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EXHIBIT 10
(i)
ALBERTO-CULVER
COMPANY
EMPLOYEE STOCK OPTION PLAN
OF 2006
(as amended through
September 18, 2007)
The Alberto-Culver Company
Employee Stock Option Plan of 2006 (hereinafter called the
“ACSOP”) is intended to encourage ownership of the
Common Stock of Alberto-Culver Company (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 and the rules
and regulations promulgated thereunder (the
“Code”)).
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.
The Compensation and
Leadership Development Committee of the Board of Directors of the
Company (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 thereof, 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. 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. Determinations by
the Committee under the ACSOP need not be uniform and may be made
by it selectively among Optionees, whether or not such persons are
similarly situated. The determination of the Committee as to any
disputed question arising under the ACSOP, including questions of
construction and interpretation, shall be final, conclusive and
binding.
The Committee may, in its
discretion, delegate to a committee of member(s) of the Committee
its authority with respect to such matters under the ACSOP and
options granted under the ACSOP as the Committee may
specify.
The Committee shall be
comprised solely of members each of whom shall be an “outside
director” within the meaning of Section 162(m) of the
Code, and a “non-employee director” within the meaning
of Section 16 (“Section 16”) of the Securities
Exchange Act of 1934 and the rules and
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regulations thereunder (“Exchange
Act”), provided, however, that if any member of the 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, the Committee shall set up a subcommittee
comprised solely of outside directors and non-employee directors
for purposes of all matters arising under this ACSOP involving
“officers” within the meaning of Rule 16a-1(f) under
Section 16, and “covered employees” within the
meaning of Section 162(m) of the Code for the plan year at
issue.
| 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 9,000,000 of the Company’s Common Stock in the
aggregate plus the number of shares of the Company’s Common
Stock subject to Substitute Options as provided in Section 14,
subject to adjustment under paragraph 10 hereof. Such shares of
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. In addition, any shares
of Common Stock withheld to pay, in whole or in part, the amount
required to be withheld under applicable tax laws in accordance
with paragraph 7(d) hereof, may be made the subject of additional
options granted under the ACSOP.
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 Common Stock on the date 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 Common Stock of the Company 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.
The Committee may not grant
to any individual Optionee in any fiscal year an option or options
with respect to more than 600,000 shares of Common
Stock.
| 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, or such
shorter period as the Committee determines (the “Expiration
Date”), and each option shall be subject to the following
limitations with respect to its exercise:
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(i) |
Except as otherwise provided in paragraphs 7(b), 8(a) or 11(a)
hereof, no option may be exercised until the day preceding the
anniversary date of the grant of the option. |
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(ii) |
Except as otherwise provided in paragraphs 7(b), 8(a) or 11(a)
hereof, on the day preceding 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. Subject
to paragraph 8 hereof, each such right to purchase may be
exercised, in whole or in part, at any time after such right
accrues and prior to the Expiration Date of the option. |
(b) Notwithstanding the
foregoing or paragraph 8 hereof, the Committee may in its
discretion (i) specifically provide at the date of grant for
another time or times of exerciseability; (ii) at any time
prior to the Expiration Date or termination of any option
previously granted, accelerate the exercisability of any option
subject to such terms and conditions as the Committee deems
necessary or appropriate to effectuate the purpose of the ACSOP; or
(iii) at any time prior to the Expiration Date 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; provided that the term of an option shall not be
extended beyond the Expiration Date of that option. 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 (subject to the receipt of payment) by giving written
notice to the Company specifying the number of shares to be
purchased. The full purchase price for such shares may be paid
(i) in cash, (ii) by check, (iii) by delivery of
previously owned shares of Common Stock, or (iv) by a
combination of these methods of payment. However, under no
circumstances may any Optionee deliver previously owned shares of
Common Stock obtained from the exercise of stock options under any
option plan of the Company or the vesting of shares restricted
under any restricted stock plan of the Company or the Management
Bonus Plan during the six months immediately preceding the exercise
date. Payment must be received by the Company before any exercise
is consummated. For purposes of the delivery of previously owned
shares of Common Stock, the per share value of such shares shall be
the Fair Market Value on the date of exercise.
(d) At any time when an
Optionee is required to pay to the Company an amount required to be
withheld under applicable tax laws in connection with the exercise
of an option (calculated by taking the minimum statutory
withholding rates for federal, foreign, state and local tax
purposes including payroll taxes, applicable to the income
generated by the Optionee by such exercise), the Optionee may
satisfy this obligation (i) in cash, (ii) by check,
(iii) by delivery of previously owned shares of Common Stock,
(iv) by making an election to have the Company withhold shares
of Common Stock, or (v) by a combination of these methods of
payment, in each case having a value equal to the amount required
to be withheld. The Optionee must specify the method of satisfying
this obligation on or before the date of exercise. The value of the
shares to be withheld or delivered shall be based on the Fair
Market Value of the Common Stock on the date of
exercise.
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| 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:
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(i) |
Upon the death of an Optionee, all unvested options shall
immediately vest and the executors or administrators of his or her
estate or legatees or distributees shall have the right during the
one (1) year period following his or her death (but not after
the Expiration Date of such option) to exercise any unexercised
options. |
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(ii) |
Upon an Optionee’s termination of employment due to
disability, all unvested options shall immediately vest and the
Optionee’s option shall terminate one (1) year after his
or her termination of employment (but not after the Expiration Date
of such option). For purposes of the ACSOP,
“disability” shall have the meaning provided in the
Company’s applicable long-term disability plan and such
disability continues for more than three months or, in the absence
of such a definition, when an Optionee becomes totally disabled as
determined by a physician mutually acceptable to the Optionee and
the Committee before attaining the age of retirement as defined
below 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
Optionee. |
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(iii) |
If an Optionee’s termination of employment is due to
retirement, all options (or portions thereof) which are
(a) vested at the time of retirement may be exercised for a
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