Document:

exv10w1

 

Exhibit 10.1

[FORM]

HOLLY LOGISTIC SERVICES, L.L.C.

PERFORMANCE UNIT AGREEMENT

     This Performance Unit Agreement (the “Agreement”) is made and entered into by and between
HOLLY LOGISTIC SERVICES, L.L.C., a Delaware limited partnership (the “Company”), and
                                         (the “Employee”). This Agreement is entered into as of the ___day of
___,                      (the “Date of Grant”).

W I T N E S S E T H:

     WHEREAS, the Company has adopted the HOLLY ENERGY PARTNERS, L.P. LONG-TERM INCENTIVE PLAN (the
“Plan”) to attract, retain and motivate employees, directors and consultants; and

     WHEREAS, the Company believes that a grant to the Employee of performance units of Holly
Energy Partners, L.P. (the “Partnership”) as part of the Executive’s compensation for services
provided to the Company is consistent with the stated purposes for which the Plan was adopted.

     NOW, THEREFORE, in consideration of the services rendered by the Employee, it is agreed by and
between the Company and the Employee, as follows:

     1. Grant. The Company hereby grants to the Employee as of the Date of Grant an
Award of                      performance units (the “Performance Units”), subject to the terms and
conditions set forth in this Agreement. Depending on the performance of Holly Energy
Partners, L.P. (the “Partnership”), the Employee may earn from ___(___%) to ___(___%)
of the Performance Units, based on [performance measure to be described].

     2. Nature of Award. The Performance Units represent an Award for the
“Performance Period” which begins on ___, ___and ends on ___, ___. Following the
completion of the Performance Period, the Employee shall be entitled to a payment of Common
Units of the Partnership (“Common Units”) as determined under this Section 2 and payable at
the time indicated in Section 4 or Section 3(b), as applicable.

     (a) Performance Measure. The number of Performance Units earned for
the Performance Period is determined on the basis of [performance measure to be
described].

     (b) Common Units Payable. The number of Common Units payable is equal
to the result of multiplying Performance Units by the “Performance Percentage” set
forth below:

1

 

	 	 	 
	___-Year Total Increase	 	 
	in	 	Performance Percentage
	[performance measure]	 	(%) to be Multiplied by
	Per Common Unit	 	Performance Units
	< $____
	 	—%
	$____
	 	—%
	$____
	 	—%
	$____
	 	—%
	> $____
	 	—%
	 
	 	 

	 	 	 	The percentages above shall be interpolated between
points.

     3. Early Termination. In the event of separation from employment of the
Employee prior to the end of the Performance Period on account of an event described in this
Section 3, the number of Performance Units with respect to which payment at the end of the
Performance Period is based shall be determined as follows:

     (a) (i) In the event that the Employee separates from employment for any reason
other than voluntary separation or Cause, as defined in Section 3(c)(vii), or (ii)
in the event of the Employee’s death or (iii) in the event of the Employee’s total
and permanent disability as determined by the Compensation Committee of the
Company’s Board of Directors (the “Committee”) in its sole discretion, or (iv) in
the event that the Employee shall retire after attaining normal retirement age of 62
or after attaining an earlier retirement age approved by the Committee in its sole
discretion, the number of Performance Units that shall be earned by and paid to the
Employee or his beneficiary, in accordance with and at the time specified in Section
4, shall be determined as follows: the Employee shall forfeit a percentage of the
Performance Units earned equal to the percentage that the number of full months
following the date of separation, death, disability or retirement to the end of the
Performance Period bears to ___. The Committee shall determine the number of
Performance Units earned and to be paid to the Employee or his beneficiary in
accordance with Section 2 for the entire Performance Period as soon as
administratively practicable after the end of the Performance Period. In its sole
discretion, the Committee may make a payment to the Employee assuming a Performance
Percentage of up to                      (___%) of the Performance Units instead of the pro-rata
number of Performance Units as determined pursuant to this Section 3(a). Unless the
Committee determines otherwise, the Employee will have no right to any other
Performance Units and those other Performance Units granted under this Agreement
will be forfeited. If the Employee separates from employment prior to the end of
the Performance Period due to voluntary separation or on account of Cause, all
Performance Units hereunder will be forfeited.

     (b) In the event of a Special Involuntary Termination, as defined in Section
3(c)(vi), before the end of the Performance Period, no Performance Units

2

 

shall be forfeited, and payment with respect to                      (___%) of the
Performance Units shall be made as soon as administratively practicable following
the Special Involuntary Termination, but in no event later than two and one-half
months after the end of the calendar year in which the Special Involuntary
Termination occurs. Payment pursuant to this Section 3(b) is in lieu of payment
pursuant to Section 3(a) and if the Employee receives payment pursuant to this
Section 3(b) the Employee will not be entitled to any payment pursuant to Section
3(a).

     (c) Definitions. For purposes of this Section 3,

     (i) “Change in Control” shall mean:

     A. Any “Person” (as defined in Section 3(c)(ii) below), other
than Holly Corporation (“Holly”) or any of its wholly-owned
subsidiaries, HEP Logistics Holdings, L.P. (the “General Partner”),
the Partnership, the Company, or any of their subsidiaries, a trustee
or other fiduciary holding securities under an employee benefit plan
of Holly, the Partnership, the Company or any of their “Affiliates”
(as defined in Section 3(c)(v) below), an underwriter temporarily
holding securities pursuant to an offering of such securities, or
entity owned, directly or indirectly, by the holders of the voting
securities of Holly, the Company, the General Partner or the
Partnership in substantially the same proportions as their ownership
in Holly, the Company, the General Partner or the Partnership,
respectively, is or becomes the “Beneficial Owner” (as defined in
Section 3(c)(iii) below), directly or indirectly, of securities of
Holly, the Company, the General Partner or the Partnership (not
including in the securities beneficially owned by such person any
securities acquired directly from Holly, the General Partner, the
Partnership, the Company or their Affiliates) representing more than
forty percent (40%) of the combined voting power of Holly’s, the
Company’s, the General Partner’s or the Partnership’s then
outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in
Section 3(c)(i)(C)(I) below.

     B. The individuals who as of the Date of Grant constitute the
Board of Directors of Holly (the “Holly Board”) and any “New
Director” (as defined in Section 3(c)(iv) below) cease for any reason
to constitute a majority of the Holly Board.

     C. There is consummated a merger or consolidation of Holly, the
Company, the General Partner or the Partnership with any other
entity, except if:

     (1) the merger or consolidation results in the voting
securities of Holly, the Company, the General

3

 

Partner or the Partnership outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof) at least sixty
percent (60%) of the combined voting power of the voting
securities of Holly, the Company, the General Partner or the
Partnership, as applicable, or such surviving entity or any
parent thereof outstanding immediately after such merger or
consolidation; or

     (2) the merger or consolidation is effected to implement
a recapitalization of Holly, the Company, the General Partner
or the Partnership (or similar transaction) in which no
Person is or becomes the Beneficial Owner, directly, or
indirectly, of securities of, as applicable, (not including
in the securities beneficially owned by such Person any
securities acquired directly from Holly, the Company, the
General Partner or the Partnership or their Affiliates other
than in connection with the acquisition by Holly, the
Company, the General Partner or the Partnership or its
Affiliates of a business) representing more than forty
percent (40%) of the combined voting power of Holly’s, the
Company’s the General Partner’s or the Partnership’s, as
applicable, then outstanding securities.

     D. The holders of the voting securities of Holly, the Company,
the General Partner or the Partnership approve a plan of complete
liquidation or dissolution of holders of the voting securities of
Holly, the Company, the General Partner or the Partnership or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or
disposition by holders of the voting securities of Holly, the
Company, the General Partner or the Partnership of all or
substantially all of Holly’s, the Company’s the General Partner’s or
the Partnership’s assets, as applicable, to an entity at least sixty
percent (60%) of the combined voting power of the voting securities
of which is owned by the direct and indirect holders of the voting
securities of Holly, the Company, the General Partner or the
Partnership in substantially the same proportions as their ownership
of direct or indirect holders of the voting securities of Holly, the
Company, the General Partner or the Partnership, as applicable,
immediately prior to such sale.

     (ii) “Person” shall have the meaning given in section 3(a)(9) of the
Securities Exchange Act of 1934 (the “1934 Act”) as modified and used in
sections 13(d) and 14(d) of the 1934 Act.

4

 

     (iii) “Beneficial Owner” shall have the meaning provided in Rule 13d-3
under the 1934 Act.

     (iv) “New Director” shall mean an individual whose election by the
Holly’s Board or nomination for election by holders of the voting securities
of Holly was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the Date of
Grant or whose election or nomination for election was previously so
approved or recommended. However, “New Director” shall not include a
director whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a consent
solicitation relating to the election of directors of the Holly.

     (v) “Affiliate” shall have the meaning set forth in Rule 12b-2
promulgated under section 12 of the 1934 Act.

     (vi) “Special Involuntary Termination” shall mean the occurrence of (1)
or (2) within sixty (60) days prior to, or at any time after, a “Change in
Control” (as defined in Section 3(c)(i)), where (1) is termination of the
Employee’s employment with the Company (including subsidiaries of the
Company) by the Company for any reason other than “Cause” (as defined in
Section 3(c)(vii)) and (2) is a resignation by the Employee from employment
with the Company (including subsidiaries of the Company) within ninety (90)
days after an “Adverse Change” (as defined in Section 3(c)(viii)) by the
Company (including subsidiaries of the Company) in the terms of the
Employee’s employment.

     (vii) “Cause” shall mean:

     A. An act or acts of dishonesty on the part of the Employee
constituting a felony or serious misdemeanor and resulting or
intended to result directly in gain or personal enrichment at the
expense of the Company;

     B. Gross or willful and wanton negligence in the performance of
the Employee’s material and substantial duties of employment with the
Company; or

     C. Conviction of a felony involving moral turpitude.

The existence of Cause shall be determined by the Committee, in its
sole and absolute discretion.

     (viii) “Adverse Change” shall mean (A) a change in the city in which
the Employee is required to work regularly, (B) a substantial increase in
travel requirements of employment, (C) a substantial reduction in duties of
the type previously performed by the Employee, or (D) a significant
reduction in compensation or benefits (other than bonuses and

5

 

other discretionary items of compensation) that does not apply
generally to Employees of the Company or its successor.

     4. Payment of Performance Units. The number of Common Units payable at the end
of the Performance Period (or such earlier time as specified under Section 3(b)) shall be
payable as soon as reasonably practicable following the close of the Performance Period, but
in no event later than two and one-half months after the end of the calendar year in which
the Performance Period closes (or such earlier time as specified under Section 3(b)), in the
amount determined in accordance with Section 2, as adjusted by Section 3, if applicable.
Such payment will be subject to withholding for taxes and other applicable payroll
adjustments. The Committee’s determination of the amount payable shall be binding upon the
Employee and his beneficiary or estate.

     5. Adjustment in Number of Performance Units. Except as provided below, in the
event that the outstanding Common Units are increased, decreased or exchanged for a
different number or kind of units or other securities, or if additional, new or different
units or securities are distributed with respect to the Units through merger, consolidation,
sale of all or substantially all of the assets of the Partnership, reorganization,
recapitalization, unit dividend, unit split, reverse unit split or other distribution with
respect to such Common Units, there shall be substituted for the Common Units under the
Performance Units subject to this Agreement the appropriate number and kind of Common Units
or new or replacement securities as determined in the sole discretion of the Committee.

     6. Delivery of Common Units. No Common Units shall be delivered pursuant to
this Agreement until the approval of any governmental authority required in connection with
this Agreement, or the issuance of Common Units hereunder, has been received by the Company.

     7. Securities Act. The Company shall have the right, but not the obligation,
to cause the Common Units payable under this Agreement to be registered under the
appropriate rules and regulations of the Securities and Exchange Commission. The Company
shall not be required to deliver any Common Units hereunder if, in the opinion of counsel
for the Company, such delivery would violate the Securities Act of 1933 or any other
applicable federal or state securities laws or regulations.

     8. Federal and State Taxes. The Employee may incur certain liabilities for
Federal, state or local taxes and the Company may be required by law to withhold such taxes
for payment to taxing authorities. Upon the determination by the Company of the amount of
taxes required to be withheld, if any, the Employee shall either pay to the Company, in cash
or by certified or cashier’s check, an amount equal to the taxes required to be withheld, or
the Employee shall authorize the Company to withhold from monies owing by the Company to the
Employee an amount equal to the federal, state or local taxes required to be withheld.
Authorization of the Employee to the Company to withhold taxes pursuant to this Section
shall be in form and content acceptable to the Committee. An authorization to withhold
taxes pursuant to this provision shall be irrevocable unless and until the tax liability of
the Employee has been fully paid. In the

6

 

discretion of the
Committee, the required taxes may be withheld in kind from the Common
Units payable under this Agreement. In the event that the Employee fails to make
arrangements that are acceptable to the Committee for providing to the Company, at the time
or times required, the amounts of federal, state and local taxes required to be withheld
with respect to the Common Units payable to the Employee under this Agreement, the Company
shall have the right to purchase at current market price as determined by the Committee
and/or to sell to one or more third parties in either market or private transactions
sufficient Common Units payable under this Agreement to provide the funds needed for the
Company to make the required tax payment or payments.

     9. Definitions; Copy of Plan. To the extent not specifically provided herein,
all terms used in this Agreement shall have the same meanings ascribed to them in the Plan.
By the execution of this Agreement, the Employee acknowledges receipt of a copy of the Plan.
If any provision of this Agreement is held to be illegal, invalid or unenforceable under
any applicable law, then such provision will be deemed to be modified to the minimum extent
necessary to render it legal, valid and enforceable; and if such provision cannot be so
modified, then this Agreement will be construed as if not containing the provision held to
be invalid, and the rights and obligations of the parties will be construed and enforced
accordingly.

     10. Administration. This Agreement shall at all times be subject to the terms
and conditions of the Plan. The Committee shall have sole and complete discretion with
respect to all matters reserved to it by the Plan and decisions of the majority of the
Committee with respect thereto and this Agreement shall be final and binding upon the
Employee and the Company. In the event of any conflict between the terms and conditions of
this Agreement and the Plan, the provisions of the Plan shall control.

     11. No Right to Continued Employment. This Agreement shall not be construed to
confer upon the Employee any right to continue as an Employee of the Company and shall not
limit the right of the Company, in its sole discretion, to terminate the service of the
Employee at any time.

     12. Governing Law. This Agreement shall be interpreted and administered under
the laws of the State of Texas, without giving effect to any conflict of laws provisions.

     13. Amendments. This Agreement may be amended only by a written agreement
executed by the Company and the Employee. Any such amendment shall be made only upon the
mutual consent of the parties, which consent (of either party) may be withheld for any
reason.

     14. No Liability for Good Faith Determinations. The Company and the members of
the Committee and the Board shall not be liable for any act, omission or determination taken
or made in good faith with respect to this Agreement or the Performance Units granted
hereunder.

7

 

     15. No Guarantee of Interests. The Board and the Company do not guarantee the
Common Units from loss or depreciation.

     16. Nontransferability of Agreement. This Agreement and all rights under this
Agreement shall not be transferable by the Employee during his life other than by will or
pursuant to applicable laws of descent and distribution. Any rights and privileges of the
Employee in connection herewith shall not be transferred, assigned, pledged or hypothecated
by the Employee or by any other person or persons, in any way, whether by operation of law,
or otherwise, and shall not be subject to execution, attachment, garnishment or similar
process. In the event of any such occurrence, this Agreement shall automatically be
terminated and shall thereafter be null and void. Notwithstanding the foregoing, all or some
of the Units or rights under this Agreement may be transferred to a spouse pursuant to a
domestic relations order issued by a court of competent jurisdiction.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers
thereunto duly authorized, and the Employee has set his hand effective as of the date and year
first above written.

	 	 	 	 	 
	 	 	HOLLY LOGISTIC SERVICES, L.L.C.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Employee

8exv10w1

 

Exhibit 10.1

PRIVILEGED & CONFIDENTIAL

FORM OF DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT

     Indemnification Agreement, dated as of January 15, 2007, between Sally Beauty Holdings Inc., a
Delaware corporation (the “Company”) and David L. Rea (“Indemnitee”).

     WHEREAS, qualified persons are reluctant to serve corporations as directors, officers or
otherwise unless they are provided with broad indemnification and insurance against claims arising
out of their service to and activities on behalf of the corporations; and

     WHEREAS, the Company has determined that attracting and retaining such persons is in the best
interests of the Company’s stockholders and that it is reasonable, prudent and necessary for the
Company to indemnify such persons to the fullest extent permitted by applicable law and to provide
reasonable assurance regarding insurance.

     NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

     1. Defined Terms; Construction.

          (a) Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:

     “Change in Control” means, and shall be deemed to have occurred if, on or after the
date of this Agreement, (i) any “person” (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended), other than (A) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or any of its
subsidiaries acting in such capacity, or (B) a corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing more than 20% of the total voting
power represented by the Company’s then outstanding Voting Securities, (ii) during any
period of two consecutive years commencing from and after the date hereof, individuals who at the
beginning of such period constitute the board of directors of the Company and any new director
whose election by the board of directors of the Company or nomination for election by the Company’s
stockholders was approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a majority thereof,
(iii) the stockholders of the Company approve a merger or consolidation of the Company with
any other corporation other than a merger or consolidation that would result in the Voting
Securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the surviving entity) at
least 80% of the total

 

 

voting power represented by the Voting Securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of related transactions) all or
substantially all of its assets, or (v) the Company shall file or have filed against it,
and such filing shall not be dismissed, any bankruptcy, insolvency or dissolution proceedings, or a
trustee, administrator or creditors committee shall be appointed to manage or supervise the affairs
of the Company.

     “Corporate Status” means the status of a person who is or was a director (or a member
of any committee of a board of directors), officer, employee or agent (including without limitation
a manager of a limited liability company) of the Company or any of its subsidiaries, or of any
predecessor thereof, or is or was serving at the request of the Company as a director (or a member
of any committee of a board of directors), officer, employee or agent (including without limitation
a manager of a limited liability company) of another corporation, limited liability company,
partnership, joint venture, trust or other enterprise, or of any predecessor thereof, including
service with respect to an employee benefit plan.

     “Determination” means a determination that either (x) there is a reasonable
basis for the conclusion that indemnification of Indemnitee is proper in the circumstances because
Indemnitee met a particular standard of conduct (a “Favorable Determination”) or
(y) there is no reasonable basis for the conclusion that indemnification of Indemnitee is
proper in the circumstances because Indemnitee met a particular standard of conduct (an
“Adverse Determination”). An Adverse Determination shall include the decision that a
Determination was required in connection with indemnification and the decision as to the applicable
standard of conduct.

     “DGCL” means the General Corporation Law of the State of Delaware, as amended from
time to time.

     “Expenses” means all attorneys’ fees and expenses, retainers, court, arbitration and
mediation costs, transcript costs, fees of experts, bonds, witness fees, costs of collecting and
producing documents, travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, appealing or otherwise participating in a
Proceeding.

     “Independent Legal Counsel” means an attorney or firm of attorneys competent to render
an opinion under the applicable law, selected in accordance with the provisions of Section 5(e),
who has not otherwise performed any services for the Company or any of its subsidiaries or for
Indemnitee within the last three years (other than with respect to

2

 

matters concerning the rights of Indemnitee under this Agreement or under indemnity agreements
similar to this Agreement).

     “Proceeding” means a threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, including without limitation a claim,
demand, discovery request, formal or informal investigation, inquiry, administrative hearing,
arbitration or other form of alternative dispute resolution, including an appeal from any of the
foregoing.

     “Voting Securities” means any securities of the Company that vote generally in the
election of directors.

          (b) Construction. For purposes of this Agreement,

          (i) References to the Company or any of its “subsidiaries” shall include any
corporation, limited liability company, partnership, joint venture, trust or other entity
or enterprise that before or after the date of this Agreement is party to a merger or
consolidation with the Company or any such subsidiary or that is a successor to the Company
as contemplated by Section 8(d) (whether or not such successor has executed and delivered
the written agreement contemplated by Section 8(d)).

          (ii) References to “fines” shall include any excise taxes assessed on Indemnitee with
respect to an employee benefit plan.

          (iii) References to a “witness” in connection with a Proceeding shall include any
interviewee or person called upon to produce documents in connection with such Proceeding.

     2. Agreement to Serve.

     Indemnitee agrees to serve as a director or officer of the Company or one or more of its
subsidiaries and in such other capacities as Indemnitee may serve at the request of the Company
from time to time, and, by its execution of this Agreement, the Company confirms its request that
Indemnitee serve as a director or officer of the Company and in such other capacities. Indemnitee
shall be entitled to resign or otherwise terminate such service with immediate effect at any time,
and neither such resignation or termination nor the length of such service shall affect
Indemnitee’s rights under this Agreement. This Agreement shall not constitute an employment
agreement, supersede any employment agreement to which Indemnitee is a party or create any right of
Indemnitee to continued employment or appointment.

3

 

     3. Indemnification.

          (a) General Indemnification. The Company shall indemnify Indemnitee, to the fullest
extent permitted by applicable law in effect on the date hereof or as amended to increase the scope
of permitted indemnification, against Expenses, losses, liabilities, judgments, fines, penalties
and amounts paid in settlement (including all interest, assessments and other charges in connection
therewith) incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding in
any way connected with, resulting from or relating to Indemnitee’s Corporate Status.

          (b) Additional Indemnification Regarding Expenses. Without limiting the foregoing, in
the event any Proceeding is initiated by Indemnitee or the Company or any of its subsidiaries to
enforce or interpret this Agreement or any rights of Indemnitee to indemnification or advancement
of Expenses (or related obligations of Indemnitee) under the Company’s or any such subsidiary’s
certificate of incorporation or bylaws, any other agreement to which Indemnitee and the Company or
any of its subsidiaries are party, any vote of stockholders or directors of the Company or any of
its subsidiaries, the DGCL, any other applicable law or any liability insurance policy, the Company
shall indemnify Indemnitee against all Expenses incurred by Indemnitee or on Indemnitee’s behalf in
connection with such Proceeding, whether or not Indemnitee is successful in such Proceeding, except
to the extent that the court presiding over such Proceeding determines that material assertions
made by Indemnitee in such Proceeding were in bad faith or were frivolous.

          (c) Partial Indemnification. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for a portion of any Expenses, losses, liabilities,
judgments, fines, penalties and amounts paid in settlement incurred by Indemnitee, but not for the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for such portion.

          (d) Nonexclusivity. The indemnification provided by this Agreement shall not be
deemed exclusive of any rights to which Indemnitee may be entitled under the Company’s certificate
of incorporation or bylaws, any agreement, any vote of stockholders or directors, the DGCL, any
other applicable law or any liability insurance policy.

          (e) Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated under the Agreement to indemnify Indemnitee:

          (i) For Expenses incurred in connection with Proceedings initiated or brought
voluntarily by Indemnitee and not by way of defense, counterclaim or crossclaim, except
(x) as contemplated by Section 3(b), (y) in

4

 

specific cases if the board of directors of the Company has approved the initiation or
bringing of such Proceeding, and (z) as may be required by law.

          (ii) For an accounting of profits arising from the purchase and sale by Indemnitee of
securities within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as
amended, or any similar successor statute.

          (f) Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall
execute such documents and do such acts as the Company may reasonably request to secure such rights
and to enable the Company effectively to bring suit to enforce such rights.

     4. Advancement of Expenses.

     The Company shall pay all Expenses incurred by Indemnitee in connection with any Proceeding in
any way connected with, resulting from or relating to Indemnitee’s Corporate Status, other than a
Proceeding initiated by Indemnitee for which the Company would not be obligated to indemnify
Indemnitee pursuant to Section 3(e)(i), in advance of the final disposition of such Proceeding and
without regard to whether Indemnitee will ultimately be entitled to be indemnified for such
Expenses and without regard to whether an Adverse Determination has been made, except as
contemplated by the last sentence of Section 5(f). Indemnitee shall repay such amounts advanced if
and to the extent that it shall ultimately be determined in a decision by a court of competent
jurisdiction from which no appeal can be taken that Indemnitee is not entitled to be indemnified by
the Company for such Expenses. Such repayment obligation shall be unsecured and shall not bear
interest.

     5. Indemnification Procedure.

          (a) Notice of Proceeding; Cooperation. Indemnitee shall give the Company notice in
writing as soon as practicable of any Proceeding for which indemnification will or could be sought
under this Agreement, provided that any failure or delay in giving such notice shall not
relieve the Company of its obligations under this Agreement unless and to the extent that
(i) none of the Company and its subsidiaries are party to or aware of such Proceeding and
(ii) the Company is materially prejudiced by such failure.

          (b) Settlement. The Company will not, without the prior written consent of
Indemnitee, which may be provided or withheld in Indemnitee’s sole discretion, effect any
settlement of any Proceeding against Indemnitee or which could have been brought against Indemnitee
unless such settlement solely involves the payment of money by persons other than Indemnitee and
includes an unconditional release of Indemnitee from all liability on any matters that are the
subject of such Proceeding and

5

 

an acknowledgment that Indemnitee denies all wrongdoing in connection with such matters. The
Company shall not be obligated to indemnify Indemnitee against amounts paid in settlement of a
Proceeding against Indemnitee if such settlement is effected by Indemnitee without the Company’s
prior written consent, which shall not be unreasonably withheld.

          (c) Request for Payment; Timing of Payment. To obtain indemnification payments or
advances under this Agreement, Indemnitee shall submit to the Company a written request therefor,
together with such invoices or other supporting information as may be reasonably requested by the
Company and reasonably available to Indemnitee. The Company shall make indemnification payments to
Indemnitee no later than 30 days, and advances to Indemnitee no later than 10 days, after receipt
of the written request of Indemnitee.

          (d) Determination. The Company intends that Indemnitee shall be indemnified to the
fullest extent permitted by law as provided in Section 3 and that no Determination shall be
required in connection with such indemnification. In no event shall a Determination be required in
connection with advancement of Expenses pursuant to Section 4 or in connection with indemnification
for Expenses incurred as a witness or incurred in connection with any Proceeding or portion thereof
with respect to which Indemnitee has been successful on the merits or otherwise. Any decision that
a Determination is required by law in connection with any other indemnification of Indemnitee, and
any such Determination, shall be made within 30 days after receipt of Indemnitee’s written request
for indemnification, as follows:

          (i) If no Change in Control has occurred, (w) by a majority vote of the
directors of the Company who are not parties to such Proceeding, even though less than a
quorum, with the advice of Independent Legal Counsel, or (x) by a committee of such
directors designated by majority vote of such directors, even though less than a quorum,
with the advice of Independent Legal Counsel, or (y) if there are no such
directors, or if such directors so direct, by Independent Legal Counsel in a written
opinion to the Company and Indemnitee, or (z) by the stockholders of the Company.

          (ii) If a Change in Control has occurred, by Independent Legal Counsel in a written
opinion to the Company and Indemnitee.

     The Company shall pay all Expenses incurred by Indemnitee in connection with a Determination.

          (e) Independent Legal Counsel. If there has not been a Change in Control, Independent
Legal Counsel shall be selected by the board of directors of the Company and approved by Indemnitee
(which approval shall not be unreasonably withheld or delayed). If there has been a Change in
Control, Independent Legal Counsel

6

 

shall be selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld or delayed). The Company shall pay the fees and expenses of Independent
Legal Counsel and indemnify Independent Legal Counsel against any and all expenses (including
attorneys’ fees), claims, liabilities and damages arising out of or relating to its engagement.

          (f) Consequences of Determination; Remedies of Indemnitee. The Company shall be bound
by and shall have no right to challenge a Favorable Determination. If an Adverse Determination is
made, or if for any other reason the Company does not make timely indemnification payments or
advances of Expenses, Indemnitee shall have the right to commence a Proceeding before a court of
competent jurisdiction to challenge such Adverse Determination and/or to require the Company to
make such payments or advances. Indemnitee shall be entitled to be indemnified for all Expenses
incurred in connection with such a Proceeding in accordance with Section 3(b) and to have such
Expenses advanced by the Company in accordance with Section 4. If Indemnitee fails to timely
challenge an Adverse Determination, or if Indemnitee challenges an Adverse Determination and such
Adverse Determination has been upheld by a final judgment of a court of competent jurisdiction from
which no appeal can be taken, then, to the extent and only to the extent required by such Adverse
Determination or final judgment, the Company shall not be obligated to indemnify or advance
Expenses to Indemnitee under this Agreement.

          (g) Presumptions; Burden and Standard of Proof. In connection with any Determination,
or any review of any Determination, by any person, including a court:

          (i) It shall be a presumption that a Determination is not required.

          (ii) It shall be a presumption that Indemnitee has met the applicable standard of
conduct and that indemnification of Indemnitee is proper in the circumstances.

          (iii) The burden of proof shall be on the Company to overcome the presumptions set
forth in the preceding clauses (i) and (ii), and each such presumption shall only be
overcome if the Company establishes that there is no reasonable basis to support it.

          (iv) The termination of any Proceeding by judgment, order, finding, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo contendere,
or its equivalent, shall not create a presumption that indemnification is not proper or
that Indemnitee did not meet the applicable standard of conduct or that a court has
determined that indemnification is not permitted by this Agreement or otherwise.

7

 

          (v) Neither the failure of any person or persons to have made a Determination nor an
Adverse Determination by any person or persons shall be a defense to Indemnitee’s claim or
create a presumption that Indemnitee did not meet the applicable standard of conduct, and
any Proceeding commenced by Indemnitee pursuant to Section 5(f) shall be de novo with
respect to all determinations of fact and law.

     6. Directors and Officers Liability Insurance.

          (a) Maintenance of Insurance. So long as the Company or any of its subsidiaries
maintains liability insurance for any directors, officers, employees or agents of any such person,
the Company shall ensure that Indemnitee is covered by such insurance in such a manner as to
provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of
the Company’s and any of its subsidiaries’ then current directors and officers.

          (b) Notice to Insurers. Upon receipt of notice of a Proceeding pursuant to Section
5(a), the Company shall give or cause to be given prompt notice of such Proceeding to all insurers
providing liability insurance in accordance with the procedures set forth in all applicable or
potentially applicable policies. The Company shall thereafter take all necessary action to cause
such insurers to pay all amounts payable in accordance with the terms of such policies.

     7. Exculpation, etc.

          (a) Limitation of Liability. Indemnitee shall not be personally liable to the Company
or any of its subsidiaries or to the stockholders of the Company or any such subsidiary for
monetary damages for breach of fiduciary duty as a director of the Company or any such subsidiary;
provided, however, that the foregoing shall not eliminate or limit the liability of Indemnitee
(i) for any breach of Indemnitee’s duty of loyalty to the Company or such subsidiary or the
stockholders thereof; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law; (iii) under Section 174 of the
DGCL or any similar provision of other applicable corporations law; or (iv) for any
transaction from which Indemnitee derived an improper personal benefit. If the DGCL or such other
applicable law shall be amended to permit further elimination or limitation of the personal
liability of directors, then the liability of Indemnitee shall, automatically, without any further
action, be eliminated or limited to the fullest extent permitted by the DGCL or such other
applicable law as so amended.

          (b) Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company or any of its subsidiaries against Indemnitee
or Indemnitee’s estate, spouses, heirs, executors, personal or legal representatives,
administrators or assigns after the expiration of two years from

8

 

the date of accrual of such cause of action, and any claim or cause of action of the Company
shall be extinguished and deemed released unless asserted by the timely filing of a legal action
within such two-year period, provided that if any shorter period of limitations is
otherwise applicable to any such cause of action, such shorter period shall govern.

     8. Miscellaneous.

          (a) Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (ii) such provision or provisions shall be deemed reformed to the extent necessary to
conform to applicable law and to give the maximum effect to the intent of the parties hereto; and
(iii) to the fullest extent possible, the provisions of this Agreement (including, without
limitation, each portion of any section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.

          (b) Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) on the date of delivery if
delivered personally, or by facsimile, upon confirmation of receipt, (ii) on the first
business day following the date of dispatch if delivered by a recognized next-day courier service
or (iii) on the third business day following the date of mailing if delivered by domestic
registered or certified mail, properly addressed, or on the fifth business day following the date
of mailing if sent by airmail from a country outside of North America, to Indemnitee as shown on
the signature page of this Agreement, to the Company at the address shown on the signature page of
this Agreement, or in either case as subsequently modified by written notice.

          (c) Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed by all the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver.

          (d) Successors and Assigns. This Agreement shall be binding upon the Company and its
successors and assigns, including without limitation any acquiror of all or substantially all of
the Company’s assets or business, any person (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) that acquires beneficial ownership of securities
of the Company representing more than

9

 

20% of the total voting power represented by the Company’s then outstanding Voting Securities
and any survivor of any merger or consolidation to which the Company is party, and shall inure to
the benefit of Indemnitee and Indemnitee’s estate, spouses, heirs, executors, personal or legal
representatives, administrators and assigns. The Company shall require and cause any such
successor, as applicable, by written agreement in form and substance satisfactory to Indemnitee,
expressly to assume and agree to perform this Agreement as if it were named as the Company herein,
and the Company shall not permit any such purchase of assets or business, acquisition of securities
or merger or consolidation to occur until such written agreement has been executed and delivered.
No such assumption and agreement shall relieve the Company of any of its obligations hereunder, and
this Agreement shall not otherwise be assignable by the Company.

          (e) Choice of Law; Consent to Jurisdiction. This Agreement shall be governed by and
its provisions construed in accordance with the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely within Delaware,
without regard to the conflict of law principles thereof. Each of the Company and Indemnitee
hereby irrevocably consents to the jurisdiction of the courts of the State of Delaware for all
purposes in connection with any Proceeding which arises out of or relates to this Agreement and
agree that any action instituted under this Agreement shall be brought only in the state courts of
the State of Delaware.

          (f) Integration and Entire Agreement. This Agreement sets forth the entire
understanding between the parties hereto and supersedes and merges all previous written and oral
negotiations, commitments, understandings and agreements relating to the subject matter hereof
between the parties hereto, provided that the provisions hereof shall not supersede the provisions
of the Company’s certificate of incorporation or bylaws, any agreement, any vote of stockholders or
directors, the DGCL or other applicable law, to the extent any such provisions shall be more
favorable to Indemnitee than the provisions hereof.

          (g) Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall constitute an original.

[Remainder of this page intentionally left blank.]

10

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 
	 

	SALLY BEAUTY HOLDINGS, INC.
	 
	 	 
	 

	By:	/s/ Raal Roos
	 

	 	
Name: Raal Roos

Title: Senior Vice President and General Counsel
	 
	 	 
	 

	 	Address: 3001 Colorado Boulevard 
                Denton, Texas 76210

AGREED TO AND ACCEPTED:

INDEMNITEE:

	 	 	 	 	 
	By:

	 	/s/ David L. Rea
	 	 
	 

	 	Name: David L. Rea	 	 
	 

	 	Title: Senior Vice President, Chief Financial Officer and Treasurer	 	 

Address: 1640 Bent Creek Drive

                Southlake, Texas 76092

11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]