Document:

Amended and Restated Employment Letter Agreement - Christopher Daniel

 Exhibit 10.3a 
 November 24, 2008 
 Mr. Chris Daniel 
 18305
E. San Jose Ave. 
 City of Industry, CA 91748 
 RE:        EMPLOYMENT TERMS 
 Dear Chris, 
 This amended and restated employment letter agreement (the “Agreement”) with Hot Topic, Inc. (the “Company”) shall replace and supersede that certain letter agreement between you and the Company
dated September 21, 2004 and that certain letter agreement between you and the Company dated November 15, 2006 (collectively, the “Prior Agreements”). The Prior Agreements are amended and restated in their entirety as set forth
herein in order to, among other things, clarify the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) to the benefits that may be provided to you pursuant to the terms of this Agreement.

  

	1.	DUTIES 

 You will be expected to perform various duties consistent with the
position of President, Torrid. You will report to the Company’s Chief Executive Officer (“CEO”), unless otherwise assigned by the Company. You will work at our facility located in the City of Industry. 
  

	2.	BASE SALARY 

 Your base salary is $437,800 per year, less payroll
deductions and all required withholdings, which will be subject to annual review. You will be paid semi-monthly and you will be eligible for the following Company benefits: medical insurance, vacation, sick leave, holidays, long-term disability,
401k plan, Employee Stock Purchase Plan and Deferred Compensation Plan. Details about these benefit plans are available for your review. The Company may modify benefits from time to time, as it deems necessary. 
  

	3.	BONUS 

 In addition to your base salary, you will be eligible to earn an
annual performance bonus (“Bonus”) pursuant to the Company’s Executive Incentive Bonus Plan, as approved by the Board of Directors. Your target Bonus under the Plan will be seventy-five percent of your base salary based upon
achievement of the goals set forth in the Plan. Assuming continuous employment, the Bonus will be awarded in the first quarter of the Company’s fiscal year. You must be employed on the date the Bonus is awarded to be eligible for the Bonus. The
Bonus will not be pro-rated in the event your employment is terminated with or without Cause (as defined below) prior to the date on which the Bonus is awarded. 
  

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	4.	AUTOMOBILE ALLOWANCE 

 The Company will pay for you to have a Company
leased automobile of your choice, provided that the value of the automobile does not exceed $60,000. The Company will also reimburse you for expenses including gas, insurance and maintenance for the automobile in accordance with the Company’s
expense reimbursement policy. 
  

	5.	EQUITY AWARDS 

 In addition to any equity awards you have previously
received, during the term of this Agreement, you shall be eligible to receive additional equity awards under the Company’s 2006 Equity Incentive Plan and various equity incentive and bonus programs that may be approved from time to time by the
Board or its Compensation Committee in either’s sole discretion. If you have questions regarding the tax implications of your equity awards or any part of your compensation package, please consult with your own tax advisor. 
  

	6.	TERMINATION 

 The Company may terminate your employment at any time and for
any or no reason, with or without Cause (as defined herein) or advance notice, by giving written notice of such termination. Similarly, you may terminate your employment with the Company at any time at your election, in your sole discretion, for any
or no reason upon two weeks notice to the Company during which time you shall provide reasonable transition assistance to the Company. The Company reserves the right to ask you to expedite your resignation date and to leave prior to the end of the
two weeks notice period. The at-will nature of your employment relationship may not be modified except by a written agreement with the CEO of the Company. 
 If the Company terminates your employment without Cause and not due to your death or Disability (as defined herein), then you shall be entitled to receive the severance benefits described in this Section, subject to your satisfaction of the
conditions set forth herein. Subject to your delivery to the Company of an executed release and waiver of claims in the form attached hereto as Exhibit A or such other form as the Company may require (the “Release”), within the time period
set forth therein, but in no event later than forty-five days following your termination, and permitting such Release to become effective in accordance with its terms, you will receive the following severance benefits: 
 Continued payment of your base salary that is in effect at the time of your termination, subject to standard payroll deductions and withholdings, for six
(6) months. Such payments shall be made according to the normal payroll practice of the Company for a period of six (6) months commencing with the first payroll period following the effective date of the Release (the “Severance
Period”); and 
 Assuming you timely and accurately elect to continue your medical, dental and vision group health insurance benefits
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), commencing with the effective date of the Release the Company shall pay the same percentage of the COBRA premiums for you and your qualified beneficiaries as it
paid for you and your qualified beneficiaries at the time of 
  

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 your termination of employment until the earliest of (i) the end of the Severance Period or
(ii) the expiration of your continuation coverage under COBRA and any applicable state COBRA-like statute that provides mandated continuation coverage. For purposes of this provision, references to COBRA premiums shall not include any amounts
payable under a Code Section 125 health care reimbursement plan. 
 If you voluntarily resign or your employment is terminated for Cause or due to your
death or Disability (as defined herein), all compensation and benefits will cease immediately and you will receive no additional payments from the Company other than your accrued base salary and accrued and unused vacation benefits earned through
the date of your termination. 
 For purposes of this Agreement, “Cause” shall mean (i) willful misconduct by you, including, but not limited
to, dishonesty which materially and adversely reflects upon your ability to perform your duties for the Company, (ii) your conviction of, or the entry of a pleading of guilty or nolo contendere by you to, any crime involving moral turpitude or
any felony, (iii) fraud, embezzlement or theft against the Company, (iv) a material breach by you of any material provision of any employment contract, assignment of inventions, confidentiality and/or nondisclosure agreement between you
and the Company, or (v) your willful and habitual failure to attend to your duties as assigned by the Hot Topic CEO or Board of Directors of the Company, after written notice to you and no less than a 90-day period to cure such failure provided
such failure to perform is subject to cure with the passage of time. 
 For purposes of this Agreement, “Disability” shall mean your inability to
perform your duties under this Agreement, even with reasonable accommodation, because you have become permanently disabled within the meaning of any policy of disability income insurance covering employees of the Company then in force. In the event
the Company has no policy of disability income insurance covering employees of the Company in force when you become disabled, the term “Disability” shall mean your inability to perform your duties under this Agreement, whether with or
without reasonable accommodation, by reason of any incapacity, physical or mental, which the Board, based upon medical advice or an opinion provided by a licensed physician acceptable to the Board, determines to have incapacitated you from
satisfactorily performing all of your usual services for the Company, with or without reasonable accommodation, for a period of at least nine (9) consecutive months during any twelve (12) month period. Based upon such medical advice or
opinion, the determination of the Board shall be final and binding and the date such determination is made shall be the date of such Disability for purposes of this Agreement. 
  

	7.	CHANGE OF CONTROL 

 Following a Change in Control (as defined herein) that
occurs prior to the termination of your employment with the Company the vesting of your stock options will be immediately accelerated such that one hundred percent (100%) of the stock options shall be vested and exercisable. For purposes of
this Agreement, Change of Control is defined as follows: (i) a sale of all or substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation and in which beneficial
ownership of securities of the Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of Directors has changed; (iii) an acquisition by any person, entity or group within 

 

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 the meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor provisions (excluding any
employee benefit plan, or related trust, sponsored or maintained by the Company or subsidiary of the Company or other entity controlled by the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act,
or comparable successor rule) of securities of the Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of Directors. 
  

	8.	APPLICATION OF INTERNAL REVENUE CODE SECTION 409A 

 Notwithstanding
anything to the contrary set forth herein, any payments and benefits provided under this Agreement (the “Severance Benefits”) that constitute “deferred compensation” within the meaning of Section 409A of the Code and the
regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with your termination of employment unless and until you have also incurred a “separation
from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h)) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to you without causing you to incur the
additional 20% tax under Section 409A. 
 It is intended that each installment of the Severance Benefit payments provided for in this Agreement is a
separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended that payments of the Severance Benefits set forth in this Agreement satisfy, to the greatest extent possible,
the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the Company (or, if applicable, the successor entity thereto) determines that the
Severance Benefits constitute “deferred compensation” under Section 409A and you are, on the termination of service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in
Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed until the earlier
to occur of: (i) the date that is six months and one day after your Separation From Service, or (ii) the date of your death (such applicable date, the “Specified Employee Initial Payment Date”), the Company (or the successor
entity thereto, as applicable) shall (A) pay to you a lump sum amount equal to the sum of the Severance Benefit payments that you would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the
payment of the Severance Benefits had not been so delayed pursuant to this Section and (B) commence paying the balance of the Severance Benefits in accordance with the applicable payment schedules set forth in this Agreement. 
  

	9.	COMPANY POLICY 

 As a Company employee, you will be expected to abide by
Company rules and regulations and acknowledge in writing that you have read the Company’s Employee Handbook which will govern the terms and conditions of your employment. The Company’s Employee Handbook may be modified from time to time at
the sole discretion of the Company. 
  

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	10.	PROPRIETARY INFORMATION AGREEMENT 

 You will continue to be subject to the
terms of your Proprietary Information Agreement dated October 4, 2004, which prohibits unauthorized use or disclosure of the Company’s proprietary information, among other things. 
 In your work for the Company, you will be expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person
to whom you have an obligation of confidentiality. Rather, you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry
or otherwise legally in the public domain, or which is otherwise provided or developed by the Company. During our discussions about your proposed job duties, you assured us that you would be able to perform those duties within the guidelines just
described. You agree that you will not bring onto Company premises any unpublished documents or property belonging to any former employer or other person to whom you have an obligation of confidentiality. 
  

	11.	ENTIRE AGREEMENT 

 This Agreement, together with the Exhibit attached
hereto and the stock option documents referred to herein, forms the complete and exclusive statement of the terms of your employment with the Company. The employment terms in this Agreement supersede any other agreements or promises made to you by
anyone, whether oral or written. 
  

	12.	GOVERNING LAW 

 This Agreement will be governed by and construed according
to the laws of the State of California. You hereby expressly consent to the personal jurisdiction of the state and federal courts located in Los Angeles County, California for any lawsuit filed there against you by the Company arising from or
related to this Agreement. In the event of any litigation arising out of or relating to this Agreement, its breach or enforcement, including an action for declaratory relief, the prevailing party in such action or proceeding shall be entitled to
receive his or its damages, court costs, and all out-of-pocket expenses, including attorneys’ fees. Such recovery shall include court costs, out-of-pocket expenses, and attorneys’ fees on appeal, if any. 
  

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 13. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon your heirs, executors, administrators and other legal
representatives and will be for the benefit of the Company, its successors, and its assigns. 
  

	
	Sincerely,
	
	 /s/    Betsy McLaughlin

	 Betsy McLaughlin

	Chief Executive Officer

  

	
	Accepted:
	
	/s/    Chris Daniel
	Chris Daniel
	
	November 24, 2008
	Date

 Attachment:            Exhibit
A:            Waiver and Release 
  

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 EXHIBIT A 
 RELEASE AND WAIVER OF CLAIMS 
 In consideration of the payments and other benefits set forth in
Section 6 of the Agreement dated November 24, 2008, to which this form is attached, I, CHRIS DANIEL, hereby furnish Hot Topic, Inc. (the “Company”), with the following release and waiver (“Release and Waiver”).

 I hereby confirm my obligations under the Company’s Proprietary Information Agreement. 
 I understand that this Release and Waiver, together with the Agreement, constitutes the complete, final and exclusive embodiment of the entire agreement
between the Company, affiliates of the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated therein. 
 Except as otherwise set forth in this Release and Waiver, I hereby release, acquit and forever discharge the Company, its parents and subsidiaries, and
their officers, directors, agents, servants, employees, shareholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed (other than any claim for indemnification I may have as a result of any third party action against me based on my
employment with the Company), arising out of or in any way related to agreements, events, acts or conduct at any time prior to the date I execute this Release and Waiver, including, but not limited to: all such claims and demands directly or
indirectly arising out of or in any way connected with my employment with the Company or the termination of that employment, including but not limited to, claims of intentional and negligent infliction of emotional distress, any and all tort claims
for personal injury, claims or demands related to salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any other form of
disputed compensation; claims pursuant to any federal, state or local law or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination in Employment Act of 1967, as amended
(“ADEA”); the federal Employee Retirement Income Security Act of 1974, as amended; the federal Americans with Disabilities Act of 1990; the federal Worker Adjustment and Retraining Notification Act of 1988; the California Fair Employment
and Housing Act, as amended; tort law; contract law; statutory law; common law; wrongful discharge; discrimination; fraud; defamation; emotional distress; and breach of the implied covenant of good faith and fair dealing; provided, however,
that nothing in this paragraph shall be construed in any way to release the Company from its obligation to indemnify me pursuant to the Company’s indemnification obligation pursuant to agreement or applicable law. 
 I also acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT 
  

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 THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any claims I may have against the Company. 
 I acknowledge that, among other rights, I am waiving and releasing any rights I may have under the ADEA, that this Release and Waiver is knowing and
voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company. I further acknowledge that I have been advised, as required by the Older
Workers Benefit Protection Act, that: (a) the Release and Waiver granted herein does not relate to claims which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and
Waiver (although I may choose voluntarily not to do so); and if I am over 40 years of age upon execution of this Release and Waiver: (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to
consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver;
and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired. 
  

							
	Date:                        	 		 	By:	 	  

		 		 		 	Chris Daniel
		 		 		 	

  

 8Employee Stock Option Plan of 2006

 EXHIBIT 10 (i) 
 ALBERTO-CULVER COMPANY 
 EMPLOYEE STOCK OPTION PLAN OF 2006 
 (as amended through September 17, 2008) 
  

	1.	Purpose of ACSOP 

 The Alberto-Culver Company
Employee Stock Option Plan of 2006 (hereinafter called the “ACSOP”) is intended to encourage ownership of the Common Stock of Alberto-Culver Company (the “Company”) by eligible key employees of the Company and its subsidiaries
and to provide incentives for them to make maximum efforts for the success of the business. Options granted under the ACSOP will be non-qualified options (not incentive options as defined in Section 422 of the Internal Revenue Code of 1986 and
the rules and regulations promulgated thereunder (the “Code”)). 
  

	2.	Eligibility 

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

	3.	Administration 

 The Compensation and Leadership
Development Committee of the Board of Directors of the Company (the “Committee”) shall have full power and authority, subject to the express provisions of the ACSOP, to determine the purchase price of the stock covered by each option, the
Optionees to whom and the time or times at which options shall be granted, the terms and conditions of the options, including the terms of payment thereof, and the number of shares of stock to be covered by each option. The Committee shall have full
power to construe, administer and interpret the ACSOP, and full power to adopt such rules and regulations as the Committee may deem desirable to administer the ACSOP. No member of the Committee shall be liable for any action or determination made in
good faith with respect to the ACSOP or any option thereunder. Determinations by the Committee under the ACSOP need not be uniform and may be made by it selectively among Optionees, whether or not such persons are similarly situated. The
determination of the Committee as to any disputed question arising under the ACSOP, including questions of construction and interpretation, shall be final, conclusive and binding. 
 The Committee may, in its discretion, delegate to a committee of member(s) of the Committee its authority with respect to such matters under the ACSOP
and options granted under the ACSOP as the Committee may specify. 
 The Committee shall be comprised solely of members each of whom shall be
an “outside director” within the meaning of Section 162(m) of the Code, and a “non-employee director” within the meaning of Section 16 (“Section 16”) of the Securities Exchange Act of 1934 and the rules and

  

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

	4.	Number of Shares of Stock to be Offered 

 The
Committee may authorize from time to time the issuance pursuant to the ACSOP of shares not to exceed 9,000,000 of the Company’s Common Stock in the aggregate plus the number of shares of the Company’s Common Stock subject to Substitute
Options as provided in Section 14, subject to adjustment under paragraph 10 hereof. Such shares of Common Stock which may be issued pursuant to options granted under the ACSOP may be authorized and unissued shares or issued and reacquired
shares as the Committee from time to time may determine. If any option granted under the ACSOP shall terminate or be surrendered or expire unexercised in whole or in part, the shares of stock so released from such option may be made the subject of
additional options granted under the ACSOP. Notwithstanding anything to the contrary contained herein, shares of Common Stock (i) tendered in payment of the purchase price, (ii) tendered or withheld by the Company in payment of any tax
withholding obligation, and (iii) repurchased by the Company with option proceeds, shall not in each case be made the subject of additional option grants under the ACSOP. 
  

	5.	Option Price 

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

	6.	Grant of Options 

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

	7.	Term and Exercise of Options 

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

	 	(i)	Except as otherwise provided in paragraphs 7(b), 8(a) or 11(a) hereof, no option may be exercised until the day preceding the anniversary date of the grant of the option.

  

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	 	(ii)	Except as otherwise provided in paragraphs 7(b), 8(a) or 11(a) hereof, on the day preceding the anniversary date of the grant of the option in each of the four calendar years
immediately following the year of the grant of the option, the right to purchase twenty-five percent (25%) of the total number of shares of stock specified in the option shall accrue to the Optionee. Subject to paragraph 8 hereof, each such
right to purchase may be exercised, in whole or in part, at any time after such right accrues and prior to the Expiration Date of the option. 

 (b) Notwithstanding the foregoing or paragraph 8 hereof, the Committee may in its discretion (i) specifically provide at the date of grant for another time or times of exerciseability; (ii) at any time prior
to the Expiration Date or termination of any option previously granted, accelerate the exercisability of any option subject to such terms and conditions as the Committee deems necessary or appropriate to effectuate the purpose of the ACSOP; or
(iii) at any time prior to the Expiration Date or termination of any option previously granted, extend the term of any option (including such options held by officers or directors) for such additional period as the Committee, in its discretion,
shall determine; provided that the term of an option shall not be extended beyond the Expiration Date of that option. In no event, however, shall the aggregate option period with respect to any option, including the original term of the option and
any extensions thereof, exceed ten years. 
 (c) An option may be exercised (subject to the receipt of payment) by giving written notice to
the Company specifying the number of shares to be purchased. The full purchase price for such shares may be paid (i) in cash, (ii) by check, (iii) by 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 stock options under any option plan of the Company or the vesting of shares restricted under
any restricted stock plan of the Company or the Management Bonus Plan during the six months immediately preceding the exercise date. Payment must be received by the Company before any exercise is consummated. For purposes of the delivery of
previously owned shares of Common Stock, the per share value of such shares shall be the Fair Market Value on the date of exercise. 
 (d) At
any time when an Optionee is required to pay to the Company an amount required to be withheld under applicable tax laws in connection with the exercise of an option (calculated by taking the minimum statutory withholding rates for federal, foreign,
state and local tax purposes including payroll taxes, applicable to the income generated by the Optionee by such exercise), the Optionee may satisfy this obligation (i) in cash, (ii) by check, (iii) by delivery of previously owned
shares of Common Stock, (iv) by making an election to have the Company withhold shares of Common Stock, or (v) by a combination of these methods of payment, in each case having a value equal to the amount required to be withheld. The
Optionee must specify the method of satisfying this obligation on or before the date of exercise. The value of the shares to be withheld or delivered shall be based on the Fair Market Value of the Common Stock on the date of exercise. 
  

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	8.	Continuity of Employment 

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

	 	(i)	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 one (1) year period following his or her death (but not after the Expiration Date of such option) to exercise any unexercised options. 

  

	 	(ii)	Upon an Optionee’s termination of employment due to disability, all unvested options shall immediately vest and the Optionee’s option shall terminate one (1) year
after his or her termination of employment (but not after the Expiration Date of such option). For purposes of the ACSOP, “disability” shall have the meaning provided in the Company’s applicable long-term disability plan and such
disability continues for more than three months or, in the absence of such a definition, when an Optionee becomes totally disabled as determined by a physician mutually acceptable to the Optionee and the Committee before attaining 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 Optionee. 

  

	 	(iii)	If an Optionee’s termination of employment is due to retirement, all options (or portions thereof) which are (a) vested at the time of retirement may be exercised for a
period of two (2) years following retirement (but not after the Expiration Date of such option) and (b) unvested at the time of retirement may be exercised for a period of five (5) years from the date of grant (but not after the
Expiration date of such option). Following retirement, options (or portions thereof) which are unvested at the time of retirement will continue to vest under such options’ vesting schedule for a period of five (5) years following
retirement. For purposes of the ACSOP, “retirement” shall be reached when an Optionee’s employment terminates and at the time of such termination the sum of such Optionee’s age and years of service as an employee of the Company
or any of its subsidiaries equals or exceeds 75 years (“Rule of 75”). 

  

	 	(iv)	If an Optionee’s termination of employment is for any reason other than death, retirement or physical disability, the Optionee’s options shall terminate three
(3) months after his or her termination of employment (but not after the Expiration Date of each such option), but may be exercised only to the extent that such Optionee could have exercised such options at the date of such termination of
employment. 

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

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	9.	Non-Transferability of Options 

 An option granted
under the ACSOP shall not be assignable or transferable by an Optionee otherwise than by will or the laws of descent and distribution, and an option shall be exercisable during the lifetime of the Optionee only by him or her. Subject to the
following sentence, an option transferred by will or the laws of descent and distribution may only be exercised by the executors or administrators of his or her estate or any legatee or distributee during the one year period following the
Optionee’s death. In the event that at the time of the Optionee’s death the Optionee met the Rule of 75, an option transferred by will or the laws of descent and distribution may only be exercised by the legatee or distributee during the
period of time that the Optionee could have exercised such options at the time of his or her death and such options shall continue to vest as if the Optionee had not died. 
  

	10.	Adjustment upon Change in Stock 

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

	11.	Change in Control 

 (a) (1) Notwithstanding any
provision of the ACSOP, in the event of a Change in Control, all outstanding options shall immediately be exercisable in full and shall be subject to the provisions of paragraph 11(a)(2) or 11(a)(3), to the extent that either such paragraph is
applicable. If neither paragraph 11(a)(2) or 11(a)(3) is applicable, in whole or in part, the Committee 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 ACSOP, in the event of a Change in Control in connection with which the holders of shares of the Company’s Common Stock receive shares of common stock that are registered under Section 12 of the Exchange Act, all
outstanding options shall immediately be exercisable in full and there shall be substituted for each share of the Company’s Common Stock available under the ACSOP, whether or not then subject to an outstanding option, the number and class of
shares into which each outstanding share of the Company’s Common Stock shall be converted pursuant to such Change in Control. In the event of any such substitution, the purchase price per share of 

  

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each option and/or the number of shares subject to options shall be appropriately adjusted by the Committee, such adjustments to be made without an increase
in the aggregate purchase price. 
 (3) Notwithstanding any provision in the ACSOP, in the event of a Change in Control in
connection with which the holders of the Company’s Common Stock receive consideration other than shares of common stock that are registered under Section 12 of the Exchange Act, each outstanding option shall be surrendered to the Company
by the holder thereof, and each such option shall immediately be cancelled by the Company, and the holder shall receive, within ten (10) days of the occurrence of such Change in Control, a cash payment from the Company in an amount equal to the
number of shares of the Company’s Common Stock then subject to such option, multiplied by the excess, if any, of (i) the greater of (A) the highest per share price offered to 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); 
 (iii) by an Exempt Person; 
  

 6 

 (iv) by an employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; or 
 (v) by any corporation pursuant to a reorganization, merger or
consolidation involving the Company, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (i) and (ii) of paragraph 11(b)(1)(C) shall be satisfied. 
 (B) The cessation for any reason of the members of the Incumbent Board (as such term is defined in paragraph 11(d)) to constitute at least
a majority of the Board of Directors of the Company (hereinafter called the “Board”). 
 (C) Consummation of a
reorganization, merger or consolidation unless, in any such case, immediately after such reorganization, merger or consolidation: 
 (i) more than 60% of the combined voting power of the then outstanding securities of the corporation resulting from such reorganization, merger or consolidation entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals or entities who were the beneficial owners of the combined voting power of all of the Outstanding Company Voting Securities immediately prior to such reorganization,
merger or consolidation; and 
 (ii) at least a majority of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such reorganization, merger or consolidation. 
 (D) Consummation of the sale or other disposition of all or substantially all of the assets of the Company other than (x) pursuant to
a tax-free spin-off of a subsidiary or other business unit of the Company or (y) to a corporation with respect to which, immediately after such sale or other disposition: 
 (i) more than 60% of the combined voting power of the then outstanding securities thereof entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the combined voting power of all of the Outstanding Company Voting Securities immediately
prior to such sale or other disposition; and 
  

 7 

 (ii) at least a majority of the members of the board of directors thereof were members
of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition. 
 (E) Approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the Company. 
 (2) Notwithstanding the provisions of paragraph 11(b)(1): 
 (A) no acquisition of Company Voting Securities shall be
subject to the exception from the definition of Change in Control contained in clause (i) of paragraph 11(b)(1)(A) if such acquisition results from the exercise of an exercise, conversion or exchange privilege unless the security being so
exercised, converted or exchanged was acquired directly from the Company; and 
 (B) for purposes of clause (ii) of
paragraph 11(b)(1)(A), if any Person (other than the Company, an Exempt Person or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall, by reason of an acquisition of
Company Voting Securities by the Company, become the beneficial owner of (x) 20% or more of the combined voting power of the Outstanding Company Voting Securities and (y) combined voting power of Outstanding Company Voting Securities in
excess of the combined voting power of the Outstanding Company Voting Securities held by the Exempt Persons, and such Person shall, after such acquisition of Company Voting Securities by the Company, become the beneficial owner of any additional
Outstanding Company Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control. 
 (c) “Exempt Person” (and collectively, the “Exempt Persons”) means: 
 (1)
Leonard H. Lavin or Bernice E. Lavin; 
 (2) any descendant of Leonard H. Lavin and Bernice E. Lavin or the spouse of any such
descendant; 
 (3) the estate of any of the persons described in paragraph 11(c)(1) or (2); 
 (4) any trust or similar arrangement for the benefit of any person described in paragraph 11(c)(1) or (2); or 
  

 8 

 (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 January 1, 2007,
constitute the Board, provided that: 
 (1) any individual who becomes a director of the Company subsequent to such
date whose election, or nomination for election by the Company’s stockholders, was approved either by the vote of at least a majority of the directors then comprising the Incumbent Board or by the vote of at least a majority of the combined
voting power of the Outstanding Company Voting Securities held by the Exempt Persons shall be deemed to have been a member of the Incumbent Board; and 
 (2) no individual who was initially elected as a director of the Company as a result of an actual or threatened solicitation by a Person other than the Board or the Exempt Persons for the purpose of opposing a
solicitation by any other Person with respect to the election or removal of directors, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board or the Exempt Persons shall be deemed to
have been a member of the Incumbent Board. 
  

	12.	Amendment and Discontinuance 

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

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

  

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

  

	13.	Stockholder Adoption 

 The ACSOP was approved by the
stockholders of the Company on November 13, 2006 and became effective on November 16, 2006, the date that the Delaware corporation having the name or previously having the name New Sally Holdings, Inc. (“New Sally”) distributed
the then outstanding Common Stock of the Company to holders of common stock, $.01 par value per share, of New Sally (the “Distributions”). 
  

 9 

	14.	Substitute Awards 

 Upon the Distributions, the
Committee shall be authorized to grant substitute options under the ACSOP (“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 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
Committee 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. Except for the terms
and conditions set forth in paragraph 7(b) of the ACSOP, 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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