EXHIBIT 10(b)(2)
THE SCOTTS COMPANY LLC
AMENDED AND RESTATED
EXECUTIVE/MANAGEMENT INCENTIVE PLAN (THE “PLAN” or “EMIP”)
TERMS AND CONDITIONS

1.   Objectives

  1.1   Provide meaningful financial incentives consistent with and supportive
of corporate strategies and objectives.     1.2   Encourage team effort toward
achievement of corporate financial and strategic goals aligned with shareholders
of The Scotts Miracle-Gro Company and our customers.     1.3   Contribute toward
a competitive compensation program for all associates participating in the Plan
(“Participants”).

2.   Participation

  2.1   All managers and more senior level associates of The Scotts Company LLC
(the “Company”) and all “Affiliates” and “Subsidiaries” (as defined below) are
eligible to participate upon recommendation by management and in the case of
covered employees (as defined in Code §162(m)) approval by the Compensation and
Organization Committee of The Scotts Miracle-Gro Company (the “Committee”). For
purposes of this Plan:

  (a)   “Code” means the Internal Revenue Code of 1986, as amended.     (b)  
“Affiliates” and “Subsidiaries” mean all persons with whom the Company would be
considered a single employer under Code §§414(b) and (c).

  2.2   Except as otherwise provided by the Committee and, in the case of
covered employees, permitted under Code §162(m), Participants must be actively
employed in an eligible job/position for at least 13 consecutive weeks during
the Plan Year (the Company’s fiscal year).     2.3   Participant eligibility is
based on active status during the Plan Year. Periods of inactive status such as
short-term disability and other leaves will be reflected in the eligible
earnings and payout calculation.     2.4   Except as otherwise provided by the
Committee and, in the case of covered employees, permitted under Code §162(m),
Participants must be employed on the last day of the Plan Year to be eligible
for an incentive payment.     2.5   Except as otherwise provided by the
Committee and, in the case of covered employees, permitted under Code §162(m),
participants whose employment terminates during the Plan Year, except in cases
of retirement, will not be eligible for an incentive payment, prorated or
otherwise.     2.6   Participants who retire during the Plan Year will be
eligible for a prorated incentive payment.     2.7   Participants who hold an
eligible position on a part-time basis are eligible for the EMIP. All other
terms and conditions apply.

 

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  2.8   Participants who move to a different EMIP eligible position or otherwise
become eligible for a different target percentage during the Plan Year will be
pro-rated based on new metrics/target (if applicable) only if the move is for an
eligible period of at least 13 weeks in the Plan Year.     2.9   Participants
who move to a non-EMIP eligible position during the Plan Year will be eligible
for a pro-rated incentive payment (based on Plan Year earnings) provided other
eligibility requirements are met.     2.10   Participants shall not have any
right with respect to any award until an award shall, in fact, be paid to them.
    2.11   The Plan confers no rights upon any associate to participate in the
Plan or remain in the employ of the Company or any Affiliate or Subsidiary.
Neither the adoption of the Plan nor its operation shall in any way affect the
right of the associate or the Company or any Affiliate or Subsidiary to
terminate the employment relationship at any time.

3.   Plan Design, Performance Measures, and Payouts

  3.1   The Plan is designed to recognize and reward performance against
established financial targets. The Plan is comprised of:

  (a)   A corporate net income “funding trigger” below which no incentives will
be paid to any Participant;     (b)   Up to five standard Performance Measures
from the list of available Performance Measures, below;     (c)   An earnings
“multiplier” that will reinforce the importance of earnings by modifying the
performance results against all of the other goals; and     (d)   The ability to
tailor incentive measure weights to each particular group or unit reflecting the
relative contribution that group or unit can make to those results.

  3.2   Available Performance Measures under the Plan shall be measured over the
period established by the Committee and be limited to the following:

  (a)   Net earnings or net income (before or after taxes);     (b)   Earnings
per share (basic or diluted);     (c)   Net sales or revenue growth;     (d)  
Net operating profit;     (e)   Return measures (including, but not limited to,
return on assets, capital, invested capital, equity, sales, or revenue);     (f)
  Cash flow (including, but not limited to, operating cash flow, free cash flow,
cash flow return on equity, and cash flow return on investment);     (g)  
Earnings before or after taxes, interest, depreciation, and/or amortization;    
(h)   Gross or operating margins;

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  (i)   Productivity ratios;     (j)   Share price (including, but not limited
to, growth measures and total shareholder return);     (k)   Expense targets;  
  (1)   Margins;     (m)   Operating efficiency;     (n)   Market share;     (o)
  Customer satisfaction/service;     (p)   Product Fill Rate percent (% of
orders filled on first delivery) or All-In Fill Rate percent (% calculated
dollar fill based on potential) times Inventory Turns;     (q)   Working capital
targets;     (r)   Economic value added or EVA(R)(net operating profit after tax
minus the sum of capital multiplied by the cost of capital);     (s)  
Developing new products and lines of revenue;     (t)   Reducing operating
expenses;     (u)   Developing new markets;     (v)   Meeting completion
schedules;     (w)   Developing and managing relationships with regulatory and
other governmental agencies;     (x)   Managing cash;     (y)   Managing claims
against the Company, including litigation; and     (z)   Identifying and
completing strategic acquisitions.     (aa)   Any Performance Measure(s) may be
used to measure the performance of the Company, Subsidiary, and/or Affiliate as
a whole or any business unit of the Company, Subsidiary, and/or Affiliate or any
combination thereof, as the Committee may deem appropriate, or any of the above
Performance Measures as compared to the performance of a group of comparator
companies, or published or special index that the Committee, in its sole
discretion, deems appropriate.

  3.3   Performance above and below target performance goals will be
incrementally calculated so Participants will receive a payout calculated on a
straight-line basis; provided, however, that the Committee may determine, in its
sole discretion, that no payouts will be made for performance below target
performance goals. Notwithstanding the foregoing or any other provision in the
Plan to the contrary, the Committee shall have the right, in its sole
discretion, to reduce the amount otherwise payable to a Participant based on the
Participant’s individual performance or any other factors that the Committee
deems appropriate.

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  3.4   The maximum amount of compensation that could be paid to any Participant
in any Plan Year from this Plan is $2.5 million.     3.5   Unless a Participant
has made a valid election under a deferred compensation plan maintained by the
Company, an Affiliate or a Subsidiary no later than the date permitted under
such plan, all awards under the Plan, including any prorated amounts described
in Section 2.6, will be paid by the 15th day of the third month following the
close of the applicable Plan Year.

4.   Employee Agreement and Forfeiture of Payment

  4.1   Regardless of any other provision of this section and unless the
Incentive Review Committee (as defined in Section 5.2) specifies otherwise, in
order to participate in the Plan, a Participant must execute an Employee
Confidentiality, Noncompetition, Nonsolicitation Agreement.     4.2  
Furthermore, regardless of any other provision of this section and unless the
Incentive Review Committee specifies otherwise, a Participant who breaches any
part of that Employee Confidentiality, Noncompetition, Nonsolicitation Agreement
will forfeit any future payment under the Plan and will also return to the
Company or any Affiliate or Subsidiary any monies paid out to Participant under
this Plan within the three years prior to said breach.     4.3   By
participating in this Plan, a Participant hereby consents to a deduction from
any amount the Company or any Affiliate or Subsidiary may owe the Participant
(including amounts owed to the Participant as wages or other compensation,
fringe benefits, or vacation pay as well as any other amounts owed to the
Participant by the Company or any Affiliate or Subsidiary), to the extent of the
amounts owed the Company, Affiliate or Subsidiary under this Section 4, whether
or not it elects to make any set-off in whole or in part. If the Company or any
Affiliate or Subsidiary does not recover the full amount the Participant owes it
by means of set-off, calculated as set forth above in Section 4.2, the
Participant agrees to pay immediately the unpaid balance to the Company,
Affiliate or Subsidiary, as applicable.

5.   Administration

  5.1   The Plan is to be administered by the Vice President, Global Total
Rewards or the Committee designee, who will be responsible for:

  (a)   Recommending changes in the Plan as appropriate;     (b)   Recommending
payout targets; and     (c)   Recommending additions or deletions to the list of
eligible associates.

  5.2   The Incentive Review Committee (comprised of the Chief Executive
Officer, Executive Vice President, Human Resources and the Chief Financial
Officer) is responsible for:

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  (a)   Approving the percentages by which financial measurements vary from
approved budgets and business unit financial performance results;     (b)  
Adjudicating changes and adjustments; and     (c)   Recommending Plan payouts.

  5.3   The Committee approves:

  (a)   Changes in the Plan design;     (b)   The payout percentage;     (c)  
Additions or deletions of eligible associates; and     (e)   Payouts to all
Participants after written certification that Performance Measures have been
met.

  5.4   The Committee shall approve the Performance Measures within 90 days of
the beginning of the performance period but no later than 25% of the performance
period. Material terms of the Plan, including the Plan measures, were approved
by shareholders on January 26, 2006. The foregoing qualifies payments under the
Plan as “qualified performance-based compensation” under Treasury Regulation
§1.162-27(e). The Plan is amended and restated effective October 30, 2007 for
purposes of Code §409A and to make certain other changes.     5.5   The
Committee shall review the operation of the Plan and (subject to restrictions
imposed in Code §162(m)), if at any time the continuation of the Plan or any of
its provisions becomes inappropriate or inadvisable, the Committee shall revise
or modify Plan provisions or recommend to the Board of Directors of The Scotts
Miracle-Gro Company (the “Board”) that the Plan be suspended or withdrawn. In
addition, the Committee reserves the right to modify incentive formulas to
reflect unusual circumstances.     5.6   The Board reserves to itself the right
to suspend the Plan, to withdraw the Plan, and, to the extent allowed without
shareholder approval, make alterations in Plan concept.     5.7   It is intended
that this Plan comply with the short-term deferral requirements under Treasury
Regulation §1.409A-1(a)(4), and this Plan will be interpreted, administered and
operated in good faith accordingly. Nothing herein shall be construed as an
entitlement to or guarantee of any particular tax treatment to a Participant.

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