(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended September 30, 2007 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to | ||
Commission file number 1-13292 |
Ohio | 31-1414921 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
14111 Scottslawn Road, Marysville, Ohio
|
43041 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class
|
Name of Each Exchange On Which Registered
|
|
Common Shares, without par value
|
New York Stock Exchange |
ITEM 1.
BUSINESS
Category
Brands
Scotts
®
;
Turf
Builder
®
Miracle-Gro
®
;
Osmocote
®
;
LiquaFeed
®
Miracle-Gro
®
;
Scotts
®
;
Hyponex
®
;
Earthgro
®
;
SuperSoil
®
Scotts
®
;
Turf
Builder
®
Ortho
®
;
Bug-B-Gon
®
;
Weed-B-Gon
®
;
Roundup
®
Smith &
Hawken
®
Morning
Song
®
;
Scotts
®
North America;
Scotts
LawnService
®
;
International; and
Corporate & Other.
that we have identified all of the significant sites that must
be remediated;
that there are no significant conditions of potential
contamination that are unknown to us; and
that with respect to the agreed judicial consent order in Ohio,
the potentially contaminated soil can be remediated in place
rather than having to be removed and only specific stream
segments will require remediation as opposed to the entire
stream.
ITEM 1A.
RISK
FACTORS
that we have identified all of the significant sites that must
be remediated;
that there are no significant conditions of potential
contamination that are unknown to us; and
that with respect to the agreed judicial consent order in Ohio
relating to the remediation of the Marysville site, the
potentially contaminated soil can be remediated in place rather
than having to be removed and only specific stream segments will
require remediation as opposed to the entire stream.
make it more difficult for us to satisfy our obligations under
outstanding indebtedness;
increase our vulnerability to general adverse economic and
industry conditions;
require us to dedicate a substantial portion of cash flows from
operating activities to payments on our indebtedness, which
would reduce the cash flows available to fund working capital,
capital expenditures, advertising, research and development
efforts and other general corporate requirements;
limit our flexibility in planning for, or reacting to, changes
in our business and the industry in which we operate;
place us at a competitive disadvantage compared to our
competitors that have less debt;
limit our ability to borrow additional funds; and
expose us to risks inherent in interest rate fluctuations
because some of our borrowings are at variable rates of
interest, which could result in higher interest expense in the
event of increases in interest rates.
fluctuations in currency exchange rates;
limitations on the remittance of dividends and other payments by
foreign subsidiaries;
additional costs of compliance with local regulations; and
historically, in certain countries, higher rates of inflation
than in the United States.
ITEM 1B.
UNRESOLVED
STAFF COMMENTS
ITEM 2.
PROPERTIES
ITEM 3.
LEGAL
PROCEEDINGS
ITEM 4.
SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS
Years with
Name
Age
Position(s) Held
Company
52
President, Chief Executive Officer and Chairman of the Board
20
44
Executive Vice President and Chief Financial Officer
14
53
Executive Vice President, Global Human Resources
7
43
Executive Vice President, North America
6
46
Executive Vice President, International and Chief Marketing
Officer
6
ITEM 5.
MARKET FOR
REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Sale Prices
High
Low
$
54.72
$
44.02
$
57.45
$
40.57
$
47.30
$
42.80
$
49.69
$
40.60
$
48.11
$
41.37
$
50.47
$
44.94
$
47.50
$
39.40
$
44.98
$
37.22
ITEM 6.
SELECTED
FINANCIAL DATA
For the fiscal year ended September 30,
(in millions, except per share amounts)
2007
2006(2)
2005(2)
2004
2003
$
2,871.8
$
2,697.1
$
2,369.3
$
2,106.5
$
1,941.6
1,004.5
955.9
860.4
792.4
701.7
277.1
252.5
200.9
252.8
231.6
113.4
132.7
100.4
100.5
103.2
113.4
132.7
100.6
100.9
103.8
67.5
67.0
67.2
57.7
52.2
412.7
445.8
301.6
396.7
364.4
1.7
1.9
1.6
1.9
1.8
365.9
367.6
337.0
328.0
338.2
2,277.2
2,217.6
2,018.9
2,047.8
2,030.3
70.0
%
30.8
%
27.7
%
41.9
%
51.0
%
1,117.8
481.2
393.5
630.6
757.6
479.3
1,081.7
1,026.2
874.6
728.2
246.6
182.4
226.7
214.2
216.1
54.0
57.0
40.4
35.1
51.8
21.4
122.9
84.6
20.5
57.1
$
1.74
$
1.97
$
1.51
$
1.56
$
1.68
1.69
1.91
1.47
1.52
1.62
543.6
33.5
8.6
$
0.50
$
0.50
$
0.125
8.00
42.75
44.49
43.97
32.08
27.35
57.45
50.47
43.97
34.28
28.85
40.57
37.22
30.95
27.63
21.77
382.6
385.9
291.5
310.5
283.8
5.4
9.7
7.0
6.4
4.1
65.2
67.5
66.8
64.7
61.8
67.0
69.4
68.6
66.6
64.3
(1)
All common share and per share information presented in the
above five-year summary have been adjusted to reflect the
2-for-1
stock split of the common shares which was distributed on
November 9, 2005 to shareholders of record on
November 2, 2005.
(2)
Fiscal 2006 includes Rod McLellan Company, Gutwein &
Co., Inc. and certain brands and assets acquired from Turf-Seed,
Inc. and Landmark Seed Company from the dates of acquisition.
Fiscal 2005 includes Smith &
Hawken
®
from the October 2, 2004 date of acquisition. See further
discussion of acquisitions in Note 7 to the Consolidated
Financial Statements included in this Annual Report on
Form 10-K.
(3)
Operating results includes the following items segregated by
accounts impacted on the Consolidated Statements of Operations
included with the Consolidated Financial Statements included in
this Annual Report on
Form 10-K.
For the Fiscal Year Ended September 30,
2007
2006
2005
2004
2003
$
41.9
$
39.9
$
(5.3
)
$
28.5
$
17.6
47.7
37.6
40.7
40.1
36.3
(45.7
)
47.7
37.6
40.7
40.1
36.3
0.1
(0.3
)
0.6
9.1
2.7
9.3
9.8
9.1
8.0
35.3
66.4
23.4
18.3
1.3
45.5
(4)
The total debt to total book capitalization percentage is
calculated by dividing total debt by total debt and
shareholders equity.
(5)
The Company began paying a quarterly dividend of 12.5 cents per
share in the fourth quarter of fiscal 2005.
(6)
The Company paid a special one-time cash dividend of $8.00 per
share on March 5, 2007. Stock prices have not been adjusted
for this special one-time cash dividend.
(7)
Given our significant borrowings, we view our credit facilities
as material to our ability to fund operations, particularly in
light of our seasonality. Reference should be made to
ITEM 1A. RISK FACTORS, in this Annual Report on
Form 10-K
for a more complete discussion of risks associated with the
Companys debt and our credit facilities and related
covenants. Our ability to generate cash flows sufficient to
cover our debt service costs is essential to our ability to
maintain our borrowing capacity. We believe that Adjusted EBITDA
provides additional information for determining our ability to
meet debt service requirements. The presentation of Adjusted
EBITDA herein is intended to be consistent with the calculation
of that measure as required by our borrowing arrangements, and
used to calculate a leverage ratio (maximum of 4.75 at
September 30, 2007) and an interest coverage ratio
(minimum of 2.75 for the year ended September 30, 2007).
The Companys leverage ratio was 3.56 at September 30,
2007 and our interest coverage ratio was 5.4 for the year ended
September 30, 2007.
In accordance with the terms of our credit facilities, Adjusted
EBITDA is defined as net income before interest, taxes,
depreciation and amortization, as well as certain other items
such as the impact of discontinued operations, the cumulative
effect of changes in accounting, costs associated with debt
refinancings, and other non-recurring, non-cash items effecting
net income. Adjusted EBITDA does not represent and should not be
considered as an alternative to net income or cash flow from
operations as determined by accounting principles generally
accepted in the United States of America, and Adjusted EBITDA
does not necessarily indicate whether cash flow will be
sufficient to meet cash requirements. Interest coverage is
calculated as Adjusted EBITDA divided by interest expense
excluding costs related to refinancings.
2007
2006
2005
2004
2003
$
113.4
$
132.7
$
100.6
$
100.9
$
103.8
70.7
39.6
41.5
48.8
69.2
74.7
80.2
57.7
58.0
59.2
67.5
67.0
67.2
57.7
52.2
38.0
66.4
23.4
(0.2
)
(0.4
)
(0.6
)
18.3
1.3
45.5
$
382.6
$
385.9
$
291.5
$
310.5
$
283.8
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Executive summary
Results of operations
Managements outlook
Liquidity and capital resources
Critical accounting policies and estimates
Percent of Net Sales
by Quarter
2007
2006
2005
9.5
%
9.3
%
10.4
%
34.6
%
33.6
%
34.3
%
38.2
%
38.9
%
38.0
%
17.7
%
18.2
%
17.3
%
2007
2006
2005
100.0
%
100.0
%
100.0
%
65.0
64.6
63.7
35.0
35.4
36.3
24.4
23.6
26.7
1.4
2.8
1.4
(0.4
)
(0.4
)
(0.3
)
9.6
9.4
8.5
0.6
0.1
2.5
1.5
1.8
6.5
7.9
6.6
2.6
3.0
2.4
3.9
4.9
4.2
3.9
%
4.9
%
4.2
%
2007
2006
6.3
%
13.8
%
(1.3
)
(5.0
)
(1.9
)
(1.6
)
0.4
3.4
%
7.3
%
2007
2006
2005
$
150.9
$
137.3
$
122.5
5.3
%
5.1
%
5.2
%
$
519.2
$
468.7
$
486.6
15.5
15.7
9.9
15.3
15.2
14.8
$
700.9
$
636.9
$
633.8
2007
2006
2005
$
35.3
$
66.4
$
23.4
9.3
26.3
(16.8
)
2.7
0.3
$
38.0
$
75.7
$
33.2
2007
2006
2005
$
1,988.3
$
1,914.5
$
1,668.1
230.5
205.7
159.8
469.8
408.5
430.3
184.0
169.2
159.6
2,872.6
2,697.9
2,417.8
(45.7
)
(0.8
)
(0.8
)
(2.8
)
$
2,871.8
$
2,697.1
$
2,369.3
2007
2006
2005
$
375.4
$
391.2
$
355.4
11.3
15.6
13.1
35.0
28.5
34.3
(90.5
)
(91.0
)
(105.7
)
331.2
344.3
297.1
(45.7
)
(0.8
)
(0.8
)
(2.8
)
(15.3
)
(15.2
)
(14.8
)
(35.3
)
(66.4
)
(23.4
)
(2.7
)
(9.4
)
(9.5
)
$
277.1
$
252.5
$
200.9
Notional
Amount in
Expiration
Fixed
Currency
USD
Term
Date
Rate
$
59.0
3 years
11/17/2008
4.76%
61.0
3 years
11/17/2008
2.98%
200.0
2 years
3/31/2009
4.90%
200.0
3 years
3/31/2010
4.87%
200.0
5 years
2/14/2012
5.20%
Payments Due by Period
More than
Contractual Cash Obligations
Total
Less than 1 year
1-3 years
4-5 years
5 years
$
1,117.8
$
86.4
$
244.4
$
783.0
$
4.0
194.2
37.5
58.3
43.0
55.4
569.2
292.0
211.6
58.1
7.5
50.7
16.8
7.5
7.8
18.6
$
1,931.9
$
432.7
$
521.8
$
891.9
$
85.5
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Expected Maturity Date
Fair
2007
2008
2009
2010
2011
After
Total
Value
$
82.6
$
84.0
$
154.0
$
193.2
$
578.4
$
1,092.2
$
1,092.2
6.5
%
6.5
%
6.5
%
6.5
%
6.5
%
6.5
%
$
1.9
$
(0.9
)
$
(1.4
)
$
$
(3.7
)
$
(4.1
)
$
(4.1
)
3.87
%
4.90
%
4.87
%
5.20
%
4.71
%
Expected Maturity Date
Fair
2006
2008
2010
After
Total
Value
$
$
200.0
$
200.0
$
194.0
6.625
%
6.625
%
$
253.8
$
$
253.8
$
253.8
4.4
%
4.4
%
$
1.3
$
$
$
1.3
$
1.3
3.87
%
3.87
%
ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9.
CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
ITEM 9A.
CONTROLS AND
PROCEDURES
information required to be disclosed by the Registrant in this
Annual Report on
Form 10-K
and the other reports that the Registrant files or submits under
the Exchange Act would be accumulated and communicated to the
Registrants management, including its principal executive
officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure;
information required to be disclosed by the Registrant in this
Annual Report on
Form 10-K
and the other reports that the Registrant files or submits under
the Exchange Act would be recorded, processed, summarized and
reported within the time periods specified in the SECs
rules and forms; and
the Registrants disclosure controls and procedures were
effective as of the end of the fiscal year covered by this
Annual Report on
Form 10-K.
ITEM 9B.
OTHER
INFORMATION
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE
COMPENSATION
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
ITEM 14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
ITEM 15.
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
Exhibit
No.
Description
Location
The O.M. Scott & Sons Company Excess Benefit Plan,
effective October 1, 1993
Incorporated herein by reference to the Annual Report on
Form 10-K
for the fiscal year ended September 30, 1993 of The Scotts
Company, a Delaware corporation (File
No. 0-19768)
[Exhibit 10(h)]
First Amendment to The O.M. Scott & Sons Company Excess
Benefit Plan, effective as of January 1, 1998
Incorporated herein by reference to the Annual Report on
Form 10-K
for the fiscal year ended September 30, 2001 of The Scotts
Company, an Ohio corporation (Scotts) (File
No. 1-13292)
[Exhibit 10(a)(2)]
Second Amendment to The O.M. Scott & Sons Company Excess
Benefit Plan, effective as of January 1, 1999
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 2001 (File
No. 1-13292)
[Exhibit 10(a)(3)]
Third Amendment to The O.M. Scott & Sons Company Excess
Benefit Plan, effective as of March 18, 2005 (amended title of
plan to be The Scotts Company LLC Excess Benefit Plan)
Incorporated herein by reference to the Quarterly Report on
Form 10-Q
for the quarterly period ended April 2, 2005 of The Scotts
Miracle-Gro Company (the Registrant) (File
No. 1-13292)
[Exhibit 10(CC)]
The Scotts Company LLC Executive/Management Incentive Plan (as
approved by the shareholders of The Scotts Miracle-Gro Company
on January 26, 2006)
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed February 2, 2006 (File
No. 1-13292)
[Exhibit 10.4]
The Scotts Company LLC Amended and Restated Executive/Management
Incentive Plan (effective as of November 7, 2007)
*
Specimen form of Employee Confidentiality, Noncompetition,
Nonsolicitation Agreement for employees participating in The
Scotts Company LLC Executive/Management Incentive Plan (now
known as The Scotts Company LLC Amended and Restated
Executive/Management Incentive Plan)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended July 1, 2006 (File
No. 1-13292)
[Exhibit 10.1]
Executive Officers of The Scotts Miracle-Gro Company who are
parties to form of Employee Confidentiality, Noncompetition,
Nonsolicitation Agreement for employees participating in The
Scotts Company LLC Executive/Management Incentive Plan (now
known as The Scotts Company LLC Amended and Restated
Executive/Management Incentive Plan)
*
Exhibit
No.
Description
Location
The Scotts Company 1996 Stock Option Plan (as amended through
May 15, 2000)
Incorporated herein by reference to Scotts Quarterly
Report on
Form 10-Q
for the quarterly period ended April 1, 2000 (File
No. 1-13292)
[Exhibit 10(d)]
The Scotts Company 1996 Stock Option Plan (2002 Amendment)
Incorporated herein by reference to Scotts Quarterly
Report on
Form 10-Q
for the quarterly period ended December 28, 2002 (File
No. 1-13292)
[Exhibit 10(d)(i)]
Amendment to The Scotts Company 1996 Stock Option
Plan 2005 Amendment, effective as of March 18, 2005
(amended title of plan to be The Scotts Miracle-Gro Company 1996
Stock Option Plan)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended April 2, 2005 (File
No. 1-13292)
[Exhibit 10(z)]
The Scotts Miracle-Gro Company Amended and Restated 1996 Stock
Option Plan (effective as of October 30, 2007)
*
Form of 1996 Stock Option Plan Stock Option
Agreement Non-Qualified Stock Option
Incorporated herein by reference to Scotts Current Report
on
Form 8-K
filed November 19, 2004 (File
No. 1-13292)
[Exhibit 10.7]
Specimen form of Stock Option Agreement (as amended through
October 23, 2001) for Non-Qualified Stock Options granted to
employees under The Scotts Company 1996 Stock Option Plan (now
known as The Scotts Miracle-Gro Company Amended and Restated
1996 Stock Option Plan), French specimen
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 2001 (File
No. 1-13292)
[Exhibit 10(f)]
The Scotts Company Executive Retirement Plan
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 1998 (File
No. 1-11593)
[Exhibit 10(j)]
First Amendment to The Scotts Company Executive Retirement Plan,
effective as of January 1, 1999
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 2001 (File
No. 1-13292)
[Exhibit 10(g)(2)]
Second Amendment to The Scotts Company Executive Retirement
Plan, effective as of January 1, 2000
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 2001 (File
No. 1-13292)
[Exhibit 10(g)(3)]
Third Amendment to The Scotts Company Executive Retirement Plan,
effective as of January 1, 2003
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 2003 (File
No. 1-13292)
[Exhibit 10(g)(4)]
Exhibit
No.
Description
Location
Fourth Amendment to The Scotts Company Executive Retirement
Plan, effective as of January 1, 2004
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 2004 (File
No. 1-13292)
[Exhibit 10(g)(5)]
Fifth Amendment to The Scotts Company Executive Retirement Plan,
effective as of March 18, 2005 (amended title of plan to be The
Scotts Company LLC Executive Retirement Plan)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended April 2, 2005 (File
No. 1-13292)
[Exhibit 10(DD)]
Employment Agreement, dated as of May 19, 1995, between The
Scotts Company and James Hagedorn
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 1995 (File
No. 1-11593)
[Exhibit 10(p)]
Letter agreement, dated June 8, 2000, between The Scotts Company
and Patrick J. Norton
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 2000 (File
No. 1-13292)
[Exhibit 10(q)]
Letter agreement, dated November 5, 2002, and accepted by Mr.
Norton on November 22, 2002, pertaining to the terms of
employment of Patrick J. Norton through December 31, 2005, and
superseding certain provisions of the letter agreement, dated
June 8, 2000, between The Scotts Company and Mr. Norton
Incorporated herein by reference to Scotts Annual Report
on
Form 10-K
for the fiscal year ended September 30, 2002 (File
No. 1-13292)
[Exhibit 10(q)]
Letter of Extension, dated October 25, 2005, between The Scotts
Miracle-Gro Company and Patrick J. Norton
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed December 14, 2005 (File
No. 1-13292)
[Exhibit 10.3]
The Scotts Company 2003 Stock Option and Incentive Equity Plan
(as approved by shareholders of The Scotts Company on January
30, 2003)
Incorporated herein by reference to Scotts Quarterly
Report on
Form 10-Q
for the quarterly period ended December 28, 2002 (File
No. 1-13292)
[Exhibit 10(w)]
First Amendment to The Scotts Company 2003 Stock Option and
Incentive Equity Plan, effective as of March 18, 2005 (amended
title of plan to be The Scotts Miracle-Gro Company 2003 Stock
Option and Incentive Equity Plan)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended April 2, 2005 (File
No. 1-13292)
[Exhibit 10(AA)]
The Scotts Miracle-Gro Company Amended and Restated 2003 Stock
Option and Incentive Equity Plan (effective as of October 30,
2007)
*
Exhibit
No.
Description
Location
Specimen form of Award Agreement for Nondirectors used to
evidence Incentive Stock Options, Nonqualified Stock Options,
Stock Appreciation Rights, Restricted Stock and Performance
Shares which may be granted under 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)
Incorporated herein by reference to the Registrants Annual
Report on
Form 10-K
for the fiscal year ended September 30, 2005 (File
No. 1-13292)
[Exhibit 10(u)]
Form of letter agreement amending Restricted Stock awards
granted under The Scotts Miracle-Gro Company 2003 Stock Option
and Incentive Equity Plan, as amended (effective as of October
30, 2007)
*
Specimen form of Award Agreement for Directors used to evidence
Nonqualified Stock Options granted under 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)
Incorporated herein by reference to the Registrants Annual
Report on
Form 10-K
for the fiscal year ended September 30, 2005 (File
No. 1-13292)
[Exhibit 10(v)]
Employment Agreement effective as of October 1, 2007, between
The Scotts Company LLC and Barry W. Sanders
*
Employment Agreement effective as of July 1, 2001, between The
Scotts Company LLC and Claude Lopez [English
Translation Original in French]
*
Employment Agreement for Christopher Nagel, entered into
effective as of October 1, 2006, by and between Christopher
Nagel and The Scotts Miracle-Gro Company (voluntarily terminated
effective July 18, 2007)
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed December 7, 2006 (File
No. 1-13292)
[Exhibit 10.1]
The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan
Award Agreement for Employees, evidencing Restricted Stock Award
of 38,000 Restricted Stock Awarded to Christopher Nagel on
October 1, 2006 by The Scotts Miracle-Gro Company (forfeited as
a result of voluntary termination effective July 18, 2007)
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed December 7, 2006 (File
No. 1-13292)
[Exhibit 10.2]
Separation Agreement and General Release, entered into and
effective as of July 18, 2007, by and between The Scotts
Miracle-Gro Company and Christopher L. Nagel
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed July 18, 2007 (File
No. 1-13292)
[Exhibit 10.1]
The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan (as
approved by the shareholders of The Scotts Miracle-Gro Company
on January 26, 2006)
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed February 2, 2006 (File
No. 1-13292)
[Exhibit 10.2]
The Scotts Miracle-Gro Company Amended and Restated 2006
Long-Term Incentive Plan (effective as of October 30, 2007)
*
Exhibit
No.
Description
Location
Specimen form of Award Agreement used to evidence Time-Based
Nonqualified Stock Options for Non-Employee Directors under 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)
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed February 2, 2006 (File
No. 1-13292)
[Exhibit 10.3]
Specimen form of Award Agreement used to evidence awards of
Restricted Stock Units, Performance Shares, Nonqualified Stock
Options, Incentive Stock Options, Restricted Stock and Stock
Appreciation Rights which may be granted under 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), used prior to October 30, 2007
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended December 31, 2005 (File
No. 1-13292)
[Exhibit 10(b)]
Form of letter agreement amending Restricted Stock awards
granted under The Scotts Miracle-Gro Company 2006 Long-Term
Incentive Plan, as amended (effective as of October 30, 2007)
*
Specimen form of Nonqualified Stock Option Award Agreement for
Employees to evidence grants of Nonqualified Stock Options which
may be made under The Scotts Miracle-Gro Company [Amended and
Restated] 2006 Long-Term Incentive Plan (used after October 30,
2007)
*
Specimen form of Restricted Stock Award Agreement for Employees
to evidence grants of Restricted Stock which may be made under
The Scotts Miracle-Gro Company [Amended and Restated] 2006
Long-Term Incentive Plan (used after October 30, 2007)
*
Specimen form of Performance Share Award Agreement for Employees
(with Related Dividend Equivalents) to evidence grants of
Performance Shares which may be made under The Scotts
Miracle-Gro Company [Amended and Restated] 2006 Long-Term
Incentive Plan (used after October 30, 2007)
*
Specimen form of Award Agreement for Third Party Service
Providers used to evidence awards which may be granted under 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) to third party service providers
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended July 1, 2006 (File
No. 1-13292)
[Exhibit 10.3]
Specimen form of Award Agreement for Employees used to evidence
Nonqualified Stock Options, Restricted Stock and Restricted
Stock Units which may be granted under 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) (Standard International Specimen covering
Australian, Canadian and The Netherlands)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended December 30, 2006 (File
No. 1-13292)
[Exhibit 10.1]
Exhibit
No.
Description
Location
Specimen form of Award Agreement for Employees used to evidence
Stock Options, Restricted Stock and Restricted Stock Units which
may be granted under 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) (Austrian Specimen)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended December 30, 2006 (File
No. 1-13292)
[Exhibit 10.2]
Specimen form of Award Agreement for Employees used to evidence
Nonqualified Stock Options which may be granted under 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) (Belgian Specimen)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended December 30, 2006 (File
No. 1-13292)
[Exhibit 10.3]
Specimen form of Award Agreement for Employees used to evidence
Nonqualified Stock Options, Restricted Stock, Restricted Stock
Units and Performance Shares which may be granted under 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) (French Specimen)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended December 30, 2006 (File
No. 1-13292)
[Exhibit 10.4]
Specimen form of Award Agreement for Employees used to evidence
Nonqualified Stock Options which may be granted under 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) (German Specimen)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended December 30, 2006 (File
No. 1-13292)
[Exhibit 10.5]
Specimen form of Award Agreement for Employees used to evidence
Nonqualified Stock Options which may be granted under 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) (Polish Specimen)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended December 30, 2006 (File
No. 1-13292)
[Exhibit 10.6]
Specimen form of Award Agreement for United Kingdom Employees
used to evidence Nonqualified Stock Options, Restricted Stock
and Restricted Stock Units which may be granted under 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) (United Kingdom Specimen)
Incorporated herein by reference to the Registrants
Quarterly Report on
Form 10-Q
for the quarterly period ended December 30, 2006 (File
No. 1-13292)
[Exhibit 10.7]
The Scotts Miracle-Gro Company Discounted Stock Purchase Plan
(As Amended and Restated as of January 26, 2006; Reflects
2-for-1 Stock Split Distributed on November 9, 2005)
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed February 2, 2006 (File
No. 1-13292)
[Exhibit 10.1]
Summary of Compensation for Directors of The Scotts Miracle-Gro
Company
*
Separation Agreement and General Release, entered into and
effective as of July 17, 2007 by and between The Scotts
Miracle-Gro Company and David M. Aronowitz
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed July 17, 2007 (File
No. 1-13292)
[Exhibit 10.1]
*
Filed herewith.
(b)
EXHIBITS
(c)
FINANCIAL STATEMENT
SCHEDULE
THE SCOTTS MIRACLE-GRO COMPANY
Officer and Chairman of the Board
Director
November 29, 2007
Director
November 29, 2007
Director
November 29, 2007
Executive Vice President and Chief Financial Officer (Principal
Financial Officer and Principal Accounting Officer)
November 29, 2007
Director
November 29, 2007
President, Chief Executive Officer, Chairman of the Board and
Director (Principal Executive Officer)
November 29, 2007
Director
November 29, 2007
Director
November 29, 2007
Director
November 29, 2007
Director
November 29, 2007
Director
November 29, 2007
Director
November 29, 2007
Director
November 29, 2007
*
The undersigned, by signing his name hereto, does hereby sign
this Report on behalf of each of the directors of the Registrant
identified above pursuant to Powers of Attorney executed by the
directors identified above, which Powers of Attorney are filed
with this Report as exhibits.
By:
AND FINANCIAL STATEMENT SCHEDULE
Page
54
55
57
58
59
60
61
100
101
David C. Evans
Executive Vice President
and Chief Financial Officer
Dated: November 29, 2007
Consolidated
Statements of Operations
for the fiscal years ended September 30, 2007, 2006 and
2005
(in millions, except per share data)
2007
2006
2005
$
2,871.8
$
2,697.1
$
2,369.3
1,867.3
1,741.1
1,509.2
0.1
(0.3
)
1,004.5
955.9
860.4
700.9
636.9
633.8
38.0
75.7
33.2
(11.5
)
(9.2
)
(7.5
)
277.1
252.5
200.9
18.3
1.3
70.7
39.6
41.5
188.1
212.9
158.1
74.7
80.2
57.7
113.4
132.7
100.4
0.2
$
113.4
$
132.7
$
100.6
$
1.74
$
1.97
$
1.51
$
1.74
$
1.97
$
1.51
$
1.69
$
1.91
$
1.47
$
1.69
$
1.91
$
1.47
Consolidated
Statements of Cash Flows
for the fiscal years ended September 30, 2007, 2006 and
2005
(in millions)
2007
2006
2005
$
113.4
$
132.7
$
100.6
38.0
66.4
23.4
18.3
1.3
13.3
15.7
10.7
51.4
51.0
49.6
16.1
16.0
17.6
6.3
(0.4
)
(13.6
)
(0.4
)
(0.5
)
(4.2
)
(37.6
)
(37.9
)
13.2
(60.6
)
(15.8
)
(6.9
)
(3.6
)
8.1
(3.5
)
34.3
10.3
(2.0
)
(33.4
)
27.9
(5.0
)
(9.2
)
10.3
6.8
2.0
6.6
(8.2
)
9.6
27.6
246.6
182.4
226.7
57.2
0.5
1.3
(54.0
)
(57.0
)
(40.4
)
(18.7
)
(118.4
)
(77.7
)
(72.2
)
(174.1
)
(60.9
)
2,519.2
746.9
924.2
(1,710.5
)
(691.7
)
(736.4
)
(399.0
)
(209.6
)
(13.0
)
(3.6
)
(543.6
)
(33.5
)
(8.6
)
(2.7
)
(4.5
)
(6.9
)
(246.8
)
(87.9
)
19.0
6.2
29.2
17.6
32.2
2.9
(158.8
)
(46.9
)
(195.2
)
4.2
6.5
(6.0
)
19.8
(32.1
)
(35.4
)
48.1
80.2
115.6
$
67.9
$
48.1
$
80.2
(75.9
)
(38.2
)
(39.9
)
(65.2
)
(60.3
)
(64.0
)
Consolidated
Statements of Shareholders Equity
for the fiscal years ended September 30, 2007, 2006 and
2005
(in millions)
Accumulated
Capital in
Other
Common Stock
Excess of
Deferred
Retained
Treasury Stock
Comprehensive
Shares
Amount
Stated Value
Compensation
Earnings
Shares
Amount
Income/(loss)
Total
65.7
$
0.3
$
443.0
$
(10.4
)
$
499.5
$
$
(57.8
)
$
874.6
100.6
100.6
4.1
4.1
2.1
2.1
(5.0
)
(5.0
)
101.8
15.1
(15.1
)
(2.6
)
2.6
10.7
10.7
(8.6
)
(8.6
)
2.1
47.7
47.7
67.8
0.3
503.2
(12.2
)
591.5
(56.6
)
1,026.2
132.7
132.7
(1.5
)
(1.5
)
(12.2
)
12.2
6.5
6.5
137.7
15.7
15.7
(33.5
)
(33.5
)
2.0
(87.9
)
(87.9
)
(21.4
)
(0.5
)
21.4
0.3
23.5
23.5
68.1
0.3
508.8
690.7
1.5
(66.5
)
(51.6
)
1,081.7
113.4
113.4
4.9
4.9
(2.4
)
(2.4
)
20.4
20.4
136.3
(13.3
)
(13.3
)
13.3
13.3
(543.6
)
(543.6
)
4.5
(246.8
)
(246.8
)
(42.1
)
(2.0
)
93.8
51.7
68.1
$
0.3
$
480.0
$
$
260.5
4.0
$
(219.5
)
$
(42.0
)
$
479.3
NOTE 1.
SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
10 25 years
10 40 years
3 15 years
6 10 years
3 8 years
Prior to Adopting
Effect of Adopting
As Reported under
SFAS 158
SFAS 158
SFAS 158
(In millions)
$
136.8
$
(9.1
)
$
127.7
283.1
3.7
286.8
179.4
0.5
179.9
1,793.7
4.2
1,797.9
(28.7
)
(13.3
)
(42.0
)
NOTE 2.
RECAPITALIZATION
Pro Forma Financial Information (Unaudited)
Year Ended September 30,
2007
2006
(In millions, except per share data)
$
188.1
$
212.9
70.7
39.6
18.3
(94.3
)
(100.8
)
$
182.8
$
151.7
72.5
57.3
$
110.3
$
94.4
$
1.74
$
1.50
$
1.68
$
1.45
$
70.7
$
39.6
21.8
53.0
1.5
7.4
0.3
0.8
$
94.3
$
100.8
39.7
%
37.8
%
Pro Forma Shares
Year Ended
September 30,
2007
2006
(In millions)
65.2
67.5
(1.8
)
(4.5
)
63.4
63.0
67.0
69.4
(1.8
)
(4.5
)
0.3
0.3
65.5
65.2
NOTE 3.
DETAIL OF CERTAIN
FINANCIAL STATEMENT ACCOUNTS
September 30,
2007
2006
(In millions)
$
289.9
$
267.4
28.3
36.0
87.7
105.8
$
405.9
$
409.2
$
58.9
$
49.8
162.8
144.6
417.4
401.8
39.2
39.2
88.6
79.7
17.8
22.5
784.7
737.6
(418.8
)
(370.0
)
$
365.9
$
367.6
$
44.0
$
53.7
138.8
126.8
2.5
6.4
101.5
82.2
$
286.8
$
269.1
$
79.8
$
93.8
4.2
4.2
67.9
49.2
28.0
17.3
$
179.9
$
164.5
September 30,
2007
2006
2005
(In millions)
$
(0.6
)
$
1.8
$
1.8
(34.1
)
(40.6
)
(27.0
)
(14.4
)
(19.3
)
(17.8
)
$
(42.0
)
$
(51.6
)
$
(56.6
)
NOTE 4.
MARKETING
AGREEMENT
2007
2006
2005
$
62.7
$
60.7
$
67.0
(20.0
)
(20.0
)
(23.8
)
(45.7
)
(0.8
)
(0.8
)
(2.8
)
41.9
39.9
(5.3
)
47.7
37.6
40.7
$
89.6
$
77.5
$
35.4
NOTE 5.
IMPAIRMENT,
RESTRUCTURING AND OTHER CHARGES
2007
2006
2005
$
$
8.5
$
15.9
0.1
4.9
2.7
0.9
5.4
(7.9
)
(8.9
)
2.7
9.4
9.5
35.3
66.4
23.4
$
38.0
$
75.8
$
32.9
$
6.4
$
15.6
$
5.3
2.7
9.4
9.5
(6.6
)
(18.6
)
0.8
$
2.5
$
6.4
$
15.6
NOTE 6.
GOODWILL AND
INTANGIBLE ASSETS, NET
September 30, 2007
September 30, 2006
Weighted
Gross
Net
Gross
Net
Average
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Life
Amount
Amortization
Amount
Amount
Amortization
Amount
14
$
56.7
$
(37.1
)
$
19.6
$
54.3
$
(34.3
)
$
20.0
16
89.0
(29.6
)
59.4
80.5
(17.9
)
62.6
17
11.3
(5.6
)
5.7
11.3
(4.9
)
6.4
15
117.7
(82.0
)
35.7
111.2
(75.6
)
35.6
120.4
124.6
298.4
300.1
418.8
424.7
462.9
458.1
$
881.7
$
882.8
North
Scotts
Other/
America
LawnService
®
International
Corporate
Total
$
190.9
$
105.0
$
112.4
$
24.6
$
432.9
16.6
3.6
20.2
(1.8
)
(1.8
)
6.8
6.8
$
205.7
$
108.6
$
119.2
$
24.6
$
458.1
4.3
14.9
19.2
(2.2
)
(24.6
)
(26.8
)
(0.1
)
12.5
12.4
$
207.7
$
123.5
$
131.7
$
$
462.9
$
16.6
15.0
13.6
12.9
11.9
NOTE 7.
ACQUISITIONS
Date of Acquisition
Assets Acquired
Consideration
Reasons for the Acquisition
Certain brands and assets of Landmark Seed Company, a leading
producer and distributor of quality professional seed and
turfgrasses.
Cash of $6.2 million with an additional $1 million deferred to
future periods.
Transaction enhances the Companys position in the global
turfgrass seed industry and compliments the acquisition from
Turf-Seed, Inc.
Certain brands and assets of Turf-Seed, Inc., a leading producer
of quality commercial turfgrasses, including 49% equity interest
in Turf-Seed Europe, which distributes Turf-Seeds grass
varieties throughout the European Union and other countries in
the region.
Cash of $10.0 million plus assumed liabilities of $4.5 million.
Contingent consideration based on future performance of the
business due in 2012 that may approximate $15 million which
would be recorded as additional purchase price.
Integration of Turf-Seeds extensive professional seed
sales and distribution network with the Companys existing
presence and industry leading brands in the consumer seed market
will strengthen the Companys overall global position in
the seed category.
All the outstanding shares of Gutwein & Co., Inc.
(Gutwein), a leader in the growing North America
wild bird food category.
$78.3 million in cash plus assumed liabilities of $4.7 million.
Gutweins Morning
Song
®
branded products are sold at leading mass retailers, grocery,
pet and general merchandise stores. This acquisition gives the
Company its entry into the North America wild bird food
category, a large, growing, fragmented category with tremendous
opportunity for branding and innovation.
All the outstanding shares of Rod McLellan Company
(RMC), a leading branded producer and marketer of
soil and landscape products in the western U.S.
$20.5 million in cash plus assumed liabilities of $6.8 million.
RMC compliments our existing line of growing media products and
has been integrated into that business.
NOTE 8.
RETIREMENT
PLANS
Curtailed Defined
International
Benefit Plans
Benefit Plans
2007
2006
2007
2006
$
93.4
$
96.1
$
178.7
$
158.2
3.9
4.2
5.3
5.2
9.2
7.7
0.9
0.9
(0.8
)
(0.6
)
(1.1
)
(1.5
)
(1.7
)
(23.8
)
3.4
(6.4
)
(6.2
)
(6.0
)
(4.7
)
0.2
0.5
17.3
10.1
$
90.8
$
93.4
$
179.5
$
178.7
$
90.8
$
93.4
$
158.6
$
154.5
$
70.9
$
72.5
$
116.1
$
96.4
9.3
4.4
10.4
9.8
4.1
0.2
9.6
7.2
0.9
0.9
(6.4
)
(6.2
)
(6.0
)
(4.7
)
11.9
6.5
(0.2
)
$
77.9
$
70.9
$
142.7
$
116.1
$
12.9
$
22.5
$
36.8
$
62.6
$
90.8
$
93.4
$
28.1
$
178.7
90.8
93.4
26.5
154.5
77.9
70.9
7.0
116.1
$
0.2
$
$
1.0
$
12.7
22.5
35.8
40.1
$
12.9
$
22.5
$
36.8
$
40.1
Curtailed Defined
International
Benefit Plans
Benefit Plans
2007
2006
2007
2006
$
22.0
$
21.7
(1.1
)
$
22.0
$
20.6
$
1.3
$
0.6
(0.1
)
$
1.3
$
0.5
6.11
%
5.93
%
5.67
%
4.86
%
n/a
n/a
3.5
%
3.5
%
Curtailed Defined
International
Benefit Plan
Benefit Plans
2007
2006
2005
2007
2006
2005
$
$
$
$
3.9
$
4.2
$
3.3
5.3
5.2
5.2
9.2
7.7
7.1
(5.6
)
(5.5
)
(5.4
)
(8.2
)
(7.0
)
(6.3
)
2.1
2.2
2.6
2.1
2.0
1.4
1.8
1.9
2.4
7.0
6.9
5.5
2.3
0.6
(1.1
)
$
1.8
$
1.9
$
4.7
$
7.6
$
5.8
$
5.5
Curtailed Defined
International
Benefit Plan
Benefit Plans
2007
2006
2005
2007
2006
2005
5.93
%
5.63
%
5.75
%
4.86
%
4.68
%
5.35
%
8.0
%
8.0
%
8.0
%
6.6
%
6.9
%
7.5
%
n/a
n/a
n/a
3.5
%
3.5
%
3.7
%
International
Curtailed Defined
Benefit
Benefit Plans
Plans
60
%
50
%
40
%
50
%
61
%
50
%
38
%
49
%
1
%
1
%
66
%
56
%
34
%
43
%
1
%
4.9
9.4
0.9
6.5
5.1
6.5
5.2
6.6
5.7
6.6
5.8
6.7
6.4
33.9
37.2
NOTE 9.
ASSOCIATE MEDICAL
BENEFITS
2007
2006
$
33.2
$
34.7
0.6
0.7
1.8
1.9
0.9
0.7
(3.4
)
(2.3
)
(2.7
)
(2.5
)
$
30.4
$
33.2
$
$
2.1
2.0
0.9
0.7
(3.0
)
(2.7
)
$
(30.4
)
$
(33.2
)
$
(2.5
)
$
(27.9
)
(29.5
)
$
(30.4
)
$
(29.5
)
$
(30.4
)
$
(33.2
)
3.7
$
(30.4
)
$
(29.5
)
$
0.3
6.22
%
5.86
%
2007
2006
2005
$
0.6
$
0.7
$
0.7
1.8
1.9
2.0
0.1
0.6
2.4
2.7
3.3
2.5
$
2.4
$
2.7
$
5.8
5.86
%
5.51
%
5.75
%
Gross
Medicare
Net
Benefit
Retiree
Part D
Company
Payments
Contributions
Subsidy
Payments
$
3.7
$
(0.9
)
$
(0.3
)
$
2.5
3.9
(1.1
)
(0.3
)
2.5
4.1
(1.2
)
(0.4
)
2.5
4.3
(1.4
)
(0.4
)
2.5
4.6
(1.6
)
(0.5
)
2.5
26.9
(11.6
)
(2.9
)
12.4
NOTE 10.
DEBT
September 30,
2007
2006
(In millions)
$
469.2
$
253.8
558.6
64.4
200.0
15.1
15.4
2.8
10.5
9.2
1,117.8
481.2
86.4
6.0
$
1,031.4
$
475.2
$
86.4
87.4
157.0
193.6
589.4
4.0
$
1,117.8
Notional
Currency
Amount in USD
Term
Expiration Date
Fixed Rate
(In millions)
$
59.0
3 years
11/17/2008
4.76
%
61.0
3 years
11/17/2008
2.98
%
200.0
2 years
3/31/2009
4.90
%
200.0
3 years
3/31/2010
4.87
%
200.0
5 years
2/14/2012
5.20
%
NOTE 11.
SHAREHOLDERS
EQUITY
2007
2006
(In millions)
0.2 shares
0.2 shares
0.0 shares
0.0 shares
100.0 shares
100.0 shares
68.1 shares
68.1 shares
Year Ended September 30,
2007
2006
2005
821,200
835,640
965,600
193,550
184,595
101,000
30,000
127,000
126,000
147,000
1,141,750
1,176,235
1,213,600
1,074,796
2,216,546
1,176,235
1,213,600
$
22.3
$
20.9
$
15.1
Year Ended September 30,
2007
2006
2005
$
15.5
$
15.7
$
10.7
6.2
5.9
3.9
WTD.
Avg.
No. of
Exercise
Options/SARs
Price
6.2
$
26.09
2.0
$
32.33
(2.1
)
$
19.17
(0.3
)
$
35.26
5.8
$
26.63
3.4
$
20.25
Awards Outstanding
Awards Exercisable
No. of
WTD. Avg.
WTD. Avg.
No. of
WTD Avg
Range of
Options/
Remaining
Exercise
Options/
Remaining
Exercise Price
SARs
Life
Price
SARS
Exercise Price
Life
0.8
1.95
$
13.66
0.8
$
13.66
1.95
0.9
3.55
16.84
0.9
16.84
3.55
1.6
5.90
23.55
1.6
23.51
5.89
0.7
7.20
29.07
0.7
8.13
35.77
0.8
8.99
38.60
0.3
8.92
43.38
0.1
41.66
8.33
5.8
6.06
$
26.63
3.4
$
20.25
4.48
2007
$
93.5
76.5
Year Ended September 30,
2007
2006
2005
26.3
%
23.0
%
23.9
%
4.8
%
4.4
%
3.7
%
1.1
%
1.2
%
0.0
%
5.83
6.19
6.15
$
11.42
$
12.04
$
10.57
WTD Avg.
Grant Date
No. of
Fair Value
Shares
per Share
302,795
$
39.26
193,550
45.69
(114,665
)
35.67
(104,600
)
43.23
277,080
$
43.74
NOTE 12.
EARNINGS PER
COMMON SHARE
Year Ended September 30,
2007
2006
2005
$
113.4
$
132.7
$
100.4
0.2
$
113.4
$
132.7
$
100.6
65.2
67.5
66.8
$
1.74
$
1.97
$
1.51
$
1.74
$
1.97
$
1.51
65.2
67.5
66.8
1.8
1.9
1.8
67.0
69.4
68.6
$
1.69
$
1.91
$
1.47
$
1.69
$
1.91
$
1.47
NOTE 13.
INCOME
TAXES
Year Ended September 30,
2007
2006
2005
$
54.5
$
68.3
$
55.9
5.4
6.0
7.0
8.5
6.3
8.4
6.5
(0.5
)
(11.8
)
(0.6
)
1.6
(1.8
)
0.4
(1.5
)
$
74.7
$
80.2
$
57.7
Year Ended September 30,
2007
2006
2005
$
175.3
$
253.6
$
170.0
12.8
(40.7
)
(11.9
)
$
188.1
$
212.9
$
158.1
Year Ended September 30,
2007
2006
2005
35.0
%
35.0
%
35.0
%
4.8
(0.5
)
(0.5
)
0.2
1.6
2.3
1.8
(0.2
)
0.1
1.9
(1.0
)
0.8
(2.4
)
39.7
%
37.7
%
36.5
%
September 30,
2007
2006
$
69.6
$
52.6
(67.9
)
(49.2
)
$
1.7
$
3.4
September 30,
2007
2006
$
12.0
$
13.0
56.0
39.0
26.5
33.9
3.4
3.3
0.1
0.1
5.4
4.5
38.6
33.2
19.1
16.4
161.1
143.4
(41.0
)
(35.4
)
120.1
108.0
(38.4
)
(44.5
)
(72.5
)
(52.1
)
(7.5
)
(8.0
)
(118.4
)
(104.6
)
$
1.7
$
3.4
NOTE 14.
FINANCIAL
INSTRUMENTS
2007
2006
Carrying
Fair
Carrying
Fair
Amount
Value
Amount
Value
$
469.2
$
469.2
$
253.8
$
253.8
200.0
194.0
2.8
2.8
558.6
558.6
64.4
64.4
(1.3
)
(1.3
)
0.4
0.4
(4.1
)
(4.1
)
1.3
1.3
1.0
1.0
(0.2
)
(0.2
)
2007
2006
$
15.1
$
15.4
10.5
9.2
NOTE 15.
OPERATING
LEASES
$
37.5
32.7
25.6
22.6
20.4
55.4
$
194.2
Amount of
Lease
Guarantee
Termination Date
$
15.9 million
2011
15.7 million
2010 and 2012
NOTE 16.
COMMITMENTS
$
292.0
144.8
66.8
45.9
12.2
7.5
$
569.2
NOTE 17.
CONTINGENCIES
that all significant sites that must be remediated have been
identified;
that there are no significant conditions of contamination that
are unknown to us; and
that with respect to the agreed judicial Consent Order in Ohio,
the potentially contaminated soil can be remediated in place
rather than having to be removed and only specific stream
segments will require remediation as opposed to the entire
stream.
$
7.9
4.1
12.0
3.0
$
15.0
NOTE 18.
CONCENTRATIONS OF
CREDIT RISK
Largest
2nd Largest
3rd Largest
Customer
Customer
Customer
20.2
%
10.9
%
10.2
%
21.5
%
11.2
%
10.5
%
23.5
%
11.9
%
9.7
%
NOTE 19.
OTHER (INCOME)
EXPENSE
2007
2006
2005
$
(9.9
)
$
(6.8
)
$
(6.5
)
(1.0
)
(0.9
)
(0.8
)
(0.2
)
(0.2
)
(0.3
)
(0.2
)
(0.7
)
2.1
(4.0
)
(0.2
)
(0.6
)
2.0
$
(11.5
)
$
(9.2
)
$
(7.5
)
NOTE 20.
SEGMENT
INFORMATION
2007
2006
2005
$
1,988.3
$
1,914.5
$
1,668.1
469.8
408.5
430.3
230.5
205.7
159.8
184.0
169.2
159.6
2,872.6
2,697.9
2,417.8
(45.7
)
(0.8
)
(0.8
)
(2.8
)
$
2,871.8
$
2,697.1
$
2,369.3
$
375.4
$
391.2
$
355.4
35.0
28.5
34.3
11.3
15.6
13.1
(90.5
)
(91.0
)
(105.7
)
331.2
344.3
297.1
(45.7
)
(0.8
)
(0.8
)
(2.8
)
(15.3
)
(15.2
)
(14.8
)
(35.3
)
(66.4
)
(23.4
)
(2.7
)
(9.4
)
(9.5
)
$
277.1
$
252.5
$
200.9
$
30.7
$
30.7
$
30.9
12.0
13.1
11.5
4.1
3.8
3.9
20.7
19.4
20.9
$
67.5
$
67.0
$
67.2
$
26.3
$
24.8
$
22.6
12.7
11.4
3.5
3.8
3.0
2.1
11.2
17.8
12.2
$
54.0
$
57.0
$
40.4
$
752.2
$
760.3
259.6
235.0
141.1
120.3
94.7
134.8
$
1,247.6
$
1,250.4
$
1,328.3
$
1,331.7
531.6
450.9
189.2
161.6
228.1
273.4
$
2,277.2
$
2,217.6
NOTE 21.
QUARTERLY
CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Full Year
$
271.2
$
993.3
$
1,098.4
$
508.9
$
2,871.8
55.3
368.4
422.7
158.1
1,004.5
(59.4
)
83.4
129.7
(40.3
)
113.4
$
(0.88
)
$
1.26
$
2.04
$
(0.63
)
$
1.74
67.2
66.1
63.6
63.9
65.2
$
(0.88
)
$
1.23
$
1.98
$
(0.63
)
$
1.69
67.2
67.8
65.4
63.9
67.0
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Full Year
$
249.5
$
907.5
$
1,048.0
$
492.1
$
2,697.1
53.5
346.4
406.0
150.0
955.9
(52.7
)
94.8
133.3
(42.7
)
132.7
$
(0.78
)
$
1.40
$
1.97
$
(0.64
)
$
1.97
68.0
67.5
67.5
66.8
67.5
$
(0.78
)
$
1.36
$
1.92
$
(0.64
)
$
1.91
68.0
69.6
69.4
66.8
69.4
Marysville, OH
Schedule II
Valuation and Qualifying Accounts
for the fiscal year ended September 30, 2007
(in millions)
Column B
Column C
Column D
Column E
Column F
Balance
Additions
Deductions
at
Charged
Credited
Balance
Beginning
Reserves
to
and
at End of
Classification
of Period
Acquired
Expense
Write-Offs
Period
$
15.1
$
$
9.6
$
(9.1
)
$
15.6
11.3
4.1
1.3
(5.3
)
11.4
35.4
8.5
(2.9
)
41.0
for the fiscal year ended September 30, 2006
(in millions)
Column B
Column C
Column D
Column E
Column F
Balance
Additions
Deductions
at
Charged
Credited
Balance
Beginning
Reserves
to
and
at End of
Classification
of Period
Acquired
Expense
Write-Offs
Period
$
16.3
$
0.3
$
9.4
$
(10.9
)
$
15.1
11.4
0.5
3.5
(4.1
)
11.3
33.0
5.1
(2.7
)
35.4
for the fiscal year ended September 30, 2005
(in millions)
Column B
Column C
Column D
Column E
Column F
Balance
Additions
Deductions
at
Charged
Credited
Balance
Beginning
Reserves
to
and
at End of
Classification
of Period
Acquired
Expense
Write-Offs
Period
$
21.3
$
$
11.4
$
(16.4
)
$
16.3
29.0
1.9
(19.5
)
11.4
28.8
2.4
1.8
33.0
Exhibit
No.
Description
Location
Amended and Restated Agreement and Plan of Merger, dated as of
May 19, 1995, among Sterns Miracle-Gro Products,
Inc., Sterns Nurseries, Inc., Miracle-Gro Lawn Products
Inc., Miracle-Gro Products Limited, Hagedorn Partnership, L.P.,
the general partners of Hagedorn Partnership, L.P., Horace
Hagedorn, Community Funds, Inc., and John Kenlon, The Scotts
Company and ZYX Corporation
Incorporated herein by reference to the Current Report on Form
8-K of The Scotts Company, a Delaware corporation, filed
June 2, 1995 (File No. 0-19768) [Exhibit 2(b)]
First Amendment to Amended and Restated Agreement and Plan of
Merger, made and entered into as of October 1, 1999, among
The Scotts Company, Scotts Miracle-Gro Products, Inc. (as
successor to ZYX Corporation and Sterns Miracle-Gro
Products, Inc.), Miracle-Gro Lawn Products Inc., Miracle-Gro
Products Limited, Hagedorn Partnership, L.P., Community Funds,
Inc., Horace Hagedorn and John Kenlon, and James Hagedorn,
Katherine Hagedorn Littlefield, Paul Hagedorn, Peter Hagedorn,
Robert Hagedorn and Susan Hagedorn
Incorporated herein by reference to the Current Report on Form
8-K of The Scotts Company, an Ohio corporation
(Scotts) filed October 5, 1999 (File No. 1-11593)
[Exhibit 2]
Agreement and Plan of Merger, dated as of December 13,
2004, by and among The Scotts Company, The Scotts Company LLC
and The Scotts Miracle-Gro Company
Incorporated herein by reference to Scotts Current Report
on Form 8-K filed February 2, 2005 (File
No. 1-13292))
[Exhibit 2.1]
Initial Articles of Incorporation of The Scotts Miracle-Gro
Company as filed with Ohio Secretary of State on
November 22, 2004
Incorporated herein by reference to the Current Report on Form
8-K of The Scotts Miracle-Gro Company (the
Registrant) filed March 24, 2005 (File No. 1-13292)
[Exhibit 3.1]
Certificate of Amendment by Shareholders to Articles of
Incorporation of The Scotts Miracle-Gro Company as filed with
Ohio Secretary of State on March 18, 2005
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed March 24, 2005 (File No.
1-13292) [Exhibit 3.2]
Code of Regulations of The Scotts Miracle-Gro Company
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed March 24, 2005 (File No.
1-13292) [Exhibit 3.3]
Amended and Restated Credit Agreement, dated as of
February 7, 2007, by and among The Scotts Miracle-Gro
Company as the Borrower; the Subsidiary Borrowers
(as defined in the Amended and Restated Credit Agreement); the
several banks and other financial institutions from time to time
parties to the Amended and Restated Credit Agreement; Bank of
America, N.A., as Syndication Agent; The Bank of
Tokyo-Mitsubushi UFJ, Ltd, BNP Paribas, CoBank, ACB, BMO Capital
Markets Financing, Inc., LaSalle Bank N.A., Cooperatieve
Centrale Raiffeisen Boerenleenbank, B.A. Rabobank
Nederland, New York Branch, Citicorp North America, Inc.
and The Bank of Nova Scotia, as Documentation Agents; and
JPMorgan Chase Bank, N.A., as Administrative Agent
Incorporated herein by reference to the Registrants
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2007 (File
No. 1-13292)
[Exhibit 4(a)]
Exhibit
No.
Description
Location
First Amendment, dated as of April 10, 2007, to the Amended
and Restated Credit Agreement, dated as of February 7,
2007, by and among The Scotts Miracle-Gro Company as the
Borrower; the Subsidiary Borrowers (as defined in
the Amended and Restated Credit Agreement); the several banks
and other financial institutions from time to time parties to
the Amended and Restated Credit Agreement; the Syndication Agent
and the Documentation Agents named in the Amended and Restated
Credit Agreement and JPMorgan Chase Bank, N.A., as
Administrative Agent
Incorporated herein by reference to the Registrants
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2007 (File
No. 1-13292)
[Exhibit 4(b)]
Amended and Restated Guarantee and Collateral Agreement, dated
as of February 7, 2007, made by The Scotts Miracle-Gro
Company and each Subsidiary Borrower (and certain of the
Subsidiary Borrowers domestic subsidiaries) under the
Amended and Restated Credit Agreement in favor of JPMorgan Chase
Bank, N.A., as Administrative Agent
Incorporated herein by reference to the Registrants
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2007 (File
No. 1-13292)
[Exhibit 4(c)]
Foreign Pledge Agreement Acknowledgement and Confirmation, dated
as of March 30, 2007, entered into by Scotts Sierra
Investments, Inc. and OMS Investments, Inc. in favor of JPMorgan
Chase Bank, N.A., as Administrative Agent
Incorporated herein by reference to the Registrants
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2007 (File
No. 1-13292)
[Exhibit 4(d)]
Agreement to furnish copies of instruments and agreements
defining rights of holders of long-term debt
*
The O.M. Scott & Sons Company Excess Benefit Plan,
effective October 1, 1993
Incorporated herein by reference to the Annual Report on Form
10-K for the fiscal year ended September 30, 1993 of The Scotts
Company, a Delaware corporation (File
No. 0-19768)
[Exhibit 10(h)]
First Amendment to The O.M. Scott & Sons Company
Excess Benefit Plan, effective as of January 1, 1998
Incorporated herein by reference to the Annual Report on Form
10-K for the fiscal year ended September 30, 2001 of The Scotts
Company, an Ohio corporation (Scotts) (File No.
1-13292) [Exhibit 10(a)(2)]
Second Amendment to The O.M. Scott & Sons Company
Excess Benefit Plan, effective as of January 1, 1999
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 2001 (File
No. 1-13292) [Exhibit 10(a)(3)]
Third Amendment to The O.M. Scott & Sons Company
Excess Benefit Plan, effective as of March 18, 2005
(amended title of plan to be The Scotts Company LLC Excess
Benefit Plan)
Incorporated herein by reference to the Quarterly Report on Form
10-Q for the quarterly period ended April 2, 2005 of The Scotts
Miracle-Gro Company (the Registrant) (File
No. 1-13292)
[Exhibit 10(CC)]
The Scotts Company LLC Executive/Management Incentive Plan (as
approved by the shareholders of The Scotts Miracle-Gro Company
on January 26, 2006)
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed February 2, 2006 (File No.
1-13292) [Exhibit 10.4]
Exhibit
No.
Description
Location
The Scotts Company LLC Amended and Restated Executive/Management
Incentive Plan (effective as of November 7, 2007)
*
Specimen form of Employee Confidentiality, Noncompetition,
Nonsolicitation Agreement for employees participating in The
Scotts Company LLC Executive/Management Incentive Plan (now
known as The Scotts Company LLC Amended and Restated
Executive/Management Incentive Plan)
Incorporated herein by reference to the Registrants
Quarterly Report on Form 10-Q for the quarterly period ended
July 1, 2006 (File No. 1-13292) [Exhibit 10.1]
Executive Officers of The Scotts Miracle-Gro Company who are
parties to form of Employee Confidentiality, Noncompetition,
Nonsolicitation Agreement for employees participating in The
Scotts Company LLC Executive/Management Incentive Plan (now
known as The Scotts Company LLC Amended and Restated
Executive/Management Incentive Plan)
*
The Scotts Company 1996 Stock Option Plan (as amended through
May 15, 2000)
Incorporated herein by reference to Scotts Quarterly
Report on Form 10-Q for the quarterly period ended April 1, 2000
(File No. 1-13292) [Exhibit 10(d)]
The Scotts Company 1996 Stock Option Plan (2002 Amendment)
Incorporated herein by reference to Scotts Quarterly
Report on Form 10-Q for the quarterly period ended December 28,
2002 (File No. 1-13292) [Exhibit 10(d)(i)]
Amendment to The Scotts Company 1996 Stock Option
Plan 2005 Amendment, effective as of March 18,
2005 (amended title of plan to be The Scotts Miracle-Gro Company
1996 Stock Option Plan)
Incorporated herein by reference to the Registrants
Quarterly Report on Form 10-Q for the quarterly period ended
April 2, 2005 (File No. 1-13292) [Exhibit 10(z)]
The Scotts Miracle-Gro Company Amended and Restated 1996 Stock
Option Plan (effective as of October 30, 2007)
*
Form of 1996 Stock Option Plan Stock Option
Agreement Non-Qualified Stock Option
Incorporated herein by reference to Scotts Current Report
on Form 8-K filed November 19, 2004 (File No. 1-13292) [Exhibit
10.7]
Specimen form of Stock Option Agreement (as amended through
October 23, 2001) for Non-Qualified Stock Options
granted to employees under The Scotts Company 1996 Stock Option
Plan (now known as The Scotts Miracle-Gro Company Amended and
Restated 1996 Stock Option Plan), French specimen
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 2001 (File
No. 1-13292) [Exhibit 10(f)]
The Scotts Company Executive Retirement Plan
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 1998 (File
No. 1-11593) [Exhibit 10(j)]
First Amendment to The Scotts Company Executive Retirement Plan,
effective as of January 1, 1999
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 2001 (File
No. 1-13292) [Exhibit 10(g)(2)]
Exhibit
No.
Description
Location
Second Amendment to The Scotts Company Executive Retirement
Plan, effective as of January 1, 2000
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 2001 (File
No. 1-13292) [Exhibit 10(g)(3)]
Third Amendment to The Scotts Company Executive Retirement Plan,
effective as of January 1, 2003
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 2003 (File
No. 1-13292) [Exhibit 10(g)(4)]
Fourth Amendment to The Scotts Company Executive Retirement
Plan, effective as of January 1, 2004
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 2004 (File
No. 1-13292) [Exhibit 10(g)(5)]
Fifth Amendment to The Scotts Company Executive Retirement Plan,
effective as of March 18, 2005 (amended title of plan to be
The Scotts Company LLC Executive Retirement Plan)
Incorporated herein by reference to the Registrants
Quarterly Report on Form 10-Q for the quarterly period ended
April 2, 2005 (File No. 1-13292) [Exhibit 10(DD)]
Employment Agreement, dated as of May 19, 1995, between The
Scotts Company and James Hagedorn
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 1995 (File
No. 1-11593) [Exhibit 10(p)]
Letter agreement, dated June 8, 2000, between The Scotts
Company and Patrick J. Norton
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 2000 (File
No. 1-13292) [Exhibit 10(q)]
Letter agreement, dated November 5, 2002, and accepted by
Mr. Norton on November 22, 2002, pertaining to the
terms of employment of Patrick J. Norton through
December 31, 2005, and superseding certain provisions of
the letter agreement, dated June 8, 2000, between The
Scotts Company and Mr. Norton
Incorporated herein by reference to Scotts Annual Report
on Form 10-K for the fiscal year ended September 30, 2002 (File
No. 1-13292) [Exhibit 10(q)]
Letter of Extension, dated October 25, 2005, between The
Scotts Miracle-Gro Company and Patrick J. Norton
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed December 14, 2005 (File No.
1-13292) [Exhibit 10.3]
The Scotts Company 2003 Stock Option and Incentive Equity Plan
(as approved by shareholders of The Scotts Company on
January 30, 2003)
Incorporated herein by reference to Scotts Quarterly
Report on Form 10-Q for the quarterly period ended December 28,
2002 (File No. 1-13292) [Exhibit 10(w)]
First Amendment to The Scotts Company 2003 Stock Option and
Incentive Equity Plan, effective as of March 18, 2005
(amended title of plan to be The Scotts Miracle-Gro Company 2003
Stock Option and Incentive Equity Plan)
Incorporated herein by reference to the Registrants
Quarterly Report on Form 10-Q for the quarterly period ended
April 2, 2005 (File No. 1-13292) [Exhibit 10(AA)]
The Scotts Miracle-Gro Company Amended and Restated 2003 Stock
Option and Incentive Equity Plan (effective as of
October 30, 2007)
*
Exhibit
No.
Description
Location
Specimen form of Award Agreement for Nondirectors used to
evidence Incentive Stock Options, Nonqualified Stock Options,
Stock Appreciation Rights, Restricted Stock and Performance
Shares which may be granted under 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)
Incorporated herein by reference to the Registrants Annual
Report on Form 10-K for the fiscal year ended September 30, 2005
(File No. 1-13292) [Exhibit 10(u)]
Form of letter agreement amending Restricted Stock awards
granted under The Scotts Miracle-Gro Company 2003 Stock Option
and Incentive Equity Plan, as amended (effective as of
October 30, 2007)
*
Specimen form of Award Agreement for Directors used to evidence
Nonqualified Stock Options granted under 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)
Incorporated herein by reference to the Registrants Annual
Report on
Form 10-K
for the fiscal year ended September 30, 2005 (File No.
1-13292) [Exhibit 10(v)]
Employment Agreement effective as of October 1, 2007,
between The Scotts Company LLC and Barry W. Sanders
*
Employment Agreement effective as of July 1, 2001, between
The Scotts Company LLC and Claude Lopez [English
Translation Original in French]
*
Employment Agreement for Christopher Nagel, entered into
effective as of October 1, 2006, by and between Christopher
Nagel and The Scotts Miracle-Gro Company (voluntarily terminated
effective July 18, 2007)
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed December 7, 2006 (File No.
1-13292) [Exhibit 10.1]
The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan
Award Agreement for Employees, evidencing Restricted Stock Award
of 38,000 Restricted Stock Awarded to Christopher Nagel on
October 1, 2006 by The Scotts Miracle-Gro Company
(forfeited as a result of voluntary termination effective
July 18, 2007)
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed December 7, 2006 (File No.
1-13292) [Exhibit 10.2]
Separation Agreement and General Release, entered into and
effective as of July 18, 2007, by and between The Scotts
Miracle-Gro Company and Christopher L. Nagel
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed July 18, 2007 (File No.
1-13292) [Exhibit 10.1]
The Scotts Miracle-Gro Company 2006 Long-Term Incentive Plan (as
approved by the shareholders of The Scotts Miracle-Gro Company
on January 26, 2006)
Incorporated herein by reference to the Registrants
Current Report on
Form 8-K
filed February 2, 2006 (File No. 1-13292)
[Exhibit 10.2]
The Scotts Miracle-Gro Company Amended and Restated 2006
Long-Term Incentive Plan (effective as of October 30, 2007)
*
Specimen form of Award Agreement used to evidence Time-Based
Nonqualified Stock Options for Non-Employee Directors under 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)
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed February 2, 2006 (File No.
1-13292) [Exhibit 10.3]
Exhibit
No.
Description
Location
Amended and Restated Exclusive Agency and Marketing Agreement,
dated as of September 30, 1998, between Monsanto Company
and The Scotts Company LLC (as successor to The Scotts Company)
Incorporated herein by reference to the Registrants Annual
Report on Form 10-K for the fiscal year ended September 30, 2005
(File
No. 1-13292)
[Exhibit 10(x)]
Master Accounts Receivable Purchase Agreement, dated as of
April 11, 2007, by and among The Scotts Company LLC as
seller, The Scotts Miracle-Gro Company as guarantor and LaSalle
Bank National Association as purchaser
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed April 17, 2007 (File
No. 1-13292)
[Exhibit 10.1]
Code of Business Conduct and Ethics of The Scotts Miracle-Gro
Company, as amended on November 2, 2006
Incorporated herein by reference to the Registrants
Current Report on Form 8-K filed November 8, 2006 (File
No. 1-13292))
[Exhibit 14]
Subsidiaries of The Scotts Miracle-Gro Company
*
Consent of Independent Registered Public Accounting
Firm Deloitte & Touche LLP
*
Powers of Attorney of Executive Officers and Directors of The
Scotts Miracle-Gro Company
*
Rule 13a-14(a)/15d-14(a)
Certification (Principal Executive Officer)
*
Rule 13a-14(a)/15d-14(a)
Certification (Principal Financial Officer)
*
Section 1350 Certification (Principal Executive Officer and
Principal Financial Officer)
*
*
Filed herewith.
Re: | The Scotts Miracle-Gro Company Annual Report on Form 10-K for the fiscal year ended September 30, 2007 |
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 Companys 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. |
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; |
2
(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 Participants individual performance or any other factors that the Committee deems appropriate. |
3
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: |
4
(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. |
5
The Scotts Miracle-Gro Company
who are parties to form of
Employee Confidentiality, Noncompetition,
Nonsolicitation Agreement for employees
participating in The Scotts Company LLC
Executive/Management Incentive Plan
Name and Principal Position
Date of Employee Confidentiality,
with The Scotts Miracle-Gro Company
Noncompetition, Nonsolicitation Agreement
August 8, 2006
May 20, 2006
April 22, 2005
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5
6
7
8
9
10
11
12
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-3-
-4-
-5-
-6-
-7-
-8-
Number of Full Years Beginning
After Grant Date |
Cumulative Percentage
Vested |
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Less than 3
3 or more |
0 percent
100 percent |
-9-
[i] 100 shares of Stock; or |
-10-
[ii] The number of full shares of Stock for which Director Options are then exercisable. |
-11-
-12-
-13-
-14-
-15-
-16-
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THE SCOTTS MIRACLE-GRO COMPANY | ||||||
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By: | |||||
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Title: | |||||
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Article 1. Term of Employment
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1 | |||
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Article 2. Definitions
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2 | |||
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Article 3. Position and Responsibilities
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5 | |||
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Article 4. Standard of Care
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5 | |||
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Article 5. Compensation
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6 | |||
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Article 6. Expenses
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7 | |||
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Article 7. Employment Terminations
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7 | |||
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Article 8. Assignment
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11 | |||
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Article 9. Notice
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12 | |||
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Article 10. Confidentiality, Noncompetition, and Nonsolicitation
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12 | |||
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Article 11. Miscellaneous
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12 | |||
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Article 12. Governing Law
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14 | |||
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Article 13. Indemnification
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14 |
2.1 | Agreement means this Employment Agreement for Barry Sanders. | ||
2.2 | Annual Bonus Award means the annual bonus to be paid to the Executive in accordance with the Companys annual bonus program as described in Section 5.2 herein. | ||
2.3 | Award Period means the performance period applicable to Long-Term Incentive Awards granted under the relevant Company long-term incentive plan. | ||
2.4 | Base Salary means the salary of record paid to the Executive as annual salary, pursuant to Section 5.1, excluding all other amounts received including under incentive or other bonus plans, whether or not deferred. | ||
2.5 | Beneficiary means the individuals or entities designated or deemed designated by the Executive pursuant to Section 11.6 herein. | ||
2.6 | Board or Board of Directors means the Board of Directors of Scotts. | ||
2.7 | Cause means the Executives: |
(a) | Continued failure to substantially perform his duties with the Company, Scotts or any of their affiliates after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has failed to substantially perform his duties, and after the Executive has failed to resume substantial performance of his duties on a continuous basis within thirty (30) calendar days of receiving such demand; or | ||
(b) | Conviction of a felony; or | ||
(c) | Engagement in illegal conduct, an act of dishonesty, violation of Scotts policies or other similar conduct, that in the Companys sole discretion, which shall be exercised in good faith, is injurious to the Company, Scotts or any of their affiliates; or | ||
(d) | Material breach of any provision of this Agreement; provided, however, that the Executives willful and material breach of Article 4 shall not constitute Cause unless the Executive has first been provided with written notice detailing such breach and a thirty (30) day period to cure such breach; or | ||
(e) | Breach of Scotts code of business conduct or ethics as determined in good faith by the Company; or | ||
(f) | Violation of Scotts insider-trading policies as determined in good faith by the Company; or |
2
(g) | Material breach of his fiduciary duties to the Company, Scotts or any of their affiliates as determined in good faith by the Company. |
2.8 | Change in Control means the occurrence of any of the following events after the Effective Date of this Agreement: |
(a) | Any person or group (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) other than Scotts, subsidiaries of Scotts, an employee benefit plan sponsored by Scotts, or Hagedorn Partnership, L.P. or its successor or any party related to Hagedorn Partnership, L.P. (as determined by the Board of Directors) becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than thirty percent (30%) of the combined voting stock of Scotts; | ||
(b) | The shareholders of Scotts adopt or approve a definitive agreement or series of related agreements for the merger or other business consolidation with another person, the agreement(s) become effective and, immediately after giving effect to the merger or consolidation, (i) less than fifty percent (50%) of the total voting power of the outstanding voting stock of the surviving or resulting person is then beneficially owned (within the meaning of Rule l3d-3 under the Exchange Act) in the aggregate by (x) the shareholders of Scotts immediately prior to such merger or consolidation, or (y) if a record date has been set to determine the shareholders of Scotts entitled to vote with respect to such merger or consolidation, the shareholders of Scotts as of such record date and (ii) any person or group (as defined in Section 13(d)(3) and 14(d)(2) of the Exchange Act) has become the direct or indirect beneficial owner (as defined in Rule l3d-3 under the Exchange Act) of more than fifty percent (50%) of the voting power of the voting stock of the surviving or resulting person; | ||
(c) | Scotts, either individually or in conjunction with one or more of its subsidiaries, sells, assigns, conveys, transfers, leases or otherwise disposes of, or the subsidiaries sell, assign, convey, transfer, lease or otherwise dispose of, all or substantially all of the properties and assets of Scotts and the subsidiaries, taken as a whole (either in one transaction or a series of related transactions), to any person (other than Scotts or a wholly owned subsidiary); |
3
(d) | For any reason, Hagedorn Partnership, L.P. or its successor or any party related to Hagedorn Partnership, L.P. (as determined by the Board of Directors) becomes the beneficial owner, as defined above, directly or indirectly, of securities of Scotts representing more than forty-nine percent (49%) of the combined voting power of Scotts then-outstanding voting securities; or | ||
(e) | The adoption or authorization by the shareholders of Scotts of a plan providing for the liquidation or dissolution of Scotts. |
2.9 | Code means the U.S. Internal Revenue Code of 1986, as amended from time to time. For purposes of this Agreement, references to sections of the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision. | ||
2.10 | Committee means the Compensation and Organization Committee of the Board or a subcommittee thereof, or any other committee designated by the Board to take any actions referenced in this Agreement. The members of the Committee shall be appointed from time to time by and shall serve at the discretion of the Board. If the Committee does not exist or cannot function for any reason, the Board may take any action under this Agreement that would otherwise be the responsibility of the Committee. | ||
2.11 | Company means The Scotts Company LLC, an Ohio corporation, or any successor company thereto as provided in Section 8.1 herein. | ||
2.12 | Director means any individual who is a member of the Board of Directors of Scotts. | ||
2.13 | Disability or Disabled means for all purposes of this Agreement, a consecutive period of ninety (90) calendar days during which the Executive is unable to perform his duties. | ||
2.14 | Effective Date means October1, 2007. | ||
2.15 | Effective Date of Termination means the date on which a termination of the Executives employment occurs. For purposes of this Agreement, references to a termination of employment or any form thereof shall mean a separation from service as defined under Section 409A of the Code. | ||
2.16 | Executive means Barry Sanders. | ||
2.17 | Good Reason means, without the Executives consent, the existence of one or more of the following conditions: |
(a) | A material diminution in the Executives base compensation; | ||
(b) | A material diminution in the Executives authority, duties, or responsibilities; | ||
(c) | A material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report; |
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(d) | A material diminution in the budget over which the Executive retains authority; | ||
(e) | A material change in the geographic location at which the Executive must perform services; or | ||
(f) | Any other action or inaction that constitutes a material breach by the Company of this Agreement (including under Section 8.1). |
2.18 | Long-Term Incentive Award means the Long-Term Incentive Award to be paid to the Executive in accordance with the Companys long-term incentive plan as described in Section 5.3 herein. | ||
2.19 | Notice of Termination means a written notice which shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executives employment under the provisions so indicated. | ||
2.20 | Scotts means The Scotts Miracle-Gro Company, an Ohio corporation. | ||
2.21 | Specified Executive means a specified employee within the meaning of Treasury Regulation §1.409A-1(i) and as determined under the Companys policy for determining specified employees. | ||
2.22 | Target Annual Bonus Award means the amount of money determined by multiplying the Executives bonus target percentage by the Executives then Base Salary. For example, if the Executives Base Salary is $100,000 and the Executives bonus target percentage is 25%, then the Executives Target Annual Bonus Award is $25,000.00. |
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(a) | Devote his full and best efforts to the fulfillment of his employment obligations; and | ||
(b) | Adhere to Scotts code of business conduct or ethics as determined by the Board, the Committee or the Company and exercise the highest standards of conduct in the performance of his duties. |
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(a) | Base Salary through the Effective Date of Termination within thirty (30) days following such Effective Date of Termination; | ||
(b) | Subject to the Executives estate signing and not revoking a release of claims satisfactory to the Company (a Release) within sixty (60) days following the Effective Date of Termination, a prorated Target Annual Bonus Award based on |
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the Executives target bonus opportunity established for the year in which termination of employment occurs. The prorated amount shall be determined as a function of time within the year that has elapsed prior to the Executives Effective Date of Termination and shall be paid no later than seventy (70) days following the Effective Date of Termination; and |
(c) | All other rights and benefits the Executive is vested in, pursuant to other plans and programs of the Company. Such rights and benefits shall be paid or provided, as applicable, in accordance with the terms of the applicable plan or program. |
(a) | Base Salary through the Effective Date of Termination (subject to an offset for any disability payments that the Executive receives during this period) within thirty (30) days following such Effective Date of Termination; | ||
(b) | Subject to the Executive signing and not revoking a Release within sixty (60) days following the Effective Date of Termination, a prorated Target Annual Bonus Award based on the Executives target bonus opportunity established for the year in which termination of employment occurs. The prorated amount shall be determined as a function of time within the year that has elapsed prior to the Executives Effective Date of Termination and shall be paid no later than seventy (70) days following the Effective Date of Termination; and | ||
(c) | All other rights and benefits the Executive is vested in, pursuant to other plans and programs of the Company. Such rights and benefits shall be paid or provided, as applicable, in accordance with the terms of the applicable plan or program. |
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(a) | An amount equal to the Executives accrued and unpaid Base Salary through the Effective Date of Termination within thirty (30) days following such Effective Date of Termination. | ||
(b) | Subject to the Executive signing and not revoking a Release within sixty (60) days following the Effective Date of Termination: |
(i) | A lump sum payment equal to two (2) times the Executives Base Salary, at the rate in effect on the Effective Date of Termination. | ||
(ii) | A lump sum payment equal to one (1) times the Executives Target Annual Bonus Award, at the targeted Annual Bonus Award in effect on the Effective Date of Termination. | ||
(iii) | A lump sum payment equal to the product of (1) the employer portion of the monthly cost of the Executives medical and dental insurance benefits as of the Effective Date of Termination (assuming the same coverage level as in effect as of the Effective Date of Termination), multiplied by (2) twelve (12). |
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(c) | All other benefits to which the Executive has a vested right as of the Effective Date of Termination, according to the provisions of the governing plan or program. Such rights and benefits shall be paid or provided, as applicable, in accordance with the terms of the applicable plan or program. |
(a) | An amount equal to the Executives accrued and unpaid Base Salary through the Effective Date of Termination within thirty (30) days following such Effective Date of Termination. | ||
(b) | Subject to the Executive signing and not revoking a Release within sixty (60) days following the Effective Date of Termination: |
(i) | A lump sum payment equal to two (2) times the Executives annual Base Salary, at the Base Salary amount in effect on the Effective Date of Termination; | ||
(ii) | A lump sum payment equal to two (2) times the Executives Targeted Annual Bonus Award, at the targeted Annual Bonus Award in effect on the Effective Date of Termination; |
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(iii) | A lump sum payment that is equal to a prorated Targeted Annual Bonus Award based on the Executives target bonus opportunity established for the fiscal year in which termination of employment occurs. The prorated amount shall be determined as a function of time within the fiscal year that has elapsed prior to the Executives Effective Date of Termination; and | ||
(iv) | A lump sum payment equal to the product of (1) the employer portion of the monthly cost of the Executives medical and dental insurance benefits as of the Effective Date of Termination (assuming the same coverage level as in effect as of the Effective Date of Termination), multiplied by (2) twenty-four (24). |
(c) | All other benefits to which the Executive has a vested right as of the Effective Date of Termination, according to the provisions of the governing plan or program. Such rights and benefits shall be paid or provided, as applicable, in accordance with the terms of the applicable plan or program. |
(a) | If the Executive is considered a Specified Executive and payment of any amounts under this Agreement is required to be delayed for a period of six months after a separation from service pursuant to Section 409A of the Code, payment of such amounts shall be delayed as required by Section 409A of the Code, and the accumulated postponed amounts, with accrued interest as described in subsection (b) below, shall be paid in a lump sum payment within five (5) days after the end of the six (6) month period. If the Executive dies during the postponement period prior to the payment of such amounts, the amounts postponed on account of Section 409A of the Code, with accrued interest as described in subsection (b) below, shall be paid to the Executives Beneficiary within sixty (60) days after the date of the Executives death. | ||
(b) | If payment of any amounts under this Agreement is required to be delayed pursuant to Section 409A of the Code, the Company shall pay interest on the postponed payments from the date on which the amounts otherwise would have been paid to the date on which such amounts are paid at an annual rate equal to the prime rate as announced on the Executives Effective Date of Termination by JPMorgan Chase Bank on such date. |
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Executive | |||
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/s/ Barry W. Sanders | |||
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Date:11/16/07 | |||
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The Scotts Company LLC | |||
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/s/ James Hagedorn | |||
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Date: 19 Nov 07 |
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(Name)
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Address:
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Address:
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Address:
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Received on:
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By:
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| You will be held to professional secrecy, during the time that you are with our Company, and after your departure therefrom, if such occurs, irrespective of the reason therefor. | |
| You also hereby agree not to work for a competing firm, even temporarily, or as a consultant, while occupying your position. | |
| Your job assignments may be subsequently changed, if such is required in the interests of the Group. |
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Pension
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Caisse ARRCO [Association of Supplementary Pension Plans]: UIRIC [Pension Union for Industry and Commerce] |
21 rue Roger Salengro
94128 FONTENAY S/BOIS CEDEX |
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Caisse AGIRC [Executive Pension
Association]: URC [Executive Pension Union] |
21 rue Roger Salengro
94128 FONTENAY S/BOIS CEDEX |
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Provident fund
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MEDERIC |
21 rue Laffitte
75317 PARIS CEDEX 09 |
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[signature]
Isabelle Proust-Cabrera |
[signature]
Michel Farkouh |
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Human Resources Director
Scotts France & International |
Chief Executive
Scotts International, General Public |
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Article 1.
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Establishment, Purpose, and Duration | 1 | ||||
Article 2.
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Definitions | 1 | ||||
Article 3.
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Administration | 8 | ||||
Article 4.
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Shares Subject to this Plan and Maximum Awards | 9 | ||||
Article 5.
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Eligibility and Participation | 11 | ||||
Article 6.
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Stock Options | 12 | ||||
Article 7.
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Stock Appreciation Rights | 14 | ||||
Article 8.
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Restricted Stock and Restricted Stock Units | 15 | ||||
Article 9.
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Performance Units/Performance Shares | 17 | ||||
Article 10.
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Cash-Based Awards and Other Stock-Based Awards | 18 | ||||
Article 11.
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Transferability of Awards | 18 | ||||
Article 12.
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Performance Measures | 19 | ||||
Article 13.
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Nonemployee Director Awards | 21 | ||||
Article 14.
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Dividend Equivalents | 21 | ||||
Article 15.
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Beneficiary Designation | 21 | ||||
Article 16.
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Rights of Participants | 22 | ||||
Article 17.
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Change of Control | 22 | ||||
Article 18.
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Amendment, Modification, Suspension, and Termination | 25 | ||||
Article 19.
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Withholding | 26 | ||||
Article 20.
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Successors | 26 | ||||
Article 21.
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General Provisions | 26 |
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(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; | ||
(i) | Productivity ratios; | ||
(j) | Share price (including, but not limited to, growth measures and total shareholder return); | ||
(k) | Expense targets; | ||
(l) | Margins; | ||
(m) | Operating efficiency; | ||
(n) | Market share; |
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(o) | Customer satisfaction; | ||
(p) | Working capital targets; | ||
(q) | Economic value added or EVA(R) (net operating profit after tax minus the sum of capital multiplied by the cost of capital); | ||
(r) | Developing new products and lines of revenue; | ||
(s) | Reducing operating expenses; | ||
(t) | Developing new markets; | ||
(u) | Meeting completion schedules; | ||
(v) | Developing and managing relationships with regulatory and other governmental agencies; | ||
(w) | Managing cash; | ||
(x) | Managing claims against the Company, including litigation; and | ||
(y) | Identifying and completing strategic acquisitions. |
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THE SCOTTS MIRACLE-GRO COMPANY | ||||||
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By: | |||||
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Title: | |||||
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Grantees Signature
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- | 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: |
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(a) | A copy of the Plan has been made available to you; | ||
(b) | You understand and accept the terms and conditions of your NSO; |
[Grantees Name] | THE SCOTTS MIRACLE-GRO COMPANY | |||||||||||||
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BY:
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BY: | |||||||||||||
Date signed: | [Name of Company representative] | |||||||||||||
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[Title of Company representative] | ||||||||||||||
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Date signed: | |||||||||||||
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| If you select the Exercise and Hold method, you must follow the procedures described in the Award Agreement to pay the Exercise Price and the taxes related to this exercise. You should contact [Third Party Administrator] at the address given below to find out the amount of taxes due. | ||
| If you select either the Cashless Exercise and Sell method or the Combination Exercise method, you should contact [Third Party Administrator] at the address given below to be sure you understand how your choice of payment will affect the number of Shares you will receive. |
| You fully understand the effect (including the investment effect) of exercising your NSO and buying Shares and understand that there is no guarantee that the value of these Shares will appreciate or will not depreciate; | ||
| This Exercise Notice will have no effect if it is not returned to [Third Party Administrator] at the address given below before the NSO expires, as specified in the Award Agreement under which the NSO was granted; and | ||
| The Shares you are buying by completing and returning this Exercise Notice will be issued to you as soon as administratively practicable. You will not have any rights as a shareholder of the Company until the Shares are issued. |
(signature)
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Date signed:
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[Grantees Name]:
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describe deficiency |
By:
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Date:
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[Grantees Name] | THE SCOTTS MIRACLE-GRO COMPANY | |||||||||||||
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By:
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By: | |||||||||||||
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Date signed: | [Name of Company Representative] | |||||||||||||
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[Title of Company Representative] | ||||||||||||||
Date signed: | ||||||||||||||
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[Grantees Name] | THE SCOTTS MIRACLE-GRO COMPANY | |||||||||||||
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By:
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By: | |||||||||||||
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Date signed: | [Name of Company Representative] | |||||||||||||
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[Title of Company Representative] | ||||||||||||||
Date signed: | ||||||||||||||
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Gutwein & Co., Inc., an Indiana corporation
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SMG Brands, Inc., a Delaware corporation
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SMG Growing Media, Inc., an Ohio corporation
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Rod McLellan Company, a California corporation
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SMGM LLC, an Ohio limited liability company
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The Scotts Company LLC, an Ohio limited liability company
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EG Systems, Inc., dba Scotts LawnService, an Indiana corporation
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Hyponex Corporation, a Delaware corporation
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OMS Investments, Inc., a Delaware corporation
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Scotts Temecula Operations, LLC, a Delaware limited liability company
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Sanford Scientific, Inc., a New York corporation
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Scotts Global Services, Inc., an Ohio corporation
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Scotts Manufacturing Company, a Delaware corporation
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Miracle-Gro Lawn Products, Inc., a New York corporation
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Scotts Products Co., an Ohio corporation
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Scotts Servicios, S.A. de C.V. (Mexico)
1
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Scotts Professional Products Co., an Ohio corporation
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Scotts Servicios, S.A. de C.V. (Mexico)
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Scotts-Sierra Horticultural Products Company, a California corporation
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Scotts-Sierra Crop Protection Company, a California corporation
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Scotts-Sierra Investments, Inc., a Delaware corporation
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ASEF BV (Netherlands)
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Scotts Australia Pty Ltd. (Australia)
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Scotts Benelux BVBA (Belgium)
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Scotts Canada Ltd. (Canada)
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Scotts Czech s.r.o. (Czech Republic)
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Scotts de Mexico SA de CV (Mexico)
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Scotts France Holdings SARL (France)
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Scotts France SARL (France)
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Scotts France SAS (France)
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Scotts Holding GmbH (Germany)
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Scotts Celaflor GmbH & Co. KG (Germany)
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Scotts Celaflor HGmbH (Austria)
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Scotts Holdings Limited (United Kingdom)
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Levington Group Ltd. (United Kingdom)
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The Scotts Company (UK) Ltd. (United Kingdom)
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The Scotts Company (Manufacturing) Ltd. (United Kingdom)
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1 | Not wholly-owned, Scotts Professional Products Co. owns 50% | |
2 | Not wholly-owned, Scotts Products Co. owns 50% | |
3 | Not wholly-owned, OMS Investments, Inc. owns .01% | |
4 | Not wholly-owned, Scotts Holdings Ltd. owns .01% | |
5 | Not wholly-owned, Scotts France SARL owns .01% |
OM Scott International Investments Ltd. (United Kingdom)
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Corwen Home and Garden Limited (United Kingdom)
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Scotts International B.V. (Netherlands)
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Scotts Deutschland GmbH (Germany)
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Scott O.M. España, S.A. (Spain)
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Scotts Italia S.r.l. (Italy)
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Scotts Horticulture Ltd. (Ireland)
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Scotts Hungary KFT (Hungary)
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Scotts PBG Malaysia Sdn. Bhd. (Malaysia)
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Scotts Poland Sp.z.o.o. (Poland)
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Scotts Sweden AB (Sweden)
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The Scotts Company (Nordic) A/S (Denmark)
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The Scotts Company Italia S.r.l. (Italy)
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The Scotts Company Kenya Ltd. (Kenya)
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Turf-Seed Europe (Ireland)
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Smith & Hawken, Ltd., a Delaware corporation
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Swiss Farms Products, Inc., a Delaware corporation
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6 | Not wholly-owned, James Hagedorn owns .05% | |
7 | Not wholly-owned, OMS Investments, Inc. owns 3% | |
8 | Not wholly-owned, Owned 51% by Tempoverde, Srl. |
/s/ James Hagedorn | ||||
James Hagedorn | ||||
/s/ Mark R. Baker | ||||
Mark R. Baker | ||||
/s/ Gordon F. Brunner | ||||
Gordon F. Brunner | ||||
/s/ Arnold W. Donald | ||||
Arnold W. Donald | ||||
/s/ Joseph P. Flannery | ||||
Joseph P. Flannery | ||||
/s/ Thomas N. Kelly Jr. | ||||
Thomas N. Kelly Jr. | ||||
/s/ Katherine Hagedorn Littlefield | ||||
Katherine Hagedorn Littlefield | ||||
/s/ Karen G. Mills | ||||
Karen G. Mills | ||||
/s/ Nancy G. Mistretta | ||||
Nancy G. Mistretta | ||||
/s/ Patrick J. Norton | ||||
Patrick J. Norton | ||||
/s/ Stephanie M. Shern | ||||
Stephanie M. Shern | ||||
/s/ John S. Shiely | ||||
John S. Shiely | ||||
/s/ David C. Evans | ||||
David C. Evans | ||||
1. | I have reviewed this Annual Report on Form 10-K of The Scotts Miracle-Gro Company for the fiscal year ended September 30, 2007; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Dated: November 29, 2007
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By: | /s/ James Hagedorn | ||||
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Printed Name: |
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Title: | President, Chief Executive Officer and Chairman of the Board |
1. | I have reviewed this Annual Report on Form 10-K of The Scotts Miracle-Gro Company for the fiscal year ended September 30, 2007; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Dated: November 29, 2007
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By: | /s/ David C. Evans | ||
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Printed Name: David C. Evans | |||
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Title: | Executive Vice President and Chief Financial Officer |
1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and | ||
2) | The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company and its subsidiaries. |
/s/ James Hagedorn
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/s/ David C. Evans | |
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James Hagedorn
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David C. Evans | |
President, Chief Executive Officer
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Executive Vice President | |
and Chairman of the Board
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and Chief Financial Officer | |
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November 29, 2007
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November 29, 2007 |
* | THIS CERTIFICATION IS BEING FURNISHED AS REQUIRED BY RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE EXCHANGE ACT), AND SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE, AND SHALL NOT BE DEEMED FILED FOR PURPOSES OF SECTION 18 OF THE EXCHANGE ACT OR OTHERWISE SUBJECT TO THE LIABILITY OF THAT SECTION. THIS CERTIFICATION SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS CERTIFICATION BY REFERENCE. |