Exhibit 10.32


 


ALBERTO-CULVER COMPANY EMPLOYEE
STOCK OPTION PLAN OF 2003


 


STOCK OPTION AGREEMENT


FOR EMPLOYEES


 


	
  Optionee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total
  Shares Subject to Option:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Option
  Exercise Price Per Share:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  of Grant:

  	
  October 21,
  2009

  	
   

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
  October 21,
  2009

  	
   

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
  October 21,
  2019

  	
   

  
	
   

  	
   

  	
   

  
	
  Type of Stock Option:

  	
  Non-Statutory Stock Option

  	
   

  



 


1.             Grant of Option.  Sally Beauty Holdings, Inc., a Delaware
corporation (the “Company”),
hereby grants to the optionee named above (the “Optionee”) an option (the “Option”) to purchase
the total number of shares of Common Stock set forth above (the “Shares”) at the
exercise price per Share set forth above (the “Exercise Price”), in accordance with
this Stock Option Agreement (“Option Agreement”) and subject to the terms and
conditions of the Alberto-Culver Company Employee Stock Option Plan of 2003, as
amended from time to time (the “Plan”), which are incorporated herein by reference.  Unless otherwise defined herein, capitalized
terms used herein shall have the same meanings ascribed to them in the Plan.


 


2.             Vesting; Time of Exercise.  Subject to the terms and conditions of the
Plan and this Option Agreement, the Option shall vest and become exercisable in
the following cumulative installments, as follows:


 


(a)           Twenty-five percent (25%) of
the Shares shall be exercisable at any time on or after the day immediately
preceding the first anniversary of the vesting commencement date set forth
above (the “Vesting Commencement Date”);


 


(b)           Up to an additional
twenty-five percent (25%) of the Shares shall become exercisable at any time on
or after the day immediately preceding the second anniversary of the Vesting
Commencement Date;


 


(c)           Up to an additional
twenty-five percent (25%) of the Shares shall become exercisable at any time on
or after the day immediately preceding the third anniversary of the Vesting
Commencement Date; and


 

















 


(d)           The remaining Shares shall
become exercisable at any time on or after the day immediately preceding the
fourth anniversary of the Vesting Commencement Date.


 


If
an installment covers a fractional Share, such installment will be rounded to
the next highest Share, except the final installment, which will be for the
balance of the total Shares; provided, that, absent the occurrence of any
change in the outstanding Common Stock or any event that could cause a change
in the outstanding Common Stock as described in Section 10 of the Plan,
the Optionee shall in no event be entitled under the Option to purchase a
number of shares of Common Stock greater than the “Total Shares Subject to
Option” indicated above.  Unless otherwise
provided in the Plan or this Option Agreement, the Option shall expire on the
Expiration Date set forth above and must be exercised, if at all, on or before
the Expiration Date.  Unless otherwise
provided below, upon the effective date of an Optionee’s termination of service
the unvested portion of the Optionee’s Option under this Option Agreement shall
be forfeited.


 


If
the Optionee’s service with the Company or any subsidiary is terminated as a
result of the Optionee’s retirement (as defined in the Plan) and the Optionee
does not agree to be bound by the restrictions of Section 5.5 of the Sally
Beauty Holdings, Inc. 2007 Omnibus Incentive Plan (the “2007 Plan”), then
the Option shall be exercisable only to the extent that the Optionee could
exercise it on the date of his or her retirement.  If the Optionee’s service with the Company or
any subsidiary is terminated as a result of the Optionee’s retirement and the
Optionee agrees to be bound by the restrictive covenants of Section 5.5 of
the 2007 Plan for the three-year period following Optionee’s retirement then
Optionee will continue to vest in the portion of the Option that was not vested
and exercisable as of the date of the Optionee’s retirement for the three-year
period following Optionee’s retirement as if the Optionee’s service had not
terminated, unless Optionee violates the any of the restrictive covenants of Section 5.5
of the 2007 Plan during such three-year period. 
If, in the sole discretion of the Committee, the Optionee violates one
of the restrictive covenants of Section 5.5 of the 2007 Plan during the
three-year period following Optionee’s retirement, then all Options, whether or
not vested, shall be immediately forfeited and cancelled as of the date of such
violation.  If the Optionee’s service
with the Company or any subsidiary is terminated as a result of the Optionee’s
death or disability (as defined in the Plan) then the Optionee shall, in
addition to the portion of the Option in which the Optionee was vested as of
the effective date of any such termination of service, vest in that portion of
the Option that becomes vested and exercisable on the next vesting date
following the effective date of the Optionee’s termination of service as a
result of the Optionee’s death or disability. 
If the Optionee voluntarily terminates service for any other reason the
Option shall be exercisable only to the extent the Optionee was vested on the
effective date of such termination of service. 
Unless, as described in Section 9.2 of the 2007 Plan, an
Alternative Award (as defined in the 2007 Plan) replaces this Option, this
Option shall become fully vested and exercisable upon the occurrence during the
term of this Option Agreement of a Change in Control.  If the Optionee’s service is terminated for
Cause (or if, following the date of termination of the Optionee’s service for
any reason, the Compensation Committee determines that circumstances exist that
the Optionee’s service could have been terminated for Cause) then all Options
shall be immediately forfeited and cancelled as of the date of such
termination.


 


2

















 


3.             Exercise of Option.


 


(a)           Right to Exercise.  The Option shall be exercisable in accordance
with the vesting provisions contained in Section 2 of this Option
Agreement and with the other applicable provisions of the Plan and this Option
Agreement.  Unless, as described in Section 9.2
of the 2007 Plan, an Alternative Award (as defined in the 2007 Plan) replaces
this Option, the Option shall be subject to the provisions of Section 11
of the Plan relating to the exercisability or termination of the Option in the
event of a Change in Control.


 


(b)           Method of Exercise.  The Option shall be exercisable only by
delivery to the Company of an executed Stock Option Exercise Notice (the “Exercise
Notice”) in the form attached hereto as Exhibit A, or in such other
form approved by the Committee, which shall state the Optionee’s election to
exercise the Option, the whole number of Shares in respect of which the Option
is being exercised, and such other provisions as may be required by the
Committee or necessary to comply with securities and other applicable laws. The
Exercise Notice shall be signed by the Optionee and shall be delivered to the
Company by such method as may be permitted by the Committee, accompanied (in
any case) by payment of, or provision for the payment of, the Exercise Price
for each Share covered by the Exercise Notice, as described in Section 4
of this Option Agreement.  The Option
shall be deemed to be exercised to the extent provided in the Exercise Notice
upon receipt by the Company of such written Exercise Notice and the Exercise
Price.


 


(c)           Issuance of Shares.  If the Exercise Notice and payment are in a
form and substance satisfactory to the Company (or its counsel), and the
Optionee or any other person permitted to exercise the Option has complied with
Section 5 of this Option Agreement, the Company shall issue or cause the
issuance of, in the name of the Optionee or Optionee’s legal representative,
the Shares purchased by such exercise of the Option.


 


4.             Method of Payment. The Optionee’s
delivery of the signed Exercise Notice to exercise the Option (in whole or in
part) shall be accompanied by full payment of the Exercise Price for the Shares
being purchased.  Payment for the Shares
may be made in cash (by check) or at the election of the Optionee and where
permitted by law in one or more of the following methods: (i) if a public
market for the Common Stock exists, through a “same day sale” arrangement
between the Optionee and a broker-dealer that is a member of the National
Association of Securities Dealers, Inc. (an “NASD Dealer”) whereby
the Optionee elects to exercise the Stock Option and to sell a portion of the
shares of Common Stock so purchased to pay for the exercise price and whereby
the NASD Dealer commits upon receipt of such shares of Common Stock to forward
the exercise price directly to the Company; (ii) if a public market for
the Common Stock exists, through a “margin” commitment from the Optionee and an
NASD Dealer whereby the Optionee elects to exercise the Stock Option and to
pledge the shares of Common Stock so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
exercise price, and whereby the NASD Dealer commits upon receipt of such shares
of Common Stock to forward the exercise price directly to the Company; (iii) in
any other form of valid consideration that is acceptable to the Committee in
its sole discretion; provided, however, that such other form of consideration
is not otherwise prohibited by the Plan or this Option Agreement; or (iv) by
any combination of the foregoing. 
Notwithstanding the foregoing, the forms of payment provided in (i) or
(ii) above shall not be available to any Optionee who is a member
of the Board or an Executive Officer of the Company if any such form of payment
would be treated as a personal loan prohibited under Section 13(k)


 


3

















 


of the Exchange Act, and
Optionee shall not provide for payment of the Exercise Price for the
Shares being purchased by surrendering for cancellation shares of Common Stock
owned by the Optionee at the Fair Market Value per share at the time of
exercise.


 


5.             Tax Withholding Obligations.  No Shares shall be delivered to the Optionee,
or any other person permitted to exercise the Option, pursuant to the exercise
of the Option until the Optionee or such other person has made arrangements
acceptable to the Committee or its designee for the satisfaction of all
applicable income tax, employment tax, and social security tax withholding
obligations, including obligations incident to the receipt of Shares.  Upon exercise of the Option, the Company or
the Optionee’s employer may offset or withhold (from any amount owed by the
Company or the Optionee’s employer to the Optionee) or collect from the
Optionee, or such other person, an amount sufficient to satisfy such tax
obligations and/or the employer’s withholding obligations.


 


6.             Termination or Change of Service.


 


(a)           Post-Termination Exercise.  Subject to the provisions of Sections 7 and 8
of this Option Agreement, if the Optionee’s service with the Company or any subsidiary
terminates, other than as described in Section 6(b) of this Option
Agreement, the Optionee may, to the extent otherwise so entitled at the date of
Optionee’s termination of service (the “Termination Date”), exercise the Option
until the 60th day following the Optionee’s Termination Date
(the “Post-Termination Exercise Period”).  Upon termination of the Optionee’s
service with the Company or any subsidiary as described in Section 6(b) of
this Option Agreement, the Optionee’s right to exercise the Option shall,
except as otherwise determined by the Committee, terminate concurrently with
the termination of the Optionee’s service with the Company or subsidiary.  In no event may the Option be exercised later
than the Expiration Date set forth on the first page of this Option
Agreement.  Except as provided in
Sections 7 and 8 of this Option Agreement, to the extent that the Optionee is
not entitled to exercise the Option on the Termination Date, or if the Optionee
does not exercise the Option within the Post-Termination Exercise Period, the
Option shall terminate.


 


(b)           No Post-Termination Exercise.  Unless the Committee otherwise determines, if
the Optionee’s service with the Company or any subsidiary is terminated either (i) by
the Company or a subsidiary for Cause, or (ii) if Optionee’s employment is
subject to the terms of a then-effective written employment agreement between
the Optionee and the Company or an affiliate, by the Optionee without compliance
with, or without “good reason” or words of similar import under, the terms of
such employment agreement, then the Optionee’s right to exercise the Option
shall immediately terminate.  For
purposes of this Option Agreement, the term “Cause” for termination by the
Company or a subsidiary of the Optionee’s service with the Company or any subsidiary
shall have the meaning set forth in a then-effective written employment
agreement between the Optionee and the Company or such subsidiary or, in the
absence of such a definition in a then-effective written employment agreement
(in the determination of the Committee), shall mean Cause as otherwise provided
in the 2007 Plan.  The Committee shall
have discretion for the purposes of this Option Agreement to determine whether
any termination of service by the Optionee is in compliance with, or is for “good
reason” or words of similar import, under the terms of a then-effective written
employment agreement.


 


4

















 


7.             Retirement. If the
Optionee’s service with the Company or any subsidiary terminates as a result of
the Optionee’s retirement (as defined in the Plan) and the Optionee does not
agree to be bound by the restrictive covenants of Section 5.5 of the 2007 Plan
then the Optionee may exercise the Option until the earlier of (i) the
twelve-month anniversary of the effective date of the Optionee’s termination of
service as a result of the Optionee’s retirement, or (ii) the Expiration
Date.  If the Optionee’s service with the
Company or any subsidiary terminates as a result of the Optionee’s retirement
and the Optionee agrees to be bound by the restrictive covenants of Section 5.5
of the 2007 Plan then the Optionee will continue to vest in the Options
pursuant to the provisions of Section 2(d) of this Option Agreement
and the Optionee may exercise the Option until the earlier of (i) 60 days
following the earlier of (A) the third anniversary of the Optionee’s retirement,
or (B) the twelve-month anniversary following the Optionee’s death, or (ii) the
Expiration Date.


 


8.             Death or Disability.  In the event of the termination of the
Optionee’s service with the Company or any subsidiary as a result of the
Optionee’s death or disability (as defined in the Plan) the Optionee, the Optionee’s
estate, or any person who acquired the right to exercise the Option by bequest
or inheritance, as applicable, may, to the extent the option was vested on the
effective date of the Optionee’s death or disability, including any additional
Options which vested pursuant to the terms of Section 2(d) of this
Option Agreement as a result of the Optionee’s death or disability, exercise
the Option until the earlier of (i) the twelve-month anniversary of the
effective date of the Optionee’s termination of service as a result of the
Optionee’s death or disability, or (ii) the Expiration Date.


 


9.             Transferability of Option.  Neither the Option nor any of the Optionee’s
rights under this Option Agreement may be transferred or assigned in any manner
other than by will or by the law of descent and distribution or as may
otherwise be permitted by the Committee or by the terms of the Plan.  The Option and those rights may be exercised
during the lifetime of the Optionee only by the Optionee.


 


10.           Tax Consequences.  Set forth below is a brief summary, as of the
Date of Grant, of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. 
THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO CHANGE.  THE OPTIONEE
SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
SHARES.


 


(a)           Exercise of Non-Qualified
Stock Option.  There may
be a regular federal income tax liability upon the exercise of the Option.  The Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to
the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price.  If the
Optionee is an employee or former employee, the Company will be required to
withhold from the Optionee’s compensation or collect from the Optionee and pay
to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.


 


(b)           Disposition of Shares.  If the Shares are held for at least one year
before disposition, any gain on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.


 


11.           Term of Option.  The Option may be exercised no later than the
Expiration Date or such earlier date as otherwise provided in this Option
Agreement.


 


5

















 


12.           Entire Agreement; Governing Law.  The Plan and this Option Agreement (with the
Exercise Notice, if the Option is exercised) constitute the entire agreement of
the Company and the Optionee (collectively the “Parties”) with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Parties with respect to the subject matter hereof, and
may not be modified adversely to the Optionee’s interest except by means of a
writing signed by the Parties.  Notwithstanding
any language in this Agreement to the contrary, to the extent of any conflict
between this Agreement and any written employment agreement with Optionee, the
terms of such employment agreement shall control.  Nothing in the Plan and this Option Agreement
(except as expressly provided therein or herein) is intended to confer any
rights or remedies on any person other than the Parties.  The Plan and this Option Agreement are to be
construed in accordance with and governed by the internal laws of the State of
Delaware without giving effect to any choice-of-law rule that would cause
the application of the laws of any jurisdiction other than the internal laws of
the State of Delaware, to the rights and duties of the Parties.  Should any provision of the Plan or this
Option Agreement be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.


 


13.           Interpretive Matters.  Whenever required by the context, pronouns
and any variation thereof shall be deemed to refer to the masculine, feminine,
or neuter, and the singular shall include the plural, and vice versa.  The term “include” or “including” does not
denote or imply any limitation.  The
captions and headings used in this Option Agreement are inserted for
convenience and shall not be deemed a part of the Option or this Option
Agreement for construction or interpretation.


 


14.           Notice.  Any notice or other communication required or
permitted hereunder shall be given in writing and shall be deemed given,
effective, and received upon prepaid delivery in person or by courier or upon
the earliest of delivery or the third business day after deposit in the United
States mail if sent by certified mail, with postage and fees prepaid, addressed
to the other Party at its address as shown beneath its signature in this Option
Agreement, or to such other address as such Party may designate in writing from
time to time by notice to the other Party in accordance with this Section 14.


 


 


	
   

  	
  SALLY BEAUTY HOLDINGS, INC.

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


6

















 


THE OPTIONEE ACKNOWLEDGES
AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED OTHERWISE HEREIN, THE SHARES
SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE
OPTIONEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER).  THE OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS OPTION AGREEMENT OR THE PLAN SHALL CONFER UPON THE
OPTIONEE ANY RIGHT WITH RESPECT TO FUTURE GRANTS OR CONTINUATION OF THE
OPTIONEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE
OPTIONEE’S RIGHT OR THE RIGHT OF THE OPTIONEE’S EMPLOYER TO TERMINATE OPTIONEE’S
CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE.  THE OPTIONEE ACKNOWLEDGES THAT UNLESS THE
OPTIONEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY,
THE OPTIONEE’S STATUS IS AT-WILL.


 


The Optionee acknowledges
receipt of a copy of the Plan, represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions hereof and thereof. 
The Optionee has reviewed this Option Agreement, the Plan, and the
Exercise Notice in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Option Agreement, and fully understands all
provisions of this Option Agreement, the Plan and the Exercise Notice.  The Optionee further agrees to provide the
Company with such information as the Company considers necessary for the
administration of this Option Agreement.


 


 


	
   

  	
  OPTIONEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print
  Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  



 


7

















 


EXHIBIT A


 


ALBERTO-CULVER COMPANY EMPLOYEE
STOCK OPTION PLAN OF 2003


 


STOCK OPTION EXERCISE NOTICE


 


This
Stock Option Exercise Notice (“Exercise Notice”) is made this         day
of                         ,
20       between Sally Beauty Holdings, Inc.
(the “Company”),
and the optionee named below (the “Optionee”) pursuant to the Alberto-Culver
Company Employee Stock Option Plan of 2003 (the “Plan”). 
Unless otherwise defined herein, the capitalized terms used in this
Exercise Notice shall have the meaning ascribed to them in the Plan and in the
Stock Option Agreement (“Option
Agreement”) to which this Exercise Notice relates.


 


	
  Award
  Number:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Optionee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number
  of Shares Purchased:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Option
  Exercise Price Per Share:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate
  Purchase Price:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date
  of Grant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Type of Stock Option:

  	
   

  	
  Non-Qualified Stock Option

  	
   

  



 


The
Optionee hereby delivers to the Company the Aggregate Purchase Price set forth
above (“Aggregate
Purchase Price”) in cash as indicated below or to the extent
provided for in the Option Agreement and approved by the Committee by accepting
this Exercise Notice, as follows (as applicable, check and complete):


 


	
  o

  	
  in
  cash in the amount of
  $                        ,
  receipt of which is acknowledged by the Company;

  
	
   

  	
   

  
	
  o

  	
  through
  a “same-day-sale” commitment, delivered herewith, from the Optionee and the
  NASD Dealer named therein in the amount of
  $                                      ;

  
	
   

  	
   

  
	
  o

  	
  through
  a “margin” commitment, delivered herewith, from the Optionee and the NASD
  Dealer named therein in the amount of
  $                                    ;

  



 


The Company and the Optionee
(the “Parties”) hereby agree as follows:


 


1.             Purchase of Shares.  On this date and subject to the terms and
conditions of this Exercise Notice, the Optionee hereby exercises the Option
granted in the Option Agreement between the Parties, dated as of the Date of
Grant set forth above, with respect to the Number of Shares Purchased set forth
above of the Common Stock (the “Shares”) at the Aggregate


 


1

















 


Purchase Price equal to the Option
Exercise Price Per Share set forth above multiplied by the Number of Shares
Purchased set forth above.  The term “Shares”
refers to the Shares purchased under this Exercise Notice and includes all
securities received (a) in replacement of the Shares, and (b) as a
result of stock dividends or stock splits in respect of the Shares.


 


2.             Representations of the Optionee.  The Optionee represents and warrants to the
Company that the Optionee has received, read and understood the Plan, the
Option Agreement and this Exercise Notice and agrees to abide by and be bound
by their terms and conditions.


 


3.             Rights as Stockholder.  Until Optionee receives evidence of the
issuance of the Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Shares, notwithstanding
the exercise of the Option.  To the
extent the Optionee exercises the Option pursuant to the execution and delivery
of this Exercise Notice, the Company shall issue to Optionee the shares of
Common Stock covered by this Exercise Notice. 
Evidence of the issuance of the shares of Common Stock purchased
pursuant to the exercise of the Option may be accomplished in such manner as
the Company or its authorized representatives shall deem appropriate including,
without limitation, electronic registration, book-entry registration or
issuance of a certificate or certificates in the name of the Optionee or in the
name of such other party or parties as the Company and its authorized
representatives shall deem appropriate. 
No adjustment will be made for a dividend or other right for which the
record date is prior to the date the Optionee receives evidence of the issuance
of the Shares.


 


In the event the shares of
Common Stock issued pursuant to the exercise of this Option remain subject to
any additional restrictions, the Company and its authorized representatives
shall take such actions as the Company, or its authorized representative, deems
appropriate to ensure that the Optionee is prohibited from entering into any
transaction which would violate any such restrictions, until such restrictions
lapse.


 


4.             Tax Withholding Obligations.  The Optionee agrees to satisfy all applicable
federal, state and local income, employment and other tax withholding
obligations and herewith delivers to the Company the amount necessary, or has
made arrangements acceptable to the Company, to satisfy such obligations as
provided in the Plan and the Option Agreement.


 


5.             Tax Consequences.  The Optionee understands that he or she may
suffer adverse tax consequences as a result of the Optionee’s purchase or
disposition of the Shares.  The Optionee
represents that the Optionee has consulted with any tax consultant(s) he
or she deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any tax advice.


 


6.             Successors and Assigns.  The Company may assign any of its rights
under this Exercise Notice, and this Exercise Notice shall inure to the benefit
of the successors and assigns of the Company. 
Subject to the restrictions on transfer herein set forth, this Exercise
Notice shall be binding upon the Optionee and his or her heirs, executors,
administrators, successors and permitted assigns.


 


7.             Interpretive Matters.  Whenever required by the context, pronouns
and any variation thereof shall be deemed to refer to the masculine, feminine,
or neuter, and the singular shall include the plural, and vice versa.  The term “include” or “including” does not
denote or imply any limitation.  The
captions and headings used in this Exercise Notice are inserted for


 


2

















 


convenience and shall not be
deemed a part of this Exercise Notice for construction or interpretation.


 


8.             Entire Agreement; Governing Law.  This Exercise Notice, with the Plan and the
Option Agreement, constitute the entire agreement of the Parties with respect
to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Parties with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Parties. 
Nothing in this Exercise Notice or in the Plan or the Option Agreement
(except as expressly provided herein or therein) is intended to confer any
rights or remedies on any person other than the Parties.  This Exercise Notice (like the Plan and the
Option Agreement) is to be construed in accordance with and governed by the
internal laws of the State of Delaware, without giving effect to any
choice-of-law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of Texas to the rights
and duties of the Parties.  Should any
provision of the Plan, the Option Agreement, or this Exercise Notice be
determined by a court of law to be illegal or unenforceable, such provision
shall be enforced to the fullest extent allowed by law, and the other
provisions shall nevertheless remain effective and shall remain enforceable.


 


9.             Notice.  Any notice or other communication required or
permitted hereunder shall be given in writing and shall be deemed given,
effective, and received upon prepaid delivery in person or by courier or upon
the earlier of delivery or the third business day after deposit in the United
States mail if sent by certified mail, with postage and fees prepaid, addressed
to the other Party at its address as shown beneath its signature in the Option
Agreement, or to such other address as such Party may designate in writing from
time to time by notice to the other Party in accordance with this Section 9.


 


10.           Further Instruments.  Each Party agrees to execute such further
instruments and to take such further action as may be necessary or reasonably
appropriate to carry out the purposes and intent of this Exercise Notice.


 


 


	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
  SALLY BEAUTY HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print Name)

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Signature)

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
   

  
					



 


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