Exhibit 10.2
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 EMPLOYEES
RESTRICTED STOCK AWARD AWARDED TO CHRISTOPHER NAGEL ON
OCTOBER 1, 2006 (“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 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;     •  
Consult your tax advisor regarding the federal income tax effect of receiving
and earning this Award, as well as the consequences if you are required to repay
the value of the Award to the Company; and     •   Contact Robert J. Hanley,
Vice President, Total Global Rewards at (937) 578-5630 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: Robert J. Hanley
Vice President, Total Global Rewards
14111 Scottslawn Road
Marysville, Ohio 43041

 

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Also, no later than November 30, 2006 you must return a signed copy of the Award
Agreement to:
Edward J. Yen & Associates c/o Marc Chapman
Merrill Lynch
8425 Pulsar Pl., Ste. 200
Columbus, OH 43240
(800) 285-0648
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.
Section 409A of the Internal Revenue Code (“Section 409A”) imposes substantial
penalties on persons who receive some forms of deferred compensation (see the
Plan’s Prospectus for more information about these penalties). Your Award has
been designed to avoid these penalties. However, because the Internal Revenue
Service (“IRS”) has not yet issued final rules fully defining the effect of
Section 409A, it is possible that your Award Agreement must be revised after the
IRS issues these rules if you are to avoid these penalties. As a condition of
accepting this Award, you must agree to accept those revisions, without any
further consideration, even if those revisions change the terms of your Award
and reduce its value or potential value.

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Description of Your Restricted Stock
You have been awarded 38,000 shares of Restricted Stock. If you satisfy the
conditions described in this Award Agreement, the Plan and the Prospectus, 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 October 1, 2007, 19,000 shares of your Restricted Stock Award will
vest if you are actively employed by the Company or any Affiliate or Subsidiary
at that time. If you are not, your Restricted Stock will be forfeited. If you
are, as soon as administratively practicable after October 1, 2007, these common
shares will be distributed to you, free of any restrictions.
Then, on October 1, 2009, the remaining 19,000 shares of your Restricted Stock
Award will vest if you are actively employed by the Company or any Affiliate or
Subsidiary at that time. If you are not, your Restricted Stock will be
forfeited. If you are, as soon as administratively practicable after October 1,
2009, these common shares 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 the pertinent vesting dates of October 1, 2007 and October 1,
2009 and all other conditions described in this Award Agreement, the Plan and
the Prospectus are met.
Tax Treatment of Your Restricted Stock
The federal income tax treatment of your Restricted Stock is discussed in the
Plan’s Prospectus. However, you may not make an election under Section 83(b) of
the Internal Revenue Code with respect to this award.
*****
General Terms and Conditions
You Will Forfeit Your Restricted Stock or Be Required to Repay the Value to the
Company if Your Employment Terminates
Normally, your Restricted Stock will be completely vested on October 1, 2009.
However, the unvested portion of your Restricted Stock will be forfeited if you
terminate employment before October 1, 2009. And, except as provided in the
section titled “You May Forfeit Your Restricted Stock if You Engage in Conduct
That is Harmful to the Company (or any Affiliate or Subsidiary),” if you
terminate employment after October 1, 2007 but before October 1, 2009:
[a] If you terminate employment through a Voluntary Termination (as described in
your Employment Agreement, effective October 1, 2006, with The Scotts
Miracle-Gro

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Company (“Employment Agreement”)) or are Terminated for Cause (also as described
in the Employment Agreement):
[i] The unvested portion of your Restricted Stock will be forfeited;
[ii] You must pay to the Company cash equal to the product of the fair market
value of a common share of the Company on October 1, 2007 multiplied by 19,000;
and
[iii] You must pay to the Company the amount of cash equal to the value of all
dividends (including any reinvested dividends) paid on your Restricted Stock
from October 1, 2006 until your Effective Date of Termination (as defined in the
Employment Agreement).
[b] If your employment is terminated due to Termination by the Company without
Cause (as defined in the Employment Agreement) other than for death or
Disability (as defined in the Employment Agreement):
[i] The unvested portion of your Restricted Stock will be forfeited; and
[ii] Subject to the vote and approval of the full Board of Directors (as defined
in the Plan), you must pay to the Company cash equal to the product of the fair
market value of a common share of the Company on October 1, 2007 multiplied by
19,000, as well as the amount of cash equal to the value of all dividends
(including any reinvested dividends) paid on your Restricted Stock from
October 1, 2006 until your Effective Date of Termination (as defined in the
Employment Agreement).
You May Forfeit Your Restricted Stock if You Engage in Conduct That is Harmful
to the Company (or any Affiliate or Subsidiary)
Regardless of parts [a] and [b] in the section titled “You Will Forfeit Your
Restricted Stock or Be Required to Repay the Value to the Company if Your
Employment Terminates,” you also will forfeit any outstanding Restricted Stock
and must return to the Company all common shares and other amounts you have
received through the Plan if, without the Company’s consent, you do any of the
following within 180 days before and 730 days after terminating employment:
[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;

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[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 Employment Agreement) had it been discovered before you
terminated employment.
Your Restricted Stock May Vest Earlier Than Described Above: Normally, your
Restricted Stock will vest only in the circumstances described above. However,
and regardless of parts [a] and [b] in the section titled “You Will Forfeit Your
Restricted Stock or Be Required to Repay the Value to the Company if Your
Employment Terminates,” 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 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 held in
escrow until the Restricted Stock is settled, reinvested in common shares of the
Company (also held in escrow), 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.

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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. 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. Contact Merrill Lynch/Edward J. Yen & Associates at (800) 285-0648
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 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 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.
*****
You may contact Merrill Lynch/Edward J. Yen & Associates at (800) 285-0648 or at
the address given below if you have any questions about your Award or this Award
Agreement.
Your Acknowledgment of Award Conditions
Note: You must sign and return a copy of this Award Agreement to Merrill
Lynch/Edward J. Yen & Associates at the address given below no later than
November 30, 2006.
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;

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  •   I understand and accept the conditions placed on my Award and understand
what I must do to earn my Award;     •   I understand that if after October 1,
2007 but before October 1, 2009 my employment is terminated by a Voluntary
Termination, a Termination for Cause, or (subject to the vote and approval of
the full Board of Directors) a Termination by the Company without Cause other
than for death or Disability (all as described or defined in the Employment
Agreement), I must pay to the Company cash equal to the product of the fair
market value of a common share of the Company on October 1, 2007 multiplied by
19,000, as well as the amount of cash equal to the value of all dividends
(including any reinvested dividends) paid on my Restricted Stock from October 1,
2006 until my Effective Date of Termination (as defined in the Employment
Agreement).     •   I understand that I should consult with my tax advisor to
discuss the federal income tax effect of earning my Restricted Stock, as well as
the consequences if I am required to repay the value of the Award to the
Company.     •   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 and to avoid paying
penalties under Section 409A of the Internal Revenue Code, 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 November 30, 2006 my Award will be forfeited and I will
not be entitled to receive anything on account of this Award.

                      Christopher Nagel       THE SCOTTS MIRACLE-GRO COMPANY    
 
                   
By:
  /s/ Christopher Nagel
 
      By:   /s/ David M. Aronowitz
 
    (Signature)       David M. Aronowitz                 Executive Vice
President, General Counsel    
 
                    Date signed: 11/9/06       Date signed: 10/30/06    

A signed copy of this Award Agreement must be sent to the following address no
later than November 30, 2006:
Edward J. Yen & Associates c/o Marc Chapman
Merrill Lynch
8425 Pulsar Pl., Ste. 200
Columbus, OH 43240
(800) 285-0648
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 November 13, 2006.

         
By:
  /s/ Marc Chapman
 
   

Christopher Nagel
þ Has complied with the conditions imposed on the grant and the Award Agreement
remains in effect; or
o Has not complied with the conditions imposed on the grant and the Restricted
Stock Award awarded to Christopher Nagel on October 1, 2006 is forfeited
because                                                                                                      .
describe deficiency
The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan Committee

         
By:
  /s/ ML
 
   

Date: 11/13/06
Note: Send a copy of this completed Award Agreement to Christopher Nagel 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 RESTRICTED STOCK AWARD GRANTED TO
CHRISTOPHER NAGEL ON OCTOBER 1, 2006
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 another 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 Merrill Lynch/Edward J. Yen & Associates 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 Merrill Lynch/Edward J.
Yen & Associates at (800) 285-0648 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:

                             
 
                           
 
  100   % to       [spouse]                  
 
   
 
                  (Name)   (Relationship)    
 
                           
 
  Address:                                    

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      % to                                      
 
                  (Name)   (Relationship)    
 
                           
 
  Address:                                      
 
                           
 
      % to                                      
 
                  (Name)   (Relationship)    
 
                           
 
  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 Merrill Lynch/Edward J. Yen & Associates and only if it
is fully and properly completed and signed.

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Chrisopher Nagel

             
 
            Date of Birth:        
 
     
 
   
Address:
                     
 
           
 
                 

Sign and return this Beneficiary Designation Form to Merrill Lynch/Edward J. Yen
& Associates at the address given below.

         
 
       
          
  /s/ Christopher Nagel    
 
       
Date 11/9/06
  Signature    

Return this signed Beneficiary Designation Form to Merrill Lynch/Edward J. Yen &
Associates at the following address:
Edward J. Yen & Associates c/o Marc Chapman
Merrill Lynch
8425 Pulsar Pl., Ste. 200
Columbus, OH 43240
(800) 285-0648
Received on: 11/13/06

         
 
       
By:
  /s/ MS    
 
       

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