Document:

2006 Restricted Stock Plan

 Exhibit 10 (n) 
 ALBERTO-CULVER COMPANY 
 2006 RESTRICTED STOCK PLAN 
 SECTION 1.   ESTABLISHMENT AND PURPOSE 
 1.1     Establishment The Alberto-Culver Company (the “Company”) hereby establishes a restricted stock plan for Key Employees, as defined herein, which shall be known as the
2006 Restricted Stock Plan (the “RSP”). At the time of approval by the stockholders of the Company, the name of the Company was New Aristotle Holdings, Inc. Following the time of approval, the name of the Company will be changed to
Alberto-Culver Company. 
 1.2     Purpose The purpose of the RSP is to enable the Company to
attract, retain, motivate, and reward Key Employees by providing them with a means to acquire an equity interest or to increase such interest in the Company in return for high levels of individual contribution and continued service. 
 1.3     Definitions Whenever used herein, the following terms shall have the meanings set forth below:

  

	 	 (a)
	 “Board” means the Board of Directors of the Company. 

  

	 	 (b)
	 “Change in Control” shall have the meaning set forth in Section 7.2(a). 

  

	 	 (c)
	 “Committee” means the Compensation and Leadership Development Committee of the Board or, if any member of the Compensation Committee is not (i) an
“outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986 and the rules and regulations thereunder (the “Code”) or (ii) 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”), the Committee shall set up a subcommittee comprised solely of outside directors and non-employee
directors for purposes of all matters arising under this RSP 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. 

  

	 	 (d)
	 “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 a Participant becomes totally disabled as determined by a physician mutually acceptable to the Participant and the Company before attaining the age of retirement as defined below 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 Participant. 

  

	 	 (e)
	 “Exempt Person” and “Exempt Persons” shall have the meaning set forth in Section 7.2(b). 

  

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	 	 (f)
	 “Fair Market Value” shall mean the average of the high and low transaction prices of a share of Common Stock 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. 

  

	 	 (g)
	 “Key Employee” means an active, salaried employee (including officers and directors who also are employees) of the Company or its subsidiaries with
direct impact on the performance of the Company. 

  

	 	 (h)
	 “Incumbent Board” shall have the meaning set forth in Section 7.2(c). 

  

	 	 (i)
	 “Participant” means a Key Employee designated by the Committee who is awarded and holds Restricted Stock pursuant to the RSP.

  

	 	 (j)
	 “Restricted Stock” shall mean the Common Stock of the Company, $.01 par value, with restrictions as described in Section 6.

  

	 	 (k)
	 “Restricted Stock Agreement” shall have the meaning set forth in Section 6.1. 

  

	 	 (l)
	 “Retirement” shall be reached when a Participant’s employment terminates and at the time of such termination the sum of such Participant’s
age and years of service as an employee of the Company or any of its subsidiaries equals or exceeds 75 years. 

 SECTION
2.   ADMINISTRATION 
 2.1     Administration The RSP shall be administered by
the Committee. The Committee shall have full power to construe, administer and interpret the RSP, and full power to adopt such rules and regulations as the Committee may deem desirable to administer the RSP. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the RSP or any Restricted Stock thereunder. Determinations by the Committee under the RSP need not be uniform and may be made by it selectively among Participants, whether or
not such persons are similarly situated. 
 2.2     Finality of Determination The
determination of the Committee as to any disputed questions arising under this RSP, including questions of construction and interpretation, shall be final, conclusive and binding. 
 SECTION 3.   ELIGIBILITY AND PARTICIPATION 
 3.1     Eligibility Key Employees of the Company and its subsidiaries are eligible to receive Restricted Stock under the RSP, in such amounts and on as many occasions as the Committee in its sole discretion
may determine. 
  

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 3.2     Participation The Committee shall designate the
Key Employees to receive Restricted Stock, the time or times and the size and terms of each individual grant of Restricted Stock under the RSP. 
 SECTION 4.  STOCK SUBJECT TO THE RSP 
 4.1     Number The total
number of shares of Restricted Stock that may be granted under the RSP shall not exceed 2,500,000. These shares may consist, in whole or in part, of authorized but unissued shares of stock or shares of stock reacquired by the Company and not
reserved for any other purpose. 
 4.2     Reacquired and Withheld Shares If, at any time,
shares of Restricted Stock issued pursuant to the RSP shall have been reacquired by the Company in connection with the restrictions herein imposed on such shares, such reacquired shares again shall become available for issuance under the RSP at any
time prior to its termination. In addition until November 1, 2016, any shares of Restricted Stock withheld to pay, in whole or in part, the amount required to be withheld under applicable tax laws in accordance with Section 6.12 hereof,
shall become available for issuance under the RSP at any time prior to its termination. 
 4.3     Adjustment upon Change in Stock The Committee shall take such action with regard to adjustment of the number of shares of Restricted Stock that may be granted hereunder as it considers to be equitable
in its sole and absolute discretion 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, stock split,
reverse stock split, spin-off, recapitalization, reclassification, merger, consolidation, combination, issuance of securities convertible into or exchangeable for Common Stock, exchange or conversion of shares, or any other similar type of event.
The Committee’s determination of any adjustment pursuant to this Section 4.3 shall be final, conclusive and binding. 
 SECTION
5.   DURATION OF THE RSP 
 The RSP shall continue until all Restricted Stock subject to it shall have been
granted and vested under the RSP, subject to the provisions of the RSP regarding amendments thereto and termination thereof. 
 SECTION
6.  SHARES OF RESTRICTED STOCK 
 6.1     Grant of Shares of Restricted Stock
Awards of Restricted Stock to Participants shall be granted under a Restricted Stock Agreement between the Company and the Participant which shall provide that the shares subject to any such award shall be subject to such forfeiture and other
conditions, including the provisions of Section 6.7 hereof, as the Committee shall designate. 
  

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 6.2     Vesting Except as otherwise provided in Sections
7.1 and/or 6.8 hereof, Restricted Stock granted to Participants hereunder will vest on a cumulative basis in equal annual increments of one-fourth of the shares granted, commencing on the day preceding the second anniversary of the grant of the
Restricted Stock. Those shares will be fully vested after a period of five (5) years from the day preceding the date of grant. The Committee, however, may (i) accelerate the vesting of any Restricted Stock granted hereunder subject to such
terms and conditions as the Committee deems necessary or desirable to effectuate the purpose of the RSP or (ii) specifically provide at the date of grant for another vesting schedule which is different than the vesting schedule set forth in the
first two sentences of this Section 6.2. 
 6.3     Transferability Subject to
Section 6.8 hereof, a Participant’s rights under the RSP may not be assigned and any Restricted Stock granted to a Participant may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated as long as the shares
are subject to forfeiture or other conditions as provided in this RSP, and as set forth in the Restricted Stock Agreement pursuant to which such shares were granted. 
 6.4     Removal of Restrictions Except as otherwise provided herein, or as may be required by applicable law, shares of Restricted Stock covered by each Restricted
Stock Agreement made under this RSP will become freely transferable by the Participant upon vesting in accordance with Sections 6.2, 6.8 and/or 7.1. 
 6.5     Other Restrictions The Committee may impose such other restrictions on any shares granted pursuant to this RSP as it may deem advisable, including, without limitation,
restrictions required by (1) federal securities laws, (2) requirements of any stock exchange upon which such shares of the same class are listed and (3) any state securities laws applicable to such shares. 
 6.6     Certificates In addition to any legends placed on certificates pursuant to Section 6.5, the
Company reserves the right to place on each certificate representing shares of Restricted Stock a restrictive legend, which legend may be in the following form: 
 The sale or other transfer of shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to the restrictions on transfer and forfeiture
conditions (which include the satisfaction of certain employment service requirements) set forth in the 2006 Restricted Stock Plan and Restricted Stock Agreement. A copy of such agreement may be inspected at the offices of the Secretary of the
Company. 
 All certificates representing shares of Restricted Stock may be held by the Secretary of the Company in escrow on behalf of the
Participant awarded such shares, together with a Power of Attorney (if any) executed by the Participant, in the form satisfactory to the Committee and authorizing the Company to transfer such shares as provided in the Restricted Stock Agreement,
until such time as all restrictions imposed on such shares pursuant to the RSP and the Restricted Stock Agreement have expired or been earlier terminated. 
  

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 6.7     Termination of Employment In the event that,
prior to the removal of restrictions on shares of Restricted Stock as contemplated by Section 6.4, a Participant’s employment with the Company terminates for any reason other than death, Retirement, Disability, or a Change in Control, any
shares subject to time period restrictions or other forfeiture conditions at the date of such termination shall automatically be forfeited to the Company. A Participant shall not forfeit any rights to Restricted Stock previously granted to him,
solely because he ceases to qualify as a Key Employee. 
 6.8     Death, Retirement or Disability
 
 (a)   In the event that, prior to the removal of restrictions on shares of Restricted Stock as contemplated
by Section 6.4, a Participant’s employment with the Company terminates because of death or Disability, any uncompleted portion of a time period restriction or other forfeiture conditions, as set forth herein or in the terms of the
Restricted Stock Agreement, shall be waived and all such Restricted Stock shall immediately vest. The shares released from such restrictions pursuant to this Section 6.8 thereafter shall be freely transferable by the Participant or by the
person set forth in Section 6.8 (c) and (d) in the case of the Participant’s death, subject to any applicable legal requirements. 
 (b)   In the event that, prior to the removal of restrictions on shares of Restricted Stock as contemplated by Section 6.4, a Participant’s employment with the Company terminates because of
Retirement, any uncompleted portion of a time period restriction or other forfeiture conditions, as set forth herein or in the terms of the Restricted Stock Agreement, shall be waived and all such Restricted Stock shall immediately vest. The shares
released from such restrictions pursuant to this Section 6.8 thereafter shall be freely transferable by the Participant, subject to any applicable legal requirements. 
 (c)   A Participant may from time to time name in writing any person or persons to whom his or her Restricted Stock should be given if the Participant dies, subject to the waiver of any
applicable forfeiture conditions by the Committee pursuant to Section 6.8(a) hereof. Each such beneficiary designation will revoke all prior designations by the Participant with respect to the RSP, shall not require the consent of any
previously named beneficiary, and will be effective only when filed with the Secretary of the Company during the Participant’s lifetime. 
 (d)   If a Participant fails to designate a beneficiary before his or her death, as provided above, or if the beneficiary designated by the Participant dies prior to receiving the Restricted Stock hereunder,
the Company shall transfer the Restricted Stock to the surviving spouse of the Participant, or in the event there is no such surviving spouse, to the estate of the Participant. 
 6.9     Voting Rights Participants shall have full voting rights with respect to shares of Restricted Stock. 
 6.10    Dividend Rights Except as the Committee may otherwise determine, Participants shall have full dividend
rights (subject to applicable withholding tax requirements) with any such dividends being paid currently. Dividends paid on shares of Restricted Stock prior to the shares vesting will be treated as wages for federal income tax purposes and will be
subject to withholding taxes by the Company. If all or part of a dividend is paid in shares of stock, the dividend shares shall be subject to the same restrictions on transferability as the shares of Restricted Stock that are the basis for the
dividend. 
  

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 6.11    Security Interest in Shares In connection with the
execution of any Restricted Stock Agreement, the Committee may require that a Participant grant to the Company a security interest in the shares of Restricted Stock issued or granted pursuant to this RSP to secure the payment of any sums
(e.g.: income withholding taxes due when restrictions lapse) then owing or thereafter coming due to the Company by such Participant. This security interest shall continue for such period of time as the certificates representing shares of
Restricted Stock are held by the Secretary of the Company in escrow on behalf of the Participant pursuant to Section 6.6. 
 6.12    Withholding Taxes Due At any time when a Participant is required to pay to the Company an amount required to be withheld under applicable tax laws in connection with the vesting of Restricted Stock
(calculated by taking the minimum statutory withholding rates for federal, foreign, state and local tax purposes including payroll taxes, applicable to the income generated by the vesting of such Restricted Stock), the Participant may satisfy this
obligation in whole or in part by making an election to have the Company withhold shares of Restricted Stock having a value equal to the amount required to be withheld. The value of shares to be withheld shall be based on the Fair Market Value of
the Restricted Stock on the date the Participant vests in such shares. 
 SECTION 7.   CHANGE IN CONTROL 
 7.1     Vesting Upon Change in Control Notwithstanding any provision of the RSP, all outstanding shares
of Restricted Stock shall immediately become fully vested upon the occurrence of a Change in Control. 
 7.2     Definitions 
 (a)   The term “Change in Control” means:

 (1)   the occurrence of any one or more of the following events: 
 (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 Section 7.2(b)); 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
Section 7.2(a)(2)(A); 
  

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 (ii)  by the Company, except as otherwise provided in
Section 7.2(a)(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 Section 7.2(a)(1)(C) shall be satisfied. 
 (B)    The cessation for any reason of the members of the Incumbent Board (as such term is defined
below) to constitute at least a majority of 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 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 

  

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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 Section 7.2(a)(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 Section 7.2(a)(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 Section 7.2(a)(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. 
 (b)   The term “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; 
  

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 (3)   the estate of any of the persons described in
Section 7.2(b)(1) or (2); 
 (4)   any trust or similar arrangement for the benefit of any
person described in Section 7.2(b)(1) or (2); or 
 (5)   the Lavin Family Foundation or any
other charitable organization established by any person described in Section 7.2(b)(1) or (2). 
 (c)   The
term “Incumbent Board” means those individuals who, as of November 1, 2006, 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. 
 SECTION 8.   EMPLOYMENT RIGHTS OF EMPLOYEES 
 Nothing
in this RSP or in any grant of Restricted Stock shall interfere with or limit in any way the right of the Company to terminate any Key Employee’s or Participant’s employment at any time, or confer upon any Key Employee or Participant any
right to continue in the employ of the Company or its subsidiaries. 
 SECTION 9.  STOCKHOLDER APPROVAL, AMENDMENT AND
TERMINATION 
 9.1     Amendment  This RSP may be amended at any time by the
Committee or the Board; provided that no such amendment shall permit the granting of Restricted Stock to anyone other than as provided in Section 3 hereof, or increase the maximum number of shares of stock that may be granted pursuant to this
RSP except pursuant to Section 4.3 hereof, without the further approval of the Company’s stockholders. 
 9.2     Termination   The Company reserves the right to terminate the RSP at any time by action of the Committee or the Board. 
  

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 9.3     Existing Restrictions  Neither
amendment nor termination of this RSP shall adversely affect any shares previously granted or issued pursuant to this RSP. 
 9.4     Stockholder Adoption  The RSP was approved by the stockholders of the Company on November 13, 2006 and shall become effective on the date that the Delaware corporation having the name
or previously having the name New Sally Holdings, Inc. (“New Sally”) distributes the then outstanding Common Stock of the Company to holders of common stock, $.01 par value per share, of New Sally. 
  

 102006 Stock Option Plan for Non-Employee Directors

 Exhibit 10 (o) 
 ALBERTO-CULVER COMPANY 
 2006 STOCK OPTION PLAN 
 FOR NON-EMPLOYEE DIRECTORS 
  

 1.     Purpose. The principal purpose of the 2006 Stock Option Plan for Non-Employee
Directors (the “Director Plan”) is to benefit Alberto-Culver Company (the “Company”) and its subsidiaries by offering its non-employee directors an opportunity to become holders of the Company’s Common Stock, par value $.01
per share (“Common Stock”), in order to enable them to represent the viewpoint of other stockholders of the Company more effectively and to encourage them to continue serving as directors of the Company. At the time of approval by the
stockholders of the Company, the name of the Company was New Aristotle Holdings, Inc. Following the time of approval, the name of the Company will be changed to Alberto-Culver Company. 
 2.     Administration. The Director Plan shall be administered by the Board of Directors, whose
interpretation of the terms and provisions of the Director Plan shall be final, conclusive and binding. No member of the Board of Directors shall be liable for any action or determination made in good faith with respect to the Director Plan or any
option thereunder. 
 3.     Eligibility. Options shall be granted under this Director Plan
only to members of the Board of Directors who are not officers or employees of the Company or any of its subsidiaries. 
 4.     Granting of Options. 
 (a)   An option to purchase approximately
$300,000 of Common Stock from the Company shall be automatically granted by the Board of Directors, without further action required, to each director of the Company upon his or her initial election or appointment as a director of the Company
(“Initial Grant”); provided such director is eligible at that time under the terms of paragraph 3 of this Director Plan and was not a director of the Company prior to November 1, 2006. The number of shares subject to such option shall
be calculated by dividing $300,000 by the Fair Market Value (as defined in Section 5) of the Company’s Common Stock on the option grant date rounded to the nearest 100 shares. No person may be granted more than one option pursuant to this
paragraph 4(a) of this Director Plan. Any director initially elected or appointed as a director of the Company after November 1, 2006 and prior to December 1, 2006 shall receive an Initial Grant on December 1, 2006. 
 (b)   An option to purchase approximately $150,000 of Common Stock from the Company shall be automatically granted by the Board
of Directors, without further action required, on January 25, 2007 and subsequently on the date of every Annual Meeting of the Stockholders of the Company commencing with the Annual Meeting of the Stockholders of the Company following the
effective date of this Director Plan as set forth in Section 13, to each director of the Company (“Subsequent Grant”); provided such director is eligible at that time under the terms of paragraph 3 of 

  

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this Director Plan. The number of shares subject to such option shall be calculated by dividing $150,000 by the Fair Market Value (as defined in
Section 5) of the Company’s Common Stock on the option grant date rounded to the nearest 100 shares. No director who has received an Initial Grant shall be entitled to receive a Subsequent Grant during the same fiscal year of the Company
and no director shall be entitled to receive more than one Subsequent Grant in any fiscal year of the Company. 
 (c)   An aggregate of 500,000 shares of Common Stock shall be available under this Director Plan. Such number of shares, and the number of shares subject to options outstanding under this Director Plan, shall be subject in all
cases to adjustment as provided in paragraph 10. Shares subject to options may be made available from unissued or treasury shares of stock. If any option granted under the Director Plan shall terminate or be surrendered or expire unexercised, in
whole or in part, the shares so released from such option may be made the subject of additional options granted under the Director Plan. 
 (d)   Nothing contained in this Director Plan or in any option granted pursuant hereto shall confer upon any optionee any right to continue serving as a director of the Company or interfere in any way with
any right of the Board of Directors or stockholders of the Company to remove such director pursuant to the certificate of incorporation or by-laws of the Company or applicable law. 
 5.     Option Price.  Subject to adjustment under paragraph 10, the option price shall be the
Fair Market Value (as defined below) of the Company’s Common Stock on the date the option is granted. For purposes of the Director Plan, “Fair Market Value” shall mean the average of the high and low transaction prices of a share of
Common Stock 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.     Duration of Options, Increments and Extensions.  Subject
to the provisions of paragraph 8, each option shall be for a term of ten (10) years. Subject to the provisions of paragraph 11, each option shall become exercisable with respect to 25% of the total number of shares on the day preceding the one
(1) year anniversary of the date of grant and with respect to an additional 25% at the end of each twelve-month period thereafter during the succeeding three years. 
 7.     Exercise of Option.  An option may be exercised by giving written notice to the Company specifying the number of shares of Common Stock to be
purchased, accompanied by the full purchase price for such number of shares, (i) in cash, (ii) by check, (iii) by delivery of previously owned shares of Common Stock, or (iv) by a combination of these methods of payment. However,
under no circumstances may any optionee deliver previously owned shares of Common Stock obtained from the exercise of options under any stock option plan of the Company during the six months immediately preceding the exercise date. The per share
value of the Common Stock delivered in payment of the option price shall be the Fair Market Value of the Common Stock on the date of exercise. 
 8.     Termination - Exercise Thereafter. 
 (a)  
Upon the death of an optionee, all unvested options shall immediately vest and the executors or administrators of his or her estate or legatees or distributees shall have the right during the 

  

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one (1) year period following his or her death (but not after the expiration of the term of any such options) to exercise any unexercised options.

 (b)   Upon any optionee’s resignation from the Board of Directors due to disability or retirement, all
unvested options shall immediately vest and the optionee’s options shall terminate one (1) year after his or her resignation (but not after the expiration of the term of any such option) 
 (c)   If the optionee’s termination from service on the Board of Directors is for any reason other than death, disability
or retirement, the optionee’s options shall terminate three (3) months after his or her termination (but not after the expiration of the term of any such option). 
 9.     Non-Transferability of Options.   No option shall be transferable by the optionee otherwise than by will or the laws of descent and distribution,
and each option shall be exercisable during an optionee’s lifetime only by the optionee. 
 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 shall be automatically granted by the Board
of Directors under the Director Plan shall be adjusted, as may be determined to be equitable in the sole and absolute discretion of the Board of Directors, 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, extraordinary cash dividend, issuance of rights to purchase Common Stock,
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 Board of
Director’s determination of any adjustment pursuant to this paragraph 10 shall be final, conclusive and binding. 
 11.    Change in Control 
 (a)  (1)  Notwithstanding any provision
of the Director Plan, 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. If neither paragraph 11(a)(2) or 11(a)(3) is applicable, in whole or in part, the Board of Directors shall make such reasonable adjustments to the exercise price, number of shares subject to options, type of shares subject to options,
and/or any other term so that no outstanding option is adversely affected or impaired by such Change in Control. 
 (2)   Notwithstanding any provision of the Director Plan, 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 Securities Exchange Act of 1934 (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 Director Plan, whether or not then subject to an outstanding option, the number and class of shares into which each 

  

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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 and/or the number of shares subject to future options shall be appropriately adjusted by the Board of Directors, such adjustments to be made without an increase in the aggregate purchase price. 
 (3)   Notwithstanding any provision in the Director Plan, 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 holders of common stock 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: 
 (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); 
  

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 (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. 
 (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 of Directors 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 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 

  

 5 

 
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 of Directors 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); 
  

 6 

 (4)   any trust or similar arrangement for the benefit of any
person described in paragraph 11(c)(1) or (2); or 
 (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 November 1, 2006, constitute the Board of Directors, 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 of Directors or the Exempt Persons shall be deemed to have been a member of the Incumbent Board. 
 12.    Amendment of Director Plan.  The Board of Directors may amend or discontinue this Director
Plan at any time; provided, however, that no such amendment or discontinuance shall, without the approval of the stockholders except as provided in paragraph 10, (i) increase the total number of shares for which options may be granted to
eligible directors pursuant to this Director Plan or (ii) change the purchase price. In addition, no amendment or discontinuance of the Director Plan shall adversely affect or impair any option previously granted, without the consent of the
optionee. 
 13.    Stockholder Adoption.  The Director Plan was approved and adopted by
stockholders of the Company on November 13, 2006 and shall become effective on the date that the Delaware corporation having the name or previously having the name New Sally Holdings, Inc. (“New Sally”) distributes the then
outstanding Common Stock of the Company to holders of common stock, $.01 par value per share, of New Sally (the “Distributions”). 
 14.    Substitute Awards.   Upon the Distributions, the Board of Directors shall be authorized to grant substitute options under the Director Plan (“Substitute Options”)
to purchase Common Stock of the Company, in accordance with the terms of the Employee Matters Agreement, dated as of June 19, 2006, among New Sally, Sally Holdings, Inc., Alberto-Culver Company, as then constituted, and the Company (the
“Employee Matters Agreement”), to holders of options to purchase common stock of New Sally (“New Sally Options”). The aggregate number of shares of Common Stock subject to Substitute Options shall not exceed the number determined
by multiplying (i) the number of shares of 

  

 7 

 
New Sally common stock subject to the New Sally Options that are converted into New Alberto Options pursuant to the Employee Matters Agreement by
(ii) the ratio of the Alberto-Culver Pre-Distribution Stock Price over the New Alberto-Culver Post Distribution Stock Price, as such terms are defined in the Employee Matters Agreement. The Board of Directors shall determine the exercise price
and number of shares of Common Stock subject to each Substitute Option in a manner that preserves the intrinsic value of the New Sally Option to which such Substitute Option relates. The terms and conditions of each Substitute Option, including,
without limitation, the expiration date of the option, the duration of the exercise period and the method of exercise shall be the same as those of the New Sally Option to which the Substitute Option relates. 
  

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