Exhibit 10.2

CENTRAL GARDEN & PET COMPANY

2003 OMNIBUS EQUITY INCENTIVE PLAN

(As Amended and Restated Effective February 13, 2012)

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TABLE OF CONTENTS

 

     Page  

SECTION 1

     1   

1.1 Background and Effective Date

     1   

1.2 Purpose of the Plan

     1   

1.3 Duration of the Plan

     1   

SECTION 2 DEFINITIONS

     1   

2.1 “1934 Act”

     1   

2.2 “Affiliate”

     2   

2.3 “Affiliated SAR”

     2   

2.4 “Award”

     2   

2.5 “Award Agreement”

     2   

2.6 “Board” or “Board of Directors”

     2   

2.7 “Code”

     2   

2.8 “Committee”

     2   

2.9 “Company”

     2   

2.10 “Consultant”

     2   

2.11 “Director”

     2   

2.12 “Disability”

     2   

2.13 “Employee”

     2   

2.14 “ERISA”

     2   

2.15 “Fair Market Value”

     3   

2.16 “Freestanding SAR”

     3   

2.17 “Incentive Stock Option” or “ISO”

     3   

2.18 “Nonqualified Stock Option”

     3   

2.19 “Option”

     3   

2.20 “Option Price”

     3   

2.21 “Participant”

     3   

2.22 “Performance Unit”

     3   

2.23 “Performance Share”

     3   

2.24 “Period of Restriction”

     3   

2.25 “Plan”

     3   

2.26 “Restricted Stock”

     3   

 

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TABLE OF CONTENTS

 

     Page  

2.27 “Retirement”

     3   

2.28 “Rule 16b-3”

     3   

2.29 “Section 16 Person”

     3   

2.30 “Shares”

     4   

2.31 “Stock Appreciation Right” or “SAR”

     4   

2.32 “Subsidiary”

     4   

2.33 “Tandem SAR”

     4   

2.34 “Termination of Employment”

     4   

SECTION 3 ADMINISTRATION

     4   

3.1 The Committee

     4   

3.2 Authority of the Committee

     4   

3.3 Decisions Binding

     5   

SECTION 4 SHARES SUBJECT TO THE PLAN

     5   

4.1 Number of Shares

     5   

4.2 Lapsed Awards

     6   

4.3 Adjustments in Authorized Shares

     6   

SECTION 5 STOCK OPTIONS

     6   

5.1 Grant of Options

     6   

5.2 Award Agreement

     6   

5.3 Option Price

     6   

5.4 Expiration of Options

     7   

5.5 Exercise of Options

     8   

5.6 Payment

     8   

5.7 Restrictions on Share Transferability

     9   

5.8 Certain Additional Provisions for Incentive Stock Options

     9   

5.9 Nontransferability of Options

     9   

SECTION 6 STOCK APPRECIATION RIGHTS

     9   

6.1 Grant of SARs

     9   

6.2 Exercise of Tandem SARs

     10   

6.3 Exercise of Affiliated SARs

     10   

6.4 Exercise of Freestanding SARs

     10   

 

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TABLE OF CONTENTS

 

     Page  

6.5 SAR Agreement

     10   

6.6 Expiration of SARs

     10   

6.7 Payment of SAR Amount

     10   

6.8 Nontransferability of SARs

     11   

SECTION 7 RESTRICTED STOCK

     11   

7.1 Grant of Restricted Stock

     11   

7.2 Restricted Stock Agreement

     11   

7.3 Transferability

     11   

7.4 Other Restrictions

     11   

7.5 Removal of Restrictions

     11   

7.6 Voting Rights

     12   

7.7 Dividends and Other Distributions

     12   

7.8 Return of Restricted Stock to Company

     12   

SECTION 8 PERFORMANCE UNITS AND PERFORMANCE SHARES

     12   

8.1 Grant of Performance Units/Shares

     12   

8.2 Value of Performance Units/Shares

     12   

8.3 Earning of Performance Units/Shares

     12   

8.4 Form and Timing of Payment of Performance Units/Shares

     12   

8.5 Cancellation of Performance Units/Shares

     13   

8.6 Nontransferability

     13   

SECTION 9 BENEFICIARY DESIGNATION

     13   

SECTION 10 DEFERRALS

     13   

SECTION 11 RIGHTS OF EMPLOYEES AND CONSULTANTS

     13   

11.1 No Effect on Employment or Service

     13   

11.2 Participation

     13   

SECTION 12 AMENDMENT, SUSPENSION, OR TERMINATION

     14   

12.1 Amendment, Suspension, or Termination

     14   

SECTION 13 TAX WITHHOLDING

     14   

13.1 Withholding Requirements

     14   

13.2 Shares Withholding

     14   

SECTION 14 INDEMNIFICATION

     14   

 

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TABLE OF CONTENTS

 

     Page  

SECTION 15 SUCCESSORS

     15   

SECTION 16 LEGAL CONSTRUCTION

     15   

16.1 Gender and Number

     15   

16.2 Severability

     15   

16.3 Requirements of Law

     15   

16.4 Securities Law Compliance

     15   

16.5 Governing Law

     15   

16.6 Captions

     15   

 

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CENTRAL GARDEN & PET COMPANY

2003 OMNIBUS EQUITY INCENTIVE PLAN

(As Amended and Restated Effective February 13, 2012)

CENTRAL GARDEN & PET COMPANY, hereby adopts the Central Garden & Pet Company
2003 Omnibus Equity Incentive Plan, effective as of December 4, 2002, and as
amended on February 7, 2005, December 14, 2005, February 5, 2007, December 10,
2008 and December 27, 2011 as follows:

SECTION 1

BACKGROUND, PURPOSE AND DURATION

1.1 Background and Effective Date. The Plan provides for the granting of
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units, and Performance Shares. The Plan was originally approved
effective as of December 4, 2002. The Plan, as amended to date, is effective as
of February 13, 2012, the date on which the shareholders approved the
December 27, 2011 amendment. Awards may be granted prior to the receipt of such
vote, but such grants shall be null and void if such vote is not in fact
received.

1.2 Purpose of the Plan. The purpose of the Plan is to promote the success, and
enhance the value, of the Company by aligning the interests of Participants with
those of the Company’s shareholders, and by providing Participants with an
incentive for outstanding performance.

The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of outstanding
individuals, upon whose judgment, interest, and special effort the success of
the Company largely is dependent.

1.3 Duration of the Plan. The Plan shall commence on the date specified in
Section 1.1, and subject to Section 12 (concerning the Board’s right to amend or
terminate the Plan), shall remain in effect thereafter. However, without further
shareholder approval, no Incentive Stock Option may be granted under the Plan on
or after December 3, 2012.

SECTION 2

DEFINITIONS

The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:

2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended. Reference
to a specific section of the Exchange Act or regulation thereunder shall include
such section or regulation, any valid regulation promulgated under such section,
and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

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2.2 “Affiliate” means any corporation or any other entity (including, but not
limited to, partnerships and joint ventures) controlling, controlled by, or
under common control with the Company.

2.3 “Affiliated SAR” means an SAR that is granted in connection with a related
Option, and which automatically will be deemed to be exercised at the same time
that the related Option is exercised.

2.4 “Award” means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units, or Performance Shares.

2.5 “Award Agreement” means the written agreement setting forth the terms and
provisions applicable to each Award granted under the Plan.

2.6 “Board” or “Board of Directors” means the Board of Directors of the Company.

2.7 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section
or regulation, any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

2.8 “Committee” means the committee appointed by the Board (pursuant to
Section 3.1) to administer the Plan.

2.9 “Company” means Central Garden & Pet Company, a Delaware corporation, or any
successor thereto.

2.10 “Consultant” means an individual who provides significant services to the
Company and/or an Affiliate, including a Director who is not an Employee.

2.11 “Director” means any individual who is a member of the Board of Directors
of the Company.

2.12 “Disability” means a permanent and total disability within the meaning of
Code Section 22(e)(3).

2.13 “Employee” means an employee of the Company or of an Affiliate, whether
such employee is so employed at the time the Plan is adopted or becomes so
employed subsequent to the adoption of the Plan.

2.14 “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended. Reference to a specific section of ERISA shall include such section,
any valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.

 

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2.15 “Fair Market Value” means the average of the highest and lowest quoted
selling prices or the closing share price for Shares on the relevant date, or if
there were no sales on such date, the arithmetic mean of the highest and lowest
quoted selling prices on the nearest day before and the nearest day after the
relevant date, as determined by the Committee. If the class of Shares is not
quoted on a national exchange, “Fair Market Value” means, as of any date, the
per share fair market value of the Shares, as determined by the Committee in
good faith on such basis as it deems appropriate and applied consistently with
respect to Participants.

2.16 “Freestanding SAR” means a SAR that is granted independently of any Option.

2.17 “Incentive Stock Option” or “ISO” means an option to purchase Shares, which
is designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code.

2.18 “Nonqualified Stock Option” means an option to purchase Shares which is not
intended to be an Incentive Stock Option.

2.19 “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

2.20 “Option Price” means the price at which a Share may be purchased pursuant
to an Option.

2.21 “Participant” means an Employee or Consultant who has an outstanding Award.

2.22 “Performance Unit” means an Award granted to an Employee pursuant to
Section 8.

2.23 “Performance Share” means an Award granted to an Employee pursuant to
Section 8.

2.24 “Period of Restriction” means the period during which the transfer of
Shares of Restricted Stock are subject to restrictions.

2.25 “Plan” means the Central Garden & Pet Company 2003 Omnibus Equity Incentive
Plan, as set forth in this instrument and as hereafter amended from time to
time.

2.26 “Restricted Stock” means an Award granted to a Participant pursuant to
Section 7.

2.27 “Retirement” means, in the case of an Employee, a Termination of Employment
by reason of the Employee’s retirement at or after age 62.

2.28 “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any
future regulation amending, supplementing or superseding such regulation.

 

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2.29 “Section 16 Person” means a person who, with respect to the Shares, is
subject to Section 16 of the 1934 Act.

2.30 “Shares” means (i) the shares of common stock, $0.01 par value, of the
Company (“Common Stock”), (ii) the shares of Class A common stock, $0.01 par
value, of the Company (“Class A Common Stock”) or (iii) shares of preferred
stock, $0.01 par value, with such rights, privileges, restrictions and
preferences as the Board of Directors may authorize from time to time
(“Preferred Stock”).

2.31 “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with a related Option, that pursuant to the terms of Section 7 is
designated as an SAR.

2.32 “Subsidiary” means any “subsidiary corporation” (other than the Company) as
defined in Code Section 424(f).

2.33 “Tandem SAR” means an SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).

2.34 “Termination of Employment” means a cessation of the employee-employer or
director or other service arrangement relationship between an Employee,
Consultant or Director and the Company or an Affiliate for any reason,
including, but not by way of limitation, a termination by resignation,
discharge, death, Disability, Retirement, or the disaffiliation of an Affiliate,
but excluding any such termination where there is a simultaneous reemployment or
re-engagement by the Company or an Affiliate.

SECTION 3

ADMINISTRATION

3.1 The Committee. The Plan shall be administered by the Committee. The
Committee shall consist of not less than two (2) Directors. The members of the
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors. The Committee shall be comprised solely of
Directors who are “outside directors” under Rule 16b-3.

3.2 Authority of the Committee. The Committee shall have all powers and
discretion necessary or appropriate to administer the Plan and to control its
operation, including, but not limited to, the power (a) to determine which
Employees and Consultants shall be granted Awards, (b) to prescribe the terms
and conditions of such Awards, (c) to interpret the Plan and the Awards, (d) to
adopt rules for the administration, interpretation and application of the Plan
as are consistent therewith, and (e) to interpret, amend or revoke any such
rules.

The Committee, in its sole discretion and on such terms and conditions as it may
provide, may delegate all or any part of its authority and powers under the Plan
to one or more directors and/or officers of the Company; provided, however, that
the Committee may not delegate its authority and powers with respect to
Section 16 Persons.

 

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3.3 Decisions Binding. All determinations and decisions made by the Committee
shall be final, conclusive, and binding on all persons, and shall be given the
maximum deference permitted by law.

SECTION 4

SHARES SUBJECT TO THE PLAN

4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the
total number of Shares available for grant under the Plan may not exceed
26,034,982, consisting of (i) a maximum of 5,800,000 shares of Common Stock of
the Company, (ii) a maximum of 19,734,982 shares of Class A Common Stock of the
Company, and (iii) a maximum of 500,000 shares of Preferred Stock of the
Company. Such Shares may be authorized but unissued Shares or Treasury Shares.
No Participant may receive Options or SARs for more than 1,500,000 shares under
the Plan in a calendar year.

The following rules will apply for purposes of the determination of the number
of Shares available for grant under the Plan:

 

  (a) While an Award is outstanding, it shall be counted against the authorized
pool of Shares, regardless of its vested status.

 

  (b) The grant of an Option or Restricted Stock shall reduce the Shares
available for grant under the Plan by the number of Shares subject to such
Award.

 

  (c) The grant of a Tandem SAR shall reduce the number of Shares available for
grant by the number of Shares subject to the related Option (i.e., there is no
double counting of Options and their related Tandem SARs); provided, however,
that, upon the exercise of such Tandem SAR, the authorized Share pool shall be
credited with the appropriate number of Shares representing the number of shares
reserved for such Tandem SAR less the number of Shares actually delivered upon
exercise thereof or the number of Shares having a Fair Market Value equal to the
cash payment made upon such exercise.

 

  (d) The grant of an Affiliated SAR shall reduce the number of Shares available
for grant by the number of Shares subject to the SAR, in addition to the number
of Shares subject to the related Option; provided, however, that, upon the
exercise of such Affiliated SAR, the authorized Share pool shall be credited
with the appropriate number of Shares representing the number of shares reserved
for such Affiliated SAR less the number of Shares actually delivered upon
exercise thereof or the number of Shares having a Fair Market Value equal to the
cash payment made upon such exercise.

 

  (e)

The grant of a Freestanding SAR shall reduce the number of Shares available for
grant by the number of Freestanding SARs

 

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  granted; provided, however, that, upon the exercise of such Freestanding SAR,
the authorized Share pool shall be credited with the appropriate number of
Shares representing the number of shares reserved for such Freestanding SAR less
the number of Shares actually delivered upon exercise thereof or the number of
Shares having a Fair Market Value equal to the cash payment made upon such
exercise.

 

  (f) The Committee shall in each case determine the appropriate number of
Shares to deduct from the authorized pool in connection with the grant of
Performance Units and/or Performance Shares.

 

  (g) To the extent that an Award is settled in cash rather than in Shares, the
authorized Share pool shall be credited with the appropriate number of Shares
having a Fair Market Value equal to the cash settlement of the Award.

 

  (h) The grant of an Award for Preferred Stock shall reduce the number of
shares of Common Stock or Class A Common Stock available for grant by the number
of shares, if any, of Common Stock or Class A Common Stock, issuable upon
conversion of the Preferred Stock; provided, however, that upon conversion of
such Preferred Stock, the authorized Share pool shall be credited with the
appropriate number of shares of Preferred Stock.

4.2 Lapsed Awards. If an Award is cancelled, terminates, expires, or lapses for
any reason (with the exception of the termination of a Tandem SAR upon exercise
of the related Option, or the termination of a related Option upon exercise of
the corresponding Tandem SAR), any Shares subject to such Award again shall be
available to be the subject of an Award.

4.3 Adjustments in Authorized Shares. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, such adjustment shall be made in
the number and class of Shares which may be delivered under the Plan, and in the
number and class of and/or price of Shares subject to outstanding Options, SARs,
and Restricted Stock granted under the Plan, as the Committee, in its sole
discretion, shall determine to be appropriate to prevent the dilution or
diminishment of Awards. Notwithstanding the preceding sentence, the number of
Shares subject to any Award always shall be a whole number.

SECTION 5

STOCK OPTIONS

5.1 Grant of Options. Options may be granted to Employees and Consultants at any
time and from time to time, as determined by the Committee in its sole
discretion. The Committee, in its sole discretion, shall determine the number
and class of Shares subject to

 

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Options granted to each Participant. The Committee may grant ISOs, NQSOs, or a
combination thereof.

5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that
shall specify the Option Price, the expiration date of the Option, the number
and class of Shares to which the Option pertains, any conditions to exercise of
the Option, and such other terms and conditions as the Committee, in its
discretion, shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO or a NQSO.

5.3 Option Price. Subject to the provisions of this Section 5.3, the Option
Price for each Option shall be determined by the Committee in its sole
discretion.

5.3.1 Nonqualified Stock Options. In the case of a Nonqualified Stock Option,
the Option Price shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the date that the Option is granted.

5.3.2 Incentive Stock Options. In the case of an Incentive Stock Option, the
Option Price shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the date that the Option is granted; provided,
however, that if at the time that the Option is granted, the Employee (together
with persons whose stock ownership is attributed to the Employee pursuant to
Section 424(d) of the Code) owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the Option Price shall be not less than one hundred and ten
percent (110%) of the Fair Market Value of a Share on the date that the Option
is granted.

5.3.3 Substitute Options. Notwithstanding the provisions of Sections 5.3.1 and
5.3.2, in the event that the Company or an Affiliate consummates a transaction
described in Section 424(a) of the Code (e.g., the acquisition of property or
stock from an unrelated corporation), persons who become Employees or
Consultants on account of such transaction may be granted Options in
substitution for options granted by their former employer. If such substitute
Options are granted, the Committee, in its sole discretion, may determine that
such substitute Options shall have an exercise price less than 100% of the Fair
Market Value of the Shares on the date the Option is granted.

5.4 Expiration of Options. Unless the applicable stock option agreement provides
otherwise, each Option shall terminate upon the first to occur of the events
listed in Section 5.4.1, subject to Section 5.4.2.

5.4.1 Expiration Dates.

 

  (a) The date for termination of the Option set forth in the written stock
option agreement;

 

  (b) The expiration of ten years from the date the Option was granted, subject
to the provisions of clause (f), below; or

 

  (c)

The expiration of one year from the date of the Optionee’s Termination of
Employment for a reason other than the Optionee’s

 

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  death, Disability or Retirement, subject to the provisions of clause (f)
below; or

 

  (d) The expiration of three years from the date of the Optionee’s Termination
of Employment by reason of Disability, subject to the provisions of clause (f)
below; or

 

  (e) The expiration of three years from the date of the Optionee’s Retirement;
provided that no Incentive Stock Option may be exercised after the expiration of
three months from the date of the Optionee’s Retirement, subject in each case to
the provisions of clause (f) below; or

 

  (f) The expiration of one year from the date of the Optionee’s death, if such
death occurs while the Optionee is in the employ or service of the Company or an
Affiliate or within the one-year or three-year periods referred to in (c),
(d) or (e) above, whichever is applicable.

5.4.2 Committee Discretion. Subject to the provisions of this Section 5.4, the
Committee shall provide, in the terms of each individual Option, when such
Option expires and becomes unexercisable. After the Option is granted, the
Committee, in its sole discretion and subject to Section 5.8.4 and this
Section 5.4, may extend the maximum term of such Option.

5.5 Exercise of Options. Options granted under the Plan shall be exercisable at
such times, and subject to such restrictions and conditions, as the Committee
shall determine in its sole discretion. After an Option is granted, the
Committee, in its sole discretion, may accelerate the exercisability of the
Option.

5.6 Payment. Options shall be exercised by the Participant’s delivery of a
written notice of exercise to the Secretary of the Company, setting forth the
number and class of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

For Options granted prior to December 14, 2005, the Option Price upon exercise
of any Option shall be payable to the Company in full in cash. The Committee, in
its sole discretion and pursuant to such procedures as it may specify from time
to time, also may permit (a) a Participant to elect to have the Company withhold
Shares having a value equal to the amount required to be withheld or by
delivering to the Company already-owned Shares to satisfy the Option Price, or
(b) by any other means which the Committee, in its sole discretion, determines
to both provide legal consideration for the Shares, and to be consistent with
the purposes of the Plan. The value of the Shares to be withheld or delivered
will be based on their Fair Market Value on the date of exercise.

For Options granted on or after December 14, 2005, the Option Price upon
exercise of any Option shall be payable by having the Company withhold Shares
having a value equal to the amount required to be withheld or by delivering to
the Company already-owned Shares to satisfy the Option Price, pursuant to such
procedures as the Committee may specify

 

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from time to time. The Committee, in its sole discretion, also may permit (a) a
Participant to pay the Option Price in full in cash, or (b) by any other means
which the Committee, in its sole discretion, determines to both provide legal
consideration for the Shares, and to be consistent with the purposes of the
Plan. The value of the Shares to be withheld or delivered will be based on their
Fair Market Value on the date of exercise.

As soon as practicable after receipt of a written notification of exercise and
full payment for the Shares purchased, the Company shall deliver to the
Participant Share certificates (in the Participant’s name) representing such
Shares.

If any shares subject to a Stock Award are not delivered to a Participant
because such shares are withheld for the payment of taxes or the Stock Award is
exercised through a reduction of shares subject to the Stock Award (i.e., “net
exercised”), the number of shares that are not delivered to the Participant
shall remain available for issuance under the Plan. If the exercise price of any
Stock Award is satisfied by tendering shares of Common Stock or Class A Common
Stock held by the Participant (either by actual delivery or attestation), then
the number of shares so tendered shall remain available for issuance under the
Plan.

5.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option, as it
may deem advisable, including, but not limited to, restrictions related to
Federal securities laws, the requirements of any national securities exchange or
system upon which such Shares are then listed and/or traded, and/or any blue sky
or state securities laws.

5.8 Certain Additional Provisions for Incentive Stock Options.

5.8.1 Exercisability. The aggregate Fair Market Value (determined at the time
the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by any Employee during any calendar
year (under all plans of the Company and its Subsidiaries) shall not exceed
$100,000.

5.8.2 Termination of Employment. No Incentive Stock Option may be exercised more
than three months after the Participant’s termination of employment for any
reason other than Disability or death, unless (a) the Participant dies during
such three-month period, and (b) the Award Agreement and/or the Committee
permits later exercise. No Incentive Stock Option may be exercised more than one
year after the Participant’s termination of employment on account of Disability,
unless (a) the Participant dies during such one-year period, and (b) the Award
Agreement and/or the Committee permit later exercise.

5.8.3 Company and Subsidiaries Only. Incentive Stock Options may be granted only
to persons who are employees of the Company and/or a Subsidiary at the time of
grant.

5.8.4 Expiration. No Incentive Stock Option may be exercised after the
expiration of 10 years from the date such Option was granted; provided, however,
that if the Option is granted to an Employee who, together with persons whose
stock ownership is attributed to the Employee pursuant to Section 424(d) of the
Code, owns stock possessing more than 10% of the total combined voting power of
all classes of the stock of the Company or any of

 

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its Subsidiaries, the Option may not be exercised after the expiration of 5
years from the date that it was granted.

5.9 Nontransferability of Options. No Option granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will, the laws of descent and distribution, or as provided under
Section 9. All Options granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant.

SECTION 6

STOCK APPRECIATION RIGHTS

6.1 Grant of SARs. An SAR may be granted to an Employee or Consultant at any
time and from time to time as determined by the Committee, in its sole
discretion. The Committee may grant Affiliated SARs, Freestanding SARs, Tandem
SARs, or any combination thereof.

The Committee shall have complete discretion to determine the number and class
of SARs granted to any Participant, and consistent with the provisions of the
Plan, the terms and conditions pertaining to such SARs. However, the grant price
of a Freestanding SAR shall be at least equal to the Fair Market Value of a
Share of Common Stock or Class A Common Stock, as the case may be, on the date
of grant. The grant price of Tandem or Affiliated SARs shall equal the Option
Price of the related Option.

6.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the
Shares subject to the related Option upon the surrender of the right to exercise
the equivalent portion of the related Option. A Tandem SAR may be exercised only
with respect to the Shares for which its related Option is then exercisable.

6.2.1 ISOs. Notwithstanding any contrary provision of the Plan, with respect to
a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR shall expire
no later than the expiration of the underlying ISO; (ii) the value of the payout
with respect to the Tandem SAR shall be for no more than one hundred percent
(100%) of the difference between the Option Price of the underlying ISO and the
Fair Market Value of the Shares subject to the underlying ISO at the time the
Tandem SAR is exercised; and (iii) the Tandem SAR shall be exercisable only when
the Fair Market Value of the Shares subject to the ISO exceeds the Option Price
of the ISO.

6.3 Exercise of Affiliated SARs. An Affiliated SAR shall be deemed to be
exercised upon the exercise of the related Option. The deemed exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option.

6.4 Exercise of Freestanding SARs. Freestanding SARs shall be exercisable on
such terms and conditions as the Committee, in its sole discretion, shall
determine.

6.5 SAR Agreement. Each SAR shall be evidenced by an Award Agreement that shall
specify the grant price, the term of the SAR, the conditions of exercise, and
such other terms and conditions as the Committee, in its sole discretion, shall
determine.

 

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6.6 Expiration of SARs. An SAR granted under the Plan shall expire upon the date
determined by the Committee, in its sole discretion, and set forth in the Award
Agreement. Notwithstanding the foregoing, the rules of Section 5.4 (pertaining
to Options) also shall apply to SARs.

6.7 Payment of SAR Amount. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

 

  (a) The difference between the Fair Market Value of a Share of Common Stock or
Class A Common Stock, as the case may be, on the date of exercise over the grant
price; times

 

  (b) The number of Shares with respect to which the SAR is exercised.

At the discretion of the Committee, the payment upon SAR exercise may be in
cash, in Shares of equivalent value, or in some combination thereof.

6.8 Nontransferability of SARs. No SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will, the laws of descent and distribution, or as permitted under
Section 9. An SAR granted to a Participant shall be exercisable during the
Participant’s lifetime only by such Participant.

SECTION 7

RESTRICTED STOCK

7.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan,
the Committee, at any time and from time to time, may grant Shares of Restricted
Stock to Employees and Consultants in such amounts and class as the Committee,
in its sole discretion, shall determine.

7.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number and class of Shares granted, and such other terms and conditions as
the Committee, in its sole discretion, shall determine. Unless the Committee
determines otherwise, shares of Restricted Stock shall be held by the Company as
escrow agent until the restrictions on such shares have lapsed.

7.3 Transferability. Except as provided in this Section 7, Shares of Restricted
Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable Period of Restriction. All rights
with respect to the Restricted Stock granted to a Participant under the Plan
shall be available during his or her lifetime only to such Participant.

7.4 Other Restrictions. The Committee, in its sole discretion, may impose such
other restrictions on any Shares of Restricted Stock as it may deem advisable
including, without limitation, restrictions based upon the achievement of
specific performance goals (Company-wide, divisional, and/or individual), and/or
restrictions under applicable Federal or state securities laws; and may legend
the certificates representing Restricted Stock to give

 

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appropriate notice of such restrictions. For example, the Committee may
determine that some or all certificates representing Shares of Restricted Stock
shall bear the following legend:

“The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer as set forth in the Central Garden & Pet
Company 2003 Omnibus Equity Incentive Plan, and in a Restricted Stock Agreement.
A copy of the Plan and such Restricted Stock Agreement may be obtained from the
Secretary of Central Garden & Pet Company.”

7.5 Removal of Restrictions. Except as otherwise provided in this Section 7,
Shares of Restricted Stock covered by each Restricted Stock grant made under the
Plan shall be released from escrow as soon as practicable after the last day of
the Period of Restriction. The Committee, in its discretion, may accelerate the
time at which any restrictions shall lapse, and/or remove any restrictions.
After the restrictions have lapsed, the Participant shall be entitled to have
any legend or legends under Section 7.4 removed from his or her Share
certificate, and the Shares shall be freely transferable by the Participant.

7.6 Voting Rights. During the Period of Restriction, Participants holding Shares
of Restricted Stock granted hereunder may exercise full voting rights, if any,
with respect to those Shares, unless the Committee determines otherwise.

7.7 Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive all
dividends and other distributions paid with respect to such Shares, unless
otherwise provided in the Award Agreement. If any such dividends or
distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

7.8 Return of Restricted Stock to Company. Subject to the applicable Award
Agreement and Section 7.5, upon the earlier of (a) the Participant’s termination
of employment, or (b) the date set forth in the Award Agreement, the Restricted
Stock for which restrictions have not lapsed shall revert to the Company and,
subject to Section 4.2, again shall become available for grant under the Plan.

SECTION 8

PERFORMANCE UNITS AND PERFORMANCE SHARES

8.1 Grant of Performance Units/Shares. Performance Units and Performance Shares
may be granted to Employees and Consultants at any time and from time to time,
as shall be determined by the Committee, in its sole discretion. The Committee
shall have complete discretion in determining the number and class of
Performance Units and Performance Shares granted to each Participant.

8.2 Value of Performance Units/Shares. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The

 

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Committee shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the number and/or value of
Performance Units/Shares that will be paid out to the Participants. The time
period during which the performance goals must be met shall be called the
“Performance Period”.

8.3 Earning of Performance Units/Shares. After the applicable Performance Period
has ended, the holder of Performance Units/Shares shall be entitled to receive a
payout of the number of Performance Units/Shares earned by the Participant over
the Performance Period, to be determined as a function of the extent to which
the corresponding performance goals have been achieved. After the grant of a
Performance Unit/Share, the Committee, in its sole discretion, may adjust and/or
waive the achievement of any performance goals for such Performance Unit/Share.

8.4 Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares shall be made as soon as practicable after the
expiration of the applicable Performance Period. The Committee, in its sole
discretion, may pay earned Performance Units/Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period) or in a combination thereof.

8.5 Cancellation of Performance Units/Shares. Subject to the applicable Award
Agreement, upon the earlier of (a) the Participant’s termination of employment,
or (b) the date set forth in the Award Agreement, all remaining Performance
Units/Shares shall be forfeited by the Participant to the Company, and subject
to Section 4.2, the Shares subject thereto shall again be available for grant
under the Plan.

8.6 Nontransferability. Performance Units/Shares may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will,
the laws of descent and distribution, or as permitted under Section 9. A
Participant’s rights under the Plan shall be exercisable during the
Participant’s lifetime only by the Participant or the Participant’s legal
representative.

SECTION 9

BENEFICIARY DESIGNATION

If permitted by the Committee, a Participant may name a beneficiary or
beneficiaries to whom any unpaid vested Award shall be paid in event of the
Participant’s death. Each such designation shall revoke all prior designations
by the same Participant and shall be effective only if given in a form and
manner acceptable to the Committee. In the absence of any such designation,
benefits remaining unpaid at the Participant’s death shall be paid to the
Participant’s estate and, subject to the terms of the Plan, any unexercised
vested Award may be exercised by the administrator or executor of the
Participant’s estate.

SECTION 10

DEFERRALS

The Committee, in its sole discretion, may permit a Participant to defer receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant

 

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under an Award. Any such deferral elections shall be subject to such rules and
procedures as shall be determined by the Committee in its sole discretion.

SECTION 11

RIGHTS OF EMPLOYEES AND CONSULTANTS

11.1 No Effect on Employment or Service. Nothing in the Plan shall interfere
with or limit in any way the right of the Company to terminate any Participant’s
employment or service at any time, with or without cause.

11.2 Participation. No Employee or Consultant shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.

SECTION 12 AMENDMENT, SUSPENSION, OR TERMINATION

12.1 Amendment, Suspension, or Termination. The Board, in its sole discretion,
may alter, amend or terminate the Plan, or any part thereof, at any time and for
any reason. However, as required by applicable law, no alteration or amendment
shall be effective without further shareholder approval. Neither the amendment,
suspension, nor termination of the Plan shall, without the consent of the
Participant, alter or impair any rights or obligations under any Award
theretofore granted. No Award may be granted during any period of suspension nor
after termination of the Plan.

SECTION 13

TAX WITHHOLDING

13.1 Withholding Requirements. Prior to the delivery of any Shares or cash
pursuant to an Award, the Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes required to be withheld
with respect to such Award.

13.2 Shares Withholding. The Committee, in its sole discretion and pursuant to
such procedures as it may specify from time to time, may permit a Participant to
satisfy the minimum statutory tax withholding obligation, in whole or in part,
by electing to have the Company withhold Shares having a value equal to the
amount required to be withheld or by delivering to the Company already-owned
shares to satisfy the withholding requirement. The value of the Shares to be
withheld or delivered will be based on their Fair Market Value on the date that
the taxes are required to be withheld.

SECTION 14

INDEMNIFICATION

Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, notion,
suit, or proceeding to which he or she may

 

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be a party or in which he or she may be involved by reason of any action taken
or failure to act under the Plan or any Award Agreement and against and from any
and all amounts paid by him or her in settlement thereof, with the Company’s
approval, or paid by him or her in settlement thereof, with the Company’s
approval, or paid by him or her in satisfaction of any judgment in any such
action, suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold them harmless.

SECTION 15

SUCCESSORS

All obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

SECTION 16

LEGAL CONSTRUCTION

16.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

16.2 Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, such illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included.

16.3 Requirements of Law. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

16.4 Securities Law Compliance. With respect to Section 16 Persons, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3. To the extent any provision of the Plan, Award Agreement or action by the
Committee fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee.

16.5 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of California.

16.6 Captions. Captions are provided herein for convenience only, and shall not
serve as a basis for interpretation or construction of the Plan.

 

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