Exhibit 10.3


 


OPTION EXERCISE PERIOD EXTENSION AGREEMENT


 


This
Option Exercise Period Extension Agreement (“Agreement”) is entered into as of
the        day of                       ,
2009 by and between Sally Beauty Holdings, Inc. (“Sally”) and                       
(“Employee”) (collectively, the “Parties”).


 


WHEREAS, Employee is a “Participant”,
as the term is defined, in the Sally Beauty Holdings 2007 Omnibus Incentive
Plan, as amended as of the date of this Agreement (the “Plan”), hereby
incorporated by reference, and has been awarded certain stock options under the
terms of the Plan, as set forth on Attachment “A” (the “Options”); and,


 


WHEREAS, Employee wishes to
agree to the terms of this Agreement in order to extend the period under which
options can be exercised under the Plan; and,


 


WHEREAS, the sum of Employee’s
age and years of service to Sally and its predecessors exceeds 75, Employee’s
separation is deemed to be a “Retirement” under the terms of the Plan, and
Employee is otherwise believed to be eligible to enter into this Agreement ;


 


NOW THEREFORE, the parties
agree as follows:


 


1.                                       Extension Of
Exercise Period.  In return
for executing and thereafter abiding by the terms of this Agreement and the
Plan, Employee is hereby awarded the option exercise period extension benefits
as set forth in Paragraph 5.3(b)(ii) of the Plan.  Employee acknowledges and agrees that through
incorporation by reference, the rights and obligations of the Parties set forth
in this Plan are incorporated into this Agreement.


 


2.                                       Employer
Confidential Information. 
Employee agrees that the information, observations and data obtained by
Employee during the course of Employee’s employment with Employer and any
relevant Employer Affiliate(1) are the sole property of 


 






(1)
“Employer Affiliate” for purposes of this agreement shall mean any affiliate,
subsidiary or other entity which has Sally Beauty Holdings, Inc. (or its
successor) as the ultimate parent company. 
The list of Employer Affiliates currently includes, but is not limited
to:  Sally Beauty Supply LLC, Beauty
Systems Group LLC, Innovation-Successful Salon Services, Armstrong-McCall, L.P.
and any entity operating “CosmoProf” stores in the United States.  If relevant in context, the term “Employer
Affiliate” shall also include any predecessor entity such as, but not limited
to, Alberto-Culver Company, Sally Beauty Company, Inc. and Beauty Systems
Group, Inc., Sally Holdings, Inc. and New Sally Holdings, Inc.


 


	
  Initial:

  	
  Employer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Employee:

  	
   

  	
   

  



 


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the Employer.    Employee agrees that from the date of this
Agreement and thereafter, without the express written consent of the Employer's
President, Employee will not disclose to any person or entity or use for Employee's
own account or for the benefit of any third party any Confidential Information(2),
unless and only to the extent that such Confidential Information becomes
generally known to and available for use by the public or in the trade other
than as a result of the Employee's acts or inaction act or the wrongful act of
any third party.   The parties agree that
Confidential Information and all elements of it are important material,
confidential and gravely affect the successful conduct of the Employer and
relevant Employer Affiliate.


 


Employee
states that Employee has delivered to Employer all memoranda, notes, plans,
records, reports, computer disks and memory, and other documentation and copies
thereof (however stored or recorded) relating to the business of the Employer
and any relevant Employer Affiliate, and/or which contain Confidential
Information, which Employee possesses or has custody or control of.  Employee has not retained copies.  Employee has also returned all of Employer’s
and all relevant Employer Affiliates’ 
property within Employee’s custody or control.


 


3.                                       Unfair
Competition.


 


A.                                   Beginning on
the day after Employee’s final date of employment with Employer and any
relevant Employer Affiliate, (the “Termination Date”) and ending on the day
four (4) years thereafter, Employee agrees he shall not, directly or
indirectly, engage in “Unfair Competition”. 
Employee agrees that it shall be considered “Unfair Competition” for him
to:


 


i.  own any interest in, operate, join, control,
or participate as a partner, director, principal, officer or agent; enter into
the employment of, act as a consultant to, or perform any services for a person
or entity (collectively, “Entity”) which competes with the Beauty Supply
Business,(3) except where: (x) Employee’s interest or association is 


 






(2)
“Confidential Information” for purposes of this Agreement shall include but not
be limited to:  Employer’s or any
Employer Affiliate’s business plans and future product or market developments;
all financial information; information regarding suppliers and costs of
products and other supplies; financing programs; and any other information
regarding personnel, operations, 
overhead, distribution; present or future plans related to real estate
and leaseholds (including site selection), computer and communication systems,
software operating systems, source codes and the like.


 


(3)
“Beauty Supply Business” for purposes of this Agreement shall mean the
distribution and/or sale of beauty supplies (including but not limited to such
items as shampoos, conditioners, hair color, straighteners, salon accessories,
electricals, salon furniture, incidental cosmetic and personal ornamentation
items and the like) to individual consumers, salons, subdistributors or
franchisees, beauty schools and/or individual beauty professionals through
stores and/or inside/outside salespeople.


 


	
  Initial:

  	
  Employer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Employee:

  	
   

  	
   

  



 


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unrelated
to the Beauty Supply Business, (y) such Entity’s gross revenue gross
revenue from the Beauty Supply Business is less than 10% of the Entity’s total
gross revenue, and (z) Employee’s interest is directly or indirectly less
than 2% of that of the Entity; or,


 


ii.  solicit for employment or employ or otherwise
interfere with the relationship of the Employer and any Employer Affiliate with
any natural person who is or was employed by or otherwise engaged to perform
services for Employer or any Employer Affiliate at any time during Employee’s
employment with Employer or any Employer Affiliate or during the twelve-month
period preceding such solicitation, employment or interference (in the case of
activity after the termination of Employee’s employment); or,


 


iii.  interfere with the business relationship
between Employer or any Employer Affiliate 
and one of its customers or suppliers, by soliciting, inducing, or
otherwise encouraging a customer or supplier of Employer or the Employer
Affiliate to reduce or stop doing business with Employer or the Employer
Affiliate; or,


 


iv.  disparage the business or interests of
Employer or any Employer Affiliate; or,


 


iv.  supervision of any of the foregoing
activities.


 


B.                                     Employee will
give Employer written notice of any offer that he receives from a competing
business before accepting it. Employee will also provide Employer at least
thirty (30) days notice before performing any personal services for a competing
business (such as a Beauty Supply Business) and meet with an Employer
representative to discuss the nature of his new position if Employer requests
such a meeting to help avoid unnecessary disputes.  Employer understands that Employer is not
required to request such a meeting and that a failure to resolve disputes
through such a meeting will not be considered a waiver of any rights by either
Party.


 


C.                                     Employer may
notify any future or prospective employer or third party of the existence of
this Agreement.  Employee stipulates that
the harm caused by a violation of this Agreement by him would be irreparable,
cannot be readily and fully remedied through monetary damages, and shall
warrant injunctive relief in addition to, and not in place of, any other legal
remedies available for any breach, including reasonable attorney’s fees and
costs. Employee understands and agrees that if he is found to have violated one
of the time-limited, post-employment-termination restrictions on his conduct
created by this Agreement, the time period for that restriction will be
extended by one day for each day that he is found to have been in violation of
the restriction up to a maximum period of nine (9) months.  If there is a dispute over this Agreement,
Employee agrees that whoever prevails shall be entitled to recover from the
other party all reasonable costs and expenses including reasonable attorneys’
fees and costs; provided, however, that Employer need not get all relief that
it requests in order to be considered a prevailing party. 


 


	
  Initial:

  	
  Employer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Employee:

  	
   

  	
   

  



 


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4.                                       Governing Law. This Agreement
shall be construed in accordance with and governed by the laws of the State of
Delaware, without reference to principles of conflict of laws which would
require application of the law of another jurisdiction, except to the extent
that the corporate law of the State of Delaware specifically and mandatorily
applies.


 


5.                                       Severability;
Blue Pencil.  In the event
that any one or more of the provisions of this Agreement shall become invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.  If, in the opinion of
any court of competent jurisdiction such covenants are not reasonable in any
respect, such court shall have the right, power and authority to exercise or
modify such provision or provisions of these covenants as to the court shall
appear not reasonable and enforce the remainder of these covenants so amended.


 


6.                                       Headings and
Captions.  The headings
and captions herein are provided for reference and convenience only, shall not
be considered part of this Agreement, and shall not be employed in the
construction of this Agreement.


 


7.                                       Entire
Agreement.  This
Agreement contains all the terms and conditions agreed upon by the parties with
respect to the subject matter hereof other than that certain Release and
Separation Agreement between the parties (the “Separation Agreement”), and no
provision expressed in this Agreement may be altered, modified and/or cancelled
except upon the express written consent of the parties.  The terms and conditions contained in this
Agreement supersede any previous agreement or arrangement between the parties
other than the Separation Agreement. 
This Agreement and all rights and benefits are personal to Employee, and
neither this Agreement, nor any Employee right or interest arising in this
Agreement, shall be voluntarily sold, transferred or assigned by Employee,
except as expressly set forth in the Plan.


 


WHEREFORE,
the parties have agreed as hereinbefore set forth.


 


	
  SALLY
  BEAUTY HOLDINGS, INC.:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  by

  	
   

  	
   

  	
   

  
	
  Gary
  Winterhalter, Chief Executive Officer

  	
   

  
				



 


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