Exhibit 10.28


 


ALBERTO-CULVER
COMPANY

EMPLOYEE STOCK OPTION PLAN OF 2003


 


(as amended
through October 21, 2009)


 


1.                     Purpose of ACSOP


 


The Alberto-Culver Company Employee Stock Option
Plan of 2003 (hereinafter called the “ACSOP”) is intended to encourage ownership
of the Common Stock of Alberto-Culver Company (the “Company”) by eligible key
employees of the Company and its subsidiaries and to provide incentives for
them to make maximum efforts for the success of the business. Options granted
under the ACSOP will be non-qualified options (not incentive options as defined
in Section 422 of the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder (the “Code”)).


 


2.                     Eligibility


 


Key employees of the Company and its subsidiaries
who perform services which contribute materially to the management, operation
and development of the business (“Optionees”) will be eligible to receive
options under the ACSOP.


 


3.                     Administration


 


The Compensation and Leadership Development
Committee of the Board of Directors of the Company (the “Committee”) shall have
full power and authority, subject to the express provisions of the ACSOP, to
determine the purchase price of the stock covered by each option, the Optionees
to whom and the time or times at which options shall be granted, the terms and
conditions of the options, including the terms of payment thereof, and the
number of shares of stock to be covered by each option. The Committee shall
have full power to construe, administer and interpret the ACSOP, and full power
to adopt such rules and regulations as the Committee may deem desirable to
administer the ACSOP. No member of the Committee shall be liable for any action
or determination made in good faith with respect to the ACSOP or any option
thereunder. Determinations by the Committee under the ACSOP need not be uniform
and may be made by it selectively among Optionees, whether or not such persons
are similarly situated. The determination of the Committee as to any disputed
question arising under the ACSOP, including questions of construction and
interpretation, shall be final, conclusive and binding.


 


The Committee may, in its discretion, delegate to a
committee of member(s) of the Committee its authority with respect to such
matters under the ACSOP and options granted under the ACSOP as the Committee
may specify.


 


The Committee shall be comprised solely of members
each of whom shall be an “outside director” within the meaning of Section 162(m) of
the Code, and a “non-employee director” within the meaning of Section 16 (“Section 16”)
of the Securities Exchange Act of 1934 and the rules and regulations
thereunder (“Exchange Act”), provided, however, that if any member of the
Committee is not (i) an “outside director” within the meaning of Section 162(m) of
the Code or (ii) a “non-employee director” within the meaning of Section 16,
the Committee shall set up a subcommittee comprised solely of outside directors
and non-employee directors for purposes of all matters arising under this ACSOP
involving “officers” within the meaning of Rule 16a-1(f) under Section 16,
and “covered employees” within the meaning of Section 162(m) of the
Code for the plan year at issue.


 

















 


4.                     Number of Shares of Stock to be Offered


 


The Committee may authorize from time to time the issuance
pursuant to the ACSOP of shares not to exceed 9,000,000 of the Company’s Common
Stock in the aggregate, subject to adjustment under paragraph 10 hereof.
Such shares of Common Stock which may be issued pursuant to options granted
under the ACSOP may be authorized and unissued shares or issued and reacquired
shares as the Committee from time to time may determine. If any option granted
under the ACSOP shall terminate or be surrendered or expire unexercised in
whole or in part, the shares of stock so released from such option may be made
the subject of additional options granted under the ACSOP. In addition, any
shares of Common Stock withheld to pay, in whole or in part, the amount
required to be withheld under applicable tax laws in accordance with paragraph 7(d) hereof,
may be made the subject of additional options granted under the ACSOP.


 


5.                     Option Price


 


The purchase price under each option granted
pursuant to the ACSOP shall be determined by the Committee but shall not be
less than the Fair Market Value (as defined below) of the Company’s Common
Stock on the date the option is granted. For purposes of the ACSOP, “Fair
Market Value” shall mean the average of the high and low transaction prices of
a share of Common Stock of the Company as reported in the New York Stock
Exchange Composite Transactions on the date as of which such value is being
determined or, if there shall be no reported transactions for such date, on the
next preceding date for which transactions were reported.


 


6.                     Grant of Options


 


The Committee may not grant to any individual
Optionee in any fiscal year an option or options with respect to more than
600,000 shares of Common Stock.


 


7.                     Term and Exercise of Options


 


(a)   Each option granted shall
provide that it is not exercisable after the expiration of ten (10) years
from the date the option is granted, or such shorter period as the Committee
determines, and each option shall be subject to the following limitations with
respect to its exercise:


 


(i) Except
as otherwise provided in paragraph 11(a) hereof, no option may be
exercised until the day preceding the anniversary date of the grant of the
option.


 


(ii) Except
as otherwise provided in paragraph 11(a) hereof, on the day preceding
the anniversary date of the grant of the option in each of the four calendar
years immediately following the year of the grant of the option, the right to
purchase twenty-five percent (25%) of the total number of shares of stock
specified in the option shall accrue to the Optionee. Subject to paragraph 8
hereof, each such right to purchase such twenty-five percent (25%) may be
exercised, in whole or in part, at any time after such right accrues and prior
to the expiration of the term of the option.


 


(b)   Notwithstanding the foregoing
or paragraph 8 hereof, the Committee may in its discretion (i) specifically
provide at the date of grant for another time or times of exerciseability; (ii) at
any time prior to the expiration or termination of any option previously
granted, accelerate the exercisability of any option subject to such terms and
conditions as the Committee deems necessary or appropriate to effectuate the
purpose of the ACSOP; or (iii) at any time prior to the expiration or
termination of any option previously granted, extend the term of any option
(including such options held by officers or


 


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directors)
for such additional period as the Committee, in its discretion, shall
determine; provided that effective January 1, 2005, the term of an option shall
not be extended beyond the later of the fifteenth day of the third month
following the date on which the option would otherwise have expired, or the
last day of the calendar year in which the option would otherwise have expired
(or such other date as may be permitted by final regulations issued under Section 409A
of the Code). In no event, however, shall the aggregate option period with
respect to any option, including the original term of the option and any
extensions thereof, exceed ten years.


 


(c)   An option may be exercised
(subject to the receipt of payment) by giving written notice to the Company
specifying the number of shares to be purchased. The full purchase price for
such shares may be paid (i) in cash, (ii) by check, (iii) by such
other method approved by the Committee and permitted by law, or (iv) by a
combination of these methods of payment. Payment must be received by the
Company before any exercise is consummated.


 


(d)   At any time when an Optionee is
required to pay to the Company an amount required to be withheld under
applicable tax laws in connection with the exercise of an option (calculated by
taking the minimum statutory withholding rates for federal, state and local tax
purposes including payroll taxes, applicable to the income generated by the
Optionee by such exercise), the Optionee may satisfy this obligation (i) in
cash, (ii) by check, (iii) by delivery of previously owned shares of
Common Stock, (iv) by making an election to have the Company withhold
shares of Common Stock, or (v) by a combination of these methods of
payment, in each case having a value equal to the amount required to be
withheld. The Optionee must specify the method of satisfying this obligation on
or before the date of exercise. The value of the shares to be withheld or
delivered shall be based on the Fair Market Value of the Common Stock on the
date of exercise.


 


8.                     Continuity of Employment


 


(a)   Each option shall be subject to
the following in addition to the restrictions set forth in paragraphs 6 and 7 hereof:


 


(i) Unless
otherwise determined by the Committee at or after the date of grant, if an
Optionee dies without having fully exercised his or her option, the executors
or administrators of his or her estate or legatees or distributees shall have
the right during the one (1) year period following his or her death (but
not after the expiration of the term of such option) to exercise such option in
whole or in part but only to the extent that the Optionee could have exercised
it at the date of his or her death.


 


(ii) Unless
otherwise determined by the Committee at or after the date of grant, if an
Optionee’s termination of employment is due to disability, the Optionee’s
option shall terminate one (1) year after his or her termination of
employment (but not after the expiration of the term of such option) and may be
exercised only to the extent that such Optionee could have exercised it at the
date of his or her termination of employment. For purposes of the ACSOP, “disability”
shall have the meaning provided in the Company’s applicable long-term
disability plan and such disability continues for more than three months or, in
the absence of such a definition, when an Optionee becomes totally disabled as
determined by a physician mutually acceptable to the Optionee and the Committee
before attaining his or her 65th birthday and
if such total disability continues for more than three months. Disability does
not include any condition which is intentionally self-inflicted or caused by
illegal acts of the Optionee.


 


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(iii) Unless
otherwise determined by the Committee at or after the date of grant and subject
to the third sentence of this paragraph 8(a)(iii), if an Optionee’s
termination of employment is due to retirement, all options (or portions
thereof) which are (a) vested at the time of retirement may be exercised
for a period of two (2) years following retirement (but not after the
expiration of the term of the option) and (b) unvested at the time of
retirement may be exercised for a period of five (5) years from the date
of grant (but not after the expiration of the term of the option). Unless
otherwise determined by the Committee at or after the date of grant and subject
to the third sentence of this paragraph 8(a)(iii), following retirement,
options (or portions thereof) which are unvested at the time of retirement will
continue to vest under such options’ vesting schedule for a period of five (5) years
following retirement. Only for options granted in January, 2003, if an Optionee’s
termination of employment is due to retirement (as defined in the ACSOP prior
to January 1, 2004), such option shall terminate one (1) year after
his or her termination of employment (but not after the expiration of the term
of such option) and may be exercised only to the extent that such Optionee
could have exercised such option at the date of his or her termination of
employment. For purposes of the ACSOP, “retirement” shall be reached when an
Optionee’s employment terminates and at the time of such termination the sum of
such Optionee’s age and years of service as an employee of the Company or any
of its subsidiaries equals or exceeds 75 years (“Rule of 75”).


 


(iv) Unless
otherwise determined by the Committee at or after the date of grant, if an
Optionee’s termination of employment is for any reason other than death,
retirement or physical disability, the Optionee’s option shall terminate upon
said termination of employment; provided, however, that if such termination of
employment occurs following a Change in Control (as such term is defined in
paragraph 11(b) hereof), the Optionee’s option shall terminate three (3) months
after his or her termination of employment (but not after the expiration of the
term of such option) unless otherwise determined by the Committee.


 


(b)   Nothing contained in the ACSOP
or any option granted pursuant to the ACSOP shall confer upon any Optionee any
right to be continued in the employment of the Company or any subsidiary or
shall prevent the Company or any subsidiary from terminating an Optionee’s
employment at any time, with or without cause. The determination by the
Committee of whether an authorized leave of absence constitutes a termination
of employment shall be final, conclusive and binding.


 


9.                     Non-Transferability of Options


 


An option granted under the ACSOP shall not be
assignable or transferable by an Optionee otherwise than by will or the laws of
descent and distribution, and an option shall be exercisable during the
lifetime of the Optionee only by him or her. Unless otherwise determined by the
Committee at or after the date of grant and subject to the following sentence,
an option transferred by will or the laws of descent and distribution may only
be exercised by the legatee or distributee during the one year period following
the Optionee’s death and may only be exercised to the extent it was exercisable
by the Optionee prior to his or her death. Unless otherwise determined by the
Committee at or after the date of grant, in the event that at the time of the
Optionee’s death the Optionee met the Rule of 75, an option transferred by
will or the laws of descent and distribution may only be exercised by the
legatee or distributee during the period of time that the Optionee could have
exercised such options at the time of his or her death and such options shall
continue to vest as if the Optionee had not died.


 


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10.              Adjustment
upon Change in Stock


 


Each option, the number and kind of shares subject
to future options and the number of shares subject to options that may be
granted to an Optionee in any fiscal year under the ACSOP shall be adjusted, as
may be determined to be equitable in the sole and absolute discretion of the
Committee, in the event there is any change in the outstanding Common Stock, or
any event that could cause a change in the outstanding Common Stock, including,
without limitation, by reason of a stock dividend, recapitalization,
reclassification, issuance of Common Stock, issuance of rights to purchase
Common Stock, extraordinary cash dividend, issuance of securities convertible
into or exchangeable for Common Stock, merger, consolidation, stock split,
reverse stock split, spin-off, combination, exchange or conversion of shares,
or any other similar type of event. The Committee’s determination of any
adjustment pursuant to this paragraph10 shall be final, conclusive and binding.


 


11.              Change in
Control


 


(a)   (1) Unless otherwise
determined by the Committee at or after the date of grant and notwithstanding
any provision of the ACSOP, in the event of a Change in Control, all
outstanding options shall immediately be exercisable in full and shall be
subject to the provisions of paragraph 11(a)(2) or 11(a)(3), to the
extent that either such paragraph is applicable.


 


(2)   Notwithstanding
any provision of the ACSOP, in the event of a Change in Control in connection
with which the holders of shares of the Company’s Common Stock receive shares
of common stock that are registered under Section 12 of the Exchange Act,
all outstanding options shall immediately be exercisable in full and there
shall be substituted for each share of the Company’s Common Stock available
under the ACSOP, whether or not then subject to an outstanding option, the
number and class of shares into which each outstanding share of the Company’s
Common Stock shall be converted pursuant to such Change in Control. In the
event of any such substitution, the purchase price per share of each option
shall be appropriately adjusted by the Committee or the committee to which
authority has been delegated pursuant to paragraph 3 hereof, such
adjustments to be made without an increase in the aggregate purchase price.


 


(3)   Notwithstanding
any provision in the ACSOP, in the event of a Change in Control in connection
with which the holders of the Company’s Common Stock receive consideration
other than shares of common stock that are registered under Section 12 of
the Exchange Act, each outstanding option shall be surrendered to the Company
by the holder thereof, and each such option shall immediately be cancelled by
the Company, and the holder shall receive, within ten (10) days of the
occurrence of such Change in Control, a cash payment from the Company in an
amount equal to the number of shares of the Company’s Common Stock then subject
to such option, multiplied by the excess, if any, of (i) the greater of (A) the
highest per share price offered to stockholders of the Company in any
transaction whereby the Change in Control takes place or (B) the Fair
Market Value of a share of the Company’s Common Stock on the date of occurrence
of the Change in Control over (ii) the purchase price per share of the
Company’s Common Stock subject to the option. The Company may, but is not
required to, cooperate with any person who is subject to Section 16 of the
Exchange Act to assure that any cash payment in accordance with the foregoing
to such person is made in compliance with Section 16 of the Exchange Act
and the rules and regulations thereunder providing for an exemption from Section 16(b) of
the Exchange Act.


 


(b)   “Change in Control” means:


 


(1)   The
occurrence of any one or more of the following events:


 


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(A)  The
acquisition by any individual, entity or group (a “Person”), including any “person”
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act of both (x) 20% or more of the combined
voting power of the then outstanding securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”) and (y) combined voting power of Outstanding Company Voting
Securities in excess of the combined voting power of the Outstanding Company
Voting Securities held by the Exempt Persons (as such term is defined in
paragraph 11(c)); provided, however,
that a Change in Control shall not result from an acquisition of Company Voting
Securities:


 


(i)    directly
from the Company, except as otherwise provided in paragraph 11(b)(2)(A);


 


(ii)   by
the Company, except as otherwise provided in paragraph 11(b)(2)(B);


 


(iii)  by
an Exempt Person;


 


(iv)  by
an employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; or


 


(v)   by
any corporation pursuant to a reorganization, merger or consolidation involving
the Company, if, immediately after such reorganization, merger or
consolidation, each of the conditions described in clauses (i) and (ii) of
paragraph 11(b)(1)(C) shall be satisfied.


 


(B)  The
cessation for any reason of the members of the Incumbent Board (as such term is
defined in paragraph 11(d)) to constitute at least a majority of the Board
of Directors of the Company (hereinafter called the “Board”).


 


(C)  Consummation
of a reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation:


 


(i)    more
than 60% of the combined voting power of the then outstanding securities of the
corporation resulting from such reorganization, merger or consolidation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
or entities who were the beneficial owners of the combined voting power of all
of the Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation; and


 


(ii)   at
least a majority of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such reorganization, merger or consolidation.


 


(D)  Consummation
of the sale or other disposition of all or substantially all of the assets of
the Company other than (x) pursuant to a tax-free spin-off of a subsidiary
or


 


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other business unit of the
Company or (y) to a corporation with respect to which, immediately after
such sale or other disposition:


 


(i)    more
than 60% of the combined voting power of the then outstanding securities
thereof entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners of the combined voting
power of all of the Outstanding Company Voting Securities immediately prior to
such sale or other disposition; and


 


(ii)   at
least a majority of the members of the board of directors thereof were members
of the Incumbent Board at the time of the execution of the initial agreement or
action of the Board providing for such sale or other disposition.


 


(E)  Approval
by the stockholders of the Company of a plan of complete liquidation or
dissolution of the Company.


 


(2)   Notwithstanding
the provisions of paragraph 11(b)(1):


 


(A)  no
acquisition of Company Voting Securities shall be subject to the exception from
the definition of Change in Control contained in clause (i) of
paragraph 11(b)(1)(A) if such acquisition results from the exercise
of an exercise, conversion or exchange privilege unless the security being so
exercised, converted or exchanged was acquired directly from the Company; and


 


(B)  for
purposes of clause (ii) of paragraph 11(b)(1)(A), if any Person
(other than the Company, an Exempt Person or any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company) shall, by reason of an acquisition of Company Voting
Securities by the Company, become the beneficial owner of (x) 20% or more
of the combined voting power of the Outstanding Company Voting Securities and (y) combined
voting power of Outstanding Company Voting Securities in excess of the combined
voting power of the Outstanding Company Voting Securities held by the Exempt
Persons, and such Person shall, after such acquisition of Company Voting Securities
by the Company, become the beneficial owner of any additional Outstanding
Company Voting Securities and such beneficial ownership is publicly announced,
such additional beneficial ownership shall constitute a Change in Control.


 


(c)   “Exempt Person” (and
collectively, the “Exempt Persons”) means:


 


(1)   Leonard
H. Lavin or Bernice E. Lavin;


 


(2)   any
descendant of Leonard H. Lavin and Bernice E. Lavin or the spouse of any such
descendant;


 


(3)   the
estate of any of the persons described in paragraph 11(c)(1) or (2);


 


(4)   any
trust or similar arrangement for the benefit of any person described in
paragraph 11(c)(1) or (2); or


 


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(5)   the
Lavin Family Foundation or any other charitable organization established by any
person described in paragraph 11(c)(1) or (2).


 


(d)   “Incumbent Board” means those
individuals who, as of October 24, 2002, constitute the Board, provided that:


 


(1)   any
individual who becomes a director of the Company subsequent to such date whose
election, or nomination for election by the Company’s stockholders, was
approved either by the vote of at least a majority of the directors then
comprising the Incumbent Board or by the vote of at least a majority of the
combined voting power of the Outstanding Company Voting Securities held by the
Exempt Persons shall be deemed to have been a member of the Incumbent Board;
and


 


(2)   no
individual who was initially elected as a director of the Company as a result
of an actual or threatened solicitation by a Person other than the Board or the
Exempt Persons for the purpose of opposing a solicitation by any other Person
with respect to the election or removal of directors, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any Person
other than the Board or the Exempt Persons shall be deemed to have been a
member of the Incumbent Board.


 


12.              Amendment
and Discontinuance


 


The Committee or the Board, without further approval
of the stockholders, may, at any time and from time to time, suspend or
discontinue the ACSOP in whole or in part or amend the ACSOP in such respects
as the Committee or the Board may deem proper and in the best interests of the
Company or as may be advisable, provided, however, that no suspension or
amendment shall be made which would:


 


(i) Adversely
affect or impair any option previously granted under the ACSOP without the
consent of the Optionee, or


 


(ii) Except
as specified in paragraph 10, increase the total number of shares for
which options may be granted under the ACSOP or decrease the minimum price at
which options may be granted under the ACSOP.


 


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