EXHIBIT 10 (c)
ALBERTO-CULVER
COMPANY
EMPLOYEE STOCK OPTION PLAN OF
1988
(as amended through
September 21, 2006)
The Alberto-Culver Company Employee
Stock Option Plan of 1988 (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 regulations thereunder
(“Exchange Act”), provided, however, that if any member
of the Committee is
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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.
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4.
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Number of Shares of Stock to
be Offered
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The Committee may authorize from
time to time the issuance pursuant to the ACSOP of shares not to
exceed 23,100,000 of the Company’s Common Stock in the
aggregate, 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. After January 23,
2003, no more stock options shall be granted hereunder.
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 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 400,000 shares of Common Stock.
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7.
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Term and Exercise of
Options
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(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, and each option shall
be subject to the following limitations with respect to its
exercise:
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(i)
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Except as otherwise provided in
paragraph 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)
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Except as otherwise provided in
paragraph 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 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 the term of the option.
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(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 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 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 effective January 1, 2005, the term
of an option shall not be extended beyond the later of the
fifteenth day of the third month following the date on which the
option would otherwise have expired, or the last day of the
calendar year in which the option would otherwise have expired (or
such other date as may be permitted by final regulations issued
under Section 409A of the Code). 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, 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.
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Continuity of
Employment
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(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)
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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 the 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.
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(ii)
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If an Optionee’s
termination of employment is due to disability, the
Optionee’s option shall terminate one year after his or her
termination of employment (b
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