to
whom any benefit may be designated (pursuant to Article 15 of the Plan) will be
limited to your children and stepchildren under the age of eighteen, spouses and
surviving spouses and civil partners (within the meaning of the UK Civil
Partnerships Act 2004) and surviving partners.
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.
Transferring Your NSOs: Normally your NSOs may not be transferred to another
person. However, you may complete a Beneficiary Designation Form to name the
person who may exercise your NSOs if you die before the Expiration Date of your
NSOs. Also, the Committee may allow you to place your NSOs into a trust
established for your benefit or for the benefit of your family. Only a person or
persons within the restricted class of beneficiaries described in the previous
section entitled “Beneficiary Designation” may be nominated to exercise your
NSOs and the beneficiaries of any such trust cannot extend beyond this
restricted class of beneficiaries. Contact [Third Party Administrator] at [TPA
Telephone Number] or at the address given below if you are interested in doing
this.
Governing Law: This Award Agreement will be construed in accordance with and
governed by the laws of the United States of America and of the State of Ohio
(other than laws governing conflicts of laws).
Other Agreements: Also, your NSOs 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.
Adjustments to NSOs: Your NSOs will be adjusted, if appropriate, to reflect any
change to the Company’s capital structure (e.g., the number of your NSOs and the
Exercise Price will be adjusted to reflect a stock split).
Other Rules: Your NSOs also are subject to more rules described in the Plan (as
restated by this Award Agreement) and in the Plan’s Prospectus, as supplemented.
You should read both of these documents carefully to ensure you fully understand
all the terms and conditions of the grant of NSOs made to you under this Award
Agreement.
For the purposes of grants of any form of award under the Plan to residents of
the United Kingdom, including this award, the Plan is restated to the effect
that:

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  (a)   such grants to United Kingdom residents may be made only to officers and
employees of the Company or one of its Subsidiaries;     (b)   any payments
pursuant to such grants shall be made only in common shares of the Company and,
for the avoidance of doubt and without limitation, dividend equivalents granted
pursuant to Article 14 of the Plan may be delivered only in Shares and no
earlier than the Shares to which they relate are delivered under the relevant
award.

*****
You may contact [Third Party Administrator] at [TPA Telephone Number] or at the
address given below if you have any questions about your Award or this Award
Agreement.

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Your Acknowledgment of Award Conditions
Note: You must sign and return a copy of this Award Agreement to [Third Party
Administrator] at the address given below no later than [___Days Post Grant
Date].
By signing below, I acknowledge and agree that:

  •   A copy of the Plan has been made available to me;     •   I have received
a copy of the Plan’s Prospectus, as supplemented;     •   I understand and
accept the conditions placed on my NSOs and understand what I must do to earn
and exercise my NSOs. I also have had the opportunity to seek advice from
independent counsel regarding the terms and conditions of my NSOs;     •   I
will consent (on my own behalf and on behalf of my beneficiaries and without any
further consideration) to any necessary change to my NSOs or this Award
Agreement to comply with any law, even if those changes affect the terms of my
NSOs and reduce their value or potential value; and     •   If I do not return a
signed copy of this Award Agreement to the address shown below on or before
[___Days Post Grant Date], my NSOs will be forfeited and I will not be entitled
to receive anything on account of this Award.

                      [Grantee’s Name]       THE SCOTTS MIRACLE-GRO COMPANY    
 
                   
By:
          By:        
 
                   
 
                   
Date signed:
          Name:        
 
                   
 
                   
 
          Title:        
 
                   
 
                   
 
          Date signed:        
 
                   

A signed copy of this Award Agreement must be sent to the following address no
later than [___Days Post Grant Date]:
[Third Party Administrator]
Attention: [TPA Contact’s Name]
[Contact’s Address]
[TPA Telephone Number]
After it is received, The Scotts Miracle-Gro Company 2006 Long-Term Incentive
Plan Committee will acknowledge receipt of your signed Award Agreement.

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THE SCOTTS MIRACLE-GRO COMPANY
2006 LONG-TERM INCENTIVE PLAN
NONQUALIFIED STOCK OPTION EXERCISE NOTICE
AFFECTING NONQUALIFIED STOCK OPTIONS GRANTED TO
[GRANTEE’S NAME] ON [GRANT DATE]
Additional copies of this Nonqualified Stock Option Exercise Notice (and any
further information you may need about this Exercise Notice or exercising your
NSOs) 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 the NSOs
described below:
NOTE: You must complete a separate Nonqualified Stock Option Exercise Notice
each time you exercise NSOs granted under each Award Agreement (e.g., if you are
exercising 200 NSOs granted January 1, 2007 and 100 NSOs granted January 1, 2008
under a separate award agreement, you must complete two Nonqualified Stock
Option Exercise Notices, one for each set of NSOs being exercised).
AFFECTED NSOS: This exercise relates to the following NSOs (fill in the blanks):
GRANT DATE: [GRANT DATE]
NUMBER OF NSOS BEING EXERCISED WITH THIS EXERCISE NOTICE:
                                        
EXERCISE PRICE: The Exercise Price due is
$                                                            
NOTE: This amount must be the product of $[Price] multiplied by the number of
NSOs being exercised.
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 Award Agreement.
     ___   Cashless Exercise and Sell.
     ___   Combination Exercise.
     ___   Exercise and Hold.
Note:

  •   If you select the Exercise and Hold method of exercise, you must also
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 the taxes
due.     •   If you select either the Cashless Exercise and Sell or the
Combination Exercise methods

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  •   f paying the Exercise Price, 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 common shares of the Company you
will receive.

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YOUR ACKNOWLEDGEMENT OF EFFECT OF EXERCISE
By signing below, I acknowledge and agree that:

  •   I fully understand the effect (including the investment effect) of
exercising my NSOs and buying common shares of the Company and understand that
there is no guarantee that the value of these common 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 Expiration Date specified in the Award Agreement under which these NSOs were
granted; and     •   The common shares of the Company I am buying by completing
and returning this Exercise Notice will be issued to me as soon as
administratively practicable.

[Grantee’s Name]
                                                                                                    
(signature)
Date signed:                                                             
A signed copy of this Nonqualified Stock Option Exercise Notice must be sent to
the following address no later than the Expiration Date:
[Third Party Administrator]
Attention: [TPA Contact’s Name]
[Contact’s Address]
[TPA Telephone Number]
*****

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ACKNOWLEDGEMENT OF RECEIPT
A signed copy of this Nonqualified Stock Option Exercise Notice was received on:
                                                            .
[Grantee’s Name]:
___   Has effectively exercised the NSOs described in this Notice; or
___   Has not effectively exercised the NSOs described in this 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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Description of Your Restricted Stock
You have been awarded [Number Granted] shares of Restricted Stock. If you
satisfy the conditions described in this Award Agreement, the Plan and the
Prospectus, as supplemented, the restrictions imposed on your Restricted Stock
will be removed and you will own the underlying common shares. You also must
arrange to pay any taxes due on settlement.
When Your Restricted Stock Will Be Settled
Normally, on [Vesting Date], the Committee (as defined in the Plan) will
ascertain if you have satisfied the conditions imposed on your Restricted Stock.
If you have not, your Restricted Stock will be forfeited. If you have, as soon
as administratively practicable after [Vesting Date], these common shares (net
of any Shares withheld to meet any tax – see next section) will be distributed
to you, free of any restrictions. Your Restricted Stock will be held in escrow
until it is settled or forfeited.
The restrictions imposed on your Restricted Stock normally will be met if you
are actively employed by the Company or any Affiliate or Subsidiary (as defined
in the Plan) on [Vesting Date] and all other conditions described in this Award
Agreement, the Plan and the Prospectus are met.
Tax Treatment of Your Restricted Stock
The tax treatment of your Restricted Stock is discussed in the Supplement to the
Plan’s Prospectus entitled “UK Tax Consequences”.
*****
General Terms and Conditions
You Will Forfeit Your Restricted Stock if Your Employment Ends
Normally, your Restricted Stock will be settled on [Vesting Date]. However, the
unvested portion of your Restricted Stock will be forfeited if you terminate
employment before [Vesting Date].
You May Forfeit Your Restricted Stock if You Engage in Conduct That is Harmful
to the Company (or any Affiliate or Subsidiary)
You also will forfeit any outstanding Restricted Stock and, to the extent
permitted by law, must return to the Company all common shares and all other
amounts you have received through the Plan if, without our consent, you do any
of the following from                     , ___[the date the Award is granted]
until the day before the fifth anniversary of such date:
[a] You serve (or agree to serve) as an officer, director, consultant or
employee of any proprietorship, partnership, corporation or other entity or
become the owner of a business or a member of a partnership 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 termination of
employment 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 termination of employment;

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[b] 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;
[c] 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;
[d] On your own behalf or on behalf of any other person, partnership,
association, corporation 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 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;
[e] 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;
[f] 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
[g] You engaged in conduct that the Committee reasonably concludes would have
given rise to a termination for “cause” (as defined in the Plan) had it been
discovered before you terminated your employment.
Your Restricted Stock May Vest Earlier Than Described Above. Normally, your
Restricted Stock will vest only in the circumstances described above. However,
if there is a “Change in Control” (as defined in the Plan), your Restricted
Stock may vest earlier. You should read the Plan and the Prospectus, as
supplemented, carefully to ensure that you understand how this may happen.
Rights Before Your Restricted Stock Vests: Even though your Restricted Stock is
held in escrow until it is settled or forfeited, you may exercise any voting
rights associated with the common shares underlying your Restricted Stock while
it is held in escrow. You also will be entitled to receive any dividends paid on
these common shares during this period, although these dividends will be
delivered only in common shares and also will be held in escrow until the
Restricted Stock is settled and distributed to you (or forfeited) depending on
whether or not you have met the conditions described in this Award Agreement and
in the Plan and the Prospectus, as supplemented.
Employment Rights in respect of your Restricted Stock: If you leave the
employment of the Company or any Subsidiary, you will not be entitled to
compensation for any loss of any right or benefit or prospective right or
benefit in respect of your Restricted Stock which you might otherwise have
enjoyed, whether such compensation is claimed by way of damages for breach of
contract or by way of compensation for loss of office or otherwise under UK law.

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Beneficiary Designation: You may name a beneficiary or beneficiaries to receive
any Restricted Stock that is settled after you die. This may be done only on the
attached Beneficiary Designation Form and by following the rules described in
that Form. For the purposes of this Award, beneficiaries to whom any benefit may
be designated (pursuant to Article 15 of the Plan) will be limited to your
children and stepchildren under the age of eighteen, spouses and surviving
spouses and civil partners (within the meaning of the UK Civil Partnerships Act
2004) and surviving partners.
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.
Transferring Your Restricted Stock: Normally your Restricted Stock may not be
transferred to another person. However, you may complete a Beneficiary
Designation Form to name the person to receive any Restricted Stock that is
settled after you die. Also, the Committee may allow you to place your
Restricted Stock into a trust established for your benefit or the benefit of
your family. Only a person or persons within the restricted class of
beneficiaries described in the previous section entitled “Beneficiary
Designation” may be nominated to exercise your Restricted Stock and the
beneficiaries of any such trust cannot extend beyond this restricted class of
beneficiaries. Contact [Third Party Administrator] at [TPA Telephone Number] or
the address given below if you are interested in doing this.
Governing Law: This Award Agreement will be construed in accordance with and
governed by the laws of the United States of America and of the State of Ohio
(other than laws governing conflicts of laws).
Other Agreements: Also, your Restricted Stock 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.
Adjustments to Your Restricted Stock: Your Restricted Stock will be adjusted, if
appropriate, to reflect any change to the Company’s capital structure (e.g., the
number of common shares underlying your Restricted Stock will be adjusted to
reflect a stock split).
Other Rules: Your Restricted Stock also is subject to more rules described in
the Plan (as restated by this Award Agreement) and in the Plan’s Prospectus. You
should read both of these documents carefully to ensure you fully understand all
the terms and conditions of the grant of Restricted Stock under this Award
Agreement.
For the purposes of grants of any form of award under the Plan to residents of
the United Kingdom, including this award, the Plan is restated to the effect
that:

  (a)   such grants to United Kingdom residents may be made only to officers and
employees of the Company or one of its Subsidiaries;     (b)   any payments
pursuant to such grants shall be made only in common shares of the Company and,
for the avoidance of doubt and without limitation, dividend equivalents granted
pursuant to Article 14 of the Plan may be delivered only in Shares and no
earlier than the Shares to which they relate are delivered under the relevant
award.

*****

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You may contact [Third Party Administrator] at [TPA Telephone Number] or at the
address given below if you have any questions about your Award or this Award
Agreement.

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Your Acknowledgment of Award Conditions
Note: You must sign and return a copy of this Award Agreement to [Third Party
Administrator] at the address given below no later than [___Days Post Grant
Date].
By signing below, I acknowledge and agree that:

  •   A copy of the Plan has been made available to me;     •   I have received
a copy of the Plan’s Prospectus, as supplemented;     •   I understand and
accept the conditions placed on my Award and understand what I must do to earn
my Award. I also have had the opportunity to seek advice from independent
counsel regarding the terms and conditions of my Award;     •   I will consent
(on my own behalf and on behalf of my beneficiaries and without any further
consideration) to any necessary change to my Award or this Award Agreement to
comply with any law, even if those changes affect the terms of my Award and
reduce their value or potential value; and     •   If I do not return a signed
copy of this Award Agreement to the address shown below on or before [___Days
Post Grant Date], my Award will be forfeited and I will not be entitled to
receive anything on account of this Award.

                      [Grantee’s Name]       THE SCOTTS MIRACLE-GRO COMPANY    
 
                   
By:
          By:        
 
                   
 
                   
Date signed:
          Name:        
 
                   
 
                   
 
          Title:        
 
                   
 
                   
 
          Date signed:        
 
                   

A signed copy of this Award Agreement must be sent to the following address no
later than [___Days Post Grant Date]:
[Third Party Administrator]
Attention: [TPA Contact’s Name]
[Contact’s Address]
[TPA Telephone Number]
After it is received, The Scotts Miracle-Gro Company 2006 Long-Term Incentive
Plan Committee will acknowledge receipt of your signed Award Agreement.

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Description of Your Restricted Stock Units
You have been awarded [Number Granted] Restricted Stock Units (or “RSUs”). If
you satisfy the conditions described in this Award Agreement, the Plan and the
Prospectus, as supplemented, you will be issued [Number Granted] common shares
of the Company. You also must arrange to pay any taxes due on settlement.
When Your RSUs Will Be Settled
Normally, on [Vesting Date] (“Settlement Date”), the Company will ascertain if
you have satisfied the conditions imposed on your RSUs. If you have not, your
RSUs will be forfeited. If you have, as soon as administratively practicable
after [Vesting Date], [Number Granted] common shares (net of any Shares withheld
to meet any tax – see next section) will be distributed to you.
The restrictions imposed on your RSUs normally will be met if you are actively
employed by the Company or any Affiliate or Subsidiary (as defined in the Plan)
on [Vesting Date] and all other conditions described in this Award Agreement,
the Plan and the Prospectus, as supplemented, are met.
Tax Treatment of Your RSUs
The tax treatment of your RSUs is discussed in the Supplement to the Plan’s
Prospectus entitled “UK Tax Consequences”.
When your RSUs vest, you will be liable for UK income tax and UK national
insurance contributions and the Company or the Subsidiary which employs you will
be entitled to withhold, as a condition of vesting, an amount equal to the
income tax and primary class 1 (employee’s) national insurance contributions
also payable by you on vesting of your RSUs. If no arrangements satisfactory to
the Company are made by you to satisfy this tax withholding requirement, the
Company will withhold Shares having a Fair Market Value on the date the tax and
national insurance contributions are to be determined equal to the total tax
withholding requirement.
*****
General Terms and Conditions
You Will Forfeit Your RSUs if Your Employment Ends
Normally, your RSUs will be settled on the date shown earlier in this Award
Agreement. However, the unvested portion of your RSUs will be forfeited if you
terminate employment before [Vesting Date].
You May Forfeit Your RSUs if You Engage in Conduct That is Harmful to the
Company (or any Affiliate or Subsidiary)
You also will forfeit any outstanding RSUs and, to the extent permitted by law,
must return to the Company all common shares and all other amounts you have
received through the Plan if, without our consent, you do any of the following
within 180 days before and 730 days after terminating employment (as defined in
the Plan) with the Company or any Affiliate or Subsidiary:
[a] You serve (or agree to serve) as an officer, director, consultant or
employee of any proprietorship, partnership, corporation or other entity or
become the owner of a business or a member of a partnership that competes with
any portion of the Company’s (or any Affiliate’s or

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Subsidiary’s) business with which you have been involved any time within five
years before termination of employment 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 termination of
employment;
[b] 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;
[c] 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;
[d] On your own behalf or on behalf of any other person, partnership,
association, corporation 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 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 and
any Affiliate’s or Subsidiary’s employees;
[e] 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;
[f] 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
[g] You engaged in conduct that the Committee (as defined in the Plan)
reasonably concludes would have given rise to a termination for “cause” (as
defined in the Plan) had it been discovered before you terminated your
employment.
Your RSUs May Vest Earlier Than Described Above. Normally, your RSUs will vest
only in the circumstances described above. However, if there is a “Change in
Control” (as defined in the Plan), your RSUs may vest earlier. You should read
the Plan and the Prospectus carefully to ensure that you understand how this may
happen.
Rights Before Your RSUs Vest: You may not vote, or receive any dividends
associated with the common shares underlying your RSUs.
Employment Rights in respect of your RSUs: If you leave the employment of the
Company or any Subsidiary, you will not be entitled to compensation for any loss
of any right or benefit or prospective right or benefit in respect of your
Restricted Stock which you might otherwise have enjoyed, whether

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such compensation is claimed by way of damages for breach of contract or by way
of compensation for loss of office or otherwise under UK law.
Beneficiary Designation: You may name a beneficiary or beneficiaries to receive
any RSUs that are settled after you die. This may be done only on the attached
Beneficiary Designation Form and by following the rules described in that Form.
For the purposes of this Award, beneficiaries to whom any benefit may be
designated (pursuant to Article 15 of the Plan) will be limited to your children
and stepchildren under the age of eighteen, spouses and surviving spouses and
civil partners (within the meaning of the UK Civil Partnerships Act 2004) and
surviving partners.
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.
Transferring Your RSUs: Normally your RSUs may not be transferred to another
person. However, you may complete a Beneficiary Designation Form to name the
person to receive any RSUs that are settled after you die. Also, the Committee
may allow you to place your RSUs into a trust established for your benefit or
the benefit of your family. Only a person or persons within the restricted class
of beneficiaries described in the previous section entitled “Beneficiary
Designation” may be nominated to exercise your Restricted Stock and the
beneficiaries of any such trust cannot extend beyond this class of
beneficiaries. Contact [Third Party Administrator] at [TPA Telephone Number] or
at the address given below if you are interested in doing this.
Governing Law: This Award Agreement will be construed in accordance with and
governed by the laws of the United States of America and of the State of Ohio
(other than laws governing conflicts of laws).
Other Agreements: Also, your RSUs 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.
Adjustments to Your RSUs: Your RSUs will be adjusted, if appropriate, to reflect
any change to the Company’s capital structure (e.g., the number of your RSUs
will be adjusted to reflect a stock split).
Other Rules: Your RSUs also are subject to more rules described in the Plan (as
restated by this Award Agreement) and in the Plan’s Prospectus, as supplemented.
You should read both of these documents carefully to ensure you fully understand
all the terms and conditions of the grant of RSUs made to you under this Award
Agreement.
For the purposes of grants of any form of award under the Plan to residents of
the United Kingdom, including this award, the Plan is restated to the effect
that:

  (a)   such grants to United Kingdom residents may be made only to officers and
employees of the Company or one of its Subsidiaries;     (b)   any payments
pursuant to such grants shall be made only in common shares of the Company and,
for the avoidance of doubt and without limitation, dividend equivalents granted
pursuant to Article 14 of the Plan may be delivered only in Shares and no
earlier than the Shares to which they relate are delivered under the relevant
award.

*****

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You may contact [Third Party Administrator] at [TPA Telephone Number] or at the
address given below if you have any questions about your Award or this Award
Agreement.

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Your Acknowledgment of Award Conditions
Note: You must sign and return a copy of this Award Agreement to [Third Party
Administrator] at the address given below no later than [___Days Post Grant
Date].
By signing below, I acknowledge and agree that:

  •   A copy of the Plan has been made available to me;     •   I have received
a copy of the Plan’s Prospectus, as supplemented;     •   I understand and
accept the conditions placed on my Award and understand what I must do to earn
my Award. I also have the opportunity to seek advice from independent counsel
regarding the terms and condititions of my Award;     •   I will consent (on my
own behalf and on behalf of my beneficiaries and without any further
consideration) to any necessary change to my Award or this Award Agreement to
comply with any law, even if those changes affect the terms of my Award and
reduce their value or potential value; and     •   If I do not return a signed
copy of this Award Agreement to the address shown below on or before [___Days
Post Grant Date], my Award will be forfeited and I will not be entitled to
receive anything on account of this Award.

                      [Grantee’s Name]       THE SCOTTS MIRACLE-GRO COMPANY    
 
                   
By:
          By:        
 
                   
 
                   
Date signed:
          Name:        
 
                   
 
                   
 
          Title:        
 
                   
 
                   
 
          Date signed:        
 
                   

A signed copy of this Award Agreement must be sent to the following address no
later than [___Days Post Grant Date]:
[Third Party Administrator]
Attention: [TPA Contact’s Name]
[Contact’s Address]
[TPA Telephone Number]
After it is received, The Scotts Miracle-Gro Company 2006 Long-Term Incentive
Plan Committee will acknowledge receipt of your signed Award Agreement.

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Committee’s Acknowledgment of Receipt
A signed copy of this Award Agreement was received on                     .
By:                                                             
[Grantee’s Name]
___   Has complied with the conditions imposed on the grant and the Award
Agreement remains in effect; or
___   Has not complied with the conditions imposed on the grant and the [Name of
Award(s)] are forfeited because
                                                                                                                        .
(describe deficiency)
The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan Committee

By:  
                                                                                

Date:  
                                                                                

Note: Send a copy of this completed Award Agreement to [Grantee’s Name] and keep
a copy as part of the Plan’s permanent records.

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THE SCOTTS MIRACLE-GRO COMPANY
2006 LONG-TERM INCENTIVE PLAN
BENEFICIARY DESIGNATION FORM
RELATING TO [FORM OF AWARD] AWARD GRANTED TO
[GRANTEE’S NAME] ON [GRANT DATE]
1.00 Instructions for Completing This Beneficiary Designation Form
You may use this Beneficiary Designation Form to [1] name the person you want to
receive any amount due under The Scotts Miracle-Gro Company 2006 Long-Term
Incentive Plan after your death or [2] change the person who will receive these
benefits.
There are several things you should know before you complete this Beneficiary
Designation Form.
First, if you do not elect a beneficiary, any amount due to you under the Plan
when you die will be paid to your surviving spouse or, if you have no surviving
spouse, to your estate.
Second, your election will not be effective (and will not be implemented) unless
you complete all applicable portions of this Beneficiary Designation Form and
return it to [Third Party Administrator] at the address given below.
Third, all elections will remain in effect until they are changed (or until all
death benefits are paid).
Fourth, if you designate your spouse as your beneficiary but are subsequently
divorced from that person (or your marriage is annulled), your beneficiary
designation will be revoked automatically.
Fifth, if you have any questions about this Beneficiary Designation Form or if
you need additional copies of this Form, please contact [Third Party
Administrator] at [TPA Telephone Number] or at the address or number given
below.
1.00 Designation of Beneficiary
1.01 Primary Beneficiary:
I designate the following person(s) as my Primary Beneficiary or Beneficiaries
to receive any amount due after my death under the terms of the Award Agreement
described at the top of this Beneficiary Designation Form. This benefit will be
paid, in the proportion specified, to:

                     
 
      % to                              
 
          (Name)   (Relationship)    
 
                   
 
  Address:                              
 
                   
 
      % to                              
 
          (Name)   (Relationship)    
 
                   
 
  Address:                              
 
                   
 
      % to                              
 
          (Name)   (Relationship)    

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  Address:                              
 
                   
 
      % to                              
 
          (Name)   (Relationship)    
 
                   
 
  Address:                              

1.02 Contingent Beneficiary
If one or more of my Primary Beneficiaries die before I die, I direct that any
amount due after my death under the terms of the Award described at the top of
this Beneficiary Designation Form:
___   Be paid to my other named Primary Beneficiaries in proportion to the
allocation given above (ignoring the interest allocated to the deceased Primary
Beneficiary); or
___   Be distributed among the following Contingent Beneficiaries:

                     
 
      % to                              
 
          (Name)   (Relationship)    
 
                   
 
  Address:                              
 
                   
 
      % to                              
 
          (Name)   (Relationship)    
 
                   
 
  Address:                              
 
                   
 
      % to                              
 
          (Name)   (Relationship)    
 
                   
 
  Address:                              
 
                   
 
      % to                              
 
          (Name)   (Relationship)    
 
                   
 
  Address:                              

Elections made on this Beneficiary Designation Form will be effective only after
this Form is received by [Third Party Administrator] and only if it is fully and
properly completed and signed.
[Grantee’s Name]
Date of Birth:
                                                                                                                                            
Address:
                                                                                                                                            
                                                                                                                                                                
     Sign and return this Beneficiary Designation Form to [Third Party
Administrator] at the address given below.

                 
 
               
 
               
Date
          Signature    

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Return this signed Beneficiary Designation Form to [Third Party Administrator]
at the following address:
[Third Party Administrator]
Attention: [TPA Contact’s Name]
[Contact’s Address]
[TPA Telephone Number]
Received on:                                                             
By:
                                                                                

- 26 -