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Exhibit 10 (c)
SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of February 26,
2007 by and between Alberto-Culver Company, a Delaware
corporation, and Ralph Nicoletti 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:
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(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 l(f)); provided, however, that a Change in control
shall not result from an acquisition of Company Voting
securities:
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(i) directly from the Company, except as otherwise provided in
Section l(c)(2)(A);
(ii) by the Company, except as otherwise provided in Section
l(c)(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 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 l(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:
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(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:
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(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 l(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 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
I(f)(1) or (2);
(4) any trust or similar arrangement for the benefit of any
person described in Section l(f)(1) or (2); or
(5) the Lavin Family Foundation or any other charitable
organization established by any person described in Section l(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 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;
(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;
(3) any requirement of the Company that the Executive be based
anywhere other than at the facility where the Executive is located
at the time of the 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 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 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 as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies,
(iv) 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 as in
effect generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies, or
(v) 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 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
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