-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UMU3qqniZh3ENdP2tA5JeGUhDbefZC4M5WZCImJb7B4MpZ7p3s3HHPIXyAGn904V YuXB89apxPjhdYCxc0vFNA== 0000003327-97-000002.txt : 19970222 0000003327-97-000002.hdr.sgml : 19970222 ACCESSION NUMBER: 0000003327-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970213 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALBERTO CULVER CO CENTRAL INDEX KEY: 0000003327 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 362257936 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05050 FILM NUMBER: 97529797 BUSINESS ADDRESS: STREET 1: 2525 ARMITAGE AVE CITY: MELROSE PARK STATE: IL ZIP: 60160 BUSINESS PHONE: 7084503039 MAIL ADDRESS: STREET 1: 2525 ARMITAGE AVENUE CITY: MELROSE PARK STATE: IL ZIP: 60160 10-Q 1 1ST QUARTER FISCAL 1997 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: December 31, 1996 -OR- [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-5050 ALBERTO-CULVER COMPANY (Exact name of registrant as specified in its charter) Delaware 36-2257936 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2525 Armitage Avenu Melrose Park, Illinois 60160 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (708) 450-3000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES X NO At December 31, 1996, there were 22,351,814 shares of Class A common stock outstanding and 33,532,480 shares of Class B common stock outstanding after giving effect to the 100% stock dividend in February, 1997. - 1 - PART I ITEM 1. FINANCIAL STATEMENTS
ALBERTO-CULVER COMPANY AND SUBSIDIARIES Consolidated Statements of Earnings Three Months Ended December 31, 1996 and 1995 (dollar amounts in thousands, except per share figures) (Unaudited) 1996 1995 Net sales $ 426,105 347,638 Costs and expenses: Cost of products sold 215,388 178,343 Advertising, promotion, selling and administrative 181,587 146,675 Interest expense, net of interest income of $787 in 1997 and $1,629 in 1996 2,392 2,102 ---------- --------- Total costs and expenses 399,367 327,120 ---------- --------- Earnings before non-recurring gain and provision for income taxes 26,738 20,518 Non-recurring gain (Note 5) 15,634 -- ---------- --------- Earnings before provision for income taxes (Note 5) 42,372 20,518 Provision for income taxes (Note 5) 15,784 7,643 ---------- --------- Net earnings (Note 5) $ 26,588 12,875 ========== ====== Net earnings per share (Notes 2, 3 and 5) Primary $ .47 .23 ========== ========= Fully-diluted $ .44 .22 ========== ========= Cash dividends paid per share (Note 2) $ . 045 .04 ========== ========= See notes to consolidated financial statements.
- 2 - ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets December 31, 1996 and September 30, 1996 (dollar amounts in thousands) (Unaudited) December 31, September 30, ASSETS 1996 1996 - ------ --------------- ----------- Current assets: Cash and cash equivalents $ 106,938 66,211 Short-term investments 6,400 5,346 Receivables, less allowance for doubtful accounts ($8,612 at 12/31/96 and $8,208 at 9/30/96) 119,294 125,718 Inventories (Note 4) 300,451 288,525 Other current assets 30,086 26,918 ---------- --------- Total current assets 563,169 512,718 ---------- --------- Property, plant and equipment at cost, less accumulated depreciation ($141,214 at 12/31/96 and $143,946 at 9/30/96) 167,550 175,920 Goodwill, net 110,434 107,603 Trade names and other intangible assets, net 75,060 76,877 Other assets 39,161 36,148 ---------- ---------- Total assets $ 955,374 909,266 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and short-term borrowings $ 5,364 3,650 Accounts payable 150,335 154,634 Accrued expenses 119,685 115,139 Income taxes 22,441 13,172 ---------- ---------- Total current liabilities 297,825 286,595 ----------- ---------- Long-term debt 60,925 61,548 Convertible subordinated debentures 100,000 100,000 Deferred income taxes 23,691 16,582 Other liabilities 19,005 19,445 Stockholders' equity (Note 2): Common stock, par value $.22 per share: Class A authorized 75,000,000 shares; issued 24,311,224 shares 2,918 2,918 Class B authorized 75,000,000 shares; issued 37,710,664 shares 4,608 4,608 Additional paid-in capital 91,359 88,955 Retained earnings 414,611 390,526 Foreign currency translation (11,986) (13,428) ----------- ----------- 501,510 473,579 Less treasury stock at cost (Class A common shares: 2,086,717 at 12/31/96 and 2,214,024 at 9/30/96; Class B common shares: 4,178,184 at 12/31/96 and at 9/30/96) (47,582) (48,483) ----------- ------------- Total stockholders' equity 453,928 425,096 ----------- ---------- Total liabilities and stockholders' equity $ 955,374 909,266 ========== ========== See notes to consolidated financial statements.
- 3 - ALBERTO-CULVER COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows Three months Ended December 31, 1996 and 1995 (dollar amounts in thousands) (Unaudited) 1996 1995 Cash Flows from Operating Activities: Net earnings $ 26,588 12,875 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 8,942 7,057 Non-recurring gain (15,634) -- Other, net (2,706) (250) Cash effects of changes in: Receivables, net 6,268 5,553 Inventories (8,888) (16,225) Other current assets (1,911) (290) Accounts payable and accrued expenses (1,582) (1,010) Income taxes 14,886 5,039 ------ -------- Net cash provided by operating activities 25,963 12,749 -------- -------- Cash Flows from Investing Activities: Short-term investments (1,054) (1,600) Capital expenditures (9,009) (12,390) Payments for purchased businesses, net of acquired companies' cash (6,215) (10,576) Proceeds from insurance settlement 28,000 -- Other, net 866 (589) ------------ -------- Net cash used by investing activities 12,588 (25,155) ---------- -------- Cash Flows from Financing Activities: Short-term borrowings 1,831 1,799 Proceeds from long-term debt 927 -- Repayments of long-term debt (302) (303) Cash dividends paid (2,504) (2,218) Cash proceeds from exercise of stock options 2,850 860 Stock purchased for treasury (994) (578) --------- -------- Net cash used by financing activities 1,808 (440) ------------ -------- Effect of foreign exchange rate changes on cash 368 9 -------------- ------- Net increase (decrease) in cash and cash equivalents 40,727 (12,837) Cash and cash equivalents at beginning of period 66,211 142,585 ----------- ------- Cash and cash equivalents at end of period $ 106,938 129,748 ========== ======= See notes to consolidated financial statements.
- 4 - ALBERTO-CULVER COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements (l) The consolidated financial statements contained in this report have not been examined by independent public accountants, except for balance sheet information presented at September 30, 1996. However, in the opinion of the company, the consolidated financial statements reflect all adjustments, which include only normal adjustments, necessary to present fairly the data contained therein. The results of operations for the periods covered are not necessarily indicative of results for a full year. (2) On January 23, 1997, the company announced a 100% stock dividend on the company's Class A and Class B outstanding shares. The new shares will be distributed February 20, 1997 to shareholders of record at the close of business on February 3, 1997. The stock dividend is being distributed only on outstanding shares and not on shares held in the treasury. All share and per share information in this report, except for treasury shares, has been restated to reflect the 100% stock dividend. The company also announced on January 23, 1997 an increase in the cash dividend on Class A and Class B common stock, raising the quarterly dividend 11.1% to 5 cents per share or 20 cents annually after reflecting the 100% stock dividend. The cash dividend is payable February 20, 1997 to stockholders of record on February 3, 1997. (3) Primary earnings per share are based on the weighted average shares outstanding, including common stock equivalents, of 56,834,000 and 55,996,000 for the three months ended December 31, 1996 and 1995, respectively, after giving effect to the 100% stock dividend described in Note 2. Fully diluted earnings per share are determined by dividing net earnings before interest expense on the convertible subordinated debentures (net of tax benefit) by the weighted average shares outstanding, including common stock equivalents, after giving effect to common shares to be issued assuming conversion of the convertible subordinated debentures to Class A common stock. Fully-diluted weighted average shares outstanding were 63,042,000 and 62,382,000 for the three months ended December 31, 1996 and 1995, respectively, after giving effect to the 100% stock dividend described in Note 2. (4) Inventories consist of the following: (in thousands) December 31, September 30, 1996 1996 ------------------------------ Finished goods $261,434 251,617 Work-in-process 5,734 5,622 Raw materials 33,283 31,286 ------------------------------- $300,451 288,525 (5) In the first quarter of fiscal year 1997, the company received a $28.0 million insurance settlement from the loss of its corporate airplane. The effect on the company's earnings was a non-recurring pre-tax gain of $15.6 million and an increase in net earnings of $9.8 million. Accordingly, earnings per share increased $0.17 on a primary basis and $0.16 on a fully-diluted basis. The following table provides pro-forma information for the first quarter excluding the non-recurring gain (in thousands, except per share data): 1996 1995 ---- ---- Pre-tax earnings $ 26,738 20,518 ======== ====== Net earnings $ 16,777 12,875 ======== ====== Net earnings per share: Primary $ 0.30 0.23 ====== ==== Fully-diluted $ 0.28 0.22 ====== ==== - 5 - ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS FIRST QUARTER ENDED DECEMBER 31, 1996 V.S. FIRST QUARTER ENDED DECEMBER 31, 1995 The company achieved record first quarter net sales of $426.1 million in fiscal year 1997, up $78.5 million or 22.6% over the comparable period of fiscal year 1996. Net earnings for the three months ended December 31, 1996, which included a non-recurring gain, were also a record for the first quarter at $26.6 million or 106.5% higher than the same period of the prior year. Earnings per share were 47 cents on a primary basis and 44 cents on a fully-diluted basis. As described in Note 5, during the first quarter of fiscal year 1997, the company received a $28.0 million insurance settlement from the loss of its corporate airplane. As a result, the company recognized a non-recurring, pre-tax gain of $15.6 million and an increase to net earnings of $9.8 million. Accordingly, earnings per share increased 17 cents on a primary basis and 16 cents on a fully-diluted basis. On a pro-forma basis, net earnings excluding the non-recurring gain were a record for the first quarter at $16.8 million or 30.3% higher than the same period of the prior year. Pro-forma earnings per share on a primary basis were 30 cents, a 7 cent or 28.4% increase over last year. Pro-forma fully-diluted earnings per share increased 6 cents or 27.3% to 28 cents. The following table presents net sales information by business segment for the first quarter of fiscal years 1997 and 1996:
FIRST QUARTER (dollars in millions) Fiscal Year Dollar Percent Net sales: 1997 1996 Change Change - ---------- ------ ------ ------ ------ Consumer products: Alberto-Culver USA $107.6 66.4 41.2 62.0 % Alberto-Culver International 112.9 101.8 11.1 10.9 ------- ------- ------- ------ Total consumer products 220.5 168.2 52.3 31.1 Specialty distribution - Sally 208.7 181.4 27.3 15.0 Eliminations (3.1) (2.0) (1.1) 55.0 ------ ------- -------- ------ $426.1 347.6 78.5 22.6 % ======= ======= ========= =======
Compared to the same period of the prior year, sales of Alberto-Culver USA consumer products increased $41.2 million or 62.0% for the first quarter of 1997. Sales in the current quarter were higher primarily due to the acquisition of St. Ives Laboratories, Inc. ("St. Ives") in February, 1996, which added $33.4 million of sales in the current year, and strong increases in several hair care product lines including TRESemme, TCB and Alberto VO5. Sales of Alberto-Culver International consumer products were $112.9 million for the current quarter, an increase of 10.9% compared to last year. The fiscal 1997 increase primarily resulted from the acquisition of St. Ives in February, 1996. . The "Specialty distribution-Sally" business segment experienced a sales increase of $27.3 million or 15.0%, reaching $208.7 million for the quarter ended December 31, 1996. The gain was attributable to Sally Beauty Company's sales growth for established stores and the addition of 161 new stores since December 31, 1995. At December 31, 1996, Sally Beauty Company had 1,697 beauty supply stores offering a full range of salon care products. Cost of products sold as a percent of net sales for the three month period ended December 31, 1996 was 50.5% as compared to 51.3% for the first quarter of the prior year. The decrease was primarily due to changes in product mix and cost efficiencies. - 6 - Advertising, promotion, selling and administrative expenses for the December 31, 1996 quarter rose 23.8% or $34.9 million versus the comparable period of the prior year. The increase resulted from additional advertising, promotion and market research expenditures and administrative expenses related to St. Ives, which was acquired in February, 1996, along with higher selling and administrative costs associated with the increase in the number of Sally Beauty Company stores. Advertising, promotion and market research expenditures totaled $56.0 million for the current period versus $43.1 million for the comparable period of the prior year. The increase was primarily due to advertising and promotion expenses related to St. Ives. Interest expense was $3.2 million for the first quarter of fiscal year 1997 versus $3.7 million for the comparable prior period. The lower interest expense was primarily due to the prepayment of $20.0 million of 9.73% notes in August, 1996. Interest income of $787,000 for the quarter ended December 31, 1996 was $842,000 less than last year mainly due to lower investment balances. The provision for income taxes as a percentage of earnings before income taxes was 37.25% for the first quarter of fiscal years 1997 and 1996. FINANCIAL CONDITION DECEMBER 31, 1996 V.S. SEPTEMBER 30, 1996 The ratio of current assets to current liabilities was 1.89 to 1.00 at the end of the first quarter of fiscal year 1997 compared to 1.79 to 1.00 at September 30, 1996. Working capital of $265.3 million was $39.2 million higher than the September 30, 1996 balance of $226.1 million primarily due to the receipt of the $28.0 million insurance settlement described in Note 5. Total borrowings increased $1.1 million during the first three months of fiscal year 1997. At December 31, 1996, the company had unused lines of credit with various banks of approximately $109 million. - 7 - PART II ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 10(a) Copy of Alberto-Culver Company Management Incentive Plan dated October 27, 1994 as amended.* 10(b) Copy of Alberto-Culver Company Employee Stock Option Plan of 1988, as amended.* 10(c) Copy of Alberto-Culver Company 1994 Shareholder Value Incentive Plan, as amended.* 10(d) Copy of Alberto-Culver Company 1994 Restricted Stock Plan, as amended.* 10(e) Copy of Alberto-Culver Company 1994 Stock Option Plan for Non-Employee Directors, as amended.* 10(f) Form of Severance Agreement between Alberto-Culver Company and certain executive officers.* 27 Financial Data Schedule * This exhibit is a management contract or compensatory plan or arrangement of the registrant. (b) Reports on Form 8-K: No report on Form 8-K was filed by the registrant during the quarter ended December 31, 1996. - 8 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALBERTO-CULVER COMPANY (Registrant) By:/s/ William J. Cernugel William J. Cernugel Senior Vice President, Finance & Controller (Principal Financial Officer) February 12, 1997 - 9 - EX-10 2 MANAGEMENT INCENTIVE Exhibit 10(a) ALBERTO-CULVER COMPANY MANAGEMENT INCENTIVE PLAN (as amended through December 3, 1996) 1. Establishment. Alberto-Culver Company and its subsidiaries hereby establish the Management Incentive Plan ("MIP") for key salaried employees of the Company. The MIP provides for annual awards to be made to Participants based upon the achievement of financial and non-financial performance objectives. This MIP is established as an unfunded, non-qualified deferred compensation plan intended for the benefit of employees who are among a select group of management and/or highly compensated participants. Nothing contained in this MIP and no action taken pursuant to the provisions of this MIP shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and the Participant, his designated beneficiary or any other person. Any funds which may be invested under the provisions of this MIP shall continue for all purposes to be a part of the general assets of the Company and no person other than the Company shall by virtue of the provisions of this MIP have any interest in such funds. To the extent that any person acquires a right to receive payments from the Company under this MIP, such right shall be no greater than the right of any unsecured general creditor of the Company. 2. Purpose. The purpose of the MIP is to attract and retain in the employ of the Company persons possessing outstanding management skills and competence who will contribute substantially to the success of the Company. The MIP is intended to provide incentives to such persons to exert their maximum efforts on behalf of the Company by rewarding them with additional compensation when the Company and the Participant have achieved the financial and individual business objectives, respectively, provided for in the MIP. 3. Effective Date and Performance Periods. The effective date of the MIP is October 1, 1994, subject to stockholder approval. The Plan Year shall be the 12 consecutive-month period ending September 30, 1995 and each September 30 thereafter. The MIP will continue in effect until and unless terminated by the Board of Directors. 4. Definitions. The definition of key terms are as follows: a. "Change in Control" shall have the meaning set forth in Section 14.d.1. b "Committee" means the Compensation Committee of the Board of Directors of the Company, consisting solely of outside directors within the meaning of Section 162(m) of the Internal Revenue Code of 1986 and the rules and regulations thereunder. c. "Company" means Alberto-Culver Company or a Subsidiary. d. "Covered Employee" means the Chief Executive Officer and the four most highly compensated executives (other than the Chief Executive Officer) within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder, as applied to the previous Fiscal Year or any person so designated by the Committee. e. "Employee" means any person, including an officer or director, who is employed on a permanent, full-time basis by, and receives a regular salary from, the Company. f. "Exempt Person" and "Exempt Persons" shall have the meaning set forth in Section 14.d.2. g. "Incumbent Board" shall have the meaning set forth in Section 14.d.3. h. "Individual Business Objectives" means the objectives as set forth in a letter of recommendation prepared by the Participant and agreed upon by the Committee. i. "Participant" means any Employee of the Company who has been selected to participate in the MIP. j. "Plan Year" shall be the Company's fiscal year for financial reporting purposes (i.e., the 12 consecutive-month period ended September 30). k. "Subsidiary" means any corporation in which the Company owns (directly or indirectly) 50% or more of the outstanding stock entitled to vote for directors. - 10 - l. "Base Salary" means (i) with respect to a Covered Employee, the base compensation payable to a Participant during the Plan Year as fixed by the Compensation Committee on the last day of the previous Plan Year; and (ii) with respect to all other Participants, the base compensation paid to the Participant during the Plan Year, exclusive of the amounts payable under this MIP, the value of stock options and fringe benefits, but inclusive of the amount of base compensation deferred under the Company's 401(k) plan or other deferred compensation plans m. "Bonus Award Opportunity" means the annual award, stated as a percent of Base Salary, which would be earned if financial and individual objectives are exactly achieved. n. "Profit Center" means a division or Subsidiary of the Company which is responsible for preparing and submitting annual sales and pre-tax profit (loss) objectives. 5. Eligibility. Participation in the MIP is limited to key salaried employees of the Company and its Subsidiaries. Each Plan Year, the Committee shall designate in writing those eligible Employees who will participate in the MIP during that Plan Year. In the event an employee who would be eligible to participant in the MIP is hired after the beginning of the Plan Year, the Committee may, but need not, designate such employee as a Participant for such Plan Year; provided, however, that no employee shall be eligible to participate in the MIP for any Plan Year in which he or she was employed with the Company for less than four months. In the event a new employee is designated as a Participant, the Committee shall assign such new Participant his or her Bonus Award Opportunity for the remaining portion of the Plan Year and notify the new Participant of the financial performance goals and his or her Individual Business Objectives on which any cash award will be based. The Committee shall make such adjustments to the new Participant's actual cash award as the Committee deems necessary or appropriate to take into account the fact that such Participant was not employed for the entire Plan Year. 6. Award Opportunities. Within 90 days following the beginning of the Plan Year, each Participant will be assigned a Bonus Award Opportunity for the Plan Year. Actual awards can range from 0% to 150% of the Bonus Award Opportunity based on actual performance compared to the performance objectives established for the Plan Year. The total Bonus Award Opportunity will relate to the performance of the Company, one or more Profit Centers, Individual Business Objectives or any combination thereof. Notwithstanding anything to the contrary hereinabove set forth in this Section 6 or in Section 8 or 9 of the MIP, but subject in all respects to Sections 7 and 14 of the MIP, any Bonus Award Opportunity and the amount of any annual award, other than a Change in Control Award (as such term is defined in Section 14.b of the MIP), payable to any Participant other than a Covered Employee may be increased or decreased as the Committee, in its sole discretion, shall determine based on such factors and circumstances as the Committee shall deem appropriate." 7. Maximum Award Payable. The maximum amount payable under the MIP to a single Participant may not exceed $2.5 million per fiscal year of the Company. 8. Financial Performance Objectives. Within 90 days following the beginning of the Plan Year, the Company and each Profit Center will be assigned one or more financial performance objectives representing the goals for the Company or the Profit Center for the Plan Year. Financial performance objectives will be based upon sales and pre-tax earnings. For each financial performance objective, three levels of performance will be established: -- Target Level. For performance equal to the target level, 50% of that portion of the Bonus Award Opportunity assigned to the performance objective will be earned. Below this level of performance, no annual award will be earned relative to this performance objective except as otherwise determined by the Committee pursuant to Section 6 of the MIP with respect to any Participant other than a Covered Employee. -- Goal Level. For performance equal to the goal level, 100% of that portion of the Bonus Award Opportunity assigned to the performance objective will be earned. ---------- -- Super Bonus Level. For performance equal to the super bonus level, 150% of that portion of the Bonus Award ----------------- Opportunity assigned to the performance objective will be earned. Each Participant will be notified in writing of his or her Bonus Award Opportunity, the performance objectives set for the Company and/or his or her Profit Center, if applicable, and the portion of his or her Bonus Award Opportunity allocated to the Participant's Individual Business Objectives, if any. If actual performance falls between the target and goal or goal and super bonus levels, the percentage of the Bonus Award Opportunity earned will be determined using arithmetic interpolation. At the end of each Plan Year, the Committee shall certify whether or not the performance objectives have been attained by each Participant. Except as otherwise provided in Section 14.a. hereof, no cash award may be payable to a Participant prior to such certification. - 11 - The Committee shall have the sole authority to set all financial performance objectives and to modify such financial performance objectives during the Plan Year as deemed appropriate; provided, however, that the Committee may not modify the performance objectives during a Plan Year to increase the cash award payable to a Covered Employee. 9. Individual Business Objectives. The Committee, at its sole discretion, may allocate a portion of a Participant's Bonus Award Opportunity for the Plan Year to the Participant's Individual Business Objectives. The three levels of performance established for the financial performance objectives in Section 8 hereof will also be applicable to the Individual Business Objectives. 10. Administration--Powers and Duties of the Committee. a. Administration. The Committee shall be responsible for the administration of the MIP. The Committee, by majority action, is authorized to interpret the MIP, to prescribe, amend, and rescind rules and regulations relating to the MIP, to provide for conditions and assurances deemed necessary or advisable to protect the interest of the Company and to make all other determinations necessary or advisable for the administration of the MIP. Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the MIP shall be final and binding and conclusive for all purposes and upon all persons whomsoever. No member of the Committee shall be liable for any action or determination made in good faith with respect to the MIP or any annual award made hereunder. b. Amendment, Modification, and Termination of MIP. The Board of Directors or the Committee may at any time terminate, and from time to time may amend or modify the MIP, except that no amendment by the Committee shall increase the amount of an annual award payable to a Participant or class of Participants or allow a member of the Committee to be a Participant. Termination of the MIP shall not be effective with respect to the Plan Year in which it occurs. 11. Payment of Annual Award. a. Payment of Award. The Company shall pay the annual award to the Participant as soon after the end of the Plan Year as the amount of the award can practicably be determined and certified by the Committee, but no later than December 15th of each year. b. Changes in Employment Status. If a Participant's employment terminates during a Plan Year or after the end of the Plan Year, but prior to the payment of the annual award, no award will be payable for that Plan Year. If the Participant's employment terminates during the Plan Year due to death, disability or retirement, the Committee shall have the sole authority and discretion to award a Participant (or his or her beneficiary) a portion of the annual award that would otherwise be payable. c. Deferral of Award. A Participant may, in writing, filed with the Committee within 15 days following the receipt of his or her participant letter, elect to defer payment of his annual award so that it shall be paid in not more than five equal annual installments commencing after his or her retirement if he or she shall then have attained the age of 60 years, and if he or she shall not then have attained such age then commencing with the year he or she shall attain the age of 60 years. The Committee, in its sole discretion, at any time, or from time to time may accelerate any distribution which would otherwise be deferred in the case of an unforeseeable event. The Committee, in its sole discretion, at any time, or from time to time, may prohibit or limit deferral of any annual award below a specific dollar amount determined by the Committee. d. Interest Payable on Deferred Payments. Any annual award to which a Participant shall have elected deferred payment hereunder shall bear interest at a rate determined by the Committee. The amount on which this interest shall accrue shall be the net deferred amount after the payment of withholding payroll taxes, if any. A separate accounting shall be maintained for each Participant with respect to the deferred payments hereunder. e. Investment in Alberto-Culver Company Stock. As an additional alternative to lump sum cash payment and at any time prior to distribution, a Participant may elect to have all or a portion of his or her annual award, less withholding taxes, invested in Alberto-Culver Company common stock under the Company's stock purchase plan, but this shall not constitute a deferred payment for purposes of this MIP. 12. Beneficiary. If a Participant dies before receiving the annual award and/or any previously deferred awards to which he or she is entitled to under the MIP, such awards shall be paid to such person whom the Participant has designated by an instrument in writing, and in a form acceptable to the Board of Directors, executed by the Participant and delivered to the Board of Directors in care of the Secretary of the Company during the Participant's lifetime. Such designation may be revoked or modified by the Participant from time to time by an instrument in writing in a form acceptable to the Board of Directors, executed by the Participant and delivered to the Board of Directors in care of the Secretary of the Company during the Participant's lifetime. If no such designation is delivered to the Board of Directors, or if no such designated beneficiary is then living, the annual award shall be paid to the surviving spouse of the Participant, or in the event there is no such surviving spouse, to the estate of the Participant. - 12 - 13. Withholding Payroll Taxes. To the extent required by the laws in effect at the time payments are made, the Company shall withhold from the annual cash, stock or deferred award made hereunder an amount necessary to satisfy any taxes required to be withheld for federal, state, or local governmental purposes. 14. Change in Control. a. Application. Notwithstanding any other provision of the Plan, the provisions of this Section 14 shall apply on and after the date that a Change in Control (as defined in Section 14.d.1.) occurs. Any award payable to a Participant pursuant to this Section 14 for a Plan Year shall be in lieu of any award otherwise payable under the Plan. b. Determination of Awards. Upon the occurrence of a Change in Control, each Participant shall be eligible to receive an award (a "Change in Control Award") equal to (i) an annual amount calculated based on the assumption that the financial performance of the Company or Profit Center, as the case may be, and the achievement of the Participant's Individual Business Objectives, if any, are each equal to the "Goal Level" for such Plan Year as described in Section 8 of the Plan, multiplied by (ii) a fraction, the numerator of which is the number of whole months that have elapsed in the Plan Year as of the date on which the Change in Control occurs (including the month in which such Change in Control occurs if the date of such Change in Control is on or after the 16th of the month), and the denominator of which is twelve. The amount of any such Change in Control Award shall not be subject to revision or adjustment. c. Payment of Awards. 1. Payment. Notwithstanding anything in this Plan to the contrary, each Participant (or Beneficiary thereof) shall be paid the Change in Control Award, determined pursuant to Section 14.b., no later than 30 days after the date of the occurrence of the Change in Control (the "Payment Date"), in the form of a single lump sum cash payment. Such award shall not be subject to forfeiture for any reason. 2. Interest on Late Payment. If any amount to be paid to a Participant (or Beneficiary thereof) pursuant to Section 14.c.1. is not paid in full by the Payment Date, then the Company shall also pay to that Participant (or Beneficiary) interest on the unpaid amount for the period beginning on the Payment Date and ending on the date that the amount is paid in full. The amount of interest to be paid to a Participant (or Beneficiary thereof) pursuant to this Section 14.c.2. shall be computed using an annual rate equal to two percent above the prime rate from time to time in effect, as published under "Money Rates" in The Wall Street Journal, but in no event higher than the maximum legal rate permissible under applicable law. Payments received by a Participant (or Beneficiary thereof) under the Plan shall be credited first against accrued interest until all accrued interest is paid in full before any such payment is credited against the amount payable pursuant to Section 14.c.1. d. Definitions. 1. The term "Change in Control" means: A. The occurrence of any one or more of the following events: (i) 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 Securities Exchange Act of 1934, as amended (the "Exchange Act"), of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act of both (x) 20% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities") and (y) combined voting power of Outstanding Company Voting Securities in excess of the combined voting power of the Outstanding Company Voting Securities held by the Exempt Persons (as such term is defined in Section 14.d.2.); provided, however, that a Change in Control shall not result from an acquisition of Company Voting Securities: (a) directly from the Company, except as otherwise provided in Section 14.d.1.B(i); (b) by the Company, except as otherwise provided in Section 14.d.1.B(ii); (c) by an Exempt Person; (d) by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or - 13 - (e) 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 (a) and (b) of Section 14.d.1.A(iii) shall be satisfied. (ii) The cessation for any reason of the members of the Incumbent Board (as such term is defined below) to constitute at least a majority of the Board of Directors. (iii) Approval by the stockholders of the Company of a reorganization, merger or consolidation unless, in any such case, immediately after such reorganization, merger or consolidation: (a) 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 (b) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board of Directors providing for such reorganization, merger or consolidation. (iv) Approval by the stockholders of the Company 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: (a) 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 (b) at least a majority of the members of the board of directors thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board of Directors providing for such sale or other disposition. (v) Approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the Company. B. Notwithstanding the provisions of Section 14.d.1.A(i): (i) no acquisition of Company Voting Securities shall be subject to the exception from the definition of Change in Control contained in clause (a) of Section 14.d.1.A(i) 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 (ii) for purposes of clause (b) of Section 14.d.1.A(i), 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. 2. The term "Exempt Person" (and collectively, the "Exempt Persons") means: A. Leonard H. Lavin or Bernice E. Lavin; - 14 - B. any descendant of Leonard H. Lavin and Bernice E. Lavin or the spouse of any such descendant; C. the estate of any of the persons described in Section 14.d.2.A. or B.; D. any trust or similar arrangement for the benefit of any person described in Section 14.d.2.A. or B.; or E. the Lavin Family Foundation or any other charitable organization established by any person described in Section 14.d.2.A. or B. 3. The term "Incumbent Board" means those individuals who, as of October 24, 1996, constitute the Board of Directors, provided that: A. 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 B. no individual who was initially elected as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors or the Exempt Persons shall be deemed to have been a member of the Incumbent Board. 15. No Employment Rights. Nothing in this MIP shall interfere with or limit in any way the right of the Company to terminate any Participant's employment at any time for any reason, or confer upon any Participant any right to continue in the employ of the Company or its Subsidiaries. 16. Non-Assignability. Except as provided herein upon the death of a Participant, no right or interest of a Participant in any annual award shall be (a) assignable or transferable in whole or in part, either directly or by operation of law or otherwise; (b) subject to any obligation or liability of any person; or (c) subject to seizure or assignment or transfer through execution, levy, garnishment, attachment, pledge, bankruptcy, or in any other manner. 17. Stockholder Adoption. The MIP shall be submitted to the stockholders of the Company for their approval and adoption at the annual meeting of stockholders to be held on January 26, 1995, or any adjournment thereof. No award shall be payable hereunder unless and until the MIP has been so approved and adopted. Thereafter, the MIP shall be submitted to stockholders for reapproval every five years. 286682.01 - 15 - EX-10 3 EMPLOYEE STOCK OPTION 1988 Exhibit 10(b) ALBERTO-CULVER COMPANY EMPLOYEE STOCK OPTION PLAN OF 1988 (as amended through October 24, 1996) 1. Purpose of ACSOP The Alberto-Culver Company Employee Stock Option Plan of 1988 (hereinafter called the "ACSOP") is intended to encourage ownership of the Class A common stock of Alberto-Culver Company (hereinafter called 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, as amended). 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. At their request, Mr. Leonard H. Lavin and Mrs. Bernice E. Lavin are ineligible to receive options under the ACSOP. 3. Administration The Compensation Committee of the Board of Directors of the Company, each of whom shall be a "Non-Employee Director," as that term is defined under Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules thereunder (hereinafter called 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 therefor, 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, and 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. The Committee may, in its discretion, delegate to a committee of members of the Committee its authority with respect to such matters under the ACSOP and options granted under the ACSOP as the Committee may specify. 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 3,200,000 of the Company's Class A common stock in the aggregate, subject to adjustment under paragraph 10 hereof. Such shares of Class A 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. 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 Class A common stock at the time 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 Class A common stock as reported in the New York Stock Exchange Composite Transactions on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported. 6. Grant of Options No option may be granted under the ACSOP after January 20, 2003. In addition, the Committee may not grant to any individual Optionee in any fiscal year an option or options with respect to more than 150,000 shares of Class A common stock. - 16 - 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, and each option shall be subject to the following limitations upon its exercise: (i) Except as otherwise provided in paragraph 11(a) hereof, no option may be exercised until the expiration of one (1) year following the grant of the option. (ii) Except as otherwise provided in paragraph 11(a) hereof, on 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. Each such right to purchase such twenty-five percent (25%) may be exercised, in whole or in part, at any time after such right accrues and prior to the expiration of ten (10) years from the date of the grant of the option. (b) Notwithstanding the foregoing, the Committee may in its discretion (i) specifically provide at the date of grant for another time or times of exercise; (ii) accelerate the exercisability of any option subject to such terms and conditions as the Committee deems necessary and appropriate to effectuate the purpose of the ACSOP including, without limitation, a requirement that the Optionee grant to the Company an option to repurchase all or a portion of the number of shares acquired upon exercise of the accelerated option for their Fair Market Value on the date of grant; or (iii) at any time prior to the expiration or termination of any option previously granted, extend the term of any option (including such options held by officers or directors) for such additional period as the Committee, in its discretion, shall determine. 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 by giving written notice to the Secretary of the Company specifying the number of shares to be purchased, accompanied by the full purchase price for the shares to be purchased either in cash, by check or by delivery of shares of Class A common stock, or by a combination of these methods of payment. For this purpose, the per share value of the Class A common stock shall be the Fair Market Value on the date of exercise, as determined by the Committee. (d) At any time when an Optionee is required to pay to the Company an amount required to be withheld under applicable income tax or other laws in connection with the exercise of an option, the Optionee may satisfy this obligation in whole or in part by making an election ("Election") to have the Company withhold shares of Class A common stock of the Company, or, if the Committee so determines, by delivering shares of Class A common stock of the Company ("Delivery") having a value equal to the amount required to be withheld. The value of the shares to be withheld or delivered shall be based on the Fair Market Value of the Class A common stock of the Company on the date of exercise (the "Tax Date"). Each Election or Delivery must be made on or prior to the Tax Date and shall be irrevocable. The Committee may disapprove any Election or Delivery or may suspend or terminate the right to make Elections or Deliveries. 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) If an Optionee dies without having fully exercised his or her option, the executors or administrators of his or her estate or legatees or distributees shall have the right during a one (1) year period following his or her death (but not after the expiration of the term of such option) to exercise such option in whole or in part but only to the extent that the Optionee could have exercised it at the date of his or her death. (ii) If an Optionee's termination of employment is due to retirement or physical disability, the Optionee's option shall terminate three (3) months after his or her termination of employment (but not after the expiration of the term of such option) and may be exercised only to the extent that such Optionee could have exercised it at the date of his or her termination of employment. (iii) If an Optionee's termination of employment is for any reason other than death, retirement or physical disability, the Optionee's option shall terminate upon said termination of employment and the Company shall have the right within a period of one year after said termination of employment to reacquire at the option price any stock acquired by the Optionee by exercise of an option within ninety (90) days prior to said termination of employment; provided, however, that if such termination of employment occurs following a Change in Control (as such term is defined in paragraph 11(b) hereof), the Optionee's option shall terminate three (3) months after his or her termination of employment (but not after the expiration of the term of such option) and may be exercised to the extent that such Optionee could have exercised it at the date of his or her termination of employment and the Company shall have no right to reacquire any stock acquired by the Optionee by exercise of an option. - 17 - (b) Nothing contained in the ACSOP or any option granted pursuant to the ACSOP shall confer upon any Optionee any right to be continued in the employment of the Company or any subsidiary or shall prevent the Company or any subsidiary from terminating an Optionee's employment at any time, with or without cause. The determination by the Committee of whether an authorized leave of absence constitutes a termination of employment shall be final, conclusive and binding. 9. Non-Transferability of Options An option granted under the ACSOP shall not be assignable or transferable by such 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. An option transferred by will or the laws of descent and distribution may only be exercised by the legatee or distributee during the one year period following the Optionee's death and may only be exercised to the extent it was exercisable by the Optionee prior to his or her death. 10. Adjustment upon Change in Stock Each option and the number and kind of shares subject to future options under the ACSOP will be adjusted, as may be determined to be equitable by the Committee, in the event there is any change in the outstanding Class A common stock of the Company by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination or exchange of shares, or the like, and the Committee's determination of such adjustment provisions 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. (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 Class A 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 Class A 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 Class A common stock shall be converted pursuant to such Change in Control. In the event of any such substitution, the purchase price per share of each option shall be appropriately adjusted by the Committee or the committee to which authority has been delegated pursuant to paragraph 3 hereof, such adjustments to be made without an increase in the aggregate purchase price. (3) Notwithstanding any provision in the ACSOP, in the event of a Change in Control in connection with which the holders of the Company's Class A 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 Class A common stock then subject to such option, multiplied by the excess, if any, of (i) the greater of (A) the highest per share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (B) the Fair Market Value of a share of the Company's Class A common stock on the date of occurrence of the Change in Control over (ii) the purchase price per share of the Company's Class A 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. (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: - 18 - (i) directly from the Company, except as otherwise provided in paragraph 11(b)(2)(A); (ii) by the Company, except as otherwise provided in paragraph 11(b)(2)(B); (iii) by an Exempt Person; (iv) by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (v) by any corporation pursuant to a reorganization, merger or consolidation involving the Company, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (i) and (ii) of paragraph 11(b)(1)(C) shall be satisfied. (B) The cessation for any reason of the members of the Incumbent Board (as such term is defined in paragraph 11(d)) to constitute at least a majority of the Board of Directors of the Company (hereinafter called the "Board"). (C) Approval by the stockholders of the Company 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) Approval by the stockholders of the Company 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 (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 - 19 - 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 (5) the Lavin Family Foundation or any other charitable organization established by any person described in paragraph 11(c)(1) or (2). (d) "Incumbent Board" means those individuals who, as of October 24, 1996, 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 election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, 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 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 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. Effective Date The ACSOP, as amended, has been adopted and authorized by the Board for submission to the stockholders of the Company. If the ACSOP is approved by the affirmative vote of a majority of the votes attributable to the outstanding shares of the Company's common stock, it shall be deemed to have become effective on October 27, 1994, the date of adoption by the Board, subject to stockholder approval. 249458.04 - 20 - EX-10 4 1994 VALUE INCENTIVE PLAN Exhibit 10(c) 1994 SHAREHOLDER VALUE INCENTIVE PLAN ALBERTO-CULVER COMPANY (as amended through October 24, 1996) I. GENERAL 1.1 Purpose of the SVIP The 1994 Shareholder Value Incentive Plan ("SVIP") of the Alberto-Culver Company ("Company") is intended to advance the best interests of the Company by providing key salaried employees who have substantial responsibility for corporate management and growth with additional incentives through the grant of awards based upon Total Shareholder Return as defined in Section 1.2(i), thereby: (1) more closely linking the interests of key salaried employees with shareholders, (2) increasing the personal stake of such key salaried employees in the continued success and growth of the Company, and (3) encouraging them to remain in the employ of the Company. 1.2 Definitions The following definitions apply with respect to the SVIP: (a) "Change in Control" shall have the meaning assigned to such term in Section 3.8(b). (b) "Committee" shall mean the Compensation Committee of the Board of Directors of the Alberto-Culver Company, consisting of at least two outside directors, as that term is defined in Section 162(m) of the Internal Revenue Code of 1986 and the rules and regulations thereunder. (c) "Common Stock" shall mean the Class A common stock of the Company, $.22 par value. (d) "Disability" shall have the meaning provided in the Company's applicable disability plan or, in the absence of such a definition, when a Participant becomes totally disabled as determined by a physician mutually acceptable to the Participant and the Committee before attaining his or her 65th birthday and if such total disability continues for more than three months. Disability does not include any condition which is intentionally self-inflicted or caused by illegal acts of the Participant. (e) "Exempt Person" and "Exempt Persons" shall have the meaning assigned to such terms in Section 3.8(c). (f) "Incumbent Board" shall have the meaning assigned to such term in Section 3.8(d). (g) "Participant" shall have the meaning assigned to it in Section 1.4. (h) "Performance Period" shall mean any three consecutive fiscal years as set forth in the Participant's Performance Unit Agreement. (i) "Performance Unit" shall have the meaning assigned to it in Section 2.1(a). (j) "Performance Unit Agreement" shall have the meaning assigned to it in Section 2.1(b). (k) "Retirement" shall have the meaning provided in the Company's Employees' Profit Sharing Plan or, in the absence of such a definition, the first day of the month following the month in which the Participant attains his or her 65th birthday. (l) "Total Shareholder Return" or "TSR" means the percentage by which the ending per share price of the Common Stock (determined as the average closing price for the ten trading days prior to and including the last date of the applicable Performance Period), as adjusted for any stock split or other recapitalization, plus reinvested dividends, exceeds the beginning per share price of the Common Stock (determined as the average closing price for the ten trading days prior to and including the first date of the applicable Performance Period). - 21 - 1.3 Administration of the SVIP The SVIP shall be administered by the Committee. The Committee shall have full and final authority in its discretion to interpret conclusively the provisions of the SVIP, to adopt such rules and regulations for carrying out the SVIP and to make all other determinations necessary or advisable for the administration of the SVIP. The Committee shall meet at least once each fiscal year, and at such additional times as it may determine to designate the eligible employees, if any, to be granted Performance Units under the SVIP, the amount of such Performance Units and the time when Performance Units will be granted. All Performance Units granted under the SVIP shall be on the terms and subject to the conditions hereinafter provided. 1.4 Eligible Participants Key salaried employees of the Company and its subsidiaries shall be eligible to participate in the SVIP (any employee receiving a Performance Unit under the SVIP hereinafter referred to as a "Participant"). 1.5 Limitation on Grants The maximum amount payable under the SVIP to a single Participant may not exceed $2.5 million per fiscal year of the Company. II. PERFORMANCE UNITS 2.1 Terms and Conditions of Grants (a) Performance Units may be granted to Participants prior to or within the first ninety (90) days following the beginning of a Performance Period. Each Performance Unit shall have a value determined by the Committee at the time of the grant. Initially each Performance Unit shall have a value set at $1,000. Each Participant shall be eligible to receive a cash award payable following the end of a Performance Period, or earlier pursuant to Section 3.8(a) in the event of a Change in Control, if the Common Stock of the Company has met the objectives established by the Committee, as set forth below. (b) At the time Performance Units are granted to Participants, the Committee shall establish objectives based on the percentile rank of the Common Stock of the Company measured by Total Shareholder Return among the companies comprising the Standard & Poor's 500 ("S&P 500"). In addition, the Committee shall establish a matrix to determine the cash awards payable to Participants upon attainment of these objectives. Within 90 days following the beginning of a Performance Period, each Participant shall receive an agreement which shall set forth the Performance Period, the number of Performance Units granted and the objectives and matrix established by the Committee (hereinafter referred to as a "Performance Unit Agreement"). (c) No cash award will be payable if the Company's TSR as a percentile among the S&P 500 companies is less than the 50th percentile, and the maximum cash award payable is 300% of the target cash award. If the TSR as a percentile among the S&P 500 companies is not specifically shown in the matrix established by the Committee and set forth in the Performance Unit Agreement, the Committee shall interpolate between the amounts shown. (d) At the end of each Performance Period, or earlier pursuant to Section 3.8(a) in the event of a Change in Control, the Common Stock of the Company will be ranked based on Total Shareholder Return among the companies comprising the S&P 500. The Committee shall certify the Company's ranking and the attainment of the objectives established by the Committee for each Performance Period or, in the event of a Change in Control, the elapsed portion of the Performance Period in which such Change in Control shall have occurred. No cash award may be paid under this SVIP until the Committee has made such certification. 2.2 Payment Cash awards approved by the Committee will be distributed on or before the 15th day of the third month following the end of the Performance Period or, in the event of a Change in Control, within 30 days following such Change in Control. 2.3 Termination of Employment (a) If a Participant's employment is terminated prior to the end of a Performance Period because of death, Retirement or Disability, the extent to which a Performance Unit shall be deemed to have been earned and payable shall be determined by multiplying (1) the cash value of the Performance Unit as calculated in accordance with the matrix established by the Committee and set forth in the Performance Unit Agreement by (b) a fraction, the numerator of which is the number of full calendar months such - 22 - Participant was employed during the Performance Period and the denominator of which is the total number of full calendar months in the Performance Period. (b) If a Participant's employment terminates for any reason other than because of death, Retirement or Disability, or a Change in Control (as defined in Section 3.8), the Performance Unit and any and all rights to payment under such Performance Unit shall be immediately canceled and the Performance Unit Agreement with such terminated Participant shall be null and void. III. ADDITIONAL PROVISIONS 3.1 Nature of Participant's Interests A Participant's benefits under the SVIP shall at all times be reflected on the Company's books and records as a general, unsecured and unfunded obligation of the Company, and the SVIP shall not give any person any right or security interest in any asset of the Company nor shall it imply a trust or segregation of assets by the Company. 3.2 Amendments The Committee may amend the SVIP from time to time, as it deems advisable and in the best interests of the Company, provided that no such amendment will adversely affect or impair previously issued grants. 3.3 Withholding The Company shall have the right to deduct from any distribution of cash to any Participant an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld with respect to any grant or distribution under the SVIP. 3.4 Nonassignability (a) Except as expressly provided in the SVIP, the rights of a Participant and any awards under the SVIP may not be assigned or transferred except by will and the laws of descent and distribution. (b) A Participant may from time to time name in writing any person or persons to whom his or her benefit is to be paid if he or she dies before complete payment of such benefit has occurred. Each such beneficiary designation will revoke all prior designations by the Participant with respect to the SVIP, shall not require the consent of any previously named beneficiary, shall be in a form prescribed by the Committee, and will be effective only when filed with the Committee in care of the Secretary of the Company during the Participant's lifetime. (c) If the Participant fails to designate a beneficiary before his or her death, as provided above, or if the beneficiary designated by the Participant dies before the date of the Participant's death or before complete payment of the Participant's benefit has occurred, the Company may pay the remaining unpaid portion of the Participant's benefit to the legal representative or representatives of the estate of the Participant. 3.5 Nonuniform Determinations Determinations by the Committee under the SVIP regarding determinations of the persons to receive grants, the form, amount and timing of such grants, and the terms and provisions of such grants and the agreements evidencing the same need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, grants under the SVIP, whether or not such persons are similarly situated. - 23 - 3.6 No Guarantee of Employment Neither grants under the SVIP nor any action taken pursuant to the SVIP shall constitute or be evidence of any agreement or understanding, express or implied, that the Company or its subsidiaries shall retain the Participant for any period of time or at any particular rate of compensation. 3.7 Effective Date; Duration The SVIP shall become effective as of October 1, 1994 subject to approval by stockholders. The Committee will have the authority to terminate the SVIP at any time. Termination of the SVIP will have no impact on Performance Units granted prior to the SVIP termination date. 3.8 Change in Control (a)(1) Notwithstanding anything herein to the contrary, in the event of a Change in Control, all Performance Units awarded prior to October 24, 1996 shall become fully payable at the TSR Percentile Rank of the Company calculated using the TSR of the Company as of the date of the Change in Control as compared to the TSR among the S&P 500 companies as of the last quarterly period for which such TSR information is available. (2) Notwithstanding anything herein to the contrary, in the event of a Change in Control, all Performance Units awarded after October 24, 1996 shall become payable in accordance with the following sentence of this Section 3.8(a)(2) at the TSR Percentile Rank of the Company calculated using the TSR of the Company as of the date of the Change in Control as compared to the TSR among the S&P 500 companies as of the last quarterly period for which such TSR information is available. A Performance Unit shall be payable pursuant to this Section 3.8(a)(2) in an amount equal to the cash value of such Performance Unit calculated in accordance with the preceding sentence, multiplied by a fraction, the numerator of which is the number of full fiscal years of the Performance Period in which the Change in Control shall have occurred which shall have elapsed prior to such Change in Control, and the denominator of which is the total number of full fiscal years in such Performance Period. For purposes of the preceding sentence of this Section 3.8(a)(2), if at least six full calendar months of a fiscal year within a Performance Period shall have elapsed, such entire fiscal year shall be deemed to have elapsed. (3) If any amount to be paid to a Participant (or beneficiary thereof) pursuant to this Section 3.8(a) is not paid in full within 30 days following the Change in Control (the "Payment Date"), then the Company shall also pay to that Participant (or beneficiary) interest on the unpaid amount for the period beginning on the Payment Date and ending on the date that the amount is paid in full. The amount of interest to be paid to a Participant (or beneficiary thereof) pursuant to this Section 3.8(a)(3) shall be computed using an annual rate equal to two percent above the prime rate from time to time in effect, as published under "Money Rates" in The Wall Street Journal, but in no event higher than the maximum legal rate permissible under applicable law. Payments received by a Participant (or beneficiary thereof) pursuant to this Section 3.8(a)(3) shall be credited first against accrued interest until all accrued interest is paid in full before any such payment is credited against the amount payable pursuant to Section 3.8(a)(1) or (2). (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 Securities Exchange Act of 1934, as amended (the "Exchange Act"), of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act of both (x) 20% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities") and (y) combined voting power of Outstanding Company Voting Securities in excess of the combined voting power of the Outstanding Company Voting Securities held by the Exempt Persons (as such term is defined in Section 3.8(c); provided, however, that a Change in Control shall not result from an acquisition of Company Voting Securities: - 24 - (i) directly from the Company, except as otherwise provided in Section 3.8(b)(2)(A); (ii) by the Company, except as otherwise provided in Section 3.8(b)(2)(B); (iii) by an Exempt Person; (iv) by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (v) by any corporation pursuant to a reorganization, merger or consolidation involving the Company, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (i) and (ii) of Section 3.8(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 Section 3.8(d)) to constitute at least a majority of the Board of Directors. (C) Approval by the stockholders of the Company of a reorganization, merger or consolidation unless, in any such case, immediately after such reorganization, merger or consolidation: (i) more than 60% of the combined voting power of the then outstanding securities of the corporation resulting from such reorganization, merger or consolidation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals or entities who were the beneficial owners of the combined voting power of all of the Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation; and (ii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board of Directors providing for such reorganization, merger or consolidation. (D) Approval by the stockholders of the Company 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 (ii) at least a majority of the members of the board of directors thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board of Directors providing for such sale or other disposition. (E) Approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the Company. (2) Notwithstanding the provisions of Section 3.8(b)(1)(A): (A) no acquisition of Company Voting Securities shall be subject to the exception from the definition of Change in Control contained in clause (i) of Section 3.8(b)(1)(A) if such acquisition results from the exercise of an - 25 - exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company; and (B) for purposes of clause (ii) of Section 3.8(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 Section 3.8(c)(1) or (2); (4) any trust or similar arrangement for the benefit of any person described in Section 3.8(c)(1) or (2); or (5) the Lavin Family Foundation or any other charitable organization established by any person described in Section 3.8(c)(1) or (2). (d) "Incumbent Board" means those individuals who, as of October 24, 1996, constitute the Board of Directors, provided that: (1) any individual who becomes a director of the Company subsequent to such date whose election, or nomination for election by the Company's stockholders, was approved either by the vote of at least a majority of the directors then comprising the Incumbent Board or by the vote of at least a majority of the combined voting power of the Outstanding Company Voting Securities held by the Exempt Persons shall be deemed to have been a member of the Incumbent Board; and (2) no individual who was initially elected as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors or the Exempt Persons shall be deemed to have been a member of the Incumbent Board. 3.9 Stockholder Approval. The SVIP shall be submitted to stockholders of the Company for their approval and adoption at the annual meeting of stockholders to be held January 26, 1995, or any adjournment thereof. No cash award shall be payable hereunder unless and until the SVIP has been so approved and adopted. Thereafter, the SVIP shall be resubmitted to the stockholders for approval and adoption every five years. 249485.03 - 26 - EX-10 5 1994 RESTRICTED STOCK PLAN Exhibit 10(d) ALBERTO-CULVER COMPANY 1994 RESTRICTED STOCK PLAN (as amended through October 24, 1996) SECTION 1. ESTABLISHMENT AND PURPOSE 1.1 Establishment The Alberto-Culver Company (the "Company") hereby establishes a restricted stock plan for Key Employees, as described herein, which shall be known as the ALBERTO-CULVER COMPANY 1994 RESTRICTED STOCK PLAN (the "RSP"). 1.2 Purpose The purpose of the RSP is to enable the Company to attract, retain, motivate, and reward Key Employees by providing them with a means to acquire an equity interest or to increase such interest in the Company in return for high levels of individual contribution and continued service. 1.3 Definitions Whenever used herein, the following terms shall have the meanings set forth below: (a) "Board" means the Board of Directors of the Company. (b) "Change in Control" shall have the meaning set forth in Section 7.2(a). (c) "Committee" means the Compensation Committee of the Board, each of whom shall be a "Non-Employee Director," as that term is defined under Section 16 of the Securities Exchange Act of 1934 and the rules thereunder (the "Exchange Act"). (d) "Disability" shall have the meaning provided in the Company's applicable disability plan or, in the absence of such a definition, when a Participant becomes totally disabled as determined by a physician mutually acceptable to the Participant and the Company before attaining his or her 65th birthday and if such total disability continues for more than three months. Disability does not include any condition which is intentionally self-inflicted or caused by illegal acts of the Participant. (e) "Exempt Person" and "Exempt Persons" shall have the meaning set forth in Section 7.2(b). (f) "Fair Market Value" shall mean the average of the high and low transaction prices of a share of Class A common stock as reported in the New York Stock Exchange Composite Transactions on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported. (g) "Key Employee" means an active, salaried employee (including officers and directors who also are employees) of the Company or its subsidiaries with direct impact on the performance of the Company. (h) "Incumbent Board" shall have the meaning set forth in Section 7.2(c). (i) "Participant" means a Key Employee designated by the Committee who is awarded and holds Restricted Stock pursuant to the RSP. (j) "Restricted Stock" shall mean the Class A common stock of the Company, $.22 par value, with restrictions as described in Section 6. (k) "Restricted Stock Agreement" shall have the meaning set forth in Section 6.1. - 27 - (l) "Retirement" shall have the meaning provided in the Company's Employees' Profit Sharing Plan or, in the absence of such a definition, the first day of the month following the month in which the Participant attains his or her 65th birthday. SECTION 2. ADMINISTRATION 2.1 Administration The RSP shall be administered by the Committee. 2.2 Finality of Determination The determination of the Committee as to any disputed questions arising under this RSP, including questions of construction and interpretation, shall be final and binding. SECTION 3. ELIGIBILITY AND PARTICIPATION 3.1 Eligibility Key Employees of the Company and its subsidiaries are eligible to receive Restricted Stock under the RSP, in such amounts and on as many occasions as the Committee in its sole discretion may determine. 3.2 Participation The Committee shall designate the Key Employees to receive Restricted Stock, the time or times and the size of each individual grant of Restricted Stock under the RSP. SECTION 4. STOCK SUBJECT TO THE RSP 4.1 Number The total number of shares of Restricted Stock that may be granted under the RSP shall not exceed 250,000. These shares may consist, in whole or in part, of authorized but unissued shares of stock or shares of stock reacquired by the Company and not reserved for any other purpose. 4.2 Reacquired Shares If, at any time, shares of Restricted Stock issued pursuant to the RSP shall have been reacquired by the Company in connection with the restrictions herein imposed on such shares, such reacquired shares again shall become available for issuance under the RSP at any time prior to its termination. 4.3 Adjustments in Capital If, at any time, the Company issues Class A common stock to its stockholders by way of a stock dividend, stock split, recapitalization, or issues rights to subscribe for shares of stock or other securities, or should the number of issued shares of Class A common stock of the Company be reduced or combined, the Committee may take such action with regard to adjustment of the number of shares to which Participants are entitled to receive hereunder as it considers to be equitable. The determination of the Committee shall be final, conclusive and binding. SECTION 5. DURATION OF THE RSP The RSP shall continue until all Restricted Stock subject to it shall have been granted under the RSP, subject to the provisions of the RSP regarding amendments thereto and termination thereof. SECTION 6. SHARES OF RESTRICTED STOCK 6.1 Grant of Shares of Restricted Stock Awards of Restricted Stock to Participants shall be granted under a Restricted Stock Agreement between the Company and the Participant which shall provide that the shares subject to any such award shall be subject to such forfeiture and other conditions, including the provisions of Section 6.7 hereof, as the Committee shall designate. 6.2 Vesting Except as otherwise provided in Section 7.1 hereof, Restricted Stock granted to Participants will vest on a cumulative basis in equal annual increments of one-fourth of the shares granted, commencing four (4) years after the date of grant. - 28 - The shares will be fully vested after a period of seven (7) years from the date of grant. The Committee, however, may accelerate the vesting of any Restricted Stock granted hereunder subject to such terms and conditions as the Committee deems necessary and appropriate to effectuate the purpose of the RSP. 6.3 Transferability Subject to Section 6.8 hereof, a Participant's rights under the RSP may not be assigned and any Restricted Stock granted to a Participant may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated as long as the shares are subject to forfeiture or other conditions as provided in this RSP, and as set forth in the Restricted Stock Agreement pursuant to which such shares were granted. 6.4 Removal of Restrictions Except as otherwise provided herein, or as may be required as applicable by law, shares of Restricted Stock covered by each Restricted Stock Agreement made under this RSP will become freely transferable by the Participant upon vesting in accordance with Section 6.2 or Section 7.1. 6.5 Other Restrictions The Company may impose such other restrictions on any shares granted pursuant to this RSP as it may deem advisable, including, without limitation, restrictions required by (1) federal securities laws, (2) requirements of any stock exchange upon which such shares of the same class are listed and (3) any state securities laws applicable to such shares. 6.6 Certificates In addition to any legends placed on certificates pursuant to Section 6.4, the Company reserves the right to place on each certificate representing shares of Restricted Stock a legend as follows: "The sale or other transfer of shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to the restrictions on transfer and forfeiture conditions (which include the satisfaction of certain employment service requirements) set forth in the Alberto-Culver Company 1994 Restricted Stock Plan and Restricted Stock Agreement. A copy of such agreement may be inspected at the offices of the Secretary of the Company. All certificates representing shares of Restricted Stock shall be held by the Secretary of the Company in escrow on behalf of the Participant awarded such shares, together with a Power of Attorney executed by the Participant, in the form satisfactory to the Committee and authorizing the Company to transfer such shares as provided in the Restricted Stock Agreement, until such time as all restrictions imposed on such shares pursuant to the RSP and the Restricted Stock Agreement have expired or been earlier terminated. 6.7 Termination of Employment In the event that, prior to the removal of restrictions on shares of Restricted Stock as contemplated by Section 6.4, a Participant's employment with the Company terminates for any reason other than death, Retirement or Disability, any shares subject to time period restrictions or other forfeiture conditions at the date of such termination shall automatically be forfeited to the Company. A Participant shall not forfeit any rights to Restricted Stock previously granted to him, solely because he ceases to qualify as a Key Employee. 6.8 Death or Disability (a) In the event that, prior to the removal of restrictions on shares of Restricted Stock as contemplated by Section 6.4, a Participant's employment with the Company terminates because of death, Retirement or Disability, any uncompleted portion of a time period restriction or other forfeiture conditions, as set forth in the terms of the Restricted Stock Agreement, may be waived by the Committee. The shares released from such restrictions pursuant to this Section 6.8 thereafter shall be freely transferable by the Participant, subject to any applicable legal requirements. (b) A Participant may from time to time name in writing any person or persons to whom his or her Restricted Stock should be given if the Participant dies. Each such beneficiary designation will revoke all prior designations by the Participant with respect to the RSP, shall not require the consent of any previously name beneficiary, shall be in a form prescribed by the Committee, and will be effective only when filed with the Committee in care of the Secretary of the Company during the Participant's lifetime. (c) If a Participant fails to designate a beneficiary before his or her death, as provided above, or if the beneficiary designated by the Participant dies prior to receiving the Restricted Stock hereunder, the Company may transfer the Restricted Stock to the legal representative or representatives of the estate of the Participant. - 29 - 6.9 Voting Rights Participants shall have full voting rights with respect to shares of Restricted Stock. 6.10 Dividend Rights Except as the Committee may otherwise determine, Participants shall have full dividend rights with any such dividends being paid currently. Dividends paid on shares of Restricted Stock prior to the shares vesting will be treated as wages for federal income tax purposes and will be subject to withholding taxes by the Company. If all or part of a dividend is paid in shares of stock, the dividend shares shall be subject to the same restrictions on transferability as the shares of Restricted Stock that are the basis for the dividend. 6.11 Security Interest in Shares In connection with the execution of any Restricted Stock Agreement, the Committee may require that a Participant grant to the Company a security interest in the shares of Restricted Stock issued or granted pursuant to this RSP to secure the payment of any sums (i.e.: income withholding taxes due when restrictions lapse) then owing or thereafter coming due to the Company by such Participant. This security interest shall continue for such period of time as the certificates representing shares of Restricted Stock are held by the Secretary of the Company in escrow on behalf of the Participant pursuant to Section 6.6. 6.12 Withholding Taxes Due At any time when a Participant is required to pay to the Company an amount required to be withheld under applicable income tax or other tax laws in connection with the vesting of Restricted Stock, the Participant may satisfy this obligation in whole or in part by making an election to have the Company withhold shares of Restricted Stock having a value equal to the amount required to be withheld. The value of shares to be withheld shall be based on the Fair Market Value of the Restricted Stock on the date the Participant vests in such shares. SECTION 7. CHANGE IN CONTROL 7.1 Vesting Upon Change in Control Notwithstanding any provision of the RSP, all outstanding shares of Restricted Stock shall immediately become fully vested upon the occurrence of a Change in Control. 7.2 Definitions (a) The term "Change in Control" means: (1) the occurrence of any one or more of the following events: (A) The acquisition by any individual, entity or group (a "Person"), including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act of both (x) 20% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities") and (y) combined voting power of Outstanding Company Voting Securities in excess of the combined voting power of the Outstanding Company Voting Securities held by the Exempt Persons (as such term is defined in Section 7.2(b)); provided, however, that a Change in Control shall not result from an acquisition of Company Voting Securities: (i) directly from the Company, except as otherwise provided in Section 7.2(a)(2)(A); (ii) by the Company, except as otherwise provided in Section 7.2(a)(2)(B); (iii) by an Exempt Person; (iv) by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (v) by any corporation pursuant to a reorganization, merger or consolidation involving the Company, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (i) and (ii) of Section 7.2(a)(1)(C) shall be satisfied. - 30 - (B) The cessation for any reason of the members of the Incumbent Board (as such term is defined below) to constitute at least a majority of the Board. (C) Approval by the stockholders of the Company 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) Approval by the stockholders of the Company 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 (ii) at least a majority of the members of the board of directors thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition. (E) Approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the Company. (2) Notwithstanding the provisions of Section 7.2(a)(1): (A) no acquisition of Company Voting Securities shall be subject to the exception from the definition of Change in Control contained in clause (i) of Section 7.2(a)(1)(A) if such acquisition results from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company; and (B) for purposes of clause (ii) of Section 7.2(a)(1)(A), if any Person (other than the Company, an Exempt Person or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall, by reason of an acquisition of Company Voting Securities by the Company, become the beneficial owner of (x) 20% or more of the combined voting power of the Outstanding Company Voting Securities and (y) combined voting power of Outstanding Company Voting Securities in excess of the combined voting power of the Outstanding Company Voting Securities held by the Exempt Persons, and such Person shall, after such acquisition of Company Voting Securities by the Company, become the beneficial owner of any additional Outstanding Company Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control. (b) The term "Exempt Person"(and collectively, the"Exempt Persons")means: - 31 - (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 Section 7.2(b)(1) or (2); (4) any trust or similar arrangement for the benefit of any person described in Section 7.2(b)(1) or (2); or (5) the Lavin Family Foundation or any other charitable organization established by any person described in Section 7.2(b)(1) or (2). (c) The term "Incumbent Board" means those individuals who, as of October 24, 1996, 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 election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board or the Exempt Persons shall be deemed to have been a member of the Incumbent Board. SECTION 8. EMPLOYMENT RIGHTS OF EMPLOYEES Nothing in this RSP or in any grant of Restricted Stock shall interfere with or limit in any way the right of the Company to terminate any Key Employee's or Participant's employment at any time, or confer upon any Key Employee or Participant any right to continue in the employ of the Company or its subsidiaries. SECTION 9. STOCKHOLDER APPROVAL, AMENDMENT AND TERMINATION 9.1 Stockholder Approval The RSP shall be submitted to the stockholders of the Company for their approval and adoption at the annual meeting of stockholders to be held on January 26, 1995, or any adjournment thereof. The grant of Restricted Stock hereunder prior to stockholder approval shall be contingent upon and subject to stockholder approval. 9.2 Amendment This RSP may be amended at any time by the Board; provided that no such amendment shall permit the granting of Restricted Stock to anyone other than as provided in Section 4 hereof, or increase the maximum number of shares of stock that may be granted pursuant to this RSP except pursuant to Section 4.3 hereof, without the further approval of the Company's stockholders. 9.3 Termination The Company reserves the right to terminate the RSP at any time by action of its Board. 9.4 Existing Restrictions Neither amendment nor termination of this RSP shall affect any shares previously granted or issued pursuant to this RSP. 249528.04 - 32 - EX-10 6 1994 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS Exhibit 10(e) ALBERTO-CULVER COMPANY 1994 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS (as amended through October 24, 1996) 1. Purpose. The principal purpose of the 1994 Stock Option Plan for Non-Employee Directors (the "Director Plan") is to benefit Alberto-Culver Company (the "Company") and its subsidiaries by offering its non-employee directors an opportunity to become holders of the Company's Class A common stock, par value $.22 per share, in order to enable them to represent the viewpoint of other stockholders of the Company more effectively and to encourage them to continue serving as directors of the Company. 2. Administration. The Director Plan shall be administered by the Board of Directors, whose interpretation of the terms and provisions of the Director Plan shall be final and conclusive. 3. Eligibility. Options shall be granted under this Director Plan only to members of the Board of Directors who are not officers or employees of the Company or any of its subsidiaries. 4. Granting of Options. (a) An option to purchase 7,500 shares of Class A common stock from the Company shall be automatically granted by the Board of Directors, without further action required, to each director of the Company upon his or her initial election or appointment as a director of the Company and to each person who is an incumbent director on October 27, 1994; provided such director is eligible at that time under the terms of Paragraph 3 of this Director Plan, and provided, further, that no person shall be granted more than one such option pursuant to this Director Plan. An aggregate of 75,000 shares shall be available under this Director Plan. Such number of shares, and the number of shares subject to options outstanding under this Director Plan, shall be subject in all cases to adjustment as provided in Paragraph 10. No option shall be granted under this Director Plan subsequent to October 27, 2004. (b) Shares subject to options may be made available from unissued or treasury shares of stock. Notwithstanding the provisions of subparagraph 4(a), any shares released from any unexercised or expired options may be made subject to additional options granted under this Director Plan. (c) Nothing contained in this Director Plan or in any option granted pursuant hereto shall in itself confer upon any optionee any right to continue serving as a director of the Company or interfere in any way with any right of the Board of Directors or stockholders of the Company to remove such director pursuant to the certificate of incorporation or by-laws of the Company or applicable law. 5. Option Price. Subject to adjustment under Paragraph 10, the option price shall be the Fair Market Value (as defined below) of the Company's Class A common stock on the date the option is granted. For purposes of the Director Plan, "Fair Market Value" shall mean the average of the high and low transaction prices of a share of Class A common stock as reported in the New York Stock Exchange Composite Transactions on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported. 6. Duration of Options, Increments and Extensions. Subject to the provisions of Paragraph 8, each option shall be for a term of ten (10) years. Subject to the provisions of Paragraph 11, each option shall become exercisable with respect to 25% of the total number of shares one year after the date of grant and with respect to an additional 25% at the end of each twelve-month period thereafter during the succeeding three years. - 33 - 7. Exercise of Option. An option may be exercised by giving written notice to the Company, attention of the Secretary, specifying the number of shares of Class A common stock to be purchased, accompanied by the full purchase price for such number of shares, either in cash, by check, or in shares of Class A common stock, or by a combination thereof. The per share value of the Class A common stock delivered in payment of the option price shall be the Fair Market Value of the Class A common stock on the date of exercise. 8. Termination - Exercise Thereafter. (a) If an optionee dies without having fully exercised his or her option, the executors or administrators of his or her estate or legatees or distributees shall have the right during a one (1) year period following his or her death (but not after the expiration of the term of such option) to exercise such option in whole or in part but only to the extent that the optionee could have exercised the option at the date of his or her death. (b) If any optionee resigns from the Board of Directors due to physical disability or retirement, the optionee's option shall terminate three (3) months after his or her resignation (but not after the expiration of the term of such option) and may be exercised only to the extent that such optionee could have exercised the option at the date of his or her resignation. (c) If the optionee resigns from the Board of Directors for any other reason other than physical disability or retirement, the optionee's option shall terminate upon said resignation; provided, however, that if such resignation occurs following a Change in Control (as such term is defined in paragraph 11(b) hereof), the optionee's option shall terminate three (3) months after his or her resignation (but not after the expiration of the term of such option) and may be exercised to the extent that such optionee could have exercised it at the date of his or her resignation. 9. Non-Transferability of Options. No option shall be transferable by the optionee otherwise than by will or the laws of descent and distribution, and each option shall be exercisable during an optionee's lifetime only by the optionee. 10. Adjustment upon Change in Stock. Each option and the number and kind of shares subject to future options under the Director Plan will be adjusted, as may be determined to be equitable by the Board of Directors, in the event there is any change in the outstanding Class A common stock of the Company by reason of a stock dividend, recapitalization, merger, consolidation, split-up, combination or exchange of shares, or the like, and the Board of Directors determination of such adjustment provisions shall be final, conclusive and binding. 11. Change in Control (a) (1) Notwithstanding any provision of the Director Plan, in the event of a Change in Control, all outstanding options shall immediately be exercisable in full and shall be subject to the provisions of paragraph 11(a)(2) or 11(a)(3), to the extent that either such paragraph is applicable. (2) Notwithstanding any provision of the Director Plan, in the event of a Change in Control in connection with which the holders of shares of the Company's Class A common stock receive shares of common stock that are registered under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"), all outstanding options shall immediately be exercisable in full and there shall be substituted for each share of the Company's Class A common stock available under the Director Plan, whether or not then subject to an outstanding option, the number and class of shares into which each outstanding share of the Company's Class A common stock shall be converted pursuant to such Change in Control. In the event of any such substitution, the purchase price per share of each option shall be appropriately adjusted by the Board of Directors, such adjustments to be made without an increase in the aggregate purchase price. (3) Notwithstanding any provision in the Director Plan, in the event of a Change in Control in connection with which the holders of the Company's Class A 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 - 34 - in Control, a cash payment from the Company in an amount equal to the number of shares of the Company's Class A common stock then subject to such option, multiplied by the excess, if any, of (i) the greater of (A) the highest per share price offered to stockholders of the Company in any transaction whereby the Change in Control takes place or (B) the Fair Market Value of a share of the Company's Class A common stock on the date of occurrence of the Change in Control over (ii) the purchase price per share of the Company's Class A 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. (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; (iv) by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (v) by any corporation pursuant to a reorganization, merger or consolidation involving the Company, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (i) and (ii) of paragraph 11(b)(1)(C) shall be satisfied. (B) The cessation for any reason of the members of the Incumbent Board (as such term is defined in paragraph 11(d)) to constitute at least a majority of the Board of Directors. (C) Approval by the stockholders of the Company of a reorganization, merger or consolidation unless, in any such case, immediately after such reorganization, merger or consolidation: (i) more than 60% of the combined voting power of the then outstanding securities of the corporation resulting from such reorganization, merger or consolidation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals or entities who were the beneficial owners of the combined voting power of all of the Outstanding Company Voting Securities immediately prior to such reorganization, merger or consolidation; and (ii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board of Directors providing for such reorganization, merger or consolidation. - 35 - (D) Approval by the stockholders of the Company 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 (ii) at least a majority of the members of the board of directors thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board of Directors providing for such sale or other disposition. (E) Approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the Company. (2) Notwithstanding the provisions of paragraph 11(b)(1): (A) no acquisition of Company Voting Securities shall be subject to the exception from the definition of Change in Control contained in clause (i) of paragraph 11(b)(1)(A) if such acquisition results from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company; and (B) for purposes of clause (ii) of paragraph 11(b)(1)(A), if any Person (other than the Company, an Exempt Person or any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company) shall, by reason of an acquisition of Company Voting Securities by the Company, become the beneficial owner of (x) 20% or more of the combined voting power of the Outstanding Company Voting Securities and (y) combined voting power of Outstanding Company Voting Securities in excess of the combined voting power of the Outstanding Company Voting Securities held by the Exempt Persons, and such Person shall, after such acquisition of Company Voting Securities by the Company, become the beneficial owner of any additional Outstanding Company Voting Securities and such beneficial ownership is publicly announced, such additional beneficial ownership shall constitute a Change in Control. (c) "Exempt Person" (and collectively, the "Exempt Persons") means: (1) Leonard H. Lavin or Bernice E. Lavin; (2) any descendant of Leonard H. Lavin and Bernice E. Lavin or the spouse of any such descendant; (3) the estate of any of the persons described in paragraph 11(c)(1) or (2); (4) any trust or similar arrangement for the benefit of any person described in paragraph 11(c)(1) or (2); or (5) the Lavin Family Foundation or any other charitable organization established by any person described in paragraph 11(c)(1) or (2). (d) "Incumbent Board" means those individuals who, as of October 24, 1996, constitute the Board of Directors, provided that: (1) any individual who becomes a director of the Company subsequent to such date whose election, or nomination for election by the Company's stockholders, was approved either by the vote of at least a majority of the directors then comprising the Incumbent Board or by the vote of at least a majority of the - 36 - 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 election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors or the Exempt Persons shall be deemed to have been a member of the Incumbent Board. 12. Amendment of Director Plan. The Board of Directors may amend or discontinue this Director Plan at any time; provided, however, that no such amendment or discontinuance shall (i) change or impair any option previously granted without the consent of the optionee, (ii) increase the maximum number of shares which may be purchased by all eligible directors pursuant to this Director Plan, (iii) change the purchase price, or (iv) change the option period or increase the time limitations on the grant of options. 13. Effective Date. This Director Plan has been adopted and authorized by the Board of Directors for submission to the stockholders of the Company. If this Director Plan is approved by the affirmative vote of the holders of a majority of the voting stock of the Company voting in person or by proxy at a duly held stockholders' meeting, it shall be deemed to have become effective on October 27, 1994, the date of adoption by the Board of Directors. Options may be granted under this Director Plan prior, but subject, to the approval of this Director Plan by stockholders of the Company and, in each such case, the date of grant shall be determined without reference to the date of approval of this Director Plan by the stockholders of the Company. 249583.05 - 37 - EX-10 7 SEVERANCE AGREEMENT Exhibit 10(f) SEVERANCE AGREEMENT THIS AGREEMENT is entered into as of __________, 1996 by and between Alberto-Culver Company, a Delaware corporation, and _______________ (the "Executive"). WHEREAS, the Executive currently serves as a key employee of the Company (as defined in Section 1) and his services and knowledge are valuable to the Company in connection with the management of one or more of the Company's principal operating facilities, divisions, departments or subsidiaries; and WHEREAS, the Board (as defined in Section 1) has determined that it is in the best interests of the Company and its stockholders to secure the Executive's continued services and to ensure the Executive's continued dedication and objectivity in the event of any threat or occurrence of, or negotiation or other action that could lead to, or create the possibility of, a Change in Control (as defined in Section 1) of the Company, without concern as to whether the Executive might be hindered or distracted by personal uncertainties and risks created by any such possible Change in Control, and to encourage the Executive's full attention and dedication to the Company, the Board has authorized the Company to enter into this Agreement. NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the Executive hereby agree as follows: 1. Definitions. As used in this Agreement, the following terms shall have the respective meanings set forth below: (a) "Board" means the Board of Directors of the Company. (b) "Cause means (1) a material breach by the Executive of those duties and responsibilities of the Executive which do not differ in any material respect from the duties and responsibilities of the Executive during the six-month period immediately prior to a Change in Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on the Executive's part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach or (2) the commission by the Executive of a felony involving moral turpitude. (c) "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 Securities Exchange Act of 1934, as amended (the "Exchange Act"), of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act of both (x) 20% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities") and (y) combined voting power of Outstanding Company Voting Securities in excess of the combined voting power of the Outstanding Company Voting Securities held by the Exempt Persons (as such term is defined in Section 1(f)); provided, however, that a Change in Control shall not result from an acquisition of Company Voting Securities: (i) directly from the Company, except as otherwise provided in Section 1(c)(2)(A); (ii) by the Company, except as otherwise provided in Section 1(c)(2)(B); (iii) by an Exempt Person; -38- (iv) by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or (v) by any corporation pursuant to a reorganization, merger or consolidation involving the Company, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (i) and (ii) of Section 1(c)(1)(C) shall be satisfied. (B) The cessation for any reason of the members of the Incumbent Board (as such term is defined in Section 1(h)) to constitute at least a majority of the Board. (C) Approval by the stockholders of the Company 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) Approval by the stockholders of the Company 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 (ii) at least a majority of the members of the board of directors thereof were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition. (E) Approval by the stockholders of the Company of a plan of complete liquidation or dissolution of the Company. (2) Notwithstanding the provisions of Section 1(c)(1)(A): (A) no acquisition of Company Voting Securities shall be subject to the exception from the definition of Change in Control contained in clause (i) of Section 1(c)(1)(A) if such acquisition results from the exercise of an exercise, conversion or exchange privilege unless the security being so exercised, converted or exchanged was acquired directly from the Company; and (B) for purposes of clause (ii) of Section 1(c)(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 -39- 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. (d)"Company" means Alberto-Culver Company, a Delaware corporation. (e "Date of Termination" means (1) the effective date on which the Executive's employment by the Company terminates as specified in a prior written notice by the Company or the Executive, as the case may be, to the other, delivered pursuant to Section 11 or (2) if the Executive's employment by the Company terminates by reason of death, the date of death of the Executive. (f)"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 Section 1(f)(1) or (2); (4)any trust or similar arrangement for the benefit of any person described in Section 1(f)(1) or (2); or (5)the Lavin Family Foundation or any other charitable organization established by any person described in Section 1(f)(1) or (2). (g) "Good Reason" means, without the Executive's express written consent, the occurrence of any of the following events after a Change in Control: (1) any of (i) the assignment to the Executive of any duties inconsistent in any material respect with the Executive's position(s), duties, responsibilities or status with the Company immediately prior to such Change in Control, (ii) a change in the Executive's reporting responsibilities, titles or offices with the Company as in effect immediately prior to such Change in Control or (iii) any removal or involuntary termination of the Executive from the Company otherwise than as expressly permitted by this Agreement or any failure to reelect the Executive to any position with the Company held by the Executive immediately prior to such Change in Control; (2) a reduction by the Company in the Executive's rate of annual base salary as in effect immediately prior to such Change in Control or as the same may be increased from time to time thereafter or the failure by the Company to increase such rate of base salary each year after such Change in Control by an amount which at least equals, on a percentage basis, the mean average percentage increase in the rate of base salary for the Executive during the two full fiscal years of the Company immediately preceding such Change in Control; (3) any requirement of the Company that the Executive (i) be based anywhere other than at the facility where the Executive is located at the time of the Change in Control or (ii) travel on Company business to an extent substantially more burdensome than the travel obligations of the Executive immediately prior to such Change in Control; (4) the failure of the Company to (i) continue in effect any employee benefit plan or compensation plan in which the Executive is participating immediately prior to such Change in Control, unless the Executive is permitted to participate in other plans providing the Executive with substantially comparable benefits, or the taking of any action by the Company which would adversely affect the Executive's participation in or materially reduce the Executive's benefits under any such plan, (ii) provide the Executive and the Executive's dependents welfare benefits (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) in accordance with the most favorable -40- plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive immediately prior to such Change in Control or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies, (iii) provide fringe benefits in accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive immediately prior to such Change in Control or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies, (iv) provide an office or offices of a size and with furnishings and other appointments, together with exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies immediately prior to such Change in Control or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies, (v) provide the Executive with paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive immediately prior to such Change in Control or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies, or (vi) reimburse the Executive promptly for all reasonable employment expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive immediately prior to such Change in Control or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies; or (5) the failure of the Company to obtain the assumption agreement from any successor as contemplated in Section 10(b). For purposes of this Agreement, any good faith determination of Good Reason made by the Executive shall be conclusive; provided, however, that an isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive shall not constitute Good Reason. (h) "Incumbent Board" means those individuals who, as of October 24, 1996, 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 election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, 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. (i) "Nonqualifying Termination" means a termination of the Executive's employment (1) by the Company for Cause, (2) by the Executive for any reason other than a Good Reason, (3) as a result of the Executive's death or (4) by the Company due to the Executive's absence from his duties with the Company on a full-time basis for at least 180 consecutive days as a result of the Executive's incapacity due to physical or mental illness. (j) "Termination Period" means the period of time beginning with a Change in Control and ending on the earlier to occur of (1) two years following such Change in Control or (2) the Executive's death. 2. Obligations of the Executive. The Executive agrees that in the event of a Change in Control, he shall not voluntarily leave the employ of the Company without Good Reason until 90 days following such Change in Control. The Executive further agrees that in the event that any person or group attempts a Change in Control, he shall not voluntarily leave the employ of the Company during such attempted Change in Control unless an event occurs which would have constituted Good Reason had it occurred following a Change in Control (for purposes of determining whether such an event would have constituted Good Reason had it occurred following a Change in Control, the definition of Good Reason shall be interpreted as if a Change in Control had occurred when such attempted Change in Control became known to the Board). The Executive acknowledges that if he leaves the employ of the Company for any reason prior to a Change in Control, he shall not be entitled to any payment or benefit pursuant to this Agreement. 3. Payments Upon Termination of Employment. -41- (a) If during the Termination Period the employment of the Executive shall terminate, other than by reason of a Nonqualifying Termination, then the Company shall pay to the Executive (or the Executive's beneficiary or estate) within 30 days following the Date of Termination, as compensation for services rendered to the Company: (1) a cash amount equal to the sum of (i) the Executive's base salary from the Company and its affiliated companies through the Date of Termination, to the extent not theretofore paid, (ii) the Executive's annual bonus in an amount determined in accordance with the terms of the Company's Management Incentive Plan, (iii) the amount payable to the Executive in accordance with the terms of the Company's 1994 Shareholder Value Incentive Plan and (iv) any compensation previously deferred for the benefit of the Executive (together with any interest and earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid; plus (2) a lump-sum cash amount (subject to any applicable payroll or other taxes required to be withheld pursuant to Section 5) equal to (i) 2.99 times the Executive's highest annual base salary from the Company and its affiliated companies in effect during the 12-month period prior to the Date of Termination, plus (ii) 2.99 times the Executive's highest annualized (for any fiscal year consisting of less than 12 full months or with respect to which the Executive has been employed by the Company for less than 12 full months) bonus, paid or payable, including by reason of any deferral, to the Executive by the Company and its affiliated companies in respect of the five fiscal years of the Company (or such portion thereof during which the Executive performed services for the Company if the Executive shall have been employed by the Company for less than such five fiscal year period) immediately preceding the fiscal year in which the Change in Control occurs; provided, that any amount paid pursuant to this Section 3(a)(2) shall be paid in lieu of any other amount of severance relating to salary or bonus continuation to be received by the Executive upon termination of employment of the Executive under any severance plan, policy or arrangement of the Company. (b) In addition to the payments to be made pursuant to Section 3(a) hereof, any stock options granted to the Executive under the Company's Employee Stock Option Plan of 1988 shall be treated in accordance with the terms of such plan. (c) For a period of 36 months commencing on the Date of Termination, the Company shall continue to keep in full force and effect all policies of medical, accident, disability and life insurance with respect to the Executive and his dependents with the same level of coverage, upon the same terms and otherwise to the same extent as such policies shall have been in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as provided generally with respect to other peer executives of the Company and its affiliated companies, and the Company and the Executive shall share the costs of the continuation of such insurance coverage in the same proportion as such costs were shared immediately prior to the Date of Termination. (d) If during the Termination Period the employment of the Executive shall terminate by reason of a Nonqualifying Termination, then the Company shall pay to the Executive within 30 days following the Date of Termination, a cash amount equal to the sum of (1) the Executive's full annual base salary from the Company through the Date of Termination, to the extent not theretofore paid and (2) any compensation previously deferred by the Executive (together with any interest and earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid. 4. Limitations on Payments by the Company. Solely for the purposes of the computation of benefits under this Agreement and notwithstanding any other provisions hereof, payments to the Executive under this Agreement shall be reduced (but not below zero) so that the present value, as determined in accordance with Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the "Code"), of such payments plus any other payments that must be taken into account for purposes of any computation relating to the Executive under Section 280G(b)(2)(A)(ii) of the Code, shall not, in the aggregate, exceed 2.99 times the Executive's "base amount," as such term is defined in Section 280G(b)(3) of the Code. Notwithstanding any other provision hereof, no reduction in payments under the limitation contained in the immediately preceding sentence shall be applied to payments hereunder which do not constitute "excess parachute payments" within the meaning of the Code. Any payments in excess of the limitation of this Section 4 or otherwise determined to be "excess parachute payments" made to the Executive hereunder shall be deemed to be overpayments which shall constitute an amount owing from the Executive to the Company with interest from the date of receipt by the Executive to the date of repayment (or offset) at the applicable federal rate under Section 1274(d) of the Code, compounded semi-annually, which shall be payable to the Company upon demand; provided, however, that no repayment shall be required under this sentence if in the written opinion of tax counsel satisfactory to the Executive and delivered to the Executive and the Company such repayment does not allow such overpayment to be excluded for federal income and excise tax purposes from the Executive's income for the year of receipt or afford the Executive a compensating federal income tax deduction for the year of repayment. -42- 5. Withholding Taxes. The Company may withhold from all payments due to the Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom. 6. Reimbursement of Expenses. If any contest or dispute shall arise under this Agreement involving termination of the Executive's employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse the Executive, on a current basis, for all legal fees and expenses, if any, incurred by the Executive in connection with such contest or dispute, together with interest in an amount equal to the prime rate from time to time in effect, as published under "Money Rates" in The Wall Street Journal, but in no event higher than the maximum legal rate permissible under applicable law, such interest to accrue from the date the Company receives the Executive's statement for such fees and expenses through the date of payment thereof; provided, however, that in the event the resolution of any such contest or dispute includes a finding denying, in total, the Executive's claims in such contest or dispute, the Executive shall be required to reimburse the Company, over a period of 12 months from the date of such resolution, for all sums advanced to the Executive pursuant to this Section 6. 7. Operative Event. Notwithstanding any provision herein to the contrary, no amounts shall be payable hereunder unless and until there is a Change in Control at a time when the Executive is employed by the Company. 8. Termination of Agreement. (a) This Agreement shall be effective on the date hereof and shall continue until terminated by the Company as provided in Section 8(b); provided, however, that this Agreement shall terminate in any event upon the first to occur of (i) termination of the Executive's employment with the Company prior to a Change in Control or (ii) the Executive's death. (b) The Company shall have the right prior to a Change in Control, in its sole discretion, pursuant to action by the Board, to approve the termination of this Agreement, which termination shall not become effective until the date fixed by the Board for such termination, which date shall be at least 120 days after notice thereof is given by the Company to the Executive in accordance with Section 11; provided, however, that no such action shall be taken by the Board during any period of time when the Board has knowledge that any person has taken steps reasonably calculated to effect a Change in Control until, in the opinion of the Board, such person has abandoned or terminated its efforts to effect a Change in Control; and provided further, that in no event shall this Agreement be terminated in the event of a Change in Control. 9. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with the Company or its subsidiaries, and if the Executive's employment with the Company shall terminate prior to a Change in Control, then the Executive shall have no further rights under this Agreement; provided, however, that any termination of the Executive's employment following a Change in Control shall be subject to all of the provisions of this Agreement. 10. Successors; Binding Agreement. (a) This Agreement shall not be terminated by any merger or consolidation of the Company whereby the Company is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Company. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred. (b) The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in Section 10(a), it will cause any successor or transferee unconditionally to assume, by written instrument delivered to the Executive (or his beneficiary or estate), all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption prior to the effectiveness of any such merger, consolidation or transfer of assets shall be a breach of this Agreement and shall entitle the Executive to compensation and other benefits from the Company in the same amount and on the same terms as the Executive would be entitled hereunder if the Executive's employment were terminated following a Change in Control other than by reason of a Nonqualifying Termination. For purposes of implementing the foregoing payment of compensation and benefits to the Executive, the date on which any such merger, consolidation or transfer becomes effective shall be deemed the Date of Termination. (c) This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided -43- herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive's estate. 11. Notice. (a) For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or five days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed (1) if to the Executive, to his most recent address as it appears in the records of the Company, and if to the Company, to Alberto-Culver Company, 2525 Armitage Avenue, Melrose Park, Illinois 60160, attention of the President, with a copy to the General Counsel or (2) to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. (b) A written notice of the Executive's Date of Termination by the Company or the Executive, as the case may be, to the other, shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) specify the termination date (which date shall be not less than 15 days after the giving of such notice). The failure by the Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder. 12. Full Settlement; Resolution of Disputes. (a) The Company's obligation to make any payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and, such amounts shall not be reduced whether or not the Executive obtains other employment. (b) If there shall be any dispute between the Company and the Executive in the event of any termination of the Executive's employment, then, unless and until there is a final, nonappealable judgment by a court of competent jurisdiction declaring that such termination was for Cause, that the determination by the Executive of the existence of Good Reason was not made in good faith, or that the Company is not otherwise obligated to pay any amount or provide any benefit to the Executive and his dependents or other beneficiaries, as the case may be, under Sections 3(a) and 3(b), the Company shall pay all amounts, and provide all benefits, to the Executive and his dependents or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Sections 3(a) and 3(b) as though such termination were by the Company without Cause or by the Executive with Good Reason; provided, however, that the Company shall not be required to pay any disputed amounts pursuant to this Section 12(b) except upon receipt of an undertaking by or on behalf of the Executive to repay all such amounts to which the Executive is ultimately adjudged by such court not to be entitled. 13. Employment with Subsidiaries. Employment with the Company for purposes of this Agreement shall include employment with any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors. 14. Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect. 15. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. 16. Miscellaneous. No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive or the Company to insist upon strict compliance with any provision of this Agreement -44- or to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. The rights of, and benefits payable to, the Executive, his estate or his beneficiaries pursuant to this Agreement are in addition to any rights of, or benefits payable to, the Executive, his estate or his beneficiaries under any other employee benefit plan or compensation program of the Company. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and the Executive has executed this Agreement as of the day and year first above written. ALBERTO-CULVER COMPANY By:___________________________ EXECUTIVE: ------------------------------ Subscribed and Sworn to before me this ___ day of __________, 1996. - ---------------------------------- Notary Public 243526.04 -45- EX-27 8 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the consolidated balance sheet as of December 31, 1996 and the consolidated statement of earnings for the three months ended December 31, 1996 and is qualified in its entirety by reference to such financial statements. 0000003327 ALBERTO-CULVER COMPANY AND SUBSIDIARIES 1,000 US DOLLARS 1.0000 12-MOS SEP-30-1996 OCT-01-1996 DEC-31-1996 $106,938 6,400 127,906 8,612 300,451 563,169 308,764 141,214 955,374 297,825 160,925 0 0 7,526 446,402 955,374 426,105 426,105 15,388 215,388 181,587 1,396 3,179 42,372 15,784 26,588 0 0 0 26,588 .47 .44
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