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 -
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
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
<S> <C> <C>
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.
</TABLE>
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<PAGE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
Consolidated Balance Sheets
December 31, 1996 and September 30, 1996
(dollar amounts in thousands)
(Unaudited)
December 31, September 30,
<S> <C> <C>
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.
</TABLE>
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<PAGE>
ALBERTO-CULVER COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
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: <C> <C>
<S>
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.
</TABLE>
- 4 -
<PAGE>
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.
<PAGE>
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:
<TABLE>
<CAPTION>
FIRST QUARTER
(dollars in millions)
Fiscal Year Dollar Percent
<S> <C> <C> <C> <C>
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 %
======= ======= ========= =======
</TABLE>
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 -
<PAGE>
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 -
<PAGE>
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 -
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 -
<PAGE>
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 -
<PAGE>
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.
<PAGE>
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
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<PAGE>
(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;
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<PAGE>
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
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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 -
<PAGE>
(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:
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<PAGE>
(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
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<PAGE>
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
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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).
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<PAGE>
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
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<PAGE>
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 -
<PAGE>
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).
<PAGE>
(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
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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.
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<PAGE>
(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.
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<PAGE>
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.
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<PAGE>
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 -
<PAGE>
(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:
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<PAGE>
(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
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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 -
<PAGE>
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 -
<PAGE>
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 -
<PAGE>
(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
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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;
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<PAGE>
(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-
<PAGE>
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.
<PAGE>
3. Payments Upon Termination of Employment.
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(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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>
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.
</LEGEND>
<CIK> 0000003327
<NAME> ALBERTO-CULVER COMPANY AND SUBSIDIARIES
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<CURRENCY> US DOLLARS
<EXCHANGE-RATE> 1.0000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> $106,938
<SECURITIES> 6,400
<RECEIVABLES> 127,906
<ALLOWANCES> 8,612
<INVENTORY> 300,451
<CURRENT-ASSETS> 563,169
<PP&E> 308,764
<DEPRECIATION> 141,214
<TOTAL-ASSETS> 955,374
<CURRENT-LIABILITIES> 297,825
<BONDS> 160,925
0
0
<COMMON> 7,526
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<TOTAL-LIABILITY-AND-EQUITY> 955,374
<SALES> 426,105
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<OTHER-EXPENSES> 181,587
<LOSS-PROVISION> 1,396
<INTEREST-EXPENSE> 3,179
<INCOME-PRETAX> 42,372
<INCOME-TAX> 15,784
<INCOME-CONTINUING> 26,588
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<EPS-DILUTED> .44
</TABLE>
