SCOTTS COMPANY, S-3, 1994-06-01

SCOTTS COMPANY
S-3, 1994-06-01
AGRICULTURAL CHEMICALS

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As filed with the Securities and Exchange Commission on June 1, 1994
Registration No. 33-____

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

THE SCOTTS COMPANY
THE O.M. SCOTT & SONS COMPANY
(Exact name of registrants as specified in their charters)

Delaware 31-1199481
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)

14111 Scottslawn Road, Marysville, Ohio 43041 (513) 644-0011
(Address, including zip code, and telephone number,
including area code, of registrants' principal executive offices)

Craig D. Walley
Vice President, General Counsel and Secretary
The Scotts Company
14111 Scottslawn Road, Marysville, Ohio 43041
(513) 644-0011
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
G. Robert Lucas II George H. White
Vorys, Sater, Seymour and Pease Sullivan & Cromwell
52 East Gay Street 125 Broad Street
P.O. Box 1008 New York, New York 10004
Columbus, Ohio 43216-1008 (212) 558-4000
(614) 464-5691

Approximate date of commencement of proposed sale to the
public: from time to time after the effective date of this
Registration Statement as the Registrants shall determine.

If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. ____

If any of the securities being registered on this form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, check the following box. X

CALCULATION OF REGISTRATION FEE

Title of Each Class of
Securities to be Registered
Debt Securities

Amount to be
Registered(1)
$100,000,000

Proposed Maximum
Offering Price
Per Unit(2)
100%

Proposed Maximum
Aggregate Offering Price(2)
$100,000,000

Amount of
Registration Fee
$34,483

(1) Such amount shall be increased, if any Debt Securities are issued
at an original issue discount, by an amount such that the net proceeds
to be received by the Registrants shall be equal to the above Amount
to be Registered. Any offering of Debt Securities denominated other
than in U.S. dollars shall be treated as the equivalent in U.S. dollars
based on the applicable exchange rate at the time of offering.

(2) Estimated solely for purposes of calculating the
registration fee.

The Registrants hereby amend this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrants shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may
determine.

SUBJECT TO COMPLETION DATED JUNE 1, 1994

[Scotts Logo]
$100,000,000
The Scotts Company
The O.M. Scott & Sons Company
Debt Securities

The Scotts Company ("Scotts") and The O.M. Scott & Sons
Company ("OMS," and, together with Scotts, the "Issuers"), a
wholly owned subsidiary of Scotts, may offer from time to time
their unsecured senior or subordinated debt securities consisting
of notes, debt securities or other evidences of indebtedness (the
"Debt Securities") at an initial offering price (or net proceeds,
in the case of Debt Securities issued at an original issue
discount) not to exceed $100,000,000, or its equivalent in such
other currency or in composite currencies or currency units
as may be designated by
the Issuers at the time of offering. The Debt Securities may be
offered in one or more series in amounts, at prices and on terms
to be determined in light of market conditions at the time of
sale and set forth in a Prospectus Supplement or Prospectus
Supplements. Scotts is a holding company, and all of Scotts'
operations are conducted through OMS and OMS' subsidiaries. The
Debt Securities will be the joint and several obligations of the
Issuers.

The terms of each series of Debt Securities, including,
where applicable, the specific designation, rank, aggregate
principal amount, authorized denominations, maturities, rate or
rates and time or times of payment of any interest, any terms for
optional or mandatory redemption or payment of additional amounts
or any sinking fund provisions, any initial public offering
price, the proceeds to the Issuers and any other specific terms
in connection with the offering and sale of such series (the
"Offered Debt Securities") will be set forth in a Prospectus
Supplement or Prospectus Supplements.

The Debt Securities may be sold directly by the Issuers,
through agents designated from time to time or through
underwriters or dealers. See "Plan of Distribution." If any
agents of the Issuers or any underwriters are involved in the
sale of any Debt Securities in respect of which this Prospectus
is being delivered, the names of such agents or underwriters and
any applicable commissions or discounts will be set forth in a
Prospectus Supplement.
__________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this Prospectus is , 1994.

Information contained herein is subject to completion or
amendment. A registration statement relating these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.

AVAILABLE INFORMATION

Scotts is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports, proxy statements and
other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional
offices located at Northwestern Atrium, 500 West Madison, 14th
Floor, Chicago, Illinois 60661 and Seven World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.

The Issuers have filed a registration statement on Form S-3
(together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as
amended. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is made to the
Registration Statement and the exhibits filed as part thereof.
Statements contained herein concerning provisions of any document
filed as an exhibit are not necessarily complete and, in each
instance, reference is made to the copy of each document filed as
an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

Scotts' Annual Report on Form 10-K for the fiscal year ended
September 30, 1993; Scotts' Current Report on Form 8-K, dated
December 30, 1993; Scotts' Quarterly Reports on Form 10-Q for the
fiscal quarters ended January 1, 1994 and April 2, 1994,
respectively; Scotts' Current Report on Form 8-K/A, dated
February 28, 1994; and all other documents filed by Scotts
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities, which
documents are filed with the Commission (File No. 0-19768)
pursuant to the Exchange Act, are incorporated herein by
reference. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as modified or
superseded, to constitute a part of this Prospectus.

Scotts will provide without charge to each person to whom a
copy of this Prospectus is delivered, upon the request of any
such person, a copy of all of the documents which are
incorporated herein by reference, other than exhibits to such
documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to
The Scotts Company, 14111 Scottslawn Road, Marysville, Ohio
43041, Attention: Chief Financial Officer, telephone
(513) 644-0011.

PROSPECTUS SUMMARY

The following summary information is qualified in its
entirety by reference to the more detailed information and
financial statements (including the notes thereto) contained
elsewhere in this Prospectus or incorporated by reference herein.
As used in this Prospectus, unless the context indicates
otherwise, the "Issuers" mean The Scotts Company ("Scotts") and
its wholly owned subsidiary, The O.M. Scott & Sons Company
("OMS"), and the "Company" means the Issuers and OMS' direct and
indirect subsidiaries, including Hyponex Corporation ("Hyponex"),
acquired in November 1988, Republic Tool & Manufacturing Corp.
("Republic"), acquired in November 1992, and Scotts-Sierra
Horticultural Products Company ("Sierra"), acquired in December
1993. Sales and market share data given for the Company in this
Prospectus do not include Sierra unless otherwise indicated.

The Company

The Company is one of the oldest and most widely recognized
manufacturers of products used to grow and maintain landscape:
lawns, gardens and golf courses. In both the consumer and
professional market segments, the Company, through its brands --
Scotts(Registered) and Turf Builder(Registered) (for consumer
lawn care), ProTurf(Registered) (for professional turf care) and
Osmocote(Registered) and Peters(Registered) (for commercial
horticulture) -- commands market-leading shares more than double
those of the next ranked competitors. The Company's long history
of technical innovation, its reputation for quality and service
and its effective marketing tailored to the needs of do-it-
yourselfers and professionals have enabled the Company to
maintain leadership in its markets while delivering consistent
growth in sales and operating income and stable operating
margins. Do-it-yourselfers and professionals purchase through
different distribution channels and have different information
and product needs. Accordingly, the Company has two business
groups, Consumer and Professional, to serve these markets.

Consumer Business Group

The Consumer Business Group (which accounted for
approximately 80% of fiscal 1993 net sales) develops and markets
the products consumers need to grow and maintain beautiful lawns
and gardens: fertilizers, weed and insect controls, grass seed,
organic products and lawn spreaders. The Company estimates that
its lawn fertilizer and fertilizer/control combination products,
sold under the Scotts and Turf Builder brand names, have a 46%
share of the U.S. consumer lawn care chemicals market. The
organic product line of topsoils, potting soils, composted
manures and mulches are sold under the Hyponex(Registered) brand
and other labels. The Company has broadened and strengthened its
organic product line as a result of its recent acquisition of
Sierra, which manufactures Peters Professional(Registered)
potting soil (see "-Recent Developments"). Management estimates
that the Company has the leading market share in the total
branded organic products market and over a 50% share of the
retail potting soil segment.

The Company provides a high level of service for consumers.
It backs its promise of satisfaction with an unconditional "No
Quibble" guarantee for its Scotts products and maintains a toll-
free hotline for lawn care advice. The Company's consumer
products are sold in the United States through mass merchandisers
and independent retailers, and internationally in Canada, Japan
and Europe through various distribution channels.

Professional Business Group

The Professional Business Group (which accounted for
approximately 20% of fiscal 1993 net sales) develops and markets
products for professional users: golf courses, commercial
nurseries, sports fields, lawn care service companies and
landscapers. Scotts professional products provide these users
with a wide array of technically sophisticated controlled-release
and water-soluble fertilizers, controls, application devices and
growing media under such well-known labels as Scotts ProTurf (for
golf course and other turf applications), Osmocote and
Sierra(Registered) (for commercial horticulture),
ProGrow(Registered) (for the landscape market) and Peters and
MetroMix(Registered) (for greenhouses and commercial nurseries).
Depending on the market segment, these products are sold through
distributors, directly through the Company's agronomically-
trained technical representatives ("tech reps"), or through
Company-operated stores.

Management estimates that Scotts ProTurf fertilizer and
control products have the leading share of the non-commodity golf
course turf care market. In 1993, ProTurf products were used on
81 of the GOLF DIGEST top 100 courses and approximately 55% of
the over 14,500 golf courses in the United States. The Company's
strong research and development capabilities and agronomically-
trained sales force have enabled the Company to introduce
innovative new products and technologies and thereby maintain its
leading position in these targeted professional turf markets.

With the acquisition of Sierra, the Company has become the
leading supplier of controlled-release and water-soluble
fertilizers to the commercial horticulture segment, with an
estimated combined market share of over 50% in the United States.
Sierra's commercial horticultural products also have significant
market positions in Europe, Australia, New Zealand and the
Pacific Rim. A recently formed unit within the Professional
Business Group, under the ProGrow name, will concentrate on
marketing products to professional turf and landscape customers
other than golf courses and sports fields, such as lawn care
service companies.

Business Strategy

The Company's business strategy is to be the premier global
manufacturer and marketer of products used in landscape growth
and maintenance. The major elements of the Company's strategy
are to:

Develop Innovative and Technologically Advanced Products.
The Company's proven ability to develop and market new products
has been instrumental in establishing its leading market shares.
The Company is fully committed to continuing this tradition. For
example, it is introducing Turf Builder for Shady
Lawns(Registered) in 1994 utilizing proprietary technology to
answer the most often expressed needs of its do-it-yourself
consumers. In its professional markets, the technical expertise
of its sales force, combined with the Company's strong research
and development efforts, have resulted in new products introduced
since 1988 accounting for 66% of the Professional Business
Group's net sales in fiscal 1993. These new professional
products often have consumer applications. With the addition of
Sierra's research and development expertise and facilities, new
product development is expected to continue and expand.

Strengthen Relationships with Mass Merchandisers and
Independent Retailers. As the only nationwide supplier of a full
line of lawn and garden products, the Company has strong
relationships with mass merchandisers and major home center
retailers such as Kmart, Home Depot and Wal-Mart. Sales to this
fastest growing segment of retailers increased approximately 28%
from fiscal 1992 to fiscal 1993 and accounted for 40% of the
Consumer Business Group's net sales in fiscal 1993. Through
customized marketing programs and product offerings, the Company
intends to further strengthen its relationship with mass
merchandisers, while continuing to support its independent
retailers.

Accelerate Growth Through Cross-Selling. The Company
intends to continue its efforts to cross-sell a wider range of
its brand name products to retailers by capitalizing on its
position as the only nationwide supplier of a full line of
landscape growth and maintenance products. The Company also
expects to improve its distribution of Scotts products
internationally using the sales distribution and manufacturing
network of the recently-acquired Sierra. Management also plans
to use the leading position of the Scotts brand name in the golf
course segment to increase sales of Sierra products and to take
advantage of Sierra's strong commercial horticulture presence
both in the United States and abroad to increase sales of various
Scotts professional products.

Expand Through Selective Strategic Acquisitions. Since
1988, the Company has completed three strategic acquisitions of
companies in the lawn and garden industry. These acquisitions
have provided the Company with the opportunity to expand its
product offerings while building upon the Company's existing
strengths in distribution, technology and brand marketing. The
Company believes its most recent acquisition of Sierra, a leading
manufacturer and marketer to the commercial horticulture markets
in the United States and abroad, will further improve the
Company's global competitiveness.

Sierra Acquisition

On December 16, 1993, the Company acquired Sierra from W.R.
Grace & Co.-Conn., and other investors, for approximately $120
million in cash. Sierra, a leading manufacturer and marketer of
specialty fertilizers, pesticides and premium growing media used
in commercial horticulture, golf course and consumer
applications, had net sales of approximately $108.7 million for
the period from January 1, 1993, through December 16, 1993.
Its products are
manufactured in six plants located in the United States and one
in the Netherlands. Sierra markets its products in the United
States and internationally under brand names including Peters,
Osmocote, Once(Registered) and Terra-Lite(Registered). Through
Sierra's overseas subsidiaries, products are distributed in
numerous foreign markets, including, among others, Australia,
Europe and the Pacific Rim. Approximately 25% of Sierra's 1993
net sales were abroad.

For the Company's fiscal year ended September 30, 1993, the
Company had net sales of $466.0 million and net income before
extraordinary items and accounting changes of $21.0 million,
representing increases of 12.7% and 39.6%, respectively, over
fiscal 1992. Net sales and net income before cumulative effect
of accounting changes for the fiscal year ended September 30,
1993, on a pro forma basis giving effect to the Sierra
acquisition were $585.3 million and $20.3 million, respectively.
See "Unaudited Pro Forma Financial Data."

<PAGE>
SUMMARY HISTORICAL FINANCIAL DATA
<TABLE>
The following summary historical financial data should be
read in conjunction with the Company's Consolidated Financial
Statements and Notes thereto as of September 30, 1992 and 1993
and for the three years ended September 30, 1993 included
elsewhere in this Prospectus.

<CAPTION>
Fiscal Year Ended September 30,
1989(1) 1990 1991 1992 1993(2)
(dollars in thousands, except ratios)

Statement of Operations Data(3):
<S> <C> <C> <C> <C> <C>
Net sales . . . . $328,368 $350,441 $388,120 $413,558 $466,043
Gross profit. . . 148,183 163,638 180,164 200,425 221,825
Total operating expenses . 118,634 132,988 142,777 158,260 177,344
Income from operations . . 29,549 30,650 37,387 42,165 44,481
Interest and other expenses . . . . 28,638 37,411 32,932 15,962 9,114
Income (loss) before income taxes,
extraordinary items and cumulative
effect of accounting changes. . . 911 (6,761) 4,455 26,203 35,367
Income taxes . . 1,750 143 2,720 11,124 14,320
Extraordinary items:
Loss on early extinguishment
of debt, net of tax. . . -- -- -- (4,186) --
Utilization of net operating
loss carryforwards . . . 1,670 -- 2,581 4,699 --
Cumulative effect of changes
in accounting for post-
retirement benefits,
net of tax and income
taxes . . . . . -- -- -- -- (13,157)
Net income (loss) 831 (6,904) 4,316 15,592 7,890

Other Historical Data:

Depreciation and amortization $19,621 $20,474 $17,785 $15,848 $18,144
Capital expenditures . . . 6,722 8,494 8,818 19,896 15,158
EBITDA(4) . . . . 47,300 49,080 53,269 56,771 61,598
Ratio of EBITDA to interest
expense . . . . 1.46x 1.42x 1.72x 3.56x 7.29x
Ratio of earnings to fixed
charges(5). . . 1.03x ___(6) 1.14x 2.40x 4.08x

</TABLE>

<TABLE>
<CAPTION>
Fiscal Year Ended September 30,
1989(1) 1990 1991 1992 1993(2)
(dollars in thousands, except for ratios)
Balance Sheet Data (end of period):
<S> <C> <C> <C> <C> <C>
Working capital. . . . . $ 10,363 $18,230 $21,260 $54,795 $78,891
Total assets . . . . . . 276,253 270,429 260,729 268,021 321,590
Long-term debt, including
current portion. . . . 201,203 192,915 182,954 35,897 92,524
Total stockholders'
equity (deficit) . . . 2,555 (12,677) (9,961) 175,929 143,013

<F1>
(1) Includes Hyponex from November 11, 1988.

<F2>
(2) Includes Republic from November 19, 1992.

<F3>
(3) Certain amounts have been reclassified to conform to 1993 presentation;
these changes did not impact net income.

<F4>
(4) As used herein, EBITDA is defined as income from operations plus
depreciation and amortization
included therein. Deferred financing costs which have been incurred
and capitalized in connection with financing the Company's operations
and acquisitions are being amortized and reported as a portion of
interest expense and therefore have been excluded from the calculation
of depreciation and amortization used in the calculation of EBITDA.
The Company believes that EBITDA is generally
recognized as an indicator of a
company's ability to service its debt and capital expenditure
requirements. However, EBITDA is not
intended to be a performance measure that should be regarded as an
alternative either to income from
operations or net income or as an indicator of operating performance
or cash flows as a measure of
liquidity, as determined in accordance with generally accepted
accounting principles.

<F5>
(5) The ratio of earnings to fixed charges is computed by dividing (a) the sum
of (i) income from
operations before income taxes, extraordinary items and the cumulative
effect of accounting changes and (ii) fixed charges by (b) fixed charges.
Fixed charges consist of interest on all indebtedness
(including amortization of deferred financing costs), capitalized
interest and the estimated interest component of operating leases
(assumed to be one-third of total rental expense).

<F6>
(6) Reflects a deficiency of earnings to fixed charges of $6.8 million.
</TABLE>

SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA

The following summary unaudited pro forma financial data of
the Company has been derived from and should be read in
conjunction with the unaudited pro forma financial information
included elsewhere in this Prospectus under "Unaudited Pro Forma
Financial Data." The Pro Forma Statement of Operations Data give
effect to the acquisition of Sierra, which occurred on
December 16, 1993, as if it had occurred on October 1, 1992. The
Pro Forma Balance Sheet Data gives effect to the acquisition of
Sierra as if it had occurred on September 30, 1993.

<TABLE>
<CAPTION>
Fiscal Year Ended
September 30, 1993
(dollars in thousands,
except ratios)
Pro Forma Statement of Operations Data:
<S> <C>
Net sales . . . . . . . . . . . . $585,318
Gross profit . . . . . . . . . . 273,716
Total operating expenses . . . . 217,727
Income from operations. . . . . . 55,989
Interest and other expenses . . . 19,914
Income before income taxes and
cumulative effect of accounting
changes . . . . . . . . . . . . 36,075
Income taxes. . . . . . . . . . . 15,801
Cumulative effect of accounting
changes . . . . . . . . . . . . (13,157)
Net income. . . . . . . . . . . . 7,117
Other Pro Forma Data:
Depreciation and amortization . . $25,246
Capital expenditures. . . . . . . 16,760
EBITDA(1) . . . . . . . . . . . . 75,647
Ratio of EBITDA to interest expense. . . . . 4.89x
Ratio of earnings to fixed
charges(2). . . . . . . . . . . 2.81x
September 30, 1993
Pro Forma Balance Sheet Data:
Working capital . . . . . . . . . $ 92,240
Total assets. . . . . . . . . . . 470,205
Long-term debt, including
current portion . . . . . . . . 215,754
Total stockholders' equity. . . . 143,013

<F1>
(1) See note (3) to Summary Historical Financial Data.

<F2>
(2) See note (4) to Summary Historical Financial Data.
</TABLE>
INVESTMENT CONSIDERATIONS

Prospective purchasers of any Debt Securities should
consider carefully, in addition to the other information
contained in this Prospectus, the following factors.

Seasonality; Weather Conditions

The Company's business is highly seasonal, with
approximately 70% of net sales occurring in the second and third
fiscal quarters. Unexpected production or transportation
difficulties occurring at a time of peak production or sales
could cause sales losses which could not readily be recovered in
the current year.

In addition, the Company's consumer business may be
adversely affected by the weather. Poor weekend weather during
the Spring tends to adversely affect consumer purchases of do-it-
yourself lawn care products. Historically, the Company has
attempted to lessen the impact of possible adverse weather by
offering promotional programs at the retailer and consumer level
to encourage consumer purchases in the early Spring. Management
believes this strategy and the international scope of the
Company's business reduces, but does not eliminate, the Company's
vulnerability to poor Spring weekend weather.

Environmental Regulation

Many of the components of the Company's products and the
harvesting of certain of Hyponex's organic products are subject
to regulation by the United States Environmental Protection
Agency (the "EPA"), other federal agencies and departments, and
similar foreign, state and local agencies. Such regulations may
affect the Company by restricting or prohibiting the use of these
components or such harvesting. The EPA and similar state
agencies may also affect the Company's business by regulating the
disposal of waste generated in the conduct of the business.

Significant Customers

Kmart Corporation, including its Builders' Square unit
("Kmart"), and Home Depot accounted for approximately 21.5% and
8.8%, respectively, of the Company's net sales in fiscal 1993,
which reflects their significant position in the retail lawn and
garden market. Although the Company considers its relations with
Kmart and Home Depot to be good, the loss of either of these
customers or a substantial decrease in the amount of their
purchases could have a material adverse effect on the Company's
business.

<PAGE>
Restrictions Imposed by Lenders

The discretion of the management of the Company with respect
to certain business matters is limited by covenants contained in
the Third Amended and Restated Credit Agreement, dated April 7,
1992, as amended (the "Bank Agreement"), among Scotts, OMS,
Chemical Bank, as agent, and the lenders named therein. Among
other things, these covenants limit or prohibit the Company from
incurring additional indebtedness, creating liens, entering into
mergers, acquisitions or divestitures, making distributions with
respect to capital stock, making capital expenditures and making
investments and loans, and require the Company to maintain
certain ratios or amounts related to interest expense coverage,
current assets, operating profit and net worth. See "Description
of the Bank Agreement" for additional information concerning the
Bank Agreement.

<PAGE>
THE COMPANY

The Company is one of the oldest and most widely recognized
manufacturers of products used to grow and maintain landscape:
lawns, gardens and golf courses. In both the consumer and
professional market segments, the Company, through its brands --
Scotts and Turf Builder (for consumer lawn care), ProTurf (for
professional turf care) and Osmocote and Peters (for commercial
horticulture) -- commands market-leading shares more than double
those of the next ranked competitors. The Company's long history
of technical innovation, its reputation for quality and service
and its effective marketing tailored to the needs of do-it-
yourselfers and professionals have enabled the Company to
maintain leadership in its markets while delivering consistent
growth in sales and operating income and stable operating
margins. Do-it-yourselfers and professionals purchase through
different distribution channels and have different information
and product needs. Accordingly, the Company has two business
groups, Consumer and Professional, to serve these markets.

Consumer Business Group

The Consumer Business Group (which accounted for
approximately 80% of fiscal 1993 net sales) develops and markets
the products consumers need to grow and maintain beautiful lawns
and gardens: fertilizers, weed and insect controls, grass seed,
organic products and lawn spreaders. The Company estimates that
its lawn fertilizer and fertilizer/control combination products,
sold under the Scotts and Turf Builder brand names, have a 46%
share of the U.S. consumer lawn care chemicals market. The
organic product line of topsoils, potting soils, composted
manures and mulches are sold under the Hyponex brand and other
labels. The Company has broadened and strengthened its organic
product line as a result of its recent acquisition of Sierra,
which manufactures Peters Professional potting soil (see
"-Recent Developments"). Management estimates that the Company
has the leading market share in the total branded organic
products market and over a 50% share of the retail potting soil
segment.

The Company provides a high level of service for consumers.
It backs its promise of satisfaction with an unconditional "No
Quibble" guarantee for its Scotts products and maintains a toll-
free hotline for lawn care advice. The Company's consumer
products are sold in the United States through both mass
merchandisers and independent retailers, and internationally in
Canada, Japan and Europe through various distribution channels.

<PAGE>
Professional Business Group

The Professional Business Group (which accounted for
approximately 20% of fiscal 1993 net sales) develops and markets
products for professional users: golf courses, commercial
nurseries, sports fields, lawn care service companies and
landscapers. Scotts professional products provide these users
with a wide array of technically sophisticated controlled-release
and water-soluble fertilizers, controls, application devices and
growing media under such well-known labels as Scotts ProTurf
(for golf course and other turf applications), Osmocote and
Sierra (for commercial horticulture), ProGrow (for the landscape
market) and Peters and MetroMix (for greenhouses and commercial
nurseries). Depending on the market segment, these products are
sold through distributors, directly through the Company's
agronomically-trained technical representatives, or through
Company-operated stores.

Management estimates that Scotts ProTurf fertilizer and
control products have the leading share of the non-commodity golf
course turf care market. In 1993, ProTurf products were used on
81 of the Golf Digest top 100 courses and approximately 55% of
the over 14,500 golf courses in the Untied States. The Company's
strong research and development capabilities and agronomically-
trained sales force have enabled the Company to introduce
innovative new products and technologies and thereby maintain its
leading position in these targeted professional turf markets.

With the acquisition of Sierra, the Company has become the
leading supplier of controlled-release and water-soluble
fertilizers to the commercial horticulture segment, with an
estimated combined market share of over 50% in the United States.
Sierra's commercial horticultural products also have significant
positions in Europe, Australia, New Zealand and the Pacific Rim.
A recently formed unit within the Professional Business Group,
under the ProGrow name, will concentrate on marketing Scotts
products to professional turf and landscape customers other than
golf courses and sports fields, such as lawn care service
companies.

Business Strategy

The Company's business strategy is to be the premier global
manufacturer and marketer of products used in landscape growth
and maintenance. The major elements of the Company's strategy
are to:

Develop Innovative and Technologically Advanced Products.
The Company's proven ability to develop and market new products
has been instrumental in establishing its leading market shares.
The Company is fully committed to continuing this tradition. For
example, it is introducing Turf Builder for Shady Lawns in 1994
utilizing proprietary technology to answer the most often
expressed needs of its do-it-yourself consumers. In its
professional markets, the technical expertise of its sales force,
combined with the Company's strong research and development
efforts, have resulted in new products introduced since 1988
accounting for 66% of the Professional Business Group's net sales
in fiscal 1993. These new professional products often have
consumer applications. With the addition of Sierra's research
and development expertise and facilities, new product development
is expected to continue and expand.

<PAGE>
Sierra Acquisition

On December 16, 1993, the Company acquired Sierra from W.R.
Grace & Co.-Conn., and other investors, for approximately $120
million in cash. Sierra, a leading manufacturer and marketer of
specialty fertilizers, pesticides and premium growing media used
in commercial horticulture, golf course and consumer
applications, had net sales of approximately $108.7 million for
the period from January 1,1993, through December 16, 1993. Its
products are
manufactured in six plants located in the United States and one
in The Netherlands. Sierra markets its products in the United
States and internationally under brand names including Peters,
Osmocote, Once and Terra-Lite. Through Sierra's overseas
subsidiaries, products are distributed in numerous foreign
markets, including, among others, Australia, Europe and the
Pacific Rim. Approximately 25% of Sierra's 1993 net sales were
abroad.

History

The Company traces its roots back to the seed business
founded in 1870 by Orlando McLean Scott in Marysville, Ohio. In
1986, OMS was purchased by Clayton & Dubilier (now Clayton,
Dubilier & Rice, Inc.), a private investment firm, members of
management and other investors from ITT Corporation in a
leveraged transaction. The Company acquired the lawn and garden
business of Hyponex in November 1988 through a series of mergers
for approximately $112 million. In February 1992, the Company
completed the initial public offering of its common stock and
received net proceeds of approximately $157 million, which were
used to redeem certain notes and debentures issued in 1986 in
connection with the leveraged transaction and to reduce other
outstanding indebtedness. The Company acquired Republic, a
garden tool and lawn spreader manufacturer, in November 1992 for
approximately $16 million. In February 1993, the Company
repurchased all 2.4 million shares of its Class A Common Stock
owned by Clayton, Dubilier & Rice, Inc. for approximately
$41.4 million. The Company acquired Sierra, then known as Grace-
Sierra Horticultural Products Company, on December 16, 1993 for
approximately $120 million.

The Company's principal executive offices are located at
14111 Scottslawn Road, Marysville, Ohio 43041, and its telephone
number is (513) 644-0011.

<PAGE>
USE OF PROCEEDS

The Company's Bank Agreement currently provides that the net
proceeds to the Company from the offering of any of the Debt
Securities, after payment of any offering expenses and
underwriting discounts or commissions, be used to repay term
loans under the Bank Agreement. Such term loans mature semi-
annually through final maturity on September 30, 2000, and, as of
September 30, 1993, bore a weighted average interest rate of
5.5%. See "Description of Bank Agreement."

SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth selected historical financial
data of the Company on a consolidated basis. The statement of
operations data for the fiscal years
ended September 30, 1989, 1990, 1991, 1992 and 1993, and the
balance sheet data as of September 30, 1989, 1990, 1991, 1992 and
1993 were derived from the audited Consolidated Financial Statements of
the Company. The selected historical financial
data should be read in conjunction with the Company's
Consolidated Financial Statements and Notes thereto and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" appearing elsewhere herein.

<TABLE>
<CAPTION>
Fiscal Year Ended September 30,
1989(1) 1990 1991 1992 1993(2)
(dollars in thousands, except for share data and ratios)
<S> <C> <C> <C> <C> <C>
Statement of Operations
Data (3)
Net sales . . . $ 328,368 $ 350,441 $ 388,120 $ 413,558 $ 466,043
Cost of sales . 180,185 186,803 207,956 213,133 244,218
Gross profit. . 148,183 163,638 180,164 200,425 221,825
Operating expenses:
Marketing . . 50,222 48,681 57,489 66,245 74,579
Distribution. 39,377 55,628 57,056 61,051 67,377
General and
administrative . . . . . . . . 24,405 23,965 22,985 24,759 27,688
Research and development . . . . 4,630 4,714 5,247 6,205 7,700
Total operating expenses . . . . 118,634 132,988 142,777 158,260 177,344

Income from operations . . . . . . 29,549 30,650 37,387 42,165 44,481
Interest and other expenses. . . . 28,638 37,411 32,932 15,962 9,114

Income (loss) before income
taxes, extraordinary items
and cumulative effect
of accounting changes . . . . . 911 (6,761) 4,455 26,203 35,367
Income taxes . 1,750 143 2,720 11,124 14,320
Income (loss) before
extraordinary items and
cumulative effect of
accounting changes . . . . . . . (839) (6,904) 1,735 15,079 21,047
Extraordinary items:
Loss on early extinguishment
of debt, net of tax. . . . . . . - - - (4,186) -
Utilization of net operating
loss carryforwards . . . . . . . 1,670 - 2,581 4,699 -
Cumulative effect of
changes in accounting
for postretirement
benefits, net of tax
and income taxes . . . . . . . . - - - - (13,157)

Net income (loss). . . . . . . . . $831 $(6,904) $4,316 $15,592 $ 7,890

Net income (loss) per
common share: (4)
Income (loss) before
extraordinary items
and cumulative effect of
accounting changes . . . . . . . $ (0.07) $ (0.58) $ 0.15 $ 0.84 $ 1.07

Extraordinary items:
Loss on early
extinguishment of debt,
net of tax. . - - - (0.23) -
Utilization of net
operating loss
carryforwards . . . . . . . . . 0.14 - 0.21 0.26 -
Cumulative effect of
changes in accounting
postretirement benefits,
net of tax and income
taxes . . . . - - - - (0.67)

Net income (loss). . . . . . . .$ 0.07 $ (0.58) $ 0.36 $ 0.87 $ 0.40

Weighted average common
shares outstanding
during the period. . . . . . . . 11,511,278 11,976,733 11,832,651 18,014,151 19,687,013

Other Historical Data:

Depreciation and amortization $19,621 $20,474 $17,785 $15,848 $ 18,144
Capital expenditures . . . . . . . 6,722 8,494 8,818 19,896 15,158
EBITDA(5) . . . 47,300 49,080 53,269 56,771 61,598
Ratio of EBITDA to interest
expense . . . 1.46x 1.42x 1.72x 3.56x 7.29x
Ratio of earnings to fixed
charges(6). . 1.03x -- (7) 1.14x 2.40x 4.08x

Balance Sheet Data (end of
period)(3)

Working capital $10,363 $18,230 $21,260 $54,795 $78,891
Property, plant and
equipment, net . . . . . . . . . 85,976 83,384 79,903 89,070 98,791
Total assets. . 276,253 270,429 260,729 268,021 321,590
Long-term debt, including
current portion. . . . . . . . . 201,203 192,915 182,954 35,897 92,524
Total stockholders'
equity (deficit) . . . . . . . . 2,555 (12,677) (9,961) 175,929 143,013

<F1>
(1) Includes Hyponex from November 11, 1988.

<F2>
(2) Includes Republic from November 19, 1992.

<F3>
(3) Certain amounts have been reclassified to conform to 1993 presentation; these changes did not impact net income.

<F4>
(4) Net income (loss) per share for fiscal 1991 and 1990 has been restated to eliminate the effect of accretion to
redemption value of redeemable common stock to be comparable with fiscal 1992. All per share amounts for fiscal
1988 through 1991 have been adjusted for the January 1992 reverse stock split, in which every 2.2 shares of old
Class A Common Stock were exchanged for one share of new Class A Common Stock.

<F5>
(5) As used herein, EBITDA is defined as income from operations plus depreciation and amortization included therein.
Deferred financing costs which have been incurred
and capitalized in connection with financing the Company's operations
and acquisitions are being amortized and reported as a portion of
interest expense and therefore have been excluded from the calculation
of depreciation and amortization used in the calculation of EBITDA.
The Company believes that EBITDA is generally recognized as an indicator of a Company's ability to service its debt
and capital expenditure requirements. However, EBITDA is not intended to be a performance measure that should be
regarded as an alternative either to income from operations or net income or as an indicator of operating
performance or cash flows as a measure of liquidity, as determined in accordance with generally accepted accounting
principles.
<F6>
(6) The ratio of earnings to fixed charges is computed by dividing (a) the sum of (i) income from continuing operations
before income taxes, extraordinary items and the cumulative effect of accounting changes and (ii) fixed charges by
(b) fixed charges. Fixed charges consist of interest on all indebtedness (including amortization of deferred
financing costs), capitalized interest and the estimated interest component of operating leases (assumed to be
one-third of total rental expense).

<F7>
(7) Reflects a deficiency of earnings to fixed charges of $6.8 million.
</TABLE>

UNAUDITED PRO FORMA FINANCIAL DATA

The following unaudited pro forma financial information of
the Company has been derived from the Consolidated Financial
Statements of the Company and the Consolidated Financial
Statements of Sierra. The Pro Forma Consolidated Statement of
Operations gives effect to the acquisition of Sierra, which
occurred on December 16, 1993, as if it had occurred on
October 1, 1992.

THE PRO FORMA INFORMATION AND ACCOMPANYING NOTES SHOULD BE
READ IN CONJUNCTION WITH THE COMPANY'S CONSOLIDATED FINANCIAL
STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE HEREIN AND WITH
SIERRA'S CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO
INCORPORATED BY REFERENCE HEREIN. THE PRO FORMA INFORMATION DOES
NOT PURPORT TO REPRESENT WHAT THE COMPANY'S RESULTS OF OPERATIONS
ACTUALLY WOULD HAVE BEEN HAD THE
ACQUISITION OF SIERRA OCCURRED ON OCTOBER 1, 1992 OR TO PROJECT THE COMPANY'S
RESULTS OF OPERATIONS FOR ANY FUTURE PERIOD. THE PRO FORMA FINANCIAL
INFORMATION IS BASED ON
ESTIMATES OF FINANCIAL EFFECTS THAT MAY NOT PROVE TO BE ACCURATE
OVER TIME.

<TABLE>
Pro Forma Consolidated Statement of Operations
For the Year Ended September 30, 1993
(Unaudited)

<CAPTION>
The Scotts Sierra
Company Historical Pro Forma
Historical (1) Adjustments Pro Forma
(dollar in thousands, except per share data and ratios)
<S> <C> <C> <C> <C>
Net sales . . . . . . . . $ 466,043 $ 119,275 $ - $ 585,318
Cost of sales . . . . . . 244,218 66,135 1,249 (2) 311,602

Gross profit. . . . . . 221,825 53,140 (1,249) 273,716

Operating expenses:
Marketing . . . . . . . 74,579 23,243 - 97,822
Distribution. . . . . . 67,377 4,025 - 71,402
General and administrative . .27,688 8,837 164 (3) 36,689
Research and development . . . 7,700 4,114 - 11,814
Total operating expenses . 177,344 40,219 164 217,727

Income from operations. . 44,481 12,921 (1,413) 55,989

Interest expense. . . . . 8,454 7,514 (507) (4) 15,461
Other expense, net. . . . 660 1,030 2,763 (5) 4,453

Income before income taxes
and cumulative effect of
accounting changes. . . 35,367 4,377 (3,669) 36,075

Income taxes. . . . . . . 14,320 1,727 (246) (6) 15,801

Income before cumulative
effect of accounting
changes . . . . . . . . $ 21,047 $ 2,650 $(3,423) $ 20,274

Earnings per common share
before cumulative effect
of accounting changes . $ 1.07 $ 1.03

Weighted average common
shares outstanding. . . 19,687,013 19,687,013
Other Pro Forma Data:
Depreciation and
amortization. . . . . $18,144 $3,840 $3,262 $25,246
EBITDA (7). . . . . . . 60,938 15,623 (914) 75,647
Ratio of EBITDA to
interest expense. . . 7.21x 2.08x - 4.89x
Ratio of earnings to
fixed charges (8) . . 4.08x 1.49x - 2.81x
________________
<F1>
(1) Certain reclassifications have been made to Sierra's
historical statement of operations to conform to The Scotts
Company classifications. To conform Sierra's fiscal year of
December 31, 1993 to the Company's fiscal year of
September 30, 1993, Sierra's results of operations for the
three months ended December 31, 1993 have been excluded and
their results of operations for the three months ended
December 31, 1992 have been included in the pro forma
presentation. Net sales and net income for these respective
three month periods were:

</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
December 31,
1993 1992
(dollars in thousands)
<S> <C> <C>
Net sales $25,705 $27,798
Net (loss) income (784) 485
</TABLE>

<F2>
(2)This adjustment reflects the following:

(in thousands)

$ 1,140 manufacturing profit in acquired inventories

209 depreciation of the step-up of tangible assets
acquired

42 amortization of patents acquired

(142) reduction in expenses related to assumed
facilities leases

$ 1,249

<F3>
(3)To amortize $164,000 of organizational costs associated with
the acquisition.

<F4>
(4) This adjustment reflects the following:

(in thousands)

$ 6,781 interest on acquisition indebtedness

326 amortization of deferred financing costs

(7,514) elimination of interest on Sierra's retired
indebtedness

(100) elimination of Sierra's deferred financing
costs
$ (507)

<F5>
(5) To amortize non-compete agreements ($1.2 million) and
goodwill ($1.6 million).

<F6>
(6) To reflect domestic income taxes not previously recorded by
Sierra due to its net operating loss position, as well as
the tax effects of pro forma adjustments to interest expense,
patent amortization, adjusted lease expense and amortization
of non-compete agreements and goodwill at statutory federal
and state income tax rates.

<F7>
(7) See note 3 to "Selected Historical Financial Data."

<F8>
(8) See note 4 to "Selected Historical Financial Data."
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with
the Company's Consolidated Financial Statements and the Unaudited
Pro Forma Financial Data and respective notes thereto included
elsewhere in this Prospectus.

General

The increasing share of consumer business attributable to
mass merchandisers, as well as the December 1993 acquisition of
Sierra, have affected and will continue to affect the Company in
several ways.

Based on its experience in the past several years,
management anticipates that a greater proportion of the Company's
consumer products will be sold through the mass merchandiser
distribution channel. Increased sales to mass merchandisers
makes the Company's sales more seasonal, as the inventory
controls and just-in-time ordering which mass merchandisers
utilize tend to concentrate the Company's sales "in season"
(i.e., during the second and third fiscal quarters). In
addition, local regulatory efforts to decrease the amount of
fertilizers and control products stored at golf courses have
resulted in increasing reluctance by golf course customers to
purchase products in the late Fall for Spring use. This
reluctance has increased, and likely will continue to increase,
the seasonality of the Company's business.

The acquisition of Sierra should have an important impact on
the Company. At the time of the acquisition, Sierra's business
was primarily professional. On a pro forma basis, Sierra would
have added approximately $100 million in net sales to the
Company's Professional Business Group and approximately $15
million to the Company's Consumer Business Group for the fiscal
year ended September 30, 1993. Management believes that Sierra's
sales should offset to some extent the increasing seasonality of
the Company's sales discussed above both because the Professional
Business Group's customers tend to purchase the Company's
products during a greater part of the fiscal year and because
Sierra has substantial sales outside of the United States, where
seasons and usage patterns are different. The Company believes
that the acquisition of Sierra will also benefit the Company by
providing fertilizer manufacturing facilities in a number of
locations outside of Ohio, including one in The Netherlands,
which, over the long term, should help ameliorate the Company's
current manufacturing capacity limitations and help to control
distribution costs while increasing customer service.

<PAGE>
Results of Operations

Fiscal 1993 Compared with Fiscal 1992

Net sales of $466.0 million increased by $52.5 million, or
12.7%. The majority of the increase resulted from increased
sales volume of consumer products. Consumer Business Group sales
of $370.2 million increased by $47.6 million, or 14.8%. The
growth was principally derived from increased sales volume to
major retailers and from sales for Republic, acquired in November
1992, which accounted for approximately 37.5% of the increase in
Consumer Business Group sales. Professional Business Group sales
of $93.7 million increased by $3.6 million, or 4.0%. The
majority of the increase was due to increased sales volume.

Cost of sales of $244.2 million (52.4% of net sales)
compared with $213.1 million (51.5% of net sales) in fiscal 1992.
The increase was primarily caused by lower gross profit margins
on Republic's products in fiscal 1993. Cost savings from the
implementation of new controlled-release fertilizer technology,
which exceeded start-up costs incurred early in fiscal 1993,
partly offset the increase.

Operating expenses of $177.3 million increased by $19.1
million, or 12.1%. The increase was caused by increased
investment in advertising and consumer rebates in fiscal 1993.
higher distribution costs related to increased sales, and the
inclusion of operating expenses for Republic which amounted to
approximately $3.0 million from November through the end of the
fiscal year.

Income from operations of $44.5 million increased by $2.3
million or 5.5%, which resulted from increased sales, partially
offset by increased operating expenses. The increase was also
offset, in part, by additional pretax charges of $2.4 million, in
fiscal 1993, resulting from the implementation of the Financial
Accounting Standards Board ("FASB") Statement of Accounting
Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" ("SFAS 106").

Interest expense of $8.5 million decreased by $7.5 million
or 47.0%. The decrease resulted from reduced borrowings and
lower interest rates in fiscal 1993 including the effect of early
redemption of subordinated notes and debentures. Reduced
borrowings resulted from the application of the net proceeds of
Scotts' January 1992 initial public offering and cash flow from
operations, partly offset by the use of capital resources for the
Republic acquisition, the purchase of Scotts' Class A Common
Stock from Clayton, Dubilier & Rice, Inc. and capital investment
in 1993.

Income before extraordinary items and cumulative effect of
accounting changes increased by approximately $6.0 million, or
39.6%, primarily due to increased operating income and lower
interest expense. The increase was partially offset by a $1.4
million charge, net of tax, related to adoption of SFAS 106 in
1993.

Net income of $7.9 million decreased by $7.7 million, or
49.4%. The decrease was attributable to current expense from the
implementation of SFAS 106 and a non-recurring charge for the
cumulative effect of the change in accounting in the amount of
$14.9 million, net of tax. The decrease was partially offset by
a non-recurring benefit of $1.8 million, related to
implementation of FASB Statement of Accounting Standards No. 109,
"Accounting for Income Taxes".

Fiscal 1992 Compared to Fiscal 1991

Net sales for the fiscal year ended September 30, 1992 of
$413.6 million increased by $25.4 million, or 6.6%. Consumer
Business Group sales of $322.6 million increased by $19.4
million, or 6.4%. This growth was derived from increased sales
to major retailers, while geographical diversification offset the
effect of locally unfavorable weather conditions and the soft
economy. Professional Business Group sales of $90.1 million
increased by $5.1 million, or 6.0%, primarily due to sales of new
Poly-S(Registered) fertilizer products and improved selling
programs. Through its patented Poly-S technology, the Company
produces nutrient particles with an inner coating of sulfur and
an outer polymer coating.

Cost of sales of $213.1 million (51.5% of net sales) for
fiscal 1992 compared with $208.0 million (53.6% of net sales) for
fiscal 1991. The decrease was partly attributable to favorable
product costs, and, in part, to non-recurring costs in fiscal
1991 resulting from the contamination of certain of the Company's
professional products with atrazine, a herbicide, and the
resulting damage to the greens of a number of golf courses in the
United States and Canada. These non-recurring costs totaled $2.2
million in fiscal 1991.

Marketing expense of $66.2 million (16.0% of net sales) for
fiscal 1992 compared with $57.5 million (14.8% of net sales) for
fiscal 1991. The increase was primarily attributable to the cost
of expanding geographic coverage of Scott's Early Bird rebate
promotion and the addition of an on-bag rebate for selected
Hyponex soil and bark products.

<PAGE>
Distribution expense of $61.1 million for fiscal 1992
compares with $57.1 million for fiscal 1991 reflecting higher
freight costs in 1992 on increased sales. Distribution expense
in both fiscal 1992 and fiscal 1991 represented approximately
14.7% of net sales.

General and administrative expense of $24.8 million (6.0% of
net sales) for fiscal 1992 compared with $23.0 million (5.9% of
net sales) for fiscal 1991. The increase was partly caused by an
increase in the cost of medical and pension benefits provided by
the Company and partly by a general increase in costs in fiscal
1992.

Other expense (net) of $.02 million for fiscal 1992 compares
with other expense (net) of $2.0 million in fiscal 1991. The
decrease was partly attributable to royalty income received in
fiscal 1992 by OMS under a licensing agreement permitting the use
of Scott's name on certain lawnmowers manufactured and
distributed by a licensee. The decrease was also attributable to
non-recurring charges recorded in fiscal 1991 offset by foreign
currency transaction losses recognized in 1992.

Liquidity and Capital Resources

Capital expenditures totaled $15.2 million and $19.9 million
for the fiscal years ended September 30, 1993 and 1992,
respectively, and are expected to total approximately $31.5
million in fiscal 1994. Capital expenditures planned for fiscal
1994 include a substantial addition to the Company's Marysville,
Ohio production facilities estimated to be $13 million. The most
significant project planned is a new production building to
manufacture products using Scott's new patented controlled-
release fertilizer Poly-S(Registered) technology. The facility
will provide additional production capacity in response to
customer demand for Poly-S(Registered) products. The Bank
Agreement, as amended on December 16, 1993, restricts the amount
the Company may spend on future capital expenditures to $35
million per year in fiscal 1994 and thereafter. These
expenditures will be financed with cash provided by operations
and utilization of available credit facilities.

Effective November 19, 1992, OMS acquired Republic for a
purchase price of approximately $16.4 million. A description of
the Republic acquisition is found in Note 2 on page F-9 of this
Prospectus.

On February 23, 1993, Scotts purchased all of the shares of
its Class A Common Stock held by a fund managed by Clayton,
Dubilier & Rice, Inc. A total of 2,414,895 shares of Class A
Common Stock were purchased for approximately $41.4 million which
was financed through the use of term loans under the Bank
Agreement which is described below.

Effective December 16, 1993, OMS completed the acquisition
of Sierra for an aggregate purchase price of approximately $123.3
million, including estimated transaction costs of $3.3 million.
The acquisition was financed through the use of term loans under
the Bank Agreement. Chemical Bank serves as agent for the
participating banks.

Primarily as the result of the inclusion of Republic's
current assets, current assets increased from $115.5 million on
September 30, 1992 to $143.7 million on September 30, 1993.
Higher inventories of the Company's products at September 30,
1993 also contributed to the increase.

Total liabilities of $178.6 million, at September 30, 1993,
increased by $86.5 million. The increase was principally due to
the addition of term loans for the purchase of Class A Common
Stock mentioned above and a long-term liability related to the
adoption of SFAS 106 effective October 1, 1992.

Total shareholders' equity decreased from $175.9 million on
September 30, 1992 to $143.0 million on September 30, 1993,
primarily due to a reduction in total shareholders' equity for
treasury stock representing the Class A Common Stock purchased in
February 1993.

The major sources of liquidity for Company operations and
expansion are funds generated internally and borrowings under the
Bank Agreement. The Bank Agreement was amended in November 1992
to permit the acquisition of Republic, amended in February 1993
to provide financing for and permission to purchase the Class A
Common Stock mentioned above and amended again in December 1993
to provide financing for and permit the acquisition of Sierra.
As amended, the Bank Agreement provides a revolving credit
commitment of $150.0 million through March 31, 1996 and $195.0
million of term loans with scheduled maturities commencing on
April 30, 1994 and extending through September 30, 2000. The
loans are provided by Chemical Bank, as agent, and thirteen other
participating banks. The increased credit availability provided
adequate capital for the acquisition of Republic and Sierra and
their estimated future working capital needs. See "Description
of Bank Agreement."

Among other requirements, the financial covenants in the
Bank Agreement require maintenance of Adjusted Operating Profit,
Consolidated Net Worth and Interest Coverage (each as defined
therein) and require the Company to reduce revolving borrowings
under the Bank Agreement to $30.0 million for thirty consecutive
days each year. The Company met all the requirements of the
financial covenants during the fiscal year ended September 30,
1993.

The Company's business is highly seasonal with approximately
69% of sales occurring in the second and third fiscal quarters
ending March and June, respectively. Seasonality is reflected in
working capital requirements. Working capital needs are greatest
from November through May, the peak production periods, and are
highest in March. Working capital needs are relatively low in
the summer months. In addition, the Company's consumer business
may be adversely affected by the weather. Poor weekend weather
during the Spring tends to adversely affect consumer purchases of
the Company's do-it-yourself products. Historically, the Company
has attempted to lessen the impact of possible adverse weather by
promotional programs at the retail and consumer levels to
encourage consumer purchases in the early Spring.

Management believes that cash flow and capital resources
will be sufficient to meet future debt service requirements and
working capital needs.

Inflation

The Company is subject to the effects of changing prices.
The Company has, however, generally been able to pass along
inflationary increases in its costs by increasing the prices of
its products. In addition, the application of purchase
accounting in connection with the Company's acquisition by a
company formed by Clayton, Dubilier & Rice and the Hyponex
acquisition mitigates the effects of changing costs on the
financial statements because assets and liabilities were adjusted
to fair values on the acquisition dates and cost of sales and
depreciation have therefore been adjusted accordingly.

Accounting Issues

The Company adopted SFAS 106 and SFAS 109 effective
October 1, 1992. The effect on 1993 net income of adopting SFAS
106 was an after-tax charge of $1.4 million for fiscal 1993 and a
non-recurring charge of $14.9 million net of tax, for the
cumulative effect of the change in accounting. The cumulative
effect of adopting SFAS 109 was a non-recurring benefit of $1.8
million. The adoption of SFAS 109 also resulted in a deferred
tax asset. A valuation reserve was not established because the
Company expects sufficient future taxable income to realize the
benefit of the deferred tax asset.

In November 1992, FASB issued Statement Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment
Benefits" ("SFAS 112") which changes the prevalent method of
accounting for benefits provided after employment but before
retirement. Scotts must adopt SFAS 112 no later than the first
quarter of fiscal 1995. Management is currently evaluating the
provisions of SFAS 112 and, at this time, the effect of adopting
SFAS 112 has not been determined.

BUSINESS

The Company is one of the oldest and most widely recognized
manufacturers of products used to grow and maintain landscape:
lawns, gardens and golf courses. In both the consumer and
professional market segments, the Company, through its brands --
Scotts and Turf Builder (for consumer lawn care), ProTurf (for
professional turf care) and Osmocote and Peters (for commercial
horticulture) -- commands market-leading shares more than double
those of the next ranked competitors. The Company's long history
of technical innovation, its reputation for quality and service
and its effective marketing tailored to the needs of do-it-
yourselfers and professionals have enabled the Company to
maintain leadership in its markets while delivering consistent
growth in sales and operating income and stable operating
margins. Do-it-yourselfers and professionals purchase through
different distribution channels and have different information
and product needs. Accordingly, the Company has two business
groups, Consumer and Professional, to serve these markets.

Consumer Business Group

Products

The Company's consumer products include lawn fertilizers,
fertilizer/control combination products, potting soils and other
organic products, grass seed, lawn spreaders, indoor and outdoor
plant care products and garden tools. The following table sets
forth information concerning sales of the Company's consumer
products in fiscal 1991, 1992 and 1993:
<TABLE>
Consumer Products Sales
(in millions)

Fiscal Year Ended September 30,
<CAPTION>
1991 1992 1993
<S> <C> <C> <C>
Fertilizers and Combination Products . . . . $132.4 $134.2 $154.4
Organic Products . . . . . . . . . . . . . . 133.4 143.2 150.3
Grass Seed . . . . . . . . . . . . . . . . . 13.3 23.7 25.4
Lawn Spreaders . . . . . . . . . . . . . . . 11.2 10.2 28.2
Garden Products, Tools and Indoor
Products . . . . . . . . . . . . . . . . . 7.5 5.7 5.0
International. . . . . . . . . . . . . . . . 5.4 5.6 6.9
Total. . . . . . . . . . . . . . . . . . . $303.2 $322.6 $370.2
</TABLE>

Lawn Fertilizers and Combination Products. The Company's
most important consumer products are lawn fertilizers, such as
Turf Builder(Registered), and combination fertilizer/control
products, such as Turf Builder Plus 2(Registered) (which is used
to eliminate dandelions and other broadleaf weeds) and Turf
Builder Plus Halts(Registered) (to prevent crabgrass and other
weeds). Typically, these are patented, homogeneous, controlled-
release products which provide complete controlled feeding for
consumers' lawns for up to two months without the risk of damage
to the lawn presented by less expensive non-controlled-release
products. A number of the Company's products are specially
formulated for geographical differences and some, such as
Bonus(Registered) S (to control weeds in Southern grasses) are
distributed to limited areas. Most of the Company's fertilizer
and combination products are sold in dry, granular form, although
the Company also sells a small amount of liquid lawn care
products. Consumer products that utilize Sierra's technology
include Peters(Registered) Professional(Registered) all-soluble
fertilizers and Once(Registered) controlled-release lawn
fertilizer, which can provide up to three months of feeding from
one application.

Management estimates that in fiscal 1993 the Company's share
of the consumer lawn chemicals products market was approximately
46%, more than double that of the second leading brand.

Organic Products. The Company sells a broad line of organic
products under the Hyponex and other labels, including retail
potting soils, topsoil, peat, manures and mulches. Management
estimates that the Company's fiscal 1993 market share was
approximately 50% in potting soils, more than double that of the
next leading brand, and approximately 39% in other consumer
organic products.

Grass Seed. High quality seed was the Company's first
product. Today, the Company sells numerous varieties and blends
of grass seed, many of them proprietary, designed for different
uses and geographies. Management estimates that the Company's
share of the consumer grass seed market was approximately 28% in
fiscal 1993.

Lawn Spreaders. Because Scott's granular lawn care products
perform best when applied evenly and accurately, the Company
sells a line of spreaders specifically developed for use with
Scotts products. This line includes the SpeedyGreen(Registered)
and EasyGreen(Registered) rotary spreaders, the
PrecisionGreen(Registered) and AccuGreen(Registered) drop
spreaders, and the HandyGreen(Registered) hand-held rotary
spreader.

In November 1992, the Company acquired Republic, a
manufacturer of spreaders and other lawn and garden equipment.
Republic had fiscal 1993 sales of approximately $17.8 million.
The Company intends to continue marketing both its line of Scotts
spreaders and Republic's EZ(Registered) line of spreaders in 1994
and is integrating the manufacture of its spreaders through
Republic. Management estimates that the Company's share of the
market for lawn spreaders was approximately 33% in fiscal 1993,
more than double that of the next leading manufacturer.

Garden Products, Tools and Indoor Products. The Company
produces and sells a line of boxed Scotts Plant Foods, garden and
landscape fertilizers. The Company has a licensing agreement
with Union Tools, Inc. ("Union") under which Union, in return for
the payment of royalties, is granted the right to produce and
market a line of garden tools bearing the Scotts trademark and
has agreed to undertake the marketing of a line of Scotts tools
produced in Germany which were formerly marketed by the Company.
The Company also has a license agreement with NOMA Industries,
licensing that company in return for royalty payments to produce
and sell a line of power lawnmowers under the Scotts name. The
Company sells a line of indoor plant care products. In
management's estimation, the Company did not have a material
share of the markets for these products in fiscal 1993.

International. The Company produces and sells consumer lawn
and garden care products, under various labels, internationally,
principally in Canada, Japan and Europe. In 1991, the Company
established a subsidiary and a network of sales representatives
in the United Kingdom to enter the consumer lawn and garden
market in Great Britain. Sierra has a manufacturing facility in
The Netherlands and sells its fertilizer products throughout
Europe, and in Australia and New Zealand, but primarily for
professional use.

Business Strategy

The Company believes that it achieved its leading position
in the do-it-yourself lawn care market on the basis of its
sophisticated technology, the superior quality and value of its
products and the service it provides consumers. The Company
seeks to maintain and expand its market position by emphasizing
these qualities and taking advantage of the Scotts name and
reputation. Since its acquisition of Hyponex, the Company has
also focused on increasing sales of its higher margin organic
items such as potting soils.

With the acquisition of Republic in 1992, the Company was
able to begin integrating the manufacture of its important lawn
spreader product line. The more recent acquisition of Sierra
should provide the Company with numerous strategic opportunities,
including expanding the distribution of Scotts products
internationally, by using the Sierra facilities and personnel in
Europe and elsewhere. The Company also expects to increase sales
of water-soluble fertilizers manufactured by Sierra in the
consumer market and to test certain bioinsecticides for which
Sierra has licenses.

Drawing upon its strong research and development
capabilities, the Company intends to continue to develop and
introduce new and innovative lawn and garden products. The
Company believes that its ability to introduce successful new
consumer products has been a key element in Scotts' growth. New
consumer products in recent years include the
HandyGreen(Registered) hand-held spreader (1991), an improved
Hyponex Professional Mix Potting Soil (1991),
PatchMaster(Registered) (1992), a unique lawn repair product
containing seed, Starter(Registered) fertilizer and mulch, and 3-
Step Scotts Lawn Care System consisting of three products in one
easy-to-carry box (1993). For fiscal 1994, the Company has
introduced premium planting and potting soils under the Scotts
brand name, a proprietary fertilizer product, Turf Builder for
Shady Areas, and a line of grass seed coated with a fungicide to
improve germination.

The Company also seeks to capitalize upon the competitive
advantages stemming from its position as the leading nationwide
supplier of a full line of consumer lawn and garden products.
The Company believes that this gives it an important edge in
selling to larger retailers, such as mass merchandisers and home
centers, who value the efficiency of dealing with a limited
number of suppliers.

Finally, the Company has developed a program to take
advantage of Hyponex's composting expertise and the increasing
concern about landfill capacity by entering into agreements with
municipalities and waste haulers to compost yard waste. A pilot
program was started in 1991 on Company-owned land in Marysville
when the Company entered into a five-year contract with Franklin
County, Ohio, to compost a minimum of 50,000 tons of yard waste
per year for a fee of $20 per ton. During 1992, the Company
entered into agreements for composting yard waste in Greensboro,
North Carolina; Waukesha County, Wisconsin; Spokane, Washington
and Portland, Oregon. The Company now has twelve compost
facilities. In addition to service fees, the Company plans to
substitute the resulting compost for a portion of the raw
materials in Hyponex and other Company products. Revenues in
fiscal 1993 and 1992 from composting services were $2.1 million
and $0.8 million, respectively.

Marketing and Promotion

The Company employs a 93 person direct sales force for its
consumer products to cover approximately 24,000 retail outlets
and headquarters of national, regional and local chains. Most
salespeople have college degrees and prior sales experience.
Sierra's sales force is composed primarily of distributors,
supported by a technically trained field force of six. In recent
years, the percentage of sales to mass merchandisers and large
buying groups has increased. The top ten accounts represented
58% of the Consumer Business Group sales in fiscal 1993 versus
47% in 1990. See "-Matters Relating to the Company
Generally-Significant Customers."

At the same time, the Company continues to support its
independent retailers. Most importantly, the Company developed a
special line of products, marketed under the Lawn Pro(Registered)
name, which are sold exclusively by independent retailers. These
products include the 4-Step(Trademark) program, introduced in
1984, which encourages consumers to purchase four products at one
time (fertilizer plus crabgrass preventer, fertilizer plus weed
control, fertilizer plus insect control and a special fertilizer
for Fall application). The Company promotes the 4-Step program
as providing consumers with all their annual lawn care needs for
less than half of what a lawn care service would cost. The
Company believes that the Lawn Pro line has helped maintain the
loyalty of the independent retailers in the face of increasing
competition from mass merchandisers. During 1993, the Company
reintroduced its Lawn Care(Registered) magazine as part of the
direct mail promotion for the Lawn Pro 4-Step program.

The Company supports its sales efforts with extensive
advertising and promotional programs. Because of the importance
of the Spring sales season in the marketing of consumer lawn and
garden products, the Company focuses its promotional efforts on
this period. Through advertising, consumer rebates, retailer
allowances and other promotional efforts, the Company seeks to
encourage customers to make the bulk of their lawn and garden
purchases in the early Spring. The Company believes that its
early season promotions substantially moderate the risk to its
consumer sales posed by bad weekend weather.

An important part of the Company's sales effort is Scotts'
national toll-free consumer hotline, on which Scott's "lawn
consultants" answer questions about the Company's products and
give general lawn care advice to consumers. The Company's lawn
consultants responded to over 240,000 telephone and written
inquiries in fiscal 1993 and have handled over 2,000,000 calls
since the inception of the consumer hotline in 1972.

Backing up the Company's marketing effort is its well-known
"No Quibble" guarantee, instituted in 1958, which promises
consumers a full refund if for any reason they are not satisfied
with the results after using Scotts products. Refunds under this
guarantee have consistently amounted to less than 0.3% of net
sales on an annual basis.

Competition

The consumer lawn and garden market is highly competitive.
The most significant competitors for the consumer lawn care
business are lawn care service companies. At least one of these,
Tru Green Company, which also owns the ChemLawn(Registered) lawn
care service business, operates nationally and is significantly
larger than the Company. In the do-it-yourself segment, the
Company's products compete primarily against regional products
and private label products produced by various suppliers and sold
by such companies as Kmart. These products compete across the
entire range of the Company's product line. In addition, certain
of the Company's products compete against branded fertilizers,
pesticides and combination products produced by such companies as
Monsanto Company (Ortho(Registered) and Greensweep(Registered)),
Lebanon Chemical Corp. (Greenview(Registered)) and Stern's
Miracle-Gro Products, Inc.

Most competitors, with the exception of lawn care service
companies, sell their products at prices lower than those of the
Company. The Company competes primarily on the basis of its
strong brand names, quality, value, service and technological
innovation. The Company's competitive position is also supported
by its national sales force, advertising campaigns and its
unconditional guarantee. There can be no assurance, however,
that additional competition from new or existing competitors will
not erode the Company's share of the consumer market or its
profit margins.

Backlog

The major portion of annual consumer product orders (other
than organic products which are normally ordered in season on an
"as needed" basis) are received from retailers during the months
of October through January and are filled during the months of
January through March. As of April 30, 1994, orders on hand for
retail customers (excluding orders for Sierra products and
Republic's EZ brand spreaders) totaled approximately
$16.8 million compared to approximately $14.7 million on the same
date in 1993. All such orders are expected to be filled in
fiscal 1994.

Professional Business Group

The Market

The Company sells its professional products to golf courses,
sports fields, nurseries, lawn and landscape service companies
and growers of specialty agricultural crops. Among the
purchasers of the Company's products in fiscal 1993 were such
golf courses as Augusta National (Georgia), Cypress Point,
Spyglass and Pebble Beach (California), Muirfield Village (Ohio),
The Country Club (Massachusetts), Colonial Country Club (Texas)
and Butler National (Illinois), and such sports complexes as
Fenway Park, Camden Yard, Wrigley Field and the Rose Bowl.

The following table sets forth the amount of Company sales
to its professional markets in fiscal 1991, 1992 and 1993:

<TABLE>
Professional Products Sales
(in millions)

Fiscal Year Ended September 30,
<CAPTION>
1991 1992 1993
<S> <C> <C> <C>
Golf Courses (North America) . . . . . . . . . $58.2 $62.6 $68.6
Nurseries . . . . . . . . . . . . . . . . . . 8.0 7.3 7.7
Lawn/Landscape Services . . . . . . . . . . . 8.9 10.6 9.0
Specialty Agriculture . . . . . . . . . . . . 4.3 3.1 1.2
Sports Fields/Parks/Schools. . . . . . . . . . 2.4 3.0 2.9
International (other than Canada) . . . . . . 3.2 3.5 4.3
Total . . . . . . . . . . . . . . . . . $85.0 $90.1 $93.7
</TABLE>
Golf courses are the most important of the Company's
professional markets, accounting for over 70% of the Company's
Professional Business Group's net sales in fiscal 1993. In
fiscal 1993, the Company sold products to approximately 55% of
the over 14,500 golf courses in the United States, including 81
of Golf Digest's top 100 U.S courses. Management estimates,
based upon an independent biannual market survey and other
information available to the Company, that the Company's share of
the $200 million golf course turf care segment (not including
commodity products) was approximately 25% in fiscal 1993. In
addition, Sierra had sales of approximately $9 million to the
golf course turf care segment in calendar 1993.

According to the National Golf Foundation, approximately 200
new golf courses have been constructed annually for the last two
years. Management believes that this increase in the number of
courses, and the trend toward more highly-maintained golf
courses, contributes to an annual sales growth rate in Scott's
targeted golf course segment of approximately 7%. The commercial
nursery and the sports field segments, management estimates, are
growing at 4-5% annually.

Sierra sells both controlled-release and water-soluble
fertilizers as well as a line of pesticides (primarily
fungicides) to the commercial horticultural segment both in the
United States and abroad with calendar 1993 sales of
approximately $55 million in the United States and $31 million
abroad. The Company estimates that, in calendar 1993, Sierra had
approximately a 33% share of the U.S. commercial ornamental
growth category overall, and over a 50% share of the U.S.
commercial ornamental fertilizer segment in the United States,
more than double the share of next leading manufacturer.

Products

The Company's professional turf products, marketed primarily
under the ProTurf(Registered) name, include a broad line of
sophisticated fertilizers, control products, growth regulators,
grass seed and application devices. The products are sold to
golf courses, lawn/landscape service companies, athletic field
managers and apartment and office complexes. Most ProTurf
products are designed for specialized applications. For example,
various fertilizers are sold for use on particular areas (e.g.,
some for golf course greens, others for fairways) and for
particular purposes (such as high phosphorous fertilizers and
fertilizer containing micronutrients to correct nutrient
deficiencies). Similarly, the Company markets a line of
fungicides primarily for use on highly maintained areas such as
bentgrass greens. A patented technology introduced in 1987,
TGR(Registered), combines a turf growth regulator and a
fertilizer to control poa annua, a serious weed problem on golf
courses. The TGR product line has since been expanded to include
other uses, including the reduction of clippings, color
enhancement and the improvement of turf density. Although
ProTurf products are primarily granular, the Company also markets
a line of liquid turf products, now numbering 15, which some turf
managers prefer for their cost effectiveness and ease-of-
application over large areas. In 1992, the Company's patented
Poly-S(Registered) fertilizer technology replaced the Company's
sulfur-coated turf fertilizer line, and has gained rapid
acceptance. Additional line extensions utilizing Poly-S
technology were introduced in 1993 in North America, Europe,
Australia, the Pacific Rim and Japan. The company's patented
Triaform(Trademark) controlled-release fertilizer technology was
introduced in 1993 in 12 new formulations. In 1993, the Company
also successfully launched its first natural control product,
Turplex(Registered) BioInsecticide, for the professional market.

Scott's horticulture products are sold primarily to
professional nurseries. The horticulture line includes
fertilizers and pesticides particularly formulated for container-
grown ornamental plants. For example, the Company markets a
proprietary fertilizer designed to meet the requirements of
commercial nursery growers who demand dependable, long-lasting
and safe controlled-release fertilizers to incorporate in their
growing media. Controlled-release fertilizer products utilizing
Poly-S technology were also introduced in 1992, and extended in
1993, into the nursery and specialty agriculture markets. A new
patented polymer coating technology, ScottKote(Registered), was
introduced late in fiscal 1993, and several new products
utilizing this technology will be added during 1994.

Sierra's products for professional users include its
Osmocote line of controlled-release fertilizers. These are sold
in various formulations for different crops and can be produced
in versions having a release period of up to 12 months. The
greenhouse segment uses water-soluble fertilizers such as Peters
Professional. Soilless growing media, under such trademarks as
Metro-Mix(Registered) and Terra-Lite(Registered) are also sold to
commercial growers. Finally, Sierra also sells a line of
proprietary pesticide products for horticultural and turf
professionals.

Business Strategy

The Company's Professional Business Group focuses its sales
efforts on the middle and high end of the professional market and
generally does not compete against sellers of commodity products.
Demand for the Company's professional products is primarily
driven by product quality, performance and technical support.
The Company seeks to meet these needs with a range of
sophisticated, specialized products and a professional,
agronomically-trained sales force.

A primary focus of the Professional Business Group's
strategy is to provide a continuing flow of innovative new
products to its professional customers. Products introduced
since 1988 accounted for 63% of the Professional Business Group's
net sales in fiscal 1993.

The Company intends to use its strong position in the golf
course segment to increase sales of Sierra products to those
users, and, conversely, to expand the distribution of its ProGrow
line in the commercial horticultural segment in which Sierra has
a strong position.

The Professional Business Group also works to increase
market coverage by focusing on various professional market
niches. In 1965, the Company established its first specialized
professional sales force, focusing on golf courses. Since 1985,
it has established separate sales forces and/or sales managers
for lawn and landscape services, sports fields, golf course
architects and construction companies, and international segments
of the professional market. In 1992, the Company introduced a
fairway application service for golf courses. This service has
been expanded and is now available in the Carolinas, Georgia,
Texas and Southern California. Additional service markets are
planned for 1994. In 1993, two new Professional Service Centers
were tested in the Washington, D.C. market. These new Company-
operated service centers offer convenient, one-stop shopping for
smaller lawn and landscape service customers. Plans are to
expand this test in 1994.

Marketing and Promotion

The Professional Business Group's sales force consists of 97
technical representatives ("tech reps") who cover approximately
11,600 accounts. Many tech reps are experienced former golf
course superintendents or nursery managers and most have degrees
in agronomy, horticulture or similar disciplines. Tech reps work
closely with golf course and sports field superintendents, turf
and nursery managers, and other landscape professionals. In
addition to marketing the Company's products, Scott's tech reps
provide consultation, testing services, and advice regarding
maintenance practices, including individualized comprehensive
programs incorporating various products for use at specified
times throughout the year. Sierra sells to the professional user
primarily through an extensive network of distributors backed up
by over 100 field sales representatives worldwide, most with
substantial experience in the horticulture market.

To reach potential purchasers, the Company uses trade
advertising and direct mail, publishes newsletters, and sponsors
seminars throughout the country. In addition, the Company
maintains a special toll-free hotline for its professional
customers. The professional customer service department
responded to over 40,000 telephone inquiries in fiscal 1993.

Competition

In the professional turf and nursery market the Company
faces a broad range of competition from numerous companies
ranging in size from multi-national chemical and fertilizer
companies such as DuPont and Dow-Elanco Company, to smaller
specialized companies such as Lesco, Inc. and Lebanon Chemical
Corp., to local fertilizer manufacturers and blenders. Portions
of this market, such as fairway and rough fertilizers for golf
courses, are sometimes served by large agricultural fertilizer
companies, while other segments, such as fertilizers and pest
controls for golf course greens and high value nursery crops, are
served by specialized, research-oriented companies. In certain
areas of the country, particularly Florida, a number of companies
have begun to offer turf care services, including product
application, to golf courses. In addition, the higher margins
available for sophisticated products to treat high value crops
continue to attract large and small chemical producers and
formulators, some of which have larger research departments and
budgets than the Company. While the Company believes that its
reputation, expertise in product development, and professional
sales force will enable it to continue to maintain and build its
share of the professional market, there can be no assurance that
the Company's market share or margins will not be eroded in the
future by new or existing competitors.

Backlog

The major portion of professional product orders are
received during the months of August through November and are
filled during the months of September through November. As of
April 30, 1994, orders on hand from professional customers
(excluding orders for Sierra products) totaled approximately
$5.8 million compared with $5.5 million on the same date in 1993.
All such orders are expected to be filled in fiscal 1994.

Matters Relating to the Company Generally

Patents, Trademarks and Licenses

The "Scotts" and "Hyponex" brand names and logos, as well as
a number of product trademarks, including "Turf Builder," "Lawn
Pro," "Osmocote" and "Peters" are federally registered and are
considered material to the Company's business. In 1989, the
Company assigned all its rights to certain Hyponex trademarks in
the Far East to a Japanese company.

As of December 31, 1993, the Company held over 100 patents
on processes, compositions, grasses, and mechanical spreaders and
has several additional patent applications pending. Over the
past two years, the Company has been granted a number of patents
covering key new process and product technologies. This new
patent protection will extend well into the next decade. The
Company also holds exclusive and non-exclusive patent licenses
from certain chemical suppliers permitting the use and sale of
patented pesticides.

Research and Development

The Company has a long history of innovation, and its
research and development successes can be measured in terms of
sales of new products and by the Company's patents. Products
introduced since 1987 accounted for over $160 million (34%) of
the Company's fiscal 1993 net sales. Virtually all of the
Company's fertilizer products, many of its grasses and many of
its mechanical devices are covered by one or more of over 100
U.S. and foreign patents owned by the Company.

The Company's research and development department is
headquartered in the Dwight G. Scott Research Center in
Marysville, Ohio. The Company also operates three research field
stations in Florida, Texas and Oregon. In addition, the Company
funds research at universities across the United States and
conducts cooperative projects with key professional customers.
Research to develop new and improved application devices is
conducted at Republic's manufacturing facility in Carlsbad,
California. Investment in research is directed toward developing
new technology and products to increase manufacturing efficiency,
reduce product cost, improve performance, solve specific
problems, improve packaging and simplify lawn, turf and
horticultural plant care.

Since its introduction of the first home lawn fertilizer in
1928, the Company has used its research and development strengths
to build the do-it-yourself market. In 1947, it introduced the
first fertilizer/control combination product; in 1950, the first
pre-emergent crabgrass control; in 1957, the first lightweight,
controlled-release fertilizer and, in 1964, the first patented
bluegrass ("Windsor"). Technology continues to be a Company
hallmark. Its introduction of the TGR line in 1987 to control
poa annua on golf courses is an example. In 1992, the Company
introduced Poly-S, a proprietary controlled-release fertilizer
technology. In 1993, ScottKote(Registered), another controlled-
release technology primarily for the nursery market, was
introduced. In addition, the Company has modified its Marysville
facility to utilize a new, patented production process which is
expected to reduce costs and improve product quality, while
increasing production capacity. (See "-Production Facilities.")
Since the Hyponex acquisition, the Company's research and
development department has worked to improve the quality and
reduce the production cost of branded organic products, in
particular potting soils. One of the results of this effort is
the introduction, in 1994, of a line of value-added, premium
quality potting soils and planting mixes under the Scotts brand.

Research has also been focused on durability, precision, and
reduced production costs of the Republic-produced spreaders.
Recently, Republic completely redesigned the major products
within the Company's consumer spreader line that can be
distributed and displayed using innovative packaging.

Sierra pioneered the use of controlled-release fertilizers
for the horticultural markets with the introduction of "Osmocote"
in the 1960s. This polymer-encapsulated technology has achieved
a large share of the horticultural markets due to its ability to
meet the strict performance requirements of professional growers.
Research and development is currently focused on product
improvement and cost reductions. A new, multi-coated controlled-
release technology has been developed by Sierra researchers. A
new production line is currently under construction at Sierra's
Charleston, South Carolina plant to commercialize this high
performance product.

In the years prior to its acquisition by the Company in
1993, Sierra's research group developed an improved, patented
line of soluble fertilizers under the "Excel" brand and
introduced reformulated potting soils and planting mixes in both
the consumer and professional markets.

Expenditures for research and development were approximately
$5.2 million (1.4% of net sales), $6.2 million (1.5% of net
sales) and $7.7 million (1.7% of net sales) in fiscal 1991, 1992,
and 1993 respectively. Approximately 14% of research and
development resources are allocated to advanced technology, 37%
to product and process development, and 49% to regulatory
compliance and other technical activities. The Company plans a
comparable level of spending for the next several years.

<PAGE>
Production Facilities

The manufacturing plants for Scotts' consumer and
professional fertilizer-based products are located in Marysville,
Ohio, adjacent to the Company's corporate headquarters and Dwight
G. Scott Research Center. The Company's Taylor Seed Packaging
Plant is located on a separate site in Marysville. Hyponex
organic products are harvested and packaged in 20 locations
throughout the United States. The Company's best selling
consumer lawn spreaders are produced at the Republic facility in
Carlsbad, California. Some granular and mechanical products and
all liquid products, constituting an aggregate of approximately
16% of the Company's cost of sales in fiscal 1993, are produced
for the Company by other manufacturers. Sierra has manufacturing
sites in the United States and one located in The Netherlands.
Sierra's controlled-release fertilizers are produced in
Charleston, South Carolina, Milpitas, California, and at Heerlen,
The Netherlands. Water-soluble fertilizers are produced in
Allentown, Pennsylvania, and the potting soils are produced in
Travelers Rest, South Carolina and in Hope, Arkansas.

Management believes that each of its facilities is well-
maintained and suitable for its purpose. Substantially all the
Company's owned properties is mortgaged to secure the Company's
indebtedness under the Bank Agreement.

The Company's fertilizer processing and packaging facilities
currently operate, on average, five days per week for three
shifts. Because of the seasonal nature of the demand for the
Company's products, these facilities operate less in the Summer
and more, usually every other weekend, during the Fall and
Winter.

The Company's Marysville facilities were substantially
modified during fiscal 1992 and 1993. The Company replaced one
of the existing fertilizer production lines with a line utilizing
a new, patented process which it developed. In addition, the
Company erected a new physical-blend facility and added equipment
to apply polymer coating to fertilizer materials.

Capital Expenditures

Capital expenditures totaled $19.9 million and $15.2 million
for the fiscal years ended September 30, 1992 and 1993,
respectively. The Company expects that capital expenditures
during fiscal 1994 will total approximately $31.5 million, of
which approximately $13 million is attributable to construction
of a new Poly-S production facility to meet strong forecasted
demand. Further, approximately $4 million is for Sierra's
capital needs, including construction of a new processing line at
its Charleston, South Carolina facility to produce a
technologically advanced fertilizer.

Purchasing

The key ingredients in the Company's fertilizer and control
products are various commodity and specialty chemicals including
vermiculite, phosphates, urea, potash, herbicides, insecticides
and fungicides. Sierra purchases granulates, homogeneous
fertilizer substrates to be coated, and the resins for coating.
These resins are primarily supplied domestically by Sierra SunPol
Resins, a 97%-owned subsidiary of Sierra. The Company obtains
its raw materials from various sources, which the Company
presently considers to be adequate. No one source is considered
to be essential to either of the Company's Consumer or
Professional Business Groups, or to its business as a whole. The
Company has never experienced a significant interruption of
supply.

Sphagum peat, peat humus, vermiculite manure and bark
constitute Hyponex's most significant raw materials. At current
production levels, the Company estimates Hyponex's peat reserves
to be sufficient for its near-term needs in all locations except
the Northeast.

Regulatory activities by the Army Corps of Engineers have
prevented production at one peat harvesting facility located in
Lafayette, New Jersey. See "Environmental and Regulatory
Considerations." To meet the demand previously filled by this
facility, the Company has been purchasing peat from other nearby
producers. Bark products are obtained from sawmills and other
wood residue producers and manure is obtained from a variety of
sources, such as feed lots, race tracks and mushroom growers.
The Company is currently substituting composted yard waste for
some organic raw materials and is planning to expand this
practice. Raw materials for Republic manufacturing include
various engineered resins and metals, all of which are available
from a variety of vendors.

Distribution

The primary distribution center for the Company's products
is also located at the Company's headquarters in Marysville,
Ohio. The Company's products are shipped from Marysville by rail
and truck. While the majority of truck shipments are made by
contract carriers, a portion is made by Scotts' own fleet of
leased trucks. Inventories are also maintained in field
warehouses located in major markets.

Most of Hyponex's organic products have low sales value per
unit of weight, making freight costs significant to
profitability. Hyponex therefore has located approximately
twenty distribution locations near large metropolitan areas in
order to minimize shipping costs. Hyponex uses its own fleet of
approximately 70 trucks as well as contract haulers to transport
its products from distribution points to retail customers.

Sierra's products are produced at three fertilizer and two
organic manufacturing facilities located in the United States.
The majority of shipments are via common carriers to
distributors' warehouses. A small private trucking fleet is
maintained at the organic facilities for direct shipment of
custom orders to customers. Inventories are also maintained in
field warehouses.

Republic-produced, Scotts branded spreaders are shipped via
common carrier to regional warehouses serving the Company's
retail network. Republic's E-Z spreader line and its private
label lines are sold freight-on-board (FOB) Carlsbad with
transportation arranged by the customer.

Significant Customers

Kmart and Home Depot represented approximately 21.5% and
8.8%, respectively, of the Company's sales in fiscal 1993, which
reflects their significant position in the retail lawn and garden
market. The loss of either of these customers or a substantial
decrease in the amount of their purchases could have a material
adverse effect on the Company's business.

Employees

The Company's corporate culture emphasizes employee
participation in management, comprehensive employee benefits and
programs and profit sharing plans. As of April 30, 1994, the
Company employed approximately 2,500 full-time, year-round
workers and an additional five part-time or temporary workers.
Full-time workers average approximately 10 years employment with
the Company or its predecessors. During peak production periods,
the Company engages as many as 750 temporary employees. The
Company's employees are not unionized, except that twenty-one of
Sierra's employees at its Milpitas facility are represented by
the International Chemical Workers Union.

Environmental and Regulatory Considerations

Federal, state and local laws and regulations relating to
environmental matters affect the Company in several ways. All
products containing pesticides must be registered with the U.S.
Environmental Protection Agency (and in many cases, similar state
agencies) before they can be sold. The inability to obtain or
the cancellation of any such registration could have an adverse
effect on the Company's business. The severity of the effect
would depend on which products were involved, whether another
product could be substituted and whether the Company's
competitors were similarly affected. The Company attempts to
anticipate regulatory developments and maintain registrations of,
and access to, substitute chemicals, but there can be no
assurance that it will continue to be able to avoid or minimize
these risks. Fertilizer and organic products (including manures)
are also subject to state labeling regulations.

In addition, the use of certain pesticide and fertilizer
products is regulated by various local, state and federal
environmental and public health agencies. These restrictions may
include requirements that only certified or professional users
apply the product or that certain products be used only on
certain types of locations (such as "not for use on sod farms or
golf courses"), may require users to post notices on properties
to which products have been or will be applied, may require
notification of individuals in the vicinity that products will be
applied in the future or may ban the use of certain ingredients.

Compliance with such regulations and the obtaining of
registrations does not assure, however, that the Company's
products will not cause injury to the environment or to people
under all circumstances.

State and federal authorities generally require Hyponex to
obtain permits (sometimes on an annual basis) in order to harvest
peat and to discharge water run-off or water pumped from peat
deposits. The state permits typically specify the condition in
which the property will be left after the peat is fully
harvested, with the residual use typically being natural wetland
habitats combined with open water areas. Hyponex is generally
required by these permits to limit its harvesting and to restore
the property consistent with the intended residual use. In some
locations, Hyponex has been required to create water retention
ponds to control the sediment content of discharged water.

In July 1990, the Philadelphia district of the Army Corps of
Engineers directed that peat harvesting operations be
discontinued at Hyponex's Lafayette, New Jersey facility, and the
Company complied. In May 1992, the Department of Justice filed
suit seeking a permanent injunction against such harvesting at
that facility and civil penalties. The Philadelphia district of
the Corps has taken the position that peat harvesting activities
there require a permit under Section 404 of the Clean Water Act.
If the Corps' position is upheld, it is possible that further
harvesting of peat from this facility would be prohibited. The
Company is defending this suit and is asserting a right to
recover its economic losses resulting from the government's
actions. Management does not believe that the outcome of this
case will have a material adverse effect on the Company's
operations or its financial condition. See "Legal Proceedings."

Finally, state, federal and local agencies regulate the
disposal, handling and storage of waste and air and water
discharges from Company facilities. During fiscal 1993, the
Company had approximately $234,000 in environmental capital
expenditures and $266,600 in environmental expenses, compared
with approximately $32,000 in environmental capital expenditures
and $209,000 in environmental expenses in fiscal 1992. The
Company has budgeted $1,061,500 in environmental capital
expenditures and $341,000 in environmental expenses for fiscal
1994.

The Company has been identified by the Ohio Environmental
Protection Agency (the "Ohio EPA") as a Potentially Responsible
Party ("PRP") with respect to a site in Union County, Ohio (the
"Hershberger site") that has allegedly been contaminated by
hazardous substances whose transportation, treatment or disposal
the Company allegedly arranged. Pursuant to a consent order with
the Ohio EPA, the Company, together with four other PRPs
identified to date, is investigating the extent of contamination
in the site and developing a remediation program.

Sierra is a potentially responsible party in connection with
the Lorentz Barrel and Drum Superfund Site in California, as a
result of its predecessor having shipped barrels to Lorentz for
reconditioning or sale between 1967 and 1972. Although many
other companies are participating in the remediation of this
site, issues relating to the allocation of the costs have not yet
been resolved. In addition, Sierra is a defendant in a private
cost-recovery action relating to the Novak Sanitary Landfill,
located near Allentown, Pennsylvania. By agreement with W. R.
Grace-Conn., Sierra's liability is limited to a maximum of
$200,000 with respect to this site. The Company's management
does not believe that the outcome of these proceedings will in
the aggregate have a material adverse effect on its financial
condition or results of operations.

Legal Proceedings

In addition to the matters described in "-Environmental and
Regulatory Considerations," the Company is involved in other
lawsuits and claims which arise in the normal course of its
business. In the opinion of management, these claims, as well as
those mentioned above individually and in the aggregate are not
expected to result in an adverse effect on the Company's
financial position or results of operations.

<PAGE>
MANAGEMENT

Executive Officers and Directors of Scotts and OMS

The executive officers of Scotts and the directors of
Scotts and OMS and, as of May 2, 1994, their positions, their
ages and years with the Company (and its predecessors) are set
forth below.
Years with the
Positions(s) Company (and its
Name Age Held Predecessors)

Tadd C. Seitz 52 Chairman of the Board; 21
Chief Executive Officer
Theodore J. Host 48 Director; President; 2
Chief Operating Officer
Paul D. Yeager 55 Executive Vice President; 19
Chief Financial Officer
Richard B. Stahl 58 Senior Vice President 26
J. Blaine McKinney 50 Senior Vice President, 1
Consumer Business Group
Bernard R. Ford 50 Vice President, Strategy 15
and Business Development
Michael P. Kelty 43 Vice President, Technology 14
and Operations
Kenneth W. Holbrook 54 Senior Vice President and
General Manager - Professional
Business Group -
Lawrence M. McCartney 53 Vice President, 19
Information Systems
Wim Pieters 52 Vice President and Managing
Director, Europe and Related
Markets -
Lisle J. Smith 37 Vice President, Administration
and Planning -
Robert A. Stern 51 Vice President, 11
Human Resources
Craig D. Walley 50 Vice President, General 9
Counsel, Secretary
Robert M. Webb 51 Vice President, 18
Manufacturing and Logistics
James B. Beard 56 Director 4
John S. Chamberlin 63 Director 4
Alberto Cribiore 48 Director 7
Joseph P. Flannery 59 Director 7
Donald A. Sherman 40 Director 10
John M. Sullivan 58 Director -
L. Jack Van Fossen 56 Director -

Executive Officers serve at the discretion of the Board
of Directors (and in the case of Mr. Host, pursuant to an
employment agreement).

The business experience of each of the persons listed
above during the past five years is as follows:

Mr. Seitz has been the Chief Executive Officer of OMS
since 1983 (and of Scotts since 1986) and Chairman of the Board
of Scotts and OMS since 1986. He was also President of the
Company from 1983 until 1991. Previously, Mr. Seitz served as
the Company's Director of Marketing and as General Manager of
Burpee. Mr. Seitz is a director of Holophane Corporation.

Mr. Host has been President and Chief Operating Officer
of OMS since October 1991 and a director of Scotts and OMS since
December 1991. From May 1990 to October 1991, he was Senior Vice
President, Marketing for Coca-Cola USA. He previously was
President of the Boyle-Midway Household Products division of
American Home Products, Inc.

Mr. Yeager has been an Executive Vice President of OMS
since 1991 and a Vice President and the Chief Financial Officer
since 1980. He was first Assistant Comptroller and then
Comptroller of OMS from 1974 to 1980. Mr. Yeager is also Vice
President and Treasurer of Scotts.

Mr. Stahl was Vice President and General Manager of the
Company's Professional Business Group from December 1987 to
December 1993. He was named Senior Vice President in December
1993. Mr. Stahl joined OMS in 1967 as a technical representative
in the golf course division.

Mr. McKinney was named Senior Vice President, Consumer
Business Group, in June 1992. From January 1990 to June 1992, he
was in marketing and sales management as Vice President of
Marketing and Sales of Salov, N.A., a manufacturer of consumer
products. From July 1989 to January 1990 he was Director of
Sales of Rickett & Colman, Ltd., a consumer products company.
Between 1965 and July 1989, he was employed by American Home
Products, Inc., becoming Vice President-Director of Sales in the
Boyle Midway Household Products Division.

Mr. Ford has been Vice President, Strategy and Business
Development of OMS since December 1987. Other positions at OMS
that Mr. Ford has held include Director of Market Development,
Director of Export Marketing Services and Director of Marketing.

Mr. Holbrook was named Senior Vice President and
General Manager of the Company's Professional Business Group in
1994. From 1991 through December 1993, Mr. Holbrook was
President of Grace-Sierra Horticultural Products Company. From
1980 to 1991, he was President of Koch Materials Company, a
division of Koch Industries.

Mr. Kelty has been a Vice President of OMS since
December 1988. He has served as Director of Research and
Development of OMS since August 1988. Prior to that, he was the
Company's Director of Advanced Technology Research, and from 1983
to 1987 he was Director, Chemical Technology Development for OMS.

Mr. McCartney has been a Vice President of OMS since
1989. He jointed OMS in 1974 as Systems and Programming Manager,
and was Director, Information Systems from 1976 until 1989.

Mr. Pieters was named a Vice President of OMS in 1994.
From January 1993 through December 1993, Mr. Pieters was a
Vice President of Grace-Sierra Horticultural Products Company, in
charge of its international business. Prior to 1993, he was
Director of Technology and Development of the Fabrics and Fiber
Division of Amoco, Europe.

Mr. Smith was named a Vice President of OMS in 1994.
From 1991 to December 1993, Mr. Smith was Vice President and
Chief Financial Officer of Grace-Sierra Horticultural Products
Company, and from 1987 to 1991 he was Comptroller.

Mr. Stern has been Vice President, Human Resources of
OMS since 1984.

Mr. Walley has been Vice President and General Counsel
of OMS since 1985. Since 1986, Mr. Walley has also been Vice
President and Secretary of Scotts.

Mr. Webb has been a Vice President of OMS since 1988.
He was Vice President-Operations of Hyponex Corporation from 1980
until 1988.

Dr. Beard became a director of Scotts and OMS in 1989.
He is a Professor of Turfgrass Physiology and Ecology at Texas
A&M University and was the first president of the International
Turfgrass Society. Dr. Beard is the author of numerous books and
articles on turfgrass science and is an active lecturer and
consultant.

Mr. Chamberlin became a director of Scotts and OMS in
1989. He has held a number of positions at General Electric
Company including Vice President and General Manager of its
Housewares and Audio Business Division. From 1976 until 1985, he
was President and Chief Executive Officer of Lenox, Inc., and in
1985 joined Avon Products, Inc. as President and Chief Operating
Officer. Since leaving Avon in 1988, he has served as advisor
for investment firms. He is also a director of The Travelers
Insurance Company.

Mr. Cribiore became a director of Scotts and OMS in
1986. He is Vice President and a director of Clayton & Dubilier,
which he joined in 1985. From 1982 to 1985, Mr. Cribiore was a
Senior Vice-President of Warner Communications. Mr. Cribiore is
a general partner of Clayton & Dubilier Associates II Limited
Partnership ("Associates"),
a general partner of the general partners of other Clayton &
Dubilier managed investment partnerships. Mr. Cribiore is also a
director of other corporations in which investment partnerships
managed by Clayton & Dubilier have invested, including CDK
Holding Corporation and its subsidiary, The Kendall Company.

Mr. Flannery became a director of Scotts and OMS in
1986. He was a consultant to Clayton & Dubilier from September,
1988 to December 1990. Mr. Flannery was President, Chief
Executive Officer and Chairman of the Board of Directors of
Uniroyal, Inc. from 1982 to 1986. Mr. Flannery has served as
President, Chief Executive Officer and Chairman of the Board of
Directors of Uniroyal Holding, Inc. since 1986. Mr. Flannery is
also a director of Ingersoll-Rand Company, Kmart Corporation,
Newmont Mining Company and Arvin Industries, Inc., as well as
other corporations in which investment partnerships managed by
Clayton & Dubilier have invested, including CDK Holding
Corporation and its subsidiary, The Kendall Company and APS
Holding Corporation and various of its subsidiaries.

Mr. Sherman became a director of Scotts and OMS in
1988. Mr. Sherman served as President of Hyponex Corporation
from 1985 until November 1988, and as Vice President -- Finance
and Treasurer of Hyponex Corporation from 1983 to 1985. He has
been President of Waterfield Mortgage Company in Fort Wayne,
Indiana since 1989.

Mr. Sullivan became a director of Scotts and OMS on
January 18, 1994. Mr. Sullivan was Chairman of the Board from
1987 to 1993, and President and Chief Executive Officer from 1984
to 1993 of Prince Holdings, Inc., a corporation which, through
its subsidiaries, manufactures sporting goods. Since his
retirement from Prince Holdings, Inc. and its subsidiaries in
1993, Mr. Sullivan has served as an independent director for
various corporations, none of which, other than the Company, are
subject to the Exchange Act.

Mr. Van Fossen became a director of Scotts and OMS in
1993. Mr. Van Fossen has been President and Chief Executive
Officer of Red Roof Inns, Inc., an owner and operator of motels,
since 1991. From 1988 to 1991, Mr. Van Fossen was self-employed
as an independent business consultant. Prior to 1988,
Mr. Van Fossen was Chairman, President and Chief Executive
Officer of Chemlawn Corporation. Mr. Van Fossen also serves as a
director of Cardinal Health, Inc.

BENEFICIAL OWNERSHIP OF CLASS A COMMON STOCK

The following table furnishes certain information as of
January 7, 1994, as to the shares of Common Stock beneficially
owned by each director and executive officer of the Company
included in the Summary Compensation Table included in the
Company's Proxy Statement, by all directors and executive
officers of the Company as a group, and, to the Company's
knowledge, by the only persons owning beneficially more than 5%
of the outstanding shares of such class.
<TABLE>
<CAPTION>
Amount and
Nature of
Beneficial Percent
Beneficial Owner Ownership(1) Of Class(2)
<S> <C> <C>
Government of Singapore
Investment Corporation Pte Ltd. 1,060,600(3) 5.68%(3)
250 North Bridge Road
#33-00 Raffles City Tower
Singapore 0617

Thorsell, Parker Partners
Incorporated
215 Main Street
Westport, CT 06880 997,100(4) 5.34%(4)

James B. Beard 20,727 (5)

John S. Chamberlin 26,727 (5)

Alberto Cribiore -- --

Joseph P. Flannery 29,454 (5)

Theodore J. Host(6)(7) 217,593 1.16%

Tadd C. Seitz(6) 519,720 2.78%

Donald S. Sherman 26,727 (5)

John M. Sullivan -- --

L. Jack Van Fossen 1,200 (5)

J. Blaine McKinney (6) 18,742 (5)

Richard B. Stahl (6) 112,344(8) (5)

Paul D. Yeager (6) 153,507(9) (5)

All directors and executive 1,624,042(10) 8.55%
officers as a group (19 persons)
<PAGE>
____________________
<F1>
(1) Unless otherwise indicated, the beneficial owner has sole
voting and investment power as to all of the shares of
Class A Common Stock reflected in the table.

<F2>
(2) The percent of class is based upon the sum of 18,658,535
shares of Class A Common Stock outstanding on January 7,
1994, and the number of shares of Class A Common Stock as to
which the named person has the right to acquire beneficial
ownership upon the exercise of options exercisable within 60
days of January 7, 1994.

<F3>
(3) Based on information contained in a Schedule 13D dated
October 18, 1993 filed with the Securities and Exchange
Commission, Government of Singapore Investment Corporation
Pte Ltd, an agency of the Singapore government and an
investment manager, shares voting and investment power with
respect to 749,400 shares of Class A Common Stock with the
Government of Singapore and shares voting and investment
power with respect to 311,200 shares of Class A Common Stock
with the Monetary Authority of Singapore.

<F4>
(4) Based on information provided to the Company by Thorsell,
Parker Partners Incorporated ("Thorsell, Parker"), Thorsell,
Parker, a registered investment advisor, is deemed to have
beneficial ownership of 997,100 shares of Class A Common
Stock as of December 31, 1993, all of which shares are held
in portfolios of clients for which Thorsell, Parker serves
as investment manager with investment discretion. Thorsell,
Parker also exercises sole voting power with respect to
747,825 of such shares.

<F5>
(5) Represents ownership of less than 1% of the outstanding
Class A Common Stock of the Company.

<F6>
(6) Executive officer of the Company named in the Summary
Compensation Table included in the Company's Proxy Statement
for 1994 Annual Meeting of Stockholders.

<F7>
(7) Includes 45,454 shares of Class A Common Stock which were
issued to Mr. Host at the time of his employment by the
Company and which are pledged to Bank One, N.A.

<F8>
(8) Includes 25,000 shares of Class A Common Stock held in the
Richard B. Stahl and Nancy E. Stahl 1992 Charitable
Remainder Trust. In his capacity as trustee of said Trust,
Mr. Stahl exercises sole voting and investment power with
respect to such Common Shares. Also includes 1,000 shares
of Class A Common Stock held by the son of Mr. Stahl who
shares his home.

<F9>
(9) Includes 100 shares of Class A Common Stock held by each of
Mr. Yeager's wife and his two daughters who share his home.

<F10>
(10) See Notes (7), (8) and (9) above. Also includes Class A
Common Stock held by the respective spouses of executive
officers of the Company and by their children who reside
with them.

</TABLE>
DESCRIPTION OF BANK AGREEMENT

Scotts and OMS are co-obligors under the Company's Bank
Agreement. As amended on December 16, 1993, in connection with
the acquisition of Sierra, the Bank Agreement provides for a
revolving credit facility of $150 million, which terminates on
March 31, 1996 and which includes swing-line and letter of credit
subfacilities, and term loans of $195 million. Scheduled
maturities for the term loans are as follows: $15 million due on
October 31, 1994; $10 million due semi-annually in 1995; $17.5
million due semi-annually in 1996 and $15 million due semi-
annually thereafter through final maturity on September 30, 2000.
The Bank Agreement generally requires that the Company apply the
Net Cash Proceeds (as defined therein) from the offering of Debt
Securities to the prepayment of the term loans as follows: 15% to
the installments due in 1994; 15% to the installments due in
1995; 20% to the installments due in 1996; 15% to the
installments due in 1997; 15% to the installments due in 1998;
10% to the installments due in 1999 and the balance to the
remaining installments in the inverse order of their stated
maturity.

The Bank Agreement is guaranteed by most of the Company's
subsidiaries and is secured by substantially all the assets of
the Company, as well as by the pledge of 100% of the capital
stock of each of the Company's wholly-owned domestic subsidiaries
and 65% of the Company's wholly-owned foreign subsidiaries.

Borrowings under the Bank Agreement bear interest, at the
Company's option, at a rate equal to either (i) the higher of the
agent bank's reference rate and 1/2% above the "Federal Funds"
rate or (ii) the LIBO Rate (as defined therein) plus 1 1/4%.

The Bank Agreement contains a number of affirmative and
negative covenants and customary events of default. The
agreement also contains financial covenants requiring the Company
to maintain certain levels of Adjusted Operating Profit,
Consolidated Net Worth and Interest Coverage (each as defined
therein) and requiring the Company to reduce, or "clean-down,"
non-term borrowings under the Bank Agreement to $30 million or
less for thirty consecutive days each year. An offering of Debt Securities
may require an amendment of the Bank Agreement.

Loans under the Bank Agreement are provided by Chemical
Bank, as a lending bank and as agent for the thirteen other
participating banks. Chemical Bank is an affiliate of Chemical
Securities Inc. In addition, Chemical Bank is the trustee under
the Indentures. See "Description of Debt Securities -- The
Trustee."

<PAGE>
DESCRIPTION OF DEBT SECURITIES

The following description sets forth certain general
terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the
Debt Securities offered by any Prospectus Supplement and the
extent, if any, to which such general provisions may not apply to
the Debt Securities so offered will be described in the
Prospectus Supplement relating to such Debt Securities.

The Senior Debt Securities are to be issued under an
Indenture to be dated as of June 1, 1994 (the "Senior Indenture")
among Scotts, OMS and Chemical Bank, as trustee. The
Subordinated Debt Securities are to be issued under a separate
Indenture to be dated as of June 1, 1994 (the "Subordinated
Indenture"), also among Scotts, OMS and Chemical Bank, as
trustee. The Senior Indenture and the Subordinated Indenture are
sometimes referred to collectively as the "Indentures." Copies
of the Senior Indenture and the Subordinated Indenture have been
filed as exhibits to the Registration Statement. Chemical Bank
is hereinafter referred to as the "Trustee." The following
summaries of certain provisions of the Senior Debt Securities,
the Subordinated Debt Securities and the Indentures do not pur-
port to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the
Indenture applicable to a particular series of Debt Securities
(the "Applicable Indenture"), including the definitions therein
of certain terms. Wherever particular Sections, Articles or
defined terms of the Indentures are referred to, it is intended
that such Sections, Articles or defined terms shall be
incorporated herein by reference. Article and Section references
used herein are references to the Applicable Indenture. Capital-
ized terms not otherwise defined herein shall have the meaning
given in the Applicable Indenture.

General

The Debt Securities will be joint and several
obligations of the Issuers. The Indentures do not limit the
aggregate principal amount of Debt Securities which may be issued
thereunder and each Indenture provides that Debt Securities may
be issued thereunder from time to time in one or more series.
Unless otherwise specified in the Prospectus Supplement, the
Senior Debt Securities when issued will be unsecured and
unsubordinated obligations of the Issuers and will rank equally
and ratably with all other unsecured and unsubordinated
indebtedness of the Issuers. The Subordinated Debt Securities
when issued will be unsecured obligations of the Issuers
subordinated in right of payment to the prior payment in full of
all Senior Debt (as defined) of each Issuer, as described under
"Subordination of Subordinated Debt Securities" and in the
Prospectus Supplement applicable to an offering of Subordinated
Debt Securities.

Reference is made to the Prospectus Supplement relating
to the particular Debt Securities offered thereby (the "Offered
Debt Securities") which shall set forth whether the Offered Debt
Securities shall be Senior Debt Securities or Subordinated Debt
Securities, and shall further set forth the following terms of
the Offered Debt Securities: (1) the title of the Offered Debt
Securities; (2) whether the Offered Debt Securities are Senior
Debt Securities or Subordinated Debt Securities; (3) any limit on
the aggregate principal amount of the Offered Debt Securities;
(4) the price (expressed as a percentage of the aggregate
principal amount thereof) at which the Offered Debt Securities
will be issued; (5) the Person to whom any interest on the
Offered Debt Securities will be payable, if other than the Person
in whose name such Offered Debt Securities (or one or more
Predecessor Securities) are registered on any Regular Record
Date; (6) the date or dates on which the principal of the Offered
Debt Securities will be payable; (7) the rate or rates per annum
(which may be fixed, floating or adjustable) at which the Offered
Debt Securities will bear interest, if any, or the formula pur-
suant to which such rate or rates shall be determined, the date
or dates from which such interest will accrue and the dates on
which such interest, if any, will be payable and the Regular
Record Dates for such interest payment dates; (8) the place or
places where principal of (and premium, if any) and interest, if
any, on Offered Debt Securities will be payable; (9) if
applicable, the price at which, the periods within which and the
terms and conditions upon which the Offered Debt Securities may
be redeemed at the option of the Issuers, pursuant to a sinking
fund or otherwise; (10) if applicable, any obligation of the
Issuers to redeem or purchase Offered Debt Securities pursuant to
any sinking fund or analogous provisions or at the option of a
Holder thereof, and the period or periods within which, the price
or prices at which and the terms and conditions upon which the
Offered Debt Securities will be redeemed or purchased, in whole
or in part; (11) if applicable, the terms of any right to convert
or exchange the Offered Debt Securities into other securities or
property of either or both of the Issuers or otherwise; (12) if
other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the Offered Debt Securities
will be issuable; (13) the currency or currencies, including
composite currencies or currency units, in which payment of the
principal of (or premium, if any) or interest, if any, on any of
the Offered Debt Securities will be payable if other than the
currency of the United States of America; (14) if the amount of
payments of principal of (or premium, if any) or interest, if
any, on the Offered Debt Securities may be determined with
reference to one or more indices, the manner in which such
amounts will be determined; (15) if the principal of (or premium,
if any) or interest, if any, on any of the Offered Debt Securi-
ties of the series is to be payable, at the election of the
Issuers or a Holder thereof, in one or more currencies, including
composite currencies, or currency units other than that or those
in which the Securities are stated to be payable, the currency,
currencies, including composite currencies, or currency units in
which payment of the principal of (or premium, if any) or
interest, if any, on Securities of such series as to which such
election is made will be payable, and the periods within which
and the terms and conditions upon which such election is to be
made; (16) the portion of the principal amount of the Offered
Debt Securities, if other than the principal amount thereof,
payable upon acceleration of maturity thereof; (17) whether all
or any part of the Offered Debt Securities will be issued in the
form of a permanent Global Security or Securities and, if so, the
depositary for, and other terms relating to, such permanent
Global Security or Securities; (18) any event or events of
default applicable with respect to the Offered Debt Securities in
addition to those provided in the Indentures; (19) any other
covenant or warranty included for the benefit of the Offered Debt
Securities in addition to (and not inconsistent with) those
included in the Indentures for the benefit of Debt Securities of
all series, or any other covenant or warranty included for the
benefit of the Offered Debt Securities in lieu of any covenant or
warranty included in the Indentures for the benefit of Offered
Debt Securities, or any combination of such covenants, warranties
or provisions; (20) if the Debt Securities are Subordinated Debt
Securities, whether the provisions of the Subordinated Indenture
described under the caption "Subordination of Subordinated Debt
Securities" or other subordination provisions will be applicable
to such Subordinated Debt Securities; (21) any restriction or
condition on the transferability of the Offered Debt Securities;
(22) if applicable, that such Offered Debt Securities, in whole
or any specified part, are defeasible pursuant to the provisions
of the Indentures described under "Defeasance and Covenant
Defeasance"; (23) any authenticating or paying agents,
registrars, conversion agents or any other agents with respect to
the Offered Debt Securities; and (24) any other terms or provi-
sions of the Offered debt Securities not inconsistent with the
Indentures. (Sections 301 and 901)

Unless otherwise indicated in the Prospectus Supplement
relating thereto, the Offered Debt Securities are to be issued as
registered securities without coupons in denominations of $1,000
or any integral multiple of $1,000. (Section 302). No service
charge will be made for any transfer or exchange of such Offered
Debt Securities, but the Issuers or the Trustee may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Section
305) The Indentures also provide that the Debt Securities of any
series, if so specified with respect to a particular series, may
be issued in permanent global form. See "Permanent Global
Securities".

Debt Securities may be issued as Original Issue
Discount Debt Securities to be sold at a substantial discount
below their principal amount. Special Federal income tax,
accounting and other considerations applicable thereto will be
described in the Prospectus Supplement relating thereto.
"Original Issue Discount Debt Security" means any security which
provides for an amount less than the principal amount thereof to
be due and payable upon the declaration of acceleration of the
maturity thereof upon the occurrence and continuance of an Event
of Default. (Section 101)

If the Debt Securities are denominated in whole or in
part in any currency other than United States dollars, if the
principal of (and premium, if any) or interest, if any, on the
Debt Securities are to be payable at the election of the Company
or a Holder thereof, in a currency or currencies other than that
in which such Debt Securities are to be payable, or if any index
is used to determined the amount of payments or principal of,
premium, if any, or interest on any series of the Debt
Securities, special Federal income tax, accounting and other
considerations applicable thereto will be described in the
Prospectus Supplement relating thereto.

Since each of the Issuers is a holding company, the
rights of each Issuer, and hence the right of creditors of each
Issuer (including the Holders of Debt Securities), to participate
in any distribution of the assets of any Subsidiary upon its
liquidation or reorganization or otherwise is necessarily subject
to the prior claims of creditors of the Subsidiary, except to the
extent that claims of an Issuer itself as a creditor of the
Subsidiary may be recognized.

The Indentures do not contain any provisions that would
provide protection to Holders of the Debt Securities against a
sudden and dramatic decline in credit quality of the Company
resulting from any takeover, recapitalization or similar
restructuring.

Payment and Paying Agents

Unless otherwise indicated in the applicable Prospectus
Supplement, payment of interest on a Debt Security on any
Interest Payment Date will be made to the Person in whose name
such Debt Security (or one or more Predecessor Debt Securities)
is registered at the close of business on the Regular Record Date
for such interest payment. (Section 307)

Unless otherwise indicated in the applicable Prospectus
Supplement, principal of and any premium and interest on the Debt
Securities of a particular series will be payable at the office
of such Paying Agent or Paying Agents as the Issuers may
designate for such purpose from time to time, except that at the
option of the Issuers payment of any interest may be made by
check mailed to the address of the Person entitled thereto as
such address appears in the Security Register. Unless otherwise
indicated in the applicable Prospectus Supplement, the corporate
trust office of the Trustee in The City of New York will be
designated as the Issuers' sole Paying Agent for payments with
respect to Debt Securities of each series. Any other Paying
Agents initially designated by the Issuers for the Debt
Securities of a particular series will be named in the applicable
Prospectus Supplement. The Issuers may at any time designate
additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying
Agent acts, except that the Issuers will be required to maintain
a Paying Agent in each place of payment for the Debt Securities
of a particular series. (Section 1002)

All moneys paid by the Issuers to a Paying Agent for
the payment of the principal of or any premium or interest on any
Debt Security which remain unclaimed at the end of two years
after such principal, premium or interest has become due and
payable will be repaid to the Issuers, and the Holder of such
Debt Security thereafter may look only to the Issuers for payment
thereof. (Section 1003)

Subordination of Subordinated Debt Securities

Unless otherwise indicated in the Prospectus Supplement
relating thereto, the following provisions will apply to the
Subordinated Debt Securities.

The payment of the principal of (and premium, if any)
and interest on the Subordinated Debt Securities will, to the
extent set forth in the Subordinated Indenture, be subordinate in
right of payment to the prior payment in full of all Senior Debt,
including the Senior Debt Securities. Upon any payment or
distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment of the
benefit of creditors, marshalling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings of an
Issuer, the holders of all Senior Debt will first be entitled to
receive payment in full of principal of (and premium, if any) and
interest, if any, due or to become due on such Senior Debt before
the holders of the Subordinated Debt Securities will be entitled
to receive or retain any payment in respect of the principal of
(and premium, if any) or interest, if any, on the Subordinated
Debt Securities. (Section 1402)

By reason of such subordination, in the event of
liquidation or insolvency, creditors of an Issuer who are not
holders of Senior Debt or Subordinated Debt Securities may
recover less, ratably, than holders of Senior Debt and may
recover more, ratably, than the holders of the Subordinated Debt
Securities.

In the event of the acceleration of the maturity of any
Subordinated Debt Securities, the holders of all Senior Debt
outstanding at the time of such acceleration will first be
entitled to receive payment in full of all amounts due thereon
before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment upon the principal of (or
premium, if any) or interest, if any, on the Subordinated Debt
Securities. (Section 1403)

No payments on account of principal of (or premium, if
any) or interest, if any, in respect of the Subordinated Debt
Securities may be made if there shall have occurred and be
continuing a default in any payment with respect to Senior Debt,
or any event of default with respect to any Senior Debt resulting
in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
(Section 1404). For purposes of the subordination provisions,
the payment, issuance and delivery of cash, property or
securities upon conversion of a Subordinated Debt Security will
be deemed to constitute payment on account of the principal of
such Subordinated Debt Security.

Unless otherwise specified in the Prospectus Supplement
relating to the particular series of Subordinated Debt Securities
offered thereby, "Debt" means (without duplication and without
regard to any portion of principal amount that has not accrued
and to any interest component thereof (whether accrued or
imputed) that is not due and payable) with respect to any Person,
whether recourse is to all or a portion of the assets of such
Person and whether or not contingent, (i) every obligation of
such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of such Person with respect to letters
of credit, bankers' acceptances or similar facilities issued for
the account of such Person; (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business); (v)
every capital lease obligation of such Person; (vi) the maximum
fixed redemption or repurchase price of redeemable stock of such
Person at the time of determination; and (vii) every obligation
of the type referred to in clauses (i) through (vi) of another
Person and all dividends of another Person the payment of which,
in either case, such Person has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise.
(Section 101 of the Subordinated Indenture)

Unless otherwise specified in the Prospectus Supplement
relating to the particular series of Subordinated Debt Securities
offered thereby, "Senior Debt" means (a) the principal of (and
premium, if any) and interest, if any, (including interest
accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to an Issuer to the extent that such
claim for post-petition interest is allowed in such proceeding)
on Debt, whether incurred on or prior to the date of the
Subordinated Indenture or thereafter created, assumed or
incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided
that such obligations are not superior in right of payment to the
Subordinated Debt Securities or to other Debt which is pari passu
with, or subordinated to the Subordinated Debt Securities and
(b) any deferrals, renewals or extensions of such Senior Debt;
provided, however, that Senior Debt shall be deemed to include
(i) Debt existing under the Bank Agreement and (ii) Debt existing
under the Senior Indenture; provided further, however, that
Senior Debt shall not be deemed to include (i) the Subordinated
Debt Securities or (ii) the Debt referred to in clause (vi) of
the definition of Debt. (Section 101 of the Subordinated
Indenture)

The Subordinated Indenture does not limit or prohibit
the incurrence of additional Senior Debt by either Issuer, which
may include Debt that is senior to the Subordinated Debt
Securities, but subordinate to other obligations of one or both
of the Issuers. The Senior Debt Securities, when issued, will
constitute Senior Debt.

The Prospectus Supplement may further describe the
provisions, if any, applicable to the subordination of the
Subordinated Debt Securities of a particular series.

At April 2, 1994 the combined total amount of
indebtedness of the Issuers that would constitute Senior Debt was
$329.6 million.

Conversion Rights

The terms on which Debt Securities of any series may be
convertible into common stock or other securities of an Issuer or
otherwise will be set forth in the Prospectus Supplement relating
thereto. Such terms shall include provisions as to whether
conversion is mandatory, at the option of the holder or at the
option of the Issuers, and may include provisions pursuant to
which the number of shares of common stock or other securities of
an Issuer or otherwise to be received by the holders of Debt
Securities would be calculated according to the market price of
common stock or such other securities as of a time stated in the
Prospectus Supplement.

Covenants

Limitations on Certain Asset Dispositions

Neither of the Issuers may, and neither may permit any
Subsidiary to, make any Asset Disposition in one or more related
transactions unless: (i) the Issuer or the Subsidiary, as the
case may be, receives consideration for such disposition at least
equal to the fair market value for the assets sold or disposed of
as determined by the Board of Directors of Scotts in good faith
and evidenced by a resolution of the Board of Directors of Scotts
filed with the Trustee; (ii) at least 85% of the consideration
for such disposition consists of cash or readily marketable cash
equivalents or the assumption of Debt of an Issuer (other than
Debt that is subordinated, either expressly or structurally, to
the Debt Securities) relating to such assets and release from all
liability on the Debt assumed, without recourse to either Issuer
or their retained assets; and (iii) all Net Available Proceeds,
less any amounts invested within 180 days of such disposition in
assets related to the business of the Issuers, are applied within
180 days of such disposition (1) first, to the permanent
repayment or reduction of Debt then outstanding under the Bank
Agreement, or any renewal or replacement thereof, to the extent
permitted thereunder, (2) second, to the extent of remaining Net
Available Proceeds, to make an Offer to Purchase outstanding
Senior Debt Securities at 100% of their principal amount plus
accrued interest to the date of purchase, (3) third, to the
extent of any remaining Net Available Proceeds, to make an Offer
to Purchase outstanding Subordinated Debt Securities at 100% of
their principal amount plus accrued interest to the date of
purchase, (4) fourth, to the extent of any remaining Net
Available Proceeds following the completion of the Offer to
Purchase, to the repayment of other Debt of an Issuer or Debt of
a Subsidiary of an Issuer, to the extent permitted under the
terms thereof and (5) fifth, to the extent of any remaining Net
Available Proceeds, to any other use as determined by the Issuers
which is not otherwise prohibited by the Indentures. (Section
1008)

Change of Control

Upon the occurrence of a Change of Control, the Issuers
will be required to make an Offer to Purchase all outstanding
Debt Securities at a purchase price equal to 101% of their
principal amount plus accrued interest to the date of purchase.
A "Change of Control" will be deemed to have occurred in the
event that either (a) any Person or any Persons acting together
that would constitute a group (for purposes of Section 13(d) of
the Securities Exchange Act of 1934, or any successor provision
thereto) (a "Group"), together with any Affiliates or Related
Persons thereof shall beneficially own (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, or any successor
provision thereto) at least 30% of the aggregate voting power of
all classes of Capital Stock of either Issuer entitled to vote
generally in the election of directors; or (b) any Person or
Group, together with any Affiliates or Related Persons thereof,
shall succeed in having a sufficient number of its nominees
elected to the Board of Directors of either Issuer such that such
nominees, when added to any existing director remaining on the
Board of Directors of such Issuer after such election who is an
Affiliated or Related Person of such Group, will constitute a
majority of the Board of Directors of such Issuer.
Notwithstanding the foregoing, with respect to OMS, Scotts shall
be deemed not to constitute such a Person or Group for the
purposes of clauses (a) and (b) above. (Section 1009)

In the event that the Issuers make an Offer to Purchase
Debt Securities, the Issuers intend to comply with any applicable
securities laws and regulations, including any applicable
requirements of Section 14(e) of, and Rule 14e-1 under, the
Securities Exchange Act of 1934.

Consolidation, Merger and Sale of Assets

Neither of the Issuers may, in a single transaction or
a series of related transactions, consolidate with or merge into
any other Person or sell, lease or otherwise transfer its
property and assets as, or substantially as, an entirety to any
Person and neither may permit any Person to merge into or
consolidate with such Issuer unless (i) either (A) such Issuer
will be the resulting or surviving entity or (B) any successor or
purchaser is a corporation, partnership or trust organized under
the laws of the United States of America, any State or the
District of Columbia, and any such successor or purchaser
expressly assumes such Issuer's obligations on the Debt
Securities under a supplemental Indenture, (ii) immediately after
giving effect to the transaction no Event of Default, and no
event which after notice or lapse of time or both would become an
Event of Default, shall have occurred and be continuing, and
(iii) certain other conditions are met. (Section 801). Upon any
consolidation or merger into any other Person or any conveyance,
transfer or lease of an Issuer's assets substantially as an
entirety to any Person, the successor Person shall succeed to,
and be substituted for, an Issuer under the Indentures, and such
Issuer, except in the case of a lease, shall be relieved of all
obligations and covenants under the Indentures and the Debt
Securities to the extent it was the predecessor Person. (Section
802)

Events of Default and Notice Thereof

Unless otherwise specified in the Prospectus Supplement
relating to a particular series of Debt Securities, the following
events are defined in the Indentures as "Events of Default" with
respect to Debt Securities of any series: (a) failure to pay
principal (including any sinking fund payment) of (or premium, if
any, on) any Debt Security of that series when due (in the case
of the Subordinated Indenture, whether or not payment is
prohibited by the subordination provisions); (b) failure to pay
any interest on any Debt Security of that series when due,
continued for 30 days (in the case of the Subordinated Indenture,
whether or not payment is prohibited by the subordination
provisions); (c) default in the payment of principal and interest
on Debt Securities of that series required to be purchased
pursuant to an Offer to Purchase as described under "Change of
Control" and "Limitation on Certain Asset Dispositions" when due
and payable (in the case of the Subordinated Indenture, whether
or not payment is prohibited by the subordination provisions);
(d) failure to perform or comply with the provisions described
under "Merger, Consolidation and Sales of Assets"; (e) failure to
perform any other covenant or agreement of the Issuers under the
Indentures (other than a covenant included in the Indentures
solely for the benefit of a series of Debt Securities other than
that series) continued for 60 days after written notice to the
Issuers by the Trustee or Holders of at least 25% in aggregate
principal amount of outstanding Debt Securities of that series;
(f) default under the terms of any instrument evidencing or
securing Debt for money borrowed, including Debt Securities of
another series, by an Issuer or any Subsidiary having an
outstanding principal amount of $5 million individually or in the
aggregate which default results in the acceleration of the
payment of such indebtedness or constitutes the failure to pay
such indebtedness when due; (g) the rendering of a final judgment
or judgments (not subject to appeal) against an Issuer or any
Subsidiary in an amount in excess of $5 million which remains
undischarged or unstayed for a period of 60 days after the date
on which the right to appeal has expired; and (h) certain events
of bankruptcy, insolvency or reorganization affecting an Issuer
or any Subsidiary. (Section 501)

Except as defined in the Prospectus Supplement relating
thereto and except as specified in clause (f) of the preceding
paragraph, no Event of Default with respect to Debt Securities of
a particular series shall necessarily constitute an Event of
Default with respect to Debt Securities of any other series. If
an Event of Default with respect to Debt Securities of any series
at the time outstanding shall occur and be continuing, either the
Trustee or the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of that series may declare the
principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all
Debt Securities of that series to be due and payable immediately;
provided, however, that under certain circumstances the Holders
of a majority in aggregate principal amount of outstanding Debt
Securities of that series may rescind or annul such declaration
and its consequences. (Section 502). If an Event of Default
specified in clause (h) of the preceding paragraph occurs, the
outstanding Debt Securities will ipso facto become immediately
payable without any declaration or other act on the part of the
Trustee or any Holder. (Section 502)

Reference is made to the Prospectus Supplement relating
to any series of Offered Debt Securities which are Original Issue
Discount Securities for the particular provisions relating to the
principal amount of such Original Issue Discount Securities due
on acceleration upon the occurrence of an Event of Default and
the continuation thereof.

The Issuers will be required to furnish to the Trustee
annually a statement by certain officers of the Issuers as to
compliance with all conditions and covenants of the Indentures.
(Section 1004)

The Holders of a majority in principal amount of the
Outstanding Debt Securities of any series affected will have the
right, subject to certain limitations, to direct the time, method
and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Debt Securities of such series, and
to waive certain defaults. (Sections 512 and 513)

The Indentures provide that, upon the occurrence of an
Event of Default that shall be continuing, the Trustee shall
exercise such of its rights and powers under the Indentures, and
use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the
conduct of his own affairs. (Section 601). Subject to such
provisions, the Trustee will be under no obligation to exercise
any of its rights or powers under the Indentures at the request
of any of the Holders of Debt Securities unless they shall have
offered to the Trustee security or indemnity in form and
substance reasonably satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred by it in
compliance with such request. (Section 603)

No Holder of a Debt Security of any series will have
any right to institute any proceeding with respect to the
Indentures or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a
continuing Event of Default and unless also the Holders of at
least 25% in aggregate principal amount of the Outstanding Debt
Securities of the same series shall have made written request,
and offered reasonable indemnity to the Trustee, to institute
such proceeding as trustee, and the Trustee shall not have
received from the Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of the same series a
direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. (Section 507).
However, such limitations do not apply to a suit instituted by a
Holder of a Debt Security for enforcement of payment of the
principal of (or premium, if any) or interest, if any, on such
Debt Security on or after the respective due dates expressed in
such Debt Security, or of the right to convert such Debt Security
in accordance with the Indentures (if applicable). (Section 508)

Modification and Waiver

Modifications and amendments of each Indenture may be
made by the Issuer and the Trustee, with the consent of the
Holders of not less than a majority of aggregate principal amount
of each series of the outstanding Debt Securities issued under
such Indenture which is affected by the modification or
amendment; provided, however, that no such modification or
amendment may, without the consent of each Holder of such Debt
Security affected thereby: (1) change the Stated Maturity of the
principal of (or premium, if any) or any instalment of principal
or interest, if any, on any such Debt Security; (2) reduce the
principal amount of (or premium, if any) or the interest rate, if
any, on any such Debt Security or the principal amount due upon
acceleration of an Original Issue Discount Security;
(3) adversely affect any right of repayment at the option of the
Holder of any such Debt Security; (4) reduce the amount of or
postpone the date fixed for, the payment of any sinking fund or
analogous obligation; (5) change the place or currency of payment
of principal of (or premium, if any) or the interest, if any, on
any such Debt Security; (6) impair the right to institute suit
for the enforcement of any such payment on or with respect to any
such Debt Security on or after the Stated Maturity (or, in the
case of redemption, on or after the Redemption Date); (7)
adversely change the right to convert or exchange, including
decreasing the conversion rate or increasing the conversion price
of, such Debt Security (if applicable); (8) reduce the percentage
of the principal amount of Outstanding Debt Securities of any
series, the consent of the Holders of which is necessary to
modify or amend the Applicable Indenture; (9) in the case of the
Subordinated Indenture, modify the subordination provisions in a
manner adverse to the holders of the Subordinated Debt
Securities; (10) modify the foregoing requirements or reduce the
percentage of outstanding Debt Securities necessary to waive
compliance with certain provisions of the Applicable Indenture or
for waiver of certain defaults or (11) following the mailing of
any Offer to Purchase, modify any Offer to Purchase required
under "Limitation on Certain Asset Dispositions" and the "Change
in Control" Covenants contained in the Indentures in a manner
materially adverse to the holders thereof. (Section 902)

The Subordinated Indenture also prohibits any
modification of amendment of the subordination provisions thereof
in a manner adverse to the holders of Senior Debt, without such
holders' consent. (Subordinated Indenture Section 902)

The holders of at least a majority of the aggregate
principal amount of the Outstanding Debt Securities of any series
may, on behalf of all Holders of that series, waive compliance by
the Issuers with certain restrictive provisions of the Indentures
and waive any past default under the Indentures, except a default
in the payment of principal, premium or interest or in the
performance of certain covenants. (Sections 1011 and 513)

Each Indenture provides that in determining whether the
Holders of the requisite principal amount of the Outstanding Debt
Securities or any series have given or taken any direction,
notice, consent, waiver or other action under the Applicable
Indenture as of any date, (i) the principal amount of an Original
Issue Discount Debt Security that will be deemed to be
Outstanding will be the amount of the principal thereof that
would be due and payable as of such date upon acceleration of the
Maturity thereof to such date, (ii) if, as of such date, the
principal amount payable at the Stated Maturity of a Debt
Security is not determinable (for example, because it is based on
an index), the principal amount of such Debt Security deemed to
be Outstanding as of such date will be an amount determined in
the manner prescribed for such Debt Security and (iii) the
principal amount of a Security denominated in one or more foreign
currencies or currency units that will be deemed to be
Outstanding will be the U.S. dollar equivalent, determined as of
such date in the manner prescribed for such Debt Security, of the
principal amount of such Debt Security (or, in the case of a Debt
Security described in clause (i) or (ii) above, of the amount
described in such clause). Certain Debt Securities, including
those for whose payment or redemption money has been deposited or
set aside in trust for the Holders and those that have been fully
defeased pursuant to Section 1302, will not be deemed to be
Outstanding. (Section 101)

Except in certain limited circumstances, the Issuers
will be entitled to set any day as a record date for the purpose
of determining the Holders of Outstanding Debt Securities of any
series entitled to give or take any direction, notice, consent,
waiver or other action under the Applicable Indenture, in the
manner and subject to the limitations provided in such Applicable
Indenture. In certain limited circumstances, the Trustee will be
entitled to set a record date for action by Holders. If a record
date is set for any action to be taken by Holders of a particular
series, such action may be taken only by persons who are Holders
of Outstanding Debt Securities of that series on the record
date. To be effective, such action must be taken by Holders of
the requisite principal amount of such Debt Securities within a
specified period following the record date. For any particular
record date, this period will be 180 days or such shorter period
as may be specified by the Issuers (or the Trustee, if it set the
record date), and may be shortened or lengthened (but not beyond
180 days) from time to time. (Section 104)

Defeasance and Covenant Defeasance

The Indentures provide, if such provision is made
applicable to the Debt Securities of any series pursuant to
Section 301 of the Applicable Indenture (which will be indicated
in the Prospectus Supplement applicable thereto), that the
Issuers may elect either (A) to defease and be discharged from
any and all obligations with respect to such Debt Securities then
outstanding (including, in the case of Subordinated Debt
Securities, the provisions described under "Subordination of
Subordinated Debt Securities" herein and except for the
obligations to exchange or register the transfer of such Debt
Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in
respect of the Debt Securities, and to hold monies for payments
in trust)("defeasance"), or (B) to be released from its obliga-
tions with respect to such Debt Securities concerning the
restrictions described under "Consolidation, Merger and Sale of
Assets" and any other covenants applicable to such Debt
Securities (including, in the case of Subordinated Debt
Securities, the provisions described under "Subordination of
Subordinated Debt Securities" herein) which are subject to
covenant defeasance ("covenant defeasance"), and the occurrence
of an event described and notice thereof in clauses (e) and (f)
under "Events of Default and Notice Thereof" (with respect to
covenants determined, pursuant to Section 301 of the Applicable
Indenture, to be subject to covenant defeasance) shall no longer
be an Event of Default, in each case, upon the irrevocable
deposit with the Trustee (or other qualifying trustee), in trust
for such purpose, of money, and/or U.S. Government Obligations
(as defined in the Indentures) (or Foreign Government Obligations
(as defined in the Indentures) in the case of Debt Securities
denominated in foreign currencies) which through the payment of
principal and interest in accordance with their terms will
provide money in an amount sufficient without reinvestment to pay
the principal of (and premium, if any) and interest, if any, on
such Debt Securities, and any mandatory sinking fund or analogous
payments thereon, on the scheduled due dates therefor. Such a
trust may only be established if, among other things, (i) the
Issuers have delivered to the Trustee an opinion of counsel (as
specified in the Applicable Indenture) to the effect that the
Holders of such Debt Securities will not recognize income, gain
or loss for Federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or
covenant defeasance had not occurred, (ii) no Event of Default or
event which with the giving of notice or lapse of time, or both,
would become an Event of Default under the Applicable Indenture
shall have occurred and be continuing on the date of such
deposit, (iii) in the case of Subordinated Debt Securities, (x)
no default in the payment of principal of (or premium, if any) or
interest, if any, on any Senior Debt beyond any applicable grace
period shall have occurred and be continuing, or (y) no other
default with respect to any Senior Debt shall have occurred and
be continuing and shall have resulted in the acceleration of such
Senior Debt and (iv) certain other customary conditions precedent
are satisfied. In the case of defeasance under clause (A) above,
the opinion of counsel referred to in clause (i) above must refer
to an be based on a ruling of the Internal Revenue Service issued
to the Company or published as a revenue ruling or on a change in
applicable Federal income tax law, in each case after the date of
the Applicable Indenture. (Article Thirteen)

Under current Federal income tax law, defeasance would
likely be treated as a taxable exchange of such Debt Securities
for interests in the defeasance trust. As a consequence a Holder
would recognize gain or loss equal to the difference between the
Holder's cost or other tax basis for such Debt Securities and the
value of the Holder's proportionate interest in the defeasance
trust, and thereafter would be required to include in income a
proportionate share of the income, gain and loss of the
defeasance trust. Under current Federal income tax law, covenant
defeasance would ordinarily not be treated as a taxable exchange
of such Debt Securities. Purchasers of such Debt Securities
should consult their own advisors with respect to the tax
consequences to them of such defeasance and covenant defeasance,
including the applicability and effect of tax laws other than the
Federal income tax law.

The Issuers may exercise the defeasance option with
respect to such Debt Securities notwithstanding its prior
exercise of the covenant defeasance option. If the Issuers
exercise the defeasance option, payment of such Debt Securities
may not be accelerated because of an Event of Default. If the
Issuers exercise the covenant defeasance option, payment of such
Debt Securities may not be accelerated by reference to the
covenants noted under clause (B) above. In the event the Issuers
omit to comply with the remaining obligations with respect to
such Debt Securities under the Applicable Indenture after
exercising its covenant defeasance option and such Debt
Securities are declared due and payable because of the occurrence
of any Event of Default, the amount of money and U.S. Government
Obligations (or Foreign Government Obligations in the case of
Debt Securities denominated in foreign currencies) on deposit
with the Trustee may be insufficient to pay amounts due on the
Debt Securities of such series at the time of the acceleration
resulting from such Event of Default, because the required
deposit in the defeasance trust is based upon scheduled cash
flows, rather than market values, which will vary depending on
prevailing interest rates and other factors. However, the
Issuers will remain liable in respect of such payments. (Arti-
cle Thirteen)

The Prospectus Supplement may further describe the
provisions, if any, applicable to defeasance with respect to the
Debt Securities of a particular series.

Certain Definitions

Set forth below is a summary of certain of the defined
terms used in the Indentures. Reference is made to the
Applicable Indenture with respect to any particular series of
Debt Securities for the full definition of all such terms, as
well as any other terms used herein for which no definition is
provided. (Section 101)

"Affiliate" of any Person means any other Person
directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person. For the
purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to
the foregoing.

"Asset Disposition" by any Person means any transfer,
conveyance, sale, lease or other disposition by such Person or
any of its Subsidiaries (including a consolidation or merger or
other sale of any such Subsidiary with, into or to another Person
in a transaction in which such Subsidiary ceases to be a
Subsidiary, but excluding a disposition by a Subsidiary of such
Person to such Person or a Wholly Owned Subsidiary of such Person
or by such Person to a Wholly Owned Subsidiary of such Person) of
(i) shares of Capital Stock (other than directors' qualifying
shares) of or other ownership interests in a Subsidiary of such
Person, (ii) substantially all of the assets of such Person, or
any of its Subsidiaries, representing a division or line of
business or (iii) other assets or rights of such Person or any of
its Subsidiaries outside of the ordinary course of business,
provided in each case that the aggregate consideration for such
transfer, conveyance, sale, lease or other disposition is equal
to $1 million or more.

<PAGE>
"Bank Agreement" means the Third Amended and
Restated Credit Agreement, dated as of April 7, 1992, among the
Issuers, Chemical Bank (as successor to Manufacturers Hanover
Trust Company), as Agent, and the lenders identified therein (the
"Banks"), as amended by the First Amendment thereto, dated as of
November 19, 1992, the Second Amendment thereto, dated as of
February 23, 1993, and the Third Amended thereto, dated as of
December 15, 1993, as such agreement may be amended, extended,
restated or otherwise modified.

"Capital Stock" of any Person means any and all shares,
interests, participation or other equivalents (however
designated) of corporate stock of such Person.

"Net Available Proceeds" from any Asset Disposition by
any Person means cash or readily marketable cash equivalents
received (including by way of sale or discounting of a note,
instalment receivable or other receivable, but excluding any
other consideration received in the form of assumption by the
acquiree of Debt or other obligations relating to such properties
or assets) therefrom by such Person, net of (i) all legal, title
and recording tax expenses, commissions and other fees and
expenses Incurred and all federal, state, provincial, foreign and
local taxes required to be accrued as a liability as a
consequence of such Asset Disposition, (ii) all payments made by
such Person or its Subsidiaries on any Debt which is secured by
such assets in accordance with the terms of any Lien upon or with
respect to such assets or which must by the terms of such Lien,
or in order to obtain a necessary consent to such Asset Disposi-
tion or by applicable law, be repaid out of the proceeds from
such Asset Disposition, (iii) all distributions and other
payments made to minority interest holders in Subsidiaries of
such Person or joint ventures as a result of such Asset Disposi-
tion and (iv) appropriate amounts to be provided by such Person
or any Subsidiary thereof, as the case may be, as a reserve in
accordance with generally accepted accounting principles against
any liabilities associated with such assets and retained by such
Person or any Subsidiary thereof, as the case may be, after such
Asset Disposition, including, without limitation, liabilities
under any indemnification obligations and severance and other
employee termination costs associated with such Asset
Disposition, in each case as determined by the Board of Directors
of Scotts, in its reasonable good faith judgment evidenced by a
resolution of the Board of Directors of Scotts filed with the
Trustee; provided, however, that any reduction in such reserve
within twelve months following the consummation of such Asset
Disposition will be treated for all purposes of the Indentures
and the Debt Securities as a new Asset Disposition at the time of
such reduction with Net Available Proceeds equal to the amount of
such reduction.

"Offer to Purchase" means a written offer (the "Offer")
sent by the Issuers by first class mail, postage prepaid, to each
Holder at its address appearing in the Debt Security Register on
the date of the Offer offering to purchase up to the principal
amount of Debt Securities specified in such Offer at the purchase
price specified in such Offer (as determined pursuant to the
Applicable Indenture). Unless otherwise required by applicable
law, the Offer shall specify an expiration date (the "Expiration
Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days or
more than 60 days after the date of such Offer and a settlement
date (the "Purchase Date") for purchase of Debt Securities within
five Business Days after the Expiration Date. The Issuers shall
notify the Trustee at least 15 Business Days (or such shorter
period as is acceptable to the Trustee) prior to the mailing of
the Offer of the Issuers' obligation to make an Offer to
Purchase, and the Offer shall be mailed by the Issuers or, at the
Issuers' request, by the Trustee in the name and at the expense
of the Issuers. The Offer shall contain information concerning
the business of the Issuers and their Subsidiaries which the
Issuers in good faith believe will enable such Holders to make an
informed decision with respect to the Offer to Purchase (which at
a minimum will include (i) the most recent annual and quarterly
financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the
documents required to be filed with the Trustee pursuant to the
Indenture (which requirements may be satisfied by delivery of
such documents together with the Offer), (ii) a description of
material developments in the Issuers' business subsequent to the
date of the latest of such financial statements referred to in
clause (i) (including a description of the events requiring the
Issuers to make the Offer to Purchase), (iii) if applicable,
appropriate pro forma financial information concerning the Offer
to Purchase and the events requiring the Issuers to make the
Offer to Purchase and (iv) any other information required by
applicable law to be included therein. The Offer shall contain
all instructions and materials necessary to enable such Holders
to tender Debt Securities pursuant to the Offer to Purchase. The
Offer shall also state:

(1) the Section of the Applicable Indenture or
Indentures pursuant to which the Offer to Purchase is being
made;

(2) the Expiration Date and the Purchase Date;

(3) the aggregate principal amount of the Outstanding
Debt Securities offered to be purchased by the Issuers
pursuant to the Offer to Purchase (including, if less than
100%, the manner by which such has been determined pursuant
to the Section of the Indentures requiring the Offer to
Purchase) (the "Purchase Amount");

(4) the purchase price to be paid by the Issuers for
each $1,000 aggregate principal amount of Debt Securities
accepted for payment (as specified pursuant to the
Applicable Indenture or Indentures) (the "Purchase Price");

(5) that the Holder may tender all or any portion of
the Debt Securities registered in the name of such Holder
and that any portion of a Debt Security tendered must be
tendered in an integral multiple of $1,000 principal amount;

(6) the place or places where Debt Securities are to
be surrendered for tender pursuant to the Offer to Purchase;

(7) that interest on any Debt Security not tendered or
tendered but not purchased by the Issuers pursuant to the
Offer to Purchase will continue to accrue;

(8) that on the Purchase Date the Purchase Price will
become due and payable upon each Debt Security being
accepted for payment pursuant to the Offer to Purchase and
that interest thereon shall cease to accrue on and after the
Purchase Date;

(9) that each Holder electing to tender a Debt
Security pursuant to the Offer to Purchase will be required
to surrender such Debt Security at the place or places
specified in the Offer prior to the close of business on the
Expiration Date (such Debt Security being, if the Issuers or
the Trustee so requires, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to
Scotts and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing);

(10) that Holders will be entitled to withdraw all or
any portion of Debt Securities tendered if the Issuers (or
their Paying Agent) receive, not later than the close of
business on the Expiration Date, a telegram, telex,
facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Debt Securities the
Holder tendered, the certificate number of the Debt Security
the Holder tendered and a statement that such Holder is
withdrawing all or a portion of its tender;

(11) that (a) if Debt Securities in an aggregate
principal amount less than or equal to the Purchase Amount
are duly tendered and not withdrawn pursuant to the Offer to
Purchase, the Issuers shall purchase all such Debt
Securities and (b) if Debt Securities in an aggregate
principal amount in excess of the Purchase Amount are
tendered and not withdrawn pursuant to the Offer to
Purchase, the Issuers shall purchase Debt Securities having
an aggregate principal amount equal to the Purchase Amount
on a pro rata basis (with such adjustments as may be deemed
appropriate so that only Debt Securities in denominations of
$1,000 or integral multiples thereof shall be purchased);
and

(12) that in the case of any Holder whose Debt
Security is purchased only in part, the Issuers shall
execute, and the Trustee shall authenticate and deliver to
the Holder of such Debt Security without service charge, a
new Debt Security or Debt Securities, of any authorized
denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the
unpurchased portion of the Debt Security so tendered.

Any Offer to Purchase shall be governed by and effected in
accordance with the Offer for such Offer to Purchase.

"Subsidiary" of any Person means (i) a corporation more
than 50% of the combined voting power of the outstanding Voting
Stock of which is owned, directly or indirectly, by such Person
or by one or more other Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof or (ii) any other
Person (other than a corporation) in which such Person, or one or
more other Subsidiaries of such Person or such Person and one or
more other Subsidiaries thereof, directly or indirectly, has at
least a majority ownership and power to direct the policies,
management and affairs thereof.

"Wholly Owned Subsidiary" of any Person means a
Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors'
qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such
Person.

Permanent Global Securities

The Debt Securities of a series may be issued in the
form of one or more permanent Global Securities that will be
deposited with a Depositary or its nominee. In such a case, one
or more Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate
principal amount of Outstanding Debt Securities of the series to
be represented by such Global Security or Securities. The
Prospectus Supplement relating to such series of Debt Securities
will describe the circumstances, if any, under which beneficial
owners of interests in any such permanent Global Security may
exchange such interests for Debt Securities of such series and of
like tenor and principal amount in any authorized form and
denomination. Unless and until it is exchanged in whole or in
part for Debt Securities in definitive registered form, a
permanent Global Security may not be registered for transfer or
exchange except in the circumstances described in the applicable
Prospectus Supplement. (Sections 204 and 305)

The specific terms of the depositary arrangement with
respect to any portion of a series of Debt Securities to be
represented by a permanent Global Security and a description of
the Depositary will be contained in the applicable Prospectus
Supplement.

The Trustee

Each Indenture contains limitations on the right of the
Trustee, as a creditor of the Issuers, to obtain payment of
claims in certain cases, or to realize on certain property
received in respect of any such claim as security or otherwise.
In the case of an Event of Default under the Subordinated
Indenture, the Trustee, as trustee under the Senior Indenture,
may be deemed to have a conflicting interest and may be required
to resign as Trustee under the Subordinated Indenture. In
addition, the Trustee may be deemed to have a conflicting
interest and may be required to resign as Trustee if at the time
of a default under the Applicable Indenture it is a creditor of
the Issuers.

The Trustee or its affiliates act as depositary for
funds of, makes loans to and performs other services for, or may
be a customer of, the Issuers in the ordinary course of business.
An affiliate of the Trustee is a lender and the lender's agent under
the Bank Agreement.

Governing Law

The Indentures and the Debt Securities are governed by
and shall be construed in accordance with the laws of the State
of New York.

PLAN OF DISTRIBUTION

The Issuers may sell Debt Securities to one or more
underwriters for public offering and sale by them or may sell
Debt Securities to investors or other persons directly or through
agents. The Issuers may sell Debt Securities as soon as
practicable after effectiveness of the Registration Statement,
provided that favorable market conditions exist. Any such
underwriter or agent involved in the offer and sale of the Debt
Securities will be named in an applicable Prospectus Supplement.

Underwriters may offer and sell the Debt Securities at
a fixed price or prices, which may be changed, or at prices
related to prevailing market prices or at negotiated prices. The
Issuers also may, from time to time, authorize firms acting as
agents of the Issuers to offer and sell the Debt Securities upon
such terms and conditions as shall be set forth in any Prospectus
Supplement. In connection with the sale of Debt Securities,
underwriters may be deemed to have received compensation from the
Issuers in the form of underwriting discounts or commissions and
may also receive commissions from purchasers of Debt Securities
for whom they may act as agent. Underwriters may sell Debt
Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions (which may be changed
from time to time) from the purchasers for whom they may act as
agent.

Any underwriting compensation paid by the Issuers to
underwriters or agents in connection with the offering of Debt
Securities, and any discounts, concessions or commissions allowed
by underwriters to participating dealers, will be set forth in an
applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Debt Securities
may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on
resale of the Debt Securities may be deemed to be underwriting
discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under
agreements with the Issuers, to indemnification against and
contribution toward certain civil liabilities, including
liabilities under the Securities Act, and to reimbursement by the
Issuers for certain expenses.

Underwriters, dealers and agents may engage in
transactions with, or perform services for, or be customers of,
the Issuers in the ordinary course of business.

The Debt Securities may or may not be listed on a
national securities exchange or a foreign securities exchange.
No assurances can be given that there will be a market for the
Debt Securities.

VALIDITY OF THE DEBT SECURITIES

The validity of the Debt Securities will be passed upon for
the Issuers by Vorys, Sater, Seymour and Pease, Columbus, Ohio.

EXPERTS

The consolidated balance sheets of the Company as of September 30,
1992 and 1993, and the consolidated statements of income, changes in
shareholder's equity (deficit) and cash flows for each of the three
years in the period
ended September 30, 1993, included in this Prospectus have been
audited by Coopers & Lybrand, independent accountants, as stated in
their report appearing in this Prospectus, and are included in
reliance upon the report, which includes an explanatory paragraph
on changes in accounting for income taxes and postretirement benefits
other than pensions, of such firm given upon their authority
as experts in accounting and auditing.

The consolidated balance sheet of Grace-Sierra Horticultural Products
Company ("Grace-Sierra") as of December 16, 1993, and the consolidated
statement of operations, changes in common shareholder's deficit and
cash flows for the period from January 1, 1993 to December 16, 1993, included
in the Company's Current Report on Form 8-K/A dated February 28, 1994,
have been audited by Coopers & Lybrand, independent accountants, and are
incorporated herein by reference in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.

The consolidated balance sheet of Grace-Sierra as of and the
consolidated statement of operations, changes in common shareholder's
deficit and cash flows for the year ended December 31, 1992, included in
the Company's Current Report on Form 8-K/A dated February 28, 1994, have
been audited by Price Waterhouse, independent accountants, and are
incorporated herein by reference in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.

THE SCOTTS COMPANY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements of The Scotts Company and
Subsidiaries:

Report of Independent Accountants F-1

Consolidated Balance Sheets at September 30, 1992 and 1993 F-2

Consolidated Statements of Income for the years ended
September 30, 1991, 1992 and 1993 F-3

Consolidated Statements of Changes in Shareholders' Equity
(Deficit) for the years ended September 30, 1991, 1992 and
1993 F-4

Consolidated Statements of Cash Flows for the years ended
September 30, 1991, 1992 and 1993 F-5

Notes to Consolidated Financial Statements F-6

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of
Directors of The Scotts Company

We have audited the accompanying consolidated balance sheets of The

Scotts Company and Subsidiaries as of September 30, 1992 and 1993,
and the related consolidated statements of income, changes in
shareholders' equity (deficit), and cash flows for each of the
three
years in the period ended September 30, 1993. These financial
statements are the responsibility of the Company's management. Our

responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts
and disclosures in the financial statements. An audit also
includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of The Scotts Company and Subsidiaries as of September 30,

1992 and 1993, and the consolidated results of their operations and

their cash flows for each of the three years in the period ended
September 30, 1993, in conformity with generally accepted
accounting
principles.

As discussed in Notes 3 and 6 to the consolidated financial
statements, effective the beginning of fiscal 1993 the Company
changed its method of accounting for postretirement benefits other
than pensions and income taxes.

Coopers & Lybrand
Columbus, Ohio
November 19, 1993, except as to Note 12, which is as of
December 16, 1993.

F-1
<TABLE>
<CAPTION>

THE SCOTTS COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 1992 and 1993
(in thousands except share amounts)

ASSETS

1992 1993
<S> <C> <C>
Current Assets:
Cash $ 880 $ 2,323
Accounts receivable, less allowance of
$2,110 in 1992 and $2,511 in 1993 51,580 60,848
Inventories 59,697 76,654
Prepaid and other assets 3,376 3,917
Total current assets 115,533 143,742

Property, plant and equipment, at cost:
Land and land improvements 18,537 19,817
Buildings 31,307 36,300
Machinery and equipment 62,082 87,250
Furniture and fixtures 5,561 5,952
Construction in progress 16,914 4,687
134,401 154,006
Less accumulated depreciation 45,331 55,215
89,070 98,791
Patents and other intangibles, net of
accumulated amortization of $17,932
in 1992 and $21,053 in 1993 20,272 19,972
Deferred financing and organizational
costs, net of accumulated amortization
of $6,673 in 1992 and $7,770 in 1993 3,708 3,530
Excess of costs over underlying value
of net assets acquired (goodwill),
net of accumulated amortization
of $4,119 in 1992 and $5,123 in 1993 36,030 41,340
Other assets 3,408 14,215

Total Assets $268,021 $321,590

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Revolving credit $ 4,000 $ -
Current portion of term debt 543 5,444
Bank line of credit 1,658 705
Accounts payable, trade 29,313 28,279
Accrued liabilities 7,315 9,135
Accrued payroll and fringe benefits 10,293 12,035
Accrued taxes 7,616 9,253
Total current liabilities 60,738 64,851

Long-term debt, less current portions 31,354 87,080
Postretirement benefits other than
pensions - 26,646

Total Liabilities 92,092 178,577

Commitments and Contingencies

Shareholders' Equity:
Preferred stock, $.01 par value,
authorized 10,000,000 shares; none issued - -
Class A Common stock, voting, par value
$.01 per share; authorized 35,000,000
shares; 21,073,430 issued in 1992
and 1993 211 211
Class B Common stock, non-voting,
par value $.01 per share; authorized
35,000,000 shares; none issued - -
Capital in excess of par value 192,604 193,263
Deficit (16,886) (9,020)
Treasury stock 2,414,895 shares in
1993, at cost - (41,441)
Total Shareholders' Equity 175,929 143,013

Total Liabilities and Shareholders'
Equity $268,021 $321,590

The accompanying notes to consolidated financial
statements are an integral part of these statements.
</TABLE>

F-2
<TABLE>
<CAPTION>

THE SCOTTS COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
for the years ended September 30, 1991, 1992 and 1993
(in thousands except share amounts)

1991 1992 1993
<S> <C> <C> <C>
Net sales $388,120 $413,558 $466,043
Cost of sales 207,956 213,133 244,218

Gross profit 180,164 200,425 221,825

Operating expenses:
Marketing 57,489 66,245 74,579
Distribution 57,056 61,051 67,377
General and administrative 22,985 24,759 27,688
Research and development 5,247 6,205 7,700

Total operating expenses 142,777 158,260 177,344

Income from operations 37,387 42,165 44,481

Other expenses, net, including
interest expense of $30,932 in 1991,
$15,942 in 1992 and $8,454 in 1993 32,932 15,962 9,114

Income before income taxes, extraordinary items
and cumulative effect of accounting changes 4,455 26,203 35,367

Income taxes 2,720 11,124 14,320

Income before extraordinary items and
cumulative effect of accounting changes 1,735 15,079 21,047

Extraordinary items:
Loss on early extinguishment of debt, net of tax - (4,186) -
Utilization of net operating loss carryforwards 2,581 4,699 -
Cumulative effect of changes in accounting for post-
retirement benefits, net of tax and income taxes - - (13,157)

Net income $ 4,316 $ 15,592 $ 7,890

Net income per common share:
Income before extraordinary items and
accounting changes $ .15 $ .84 $ 1.07
Extraordinary items:
Loss on early extinguishment of debt, net of tax - (.23) -
Utilization of net operating loss carryforwards .21 .26 -
Cumulative effect of changes in accounting for
postretirement benefits, net of tax
and income taxes - - (.67)
Net income $ .36* $ .87 $ .40

Weighted average common
shares outstanding during the period 11,832,651 18,014,151 19,687,013

* - Net income per share for fiscal 1991 has been restated to eliminate the effect of
accretion to redemption value of redeemable common stock to be comparable with
fiscal
1992 and 1993.

The accompanying notes to consolidated financial
statements are an integral part of these statements.
</TABLE>
F-3

THE SCOTTS COMPANY AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders' Equity (Deficit)

for the years ended September 30, 1991, 1992 and 1993
(in thousands except share amounts)

Capital in Total
Shareholders'
Class A Common Stock excess of Treasury Stock Equity(Deficit)

Shares Amount Par Value (Deficit) Shares Amount

<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1990 9,500,000 $ 95 $ 19,264 $(32,036) - - $(12,677)

Purchase of redeemable
common stock 235,227 2 733 235,227 $(710) 25
Issuance of redeemable
common stock (118,182) (1) (289) (118,182) 290 -
Net income 4,316 4,316
Accretion to redemption
value of redeemable
common stock (1,625) (1,625)

Balance, September 30, 1991 9,617,045 96 18,083 (27,720) 117,045 (420) (9,961)

Adjustment for redeemable
common stock 2,162,500 22 9,826 9,848
Issuance of common stock held
in treasury 310 (112,499) 407 717
Exchange of warrants for
common stock 325,454 3 4,754 (4,770) (4,546) 13 -
Issuance of common stock 8,968,750 90 159,430 159,520
Net income 15,592 15,592
Amortization of unearned
compensation 24 24
Options outstanding 177 177
Foreign currency translation
adjustment 12 12
Adjustment for fractional
shares (319) -

Balance, September 30, 1992 21,073,430 211 192,604 (16,886) - - 175,929

Net income 7,890 7,890
Amortization of unearned
compensation 24 24
Options outstanding 635 635
Foreign currency translation
adjustment (24) (24)
Purchase of common stock (2,414,895) (41,441) (41,441)

Balance, September 30, 1993 21,073,430 $ 211 $193,263 $ (9,020) (2,414,895) $(41,441) $143,013

The accompanying notes to consolidated financial
statements are an integral part of these statements.

</TABLE>

F-4

THE SCOTTS COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
for the years ended September 30, 1991, 1992 and 1993
(in thousands)

1991 1992 1993
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income $ 4,316 $ 15,592 $ 7,890
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 10,670 10,206 12,278
Amortization 7,115 5,642 5,866
Extraordinary loss on early extinguishment of debt - 4,186 -
Cumulative effect of change in accounting for
postretirement benefits - - 24,280
Postretirement benefits - - 2,366
Deferred income taxes - 1,588 (12,740)
Loss on sale of equipment 1,414 392 94
Provision for losses on accounts receivable 1,068 990 1,409
Other - 204 748
Changes in assets and liabilities:
Accounts receivable (1,514) (5,476) (10,002)
Inventories 1,735 (3,291) (11,147)
Prepaid and other current assets 1,216 (268) (393)
Accounts payable 1,826 (654) (2,390)
Accrued liabilities (4,750) (5,351) 1,630
Other assets and liabilities 3,542 3,682 4,784
Net cash provided by operating activities 26,638 27,442 24,673

CASH FLOWS FROM INVESTING ACTIVITIES
Investment in plant and equipment (8,818) (19,896) (15,158)
Acquisition of Republic, net of cash acquired - - (16,366)
Proceeds from sale of equipment 215 131 194
Net cash used in investing activities (8,603) (19,765) (31,330)

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under term debt 941 - 70,000
Payments on term and other debt (11,008) (58,307) (640)
Net payments under revolving credit (6,000) (36,500) (18,238)
Net borrowings (payments) under bank line of credit 58 349 (953)
Redemption of senior subordinated notes - (53,223) -
Redemption of subordinated debentures - (21,132) -
Deferred financing cost incurred - (1,117) (628)
Net proceeds from issuance of Class A Common Stock - 160,237 -
Purchase of Class A Common Stock - - (41,441)
Net purchase of redeemable Class A Common Stock (241) - -
Net cash (used in) provided by
financing activities (16,250) (9,693) 8,100

Net increase (decrease) in cash 1,785 (2,016) 1,443
Cash, beginning of period 1,111 2,896 880
Cash, end of period $ 2,896 $ 880 $ 2,323

SUPPLEMENTAL CASH FLOW INFORMATION:
Interest (net of amount capitalized) $ 29,592 $ 16,240 $ 6,169
Income taxes paid 72 1,189 11,500

The accompanying notes to consolidated financial
statements are an integral part of these statements.

</TABLE>

F-5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

The Scotts Company ("Scotts") through its wholly-owned
subsidiaries, The O. M. Scott & Sons Company ("OMS"), Hyponex
Corporation ("Hyponex") and Republic Tool and Manufacturing Corp.
("Republic"), collectively, the "Company"), is engaged in the
manufacture and sale of lawn care and garden products.
Substantially all of the assets currently held by Scotts consist
of the capital stock of OMS and advances to OMS. The
consolidated financial statements include the financial
statements of Scotts and OMS. All material intercompany
transactions have been eliminated.

Shareholders' equity, shares outstanding and per share
amounts for all periods have been adjusted for the January 1992
reverse stock split, in which every 2.2 shares of old Class A
Common Stock were exchanged for one share of new Class A Common
Stock.

Inventories

Inventories are principally stated at the lower of cost or
market determined by the FIFO method; certain inventories of
Hyponex primarily organic products) are accounted for by the
LIFO method. At September 30, 1992 and 1993, approximately 28%
and 24% of inventories, respectively, are valued at the lower of
LIFO cost or market. Inventories include the cost of raw
materials, labor and manufacturing overhead.

The Company makes provisions for obsolete or slow-moving
inventories as necessary to properly reflect inventory value.
Inventories as of September 30, 1992 and 1993, net of such
provisions, consisted of:
<TABLE>
<CAPTION>

1992 1993

<S> <C> <C>
Finished Goods $34,605,000 $44,735,000
Raw Materials 26,063,000 31,905,000
FIFO Cost 60,668,000 76,640,000

LIFO Reserve (971,000) 14,000

$59,697,000 $76,654,000
</TABLE>

Advertising and Consumer Guarantee

The Company has a cooperative advertising program with
customer dealers whereby the Company reimburses dealers for the
qualifying portion of dealer advertising costs. Such advertising
allowances are based on the timing of dealer orders and
deliveries. The Company provides for the cost of this program in
the period the sales to dealers are recorded.

F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company accrues amounts for product non-performance
claims by consumers under the Company's product guarantee
program. The provision is determined by applying an experience
rate to sales in the period the related products are shipped to
dealers.

Property, Plant and Equipment

Property, plant and equipment, including significant
improvements, are stated at cost. Expenditures for maintenance
and repairs are charged to operating expenses as incurred. When
properties are retired, or otherwise disposed of, the cost of the
asset and the related accumulated depreciation are removed from
the accounts.

Depletion of applicable land is computed on the
units-of-production method. Depreciation of other property,
plant and equipment is provided on the straight-line method and
is based on the estimated useful economic lives of the assets as
follows:

Land improvements 10-25 years
Buildings 10-40 years
Machinery and equipment 3-15 years
Furniture and fixtures 6-10 years

Property subject to capital leases in the amount of
$1,951,000 and $1,484,000 (net of accumulated amortization of
$1,128,000 in 1992 and $1,560,000 in 1993) has been included in
machinery and equipment at September 30, 1992 and 1993,
respectively.

The Company capitalized interest costs of $380,000 in fiscal
1992 as part of the cost of major asset construction projects.

Research and Development

Significant costs are incurred each year in connection with
researchand development programs that are expected to contribute
profits to operations of future years. All costs associated with
research and development are charged to expense as incurred.

Intangible Assets

Goodwill is being amortized over 40 years on a straight-line
basis. Financing costs incurred in obtaining long-term debt are
capitalized and amortized over the life of the related debt using
the effective-interest method. Other intangible assets consist
primarily of patents and are being amortized on a straight-line
basis over their estimated useful economic lives varying from 7
to 24 years.

Foreign Currency

The Company has operations located in the United Kingdom
where the local currency is the functional currency. Foreign
currency financial statements of these operations are translated
using exchange rates in effect at period end for assets and
liabilities

F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and average exchange rates during the period for results of
operations. Related foreign currency translation
adjustments of $12,000 and ($12,000) are reported as a component
of shareholders' equity as of September 30, 1992 and 1993,
respectively.

Gains and losses from foreign currency transactions are
included in other expenses, net. In fiscal 1991, 1992 and 1993,
the Company recorded foreign exchange losses of $141,000,
$324,000 and $196,000, respectively.

Income Taxes

Effective October 1, 1992, the Company adopted Statement of
Financial Accounting Standard ("SFAS") No. 109, "Accounting for
Income Taxes", which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of
events that have been recognized in the financial statements or
tax returns. Under this method, deferred tax assets and
liabilities are determined based on the difference between the
financial statement and tax bases of the assets and liabilities
using enacted tax rates.

Prior to fiscal 1993, the Company's deferred income tax
provision was based on differences between financial reporting
and taxable income.

Reclassifications

Certain reclassifications have been made to the prior years'
financial statements to conform to fiscal 1993 classifications.

2. ACQUISITION

Effective November 19, 1992, the Company acquired Republic
headquartered in Carlsbad, California. Republic designs,
develops, manufactures and markets lawn and garden equipment with
the substantial majority of its revenue derived from the sale of
its products to mass merchandisers, home centers and garden
outlets in the United States. The purchase price of
approximately $16,366,000 was financed under the Company's
revolving credit agreement.

The acquisition was accounted for using the purchase method.
Accordingly, the purchase price was allocated among the assets
acquired and liabilities assumed based on their estimated fair
values at the date of acquisition. The excess of purchase price
over the estimated fair values of the net assets acquired
("goodwill") of approximately $6,400,000 is being amortized on a
straight-line basis over 40 years.

F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following represents the pro forma results of operations
assuming the acquisition had occurred effective October 1, 1991
after giving effect to certain adjustments, including
depreciation and amortization on tangible and intangible
property, increased interest on acquisition debt and related
income tax effects. Republic's results of operations have been
included in the Company's Consolidated Statement of Income since
November 19, 1992. As such, the Company's fiscal 1993 pro forma
results of operations are not materially different from actual
results and are therefore not presented.
<TABLE>
<CAPTION>

Year Ended
September 30, 1992
(unaudited)
<S> <C>
Net sales $ 427,706,000

Income before extraordinary items $ 13,968,000

Net income $ 14,481,000

Earnings per common share on
income before extraordinary items $ .77

Earnings per common share $ .80
</TABLE>

The pro forma information provided does not purport to be
indicative of actual results of operations if the acquisition had
occurred asof October 1, 1991, and is not intended to be
indicative of future results or trends.

3. ASSOCIATE BENEFITS

OMS has a defined benefit pension plan covering
substantially all full-time associates who have completed one
year of eligible service or reached the age of 21, whichever is
later. Benefits are based on years of service and the
associates' average final compensation and are adjusted for
Social Security Benefits as defined in the plan. The Company's
funding policy is to contribute an amount that can be deducted
for Federal income tax purposes subject to Employee Retirement
Income Security Act limitations.

F-9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>

The following table sets forth the plan's funded status and the
related amounts recognized in the consolidated balance sheets at
September 30, 1992 and 1993.
<CAPTION>
1992 1993
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation:
Vested benefits $(26,112,000) $(28,904,000)
Nonvested benefits (1,649,000) (1,875,000)
Additional obligation for
projected compensation increases (6,028,000) (5,530,000)
Projected benefit obligation for
service rendered to date (33,789,000) (36,309,000)
Plan assets at fair value, primarily
corporate bonds, U.S. bonds and
cash equivalents 30,890,000 33,214,000
Plan assets less than projected
benefit obligations (2,899,000) (3,095,000)
Unrecognized net asset being
recognized over 11 1/2 years (757,000) (626,000)
Unrecognized net loss 5,323,000 4,609,000

Prepaid pension costs $ 1,667,000 $ 888,000
</TABLE>

Pension cost includes the following components:

Year Ended September 30,
1991 1992 1993
<S> <C> <C> <C>
Service cost $ 1,172,000 $ 1,571,000 $ 1,571,000
Interest cost 2,172,000 2,438,000 2,628,000
Actual return on plan assets (2,450,000) (2,602,000) (2,774,000)
Net amortization and deferral (132,000) (133,000) (18,000)

Net pension cost $ 762,000 $ 1,274,000 $ 1,407,000
</TABLE>

The weighted average settlement rate used in determining the
actuarial
present value of the projected benefit obligation was 9%, 8% and
8% as of
September 30, 1991, 1992 and 1993, respectively. Future
compensation is
assumed to increase 5% annually for fiscal 1991 and 1992, and 4%
annually
for fiscal 1993. The expected long-term rate of return on plan
assets
was 10% in fiscal 1991 and 1992, and 9% in fiscal 1993.

The Company provides comprehensive major medical benefits to some
of its
retired associates and their dependents. Substantially all of
the
Company's associates become eligible for these benefits if they
retire at
age 55 or older with more than ten years of service. The plan
requires
certain minimum contributions from retired associates and
includes
provisions to limit the overall cost increases the Company is
required to
cover. The Company funds its portion of retiree medical benefits
on a
pay-as-you-go basis.

F-10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective October 1, 1992, the Company changed its method of

accounting for postretirement benefit costs other than
pensions by
adopting SFAS No. 106, "Employers' Accounting for
Postretirement
Benefits Other Than Pensions." The Company elected to
immediately
recognize the cumulative effect of the change in accounting
which
resulted in a charge of $14,932,000, net of income taxes of
$9,348,000, or $.76 per share. In addition to the
cumulative
effect, the Company's retiree medical costs applying the new

accounting method increased $1,437,000, net of income taxes
of
$929,000, or $.07 per share, during fiscal 1993 as a result
of the
change in accounting.

Net periodic postretirement benefit cost for fiscal 1993
included
the following components:

Service cost - benefits attributed to
associate service during the year $ 930,000
Interest cost on accumulated
postretirement benefit obligation 2,038,000

Net periodic postretirement benefit cost $ 2,968,000

The following table sets forth the retiree medical plan
status
reconciled to the amount included in the consolidated
balance sheet
as of September 30, 1993.

Accumulated postretirement benefit obligation:
Retirees $ 6,738,000
Fully eligible active plan participants 314,000
Other active plan participants 8,305,000
Total accumulated postretirement
benefit obligation 15,357,000
Unrecognized prior service cost 9,494,000
Unrecognized gains from changes
in assumptions 1,795,000

Accrued postretirement benefit cost $26,646,000

The discount rate used in determining the accumulated
postretirement
benefit obligation was 8.5%. For measurement purposes, a
14% annual
rate of increase in per capita cost of covered retiree
medical
benefits was assumed for fiscal 1994; the rate was assumed
to
decrease gradually to 5.5% through the year 2051 and remain
at that
level thereafter. A 1% increase in the health care cost
trend rate
assumptions would increase the accumulated postretirement
benefit
obligation as of September 30, 1993 by $875,000.

Both OMS and Hyponex have defined contribution profit
sharing
plans. Both plans provide for associates to become
participants
following one year of service. The Hyponex plan also
requires
associates to have reached the age of 21 for participation.
The
plans provide for annual contributions which are entirely at
the

F-11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

discretion of the Board of Directors. Contributions are
allocated
among the participants employed as of the last day of the
calendar
year, based upon participants' earnings. Each participant's
share
of the annual contributions vest according to the provisions
of the
plans. The Company has provided a profit sharing provision
for the
plans of $1,750,000, $1,750,000 and $1,993,000 for fiscal
1991, 1992
and 1993, respectively. The Company's policy is to deposit
the
contributions with the trustee in the following year.

The Company is self-insured for certain health benefits up
to
$125,000 per occurrence per individual. The cost of such
benefits
is recognized as expense in the period the claim occurred.
This
cost was $5,293,000, $6,439,000 and $6,662,000 in 1991, 1992
and
1993, respectively. The Company is self-insured for State
of Ohio
workers compensation up to $500,000 per claim. The cost for
workers
compensation was $139,000, $127,000 and $268,000 in 1991,
1992 and
1993, respectively. Claims in excess of stated limits of
liability
and claims for workers compensation outside of the State of
Ohio are
insured with commercial carriers. The Company had an
accrued
vacation liability of $3,404,000 and $3,612,000 at September
30,
1992 and 1993, respectively.

In November 1992, the Financial Accounting Standards Board
issued
SFAS No. 112, "Employers' Accounting for Postemployment
Benefits",
which changes the prevalent method of accounting for
benefits
provided after employment but before retirement. The
Company is
required to adopt SFAS No. 112 no later than the first
quarter of
fiscal 1995. Management is currently evaluating the
provisions of
SFAS No. 112 and, at this time, the effect of adopting SFAS
No. 112
has not been determined.

4. LONG-TERM DEBT
<TABLE>
<CAPTION>
September 30,
1992 1993
<S> <C> <C>
Revolving Credit Loan $ 34,000,000 $ 21,000,000
Term Loan - 70,000,000
Capital lease obligations and other 1,897,000 1,524,000

35,897,000 92,524,000
Less current portions 4,543,000 5,444,000

$ 31,354,000 $ 87,080,000
</TABLE>

Maturities of term debt in 1994 through 1996 are $5,000,000
in each
year; 1997 and 1998 maturities are $10,000,000 in each year;
and
aggregate maturities thereafter are $35,000,000.

On February 23, 1993, the Company entered into an amendment
to the
Third Amended and Restated Credit Agreement ("Agreement")
with
Chemical Bank ("Chemical") and various participating banks.
This

F-12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

amendment to the Agreement provides the Company with
$70,000,000 of
term loans with scheduled maturities commencing on March 31,
1994
and extending through September 30, 2000. The Agreement
continues
to provide a revolving credit commitment of $150,000,000
through the
scheduled termination date of March 31, 1996. The Agreement
permits
up to $75,000,000 of the revolving credit commitment to be
utilized
in support of commercial paper and up to $15,000,000 to be
utilized
for letters of credit. The facility contains a requirement
limiting
the maximum amount borrowed under the revolving credit
commitment to
$30,000,000 for a minimum of 30 consecutive days each fiscal
year.

For both term and revolving credit borrowings under the
Agreement,
the Company can elect to borrow domestic funds at the
reference rate
("prime") of Chemical or Eurodollars at 1 1/4% in excess of
the
London Interbank Offered Rate ("LIBOR"). Interest on
Chemical rate
loans is payable quarterly and interest on Eurodollar loans
is
payable at three month intervals from the date of each
Eurodollar
contract. Applicable rates for Chemical and Eurodollar
loans were
6.0% and 4.5%, respectively, at September 30, 1993. A
commitment
fee of 3/8 of 1% is charged on the average daily unused
portion of
the available commitment. An additional 1/4 of 1% is
charged on the
average daily aggregate principal amount of commercial paper

obligations outstanding. Loans under the Agreement are
collateralized by substantially all of the Company's
tangible and
intangible assets.

The Agreement contains certain financial and operating
covenants,
the most restrictive of which requires the Company to
maintain
earnings before interest, taxes, profit sharing, certain
depreciation charges and the effect of certain accounting
changes,
as defined, to meet specified requirements. The Company was
in
compliance with all required covenants at September 30,
1993.

At September 30, 1993, the Company had available an
unsecured
$2,000,000 line of credit with a bank, which is renewable
annually,
of which $1,658,000 and $705,000 was outstanding at
September 30,
1992 and 1993, respectively.

During fiscal 1992, the Company recorded an extraordinary
charge of
$4,186,000, net of income taxes of $2,157,000, related to
the early
extinguishment of 13% Senior Subordinated Notes and 13.5%
Subordinated Debentures.

5. SHAREHOLDERS' EQUITY

The Class A and Class B Common Stock are identical in all
respects
except for voting rights and the right of the holder of
non-voting
Class B stock to convert into an equal number of shares of
voting
Class A stock and the right of the holder of voting Class A
stock to
convert into an equal number of shares of non-voting Class B
stock.
In January 1992, every 2.2 shares of old Scotts Class A
Common Stock
were exchanged for one share of new Scotts Class A Common
Stock
("Shares"). On February 7, 1992, the Company closed the
initial
public offering of its Shares pursuant to which Scotts sold
8,968,750 newly issued Shares and certain non-management
shareholders of Scotts sold an aggregate of 5,406,250
Shares. The
Scotts Class A Common Stock is listed on the NASDAQ National
Market
System under the symbol "SCTT."

F-13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On February 23, 1993, the Company purchased all of the
shares of
Class A Common Stock held by a fund managed by Clayton,
Dubilier &
Rice, Inc. In aggregate, 2,414,895 shares of Class A Common
Stock
were purchased for approximately $41,441,000, including
transaction
costs. As a result of this transaction, 18,658,535 shares
of
Class A Common Stock were outstanding as of September 30,
1993.

In accordance with the provisions of certain of the
Management Stock
Subscription Agreements ("MSS Agreements") under which
certain
Shares were sold to management investors ("Purchaser")
during
periods prior to the initial public offering, under
specified
conditions Purchasers could require the Company to purchase
all of
the Shares held by the Purchaser at a formula price based on
book
value. Pursuant to requirements of the Securities and
Exchange
Commission, Shares issued by the Company under the MSS
Agreements
were considered redeemable Shares, excluded from
shareholders'
equity and were subject to accretion to the current
redemption value
of the Shares. Upon closing of the initial public offering,
the
obligation of the Company to purchase Shares terminated.
Accordingly, Shares previously classified as redeemable
common stock
were reclassified to shareholders' equity. During the year
ended
September 30, 1991, activity in redeemable Shares consisted
of
235,227 Shares being redeemed for $710,100 and 118,182
Shares being
issued for $469,550. Accretion totalled $1,625,000 for
fiscal 1991.

On November 4, 1992, the Company adopted The Scotts Company
1992
Long Term Incentive Plan (the "Plan"). The Plan was
accepted by the
shareholders at Scotts' annual meeting on February 25, 1993.
Under
the Plan stock options, stock appreciation rights and
performance
share awards may be granted to officers and other key
employees of
the Company. The Plan also provides for Board members, who
are
neither employees of the Company nor associated with
Clayton,
Dubilier & Rice, Inc., to receive stock options. The
maximum number
of shares of Class A Common Stock that may be issued under
the Plan
is 1,700,000, plus the number of shares surrendered to
exercise
options (other than director options) granted under the
Plan, up to
a maximum of 1,000,000 surrendered shares.

In addition, pursuant to various employment agreements, the
Company
granted 136,364 and 300,000 stock options in fiscal 1992 and
1993,
respectively.
<TABLE>

Aggregate stock option activity consists of the following:
<CAPTION>
Year Ended September 30,
1992 1993
<S> <C> <C>
Options outstanding at October 1 - 136,364
Options granted 136,364 449,925
Options exercised - -
Options cancelled - -

Options outstanding at September 30 136,364 586,289

Options exercisable at September 30 45,455 90,910

Option prices per share:
Granted $ 9.90 $16.25-$18.75
</TABLE>

F-14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During fiscal 1993, 128,880 performance share awards were
granted.
These awards entitle the grantee to receive shares or, at
the
grantees election, the equivalent value in cash or stock
options,
subject to stock ownership requirements. These awards are
conditioned on the attainment of certain performance and
other
objectives established by the Compensation Committee of the
Company's Board of Directors.

Compensation for certain stock options results from the
difference
between the grant price and market price at the date of
grant, and
is recognized over the vesting period of the options.
Compensation
for performance share awards is initially measured at the
grant date
based upon the current market value of the common stock,
with
adjustments made quarterly for market price fluctuations.
The
Company recognized compensation expense for stock options
and
performance share awards of $177,000 and $635,000 in fiscal
1992 and
1993, respectively.

In October 1991, an officer of Scotts purchased 22,727
Shares and
three other Scotts associates purchased an aggregate of
44,318
Shares at a purchase price of $3.98 per share. Pursuant to
an
employment agreement, an officer of Scotts purchased 45,454
Shares
at a purchase price of $9.90 per share in January 1992. The
Company
has recognized $118,000 of unearned compensation equivalent
to the
difference between the fair market value and the purchase
price of
the Shares as a charge to capital in excess of par value.
This
unearned compensation is being amortized on a straight line
basis
over the period of the employment agreement.

A significant portion of the price paid by certain officers
and
management associates is financed by a major bank. The
Company has
guaranteed the full and prompt payment of debt outstanding
by
management investors to purchase stock of approximately
$1,729,000
and $230,000 at September 30, 1992 and 1993, respectively.

In connection with the 1988 acquisition of the lawn and
garden
business of Hyponex, the Company entered into a warrant
purchase
agreement with the prior majority shareholder of Hyponex.
In
January 1992, the warrants were exchanged for 330,000
Shares. The
repurchase and retirement of the warrants was valued at the
estimated value of the Shares at the date of the exchange
less the
original consideration received.

F-15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. INCOME TAXES

The Company adopted SFAS No. 109 effective October 1, 1992,
resulting in a benefit of $1,775,000 being reported as a
cumulative
effect of accounting change in the fiscal 1993 Consolidated
Statement of Income. Assets recorded in prior business
combinations
net-of-tax were adjusted to pre-tax amounts, resulting in
recognition of $1,501,000 of deferred tax liabilities at the
date of
adoption. Prior to fiscal 1993 the Company accounted for
income
taxes under Accounting Principles Board Opinion No. 11.
<TABLE>

The provision for income taxes consists of the following:
<CAPTION>
Year Ended September 30,
1991 1992 1993
<S> <C> <C> <C>
Currently Payable:
Federal $ 139,000 $ 1,802,000 $14,537,000
State - 878,000 1,400,000

Deferred:
Federal - 1,588,000 (11,694,000)
State - - (1,046,000)

Income Tax Expense $ 139,000 $ 4,268,000 $ 3,197,000

Income tax expense is included in the financial statements as
follows:

Operations $ 2,720,000 $11,124,000 $14,320,000
Cumulative effect of change
in accounting principles - - (11,123,000)
Extraordinary items (2,581,000) (6,856,000) -

Income Tax Expense $ 139,000 $ 4,268,000 $ 3,197,000
</TABLE>

Deferred income taxes for fiscal 1993 reflect the impact of
"temporary differences" between the amounts of assets and
liabilities for financial reporting purposes and such
amounts as
determined by tax regulations. These temporary differences
are
determined in accordance with SFAS No. 109 and are more
inclusive in
nature than "timing differences" as determined under
previously
applicable accounting principles.

F-16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>

The components of the net deferred tax asset (liability) are
as
follows:
<CAPTION>
September 30,
1993
<S> <C>
Assets
Accounts receivable $ 687,000
Inventory 2,359,000
Accrued expenses 6,589,000
Postretirement benefits 10,458,000
Other 652,000

Gross deferred tax assets $ 20,745,000

Liabilities
Property and equipment (9,913,000)
Safe harbor leases (1,181,000)

Gross deferred tax liabilities (11,094,000)

Net asset $ 9,651,000
</TABLE>
<TABLE>

The net current and non-current components of deferred
income
taxes recognized in the balance sheet at September 30, 1993
are:

<S> <C>
Net current liability $ (57,000)
Net non-current asset 9,708,000

Net asset $ 9,651,000
</TABLE>
<TABLE>

A reconciliation of the Federal corporate income tax rate
and the
effective tax rate on income before income taxes is
summarized below:
<CAPTION>
Year Ended September 30,
1991 1992 1993
<S> <C> <C> <C>
Statutory income tax rate 34.0% 34.0% 35.0%
Pension amortization 5.8 0.3 0.7
Goodwill amortization and other
permanent differences resulting
from purchase accounting 25.4 4.0 4.7
State taxes, net of federal benefit - 2.2 3.4
Other (4.1) 2.0 (3.3)

Effective income tax rate 61.1% 42.5% 40.5%
</TABLE>

In fiscal 1991 and 1992, for financial reporting purposes
the
Company utilized $8,000,000 and $13,800,000 of net operating
loss
carryforwards and reflected the related tax benefits of
$2,581,000
and $4,699,000, respectively, as extraordinary items. At
September 30, 1992, the Company fully utilized its financial

F-17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reporting net operating loss carryforwards. For tax
purposes, the
Company has remaining net operating loss carryforwards of
approximately $5,000,000 which will be utilized on the
fiscal 1993
Federal income tax return. The variance between the
operating loss
carryforwards on a tax basis and a financial reporting basis
is
principally due to excess tax depreciation, uniform
capitalization
rules, nondeductible reserves, capitalization and
amortization of
package and design costs, and various accrued liabilities
that are
not deductible for tax purposes until paid. Deferred taxes
were not
recorded during fiscal 1991 as the Company was in a net
operating
loss carryforward position at the end of that year. During
1992,
the Company recognized $1,588,000 of deferred taxes
previously
offset by net operating loss carryforwards.

During fiscal 1991 and 1992, the Company was subject to the
alternative minimum tax ("AMT") for financial reporting
purposes
resulting in AMT expense of $139,000 and $1,200,000,
respectively.
The net operating loss carryforwards for AMT purposes were
approximately $18,500,000 and $18,600,000 for financial
reporting
and income tax purposes, respectively, at September 30,
1991.
During fiscal 1992, the Company fully utilized its AMT net
operating
loss carryforwards. AMT paid results in a tax credit
carryforward
which can be used in subsequent years to offset regular
income tax
to the extent it exceeds AMT tax in those years. At
September 30,
1992, the Company had $1,480,000 of AMT credit carryforwards
which
will be utilized on the fiscal 1993 Federal income tax
return.

7. LEASES

The Company leases buildings, land and equipment under
various
noncancellable lease agreements for periods of two to six
years.
The lease agreements generally provide that the Company pay
taxes,
insurance and maintenance expenses related to the leased
assets.
Certain lease agreements contain purchase options. At
September 30,
1993, future minimum lease payments were as follows:
<TABLE>
<CAPTION>

Year Ending Capital Operating
September 30, Leases Leases Total
<S> <C> <C> <C>
1994 $ 566,000 $ 5,775,000 $ 6,341,000
1995 508,000 4,054,000 4,562,000
1996 367,000 3,068,000 3,435,000
1997 54,000 2,204,000 2,258,000
1998 - 860,000 860,000
1999 and
thereafter - 159,000 159,000
Total minimum
lease payments 1,495,000 $ 16,120,000 $ 17,615,000
Less: Amount
representing
interest 223,000
Present value
of net minimum
lease payments $ 1,272,000

</TABLE>

F-18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company also leases transportation and production
equipment
under various one-year operating leases, which provide for
the
extension of the initial term on a monthly or annual basis.
Total
rental expense for operating leases was $6,003,000,
$7,281,000 and
$9,125,000 for fiscal 1991, 1992 and 1993, respectively.

8. COMMITMENTS AND CONTINGENCIES

Seed production agreements obligate the Company to make
future
purchases. Seed purchases under production agreements for
fiscal
1991, 1992 and 1993 were approximately $5,124,000,
$9,281,000 and
$4,692,000, respectively. At September 30, 1993, estimated
annual
seed purchase commitments were as follows:

Year Ending
September 30,

1994 $ 10,670,000
1995 5,463,000
1996 3,037,000
1997 692,000

The Company is involved in various lawsuits and claims which
arise
in the normal course of business. In the opinion of
management,
these claims individually and in the aggregate are not
expected to
result in a material adverse effect on the Company's
financial
position or results of operations, however, there can be no
assurance that future quarterly or annual operating results
will not
be materially affected by final resolution of these matters.
The
following details the more significant of these matters.

The Company has been involved in studying a landfill to
which it is
believed some of the Company's solid waste had been hauled
in the
1970's. In September 1991, the Company was named by the
Ohio
Environmental Protection Agency ("Ohio EPA") as a
Potentially
Responsible Party ("PRP") with respect to this landfill.
Pursuant
to a consent order with the Ohio EPA, the Company, together
with
four other PRP's identified to date, is investigating the
extent of
contamination at the landfill and developing a remediation
program.

In July 1990, the Company was directed by the Army Corps of
Engineers (the "Corps") to cease peat harvesting operations
at its
New Jersey facility. The Corps' has alleged that the peat
harvesting operations were in violation of the Clean Water
Act
("CWA"). The United States Department of Justice has
commenced a
legal action to seek a permanent injunction against peat
harvesting
at this facility and to recover civil penalties under the
CWA. This
action had been suspended while the parties engaged in
discussion to
resolve the dispute. Those discussions have not resulted in
a
settlement and accordingly the action has been reinstated.
The
Company intends to defend the action vigorously but if the
Corps'
position is upheld the Company could be prohibited from
further

F-19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

harvesting of peat at this location and penalties could be
assessed
against the Company. In the opinion of management, the
outcome of
this action will not have a material adverse effect on the
Company's
financial position or results of operations. Furthermore,
management believes the Company has sufficient raw material
supplies
available such that service to customers will not be
adversely
affected by continued closure of this peat harvesting
operation.

9. CONCENTRATIONS OF CREDIT RISK

Financial instruments which potentially subject the Company
to
concentration of credit risk consist principally of trade
accounts
receivable. The Company sells its consumer products to a
wide
variety of retailers, including mass merchandisers, home
centers,
independent hardware stores, nurseries, garden outlets,
warehouse
clubs and local and regional chains. Professional products
are sold
to golf courses, sportsfields, nurseries, lawn care service
companies and growers of specialty agricultural crops. One
customer
accounted for 16.6% of consolidated net sales in fiscal
1991; in
1992 and 1993 two customers accounted for 15.3% and 7.5%,
and 18.0%
and 9.3% of consolidated net sales, respectively. No other
customer
accounted for more than 5% of consolidated net sales. As of

September 30, 1993, two accounts comprised 9.2% and 7.9% of
trade
accounts receivable, respectively. The Company performs a
credit
review before extending credit to a customer. The Company
establishes its allowance for doubtful accounts based on
factors
surrounding the credit risk of specific customers,
historical trends
and other information.

F-20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
<TABLE>

The following is a summary of the unaudited quarterly results of
operations for fiscal 1992 and 1993 (in thousands except share data):
<CAPTION>
Fiscal Quarter Ended,

Fiscal 1992 December 28 March 28 June 27 September 30 Full Year
<S> <C> <C> <C> <C> <C>
Net sales $ 61,638 $150,780 $130,219 $ 70,921 $41,558
Gross profit 28,960 73,919 63,271 34,275 200,425
Income (loss) before
extraordinary items (2,677) 9,266 7,277 (1) 1,213 15,079
Net income (loss) (2,677) 13,965 3,091 1,213 15,592
Net income (loss) per
common share:
Income (loss) before
extraordinary items (.23) .52 .34 (1) .06 .84
Net income (loss) (.23) .79 .15 .06 .87

Weighted average common
shares outstanding
during the period 11,815,642 17,690,462 21,117,117 21,123,574 18,014,151

Fiscal 1993 January 2 April 3 July 3 September 30 Full Year

Net sales $ 67,757 $161,102 $156,327 $ 80,857 $466,043
Gross profit 30,703 78,621 74,814 37,687 221,825
Income (loss) before
cumulative effect of
accounting changes (2) (471) 10,847 7,986 2,685 21,047
Net income (loss) (3) (13,628) 10,847 7,986 2,685 7,890
Net income (loss) per
common share:
Income (loss) before
cumulative effect of
accounting changes (2) (.02) .54 .43 .14 1.07
Net income (loss) (3) (.65) .54 .43 .14 .40

Weighted average common
shares outstanding
during the period 21,128,564 20,138,585 18,743,752 18,737,150 19,687,013
<F1>
(1) Income before extraordinary items for the quarter ended June 27, 1992 has been
restated from that previously reported as a result of a change in the estimated
effective tax rate attributable to the loss on early retirement of debt reported
in that quarter. This change did not impact net income for the quarter.
<F2>
(2) Income (loss) before cumulative effect of accounting changes for each of the first
three quarters of fiscal 1993 has been restated to reflect the ongoing charge
resulting from the adoption of SFAS 106 effective October 1, 1992. The net of tax
charge was $462 or $.02 per share for the quarter ended January 2, 1993 and $325
or $.02 per share for each of the subsequent two quarters.
<F3>
(3) The net loss for the quarter ended January 2, 1993 has been restated to reflect
the cumulative effect of accounting for postretirement benefits (a net of tax
charge of $14,932 or $.71 per share) and income taxes (a benefit of $1,775 or
$.08 per share).

F-21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. RELATED PARTIES

Clayton, Dubilier & Rice, Inc., a private investment firm in
which a
director of the Company is an owner, was paid $300,000 in
fiscal
1991 and 1992, and $125,000 in 1993 by the Company for
financial
advisory and management consulting services. These services
ceased
effective with the Class A Common Stock purchase described
in Note 5.

12. SUBSEQUENT EVENTS

Effective December 16, 1993, the Company completed the
acquisition
of Grace-Sierra Horticultural Products Company
("Grace-Sierra") for
an aggregate purchase price of approximately $123,300,000,
including
estimated transaction costs of $3,300,000. Grace-Sierra,
based in
Milpitas, California, is a leading international
manufacturer and
marketer of specialty fertilizers and related products for
the
nursery, golf course, greenhouse and consumer markets with
calendar
1992 worldwide net sales of approximately $107,000,000.

In connection with the acquisition of Grace-Sierra, the
Company
amended its Agreement with Chemical, whereby term debt
commitments
available thereunder were increased to $195,000,000 to
enable the
Company to consummate the acquisition.

F-22

No person has been authorized to give any information or to
make any representations other than those contained in this
Prospectus, and, if given or made, such information or
representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to buy
any securities other than the securities to which it relates or
an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or
that the information contained herein is correct as of any time
subsequent to its date.

TABLE OF CONTENTS
Page

Available Information 2
Incorporation of Certain Documents
by Reference 2
Prospectus Summary 4
Investment Considerations 12
The CompanY 14
Use of Proceeds 19
Selected Historical Financial Data 19
Unaudited Pro Forma Financial Data 22
Management's Discussion and Analysis
of Financial Condition and Results
of Operations 29
Business 35
Management 52
Beneficial Ownership of Class A Common
Stock 56
Description of Bank Agreement 59
Description of the Debt Securities 60
Validity of the Debt Securities 81
Experts 82
Index to Financial Statements

The Scotts Company
The O.M. Scott &
Sons Company

Debt Securities

[Scotts Logo]

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following table sets forth the estimated (except for the
Securities and Exchange Commission registration fee and the
National Association of Securities Dealers, Inc. filing fee) fees
and expenses (other than underwriting discounts and commissions)
in connection with the Offering described in this Registration
Statement:

Securities and Exchange Commission registration
fee. . . . . . . . . . . . . . . . . . . . . . . . . $34,483
National Association of Securities Dealers, Inc.
filing fee . . . . . . . . . . . . . . . . . . . . . 10,500
Transfer Agent and Registrar fees. . . . . . . . . . . *
Blue Sky filing and counsel fees and expenses. . . . . *
Printing and engraving costs . . . . . . . . . . . . . *
Legal fees and expenses. . . . . . . . . . . . . . . . *
Accounting fees and expenses . . . . . . . . . . . . . *
Miscellaneous expenses . . . . . . . . . . . . . . . .$ *

Total. . . . . . . . . . . . . . . . . . . . . . .$ *

*To be filed by amendment

Item 15. Indemnification of Directors and Officers

General

Article Sixth of Scotts' Certificate of Incorporation
eliminates the personal liability of directors to Scotts or its
stockholders for monetary damages for breaches of fiduciary duty
as directors to the fullest extent permitted by Delaware law.
Article Sixth of Scotts' By-laws defines the rights of certain
individuals, including directors and officers, to indemnification
by Scotts in the event of personal liability or expenses incurred
by them as a result of certain litigation against them.

Elimination of Liability in Certain Circumstances

Article Sixth of the Certificate of Incorporation and
Article VI of the By-laws of Scotts protects Scotts' directors
against personal liability for monetary damages resulting from
breaches of their fiduciary duty of care, except as set forth
below. Under the Delaware General Corporation Law ("DGCL"),
absent such provisions, directors could be held liable for gross
negligence in the performance of their duty of care but not for
simple negligence. Article Sixth of the Certificate of
Incorporation absolves directors of liability for negligence in
the performance of their duties, including gross negligence.
Directors remain liable for breaches of their duty of loyalty to
Scotts and its stockholders, as well as acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law and transactions from which a director derives
improper personal benefit. Article Sixth of the Certificate of
Incorporation also does not absolve directors of liability under
Section 174 of the DGCL, which makes directors personally liable
for unlawful dividends or unlawful stock repurchases or
redemptions and expressly sets forth a negligence standard with
respect to such liability.

Indemnification

Under the DGCL, directors and officers as well as other
employees and individuals may be indemnified against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation -- a "derivative action"), if they acted in good
faith and in a manner they reasonably believed to be in or not
opposed to the best interest of Scotts and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
their conduct was unlawful. A similar standard of care is
applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys'
fees) incurred in connection with defense or settlement of such
an action and the DGCL requires court approval before there can
be any indemnification of expenses where the person seeking
indemnification has been found liable to Scotts.

Article VI of Scotts' By-laws provides that each person who
was or is made a party to, or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was or has agreed to become a
director or officer of Scotts (or is or was or has agreed to
serve at the request of the Company as a director or officer,
employee or agent for another entity) while serving in such
capacity shall be indemnified and held harmless by Scotts to the
full extent authorized by the DGCL, as in effect (or, to the
extent indemnification is broadened, as it may be amended)
against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf.

Pursuant to Article VI of its By-laws, Scotts is required to
purchase and maintain insurance on behalf of such directors and
officers, provided that such insurance is available on acceptable
terms as determined by the Board of Directors.

Item 16. Exhibits.

Exhibit
No. Exhibits

1* Form of Underwriting Agreement
4(a)* Form of Senior Indenture dated as of June 1, 1994
between Scotts, OMS and Chemical Bank, as Trustee
4(b)* Form of Subordinated Indenture dated as of June 1,
1994 between Scotts, OMS and Chemical Bank, as Trustee
5* Opinion of Vorys, Sater, Seymour and Pease
12 Computation of Ratio of Earnings to Fixed Charges
23(a) Consents of Coopers & Lybrand, Independent Accountants
23(b) Consent of Price Waterhouse, Independent Accountants
23(c) Consent of Vorys, Sater, Seymour and Pease
24 Powers of Attorney (included on signature page)
25* Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939 on Form T-1 (bound separately)

*To be filed by amendment.

Item 17. Undertakings.

(1) The undersigned registrants hereby undertake:

(a) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:

(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the registration statement;

(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration
statement;

provided, however, that paragraphs (1)(a)(i) and (1)(a)(ii) do
not apply if the registration statement is no Form S-3 or Form
S-8, and the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the registrants pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.

(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.

(c) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.

(2) The undersigned registrants hereby undertake that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrants' annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(3) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 maybe permitted to directors,
officers and controlling persons of the registrants pursuant to
the foregoing provisions, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the
registrants in the successful defense of any action, suit or
proceeding) is asserted against the registrants by such director,
officer or controlling person in connection with the securities
being registered, the registrants will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.

(4) The undersigned registrants hereby undertake that:

(a) For purposes of determining any liability under
the Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrants pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as
of the time it was declared effective.

(b) For the purposes of determining any liability
under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrants certify
that they have reasonable grounds to believe that they meet all of the
requirements for filing on Form
S-3 and have duly caused this Registration Statement on Form S-3 to be signed
on their behalf by the
undersigned, thereunto duly authorized, in the City of Marysville, State of
Ohio, on June 1, 1994.

THE SCOTTS COMPANY
THE O.M. SCOTT & SONS COMPANY

By /s/Tadd C. Seitz
Tadd C. Seitz
Chairman and Chief Executive Officer

POWER OF ATTORNEY

We, the undersigned directors and officers of The Scotts Company ("Scotts")
and The O.M.
Scott & Sons Company ("OMS"), and each of us, do hereby constitute and appoint
Tadd C. Seitz,
Theodore J. Host and Paul D. Yeager, or any of them, our true and lawful
attorneys and agents, each
with power of substitution, to do any and all acts and things in our name and on
our behalf in our
capacities as directors and officers and to execute any and all instruments for
us and in our names in
the capacities indicated below, which said attorneys or agents, or any of them,
may deem necessary or
advisable to enable Scotts and OMS to comply with the Securities Act of 1933,
as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission,
in connection with the
filing of this Registration Statement on Form S-3, including specifically but
without limitation, power and
authority to sign for us or any of us in our names in the capacities indicated
below for each of Scotts
and OMS, any and all amendments (including post-effective amendments) to such
Registration
Statement; and we do hereby ratify and confirm all that said attorneys and
agents, or their substitute or
substitutes, or any of them, shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

Signature Title Date

/s/James B. Beard Director June 1, 1994
James B. Beard

/s/John S. Chamberlin Director June 1, 1994
John S. Chamberlin

______________________ Director June 1, 1994
Alberto Cribiore

/s/Joseph P. Flannery Director June 1, 1994
Joseph P. Flannery

/s/Theodore J. Host Director/President/ June 1, 1994
Theodore J. Host Chief Operating
Officer

/s/Tadd C. Seitz Chairman/Chief June 1, 1994
Tadd C. Seitz Executive Officer

/s/Donald A. Sherman Director June 1, 1994
Donald A. Sherman

/s/John M. Sullivan Director June 1, 1994
John M. Sullivan

/s/L. Jack Van Fossen Director June 1, 1994
L. Jack Van Fossen

/s/Paul D. Yeager Executive Vice June 1, 1994
Paul D. Yeager President/Chief
Financial Officer/
Principal Accounting
Officer

</TABLE>

<EX-12>
EXHIBIT 12
<TABLE>
<CAPTION>

THE SCOTTS COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

Pro Forma
Fiscal Year
Ended
September 30,
1989 1990 1991 1992 1993 1993
(in thousands except ratio data)
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes,
extraordinary items and
cumulative effect of accounting
changes $ 911 $ (6,761) $ 4,455 $ 26,203 $ 35,367 $36,075

Fixed Charges:

Interest expense 32,477 34,531 30,932 15,942 8,454 15,461
Capitalized interest - - - 380 - -

Rental expense 980 1,345 2,001 2,427 3,042 4,424

Earnings, as defined 34,368 29,115 37,388 44,952 46,863 55,960

Fixed Charges:
Interest expense 32,477 34,531 30,932 15,942 8,454 15,461
Capitalized interest - - - 380 - -
Rental expense 980 1,345 2,001 2,427 3,042 4,424
Fixed Charges 33,457 35,876 32,933 18,749 11,496 19,885

Ratio of Earnings to fixed
charges (1)(2) 1.03 - 1.14 2.40 4.08 2.81

<F1>
(1) The ratio of earnings to fixed charges is computed by dividing (a) the sum of (i) income from
continuing operations before income taxes, extraordinary items and the cumulative effect of
changes in accounting method and (ii) fixed charges by (b) fixed charges. Fixed charges
consist of interest on all indebtedness (including amortization of deferred financing costs),
capitalized interest and the estimated interest component of operating leases (assumed to be
one-third of total rental expense).

<F2>
(2) The fiscal year ended September 30, 1990 reflected a deficiency of earnings to fixed charges in
the amount of $6,761.
</TABLE>

<EX-23.a>
EXHIBIT 23(a)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We consent to the incorporation by reference in the Registration
Statement of The Scotts Company and Subsidiaries on Form S-3 of
our report dated November 19, 1993 and December 16, 1993, appear-
ing in the annual report on Form 10-K, on our audits of the con-
solidated financial statements and financial statements schedules
of The Scotts Company and Subsidiaries as of September 30, 1993
and 1992, and for each of the three years in the period ended
September 30, 1993. We also consent to the reference to our Firm
under the caption "Experts."

COOPERS & LYBRAND

Columbus, Ohio
May 31, 1994

<PAGE>

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We consent to the incorporation by reference in the Registration
Statement of The Scotts Company and Subsidiaries on Form S-3 of
our report dated February 11, 1994, appearing in the Form 8-K/A,
on our audit of the consolidated financial statements of Grace-
Sierra Horticultural Products Company and it Subsidiaries as of
December 16, 1993. We also consent to the reference to our Firm
under the caption "Experts."

COOPERS & LYBRAND

Columbus, Ohio
May 31, 1994

<EX-23.b>
EXHIBIT 23(b)

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the Registration
Statement of The Scotts Company on Form S-3 of our report dated
February 17, 1993 on our audit of the consolidated financial
statements of Grace-Sierra Horticultural Products Company as of
December 31, 1992 and for the year then ended.

Price Waterhouse
San Jose, California
May 27, 1994

<EX-23.c>
EXHIBIT 23(c)

CONSENT OF VORYS, SATER, SEYMOUR AND PEASE

We hereby consent to the reference to our firm under the
caption "Validity of the Debt Securities" in the Registration
Statement on Form S-3 and related Prospectus of The Scotts
Company and O.M. Scott & Sons Company for the registration of up
to $100,000,000 of Debt Securities.

VORYS, SATER, SEYMOUR AND PEASE

Columbus, Ohio
June 1, 1994