ALBERTO-CULVER COMPANY MANAGEMENT INCENTIVE PLAN

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 financial performance and achievement of Individual Bonus Objectives. This MIP is established as an unfunded, non-qualified incentive 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 or Profit Center and/or the Participant have achieved the financial performance and Individual Business Objectives, respectively, provided for in the MIP.

3.

Effective Date and Performance Periods. Except for the amendments made to Sections 8, 11.c and 14.c to comply with Section 409A of the Internal Revenue Code of 1986 and the rules and regulations thereunder (the “Code”), which amendments shall be effective as of January 1, 2005, the effective date of the amended and restated MIP is September 21, 2006. The Plan Year shall be the 12 consecutive-month period ending September 30 of each year. The MIP will continue in effect until and unless terminated by the Compensation Committee or the Board of Directors.

4.

Definitions. The definition of key terms are as follows:

a.

“Base Salary” means the base salary, as set by the Company, paid to the Participant during the Plan Year, exclusive of any amounts payable under bonus and incentive plans, severance plans, option plans, and any other benefit or welfare plan of the Company now or hereafter existing.

b.

“Bonus Award Opportunity” means 200% of Base Salary.

c.

“Change in Control” shall have the meaning set forth in Section 14.d.1.

d.

“Committee” means the Compensation and Leadership Development Committee of the Board of Directors of the Company or, if any member of the Compensation Committee is not (i) an “outside director” within the meaning of Section 162(m) of the Code or (ii) a “non-employee director” within the meaning of Section 16 (“Section 16”) of the Securities Exchange Act of 1934 and the rules and regulations thereunder (“Exchange Act”), the Committee shall set up a subcommittee comprised solely of outside directors and non-employee directors for purposes of all matters arising under this MIP involving “officers” within the meaning of Rule 16a-1(f) under Section 16 (“Executive Officer”) and Covered Employees as defined herein.

e.

“Company” means Alberto-Culver Company or a Subsidiary.

f.

“Covered Employee” means a Participant who is a “covered employee” within the meaning of Section 162(m) of the Code during the Plan Year at issue.

g.

“Employee” means any person, including an officer or director, who is employed on a permanent basis by, and receives a regular salary from, the Company.

h.

“Exempt Person” and “Exempt Persons” shall have the meaning set forth in Section 14.d.2.

i.

“Incumbent Board” shall have the meaning set forth in Section 14.d.3.

j.

“Individual Business Objectives” means the objectives as set forth in a letter of recommendation prepared by the Participant and agreed upon by (i) the Chairman, any Vice Chairman or the Chief Executive Officer of the Company, (ii) the President of Alberto-Culver Consumer Products Worldwide or Sally Beauty Company, Inc. or (iii) the Committee.

k.

“Participant” means any Employee of the Company who has been selected to participate in the MIP.

l.

“Plan Year” shall be the Company’s fiscal year for financial reporting purposes ( i.e. , the 12 consecutive-month period ended September 30).

m.

“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.

n.

“Subsidiary” means any corporation in which the Company owns (directly or indirectly) 50% or more of the outstanding stock entitled to vote for directors.

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 those eligible Employees who will participate in the MIP during that Plan Year. In the event an employee who would be

eligible to participate 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 notify the new Participant of his or her financial performance award opportunities 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. Actual awards can range from 0% to 100% of the Bonus Award Opportunity (a maximum of 200% of Base Salary or $4.0 million, whichever is less) based on actual performance compared to the performance objectives established for the Plan Year. The total Bonus Award Opportunity will relate to the financial performance of the Company, one or more Profit Centers, or 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 (i) increased or decreased by up to 35% of such Participant’s Base Salary as the Committee, in its sole discretion, shall determine based on such factors and circumstances as the Committee shall deem appropriate or (ii) decreased by such amount as the Committee, in its sole discretion, shall determine in the event a Participant (a) is found to have violated any policy contained in the applicable Compliance Policy Manual, (b) is placed on probation at any time during the Plan Year, (c) has engaged in purposeful diversion, and/or (d) has engaged in activities intended to enhance current Plan Year awards to the detriment of future periods (e.g. inadequate marketing expenditures that artificially increase short-term profits, unnecessary year-end loading shipments or promotions that build sales for the short-term, etc.)

7.

Maximum Award Payable. The maximum award payable under the MIP to a single Participant may not exceed the lesser of $4.0 million or 200% of such Participant’s Base Salary per fiscal year of the Company.

8.

Financial Performance Award Opportunities. Each Participant will be assigned financial performance award opportunities for the Company and/or the Profit Center for the Plan Year no later than the 90 ^th day of the applicable Plan Year. Each Participant who is hired after December 1 ^st of a Plan Year will be assigned financial performance award opportunities for the Company and/or the Profit Center for that Plan Year no later than the 30 ^th day following his first day of employment. If the Committee fails to timely assign financial performance award opportunities, a Participant shall not be allowed to defer payment of his or her award pursuant to an election under Section 11.c to the extent such deferral would result in additional taxes under Section 409A of the Code. Financial performance award opportunities will be based, in whole or in part, upon one or more of the following: targeted levels of sales, operating earnings, operating margin, pre-tax earnings, pre-tax margin, net earnings, earnings per share, return on stockholders’ equity and, except for Covered Employees, any other measurements the

Committee shall deem appropriate. For purposes of the MIP, “operating earnings” will mean pre-tax earnings before non-recurring and other unusual items reported separately in the Company’s income statement.

9.

Individual Business Objectives. Except for Covered Employees, 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. Subject to Section 7, awards for the achievement of these objectives can range from 0% to 150% of the Bonus Award Opportunity assigned thereto. The Committee shall determine the actual level of performance achieved by Participants for their Individual Business Objectives.

10 .

Administration—Powers and Duties of the Committee.

11.

Payment of Annual Award.