FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 30, 1996

                                      OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from ____________ to ____________

                        Commission file number 1-11593

                              THE SCOTTS COMPANY
            (Exact name of registrant as specified in its charter)

               Ohio                                31-1199481
 (State or other jurisdiction of      (I.R.S. Employer Identification No.)
  incorporation or organization)

                             14111 Scottslawn Road
                            Marysville, Ohio 43041
                    --------------------------------------
                   (Address of principal executive offices)
                                  (Zip Code)

                                (513) 644-0011
             (Registrant's telephone number, including area code)

                                   No change
          ----------------------------------------------------------
             (Former name, former address and former fiscal year,
                        if changed since last report.)

Indicate  by check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the Securities  Exchange Act of
1934  during the  preceding  12 months (or for such  shorter  period  that the
registrant  was  required to file such  reports),  and (2) has been subject to
such filing requirements for the past 90 days.

                                          Yes X        No____

Indicate the number of shares  outstanding of each of the issuer's  classes of
common stock as of the latest practicable date.

             18,980,553                  Outstanding at May 6, 1996
- -------------------------------------    ---------------------------
 Common Shares, voting, no par value



                              Page 1 of 27 pages

                           Exhibit Index at page 17



                      THE SCOTTS COMPANY AND SUBSIDIARIES

                                     INDEX




                                                                      Page No.

Part  I.  Financial Information:

Item 1. Financial Statements
        Consolidated Statements of Income - Three month and
        six month periods ended April 1, 1995 and March 30, 1996 ....... 3

        Consolidated Statements of Cash Flows - Six month periods
        ended April 1, 1995 and March 30, 1996 ......................... 4

        Consolidated Balance Sheets - April 1, 1995,
        March 30, 1996 and September 30, 1995 .......................... 5

        Notes to Consolidated Financial Statements ..................... 6-10

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations .................. 11-14


Part II.  Other Information:

         Item 1.  Legal Proceedings .................................... 15

         Item 4.  Submission of Matters to a Vote of Security Holders .. 15

         Item 6.  Exhibits and Reports on Form 8-K ..................... 15


Signatures ............................................................. 16


Exhibit Index .......................................................... 17





                                    Page 2


                        PART I - FINANCIAL INFORMATION
                         ITEM 1. FINANCIAL STATEMENTS

                      THE SCOTTS COMPANY AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
                     (in thousands except per share data)


                                    Three Months Ended        Six Months Ended
                                   April 1     March 30     April 1     March 30
                                    1995         1996        1995        1996


Net sales ......................   $236,092   $ 251,224    $334,111   $ 369,152
Cost of sales ..................    123,890     134,835     177,410     199,549
                                   --------   ---------    --------   ---------

Gross profit ...................    112,202     116,389     156,701     169,603
                                   --------   ---------    --------   ---------

Marketing ......................     38,513      44,135      60,910      71,725
Distribution ...................     30,479      28,726      45,019      45,191
General and administrative .....      6,997       8,969      12,964      17,026
Research and development .......      2,963       2,905       5,728       5,568
Amortization of goodwill .......      1,374       2,236       2,227       4,408
  and other intangibles
Other (income) expense, net ....        184        (837)        326        (595)
Unusual items ..................       --         3,176        --         5,231
                                   --------   ---------    --------   ---------

Income from operations .........     31,692      27,079      29,527      21,049

Interest expense ...............      8,114       8,118      13,808      14,719
                                   --------   ---------    --------   ---------

Income before income taxes .....     23,578      18,961      15,719       6,330

Income taxes ...................      9,785       8,331       6,523       2,874
                                   --------   ---------    --------   ---------

Net income .....................     13,793      10,630       9,196       3,456
                                   ========   =========    ========   =========

Net income (loss) per common ...   $    .73   $     .36    $    .49   $    (.08)
  share (note 7)                   ========   =========    ========   =========


Common shares used in net
  income (loss) per common .....     18,820      29,350      18,762      18,778
  share computation                ========   =========    ========   =========




See Notes to Consolidated Financial Statements


                                    Page 3



                      THE SCOTTS COMPANY AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                (in thousands)



                                                            Six Months Ended
                                                         April 1      March 30
                                                           1995         1996
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income .....................................     $   9,196      $   3,456
  Adjustments to reconcile net income to
    net cash used in operating activities:
      Depreciation and amortization ..............        11,908         14,320
      Equity in income of unconsolidated .........                         (382)
        business
      Postretirement benefits ....................           204             90
      Unusual charges ............................          --            4,476
      Net increase in certain components of
          working capital ........................      (130,838)      (167,245)
      Net change in other assets and
          liabilities and other adjustments ......          (504)         2,019
                                                         -------        -------
            Net cash used in operating                  (110,034)      (143,266)
              activities .........................       -------        -------

CASH FLOWS FROM INVESTING ACTIVITIES
  Investment in plant and equipment, net .........       (10,891)        (8,355)
  Investment in software .........................          (483)          --
  Investment in Affiliate ........................          (250)          --
                                                       ---------      ---------

            Net cash used in investing                   (11,624)        (8,355)
              activities .........................     ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES
  Payments on term and other debt ................        (1,197)          (264)
  Revolving lines of credit and bank line ........       118,378        153,318
    of credit, net
  Issuance of Common Shares ......................          --            5,055
  Deferred financing costs incurred ..............          (275)          --
  Dividends on preferred stock ...................          --           (4,874)
                                                         -------        -------
            Net cash provided by financing               116,906        153,235
              activities .........................       -------        -------

Effect of exchange rate changes on cash ..........           676           (155)
                                                       ---------      ---------

Net increase (decrease) in cash ..................        (4,076)         1,459

Cash at beginning of period ......................        10,695          7,028
                                                       ---------      ---------

Cash at end of period ............................     $   6,619      $   8,487
                                                       =========      =========
SUPPLEMENTAL CASH FLOW INFORMATION
  Interest paid, net of amount capitalized .......     $  14,007      $  12,171
  Income taxes paid ..............................     $     996      $   2,589


See Notes to Consolidated Financial Statements


                                    Page 4




                      THE SCOTTS COMPANY AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                (in thousands)

                                    ASSETS

                                                   Unaudited
                                             April 1     March 30   September 30
                                              1995         1996         1995
                                            _________    _________    ________
Current Assets:
  Cash ..................................   $   6,619    $   8,487    $   7,028
  Accounts receivable, less allowances
   of $3,395, $3,908 and $3,406,
   respectively .........................     252,509      315,392      176,525
  Inventories ...........................     143,574      187,370      143,953
  Prepaid and other assets ..............      18,601       21,907       23,354
                                            ---------    ---------    ---------
   Total current assets .................     421,303      533,156      350,860
                                            ---------    ---------    ---------

Property, plant and equipment, net ......     143,791      147,382      148,754
Trademarks, net .........................        --         88,125       89,250
Other intangibles, net ..................      26,529       22,096       24,421
Goodwill, net ...........................     103,224      181,600      179,988
Other assets ............................       9,755       15,818       15,772
                                            ---------    ---------    ---------

   Total Assets .........................   $ 704,602    $ 988,177    $ 809,045
                                            =========    =========    =========


                     LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
  Revolving credit line .................   $  39,852    $ 100,915    $      97
  Current portion of term debt ..........        --            221          421
  Accounts payable ......................      79,591       78,639       63,207
  Accrued liabilities ...................      24,258       46,682       41,409
  Accrued taxes .........................      20,572       21,125       18,728
                                            ---------    ---------    ---------
   Total current liabilities ............     164,273      247,582      123,862
                                            ---------    ---------    ---------

Term debt, less current portions ........     324,630      324,500      272,025
Postretirement benefits other than
   pensions .............................      27,218       27,249       27,159
Other liabilities .......................       7,622        5,103        5,209
                                            ---------    ---------    ---------

   Total Liabilities ....................     523,743      600,434      428,255
                                            ---------    ---------    ---------

Shareholders' Equity:
  Class A Convertible Preferred Stock,
   no par value .........................        --        177,255      177,255
  Common Shares, no par value ...........         211          211          211
  Capital in excess of par value ........     193,155      207,695      207,551
  Retained earnings .....................      23,071       31,254       32,672
  Cumulative translation gain ...........       5,863        3,391        4,082
  Treasury stock, 2,415 shares on
    April 1, 1995, 2,102 shares on
    March 30, 1996 and 2,388 shares .....     (41,441)     (36,063)     (40,981)
    on September 30, 1995 at cost           ---------    ---------    ---------
    Total Shareholders' Equity ..........     180,859      383,743      380,790
                                            ---------    ---------    ---------

   Total Liabilities and Shareholders'
     Equity .............................   $ 704,602    $ 988,177    $ 809,045
                                            =========    =========    =========


See Notes to Consolidated Financial Statements

                                    Page 5





                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements



1.  Organization and Basis of Presentation

    The Scotts Company ("Scotts") and its wholly owned  subsidiaries,  Hyponex
    Corporation   ("Hyponex"),   Republic   Tool   and   Manufacturing   Corp.
    ("Republic"),  Scotts-Sierra Horticultural Products Company ("Sierra") and
    Scotts' Miracle-Gro Products,  Inc.  ("Miracle-Gro"),  (collectively,  the
    "Company"),  are  engaged  in the  manufacture  and sale of lawn  care and
    garden  products.   All  material  intercompany   transactions  have  been
    eliminated.

    The  consolidated  balance  sheets as of April 1, 1995 and March 30, 1996,
    the related consolidated  statements of income for the three and six month
    periods   ended  April  1,  1995  and  March  30,  1996  and  the  related
    consolidated  statements  of cash  flows for the six month  periods  ended
    April 1, 1995 and March 30, 1996 are unaudited; however, in the opinion of
    management,  such financial  statements contain all adjustments  necessary
    for the fair presentation of the Company's financial position,  results of
    operations and cash flows.  Interim results  reflect all normal  recurring
    adjustments and are not necessarily indicative of results for a full year.
    The interim  financial  statements and notes are presented as specified by
    Regulation S-X of the Securities  Exchange Act of 1934, and should be read
    in conjunction with the financial statements and accompanying notes in the
    Company's fiscal 1995 Annual Report on Form 10-K/A.

2.  Inventories
    (in thousands)

    Inventories, net of allowances of $6,118, $6,916 and $6,711, consisted of:

                                        April 1       March 30     September 30
                                         1995           1996          1995

Raw material ......................    $ 56,326       $ 64,563       $ 71,431
Finished products .................      87,248        122,807         72,522
                                       --------       --------       --------
    Total Inventories .............    $143,574       $187,370       $143,953
                                       ========       ========       ========

3.  Foreign Exchange Instruments

    The Company  enters into forward  foreign  exchange  and currency  options
    contracts  to hedge its  exposure  to  fluctuations  in  foreign  currency
    exchange  rates.  These  contracts  generally  involve the exchange of one
    currency  for a second  currency at some future  date.  Counterparties  to
    these  contracts  are major  financial  institutions.  Gains and losses on
    these  contracts   generally  offset  gains  and  losses  on  the  assets,
    liabilities and transactions being hedged.

    Realized and unrealized  foreign  exchange gains and losses are recognized
    and offset foreign  exchange  gains or losses on the underlying  exposure.
    Unrealized gains and losses that are designated and effective as hedges on
    such transactions are deferred and recognized in income in the same period
    as the hedged  transactions.  The net  unrealized  gain  deferred  totaled
    $49,379 at March 30, 1996.



                                    Page 6



                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements



    At March 30, 1996, the Company's European  operations had foreign exchange
    risk in various  currencies  tied to the Dutch guilder.  These  currencies
    are: the Australian  Dollar,  Belgian Franc,  German Mark, Spanish Peseta,
    Italian  Lira,  French  Franc,  British  Pound and the U. S.  Dollar.  The
    Company's U. S. operations have foreign exchange rate risk in the Canadian
    Dollar,  the Dutch  Guilder and the British Pound which are tied to the U.
    S.  Dollar.  As of March 30,  1996,  the Company had  outstanding  forward
    foreign exchange  contracts with a contract value of  approximately  $24.1
    million and outstanding  purchased  currency options with a contract value
    of approximately $4.7 million. These contracts have maturity dates ranging
    from April 3, 1996 to October 2, 1996.

4.  Acquisitions

    Effective May 19, 1995, the Company completed the merger transactions with
    Stern's  Miracle-Gro   Products,   Inc.  and  affiliated   companies  (the
    "Miracle-Gro Companies").  The ultimate surviving corporation is now known
    as Scotts'  Miracle-Gro  Products,  Inc.  ("Miracle-Gro").  Miracle-Gro is
    engaged in the  marketing  and  distribution  of plant  foods and lawn and
    garden products primarily in the United States, Canada and Europe.

    The  following  pro  forma  results  of  operations  give  effect  to  the
    Miracle-Gro  Companies  acquisition  as if it had  occurred  on October 1,
    1994.

    (in thousands, except per share amounts)
                                        Three Months Ended Six Months Ended
                                             April 1,          April 1,
                                               1995              1995
                                             -------            ------

       Net sales .......................  $  283,711         $  393,617
                                             =======            =======

       Net income ......................  $   21,585         $   17,817
                                            ========            =======

       Net income per common share .....  $      .74         $      .61
                                            ========           ========


    For purposes of computing  net income per common  share,  Scotts'  Class A
    Convertible  Preferred Stock is considered a common stock equivalent.  Pro
    forma  primary  net income per common  share for the three  months and six
    months  ended  April 1, 1995 are  calculated  using the  weighted  average
    common shares outstanding of 29,153,000 and 29,083,000, respectively.

    The pro forma  information  provided  does not purport to be indicative of
    actual  results  of  operations  if  the  merger   transactions  with  the
    Miracle-Gro  Companies  had  occurred  as of October  1, 1994,  and is not
    intended to be indicative of future results or trends.

5.  Accounting Issues

    In December 1995, the Financial Accounting Standards Board issued SFAS No.
    123,   "Accounting  for  Stock-Based   Compensation"   which  changes  the
    measurement,   recognition   and  disclosure   standards  for  stock-based
    compensation.  Management is currently  evaluating  the provisions of SFAS
    No. 123 and at this time,  the effect of  adoption of SFAS No. 123 and the
    related disclosures have not been decided.



                                    Page 7



                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements



6.  Unusual Items

    For the six months  ended March 30,  1996,  the Company  recorded  unusual
    charges  of $5.2  million  related  to  site  closings  and the  personnel
    reduction.  These  non-recurring  charges  arose  as a  direct  result  of
    management's  commitment  to reduce  costs  and  achieve  more  profitable
    growth. As of March 30, 1996  approximately  $3.3 million has been accrued
    related  to these  charges.  It is  currently  anticipated  the  remaining
    balance will be expended by the end of fiscal 1996.

7.  Earnings Per Share Computation

    The earnings per share computation is based on the weighted average number
    of common shares and common share equivalents (stock options,  convertible
    preferred stock and warrants) outstanding each period. The shares of Class
    A  Convertible   Preferred  Stock  were  issued  in  connection  with  the
    Miracle-Gro  merger  transactions  on May 19, 1995.  These shares were not
    considered in the earnings per share  computation for the six months ended
    March 30, 1996 because they were antidilutive for such period.

    The following table presents information necessary to calculate net income
    (loss) per common share.

                                     Three Months Ended      Six Months Ended
     (in thousands)                  April 1,  March 30,    April 1,  March 30,
                                      1995       1996          1995     1996
                                     ------------------    --------------------

Net income ......................    $13,793    $10,630    $  9,196    $  3,456
Preferred stock dividend ........    N/A           --      N/A            4,874
                                     -------    -------    --------    --------
Income (loss) applicable
  to common shares ..............    $13,793    $10,630    $  9,196    $ (1,418)
                                     =======    =======    ========    ========
Common shares used in net
  income (loss) per
  common share calculation ......     18,820     29,350      18,762      18,778
                                     =======    =======    ========    ========

Income (loss) per common ........    $   .73    $   .36    $    .49    $   (.08)
  share .........................    =======    =======    ========        ====

    Fully  diluted net income  (loss) per common share is considered to be the
    same  as  primary  net  income  (loss)  per  common  share  as it was  not
    materially different from primary net income (loss) per common share.

8.  Contingencies

    The   Company's   management    continually    evaluates   the   Company's
    contingencies,  including  various  lawsuits and claims which arise in the
    normal course of business. In the opinion of management, its assessment of
    contingencies is reasonable and that related  reserves,  in the aggregate,
    are adequate;  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
    the Company's identified contingencies.




                                    Page 8



                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements



    In September  1991, the Company was  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  PRP's   identified  to  date,   investigated  the  extent  of
    contamination  in the Hershberger  site. The results of the  investigation
    were that the site  presents  a low  degree of risk and that the  chemical
    compounds  which  contribute  to the  risk are not  compounds  used by the
    Company.  As a result of the joint and  several  liability  of PRP's,  the
    Company  may be subject  to  financial  participation  in the costs of the
    remediation  plan, if any.  However,  management does not believe any such
    obligations  would  have a  significant  adverse  effect on the  Company's
    results of operations or financial condition.

    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 in the U. S. District  Court for the District of New
    Jersey,  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. 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.

    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 this  proceeding will have a material
    adverse effect on its financial condition or results of operations.

    On January 30, 1996,  the United States  Environmental  Protection  Agency
    (the "U. S. EPA") served a Complaint and Notice of Opportunity for Hearing
    upon  Sierra's  wholly-owned  subsidiary,  Scotts-Sierra  Crop  Protection
    Company ("Crop  Protection").  The Complaint  alleges labeling  violations
    under the Federal  Insecticide,  Fungicide and  Rodenticide  Act ("FIFRA")
    during 1992 and 1993 and proposed penalties totaling $785,000, the maximum
    allowable under FIFRA according to management's calculations. On April 18,
    1996,  an EPA  Administrative  Law judge  dismissed  the  EPA's  complaint
    without  prejudice,  due to  mistakes  in  the  pleadings.  If an  amended
    complaint is filed,  based upon Crop  Protection's  good faith  compliance
    actions and FIFRA's  provisions for  "gravity-based"  penalty  reductions,
    management  believes Crop  Protection's  maximum liability to be $200,000,
    which has been accrued in the financial  statements.  The Company does not
    believe that the outcome of this proceeding  will have a material  adverse
    effect on its financial condition or results of operations.




                                    Page 9





                      THE SCOTTS COMPANY AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements



    During 1993 and 1994, Stern's  Miracle-Gro  Products,  Inc.  ("Miracle-Gro
    Products")  discussed  with  Pursell  Industries,   Inc.  ("Pursell")  the
    feasibility  of forming a joint  venture  to produce  and market a line of
    slow-release lawn food, and in October 1993,  signed a non-binding  "heads
    of agreement." After the merger  transactions  between the Company and the
    Miracle-Gro  Companies were announced,  Pursell  demanded that Miracle-Gro
    Products  reimburse it for monies allegedly spent by Pursell in connection
    with the proposed project.  Because Miracle-Gro  Products does not believe
    that any such  monies  are due or that any  such  joint  venture  ever was
    formed, on February 10, 1995, it instituted an action in the Supreme Court
    of the State of New York, Stern's  Miracle-Gro  Products,  Inc. v. Pursell
    Industries, Inc. Index No. 95-004131 (Nassau Co.) (the "New York Action"),
    seeking  declarations that, among other things,  Miracle-Gro Products owed
    no monies to Pursell  relating to the  proposed  project and that no joint
    venture was formed.  Pursell moved to dismiss the New York Action in favor
    of the Alabama action described below,  which motion was granted August 7,
    1995.

    On March 2,  1995,  Pursell  instituted  an  action in the  United  States
    District Court for the Northern District of Alabama,  Pursell  Industries,
    Inc. v. Stern's Miracle-Gro Products,  Inc.,  CV-95-C-0524-S (the "Alabama
    Action"),  alleging,  among other things, that a joint venture was formed,
    that  Miracle-Gro  Products  breached an alleged joint  venture  contract,
    committed  fraud,  and breached an alleged  fiduciary duty owed Pursell by
    not informing Pursell of negotiations  concerning the merger transactions.
    On December 18, 1995,  Pursell  filed an amended  complaint in the Alabama
    Action in which Scotts was named as an  additional  party  defendant.  The
    amended complaint  contains a number of allegations and seeks compensatory
    damages in excess of $10 million,  punitive damages of $20 million, treble
    damages  as  allowed  by law and  injunctive  relief  with  respect to the
    advertising and trade dress allegations. The Company does not believe that
    the amended  complaint has any merit and intends to vigorously defend that
    action.

    On April 14, 1996, in response to  discussions  with Scotts  regarding the
    possible  infringement  upon certain  Scotts' patents by one or several of
    Pursell's  controlled-release  fertilizers,  Pursell  instituted  a second
    action in the United States  District  Court for the Northern  District of
    Alabama,  Pursell Industries,  Inc. v. The Scotts Company,  CV-96-AR-931-S
    (the "Patent  Action").  Pursell has  alleged,  among other  things,  that
    Scotts'  marking of its Poly-S  fertilizers  with its patents  constitutes
    false  marking  under  35  U.S.C.   Sec.  292  and  that  Scotts'  conduct
    constitutes  unfair  competition.  The complaint seeks  declarations that,
    among other things,  Scotts'  patents are invalid and that Pursell has not
    infringed any of Scotts' patents. It further seeks that Scotts be enjoined
    from bringing a patent infringement suit against Pursell and requests that
    Pursell be  awarded  its costs of this  action  and such  other  relief as
    deemed proper. The Company does not believe that this action has merit and
    intends  to  vigorously  defend  it and to  possibly  bring  counterclaims
    against Pursell.




                                    Page 10



                ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The following  discussion  should be read in conjunction with the Consolidated
Financial Statements of the Company included elsewhere in this report.

                          NET SALES BY BUSINESS UNIT

     (in thousands)            Three Months Ended
                         April 1, 1995  March 30, 1996   % Change
                         -------------  --------------   --------

     Consumer Lawn         $174,560       $147,336         (15.6)%
     Consumer Garden          6,811         47,235         593.5 %
     Professional            34,073         34,984           2.7 %
     International           20,648         21,669           4.9 %
                           --------       --------                

     Consolidated          $236,092       $251,224           6.4 %
                            =======        =======                

                               Six Months Ended
                         April 1, 1995  March 30, 1996   % Change
                         -------------  --------------   --------

     Consumer Lawn         $227,813       $211,164         (7.3)%
     Consumer Garden          9,130         59,850        555.5 %
     Professional            61,979         61,115         (1.4)%
     International           35,189         37,023          5.2 %
                           --------       --------               

     Consolidated          $334,111       $369,152         10.5 %
                            =======        =======               


Results of Operations

Three Months Ended March 30, 1996, versus Three Months Ended April 1, 1995

Net  sales  increased  6.4% to  $251.2  million.  The  increase  is  primarily
attributed to the inclusion of Miracle-Gro,  partially  offset by decreases in
sales due to the marketing program  incentivizing  retailers to purchase their
spring  requirements  early, the divestiture of the Peters U.S. consumer water
soluble  fertilizer  business  and the  late-breaking  spring.  On a pro forma
basis,  assuming the Miracle-Gro  merger  occurred  October 1, 1994, net sales
decreased by $32.5 million or 11.5%

The  Consumer  Lawn  Business  Group had net sales of $147.3  million,  a  de-
crease  of  15.6%. The decrease is attributable to the impact of the marketing
program  incentivizing  retailers to purchase their spring  requirements early
and the  late-breaking  spring in most  parts of the  country.  The  marketing
program resulted in large trade inventories  entering the 1996 selling season.
Sales decreases in fertilizers,  spreaders and organics were partially  offset
by increased seed sales.  The Consumer  Garden Business Group had net sales of
$47.2  million,  an increase of 593.5%,  due to the inclusion of  Miracle-Gro,
partially offset by the divestiture of the Peters U.S.  consumer water soluble
fertilizer business.  Professional  Business Group net sales increased 2.7% to
$35.0 million principally due to volume. International sales increased 4.9% to
$21.7 million. The increase resulted primarily from increased sales volume.



                                    Page 11



Cost of sales represented 53.7% of net sales, up 1.2% compared to 52.5% of net
sales  last  year.  The  increase  was  partially  attributable  to higher raw
materials costs and to a lesser extent,  sales mix which  reflected  increased
volume in lower margin products.

Operating  expenses  increased   approximately  10.9%  due  partially  to  the
inclusion of Miracle-Gro.  Marketing expenses increased 14.6% due to increased
promotional  allowances  to  retailers  and  increased  national  advertising.
Distribution  expenses  decreased 5.8%  principally as a result of a sales mix
which includes  Miracle-Gro,  which has a proportionately  lower  distribution
cost. General and administrative expenses increased 28.2% due to the inclusion
of Miracle-Gro,  and increased outside services. Other expenses, net decreased
by 554.9% due to lower  foreign  exchange  losses and an increase in income of
unconsolidated  businesses.  Amortization  of goodwill  and other  intangibles
increased as a result of the merger with Miracle-Gro. Unusual expenses of $3.2
million  were  recorded  for   restructuring   charges  related  to  personnel
reductions and facilities closings.

The Company's  effective tax rate increased from 41.5% to 43.9%. This increase
results  primarily from an increase in nondeductible  amortization of goodwill
and intangible assets.

Net income of $10.6  million  decreased by $3.2  million from 1995.  Among the
significant  items  impacting 1996 results were the inclusion of  Miracle-Gro,
decreased  revenues in the  Consumer  Lawn  Business  Group,  the $3.2 million
charge for restructuring and the higher effective tax rate.

Six Months Ended March 30, 1996 versus Six Months Ended April 1, 1995

Net sales  increased to $369.2  million,  up 10.5%.  The increase is primarily
attributed to the inclusion of Miracle-Gro,  partially offset by decreases due
to the  marketing  program  which  incentivized  retailers to purchase  spring
requirements  early, the divestiture of the Peters U.S. consumer water soluble
fertilizer business, the loss of exclusivity of an advanced control chemistry,
and the  late-breaking  spring.  On a pro forma basis,  net sales decreased by
$24.5 million or 6.2%.

Consumer Lawn Business  Group had net sales of $211.2  million,  a decrease of
7.3%.  The decrease is  attributable  to the impact of the  marketing  program
incentivizing  retailers to purchase  their  spring  requirements  early,  the
divestiture of the Peters U.S. consumer water soluble fertilizer  business and
the late-breaking  spring in most parts of the country.  The marketing program
resulted in large trade  inventories  entering the 1996 selling season.  Sales
decreases in  fertilizers,  spreaders  and organics were  partially  offset by
sales  increases in seed. The Consumer  Garden Business Group had net sales of
$59.9  million,  an increase of 555.5% due to the  inclusion  of  Miracle-Gro,
partially offset by the divestiture of the Peters U.S.  consumer water soluble
fertilizer  business.  Professional  Business Group net sales  decreased 1.4%.
International  sales  increased 5.2% to $37.0 million.  The increase  resulted
primarily from increased sales volume.

Cost of sales  represented  54.1% of net sales, up 1% compared to 53.1% of net
sales  last  year.  The  increase  was  partially  attributable  to higher raw
materials costs and to a lesser extent,  sales mix which  reflected  increased
volume in lower margin products.

Operating   expenses  increased  16.8%  due  partially  to  the  inclusion  of
Miracle-Gro.  Marketing expenses increased 17.8% due to increased  promotional
allowances to retailers and increased national advertising. Distribution costs
increased  0.4% as a result of a sales mix which includes  Miracle-Gro,  which
has a proportionately  lower  distribution  cost.  General and  administrative
expenses  increased  31.3%  due to the  inclusion  of  Miracle-Gro,  increased
spending in corporate communications and increased outside services.


                                    Page 12






Other  expenses,  net,  decreased  by 282.5% due to an  increase  in income of
unconsolidated   businesses  and  lower  foreign  currency  exchange  impacts.
Amortization  of goodwill and other  intangibles  increased as a result of the
merger with  Miracle-Gro.  Unusual  expenses of $5.2 million were recorded for
restructuring charges related to personnel reductions and facilities closings.

Interest  expense  increased  6.6%.  The increase  was caused  primarily by an
increase in borrowing levels in the first quarter.

The Company's  effective tax rate increased from 41.5% to 45.4% in 1996.  This
increase results  primarily from an increase in nondeductible  amortization of
goodwill and intangible assets.

Net income of $3.5 million  decreased  by $5.7  million  from 1995.  Among the
significant  items  impacting 1996 results were the inclusion of  Miracle-Gro,
decreased  revenues in the  Consumer  Lawns  Business  Group and  Professional
Business  Group,  a $5.2  million  charge  for  restructuring  and the  higher
effective tax rate.

Financial Position as of March 30, 1996

Current  assets of $533.2 million  increased by $182.3  million  compared with
current  assets at  September  30, 1995 and by $111.9  million  compared  with
current assets at April 1, 1995. The increase compared with September 30, 1995
is primarily  attributable to the seasonal  nature of the Company's  business,
with inventory and accounts  receivable levels generally being higher in March
relative to  September.  The increase  compared  with April 1, 1995 was due in
part to the inclusion of Miracle-Gro's  current assets which amounted to $69.4
million.  The  increase  was also  caused by  higher  receivables  and  higher
inventory levels.

Current  liabilities  of $247.6 million  increased by $123.7 million  compared
with current  liabilities at September 30, 1995 and by $83.3 million  compared
with  current  liabilities  at April  1,  1995.  The  increase  compared  with
September  30,  1995 is caused  in part by  increased  short-term  borrowings,
accounts payable and accrued expenses.  The increase as compared with April 1,
1995 is caused in part by the inclusion of Miracle-Gro's  current  liabilities
which  amount  to $19.9  million  . The  increase  was also  caused  by higher
short-term borrowings and accrued expenses.

Capital  expenditures for the year ended September 30, 1996 are expected to be
approximately  $20.0 million.  The Credit  Agreement  restricts the amount the
Company may spend on capital  expenditures  to $50 million per year for fiscal
1996 and each year thereafter.  Fiscal 1996 capital  expenditures are expected
to be financed with cash provided by operations  and  utilization of available
credit facilities.

Long-term  debt  increased by $52.5 million  compared with  long-term  debt at
September  30, 1995.  The  increase as compared to  September  30, 1995 was to
support the seasonal increase in working capital and capital expenditures.

Shareholders'  equity  increased by $3.0 million  compared with  shareholders'
equity at September 30, 1995 and by $202.9 million compared with shareholders'
equity at April 1,  1995.  The  increase  compared  with  September  30,  1995
reflects  net income for the six months of $3.5  million  and the  issuance of
treasury  stock for options  exercised of $5.1 million  offset by  Convertible
Preferred  Stock  dividends of $4.9  million and the change in the  cumulative
foreign currency adjustment of $0.7 million.  The increase compared with April
1, 1995 is primarily a result of the merger with  Miracle-Gro,  including  the
issuance of  Convertible  Preferred  Stock with a fair market  value of $177.3
million and Warrants with a fair market value of $14.4 million.  The remaining
change in  shareholders'  equity  was a result of net  income  for the  twelve
months  ended March 30, 1996 of $16.6  million,  and the  issuance of treasury
stock for  options  exercised  of $5.5  million  offset  by the  change in the
cumulative  foreign  currency  adjustment  of  $2.5  million  and  Convertible
Preferred Stock dividends of $8.4 million.


                                    Page 13



The Company has foreign exchange rate risk related to  international  earnings
and cash flows.  During  fiscal  1995,  a  management  program was designed to
minimize  the  exposure to adverse  currency  impacts on the cash value of the
Company's  non-local  currency  receivables  and  payables,  as  well  as  the
associated  earnings  impact.  The Company has entered  into  forward  foreign
exchange  contracts and purchased  currency options tied to the economic value
of  receivables,  payables and expected  cash flows  denominated  in non-local
foreign currencies.  Management  anticipates that these financial  instruments
will act as an  effective  hedge  against  the  potential  adverse  impact  of
exchange rate fluctuations on the Company's  results of operations,  financial
condition  and  liquidity.  It is  recognized,  however,  that the  program is
intended to minimize but cannot completely eliminate the Company's exposure to
adverse foreign currency movements.

As of March 30, 1996, the Company's  European  operations had foreign exchange
risk in various currencies tied to the Dutch Guilder. These currencies include
the Australian Dollar,  Belgian Franc,  German Mark,  Spanish Peseta,  Italian
Lira,  French Franc,  British Pound and the U.S.  Dollar.  The Company's  U.S.
operations  had  foreign  exchange  rate risk in the  Canadian  Dollar,  Dutch
Guilder and the British Pound which are tied to the U.S.  Dollar.  As of March
30, 1996,  outstanding foreign exchange forward contracts had a contract value
of approximately $24.1 million and outstanding  purchased currency options had
a contract value of approximately $4.7 million.  These contracts have maturity
dates ranging from April 3, 1996 to October 2, 1996.

The  primary  sources of  liquidity  for the Company  are funds  generated  by
operations and borrowings  under the Company's Credit  Agreement.  As amended,
the Credit  Agreement  is unsecured  and  provides up to $375 million  through
March 31, 2000 and does not contain a term loan facility.

In the opinion of the Company's  management,  cash flows from  operations  and
capital  resources will be sufficient to meet debt service and working capital
needs during the 1996 fiscal year.

Inflation

The Company is subject to the effect 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.

Selective price increases for products which contain urea became  effective at
the  beginning  of  1996.  The  price  increases  offset  higher  urea  prices
experienced by the Company. In addition, the Company has entered into a supply
agreement  through  the year 2000,  under  which the  Company is  required  to
purchase set tonnage of urea at a set price.

Accounting Issues

In  December  1995,  the  Financial  Accounting  Standards  Board  issued SFAS
No. 123  "Accounting   for   Stock-Based   Compensation"   which  changes  the
measurement,    recognition   and   disclosure   standards   for   stock-based
compensation.  Management is currently  evaluating  the provisions of SFAS No.
123 and at this time,  the effect of  adopting  SFAS No. 123 on the results of
operations and the method of disclosure has not been determined.

Contingencies

The  Company's  management continually evaluates the Company's  contingencies,
including  various  lawsuits  and claims which arise in the normal  course  of
business.  In  the  opinion  of  management,   its  assessment  of  contingen-
cies  is reasonable and the related reserves, in the aggregate,  are adequate;
however,  there can be no assurance that future quarterly  or annual operating
results will not be materially affected by final resolution of  these matters.
Additional information  with  respect to the more significant of these matters
is described in  footnote  number 8 to the  Company's  Consolidated  Financial
Statements.

                                    Page 14



PART II - OTHER INFORMATION


Item 1      Legal Proceedings

      Please see the  information  provided  in  Footnote  8 to the  Company's
      Consolidated Financial Statements on pages 8 and 9 of this Report, which
      information is incorporated herein by reference.

Item 2-3

      Not applicable.

Item 4 - Submission of Matters to a Vote of Security Holders

      The Annual Meeting of Shareholders of the Company (the "Annual Meeting")
      was held in Columbus, Ohio on April 9, 1996.

      The  result  of the vote of the  shareholders  for  each of the  matters
      submitted to the shareholders at the Annual Meeting is as follows:

      A.  The proposal to elect three directors for terms of three years:

            Nominee            Votes For       Withheld      Not Voted
           ---------          -----------     ----------    -----------
       James Hagedorn         23,141,916                       80,507
       Karen Gordon Mills     23,177,933                       44,490
       Tadd C. Seitz          23,168,953                       53,470

      Each of the nominees was elected.  The  Directors  whose terms of office
      continue after the Annual Meeting are James B Beard,  John Kenlon,  John
      M. Sullivan, L. Jack VanFossen, John S. Chamberlin,  Joseph P. Flannery,
      Horace Hagedorn and Donald A.
      Sherman.

      B.   The  proposal to approve the  adoption of the  Company's 1996 Stock
           Option Plan:

                                                               Broker
                For             Against        Abstain       Non Votes
               -----           ---------      ---------     -----------
            18,945,876          425,050        792,046       3,059,451

            This proposal was approved.

Item 6 - Exhibits and Reports on Form 8-K.

      (a)  See  Exhibit  Index at page 16 for a list of the  exhibits included
           herewith.

      (b)  No reports on Form 8-K were filed  during the fiscal quarter  ended
           March 30, 1996.


                                    Page 15


                                  SIGNATURES





Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934,  the
Registrant  has duly  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.




                              THE SCOTTS COMPANY



Date    May 14, 1996               /s/  Paul D. Yeager
                                   -----------------------------------
                                        Paul D. Yeager
                                        Executive Vice President
                                        Chief Financial Officer
                                        Principal Accounting Officer









                                    Page 16



                              THE SCOTTS COMPANY
                       QUARTERLY REPORT ON FORM 10-Q FOR
                      FISCAL QUARTER ENDED MARCH 30, 1996
                                 EXHIBIT INDEX


 Exhibit                                                        Page
  Number              Description                              Number
- ------------------------------------------------------------------------------

   10    The Scotts Company 1996 Stock Option Plan ......... Pages 18-25


   11    Computation of Net Income Per Common Share ........ Page 26


   27    Financial Data Schedule ........................... Page 27



                                   Page 17

                              THE SCOTTS COMPANY
                            1996 STOCK OPTION PLAN

                                  SECTION l.

                                    PURPOSE

      The purpose of the Plan is to foster and promote the long-term financial
success  of the  Company  and  materially  increase  shareholder  value by (a)
encouraging and providing for the acquisition of an ownership  interest in the
Company by Employees and Eligible  Directors,  and (b) enabling the Company to
attract and retain the services of an outstanding  management  team upon whose
judgment,   interest,  and  special  effort  the  successful  conduct  of  its
operations is largely dependent.

                                  SECTION 2.

                                  DEFINITIONS

      2.1   Definitions.  Whenever  used  herein,  the  following  terms shall
have the respective meanings set forth below:

      (a)   "Act" means the Securities Exchange Act of 1934, as amended.

      (b)   "Award" means any Option.

      (c)   "Board" means the Board of Directors of the Company.

      (d) "Cause" means (i) the willful  failure by a  Participant  to perform
substantially  his duties as an  Employee  of the  Company  (other than due to
physical or mental illness) after reasonable notice to the Participant of such
failure,  (ii)  the  Participant's  engaging  in  serious  misconduct  that is
injurious to the Company or any  Subsidiary,  (iii) the  Participant's  having
been  convicted  of, or  entered a plea of nolo  contendere  to, a crime  that
constitutes  a felony or (iv) the  breach by the  Participant  of any  written
covenant or agreement  with the Company or any  Subsidiary not to disclose any
information  pertaining to the Company or any  Subsidiary or not to compete or
interfere with the Company or any Subsidiary.

      (e)   "Change in Control"  means the  occurrence of any of the following
events:

            (i) the members of the Board at the  beginning of any  consecutive
      twenty-four calendar month period (the "Incumbent  Directors") cease for
      any reason other than due to death to  constitute at least a majority of
      the members of the Board,  provided that any director whose election, or
      nomination for election by the Company's shareholders, was approved by a
      vote of at least a  majority  of the  members of the Board then still in
      office  who  were  members  of  the  Board  at  the  beginning  of  such
      twenty-four  calendar  month  period,  shall be treated as an  Incumbent
      Director; or

            (ii) any "person,"  including a "group" (as such terms are used in
      Sections  13(d) and 14(d)(2) of the Act, but excluding the Company,  any
      of its  Subsidiaries,  or any employee benefit plan of the Company or of
      any of its  Subsidiaries,)  is or  becomes  the  "beneficial  owner" (as
      defined in Rule  13(d)(3)  under the Act),  directly or  indirectly,  of
      securities  of the Company  representing  more than 49% of the  combined
      voting power of the Company's then outstanding securities; or

            (iii) the  shareholders  of the Company shall approve a definitive
      agreement  (1) for the  merger  or  other  business  combination  of the
      Company with or into another corporation, a majority of the directors of

                                     -18-

      which were not directors of the Company  immediately prior to the merger
      and in which the  shareholders of the Company  immediately  prior to the
      effective  date of such merger own less than 50% of the voting  power in
      such  corporation;  or (2) for the sale or other  disposition  of all or
      substantially all of the assets of the Company; or

            (iv) the  purchase  of Stock  pursuant  to any tender or  exchange
      offer made by any "person,"  including a "group" (as such terms are used
      in Sections 13(d) and l4(d)(2) of the Act), other than the Company,  any
      of its  Subsidiaries,  or an employee  benefit plan of the Company or of
      any of its Subsidiaries, for more than 49% of the Stock of the Company.

      (f) "Change in Control Price" means the highest price per share of Stock
offered in conjunction  with any transaction  resulting in a Change in Control
(as determined in good faith by the Committee if any part of the offered price
is  payable  other  than in  cash)  or,  in the case of a  Change  in  Control
occurring  solely by reason of a change in the  composition of the Board,  the
highest  Fair  Market  Value  of the  Stock  on any  of  the 30  trading  days
immediately preceding the date on which a Change in Control occurs.

      (g)   "Code" means the Internal Revenue Code of 1986, as amended.

      (h) "Committee" means the Compensation and Organization Committee of the
Board which shall have the meaning  ascribed to a "compensation  committee" in
Section  1.162-27(c)(4)  of the final  regulations  promulgated  under Section
162(m) of the Code and which shall consist of three or more  members,  each of
whom  shall  be (i) a  person  from  time  to  time  permitted  by  the  rules
promulgated  under  Section  16 of the Act in order for grants of Awards to be
exempt  transactions under said Section 16 and (ii) receiving  remuneration in
no other  capacity  than as a  director,  except as  permitted  under  Section
1.162-27(e)(3)  of the final  regulations  promulgated under Section 162(m) of
the Code and the rulings thereunder.

      (i)   "Company" means The Scotts Company,  an Ohio corporation,  and any
successor thereto.

      (j) "Director Option" means a Nonstatutory  Stock Option granted to each
Eligible  Director  pursuant to Section 6.7 without any action by the Board or
the Committee.

      (k)  "Disability"  means the inability of the Participant to perform his
duties  for a period of at least  six  months  due to a  physical  or  medical
infirmity.  Notwithstanding  the  foregoing,  with respect to Incentive  Stock
Options,  the term  "Disability"  shall be  defined as such term is defined in
Section 22(e)(3) of the Code.

      (l)   "Eligible  Director"  means,  on any date, a person who is serving
as a member of the Board and who is not an Employee.

      (m)   "Employee"   means  any  officer  or  other  key   executive   and
management employee of the Company or of any of its Subsidiaries.

      (n) "Fair Market  Value"  means,  on any date,  the closing price of the
Stock as reported on the New York Stock Exchange (or on such other  recognized
market or quotation system on which the trading prices of the Stock are traded
or quoted at the relevant  time) on such date.  In the event that there are no
Stock  transactions  reported  on the New York Stock  Exchange  (or such other
market or system) on such date, Fair Market Value shall mean the closing price
on the  immediately  preceding  date  on  which  Stock  transactions  were  so
reported.

      (o) "Option"  means the right to purchase  Stock at a stated price for a
specified  period of time.  For purposes of the Plan,  an Option may be either
(i) an "Incentive Stock Option" (ISO) within the meaning of Section 422 of the
Code or (ii) a  "Nonstatutory  Stock  Option" (NSO) which does not qualify for
treatment as an "Incentive Stock Option."

      (p)   "Participant"  means any Employee  designated  by the Committee to
participate in the Plan.

      (q) "Plan" means The Scotts Company 1996 Stock Option Plan, as in effect
from time to time.

                                     -19-

      (r) "Retirement"  means termination of a Participant's  employment on or
after the normal  retirement  date or, with the  Committee's  approval,  on or
after  any  early  retirement  date  established  under  any  retirement  plan
maintained  by  the  Company  or  a  Subsidiary   in  which  the   Participant
participates.

      (s)   "Stock"  means  the  Common  Shares,  without  par  value,  of the
Company.

      (t)  "Subsidiary"  means any  corporation  or  partnership  in which the
Company owns, directly or indirectly, 50% or more of the total combined voting
power of all classes of stock of such  corporation or of the capital  interest
or profits interest of such partnership.

      2.2 Gender and Number.  Except when otherwise  indicated by the context,
words in the  masculine  gender used in the Plan shall  include  the  feminine
gender,  the singular  shall include the plural,  and the plural shall include
the singular.

                                  SECTION 3.

                         ELIGIBILITY AND PARTICIPATION

      Except as otherwise  provided in Section 6.7, the only persons  eligible
to participate in the Plan shall be those Employees  selected by the Committee
as Participants.

                                  SECTION 4.

                            POWERS OF THE COMMITTEE

      4.l Power to Grant.  The Committee shall  determine the  Participants to
whom Awards  shall be  granted,  the type or types of Awards to be granted and
the  terms  and  conditions  of any and all such  Awards.  The  Committee  may
establish  different terms and conditions for different  types of Awards,  for
different  Participants  receiving  the same  type of  Award  and for the same
Participant  for each  Award  such  Participant  may  receive,  whether or not
granted at different times.

      4.2   Administration.   The  Committee  shall  be  responsible  for  the
administration  of the Plan. The Committee,  by majority  action  thereof,  is
authorized to prescribe,  amend, and rescind rules and regulations relating to
the Plan, to provide for conditions  deemed  necessary or advisable to protect
the interests of the Company, and to make all other determinations (including,
without limitation, whether a Participant has incurred a Disability) necessary
or advisable for the administration and interpretation of the Plan in order to
carry out its provisions  and purposes.  Determinations,  interpretations,  or
other actions made or taken by the Committee pursuant to the provisions of the
Plan shall be final,  binding,  and  conclusive  for all purposes and upon all
persons.

                                  SECTION 5.

                             STOCK SUBJECT TO PLAN

      5.1 Number.  Subject to the  provisions  of Section  5.3,  the number of
shares of Stock  subject  to Awards  under the Plan may not  exceed  1,500,000
shares of Stock.  Subject to the  provisions of Section 5.3, no Employee shall
receive Awards for more than 150,000 shares of Stock over any one-year period.
For this  purpose,  to the extent that any Award is cancelled (as described in
Section  1.162-27(e)(2)(vi)(B)  of the  final  regulations  promulgated  under
Section 162(m) of the Code), such cancelled Award shall continue to be counted
against the maximum  number of shares of Stock for which Awards may be granted
to an Employee under the Plan.  The shares of Stock to be delivered  under the
Plan may consist,  in whole or in part, of treasury  Stock or  authorized  but
unissued Stock, not reserved for any other purpose.

                                     -20-

      5.2 Cancelled,  Terminated,  or Forfeited Awards.  Except as provided in
Section 5.1,  any shares of Stock  subject to an Award which for any reason is
cancelled,  terminated or otherwise  settled without the issuance of any Stock
shall again be available for Awards under the Plan.

      5.3 Adjustment in Capitalization.  In the event of any Stock dividend or
Stock split,  recapitalization (including,  without limitation, the payment of
an extraordinary  dividend),  merger,  consolidation,  combination,  spin-off,
distribution of assets to shareholders,  exchange of shares,  or other similar
corporate change, the aggregate number of shares of Stock available for Awards
under Section 5.1 or subject to outstanding  Awards and the respective  prices
and/or  limitations  applicable  to  outstanding  Awards may be  appropriately
adjusted  by the  Committee,  whose  determination  shall be  conclusive.  If,
pursuant to the  preceding  sentence,  an  adjustment is made to the number of
shares subject to  outstanding  Options held by  Participants a  corresponding
adjustment  shall be made to the  number  of  shares  subject  to  outstanding
Director Options and if an adjustment is made to the number of shares of Stock
authorized for issuance under the Plan, a  corresponding  adjustment  shall be
made to the  number of  shares  subject  to each  Director  Option  thereafter
granted pursuant to Section 6.7.

                                  SECTION 6.

                                    OPTIONS

      6.1 Grant of  Options.  Options may be granted to  Participants  at such
time or times as shall be determined by the Committee.  Options  granted under
the  Plan  may  be  of  two  types:  (i)  Incentive  Stock  Options  and  (ii)
Nonstatutory  Stock Options.  The Committee shall have complete  discretion in
determining  the number of Options,  if any,  to be granted to a  Participant.
Without  limiting the  foregoing,  the Committee may grant Options  containing
provisions for the issuance to the  Participant,  upon exercise of such Option
and payment of the exercise  price  therefor with  previously  owned shares of
Stock, of an additional  Option for the number of shares so delivered,  having
such  other  terms  and  conditions  not  inconsistent  with  the  Plan as the
Committee  shall  determine.  Each  Option  shall be  evidenced  by an  Option
agreement that shall specify the type of Option  granted,  the exercise price,
the duration of the Option,  the number of shares of Stock to which the Option
pertains,  and such other terms and conditions not inconsistent  with the Plan
as the Committee shall determine.

      6.2 Option Price. Nonstatutory Stock Options and Incentive Stock Options
granted  pursuant to the Plan shall have an  exercise  price which is not less
than the Fair Market Value of the Stock on the date the Option is granted.  To
the extent that an Incentive Stock Option is granted to a Participant who owns
(actually or  constructively  under the  provisions  of Section  424(d) of the
Code) Stock possessing more than 10% of the total combined voting power of all
classes of Stock of the Company or of any  Subsidiary,  such  Incentive  Stock
Option  shall have an  exercise  price which is not less than 110% of the Fair
Market Value on the date the Option is granted.

      6.3 Exercise of Options. Options awarded to a Participant under the Plan
shall be exercisable  at such times and shall be subject to such  restrictions
and conditions  including the  performance of a minimum period of service,  as
the  Committee  may  impose,  either  at or  after  the  time of grant of such
Options;  provided,  however,  that if the Committee does not specify  another
exercise schedule at the time of grant,  each Option shall become  exercisable
in  three  approximately  equal  installments  on  each  of  the  first  three
anniversaries  of the  date of  grant,  subject  to the  Committee's  right to
accelerate   the   exercisability   of   such   Option   in  its   discretion.
Notwithstanding the foregoing, no Option shall be exercisable for more than 10
years after the date on which it is granted; provided, however, in the case of
an  Incentive  Stock Option  granted to a  Participant  who owns  (actually or
constructively  under the  provisions  of  Section  424(d) of the Code)  Stock
possessing  more than 10% of total  combined  voting  power of all  classes of
Stock of the Company or any Subsidiary,  such Incentive Stock Option shall not
be exercisable for more than 5 years after the date on which it is granted.

      6.4 Payment.  The Committee  shall  establish  procedures  governing the
exercise of Options,  which shall  require that written  notice of exercise be
given  and  that  the  Option  price  be paid in full in cash or  equivalents,
including  by  personal  check,  at the time of  exercise  or  pursuant to any

                                     -21-

arrangement  that the  Committee  shall  approve.  The  Committee  may, in its
discretion,  permit a  Participant  to make payment in Stock  already owned by
him,  valued at its Fair Market Value on the date of  exercise,  as partial or
full payment of the exercise price. As soon as practicable  after receipt of a
written  exercise notice and full payment of the exercise  price,  the Company
shall deliver to the  Participant a certificate or  certificates  representing
the acquired shares of Stock.

      6.5 Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary,  no term of this Plan  relating to Incentive  Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under Section 422
of the Code, or, without the consent of any Participant  affected thereby,  to
cause any Incentive Stock Option previously granted to fail to qualify for the
Federal income tax treatment afforded under Section 421 of the Code.  Further,
the aggregate Fair Market Value  (determined as of the time an Incentive Stock
Option is granted) of the Stock with respect to which  Incentive Stock Options
are exercisable for the first time by any Participant during any calendar year
(under all option  plans of the Company and all  Subsidiaries  of the Company)
shall not exceed $100,000.

      6.6 Director Options.  Notwithstanding anything else contained herein to
the  contrary,  on the first  business day  following  the date of each annual
meeting of shareholders  during the term of the Plan,  each Eligible  Director
shall  receive a  Director  Option  to  purchase  4,000  shares of Stock at an
exercise  price per share equal to the Fair  Market  Value of the Stock on the
date of grant.  Each Director Option shall be exercisable six months after the
date of grant and shall remain  exercisable  until the earlier to occur of (i)
the tenth  anniversary  of the date of grant or (ii) the first  anniversary of
the date the Eligible Director ceases to be a member of the Board, except that
if the Eligible  Director ceases to be a member of the Board after having been
convicted  of, or pled guilty or nolo  contendere  to, a felony,  his Director
Options shall be cancelled on the date he ceases to be a director. An Eligible
Director  may  exercise a Director  Option in the manner  described in Section
6.4.

                                  SECTION 7.

                           TERMINATION OF EMPLOYMENT

      7.1  Termination  of  Employment  Due to  Retirement.  Unless  otherwise
determined by the Committee at the time of grant, in the event a Participant's
employment  terminates by reason of  Retirement,  any Options  granted to such
Participant  which are then outstanding  (whether or not exercisable  prior to
the  date of such  termination)  may be  exercised  at any  time  prior to the
expiration  of the term of the  Options  or  within  five (5)  years  (or such
shorter  period  as the  Committee  shall  determine  at the  time  of  grant)
following the  Participant's  termination of employment,  whichever  period is
shorter.  Notwithstanding  any provision contained herein, with respect to any
Incentive Stock Option,  a Participant who terminates his employment by reason
of Retirement  may exercise such  Incentive  Stock Option at any time prior to
the expiration of the term of the Option or within three (3) months  following
the Participant's termination of employment, whichever period is shorter.

      7.2  Termination  of  Employment  Due to  Death  or  Disability.  Unless
otherwise  determined  by the  Committee at the time of grant,  in the event a
Participant's  employment  terminates  by reason of death or  Disability,  any
Options granted to such Participant which are then outstanding (whether or not
exercisable  prior to the date of such  termination)  may be  exercised by the
Participant or the Participant's designated beneficiary, and if none is named,
in accordance  with Section 10.2, at any time prior to the expiration  date of
the term of the  Options or within five (5) years (or such  shorter  period as
the  Committee   shall   determine  at  the  time  of  grant)   following  the
Participant's   termination  of  employment,   whichever  period  is  shorter.
Notwithstanding  any provision contained herein, with respect to any Incentive
Stock Option, a Participant whose employment  terminates by reason of death or
Disability may exercise (or his designated  beneficiary  may exercise,  in the
case of death) such Incentive Stock Option at any time prior to the expiration
of the term of the Option or within one (1) year  following the  Participant's
termination of employment, whichever period is shorter.

      7.3 Termination of Employment For Cause. Unless otherwise  determined by
the Committee at the time of grant, in the event a Participant's employment is
terminated for Cause, any Options granted to such  Participant  which are then
outstanding (whether or not exercisable prior to the date of such termination)
shall be forfeited.

                                     -22-

      7.4  Termination  of Employment for Any Other Reason.  Unless  otherwise
determined  by the  Committee at or after the time of grant,  in the event the
employment of the  Participant  shall  terminate for any reason other than one
described in Section 7.1, 7.2 or 7.3, any Options granted to such  Participant
which  are  exercisable  at the  date  of  the  Participant's  termination  of
employment  shall  remain  exercisable  until the  earlier to occur of (i) the
expiration of the term of such Options or (ii) the thirtieth day following the
Participant's termination of employment, whichever period is shorter.

                                  SECTION 8.

                               CHANGE IN CONTROL

      8.l  Accelerated  Vesting  and  Payment.  Subject to the  provisions  of
Section 8.2 below, in the event of a Change in Control, each Option (excluding
any Director  Option)  shall be cancelled in exchange for a payment in cash of
an amount equal to the excess of the Change in Control Price over the exercise
price for such Option.

      8.2 Alternative Awards.  Notwithstanding Section 8.l, no cancellation or
cash  settlement or other payment shall occur with respect to any Award or any
class of Awards if the Committee reasonably  determines in good faith prior to
the  occurrence  of a Change in  Control  that such  Award or Awards  shall be
honored or assumed, or new rights substituted therefor (such honored,  assumed
or  substituted  award  hereinafter  called  an  "Alternative  Award"),  by  a
Participant's  employer  (or the  parent  or a  subsidiary  of such  employer)
immediately   following  the  Change  in  Control,   provided  that  any  such
Alternative Award must:

      (i) be based  on stock  which is  traded  on an  established  securities
market, or which will be so traded within 60 days of the Change in Control;

      (ii)  provide  such  Participant  (or  each  Participant  in a class  of
Participants)  with rights and  entitlements  substantially  equivalent  to or
better  than the rights,  terms and  conditions  applicable  under such Award,
including,  but not limited  to, an  identical  or better  exercise or vesting
schedule and identical or better timing and methods of payment;

      (iii) have  substantially   equivalent  economic  value  to  such  Award
(determined at the time of the Change in Control); and

      (iv) have terms and conditions  which provide that in the event that the
Participant's   employment  is  involuntarily   terminated  or  constructively
terminated,   any  conditions  on  a   Participant's   rights  under,  or  any
restrictions   on  transfer  or   exercisability   applicable  to,  each  such
Alternative Award shall be waived or shall lapse, as the case may be.

      For this purpose, a constructive termination shall mean a termination by
a   Participant   following  a  material   reduction   in  the   Participant's
compensation,  a material reduction in the Participant's  responsibilities  or
the relocation of the  Participant's  principal place of employment to another
location, in each case without the Participant's written consent.

      8.3 Director  Options.  Upon a Change in Control,  each Director  Option
granted to an Eligible  Director  shall be cancelled in exchange for a payment
in cash of an amount  equal to the excess of the Change in Control  Price over
the  exercise  price for such  Director  Option  unless (i) the Stock  remains
traded on an established securities market following the Change in Control and
(ii) such  Eligible  Director  remains  on the Board  following  the Change in
Control.

      8.4 Options  Granted Within Six Months of the Change in Control.  If any
Option  (including a Director Option) granted within six months of the date on
which a  Change  in  Control  occurs  (i) is held by a person  subject  to the
reporting  requirements  of Section  16(a) of the Act and (ii) is to be cashed
out  pursuant to Section 8.1 or 8.3,  such cash out shall not occur unless and
until,  in the  opinion of the  Company's  counsel,  such cash out could occur
without such reporting  person being  potentially  subject to liability  under
Section 16(b) of the Act by reason of such cash out.

                                     -23-

                                  SECTION 9.

               AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN

      The Board or the  Committee  may at any time  terminate  or suspend  the
Plan, and from time to time may amend or modify the Plan;  provided,  however,
that no  amendment  may be made to Section 6.6 or any other  provision  of the
Plan relating to Director  Options within six months of the last date on which
any such provision was amended. Any such amendment,  termination or suspension
may be made without the approval of the  shareholders of the Company except as
such  shareholder  approval may be required (a) to satisfy the requirements of
Rule 16b-3 under the Act, or any successor rule or regulation,  (b) to satisfy
applicable  requirements of the Code or (c) to satisfy applicable requirements
of any  securities  exchange on which are listed any of the  Company's  equity
securities.  No amendment of the Plan shall result in any  Committee  member's
losing his status as a  "disinterested  person" as defined in Rule 16b-3 under
the Act, or any  successor  rule or  regulation,  with respect to any employee
benefit  plan of the  Company or result in the  Plan's  losing its status as a
plan   satisfying  the   requirements   of  said  Rule  16b-3.  No  amendment,
modification,  or termination of the Plan shall in any manner adversely affect
any Award  theretofore  granted  under the Plan,  without  the  consent of the
Participant.

                                  SECTION 10

                           MISCELLANEOUS PROVISIONS

      10.1  Nontransferability of Awards. No Awards granted under the Plan may
be  sold,   transferred,   pledged,   assigned,   or  otherwise  alienated  or
hypothecated,  other than by will or by the laws of descent and  distribution.
All rights  with  respect to Awards  granted to a  Participant  under the Plan
shall be  exercisable  during his lifetime  only by such  Participant  and all
rights with respect to any Director  Options  granted to an Eligible  Director
shall be exercisable during his lifetime only by such Eligible Director.

      10.2  Beneficiary  Designation.   Each  Participant  and  each  Eligible
Director  under  the Plan  may  from  time to time  name  any  beneficiary  or
beneficiaries  (who may be named  contingently  or  successively)  to whom any
benefit under the Plan is to be paid or by whom any right under the Plan is to
be exercised  in case of his death.  Each  designation  shall revoke all prior
designations by the same Participant or Eligible Director,  shall be in a form
prescribed by the Committee, and shall be effective only when filed in writing
with the Committee. In the absence of any such designation, benefits remaining
unpaid  at the  Participant's  death  shall  be  paid to or  exercised  by his
surviving  spouse,  if any,  or  otherwise  to or by his estate  and  Director
Options outstanding at the Eligible Director's death shall be exercised by his
surviving spouse, if any, or otherwise by his estate.

      10.3 No Guarantee of  Employment or  Participation.  Nothing in the Plan
shall  interfere  with or limit in any way the  right  of the  Company  or any
Subsidiary to terminate any  Participant's  employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary.  No Employee  shall have a right to be selected as a  Participant,
or, having been so selected, to receive any future Awards. Nothing in the Plan
shall  confer  upon an  Eligible  Director a right to continue to serve on the
Board or to be nominated for reelection to the Board.

      10.4 Tax Withholding.  The Company shall have the power to withhold,  or
require a Participant or Eligible Director to remit to the Company,  an amount
sufficient to satisfy Federal,  State, and local  withholding tax requirements
on any Award  under the Plan,  and the  Company  may defer  payment of cash or
issuance of Stock until such requirements are satisfied. The Committee may, in
its discretion,  permit a Participant to elect,  subject to such conditions as
the Committee  shall impose,  (i) to have shares of Stock  otherwise  issuable
under the Plan  withheld  by the  Company or (ii) to  deliver  to the  Company
previously  acquired shares of Stock having a Fair Market Value  sufficient to
satisfy all or part of the Participant's  estimated total Federal,  state, and
local tax obligation associated with the transaction.

                                     -24-

      10.5 Indemnification.  Each person who is or shall have been a member of
the  Committee or of the Board shall be  indemnified  and held harmless by the
Company  against and from any loss,  cost,  liability,  or expense that may be
imposed upon or  reasonably  incurred by him in  connection  with or resulting
from any claim, action, suit, or proceeding to which he may be made a party or
in which he may be  involved  by reason of any action  taken or failure to act
under  the  Plan and  against  and  from  any and all  amounts  paid by him in
settlement  thereof,   with  the  Company's  approval,   or  paid  by  him  in
satisfaction of any judgment in any such action,  suit, or proceeding  against
him, provided he shall give the Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it on his
own behalf. The foregoing right of indemnification  shall not be exclusive and
shall be  independent  of any other  rights of  indemnification  to which such
persons may be entitled under the Company's  Articles of Incorporation or Code
of Regulations, by contract, as a matter of law, or otherwise.

      10.6 No  Limitation  on  Compensation.  Nothing  in the  Plan  shall  be
construed to limit the right of the Company to establish other plans or to pay
compensation to its Employees or directors,  in cash or property,  in a manner
which is not expressly authorized under the Plan.

      10.7  Requirements  of Law.  The  granting of Awards and the issuance of
shares  of  Stock  shall  be  subject  to  all  applicable  laws,  rules,  and
regulations,  and to such approvals by any  governmental  agencies or national
securities  exchanges as may be required.  Notwithstanding  the foregoing,  no
Stock shall be issued under the Plan unless the Company is satisfied that such
issuance will be in compliance  with applicable  federal and state  securities
laws.  Certificates  for Stock delivered under the Plan may be subject to such
stock  transfer  orders  and  other  restrictions  as the  Committee  may deem
advisable  under  the  rules,   regulations  and  other  requirements  of  the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed or traded, the Nasdaq National Market or any applicable federal or
state securities law. The Committee may cause a legend or legends to be placed
on any such certificates to make appropriate reference to such restrictions.

      10.8 Term of Plan.  The Plan shall be effective upon its adoption by the
Committee,  subject to approval by the Board and  approval by the  affirmative
vote of the  holders of a majority  of the shares of voting  stock  present in
person or represented by proxy at the 1996 Annual Meeting of Shareholders. The
Plan shall continue in effect, unless sooner terminated pursuant to Section 9,
until the tenth anniversary of the date on which it is adopted by the Board.

      10.9  Governing Law. The Plan, and all  agreements  hereunder,  shall be
construed in accordance with and governed by the laws of the State of Ohio.

      10.10 No  Impact On  Benefits.  Plan  Awards  are not  compensation  for
purposes of calculating an Employee's rights under any employee benefit plan.

                                     -25-

                                                                    Exhibit 11

                              THE SCOTTS COMPANY


                  Computation of Net Income Per Common Share
                              Primary (Unaudited)
                (Dollars in thousands except per share amounts)


                                  For the Three Months Ended    For the Six Months Ended
                                     April 1      March 30       April 1      March 30
                                       1995         1996          1995          1996
                                  --------------------------    ------------------------
                                                                         
Net income for computing net
income per common share:

Net income ....................   $    13,793   $    10,630   $     9,196   $      3,456
Preferred stock dividend ......          --            --            --           (4,876)
                                  -----------   -----------   ------------    ----------

Net income (loss) applicable to
    common shares .............   $    13,793   $    10,630   $     9,196   $     (1,420)
                                  ===========   ===========   ============    ==========
Net income (loss) per
  common share:

Net income (loss) per
  common share ................   $       .73   $       .36   $       .49   $       (.08)   ==
                                  ===========   ===========   ============    ==========


                    Computation of Weighted Average Number
                   of Common Shares Outstanding (Unaudited)

                                  For the Three Months Ended    For the Six Months Ended
                                     April 1      March 30       April 1      March 30
                                       1995         1996          1995          1996
                                  --------------------------    ------------------------
Weighted average common shares
  outstanding during the ......    18,667,064    18,861,442    18,667,064     18,777,689
  period

Assuming conversion of ........          --      10,263,158          --             --
preferred stock

Assuming exercise of options
  using the Treasury Stock
  Method ......................        95,294       225,415       153,103           --
                                  -----------   -----------   ------------    ----------

Weighted average number of
  common shares outstanding ...    18,820,167    29,350,015    18,762,358     18,777,689
  as adjusted .................    ==========    ==========    ==========     ==========    ==========

The earnings per share computation is based on the weighted average number of common shares and common share equivalents (stock options, convertible preferred stock and warrants) outstanding each period. The Class A Convertible Preferred Stock were issued in connection with the Miracle-Gro merger transactions on May 19, 1995. These shares were not considered in the earnings per share computation for the six months ended March 30, 1996 because they were antidilutive for such period. Fully diluted net income (loss) per common share is considered to be the same as primary net income (loss) per common share as it was not materially different from primary net income (loss) per common share. Page 26
 

5 This schedule contains summary financial information extracted from the consolidated balance sheet and consolidated statement of income of The Scotts Company and is qualified in its entirety by reference to the Form 10-Q for the quarter ended March 30, 1996. 1000 U.S. DOLLARS 6-MOS SEP-30-1996 OCT-01-1995 MAR-30-1996 1 8,487 0 319,300 3,908 187,370 533,156 237,030 89,648 988,177 247,582 0 0 177,255 211 206,277 988,177 369,152 369,407 199,549 348,698 (340) 0 14,719 6,330 2,874 3,456 0 0 0 3,456 (.08) (.08)