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EXHIBIT 10
(h)
ALBERTO-CULVER
COMPANY
2006 SHAREHOLDER VALUE
INCENTIVE PLAN
(as amended through
September 18, 2007)
I. GENERAL
1.1 Purpose of the
SVIP
The 2006 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 the Company’s management and
growth with additional incentives through the grant of awards based
upon one or more of the objectives set forth in
Section 2.1(b), 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:
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(a) |
“Change in Control” shall have the meaning assigned
to such term in Section 3.8(b). |
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(b) |
“Committee” shall mean the Compensation and
Leadership Development Committee of the Board of Directors of the
Company or, if any member of the Compensation and Leadership
Development Committee is not (i) an “outside
director” within the meaning of Section 162(m) of the
Internal Revenue Code of 1986 and the rules and regulations
thereunder (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 SVIP
involving “officers” within the meaning of Rule
16a-1(f) under Section 16 (“Executive Officers”)
and Covered Employees as defined herein. |
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(c) |
Intentionally Omitted |
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(d) |
“Common Stock” shall mean the Common Stock of the
Company, $.01 par value. |
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(e) |
“Covered Employee” shall mean a Participant who is
a “covered employee” within the meaning of
Section 162(m) of the Code during the plan year at
issue. |
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(f) |
“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
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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.
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(g) |
“Exempt Person” and “Exempt Persons”
shall have the meaning assigned to such terms in
Section 3.8(c). |
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(h) |
“Incumbent Board” shall have the meaning assigned
to such term in Section 3.8(d). |
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(i) |
“Ownership Threshold” shall mean the dollar value
of the ownership guideline of the Common Stock for each Participant
as set by the Committee from time to time. In determining such
ownership for each Participant, the Committee may conclusively rely
on the books and records of the Company. |
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(j) |
“Participant” shall have the meaning assigned to it
in Section 1.4. |
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(k) |
“Performance Period” shall mean any one, two or
three consecutive fiscal years as set forth in the
Participant’s Performance Unit Agreement, unless accelerated
pursuant to Section 3.8. |
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(l) |
“Performance Unit” shall have the meaning assigned
to it in Section 2.1(a). |
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(m) |
“Performance Unit Agreement” shall have the meaning
assigned to it in Section 2.1(b). |
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(n) |
“Retirement” shall be reached when a
Participant’s employment terminates and at the time of such
termination the sum of such Participant’s age and years of
service as an employee of the Company or any of its subsidiaries
equals or exceeds 75 years. |
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(o) |
“Total Shareholder Return” or “TSR”
means the percentage by which the ending per share price of 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,
reclassification, 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). For purposes of the Company, TSR shall be
computed using the Common Stock. |
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. No
member of the Committee shall be liable for any action or
determination made in good faith with respect to the SVIP or any
Performance Unit thereunder.
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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 as determined by the Committee 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 $4.0 million
per Performance Period.
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 target value
at the time of the grant of $1,000. Except as provided in the
following sentence, each Participant shall be eligible, in his or
her sole discretion, to receive such Participant’s award in
cash or shares of Common Stock or a combination thereof as set
forth in Section 2.2, payable in each case following the end
of a Performance Period, if the objectives established by the
Committee, as set forth below, have been attained (unless the
Committee, pursuant to Section 2.1(c), determines that no
award will be payable because the Company’s TSR is negative
for that Performance Period). Participants owning less than their
Ownership Threshold shall be required to receive 100% of their
award in Common Stock (each, a “Required Election”).
Notwithstanding anything to the contrary contained in this
Section 2.1(a), each Participant shall be eligible to receive
an award (payable only in cash) in the event of a Change in Control
at such time and in such amounts as set forth in
Section 3.8. |
| (b) |
At the time
Performance Units are granted to Participants, the Committee shall
establish objectives based on (i) the percentile rank of the
Common Stock of the Company measured by Total Shareholder Return
among the companies comprising the (a) Standard &
Poor’s 500 Index, (b) Standard & Poor’s
MidCap 400 Index, (c) Standard & Poor’s Small
Cap 600 Index, (d) Standard & Poor’s Super
Composite 1500 Index, (e) Russell 3000 Index, or
(f) Russell 2000 Index (The index chosen by the Committee for
a particular Performance Period shall be referred to as the
“Applicable Index”), (ii) operating earnings,
(iii) operating
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earnings margin,
(iv) pre-tax earnings, (v) pre-tax earnings margin,
(vi) net earnings, (vii) net earnings margin,
(viii) net earnings per share, (ix) sales,
(x) pre-tax return on invested capital, (xi) gross
profit, (xii) return on assets, (xiii) pre-tax return on
equity, (xiv) gross profit margin, (xv) post-tax return
on invested capital, (xvi) post-tax return on equity, and
(xvii) working capital. In addition, the Committee shall
establish a matrix to determine the 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”). For purposes of the
SVIP, “operating earnings” will mean pre-tax earnings
before non-recurring and other unusual items reported separately in
the Company’s income statement.
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(c)
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No award will be payable if
the objective is Total Shareholder Return and the Company’s
TSR as a percentile among the Applicable Index companies is less
than the 40 th percentile. If the objective is Total Shareholder Return and
the Company’s TSR is negative, the Committee may, in its
discretion, not pay any award or reduce an award otherwise payable,
notwithstanding the fact that the Company’s TSR as a
percentile among the Applicable Index companies is equal to or
greater than the 40 th percentile. If the attainment of the objective is not
specifically shown in the matrix established by the Committee and
set forth in the Performance Unit Agreement, the amount of the
award shall be calculated by interpolating between the amounts
shown. The maximum award payable per unit is 200% of the target
value, subject to the limitations set forth in
Section 1.5.
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| (d) |
At the end of each Performance Period, the Committee shall
certify the Company’s attainment of the objectives
established by the Committee for each Performance Period. In the
event of a Change in Control, the awards under this SVIP shall be
calculated in accordance with Section 3.8(a) and no
certification by the Committee or otherwise will be required. In
the absence of a Change in Control, no award may be paid to Covered
Employees under this SVIP until the Committee has made such
certification. |
2.2 Payment
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 (but in the event of a Change in Control, such award
shall be payable only in cash). Awards payable, in whole or in
part, in Common Stock shall be the number of shares of Common Stock
that a Participant could have purchased at the average of the high
and low trading prices of a share of Common Stock on the last
trading day of the applicable Performance Period had such
Participant used the releva
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