Document:

SMG 2013 10-Q1 Exhibit 10-4

Exhibit 10.4

THE SCOTTS MIRACLE-GRO COMPANY
LONG-TERM INCENTIVE PLAN
(As Amended And Restated January 17, 2013) 

DEFERRED STOCK UNIT AWARD AGREEMENT
FOR NONEMPLOYEE DIRECTORS 
(WITH RELATED DIVIDEND EQUIVALENTS)

DEFERRED STOCK UNITS GRANTED TO
[Director’s Name] ON [Grant Date]

The Scotts Miracle-Gro Company (“Company”) believes that its 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 The Scotts Miracle-Gro Company Long-Term Incentive Plan, as amended and restated January 17, 2013 (“Plan”) through which members of its Board of Directors, like you, may acquire (or share in the appreciation of) common shares, without par value, of the Company (“Shares”).  Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Plan.

This Award Agreement describes the type of Award that you have been granted and the terms and conditions of your Award.  To ensure you fully understand these terms and conditions, you should:

-    Read the Plan and this Award Agreement carefully; and

-    Contact [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: [Title]
14111 Scottslawn Road
Marysville, Ohio 43041

Also, no later than [Date 30 Days After Grant Date], you must return a signed copy of this Award Agreement to:

[Third Party Administrator]
Attention:  [TPA Contact’s Name]
[TPA Contact’s Address]

[TPA Telephone Number]

The Company intends that this Award satisfy the requirements of Section 409A of the Code and that this Award Agreement be so administered and construed.  You agree that the Company may modify this Award Agreement, without any further consideration, to fulfill this intent, even if those modifications change the terms of your Award and reduce its value or potential value.

1.    DESCRIPTION OF YOUR DEFERRED STOCK UNITS
You have been granted [insert Number] of deferred stock units (“DSUs”) and an equal number of related dividend equivalents, subject to the terms and conditions of the Plan and this Award Agreement.  The “Grant Date” of your Award is [insert Grant Date].  Each whole DSU represents the right to receive one full Share at the time and in the manner described in this Award Agreement.   Each dividend equivalent represents the right to receive additional DSUs (determined in accordance with Section 3(e)) in respect of the dividends that are declared and paid during the period beginning on the Grant Date and ending on the Settlement Date (as described in Section 2(b)) with respect to the Share represented by the related DSU.  
2.    VESTING AND SETTLEMENT
(a)    Vesting.  Subject to Sections 3(a) and 3(b), your DSUs will become 100% vested on [insert  third anniversary of the Grant Date] (“Vesting Date”), including any DSUs received pursuant to Section 3(e) on or prior to the Vesting Date.  Any DSUs received pursuant to Section 3(e) following the Vesting Date will be 100% vested on the date they are credited to you.  
(b)    Settlement.  Subject to the terms of the Plan, your vested DSUs shall be settled in a lump sum as soon as administratively practicable, but no later than 90 days, following the earliest to occur of: (i) your Termination; (ii) your death; (iii) the date you become Disabled (as defined below); or (iv) the third anniversary of the Grant Date (the “Settlement Date”).  Your whole DSUs shall be settled in full Shares, and any fractional DSU shall be settled in cash, determined based upon the Fair Market Value of a Share on the Settlement Date.  For purposes of this Award Agreement, “Disabled” means that you have been determined to be totally disabled by the Social Security Administration.
3.    GENERAL TERMS AND CONDITIONS
(a)    YOU MAY FORFEIT YOUR DSUs IF YOU TERMINATE.  Except as otherwise provided in this Section 3(a) and Section 3(b), you will forfeit your DSUs if you Terminate prior to the Vesting Date:

(i)    If you Terminate for Cause (as defined below) prior to the Vesting Date, your DSUs will be forfeited immediately.  For purposes of this Award Agreement, “Cause” means your conviction of, or plea of guilty or nolo contendere to, a felony.

(ii)    If you (A) Terminate (other than for Cause) after completing at least one full term of continuous service on the Board of Directors, (B) die or (C) become Disabled, the DSUs granted during your first term will become 100% vested as of the date of such event.

(iii)    If you Terminate for any reason not described in Section 3(a)(i) or 3(a)(ii) prior to the Vesting Date, your DSUs will be forfeited immediately.

(b)    CHANGE IN CONTROL.  Normally, your DSUs will vest and be settled only under the circumstances described in Sections 2 and 3(a).  However, if there is a Change in Control, your DSUs will become 100% vested on the date of the Change in Control and will be settled as 

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described in the Plan.  You should read the Plan carefully to ensure that you understand how this may happen.
(c)    AMENDMENT AND TERMINATION.  Subject to the terms of the Plan, the Company may amend or terminate this Award Agreement or the Plan at any time.
(d)    RIGHTS BEFORE YOUR DSUs ARE SETTLED.  Except as provided in Section 3(e) below, you will have none of the rights of a shareholder with respect to Shares underlying the DSUs unless and until you become the record holder of such Shares.
(e)    DIVIDEND EQUIVALENTS.  With respect to each dividend equivalent:
(i)    If a cash dividend is declared and paid on the Shares underlying the DSUs, you will receive an additional number of DSUs equal to the quotient of:
(A)    the product of (I) the number of DSUs granted under this Award Agreement (including additional DSUs previously received in accordance with this Section 3(e)) that have not been settled as of the dividend payment date, multiplied by (II) the amount of the cash dividend paid per Share; divided by
(B)    the Fair Market Value (which shall be equal to the closing price) of a Share on the date such cash dividend is paid.
Any additional DSU credited pursuant to this Section 3(e)(i) shall be subject to the same terms and conditions as the DSUs granted pursuant to Section 1 above.
(ii)    If a Share dividend is declared and paid on the Shares underlying the DSUs, you will receive an additional number of DSUs equal to the product of (A) the number of DSUs granted under this Award Agreement (including additional DSUs previously received in accordance with this Section 3(e)) that have not been settled as of the dividend payment date, multiplied by (B) the dividend paid per Share.  Any additional DSUs credited pursuant to this Section 3(e)(ii) shall be subject to the same terms and conditions as the DSUs granted pursuant to Section 1 above.
(iii)    Any fractional number of DSUs resulting from the calculations under this Section 3(e) shall be rounded to the nearest whole Share. 
(f)    BENEFICIARY DESIGNATION.  You may name a beneficiary or beneficiaries to receive any DSUs and related dividend equivalents that vest before you die but are settled after you die.  This may be done only on a Beneficiary Designation Form and by following the rules described in that Form.  The Beneficiary Designation Form does not need to be completed now and is not required as a condition of receiving your Award.  However, 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.
(g)    TRANSFERRING YOUR DSUs AND RELATED DIVIDEND EQUIVALENTS.  Normally your DSUs and the related dividend equivalents may not be transferred to another person.  However, as described in Section 3(f), you may complete a Beneficiary Designation Form to name the person to receive any DSUs and related dividend equivalents that 

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vest before you die but are settled after you die.  Also, the Committee may allow you to place your DSUs and dividend equivalents into a trust established for your benefit or the benefit of your family.  Contact [Third Party Administrator] at [TPA Telephone Number] or at the address given above if you are interested in doing this.

(h)    GOVERNING LAW.  This Award Agreement shall be governed by the laws of the State of Ohio, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

(i)    OTHER AGREEMENTS AND POLICIES.  Your DSUs and the related dividend equivalents 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.  Your DSUs and related dividend equivalents granted under the Plan shall be subject to any applicable Company clawback or recoupment policies, share trading policies and other policies that may be implemented by the Company from time to time.
(j)    ADJUSTMENTS TO YOUR DSUs.  Subject to the terms of the Plan, your DSUs and the related dividend equivalents will be adjusted, if appropriate, to reflect any change to the Company’s capital structure (e.g., the number of Shares underlying your DSUs will be adjusted to reflect a stock split).
(k)    OTHER RULES.  Your DSUs and dividend equivalents are subject to more rules described in the Plan.  You should read the Plan carefully to ensure you fully understand all the terms and conditions of the grant of DSUs and the related dividend equivalents under this Award Agreement. 

4.    YOUR ACKNOWLEDGMENT OF AWARD CONDITIONS
By signing below, you acknowledge and agree that:
(a)    A copy of the Plan has been made available to you;
(b)    You understand and accept the terms and conditions of your Award;
(c)    You will consent (on your own behalf and on behalf of your beneficiaries and transferees and without any further consideration) to any necessary change to your Award or this Award Agreement to comply with any law and to avoid paying penalties under Section 409A of the Code, even if those changes affect the terms of your Award and reduce its value or potential value; and

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(d)    You must return a signed copy of this Award Agreement to the address given above before [Date 30 Days After Grant Date].
	
		
	[Director’s Name]

By: ______________________________

Date signed: ________________________
	THE SCOTTS MIRACLE-GRO COMPANY

By: ___________________________________

[Name of Company Representative]
[Title of Company Representative]
Date signed: ____________________________SMG 2013 10-Q1 Exhibit 10-5

Exhibit 10.5

THE SCOTTS MIRACLE-GRO COMPANY
LONG-TERM INCENTIVE PLAN
(As Amended And Restated January 17, 2013)

RESTRICTED STOCK UNIT AWARD AGREEMENT FOR EMPLOYEES 
(with related dividend equivalents)

RESTRICTED STOCK UNITS GRANTED TO
[Grantee’s Name] ON [Grant Date]

This Award Agreement describes the type of Award that you have been granted and the terms and conditions of your Award.  

1.    DESCRIPTION OF YOUR RESTRICTED STOCK UNITS.  You have been granted [Number] Restricted Stock Units (“RSUs”) and an equal number of related dividend equivalents.  The “Grant Date” of your Award is [Grant Date].  Each whole RSU represents the right to receive one full Share at the time and in the manner described in this Award Agreement.  Subject to Section 5 of this Award Agreement, each dividend equivalent represents the right to receive an amount equal to the dividends that are declared and paid during the period beginning on the Grant Date and ending on the Settlement Date (as described in Section 4(a) of this Award Agreement) with respect to the Share represented by the related RSU.  To accept this Award Agreement, you must return a signed copy of this Award Agreement no later than [Date 30 Days After Grant Date], to [Third Party Administrator] (the “Third Party Administrator”) as follows:

[Third Party Administrator]
Attention:  [TPA Contact’s Name]
[TPA Contact’s Address]
[TPA Telephone Number]

		
	2.
	INCORPORATION OF PLAN AND DEFINITIONS.  

		
	(a)
	This Award Agreement and your RSUs are granted pursuant to and in accordance with The Scotts Miracle-Gro Company Long-Term Incentive Plan as amended and restated January 17, 2013 (the “Plan”).  All provisions of the Plan are incorporated herein by reference, and your RSUs and related dividend equivalents are subject to the terms of the Plan and this Award Agreement.  To the extent there is a conflict between this Award Agreement and the Plan, the Plan will govern.  

		
	(b)
	Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Plan.

3.    VESTING.  Except as provided in Section 6 of this Award Agreement, the RSUs described in this Award Agreement will vest as follows:

		
	(a)
	General Vesting.  If your employment continues from the Grant Date until the third anniversary of the Grant Date, in this case [Vesting Date] (the “Vesting Date”), your 

RSUs described in this Award Agreement will become 100% vested on the Vesting Date; or

		
	(b)
	Accelerated Vesting.  Under the following circumstances, your RSUs described in this Award Agreement will become 100% vested earlier than the Vesting Date:

		
	(i)
	If you Terminate because of your death or because you become Disabled (as defined below), your RSUs described in this Award Agreement will become 100% vested as of the date of such event and will be settled in accordance with Section 4 of this Award Agreement.  For purposes of this Award Agreement, “Disabled” means (A) you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, (B) you are, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees of your employer, or (C) you are determined to be totally disabled by the Social Security Administration or Railroad Retirement Board; or

		
	(ii)
	If you Terminate for a reason other than Cause after reaching age 55 and completing at least 10 years of employment with the Company, its Affiliates and/or its Subsidiaries, your RSUs described in this Award Agreement will become 100% vested as of the date of such event and will be settled in accordance with Section 4 of this Award Agreement.

4.    SETTLEMENT.  
		
	(a)
	Subject to the terms of the Plan and this Award Agreement, your vested RSUs, minus any shares that are withheld for taxes as provided under Section 4(c), shall be settled in a lump sum as soon as administratively practicable, but no later than 90 days following the earliest date to occur of: (i) your Termination due to your death or Disability; or (ii) the third anniversary of the Grant Date (the “Settlement Date”).  Your whole RSUs shall be settled in full Shares, and any fractional RSU shall be settled in cash, determined based upon the Fair Market Value of a Share on the Settlement Date.

		
	(b)
	Except as provided in Section 5 of this Award Agreement, you will have none of the rights of a shareholder with respect to Shares underlying the RSUs unless and until you become the record holder of such Shares.

		
	(c)
	You may use one of the following methods to pay the required withholding taxes related to the vesting of your RSUs.  You will decide on the method at the time 

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prescribed by the Company.  If you do not elect one of these methods, the Company will apply the Net Settlement method described below:
		
	 (i)
	CASH PAYMENT: If you elect this alternative, you will be responsible for paying the Company through the Third Party Administrator cash equal to the minimum statutory withholding requirements applicable on your RSUs.

		
	(ii) 
	NET SETTLEMENT: If you elect this alternative, the Company will retain the number of shares with a Fair Market Value equal to the minimum statutory withholding requirements applicable on your RSUs.  

		
	(d)
	Normally, your RSUs will vest and be settled only under the circumstances described above.  However, if there is a Change in Control, your RSUs will become 100% vested on the date of the Change in Control and will be settled as described in the Plan.  See the Plan for further details.

5.    DIVIDEND EQUIVALENTS.  You will be entitled to receive a dividend equivalent equal to any dividends declared and paid on each Share represented by a related RSU, subject to the same terms and conditions as the related RSU.  Any dividend equivalents described in this Section 5 will be distributed to you in accordance with Section 4 of this Award Agreement or forfeited, depending on whether or not you have met the conditions described in this Award Agreement and the Plan.  Any such distributions will be made in (i) cash, for any dividend equivalents relating to cash dividends and/or (ii) Shares, for any dividend equivalents relating to Share dividends.

6.    FORFEITURE.  

		
	(a)
	Except as otherwise provided in Section 3 or Section 4(d) of this Award Agreement, you will forfeit your unvested RSUs if you Terminate prior to the Vesting Date.

		
	(b)
	If you engage in “Conduct That Is Harmful To The Company” (as described below), you will forfeit your RSUs and related dividend equivalents and must return to the Company all Shares and other amounts you have received through the Plan or this Award Agreement if, without the Company’s written consent, you do any of the following within 180 days before and 730 days after you Terminate: 

		
	(i)
	You breach any confidentiality, nondisclosure, and/or noncompetition obligations under any agreement or plan with the Company or any Affiliate or Subsidiary; 

		
	(ii)
	You fail or refuse to consult with, supply information to or otherwise cooperate with the Company or any Affiliate or Subsidiary after having been requested to do so;

		
	(iii)
	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;

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	(iv)
	You fail to return all property (other than personal property), including vehicles, computer or other equipment or electronic devices, 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 provided to you in the course of your employment with the Company or any Affiliate or Subsidiary; or

		
	(v)
	You engaged in conduct that the Committee reasonably concludes would have given rise to a Termination for Cause had it been discovered before you Terminated.

7.    AMENDMENT AND TERMINATION.  Subject to the terms of the Plan, the Company may amend or terminate this Award Agreement or the Plan at any time.
8.    BENEFICIARY DESIGNATION.  You may name a beneficiary or beneficiaries to receive any RSUs and related dividend equivalents that vest before you die but 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.  The Beneficiary Designation Form does not need to be completed now and is not required as a condition of receiving your Award.  However, 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.
9.    TRANSFERRING YOUR RSUs AND RELATED DIVIDEND EQUIVALENTS.  Except as described in Section 8, your RSUs and related dividend equivalents may not be transferred to another person. Also, the Committee may allow you to place your RSUs and related dividend equivalents into a trust established for your benefit or the benefit of your family.  Contact the Third Party Administrator for further details.

10.    GOVERNING LAW.  This Award Agreement shall be governed by the laws of the State of Ohio, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

11.    OTHER AGREEMENTS AND POLICIES.  Your RSUs and related dividend equivalents 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.  Your RSUs and related dividend equivalents granted under the Plan shall be subject to any applicable Company clawback or recoupment policies, share trading policies and other policies that may be implemented by the Company from time to time.
12.    ADJUSTMENTS TO YOUR RSUs.  Subject to the terms of the Plan, your RSUs and related dividend equivalents will be adjusted, if appropriate, to reflect any change to the Company’s capital structure (e.g., the number of Shares underlying your RSUs will be adjusted to reflect a stock split).

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13.    YOUR ACKNOWLEDGMENT OF AND AGREEMENT TO AWARD CONDITIONS.
By signing below, you acknowledge and agree that:
(a)    A copy of the Plan has been made available to you;
(b)    You understand and accept the terms and conditions of your Award;
		
	(c)
	You will consent (on your own behalf and on behalf of your beneficiaries and transferees and without any further consideration) to any necessary change to your Award or this Award Agreement to comply with any law and to avoid paying penalties under Section 409A of the Code, even if those changes affect the terms of your Award and reduce its value or potential value; and

		
	(d)
	You must return a signed copy of this Award Agreement to the address given above before [Date 30 Days After Grant Date].

	
		
	[Grantee’s Name]

By: ______________________________

Date signed: ________________________
	THE SCOTTS MIRACLE-GRO COMPANY

By: ___________________________________

[Name of Company Representative]
[Title of Company Representative]
Date signed: ____________________________

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