Document:

Exhibit 10.32

 

ALBERTO-CULVER COMPANY EMPLOYEE
STOCK OPTION PLAN OF 2003

 

STOCK OPTION AGREEMENT

FOR EMPLOYEES

 

	
  Optionee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total
  Shares Subject to Option:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Option
  Exercise Price Per Share:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  of Grant:

  	
  October 21,
  2009

  	
   

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
  October 21,
  2009

  	
   

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
  October 21,
  2019

  	
   

  
	
   

  	
   

  	
   

  
	
  Type of Stock Option:

  	
  Non-Statutory Stock Option

  	
   

  

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

2

 

3.             Exercise of Option.

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

6.             Termination or Change of Service.

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

 

	
   

  	
  SALLY BEAUTY HOLDINGS, INC.

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

6

 

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

 

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

 

 

	
   

  	
  OPTIONEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print
  Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  

 

7

 

EXHIBIT A

 

ALBERTO-CULVER COMPANY EMPLOYEE
STOCK OPTION PLAN OF 2003

 

STOCK OPTION EXERCISE NOTICE

 

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

 

	
  Award
  Number:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Optionee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number
  of Shares Purchased:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Option
  Exercise Price Per Share:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate
  Purchase Price:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date
  of Grant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Type of Stock Option:

  	
   

  	
  Non-Qualified Stock Option

  	
   

  

 

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

 

	
  o

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

  
	
   

  	
   

  
	
  o

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

  
	
   

  	
   

  
	
  o

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

  

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

 

	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
  SALLY BEAUTY HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print Name)

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Signature)

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
   

  
					

 

3Exhibit 10.33

 

PRIVILEGED &
CONFIDENTIAL

 

AMENDED AND RESTATED DIRECTOR INDEMNIFICATION
AGREEMENT

 

Indemnification
Agreement, dated as of October 22, 2009, between Sally Beauty Holdings
Inc., a Delaware corporation (the “Company”) and
                                          
(“Indemnitee”).

 

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

 

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

 

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

 

1.             Defined Terms; Construction.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

(b)           Construction. 
For purposes of this Agreement,

 

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

 

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

 

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

 

2.             Agreement to Serve.

 

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

 

3

 

3.             Indemnification.

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

(g)           Notwithstanding Subparagraph (f) immediately
above, the Company acknowledges and agrees that Indemnitee has certain rights
to indemnification, advancement of expenses and/or insurance provided by
another person or entity and certain of its affiliates including the entities
named on Annex I attached hereto (collectively the “Indemnitee-Related Entities”)
that also covers Expenses, losses, liabilities, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges in connection therewith) incurred by Indemnitee or on Indemnitee’s
behalf in connection with any Proceeding in any way connected with, resulting
from or relating to Indemnitee’s Corporate Status (hereinafter “Jointly
Indemnifiable Claims”).  The Company
hereby agrees that:

 

(i) the Company is
the indemnitor of first resort, i.e., its obligations to Indemnitee are primary
and any obligation of the Indemnitee-Related Entities are secondary, with
respect to Jointly Indemnifiable Claims;

 

(ii) the Company
shall be required to advance the full amount of Expenses incurred by Indemnitee
and shall be liable for the full amount of all Expenses, losses, liabilities,
judgments, fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges in connection therewith) to the extent
provided herein; and

 

(iii) the Company
irrevocably waives, relinquishes and releases the Indemnitee-Related Entities
from any and all claims against the Indemnitee-Related Entities for
contribution, subrogation or any other recovery of any kind in respect thereof.

 

The Company and
the Indemnitee further agree that no advancement or payment by the
Indemnitee-Related Entities on behalf of Indemnitee with respect to any Jointly
Indemnifiable Claims shall affect the foregoing, and the Indemnitee-Related
Entities shall be subrogated to the extent of such advancement or payment to
all of the rights of recovery of Indemnitee against the Company.  The Company and Indemnitee agree that

 

5

 

the
Indemnitee-Related Entities are express third-party beneficiaries of the terms
of this Subparagraph (g).  The Company
and Indemnitee further agree that nothing herein is intended to modify, expand,
decrease or otherwise affect the rights or obligations of the parties with
respect to the indemnification provisions of the Company’s Certificate of
Incorporation, Bylaws and this Agreement, and that this provision is intended
only to establish the respective priorities of the indemnity and advancement
obligations between the Company and the Indemnitee-Related Entities.

 

4.             Advancement of Expenses.

 

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

 

5.             Indemnification Procedure.

 

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

 

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

 

6

 

Indemnitee without
the Company’s prior written consent, which shall not be unreasonably withheld.

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

all
expenses (including attorneys’ fees), claims, liabilities and damages arising
out of or relating to its engagement.

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)           Neither the failure of any person or persons to have
made a Determination nor an Adverse Determination by any person or persons
shall be a defense to Indemnitee’s claim or create a presumption that
Indemnitee did not

 

8

 

meet the applicable standard of conduct, and any
Proceeding commenced by Indemnitee pursuant to Section 5(f) shall be de novo with respect to all determinations
of fact and law.

 

6.             Directors and Officers Liability
Insurance.

 

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

 

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

 

7.             Exculpation, etc.

 

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

 

(b)           Period of Limitations. 
No legal action shall be brought and no cause of action shall be
asserted by or in the right of the Company or any of its subsidiaries against
Indemnitee or Indemnitee’s estate, spouses, heirs, executors, personal or legal
representatives, administrators or assigns after the expiration of two years
from the date of accrual of such cause of action, and any claim or cause of
action of the Company shall be extinguished and deemed released unless asserted
by the timely filing of a legal action within such two-year period, provided
that if any shorter period of

 

9

 

limitations
is otherwise applicable to any such cause of action, such shorter period shall
govern.

 

8.             Miscellaneous.

 

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

 

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

 

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

 

(d)           Successors and Assigns. 
This Agreement shall be binding upon the Company and its successors and
assigns, including without limitation any acquiror of all or substantially all
of the Company’s assets or business, any person (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) that acquires beneficial ownership of securities of the Company
representing more than 20% of the total voting power represented by the Company’s
then outstanding Voting Securities and any survivor of any merger or
consolidation to which the Company is party, and shall inure to the benefit of
Indemnitee and Indemnitee’s estate, spouses, heirs,

 

10

 

executors,
personal or legal representatives, administrators and assigns.  The Company shall require and cause any such
successor, as applicable, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement as if it were named as the Company herein, and the Company shall not
permit any such purchase of assets or business, acquisition of securities or
merger or consolidation to occur until such written agreement has been executed
and delivered.  No such assumption and
agreement shall relieve the Company of any of its obligations hereunder, and
this Agreement shall not otherwise be assignable by the Company.

 

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

 

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

 

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

 

[Remainder of this
page intentionally left blank.]

 

11

 

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

 

	
   

  	
  SALLY BEAUTY HOLDINGS,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED TO AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  INDEMNITEE:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

12

 

Annex I —
Indemnitee-Related Entities

 

Clayton, Dubilier & Rice, Inc.

 

Clayton, Dubilier & Rice Fund VII, L.P.

 

CD&R Parallel Fund VII, L.P.

 

Notices to the above parties may be delivered to:

 

Clayton, Dubilier & Rice, Inc.

375 Park Avenue, 18th floor

New York, New York 10152

Attention:  Theresa Gore

Fax:  212-407-5252

 

With a copy to:

 

Paul S. Bird

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Fax:  212-909-6836

 

13

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