Exhibit 10(dd)
Summary of Compensation for Directors of The Scotts Miracle-Gro Company
Annual Retainer; Reimbursement of Expenses
Each director of The Scotts Miracle-Gro Company (“Scotts Miracle-Gro”) who is
not an employee of Scotts Miracle-Gro or its subsidiaries (a “non-employee
director”) receives a $40,000 annual retainer for Scotts Miracle-Gro Board of
Directors and Board committee meetings. Each member of the Audit Committee of
Scotts Miracle-Gro’s Board of Directors receives an additional $5,000 annually.
Annual retainers are pro-rated if a non-employee director is appointed by the
Board of Directors during the year. Non-employee directors receive reimbursement
of all reasonable travel and other expenses of attending Scotts Miracle-Gro
Board of Directors and Board committee meetings.
Stock Units
Prior to January 26, 2006, non-employee directors were able to elect under The
Scotts Miracle-Gro Company 1996 Stock Option Plan (now known as The Scotts
Miracle-Gro Company Amended and Restated 1996 Stock Option Plan) (the “1996
Plan”) and The Scotts Miracle-Gro Company 2003 Stock Option and Incentive Equity
Plan (now known as The Scotts Miracle-Gro Company Amended and Restated 2003
Stock Option and Incentive Equity Plan) (the “2003 Plan”), to receive all or a
portion, in 25% increments, of their annual cash retainer in cash or in stock
units. If stock units were elected, the non-employee director received a number
of stock units determined by dividing the chosen dollar amount by the closing
price of Scotts Miracle-Gro’s common shares on the New York Stock Exchange
(“NYSE”) on the first trading day following the date of the annual meeting of
shareholders of Scotts Miracle-Gro for which the deferred value of the annual
cash retainer otherwise would have been paid. The terms of the stock units and
their settlement are set forth in the 1996 Plan and the 2003 Plan, as
applicable.

 

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Following the approval of The Scotts Miracle-Gro Company 2006 Long-Term
Incentive Plan (now known as The Scotts Miracle-Gro Company Amended and Restated
2006 Long-Term Incentive Plan) (the “2006 Plan”) by the shareholders of Scotts
Miracle-Gro on January 26, 2006, the non-employee directors have had the
opportunity to elect, under the 2006 Plan, to receive all or a portion (in 25%
increments) of their 2007 and 2006 annual cash retainer in cash or in stock
units. If stock units were elected, the non-employee director received a number
of stock units determined by dividing the chosen dollar amount by the closing
price of Scotts Miracle-Gro’s common shares on NYSE on the first trading day
following the date of the annual meeting of shareholders of Scotts Miracle-Gro
for which the deferred value of the annual cash retainer otherwise would have
been paid. Final distributions in respect of stock units are to be made in cash
or common shares, as elected by the non-employee director, upon the date that
the non-employee director ceases to be a member of the Scotts Miracle-Gro Board
of Directors, upon the date the non-employee director has specified in his or
her deferral form or upon a “change in control” (as defined in the 2006 Plan),
whichever is earliest. If stock units are to be settled in cash, the amount
distributed will be calculated by multiplying the number of stock units to be
settled in cash by the fair market value of Scotts Miracle-Gro’s common shares.
If stock units are to be settled in common shares, the number of common shares
distributed will equal the whole number of stock units to be settled in common
shares, with the fair market value of any fractional stock units distributed in
cash. Distributions may be made either in a lump sum or in installments over a
period of up to ten years, as elected by the non-employee director. However,
upon a change in control, each outstanding stock unit held by a non-employee
director will be settled for a lump sum cash payment equal to the change in
control price per common share.
Non-Qualified Stock Options
Prior to January 26, 2006, individuals then serving as non-employee directors
automatically received an annual grant, on the first business day following the
date of each annual meeting of shareholders of Scotts Miracle-Gro, of
non-qualified stock options (“NSOs”) to purchase 10,000 common shares at an
exercise price equal to the fair market value of the Scotts Miracle-Gro common
shares on the grant date. Non-employee directors who were members of one or more
committees of the Scotts Miracle-Gro Board of Directors received NSOs to
purchase an additional 1,000 common shares for each committee on which they
served. Additionally, non-employee directors who chaired a committee received
NSOs to purchase an additional 2,000 common shares for each committee they
chaired. These NSOs were granted under the 1996 Plan or the 2003 Plan. Since the
approval of the 2006 Plan, no further automatic grants have been or will be made
under the 1996 Plan or the 2003 Plan.
Grants of NSOs to directors under the 2006 Plan are discretionary. On
January 26, 2007, consistent with the automatic grants which had previously been

 

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made under the 1996 Plan and the 2003 Plan, each of the individuals then serving
as a non-employee director of Scotts Miracle-Gro received a grant of NSOs to
purchase 10,000 common shares of Scotts Miracle-Gro. Non-employee directors who
were members of one or more committees of the Board of Directors received NSOs
to purchase an additional 1,000 common shares for each committee on which they
served. Additionally, non-employee directors who chaired a committee received
NSOs to purchase an additional 2,000 common shares for each committee they
chaired. Each of the NSOs granted on January 26, 2007 has an exercise price
$53.15, the closing price of Scotts Miracle-Gro’s common shares on NYSE on the
grant date. The NSOs granted to the non-employee directors then serving on
January 26, 2007 will vest and become exercisable on January 26, 2008.
Once vested, NSOs remain exercisable until the earlier to occur of the tenth
anniversary of the grant date or the first anniversary of the date the
non-employee director ceases to be a member of Scotts Miracle-Gro’s Board of
Directors. However, if the non-employee director ceases to be a member of the
Scotts Miracle-Gro Board of Directors after having been convicted of, or pled
guilty or nolo contendere to, a felony, his or her NSOs will be cancelled on the
date he or she ceases to be a director. If the non-employee director ceases to
be a member of the Scotts Miracle-Gro Board of Directors after having retired
after serving at least one full term, his or her NSOs will remain exercisable
for a period of five years following retirement subject to the stated terms of
the NSOs.
Upon a change in control of Scotts Miracle-Gro, each non-employee director’s
outstanding NSOs granted under the 2003 Plan or the 2006 Plan will be cancelled,
unless (a) Scotts Miracle-Gro’s common shares remain publicly traded, (b) the
non-employee director remains a director of Scotts Miracle-Gro after the change
in control or (c) the non-employee director exercises, with the permission of
the Compensation and Organization Committee (in the case of NSOs granted under
the 2003 Plan) or the Board of Directors (in the case of NSOs granted under the
2006 Plan), the non-employee director’s outstanding NSOs within 15 days of the
date of the change in control. In addition, each non-employee director’s
outstanding NSOs granted under the 1996 Plan will be cancelled unless the
non-employee director exercises, with the permission of the Compensation and
Organization Committee, the non-employee director’s outstanding NSOs within
15 days of the date of the change in control. For each cancelled NSO, a
non-employee director will receive cash in the amount of, or common shares
having a value equal to, the difference between the change in control price per
common share and the exercise price per common share associated with the
cancelled NSO.