8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 9, 2006

ALBERTO-CULVER COMPANY

(Exact name of registrant as specified in its charter)

Delaware

(State or Other Jurisdiction of Incorporation)

1-5050	36-2257936
(Commission File Number)	(IRS Employer Identification No.)

2525 Armitage Avenue

Melrose Park, Illinois 60160

(Address of principal executive offices) (zip code)

(708) 450-3000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1 – Registrant’s Business and Operations

Item 1.01. Entry into a Material Definitive Agreement.

On January 10, 2006, Alberto-Culver Company (“Alberto-Culver”) entered into (i) a Separation Agreement (the “Separation Agreement”) with Sally Holdings, Inc., a subsidiary of Alberto-Culver (“Sally Holdings”), (ii) an Agreement and Plan of Merger (the “Merger Agreement”) with Sally Holdings, Regis Corporation (“Regis”), Roger Merger Inc., a subsidiary of Regis (“Merger Sub”), and Roger Merger Subco LLC, a subsidiary of Regis (“Subco”), (iii) an Employee Matters Agreement (the “Employee Matters Agreement”) with Sally Holdings and (iv) a Tax Allocation Agreement (the “Tax Allocation Agreement”) with Sally Holdings. The description of these agreements below is subject to, and qualified in its entirety by reference to, the Separation Agreement, the Merger Agreement, the Employee Matters Agreement and the Tax Allocation Agreement filed herewith and incorporated herein by reference. All stockholders of Alberto-Culver are urged to read the Separation Agreement, the Merger Agreement, the Employee Matters Agreement and the Tax Allocation Agreement carefully to understand the rights and obligations of the parties under those agreements. The representations, warranties, covenants and agreements contained in the Merger Agreement, Separation Agreement, Employee Matters Agreement and Tax Allocation Agreement are solely for the benefit of the parties thereto or the intended third party beneficiaries thereof, may represent an allocation of risk between the parties, are not necessarily statements of facts, may be subject to standards of materiality that differ from those that are applicable to investors and may be qualified by disclosures between or among the parties thereto.

Separation Agreement

Pursuant to the Separation Agreement, Alberto-Culver will, subject to the terms and conditions of the Separation Agreement, distribute (the “Distribution”) to the stockholders of record of Alberto-Culver on a pro rata basis one share of Sally Holdings common stock for each share of Alberto-Culver common stock held by such holder. Prior to the Distribution, Alberto-Culver will effect a recapitalization of Sally Holdings that will result in Alberto-Culver holding a number of shares of common stock of Sally Holdings equal to the number of shares of Alberto-Culver common stock outstanding as of the record date for the Distribution. In addition, prior to the Distribution, Sally Holdings will pay to Alberto-Culver, as the sole stockholder of Sally Holdings, a dividend of $400 million. It is anticipated that Sally Holdings or its subsidiaries will borrow the funds to pay the dividend.

Prior to the Distribution, Sally Holdings will transfer to Alberto-Culver all cash of Sally Holdings and its subsidiaries other than $17.5 million plus an amount to cover certain taxes (as specified in the Tax Allocation Agreement) and an amount to cover certain outstanding checks, drafts and similar items. After the Merger, Alberto-Culver will transfer an amount of cash (calculated pursuant to the Separation Agreement) related to the exercise of options to purchase Alberto-Culver common stock after the date of the Merger Agreement and prior to the record date for the Distribution. All intercompany receivables, payables and loans (other than trade payables and a specified amount of transaction expenses (as described below)) between Sally Holdings or any of its subsidiaries and Alberto-Culver or any of its subsidiaries (other than Sally Holdings and its subsidiaries), on the other hand will be cancelled prior to the Distribution. In addition, prior to the Distribution, all intercompany agreements between Sally Holdings or any of its subsidiaries, on the one hand, and Alberto-Culver or any of its subsidiaries (other than Sally Holdings or any of its subsidiaries), on the other hand, will terminate, other than those specifically designated to survive following the Distribution.

The Distribution is subject to the satisfaction or waiver of certain conditions set forth in the Separation Agreement, including the absence of any legal impediments prohibiting the Distribution and the satisfaction or waiver of all conditions to closing of the Merger under the Merger Agreement.

Pursuant to the Separation Agreement, Alberto-Culver and Sally Holdings will indemnify each other for liabilities relating to their respective businesses, subject to certain.

Merger Agreement

Pursuant to the Merger Agreement, subject to the terms and conditions of the Merger Agreement, immediately following the Distribution, Merger Sub will be merged (the “Merger”) with and into Sally Holdings with Sally Holdings continuing as the surviving corporation. At the effective time of and as a result of the Merger, each share of Sally Holdings common stock (other than treasury shares or shares owned by Regis) will be converted into 0.600 shares of Regis common stock. All outstanding Sally Holdings stock options (which will be converted from Alberto-Culver stock options pursuant to the Employee Matters Agreement) will be converted into options to purchase shares of Regis common stock in such a manner as to retain the intrinsic value thereof. Immediately following the consummation of the Merger, Alberto-Culver’s stockholders will hold approximately 54.5% of the

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Regis common stock, and the shareholders of Regis immediately prior to the Merger will hold the remaining 45.5% of the Regis common stock. Immediately following the Merger, the surviving corporation will merge with and into Subco, with Subco being the surviving entity.

Alberto-Culver intends to treat the transactions contemplated by the Merger Agreement and the Separation Agreement as though they constitute a Change in Control for purposes of Alberto-Culver’s 2003 Restricted Stock Plan, 1994 Restricted Stock Plan, Employee Stock Option Plan of 2003, 2003 Stock Option Plan for Non-Employee Directors, 1994 Stock Option Plan for Non-Employee Directors, Employee Stock Option Plan of 1988, 1994 Shareholder Value Incentive Plan, Management Incentive Plan, Management Bonus Plan and Executive Deferred Compensation Plan.

The Merger Agreement provides that, following the Merger, Regis will have a ten member board of directors, and Regis will take all actions necessary so that at the effective time the board of directors is comprised of the following three individuals designated by Alberto-Culver: Howard B. Bernick, Sam J. Susser and John A. Miller, or their replacements if they are unable or unwilling to serve as members of the board of directors of Regis, and an individual to be named prior to closing by the Shareholders (the “Alberto-Culver Designees”) and the following four individuals designated by Regis: Paul D. Finkelstein, Rolf F. Bjelland, Van Zandt Hawn and Susan S. Hoyt, or their replacements if they are unable or unwilling to serve as members of the board of directors of Regis (the “Regis Designees”). Two additional individuals will serve on the Regis board of directors. These individuals will be mutually selected by Alberto-Culver and Regis at or prior to closing of the Merger and will have agreed prior to closing to serve on the board of directors at closing or within a reasonable period of time after closing. Three of the Alberto-Culver Designees) (subject to certain exceptions), three of the Regis Designees and both persons mutually selected shall be “independent” of Regis within the meaning of the rules of The New York Stock Exchange. In addition, the Merger Agreement provides that at the effective time, Mr. Bernick will be appointed as the non-executive Chairman of the Regis board of directors, Mr. Finkelstein will continue as the Chief Executive Officer and President of Regis, and Mr. Susser will be appointed as the Chairman of the Nominating and Corporate Governance Committee of Regis. The Merger Agreement also provides that Regis will take all actions necessary to adopt an amendment to its Restated Articles of Incorporation, which will provide for certain governance arrangements with respect to the Regis board of directors for a period ending immediately after the 2007 annual meeting of Regis, which is expected to take place in October of that year.

The parties have made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants (i) not to solicit proposals relating to alternative business combination transactions or, subject to certain exceptions, not to enter into discussions concerning alternative business combination transactions, (ii) to cause shareholder meetings to be held to consider approval of, in the case of Regis, the issuance of shares of common stock of Regis, an amendment to Regis’ Restated Articles of Incorporation to increase its authorized capital stock and an amendment to Regis’ Restated Articles of Incorporation to include certain governance matters described above and, in the case of Alberto-Culver, to approve the transactions contemplated by the Merger Agreement, (iii) subject to Alberto-Culver’s and Regis’ respective right to terminate the Merger Agreement to accept a superior proposal (as described in the Merger Agreement) and to the fiduciary duties of the respective boards of directors, for the board of directors of each party to recommend approval of the matters described above and (iv) for thirty months after the Merger, for Alberto-Culver not to engage in certain activities that compete with the business of Sally Holdings described in the Merger Agreement, subject to certain exceptions.

Consummation of the Merger is subject to various conditions, including, without limitation, the requisite approval by the shareholders of Alberto-Culver and Regis, respectively, no legal impediment to the Merger, the receipt of required regulatory approvals, the absence of a material adverse effect (as defined in the Merger Agreement) on Sally Holdings or Regis, the receipt of a Private Letter Ruling from the Internal Revenue Service and an opinion from legal counsel that the Distribution constitutes a tax-free distribution under Section 355 of the Internal Revenue Code and an opinion from legal counsel that the Merger constitutes a tax-free reorganization under Section 368(a) of the Internal Revenue Code.

The Merger Agreement contains certain termination rights for both Alberto-Culver and Regis, and further provides that, upon termination of the Merger Agreement, a termination fee may be payable under specified

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circumstances, including (i) if either Alberto-Culver or Regis terminates to accept a superior proposal (as described in the Merger Agreement), a fee of $50 million payable by the terminating party and (ii) generally if the board of directors of either party changes its recommendation of the transactions and the other party terminates, a fee of $50 million payable by the non-terminating party.

The Merger Agreement provides that (i) Regis will bear all of its own transaction expenses and (ii) Sally Holdings will bear two-thirds and Alberto-Culver will bear one-third of the combined transaction expenses of Alberto-Culver and Sally Holdings; however, the amount of the combined transaction expenses of Alberto-Culver and Sally Holdings that Sally Holdings must bear cannot exceed $18 million.

In connection with the signing of the Merger Agreement, certain shareholders of Alberto-Culver, consisting of trusts for the benefit of Leonard H. Lavin and Bernice E. Lavin and their descendants, including Carol L. Bernick, the Chairman of Alberto-Culver (the “Lavin Family”), and a partnership whose partners are trusts for the benefit of members of the Lavin Family (the “Shareholders”), entered into a Support Agreement with Regis. Under the Support Agreement, the Shareholders agreed that, so long as the board of directors of Alberto-Culver is recommending approval of the transactions contemplated by the Merger Agreement and the Merger Agreement has not been terminated, they would vote their shares of Alberto-Culver in favor of the transactions contemplated by the Merger Agreement and against any action or transaction that would reasonably be expected to impede or prevent the Merger Agreement or the transactions contemplated by the Merger Agreement. Furthermore, the Shareholders have agreed to certain restrictions on their ability to transfer their shares of Alberto-Culver common stock prior to the closing of the Merger or the termination of the Merger Agreement, whichever occurs first.

The Merger Agreement also provides that Regis will enter into a Shareholders Agreement with the Shareholders pursuant to which, among other things, the Shareholders will have the right to designate an individual to be nominated to the Regis board of directors (which individual will be considered an Alberto-Culver Designee) until the earlier of (i) the time the Shareholders no longer hold at least 5% of the issued and outstanding common stock of Regis (as calculated in accordance with the Shareholders Agreement) and (ii) the fifth anniversary of the Merger.

In connection with entering into the Merger Agreement, Alberto-Culver agreed to pay the legal expenses of the Shareholders relating to the negotiation of the Support Agreement and the Shareholders Agreement and matters incident to the transactions contemplated by the Merger Agreement, including, if applicable, regulatory filing fees. In addition, Alberto-Culver agreed with the Shareholders that it would not waive or amend certain provisions of the Merger Agreement related to specific corporate governance matters, including the composition of the board of directors of Regis at the effective time of the Merger, without the prior written consent of the Shareholders.

Employee Matters Agreement

The Employee Matters Agreement generally provides that at the time of the Distribution, Sally Holdings will assume the liabilities and obligations of Alberto-Culver with respect to employees of Sally Holdings under the Alberto-Culver or Sally Holdings benefit plans, subject to certain exceptions. In addition, the Employee Matters Agreement provides for the conversion of Alberto-Culver options held by Sally Holdings employees into Sally Holdings options (which would be converted into Regis options pursuant to the Merger Agreement as described above).

Tax Allocation Agreement

The Tax Allocation Agreement allocates liability for taxes, including any taxes that may arise in connection with separating Sally Holdings from Alberto-Culver. Under the Tax Allocation Agreement, (i) Alberto-Culver is generally responsible for taxes with respect to the original filings of U.S. federal and consolidated state income taxes for fiscal year 2005 and the pre-Distribution period of fiscal year 2006 and (ii) Sally Holdings is responsible for its foreign, local, municipal and separate company state taxes as of the Distribution; however, Alberto-Culver is generally obligated to leave with Sally Holdings an amount of cash equal to the amount of the portion of the taxes described in clause (ii) above related to current income taxes (plus an additional $3.9 million). Sally Holdings is responsible for all tax liabilities of Sally Holdings and it subsidiaries arising from tax audits concluding after the Distribution. In addition, the Tax

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Allocation Agreement provides the extent to which, and the circumstances under which, the parties would be liable if the Distribution were not to constitute a tax-free distribution under Section 355 of the Internal Revenue Code. The Tax Allocation Agreement is not binding on the Internal Revenue Service and does not affect the liability of each of Alberto-Culver, Sally Holdings and their respective subsidiaries to the Internal Revenue Service for all federal taxes of the consolidated group relating to periods through the date of the Distribution.

Severance Agreement Amendments

In connection with the entry into the transaction agreements described above, Alberto-Culver entered into amendments to the severance agreements of Mrs. Bernick, William J. Cernugel, the Senior Vice President and Chief Financial Officer of Alberto-Culver, and V. James Marino, the President of Alberto-Culver Consumer Products Worldwide, a division of Alberto-Culver. The description of these amendments below is subject to, and qualified by reference to, the severance agreement amendments filed herewith and incorporated herein by reference.

The severance agreement amendment with Mrs. Bernick provides that she acknowledges that the transactions under the Merger Agreement and other transaction agreements are not a Change in Control for purposes of her severance agreement.

The severance agreement amendments with Messrs. Cernugel and Marino each provides an acknowledgment that the transactions under the Merger Agreement and other transaction agreements are not a Change in Control for purposes of his severance agreement. Each amendment also provides that if during the period from January 10, 2006 to the date two years after the closing of the Merger, the executive is terminated by Alberto-Culver without “Cause” or leaves the employment of Alberto-Culver for “Good Reason” (each as defined in his severance agreement), the executive will be entitled to the following: (1) a lump sum payment equal to two times the Executive’s annual base salary with Alberto-Culver in effect at the date of termination, (2) a lump sum payment equal to two times the average of the dollar amount of the executive’s actual or annualized annual bonus paid or payable by Alberto-Culver in respect of the five fiscal years immediately preceding the fiscal year in which the date of termination occurs and (3) continued health care benefits for a period beginning on the date of termination and ending on the earlier of 18 months after the date of termination and, if the executive is employed by another company, the date on which the executive becomes entitled to receive similar benefits by such company.

In addition, Alberto-Culver entered into similar amendments with other executive officers, which provide that, in exchange for certain severance benefits described therein, such officers acknowledge that the transactions under the Merger Agreement and other transaction agreements are not a Change in Control for purposes of their severance agreements. The Form of Severance Agreement Amendment entered into with these executives, which is filed as Exhibit 10.06, is incorporated herein by reference.

Termination Agreements

In connection with the transaction agreements described above, Alberto-Culver also entered into Termination Agreements with Mr. Bernick, the Chief Executive Officer and President of Alberto-Culver, and Michael H. Renzulli, the Chairman of Sally Beauty Company, Inc. The description of these agreements below is subject to, and qualified by reference to, the termination agreements filed herewith and incorporated herein by reference.

The termination agreement with Mr. Bernick provides that at the closing of the Merger, Mr. Bernick’s employment with Alberto-Culver will terminate. The termination agreement also provides that Mr. Bernick acknowledges that the transactions under the Merger Agreement and other transaction agreements are not a Change in Control for purposes of his severance agreement. In consideration for Mr. Bernick entering into the agreement, Alberto-Culver will (i) within 30 days after the closing of the Merger pay to Mr. Bernick a lump sum payment of $6,723,200, (ii) for 36 months after the closing of the Merger continue to provide Mr. Bernick with certain medical benefits (and thereafter permit Mr. Bernick to continue for his lifetime certain medical benefits with Alberto-Culver at his cost) and (iii) reimburse Mr. Bernick for up to $75,000 of legal fees and expenses incurred in connection with the negotiation and execution of his termination agreement.

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The termination agreement with Mr. Renzulli provides that at the closing of the Merger, Mr. Renzulli’s employment with Alberto-Culver will terminate. The termination agreement also provides that Mr. Renzulli acknowledges that the transactions under the Merger Agreement and other transaction agreements are not a Change in Control for purposes of his severance agreement. In consideration for Mr. Renzulli entering into the agreement, Alberto-Culver will (i) within 30 days after the closing of the Merger pay to Mr. Renzulli a lump sum payment of $3,641,034, (ii) for 36 months after the closing of the Merger continue to provide Mr. Renzulli with certain medical benefits (and thereafter permit Mr. Renzulli to continue for his lifetime certain medical benefits with Alberto-Culver at his cost) and (iii) reimburse Mr. Renzulli for up to $50,000 of legal fees and expenses incurred in connection with the negotiation and execution of his termination agreement.

In addition, Alberto-Culver entered into a similar agreement with Gary G. Winterhalter, President of Sally Beauty Company, Inc., which provides that, in exchange for certain termination benefits described therein, such officer acknowledges that the transactions under the Merger Agreement and other transaction agreements are not a Change in Control for purposes of his severance agreement. The Termination Agreement entered into with Mr. Winterhalter, which is filed as Exhibit 10.09, is incorporated herein by reference.

Transaction Committee Compensation

On January 9, 2006, the Board of Directors of Alberto-Culver approved the payment of compensation to the members of the Transaction Committee of the Alberto-Culver Board of Directors. The Transaction Committee was formed on September 1, 2005 for the purpose of providing oversight on behalf of the full board of directors of Alberto-Culver in connection with its consideration of the possible transaction with Regis and Alberto-Culver’s strategic direction and alternatives more generally. The Transaction Committee is comprised of James G. Brocksmith, Jr., Chairman, King Harris, and Messrs. Miller and Susser. Each member of the Transaction Committee receives $1,500 for attending a meeting in person and $750 for attending a meeting by telephone. In addition, the chairman of the Transaction Committee receives an annual retainer of $7,500.

Item 1.02. Termination of Material Definitive Agreement.

See Item 1.01 for a description of the termination agreements entered into between Alberto-Culver and Messrs. Bernick and Renzulli, which description is incorporated herein by reference.

Section 5—Corporate Governance Management

Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

See Item 1.01 for a description of the current Alberto-Culver directors, Messrs. Bernick, Susser and Miller, who are contemplated to become Regis directors at the closing of the Merger. At or prior to the closing of the Merger, it is contemplated that such individuals will leave the board of directors of Alberto-Culver. In addition, see Item 1.01 for a description of the termination of Messrs. Bernick’s and Renzulli’s employment with Alberto-Culver pursuant to the termination agreements described therein.

Alberto-Culver intends to name Mr. Marino as President and Chief Executive Officer and a director of Alberto-Culver effective at the closing of the Merger.

***

This material is not a substitute for the registration statement that Regis will file with the Securities and Exchange Commission (“SEC”) in connection with the transaction, or the joint proxy statement/prospectus to be mailed to Regis shareholders and Alberto-Culver stockholders. Investors are urged to read the joint proxy statement/prospectus which will contain important information, including detailed risk factors, when it becomes available. The joint proxy statement/prospectus and other documents which will be filed by Regis

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and Alberto-Culver will be available free of charge at the SEC’s website, www.sec.gov, or by directing a request when such a filing is made to Alberto-Culver Company, 2525 Armitage Avenue, Melrose Park, IL 60160, Attention: Investor Relations; or by directing a request when such a filing is made to Regis Corporation, 7201 Metro Boulevard, Edina, MN 55439, Attention: Investor Relations.

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Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statement and Exhibits

The following exhibits are included herein.

Number	Description
2.01	Separation Agreement, dated as of January 10, 2006 between Alberto-Culver Company and Sally Holdings, Inc.
2.02	Agreement and Plan of Merger, dated as of January 10, 2006, among Alberto-Culver Company, Sally Holdings, Inc., Regis Corporation, Roger Merger Inc. and Roger Merger Subco LLC.
10.01	Tax Allocation Agreement, dated as of January 10, 2006 between Alberto-Culver Company and Sally Holdings, Inc.
10.02	Employee Matters Agreement, dated as of January 10, 2006 between Alberto-Culver Company and Sally Holdings, Inc.
10.03	Severance Agreement Amendment, dated as of January 10, 2006 between Alberto-Culver Company and Carol L. Bernick.
10.04	Severance Agreement Amendment, dated as of January 10, 2006 between Alberto-Culver Company and William J. Cernugel.
10.05	Severance Agreement Amendment, dated as of January 10, 2006 between Alberto-Culver Company and V. James Marino.
10.06	Form of Severance Agreement Amendment between Alberto-Culver and Executive.
10.07	Termination Agreement, dated as of January 10, 2006 among Alberto-Culver Company and Michael H. Renzulli.
10.08	Termination Agreement, dated as of January 10, 2006 between Alberto-Culver Company and Howard B. Bernick.
10.09	Termination Agreement dated as of January 10, 2006 among Alberto-Culver Company, Sally Holdings, Inc. and Gary G. Winterhalter.
10.10	Letter regarding Amendments to or Waivers of Merger Agreement, dated as of January 10, 2006.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ALBERTO-CULVER COMPANY
By:	/s/ William J. Cernugel
Name:	William J. Cernugel
Title:	Senior Vice President and Chief Financial Officer

Date: January 13, 2006

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EX-2.01

EXHIBIT 2.01

SEPARATION AGREEMENT

between

ALBERTO-CULVER COMPANY

and

SALLY HOLDINGS, INC.

Dated as of

January 10, 2006

TABLE OF CONTENTS

		Page
ARTICLE I	DEFINITIONS	1
Section 1.01	Definitions.	1
ARTICLE II	ACTIONS PRIOR TO THE DISTRIBUTION	7
Section 2.01	Reorganizations	7
Section 2.02	Recapitalization of Spinco	8
Section 2.03	Special Dividend	8
Section 2.04	Financial Instruments.	8
Section 2.05	Related Party Agreements; Intercompany Accounts; Cash.	9
Section 2.06	Resignations; Transfer of Stock Held as Nominee.	10
Section 2.07	Other Ancillary Agreements	11
Section 2.08	Sequence of Events	11
Section 2.09	No Termination of Employees	11
ARTICLE III	THE DISTRIBUTION	11
Section 3.01	Alberto-Culver Record Date and Distribution Date	11
Section 3.02	The Distribution Agent	11
Section 3.03	Delivery of Distribution Shares	12
Section 3.04	The Distribution	12
Section 3.05	Cooperation Prior to the Distribution	12
Section 3.06	Conditions to the Distribution	12
Section 3.07	Waiver of Conditions	13
ARTICLE IV	MUTUAL RELEASE; INDEMNIFICATION	13
Section 4.01	Mutual Release.	13
Section 4.02	Indemnification by Alberto-Culver	14
Section 4.03	Indemnification by Spinco	15
Section 4.04	Notice of Claims	15
Section 4.05	Determination of Amount.	16
Section 4.06	Third Person Claims.	16
Section 4.07	Exclusive Remedy	18
Section 4.08	Limitations	18
Section 4.09	Survival of Indemnities	18
Section 4.10	Exclusivity of Tax Allocation Agreement	18
ARTICLE V	CERTAIN OTHER MATTERS	18
Section 5.01	Insurance.	18

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Section 5.02	Use of Names.	20
Section 5.03	Subsequent Transfers.	21
Section 5.04	Consents	22
Section 5.05	Reporting Cooperation	22
ARTICLE VI	ACCESS TO INFORMATION	22
Section 6.01	Provision of Corporate Records	22
Section 6.02	Access to Information.	23
Section 6.03	Production of Witnesses	24
Section 6.04	Retention of Records	25
Section 6.05	Confidentiality	25
ARTICLE VII	TERMINATION	26
Section 7.01	Termination	26
Section 7.02	Effect of Termination	26
ARTICLE VIII	MISCELLANEOUS	26
Section 8.01	Entire Agreement; Construction	26
Section 8.02	Survival of Agreements	26
Section 8.03	Governing Law	26
Section 8.04	Notices	26
Section 8.05	Expenses	28
Section 8.06	Consent to Jurisdiction	28
Section 8.07	Amendments	28
Section 8.08	Assignment	28
Section 8.09	Captions; Currency	29
Section 8.10	Severability	29
Section 8.11	Parties in Interest	29
Section 8.12	Schedules	29
Section 8.13	Waivers; Remedies	29
Section 8.14	Further Assurances	30
Section 8.15	Counterparts	30
Section 8.16	Performance	30
Section 8.17	Interpretation	30
Section 8.18	Limited Liability	30
Section 8.19	Enforcement	30
Section 8.20	Mutual Drafting	31

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SCHEDULES

Schedule 1.01(a)	Alberto-Culver Financial Instruments
Schedule 1.01(b)	Continuing Agreements
Schedule 1.01(c)	Spinco Financial Instruments
Schedule 2.01	Reorganization Transactions
Schedule 2.09	Certain Employees
Schedule 5.01(e)	Insurance Premiums

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SEPARATION AGREEMENT

SEPARATION AGREEMENT (this “Agreement”), dated as of January 10, 2006, between Alberto-Culver Company, a Delaware corporation (“Alberto-Culver”), and Sally Holdings, Inc., a Delaware corporation and at all times prior to the Distribution Time, a direct, wholly owned Subsidiary of Alberto-Culver (including any successor thereto, “Spinco”).

W I T N E S S E T H

WHEREAS, the Board of Directors of Alberto-Culver has determined it would be in the best interests of Alberto-Culver and its stockholders to distribute to the holders of common stock, $0.22 par value per share, of Alberto-Culver (“Alberto-Culver Common Stock”) all of the outstanding shares of common stock, no par value per share, of Spinco (the “Spinco Common Stock”), and, pursuant to the Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), among Alberto-Culver, Spinco, Regis Corporation, a Minnesota corporation (“Regis”), Roger Merger Inc., a Delaware corporation and a direct, wholly owned Subsidiary of Regis (“Merger Sub”), and Roger Merger Subco LLC, a Delaware limited liability company and wholly owned Subsidiary of Regis (“Subco”), merge Merger Sub with and into Spinco with Spinco continuing as the surviving corporation (the “Merger”) and immediately following the Merger the surviving corporation of the Merger will merge with and into Subco, a Delaware limited liability company and a direct, wholly owned Subsidiary of Regis;

WHEREAS, it is a condition to the Merger that, prior to the Effective Time, the Distribution be completed;

WHEREAS, subject to the terms and conditions of this Agreement, immediately prior to the Effective Time, Alberto-Culver shall distribute to the holders of shares of Alberto-Culver Common Stock, other than shares held in the treasury of Alberto-Culver, on a pro rata basis as provided for herein, all of the issued and outstanding shares of Spinco Common Stock (the “Distribution”); and

WHEREAS, the parties to this Agreement intend that the Distribution qualify under Section 355 of the Code as a tax-free distribution and that the Merger qualify as a reorganization under Section 368 of the Code.

NOW, THEREFORE, in consideration of the premises and of the respective agreements and covenants contained in this Agreement, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions.

(a) As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Actual Cash Amount” has the meaning set forth in Section 2.05(c).

“Affiliate” means, as to any Person, any other Person which, directly or indirectly, controls, or is controlled by, or is under common control with, such Person; provided, however, that for purposes of the Transaction Agreements, following the Distribution Time, no member of either Group shall be deemed to be an Affiliate of any member of the other Group. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

“Agreement” has the meaning set forth in the first paragraph of this Agreement.

“Alberto-Culver” has the meaning set forth in the first paragraph of this Agreement.

“Alberto-Culver Amount” means an amount equal to the product of (a) the number of issued and outstanding shares of Alberto-Culver Common Stock resulting from the exercise after the date hereof and prior to the Alberto-Culver Record Date of Alberto-Culver Stock Options that are held by Persons other than Spinco Employees and (b) the Exchange Ratio and (c) the average of the closing prices of the Regis Common Stock on the NYSE on the 10 trading days immediately preceding but not including the Alberto-Culver Record Date.

“Alberto-Culver Board” means the Board of Directors of Alberto-Culver or a duly authorized committee thereof.

“Alberto-Culver Business” means (a) the businesses engaged in immediately prior to the Distribution Time by the Alberto-Culver Group; (b) Former Businesses of the Alberto-Culver Group; and (c) activities related primarily to or in furtherance of the foregoing.

“Alberto-Culver Common Stock” has the meaning set forth in the Recitals.

“Alberto-Culver Financial Instruments” means all credit facilities, guaranties, foreign currency forward exchange contracts, letters of credit and similar instruments primarily related to the Alberto-Culver Business under which any member of the Spinco Group has any primary, secondary, contingent, joint, several or other Liability, including those set forth on Schedule 1.01(a).

“Alberto-Culver Group” means Alberto-Culver and the Alberto-Culver Subsidiaries.

“Alberto-Culver Group Assets” has the meaning set forth in Section 5.03(b).

“Alberto-Culver Indemnified Parties” means each member of the Alberto-Culver Group and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.

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“Alberto-Culver Liabilities” means (a) all Liabilities of any member of the Alberto-Culver Group under, or for which any member of the Alberto-Culver Group is expressly made responsible pursuant to, any Transaction Agreement or the Merger Agreement to which it is or becomes a party, including the breach by any member of the Alberto-Culver Group of any agreement or covenant contained therein that does not by its express terms expire at the Distribution Time; (b) all Liabilities of any member of the Alberto-Culver Group to the extent based upon, arising out of or resulting from the Alberto-Culver Business; and (c) all Liabilities of any member of the Spinco Group to the extent based upon, arising out of or resulting from the Alberto-Culver Business, in the case of each of clauses (a) through (c), whether such Liability existed prior to, at or after the Distribution Time.

“Alberto-Culver Record Date” means the date set by the Alberto-Culver Board to determine holders of record of Alberto-Culver Common Stock entitled to receive shares of Spinco Common Stock in the Distribution.

“Alberto-Culver Sell-off Period” has the meaning set forth in Section 5.02(c).

“Alberto-Culver Subsidiary” means each direct and indirect Subsidiary of Alberto-Culver (other than Spinco and the Spinco Subsidiaries).

“Alberto-Culver Trademarks” has the meaning set forth in Section 5.02(d).

“Ancillary Agreements” means, collectively, the Employee Matters Agreement, the Tax Allocation Agreement and the other agreements, if any, entered into or to be entered into in connection with the Distribution (other than the Merger Agreement).

“Benefiting Person” has the meaning set forth in Section 5.04.

“Claim Notice” has the meaning set forth in Section 4.04.

“Claims Administration” means the processing of claims made under Policies, including the reporting of claims to the insurance carrier, management and defense of claims, and providing for appropriate releases upon settlement of claims.

“Claims Made Policies” has the meaning set forth in Section 5.01(b).

“Code” means the Internal Revenue Code of 1986, as amended, or any successor legislation.

“Data and Records” means financial, accounting, corporate, operating, design, manufacturing, test and other data and records (in each case, in whatever form or medium, including electronic media), including books, records, notes, sales and sales promotional material and data, advertising materials, credit information, cost and pricing information, customer, supplier and agent lists, other records pertaining to customers, business plans, reference catalogs, payroll and personnel records and procedures, research and development files, sales order files, litigation files, minute books, stock ledgers, stock transfer records and other similar data and records.

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“Distribution” has the meaning set forth in the Recitals.

“Distribution Agent” means the Exchange Agent (as defined in the Merger Agreement).

“Distribution Date” means the date determined by the Alberto-Culver Board in accordance with Section 3.01 as the date as of which the Distribution will be effected.

“Distribution Shares” means the shares of Spinco Common Stock to be distributed in the Distribution.

“Distribution Time” means the time at which the Distribution is effective on the Distribution Date as determined by the Alberto-Culver Board.

“Employee Matters Agreement” means the Employee Matters Agreement, dated as of the date hereof, between Alberto-Culver and Spinco.

“Estimated Retained Cash Amount” has the meaning set forth in Section 2.05(c).

“Former Business” means any corporation, partnership, entity, division, business unit or business within the definition of Rule 11-01(d) of Regulation S-X (in each case, including any assets and liabilities comprising the same) that has been sold, conveyed, assigned, transferred or otherwise disposed of or divested (in whole or in part) or the operations, activities or production of which has been discontinued, abandoned, completed or otherwise terminated (in whole or in part).

“Group” means the Alberto-Culver Group or the Spinco Group, as applicable.

“Indemnifiable Losses” means any and all losses, Liabilities, claims, damages, deficiencies, obligations, fines, payments, Taxes, Liens, costs and expenses, matured or unmatured, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown, whenever arising and whether or not resulting from Third Party Claims (including the costs and expenses of any and all Actions; all amounts paid in connection with any demands, assessments, judgments, settlements and compromises relating thereto; interest and penalties with respect thereto; reasonable out-of-pocket expenses and reasonable attorneys’, accountants’ and other experts’ fees and expenses reasonably incurred in investigating, preparing for or defending against any such Actions or in asserting, preserving or enforcing an Indemnified Party’s rights hereunder; and any losses that may result from the granting of injunctive relief as a result of any such Actions).

“Indemnified Party” has the meaning set forth in Section 4.04.

“Indemnitor” has the meaning set forth in Section 4.04.

“Information” means all records, books, contracts, instruments, computer data and other data and information (in each case, in whatever form or medium, including electronic media).

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“Liabilities” means any and all claims, debts, liabilities, guarantees, commitments and obligations of whatever nature, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown, due or to become due, whenever or however arising (including those arising out of any Contract or tort, whether based on negligence, strict liability or otherwise) and whether or not the same would be required by generally accepted accounting principles to be reflected as a liability in financial statements or disclosed in the notes thereto, including all costs and expenses relating thereto.

“Merger” has the meaning set forth in the Recitals.

“Merger Agreement” has the meaning set forth in the Recitals.

“Merger Sub” has the meaning set forth in the Recitals.

“Occurrence Basis Policies” has the meaning set forth in Section 5.01(b).

“Option Exercise Adjustment Amount” means the sum of the Alberto-Culver Amount and the Spinco Amount.

“Policies” means all insurance policies, insurance contracts and claim administration contracts of any kind of any member of the Alberto-Culver Group and their predecessors which were or are in effect at any time at or prior to the Distribution Time (other than insurance policies, insurance contracts and claim administration contracts established in contemplation of the Distribution and the Merger to cover only the members of the Spinco Group after the Distribution Time), including primary, excess and umbrella, commercial general liability, fiduciary liability, product liability, automobile, aircraft, property and casualty, business interruption, directors and officers liability, employment practices liability, workers’ compensation, crime, errors and omissions, special accident, cargo and employee dishonesty insurance policies and captive insurance company arrangements, together with all rights, benefits and privileges thereunder.

“Privileged Information” means, with respect to either Group, Information regarding a member of such Group, or any of its operations, employees, assets or Liabilities (whether in documents or stored in any other form or known to its employees or agents) that is or may be protected from disclosure pursuant to the attorney-client privilege, the work product doctrine or other applicable privilege or that a Group is required to keep confidential pursuant to the terms of a Contract with a third Person.

“Regis” has the meaning set forth in the Recitals.

“Regis Group” means Regis and its Subsidiaries.

“Related Party Agreements” means any Contract between any member of the Spinco Group, on the one hand, and any member of the Alberto-Culver Group, on the other hand, other than the Merger Agreement and the Transaction Agreements, any Contract contemplated thereby to be entered into by any member of the Alberto-Culver Group, on the one hand, and any member of the Spinco Group, on the other hand, any Trade Payables, the Transaction Payables and any Contracts set forth on Schedule 1.01(b).

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“Representative” means, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.

“Required Consent” has the meaning set forth in Section 5.04.

“Retained Cash Amount” has the meaning set forth in Section 2.05(c).

“Shared Policies” means all Policies that include any member of the Spinco Group and/or any or all of the Spinco Business within the definition of the named insured.

“Spinco” has the meaning set forth in the first paragraph to this Agreement.

“Spinco Amount” means an amount equal to the product of (a) 0.47 and (b) the number of issued and outstanding shares of Alberto-Culver Common Stock resulting from the exercise after the date hereof and prior to the Alberto-Culver Record Date of Alberto-Culver Stock Options that would have become Spinco Stock Options pursuant to the terms of the Employee Matters Agreement had they been outstanding immediately prior to the Distribution Time and (c) the weighted average exercise price of all such Alberto-Culver Stock Options described in clause (b).

“Spinco Business” means (a) the businesses engaged in immediately prior to the Distribution Time by the Spinco Group and that constitute Alberto-Culver’s Sally Beauty Supply and Beauty Systems Group divisions for segment reporting purposes as listed in the latest Annual Report on Form 10-K of Alberto-Culver included in the Alberto-Culver Filed SEC Reports; (b) Former Businesses of the Spinco Group; and (c) activities primarily related to or in furtherance of the foregoing, other than activities of the type described in Section 7.22 of the Merger Agreement and Section 7.22 of the Spinco Disclosure Schedules.

“Spinco Common Stock” has the meaning set forth in the Recitals.

“Spinco Dividend” means a dividend in the amount of $400,000,000 to be declared and paid by Spinco to Alberto-Culver, as the sole stockholder of Spinco.

“Spinco Financial Instruments” means all credit facilities, guaranties, foreign currency forward exchange contracts, letters of credit and similar instruments primarily related to the Spinco Business under which any member of the Alberto-Culver Group has any primary, secondary, contingent, joint, several or other Liability, including those set forth on Schedule 1.01(c).

“Spinco Group” means Spinco and the Spinco Subsidiaries.

“Spinco Group Assets” has the meaning set forth in Section 5.03(a).

“Spinco Indemnified Parties” means each member of the Spinco Group and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.

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“Spinco Liabilities” means (a) all Liabilities of any member of the Spinco Group under, or for which any member of the Spinco Group is expressly made responsible pursuant to, any Transaction Agreement or the Merger Agreement to which it is or becomes a party, including the breach by any member of the Spinco Group of any agreement or covenant contained therein that does not by its express terms expire at the Distribution Time; (b) all Liabilities of any member of the Spinco Group to the extent based upon, arising out of or resulting from the Spinco Business; and (c) all Liabilities of any member of the Alberto-Culver Group to the extent based upon, arising out of or resulting from the Spinco Business, in the case of each of clauses (a) through (c), whether such Liability existed prior to, at or after the Distribution Time.

“Spinco Sell-off Period” has the meaning set forth in Section 5.02(d).

“Spinco Subsidiaries” means each direct and indirect Subsidiary of Spinco.

“Spinco Trademarks” has the meaning set forth in Section 5.02(c).

“Subsidiary” has the meaning set forth in the Merger Agreement.

“Tax” and “Taxes” has the meaning set forth in the Tax Allocation Agreement.

“Tax Allocation Agreement” has the meaning set forth in the Merger Agreement.

“Third Party Claim” has the meaning set forth in Section 4.06(a).

“Trade Payables” means all payables of any member of the Spinco Group incurred in the ordinary course of business consistent with past practice for purchases of goods or services from any member of the Alberto-Culver Group.

“Transaction Agreements” means, collectively, this Agreement and each Ancillary Agreement.

“Transaction Payables” means all expenses to be paid by Spinco pursuant to Section 8.05.

“Transferring Person” has the meaning set forth in Section 5.04.

(b) Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Merger Agreement.

ARTICLE II

ACTIONS PRIOR TO THE DISTRIBUTION

Section 2.01 Reorganizations. Prior to the Distribution Date, Alberto-Culver may and may cause the members of the Alberto-Culver Group and the Spinco Group to consummate the transactions set forth on Schedule 2.01. For the avoidance of doubt, nothing in

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this Section 2.01 or Schedule 2.01 shall be deemed to limit the ability of Alberto-Culver, Spinco and their Subsidiaries to take the actions they are permitted to take under the Merger Agreement, including under Section 6.2 thereof.

Section 2.02 Recapitalization of Spinco. Prior to the Distribution Time, Alberto-Culver and Spinco shall cause (a) the number of authorized shares of Spinco Common Stock to equal or exceed the number of shares of Alberto-Culver Common Stock (excluding treasury shares held by Alberto-Culver) outstanding as of the Alberto-Culver Record Date and (b) the number of shares of Spinco Common Stock outstanding as of the Alberto-Culver Record Date to be increased to equal the number of shares of Alberto-Culver Common Stock (excluding treasury shares held by Alberto-Culver) outstanding as of the Alberto-Culver Record Date.

Section 2.03 Special Dividend. Prior to the Distribution Time, Spinco shall have lawfully declared and paid to Alberto-Culver, as the sole stockholder of Spinco, the Spinco Dividend.

Section 2.04 Financial Instruments.

(a) Spinco will use its reasonable best efforts to take or cause to be taken all actions, and enter into (or cause the Spinco Subsidiaries to enter into) such agreements and arrangements, as shall be necessary to cause, as of the Distribution Time, (i) the removal of members of the Alberto-Culver Group from all Spinco Financial Instruments and (ii) the members of the Alberto-Culver Group to be fully and unconditionally released from all Liabilities in respect of the Spinco Financial Instruments. It is understood and agreed that all Liabilities in respect of the Spinco Financial Instruments are Spinco Liabilities and Spinco shall indemnify the members of the Alberto-Culver Group from any Liabilities suffered thereby arising out of, resulting from or relating to the Spinco Financial Instruments. Without limiting the foregoing, after the Distribution Time, Spinco will not, and will not permit any member of the Spinco Group or the Regis Group to, renew, extend, modify, amend or supplement any Spinco Financial Instrument in any manner that would increase, extend or give rise to any Liability of a member of the Alberto-Culver Group under such Spinco Financial Instrument.

(b) Alberto-Culver will use its reasonable best efforts to take or cause to be taken all actions, and enter into (or cause the Alberto-Culver Subsidiaries to enter into) such agreements and arrangements, as shall be necessary to cause, as of the Distribution Time, (i) the removal of members of the Spinco Group from all Alberto-Culver Financial Instruments and (ii) the members of the Spinco Group to be fully and unconditionally released from all Liabilities in respect of the Alberto-Culver Financial Instruments. It is understood and agreed that all Liabilities in respect of the Alberto-Culver Financial Instruments are Alberto-Culver Liabilities and Alberto-Culver shall indemnify the members of the Spinco Group and the Regis Group from any Liabilities suffered thereby arising out of, resulting from or relating to the Alberto-Culver Financial Instruments. Without limiting the foregoing, after the Distribution Time, Alberto-Culver will not, and will not permit any member of the Alberto-Culver Group to, renew, extend, modify, amend or supplement any Alberto-Culver Financial Instrument in any manner that would increase, extend or give rise to any Liability of a member of the Spinco Group under such Alberto-Culver Financial Instrument.

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(c) The parties’ obligations under this Section 2.04 will continue to be applicable to all Spinco Financial Instruments and Alberto-Culver Financial Instruments identified at any time by Alberto-Culver or Spinco, whether before, at or after the Distribution Time.

Section 2.05 Related Party Agreements; Intercompany Accounts; Cash.

(a) Immediately prior to the Distribution Time, all Related Party Agreements shall automatically terminate.

(b) Effective immediately prior to the Distribution Time, all intercompany receivables, payables and loans (other than Trade Payables and the Transaction Payables) between the members of the Alberto-Culver Group, on one hand, and the members of the Spinco Group, on the other hand, shall, except as provided in Section 2.05(c), be cancelled. All Trade Payables shall be promptly paid when due. Spinco shall pay to Alberto-Culver after the Effective Time an amount equal to the Transaction Payables by wire transfer of immediately available funds to an account specified in writing by Alberto-Culver no later than 10 days after delivery by Alberto-Culver to Spinco of an invoice for the Transaction Payables.

(c) Alberto-Culver and Spinco agree that immediately after the Distribution Time Spinco shall retain cash and cash equivalents held by or on behalf of Spinco and the Spinco Subsidiaries in an amount equal to (i) $17,500,000 plus (ii) an amount equal to the Estimated Retained Tax Amount (as defined in the Tax Allocation Agreement) plus (iii) an amount equal to the amount of all checks, wire transfers, drafts or other instruments written or issued to unaffiliated third Persons by any member of the Spinco Group prior to the Distribution Time that have not cleared or been processed as of immediately prior to the Distribution Time (which amount, except to the extent Alberto-Culver is in breach of its covenant under Section 2.05(d), shall exclude all amounts under checks, wire transfers, drafts and other instruments written or issued to unaffiliated third Persons other than in the ordinary course of business consistent with past practice) (the amounts referred to in clauses (i) through (iii), the “Retained Cash Amount”). In furtherance of the foregoing, immediately prior to the Distribution Time, Spinco shall, and shall cause the Spinco Subsidiaries to, transfer to Alberto-Culver the estimated amount of cash and cash equivalents on hand in excess of the good faith estimate of Alberto-Culver of the Retained Cash Amount (the “Estimated Retained Cash Amount”), and shall promptly deliver written notice of such amount to Regis. Within 30 days after the Distribution Time, Alberto-Culver and Spinco shall determine the actual amount of cash and cash equivalents that were retained by Spinco immediately after the Distribution Time (the “Actual Cash Amount”; provided, however, that the Actual Cash Amount shall not be less than the sum of $17,500,000 and the Estimated Retained Tax Amount), and shall promptly deliver written notice of such amount to Regis. To the extent the Actual Cash Amount exceeds the Estimated Retained Cash Amount, Spinco shall pay to Alberto-Culver within 5 days the amount of such excess by wire transfer of immediately available funds. To the extent the Estimated Retained Cash Amount exceeds the Actual Cash Amount, Alberto-Culver shall pay to Spinco within 5 days the amount of such excess by wire transfer of immediately available funds. To the extent the cash and cash equivalents transferred to Alberto-Culver pursuant to this Section 2.05(c), exceed the amount of intercompany payables and loans (other than Trade Payables and the Transaction Payables) owed by members of the Spinco Group to members of the Alberto-Culver Group, the amount of such

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excess shall be deemed a dividend from the Spinco Group to Alberto-Culver and to the extent such cash and cash equivalents are less than the amount of intercompany payables and loans (other than Trade Payables and the Transaction Payables) owed by members of the Spinco Group to members of the Alberto-Culver Group, the amount of such deficit shall be deemed to be a capital contribution from Alberto-Culver to Spinco. For the avoidance of doubt, all amounts deposited by or on behalf of any member of the Spinco Group with respect to cash and cash equivalents received on or prior to the Distribution Date in excess of the Retained Cash Amount shall be transferred to Alberto-Culver.

(d) At all times after the date hereof and prior to the Distribution Time, Alberto-Culver shall use its reasonable best efforts to cause (i) all members of the Alberto-Culver Group (to the extent relating to the Spinco Business) and (ii) all members of the Spinco Group to collect receivables, pay and discharge payables and other liabilities and maintain inventory levels, in each case in the ordinary course of business consistent with past practice. At all times after the date hereof and prior to the Distribution Time, Spinco shall cause all members of the Spinco Group to collect receivables, pay and discharge payables and other liabilities and maintain inventory levels, in each case in the ordinary course of business consistent with past practice.

(e) No later than 10 days after the Effective Time, Alberto-Culver shall pay to Spinco an amount equal to the Option Exercise Adjustment Amount.

Section 2.06 Resignations; Transfer of Stock Held as Nominee.

(a) Alberto-Culver will cause all of its employees and directors and all of the employees and directors of each other member of the Alberto-Culver Group to resign, effective not later than immediately prior to the Distribution Time, from all boards of directors or similar governing bodies of any member of the Spinco Group on which they serve, and from all positions as officers of any member of the Spinco Group in which they serve. Spinco will cause all of its employees and directors and all of the employees and directors of each other member of the Spinco Group to resign, effective not later than immediately prior to the Distribution Time, from all boards of directors or similar governing bodies of any member of the Alberto-Culver Group on which they serve, and from all positions as officers of any member of the Alberto-Culver Group in which they serve.

(b) Alberto-Culver will cause each of its employees, and each of the employees of the other members of the Alberto-Culver Group, who holds stock or similar evidence of ownership of any member of the Spinco Group as nominee for such entity pursuant to the laws of the jurisdiction in which such entity is located to transfer such stock or similar evidence of ownership to the Person so designated by Spinco to be such nominee as of and after the Distribution Time. Spinco will cause each of its employees, and each of the employees of the other members of the Spinco Group, who holds stock or similar evidence of ownership of any member of the Alberto-Culver Group as nominee for such entity pursuant to the laws of the jurisdiction in which such entity is located to transfer such stock or similar evidence of ownership to the Person so designated by Alberto-Culver to be such nominee as of and after the Distribution Time.

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(c) Effective no later than immediately prior to the Distribution Time, Alberto-Culver will cause each of its employees and each of the employees of the other members of the Alberto-Culver Group to revoke or withdraw their express written authority, if any, to act on behalf of any member of the Spinco Group as an agent or representative therefor after the Distribution Time. Effective immediately prior to the Distribution Time, all authority of employees of Alberto-Culver and employees of the other members of the Alberto-Culver Group to act on behalf of any member of the Spinco Group shall automatically terminate. Effective no later than immediately prior to the Distribution Time, Spinco will cause each of its employees and each of the employees of the other members of the Spinco Group to revoke or withdraw their express written authority, if any, to act on behalf of any member of the Alberto-Culver Group as an agent or representative therefor after the Distribution Time. Effective immediately prior to the Distribution Time, all authority of employees of Spinco and employees of the other members of the Spinco Group to act on behalf of any member of the Alberto-Culver Group shall automatically terminate.

Section 2.07 Other Ancillary Agreements. Subject to the terms and conditions of this Agreement and the Merger Agreement, at or prior to the Distribution Time, each of Alberto-Culver and Spinco shall execute and deliver to the other the Ancillary Agreements not previously executed and delivered.

Section 2.08 Sequence of Events. The following transactions contemplated by this Agreement, the Merger Agreement and the other Transaction Agreements shall, unless otherwise agreed by Alberto-Culver, Spinco and Regis, occur in the following order (first to last): (a) the transactions described in Section 2.01 and Schedule 2.01 (but not necessarily in the order set forth on such Schedule); (b) the Distribution; (c) the Merger; and (d) the Subsequent Merger.

Section 2.09 No Termination of Employees. Spinco shall not, and shall cause its Subsidiaries not to, without the prior written consent of the Chief Financial Officer of Alberto-Culver or the General Counsel of Alberto-Culver, (i) terminate the employment of any of the individuals listed on Schedule 2.09 or (ii) take any action that would reasonably be expected to give any of such individuals the right to terminate his or her employment for “Good Reason” as such term is defined in such individual’s respective severance agreement.

ARTICLE III

THE DISTRIBUTION

Section 3.01 Alberto-Culver Record Date and Distribution Date. Subject to the terms and conditions of this Agreement, the Alberto-Culver Board, in accordance with Applicable Law, shall establish the Alberto-Culver Record Date and the Distribution Date and any appropriate procedures in connection with the Distribution. Subject to the terms and conditions of this Agreement, the Distribution Date shall be established to be the same as the Closing Date.

Section 3.02 The Distribution Agent. Prior to the Distribution Date and subject to the terms and conditions of this Agreement, Alberto-Culver shall enter into an agreement with the Distribution Agent providing for, among other things, the transactions described in this Article III.

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Section 3.03 Delivery of Distribution Shares. Subject to the terms and conditions of this Agreement, on or prior to the Distribution Date, Alberto-Culver shall deliver to the Distribution Agent for the benefit of each record holder of Alberto-Culver Common Stock (excluding treasury shares held by Alberto-Culver) on the Alberto-Culver Record Date, the Distribution Shares (which shall represent all of the outstanding shares of Spinco Common Stock) and shall cause the transfer agent for the shares of Spinco Common Stock to instruct the Distribution Agent to hold in trust (pending the conversion of such shares of Spinco Common Stock into shares of Regis Common Stock pursuant to the Merger Agreement) the appropriate number of such shares of Spinco Common Stock for each holder of record of Alberto-Culver Common Stock (excluding treasury shares held by Alberto-Culver) as of the Alberto-Culver Record Date.

Section 3.04 The Distribution. Subject to the terms and conditions of this Agreement, Alberto-Culver shall instruct the Distribution Agent to make book entry credits at the Distribution Time in the name of each holder of record of Alberto-Culver Common Stock (excluding treasury shares held by Alberto-Culver) on the Alberto-Culver Record Date for a number of shares of Spinco Common Stock equal to the number of shares of Alberto-Culver Common Stock held of record by such holder on the Alberto-Culver Record Date. For the period beginning immediately after the Distribution Time and to and including the Effective Time, the shares of Spinco Common Stock shall not be transferable and the transfer agent for the Spinco Common Stock shall not transfer any shares of Spinco Common Stock.

Section 3.05 Cooperation Prior to the Distribution. Prior to the Distribution, Alberto-Culver and Spinco will use their reasonable best efforts to take all such action as may be necessary or appropriate under the securities or “blue sky” laws of the states or other political subdivisions of the United States and the securities laws of any applicable foreign countries or other political subdivisions thereof in connection with the transactions contemplated by this Agreement.

Section 3.06 Conditions to the Distribution. The obligation of Alberto-Culver to consummate the Distribution and the other transactions contemplated by this Agreement is subject to the satisfaction of the following conditions:

(a) all consents, approvals and authorizations of Governmental Entities required under Applicable Laws for the consummation of the Distribution shall have been obtained and shall be in full force and effect;

(b) no Applicable Laws shall have been adopted, promulgated or enforced by any Governmental Entity, and no Injunction shall be in effect, having the effect of making the Distribution or any material provision of this Agreement illegal or otherwise prohibiting consummation of the Distribution or the performance of any material provision of this Agreement;

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(c) no proceeding initiated by any Governmental Entity seeking, and which is reasonably likely to result in the granting of, an Injunction having the effect of making the Distribution or any material provision of this Agreement illegal or otherwise prohibiting consummation of the Distribution or the performance of any material provision of this Agreement shall be pending;

(d) Spinco or its Subsidiaries shall have received no less than $400,000,000 in cash from the financing in connection with the Spinco Dividend and Spinco shall have lawfully declared and paid to Alberto-Culver the Spinco Dividend; and

(e) each condition to the closing of the Merger Agreement set forth in Article VIII thereof, other than the condition set forth in Section 8.1(h) thereof as to the consummation of the Distribution, shall have been fulfilled or, to the extent permitted under Applicable Law, waived by the party for whose benefit such condition exists.

Section 3.07 Waiver of Conditions. All of the conditions in Section 3.06 may be waived by the Alberto-Culver Board; provided, however, that unless the Merger Agreement has been terminated, none of the conditions set forth in Section 3.06(a), (b), (c) or (e) shall be waived unless Alberto-Culver receives the prior written consent of Regis. The conditions set forth in Section 3.06 are for the sole benefit of Alberto-Culver and shall not give rise to or create any duty on the part of Alberto-Culver or the Alberto-Culver Board to waive or not waive any such conditions.

ARTICLE IV

MUTUAL RELEASE; INDEMNIFICATION

Section 4.01 Mutual Release.

(a) Effective as of the Distribution Time and except as provided in Section 4.01(b) or as otherwise expressly provided in the Transaction Agreements, each of Alberto-Culver, on behalf of itself and each of the Alberto-Culver Subsidiaries, on the one hand, and Spinco, on behalf of itself and each of the Spinco Subsidiaries, on the other hand, hereby releases and forever discharges the members of the other Group and their respective directors, officers and employees (in each case, in their respective capacities as such) and their respective heirs, executors, administrators, successors and assigns, of and from all debts, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, damages, claims and Liabilities whatsoever of every name and nature, both in law and in equity, which the releasing party has or ever had or ever will have, which arise out of, result from or relate to events, circumstances or actions taken by such other party occurring or failing to occur or any conditions existing at or prior to the Distribution Time.

(b) Nothing in Section 4.01(a) shall impair the right of any Person to enforce this Agreement, any other Transaction Agreement, the Merger Agreement or any Contract between any member of the Alberto-Culver Group, on the one hand, and any member of the Spinco Group, on the other hand, that does not terminate as of the Distribution Date. In addition, nothing in Section 4.01(a) shall release or discharge any Person from:

(i) any Liabilities or obligations under or resulting from any Contract between any member of the Alberto-Culver Group, on the one hand, and any member of the Spinco Group, on the other hand, that does not terminate as of the Distribution Date;

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(ii) any Liability or obligation, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of a Group under, this Agreement or any other Transaction Agreement or the Merger Agreement;

(iii) any Liability arising from or relating to the sale, lease, manufacture, construction, provision, or receipt of goods, payment for goods, property or services purchased, obtained or used in the ordinary course of business by a member of a Group from a member of the other Group prior to the Distribution Date or any related refund claims; or

(iv) any Liability the release of which would result in the release of any Person other than a member of the Alberto-Culver Group or the Spinco Group or their respective directors, officers and employees; provided, however, that the parties agree not to and to cause the other members of their Group not to bring suit against any member of the other Group or any of their respective directors, officers and employees with respect to any such Liability.

(c) Spinco agrees, for itself and as agent for each other member of the Spinco Group, not to make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Alberto-Culver or any other member of the Alberto-Culver Group or any of their respective directors, officers and employees, with respect to any Liabilities released pursuant to this Section 4.01. Alberto-Culver agrees, for itself and as agent for each other member of the Alberto-Culver Group, not to make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Spinco or any other member of the Spinco Group or any of their respective directors, officers and employees, with respect to any Liabilities released pursuant to this Section 4.01.

(d) At any time, at the request of any other party, each party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions of this Section 4.01, provided that such member is a member of the applicable Group at the time of such request.

Section 4.02 Indemnification by Alberto-Culver. Subject to the provisions of this Article IV, from and after the Distribution Time, Alberto-Culver shall, and shall cause each member of the Alberto-Culver Group to, indemnify, defend and hold harmless the Spinco Indemnified Parties from and against, and pay or reimburse, as the case may be, the Spinco Indemnified Parties for, all Indemnifiable Losses, as incurred, suffered by any Spinco Indemnified Party based upon, arising out of or resulting from the following:

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(a) the Alberto-Culver Liabilities (including the failure by Alberto-Culver or any other member of the Alberto-Culver Group to pay, perform or otherwise discharge the Alberto-Culver Liabilities in accordance with their terms), whether such Indemnifiable Losses are based upon, arise out of or relate to events, occurrences, actions, omissions, facts, circumstances or conditions occurring, existing or asserted before, at or after the Distribution Time;

(b) the enforcement by the Spinco Indemnified Parties of their rights to be indemnified, defended and held harmless under this Section 4.02; or

(c) the use by any member of the Alberto-Culver Group of any Spinco Trademarks.

Section 4.03 Indemnification by Spinco. Subject to the provisions of this Article IV, from and after the Distribution Time, Spinco shall, and shall cause each member of the Spinco Group and each member of the Regis Group to, indemnify, defend and hold harmless the Alberto-Culver Indemnified Parties from and against, and pay or reimburse, as the case may be, the Alberto-Culver Indemnified Parties for, all Indemnifiable Losses, as incurred, suffered by any Alberto-Culver Indemnified Party based upon, arising out of or resulting from the following:

(a) the Spinco Liabilities (including the failure by Spinco or any other member of the Spinco Group to pay, perform or otherwise discharge the Spinco Liabilities in accordance with their terms), whether such Indemnifiable Losses are based upon, arise out of or relate to events, occurrences, actions, omissions, facts, circumstances or conditions occurring, existing or asserted before, at or after the Distribution Time;

(b) the enforcement by the Alberto-Culver Indemnified Parties of their rights to be indemnified, defended and held harmless under this Section 4.03; or

(c) the use by any member of the Spinco Group of any Alberto-Culver Trademarks.

Section 4.04 Notice of Claims. Any Alberto-Culver Indemnified Party or Spinco Indemnified Party seeking indemnification hereunder (the “Indemnified Party”) shall give promptly to the Person obligated to provide indemnification to such Indemnified Party (the “Indemnitor”) a notice (a “Claim Notice”) describing in reasonable detail the facts giving rise to the claim for indemnification hereunder and shall include in such Claim Notice (if then known) the amount or the method of computation of the amount of such claim, and a reference to the provision of this Agreement or any other agreement, document or instrument executed hereunder or in connection herewith upon which such claim is based; provided, however, that a Claim Notice in respect of any pending or overtly threatened action at law or suit in equity by or against a third Person as to which indemnification will be sought shall be given promptly after the threat has been communicated or the action or suit is commenced; provided, further, that, in each case, the failure to give such notice shall not relieve the Indemnitor of its obligations hereunder except to the extent it shall have been prejudiced by such failure.

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Section 4.05 Determination of Amount.

(a) In calculating any amount that any Indemnitor is required to pay an Indemnified Party in respect of Indemnifiable Losses provided under this Agreement, there shall be deducted any insurance recovery actually received by or on behalf of such Indemnified Party under any Policy. In determining the amount of any Indemnifiable Losses, such amount shall be (i) reduced to take into account any net Tax benefit realized by the Indemnified Party arising from the incurrence or payment by the Indemnified Party of such Indemnifiable Losses and (ii) increased to take into account any net Tax cost incurred by the Indemnified Party as a result of the receipt or accrual of payments hereunder (grossed-up for such increase), in each case determined by treating the Indemnified Party as recognizing all other items of income, gain, loss, deduction or credit before recognizing any item arising from such Indemnifiable Losses (provided that if the Tax benefit or cost is realized in a Tax period following the period in which the indemnity payment is made, the Tax benefit or cost amount (as the case may be) shall be paid over when realized). It is the intention of the parties to this Agreement that indemnity payments made pursuant to this Agreement are to be treated as relating back to the Distribution as an adjustment to capital (i.e., capital contribution or distribution), and the parties shall not take any position inconsistent with such intention before any Tax authority, except to the extent that a final determination (as defined in Section 1313 of the Code) with respect to the recipient party causes any such payment not to be so treated.

(b) After the giving of any Claim Notice pursuant to Section 4.04, the amount of indemnification to which an Indemnified Party shall be entitled under this Article IV shall be determined: (i) by the written agreement between the Indemnified Party and the Indemnitor; (ii) by a final judgment or decree of any court of competent jurisdiction; or (iii) by any other means to which the Indemnified Party and the Indemnitor shall agree. The judgment or decree of a court shall be deemed final when the time for appeal, if any, shall have expired and no appeal shall have been taken or when all appeals taken shall have been finally determined. The Indemnified Party shall have the burden of proof in establishing the amount of Indemnifiable Losses suffered by it.

Section 4.06 Third Person Claims.

(a) If a claim or demand is made against an Indemnified Party, or an Indemnified Party shall otherwise learn of an assertion, by any Person who is not a party to this Agreement (or an Affiliate thereof) as to which an Indemnitor is reasonably likely to be obligated to provide indemnification pursuant to this Agreement (a “Third Party Claim”), such Indemnified Party will notify the Indemnitor in writing, and in reasonable detail, of the Third Party Claim reasonably promptly after becoming aware of such Third Party Claim; provided, however, that failure to give such notification will not affect the indemnification provided hereunder except to the extent the Indemnitor shall have been actually prejudiced as a result of such failure. Thereafter, the Indemnified Party will deliver to the Indemnitor, promptly after the Indemnified Party’s receipt thereof, copies of all material notices and documents (including court papers) received or transmitted by or on behalf of the Indemnified Party relating to the Third Party Claim.

(b) If a Third Party Claim is made against an Indemnified Party, the Indemnitor will be entitled to participate in or to assume the defense thereof (in either case, at the expense of the Indemnitor) with counsel selected by the Indemnitor and reasonably satisfactory

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to the Indemnified Party. Should the Indemnitor so elect to assume the defense of a Third Party Claim, the Indemnitor will not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof; provided, that if in the Indemnified Party’s reasonable judgment a conflict of interest exists in respect of such claim, such Indemnified Party will have the right to employ separate counsel reasonably satisfactory to the Indemnitor to represent such Indemnified Party and in that event the reasonable fees and expenses of such separate counsel (but not more than one separate counsel for all Indemnified Parties similarly situated) shall be paid by such Indemnitor. If the Indemnitor assumes the defense of any Third Party Claim, the Indemnified Party will have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnitor, it being understood that the Indemnitor will control such defense. If the Indemnitor assumes the defense of any Third Party Claim, the Indemnitor will promptly supply to the Indemnified Party copies of all material correspondence and documents relating to or in connection with such Third Party Claim and keep the Indemnified Party informed of all material developments relating to or in connection with such Third Party Claim. If the Indemnitor chooses to assume the defense of a Third Party Claim, the parties hereto will cooperate in the defense thereof (such cooperation to be at the expense, including reasonable legal fees and expenses, of the Indemnitor), which cooperation shall include the retention in accordance with this Agreement and (upon the Indemnitor’s request) the provision to the Indemnitor of records and information that are reasonably relevant to such Third Party Claim, and making employees, officers, directors, and, to the extent practicable, agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.

(c) No Indemnitor will consent to any settlement, compromise or discharge (including the consent to entry of any judgment) of any Third Party Claim without the Indemnified Party’s prior written consent (which consent will not be unreasonably withheld, delayed or conditioned); provided, that if the Indemnitor assumes the defense of any Third Party Claim, the Indemnified Party will agree to any settlement, compromise or discharge of such Third Party Claim that the Indemnitor may recommend and that by its terms obligates the Indemnitor to pay the full amount of Indemnifiable Losses in connection with such Third Party Claim and unconditionally and irrevocably releases the Indemnified Party and its Affiliates completely from all Liability in connection with such Third Party Claim; provided, however, that the Indemnified Party may refuse to agree to any such settlement, compromise or discharge that (i) provides for injunctive or other nonmonetary relief affecting the Indemnified Party or any of its Affiliates, (ii) includes the admission of guilt or responsibility of the Indemnified Party or any of its Affiliates or (iii) in the reasonable opinion of the Indemnified Party, would otherwise materially adversely affect the Indemnified Party or any of its Affiliates. Whether or not the Indemnitor shall have assumed the defense of a Third Party Claim, the Indemnified Party will not admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the Indemnitor’s prior written consent.

(d) In the event of payment in full by an Indemnitor to any Indemnified Party in connection with any Third Party Claim, such Indemnitor will be subrogated to and shall stand in the place of such Indemnified Party as to any events or circumstances in respect of which such Indemnified Party may have any right or claim relating to such Third Party Claim against any claimant or plaintiff asserting such Third Party Claim or against any other Person. Such Indemnified Party will cooperate with such Indemnitor in a reasonable manner, and at the cost and expense of such Indemnitor, in prosecuting any subrogated right or claim.

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Section 4.07 Exclusive Remedy. This Article IV shall be the exclusive remedy with respect to matters covered by this Article IV.

Section 4.08 Limitations. IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL (INCLUDING LOSS OF REVENUES OR PROFITS), EXEMPLARY OR PUNITIVE DAMAGES ARISING UNDER ANY LEGAL OR EQUITABLE THEORY OR ARISING UNDER OR IN CONNECTION WITH THIS ARTICLE IV, ALL OF WHICH ARE HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER OR NOT ANY PARTY TO THIS AGREEMENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES PAID BY AN INDEMNIFIED PARTY TO A THIRD PERSON IN RESPECT OF A THIRD PARTY CLAIM SHALL NOT BE DEEMED TO BE SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES FOR PURPOSES OF THIS AGREEMENT.

Section 4.09 Survival of Indemnities. The obligations of each of Alberto-Culver and Spinco under this Article IV will not terminate at any time and will survive the sale or other transfer by any member of a Group of any assets or businesses or the assignment by any member of a Group of any Liabilities.

Section 4.10 Exclusivity of Tax Allocation Agreement. Notwithstanding anything in this Agreement to the contrary, the Tax Allocation Agreement will be the exclusive agreement among the parties with respect to all Tax matters, including indemnification in respect of Tax matters.

ARTICLE V

CERTAIN OTHER MATTERS

Section 5.01 Insurance.

(a) Coverage. Subject to the provisions of this Section 5.01, coverage of Spinco and the Spinco Subsidiaries under all Policies shall cease as of the Distribution Time. From and after the Distribution Time, Spinco and the Spinco Subsidiaries will be responsible for obtaining and maintaining all insurance coverages in their own right. All Policies will be retained by Alberto-Culver and the Alberto-Culver Subsidiaries, together with all rights, benefits and privileges thereunder (including the right to receive any and all return premiums with respect thereto), except that Spinco will have the rights in respect of Policies to the extent described in Section 5.01(b).

(b) Rights Under Shared Policies. From and after the Distribution Time, (i) Spinco will have the right to assert claims (and Alberto-Culver will use reasonable best efforts to assist Spinco in asserting claims if so requested) for any loss, liability or damage with respect to the Spinco Business under Shared Policies with third party insurers that are “occurrence basis” insurance policies (“Occurrence Basis Policies”) arising out of insured incidents occurring from

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the date coverage thereunder first commenced until the Distribution Time to the extent that the terms and conditions of any such Occurrence Basis Policies and agreements relating thereto so allow and (ii) Spinco will have the right to continue to prosecute claims with respect to the Spinco Business properly asserted with the insurer prior to the Distribution Time (and Alberto-Culver will use reasonable best efforts to assist Spinco in connection therewith if so requested) under Shared Policies with third party insurers that are insurance policies written on a “claims made” basis (“Claims Made Policies”) arising out of insured incidents occurring from the date coverage thereunder first commenced until the Distribution Time to the extent that the terms and conditions of any such Claims Made Policies and agreements relating thereto so allow, provided, that in the case of both clauses (i) and (ii), (A) all of Alberto-Culver’s and each Alberto-Culver Subsidiary’s reasonable costs and expenses incurred in connection with the foregoing are promptly paid by Spinco, (B) Alberto-Culver and the Alberto-Culver Subsidiaries may, at any time, without liability or obligation to Spinco or any of the Spinco Subsidiaries (other than as set forth in Section 5.01(c)), amend, commute, terminate, buy-out, extinguish liability under or otherwise modify any Occurrence Basis Policies or Claims Made Policies (and such claims shall be subject to any such amendments, commutations, terminations, buy-outs, extinguishments and modifications), (C) such claims will be subject to (and recovery thereon will be reduced by the amount of) any applicable deductibles, retentions or self-insurance provisions, (D) such claims will be subject to (and recovery thereon will be reduced by the amount of) any payment or reimbursement obligations of Alberto-Culver, any Alberto-Culver Subsidiary or any Affiliate of Alberto-Culver or any Alberto-Culver Subsidiary in respect thereof and (E) such claims will be subject to exhaustion of existing sublimits and aggregate limits. Alberto-Culver’s obligation to use reasonable best efforts to assist Spinco in asserting claims under applicable Shared Policies will include using reasonable best efforts in assisting Spinco to establish its right to coverage under such Shared Policies (so long as all of Alberto-Culver’s reasonable out-of-pocket costs and expenses in connection therewith are promptly paid by Spinco). None of Alberto-Culver or the Alberto-Culver Subsidiaries will bear any Liability for the failure of an insurer to pay any claim under any Shared Policy. It is understood that any Claims Made Policies will not provide any coverage to Spinco and the Spinco Subsidiaries for incidents occurring prior to the Distribution Time but that are asserted with the insurance carrier after the Distribution Time.

(c) Alberto-Culver Actions. In the event that after the Distribution Time Alberto-Culver or any Alberto-Culver Subsidiary proposes to amend, commute, terminate, buy-out, extinguish liability under or otherwise modify any Shared Policies under which Spinco has or may in the future have rights to assert claims pursuant to Section 5.01(b) in a manner that would adversely affect any such rights of Spinco, (i) Alberto-Culver will give Spinco prior notice thereof and consult with Spinco with respect to such action (it being understood that the decision to take any such action will be in the sole discretion of Alberto-Culver) and (ii) Alberto-Culver will pay to Spinco its equitable share (which shall be mutually agreed upon by Alberto-Culver and Spinco, acting reasonably, based on the amount of premiums paid by or allocated to the Spinco Business in respect of the applicable Shared Policy), if any, of any net proceeds actually received by Alberto-Culver from the insurer under the applicable Shared Policy as a result of such action by Alberto-Culver (after deducting Alberto-Culver’s reasonable costs and expenses incurred in connection with such action).

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(d) Administration. From and after the Distribution Time:

(i) Alberto-Culver or an Alberto-Culver Subsidiary, as appropriate, will be responsible for the Claims Administration with respect to claims of Alberto-Culver and the Alberto-Culver Subsidiaries under Shared Policies; and

(ii) Spinco or a Spinco Subsidiary, as appropriate, will be responsible for the Claims Administration with respect to claims of Spinco and the Spinco Subsidiaries under Shared Policies.

(e) Insurance Premiums. From and after the Distribution Time, Alberto-Culver will pay all premiums, taxes, assessments or similar charges (retrospectively-rated or otherwise) as required under the terms and conditions of the respective Shared Policies in respect of periods prior to the Distribution Time, whereupon Spinco will upon the request of Alberto-Culver, promptly reimburse Alberto-Culver for that portion of such premiums and other payments paid by Alberto-Culver as set forth or described in Schedule 5.01(e).

(f) Agreement for Waiver of Conflict and Shared Defense. In the event that a Shared Policy provides coverage for both Alberto-Culver and/or an Alberto-Culver Subsidiary, on the one hand, and Spinco and/or a Spinco Subsidiary, on the other hand, relating to the same occurrence, Alberto-Culver and Spinco agree to defend jointly and to waive any conflict of interest necessary to the conduct of that joint defense. Nothing in this Section 5.01(f) will be construed to limit or otherwise alter in any way the indemnity obligations of the parties to this Agreement, including those created by this Agreement, by operation of law or otherwise.

(g) Duty to Mitigate Settlements. To the extent that any member of any Group is responsible for the Claims Administration for any claims under any Shared Policies after the Distribution Time, it shall use its reasonable best efforts to mitigate the amount of any settlements of such claims.

Section 5.02 Use of Names.

(a) Subject to Section 5.02(c) below, any material showing any affiliation or connection of any member of the Alberto-Culver Group with any member of the Spinco Group shall not be used by Alberto-Culver or any member of the Alberto-Culver Group after the Distribution Date, except that the restrictions contained in this Section 5.02(a) shall not apply to filings, reports and other documents required by Applicable Laws or regulations of securities exchanges to be filed and/or made publicly available. On and after the Distribution Date, neither Alberto-Culver nor any Alberto-Culver Subsidiary shall represent to third parties that any of them is affiliated or connected with Spinco or any member of the Spinco Group.

(b) Subject to Section 5.02(d) below, any material showing any affiliation or connection of any member of the Spinco Group with any member of the Alberto-Culver Group shall not be used by Spinco or any member of the Spinco Group after the Distribution Date, except that the restrictions contained in this Section 5.02(b) shall not apply to filings, reports and other documents required by applicable law or regulations of securities exchanges to be filed and/or made publicly available. On and after the Distribution Date, no member of the Spinco Group shall represent to third parties that any of them is affiliated or connected with any member of the Alberto-Culver Group.

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(c) The parties agree that, during the period from the Distribution Date until 90 days after the Distribution Date (the “Alberto-Culver Sell-off Period”), the Alberto-Culver Group shall be entitled to continue to use all trademarks or other source identifiers owned by Spinco and the Spinco Subsidiaries (the “Spinco Trademarks”) to the extent that such Spinco Trademarks are contained as of the Distribution Date on any business cards, schedules, stationery, displays, signs, promotional materials, manuals, forms, computer software and other material used in the Alberto-Culver Business, without any obligation on the part of Alberto-Culver or any Alberto-Culver Subsidiaries to pay royalties or similar fees to any member of the Spinco Group or the Regis Group during the Alberto-Culver Sell-off Period. Alberto-Culver agrees that, upon termination of the Alberto-Culver Sell-off Period, Alberto-Culver shall and shall cause the other members of the Alberto-Culver Group to cease and desist from all further use of the Spinco Trademarks.

(d) The parties agree that, during the period from the Distribution Date until 90 days after the Distribution Date (the “Spinco Sell-off Period”), the Spinco Group shall be entitled to continue to use all trademarks or other source identifiers owned by Alberto-Culver and the Alberto-Culver Subsidiaries (the “Alberto-Culver Trademarks”) to the extent that such Alberto-Culver Trademarks are contained as of the Distribution Date on any business cards, schedules, stationery, displays, signs, promotional materials, manuals, forms, computer software and other material used in the Spinco Business, without any obligation on the part of Spinco or any Spinco Subsidiaries to pay royalties or similar fees to Alberto-Culver during the Spinco Sell-off Period. Spinco agrees that, upon termination of the Spinco Sell-off Period, Spinco shall and shall cause the other members of the Spinco Group to cease and desist from all further use of the Alberto-Culver Trademarks.

Section 5.03 Subsequent Transfers.

(a) If following the Distribution Date a member of the Alberto-Culver Group possesses any assets, rights or properties used primarily or held for use primarily by a member of the Spinco Group in the conduct of its businesses as conducted as of the Distribution Date (except (i) for assets, rights and properties provided by members of the Alberto-Culver Group pursuant to the Transition Services Agreement; (ii) for assets, rights and properties set forth on Section 5.3(j) of the Spinco Disclosure Schedule to the Merger Agreement; (iii) as otherwise contemplated by the Transaction Agreements; or (iv) those assets, rights and properties used primarily or held for use primarily by a member of the Alberto-Culver Group) (the “Spinco Group Assets”) and Spinco notifies Alberto-Culver thereof prior to the two-year anniversary of the Distribution Date, Alberto-Culver shall cause the prompt transfer of such Spinco Group Assets to Spinco subject to Spinco obtaining any required consents, approvals or authorizations of any Governmental Entity or third Person.

(b) If following the Distribution Date a member of the Spinco Group possesses any assets, rights or properties used primarily or held for use primarily by a member of the Alberto-Culver Group in the conduct of its businesses as conducted as of the Distribution Date (except (i) for assets, rights and properties provided by members of the Spinco Group

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pursuant to the Transition Services Agreement; (ii) as otherwise contemplated by the Transaction Agreements; or (iii) those assets, rights and properties used primarily or held for use primarily by a member of the Spinco Group) (the “Alberto-Culver Group Assets”) and Alberto-Culver notifies Spinco thereof prior to the two-year anniversary of the Distribution Date, Spinco shall cause the prompt transfer of such Alberto-Culver Group Assets to Alberto-Culver subject to Alberto-Culver obtaining any required consents, approvals or authorizations of any Governmental Entity or third Person.

(c) It is the intention of the parties to this Agreement that any transfers made pursuant to this Section 5.03 are to be treated as relating back to the Distribution as an adjustment to capital (i.e., capital contribution or distribution), and the parties shall not take any position inconsistent with such intention before any Tax authority, except to the extent that a final determination (as defined in Section 1313 of the Code) with respect to the recipient party causes any such transfer not to be so treated.

Section 5.04 Consents. Notwithstanding anything in this Agreement to the contrary, if a consent, authorization or approval of any third party to the transactions contemplated hereby (a “Required Consent”) is necessary to preserve for any member of the Alberto-Culver Group or the Spinco Group, as applicable (a “Benefiting Person”), any right or benefit to which it is entitled under any Alberto-Culver Group Asset or Spinco Group Asset, respectively, or under any Contract to which any member of the Group of which the Benefiting Person is not a member is a party (the owner of such Alberto-Culver Group Asset or Spinco Group Asset or the party to such Contract, the “Transferring Person”), and if the Required Consent is not obtained prior to the Distribution, the Transferring Person will, subsequent to the Distribution Time, cooperate with the Benefiting Person and use reasonable best efforts in attempting to obtain the Required Consent as promptly as reasonably practicable thereafter. Until such time (if any) as the Required Consent is obtained, the Transferring Person will use its reasonable best efforts to provide Benefiting Person with, or pass through to the Benefiting Person, the rights and benefits of the affected Alberto-Culver Group Asset or Spinco Group Asset, as applicable, or the affected Contract to which the Benefiting Person is entitled, and, if and to the extent the Transferring Person provides or passes through such rights and benefits, the Benefiting Person shall assume the obligations and burdens in connection therewith.

Section 5.05 Reporting Cooperation. Spinco and its Affiliates shall, at Alberto-Culver’s cost, provide reasonable assistance to Alberto-Culver in connection with the preparation by Alberto-Culver of its SEC reports and filings with respect to periods relating to the fiscal year in which the Distribution occurs.

ARTICLE VI

ACCESS TO INFORMATION

Section 6.01 Provision of Corporate Records. Prior to or as promptly as practicable after the Distribution Time, Alberto-Culver shall deliver to Spinco copies of all minute books and other records of meetings of the Board of Directors, committees of the Board of Directors and stockholders of each member of the Spinco Group, all corporate books and records and other Data and Records of each member of the Spinco Group in its possession and

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the relevant portions (or copies thereof) of all corporate books and records of each member of the Alberto-Culver Group relating directly and primarily to the Spinco Business, including, in each case, all active agreements and active litigation files. From and after the Distribution Time, all such books, records and copies shall be the property of Spinco. Except as may otherwise be provided in the Transition Services Agreement, prior to or as promptly as practicable after the Distribution Time, Spinco shall deliver to Alberto-Culver all corporate books and records and other Data and Records of each member of the Alberto-Culver Group in Spinco’s possession (other than the books, records and copies described in the first sentence of this Section 6.01) and the relevant portions (or copies thereof) of all corporate books and records of any member of the Spinco Group relating directly and primarily to the Alberto-Culver Business, including, in each case, all active agreements and active litigation files. From and after the Distribution Time, all such books, records and copies shall be the property of Alberto-Culver.

Section 6.02 Access to Information.

(a) From and after the Distribution Time, Alberto-Culver will, and will cause each Alberto-Culver Subsidiary to, to the extent that such information has not previously been delivered pursuant to Section 6.01, afford to Spinco and its Representatives (at Spinco’s expense) reasonable access and duplicating rights during normal business hours and upon reasonable advance notice to all Information within Alberto-Culver’s possession or control or in the possession or control of an Alberto-Culver Subsidiary to the extent relating to Spinco, any Spinco Subsidiary or the Spinco Business, insofar as such access is reasonably required by Spinco or any Spinco Subsidiary; subject to the provisions below regarding Privileged Information. Notwithstanding anything in this Section 6.02(a), Alberto-Culver may redact from any Information provided pursuant to this Section 6.02(a) any Information to the extent relating to the Alberto-Culver Business.

(b) From and after the Distribution Time, Spinco will, and will cause each of the Spinco Subsidiaries to, to the extent that such information has not previously been delivered pursuant to Section 6.01, afford to Alberto-Culver and its Representatives (at Alberto-Culver’s expense) reasonable access and duplicating rights during normal business hours and upon reasonable advance notice to all Information within Spinco’s possession or control or in the possession or control of a Subsidiary of Spinco to the extent relating to Alberto-Culver, any Alberto-Culver Subsidiary or the Alberto-Culver Business, insofar as such access is reasonably required by Alberto-Culver or any Alberto-Culver Subsidiary, subject to the provisions below regarding Privileged Information. Notwithstanding anything in this Section 6.02(b), Spinco may redact from any Information provided pursuant to this Section 6.02(b) any Information to the extent relating to the Spinco Business.

(c) Without limiting the foregoing, Information may be requested under this Article VI for audit, accounting, claims, litigation, insurance, environmental and safety and tax purposes, as well as for purposes of fulfilling disclosure and reporting obligations and for performing this Agreement and the transactions contemplated hereby.

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(d) In furtherance of the foregoing:

(i) Each party acknowledges that (A) each of Alberto-Culver and Spinco (and the members of the Alberto-Culver Group and the Spinco Group, respectively) has or may obtain Privileged Information; (B) there are or may be a number of Actions affecting one or more of the members of the Alberto-Culver Group and the Spinco Group; (C) the parties may have a common legal interest in Actions, in the Privileged Information, and in the preservation of the confidential status of the Privileged Information; and (D) each of Alberto-Culver and Spinco intends that the transactions contemplated by the Transaction Agreements and any transfer of Privileged Information in connection therewith shall not operate as a waiver of any potentially applicable privilege.

(ii) Each of Alberto-Culver and Spinco agrees, on behalf of itself and each member of the Group of which it is a member, not to disclose or otherwise waive any privilege attaching to any Privileged Information relating to the business of the other Group without providing prompt written notice to and obtaining the prior written consent of the other, which consent will not be unreasonably withheld, delayed or conditioned. In the event of a disagreement between any member of the Alberto-Culver Group and/or any member of the Spinco Group concerning the reasonableness of withholding such consent, no disclosure will be made prior to a final, nonappealable resolution of such disagreement by a court of competent jurisdiction.

(iii) Upon any member of the Alberto-Culver Group or any member of the Spinco Group receiving any subpoena or other compulsory disclosure notice from a court, other Governmental Entity or otherwise that requests disclosure of Privileged Information, in each case relating to the business of the other Group, the recipient of the notice will promptly provide to the other party a copy of such notice, the intended response, and all materials or information relating to the other Group that might be disclosed. In the event of a disagreement as to the intended response or disclosure, unless and until the disagreement is resolved as provided in Section 6.02(d)(ii), the parties will cooperate to assert all defenses to disclosure claimed by either Group, at the cost and expense of the Group claiming such defense to disclosure, and shall not disclose any disputed documents or information until all legal defenses and claims of privilege have been finally determined.

Section 6.03 Production of Witnesses. Subject to Section 6.02, after the Distribution Time, each of Alberto-Culver and Spinco will, and will cause each member of the Alberto-Culver Group and the Spinco Group, respectively, to, make available to the other party and members of such other party’s Group, upon written request and at the cost and expense of the party so requesting, its directors, officers, employees and, to the extent reasonably practicable, agents as witnesses to the extent that any such Person may reasonably be required (giving consideration to business demands of such directors, officers, employees and agents) in connection with any Actions or other proceedings in which the requesting party may from time to time be involved, provided that the same shall not unreasonably interfere with the conduct of business by the Group of which the request is made.

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Section 6.04 Retention of Records. Except as otherwise required by law or agreed to by the parties in writing, if any Information relating to the business, assets or Liabilities of a member of a Group is retained by a member of the other Group, each of Alberto-Culver and Spinco will, and will cause the members of the Group of which it is a member to, retain for the period required by the applicable records retention policy of Alberto-Culver or Regis, respectively, in effect from time to time all such Information in such Group’s possession or under its control. In addition, after the expiration of such required retention period, if any member of either Group wishes to destroy or dispose of any such Information, prior to destroying or disposing of any of such Information, (a) Alberto-Culver or Spinco, on behalf of the member of its Group that is proposing to destroy or dispose of any such Information, will provide no less than 30 days’ prior written notice to the other party, specifying in reasonable detail the Information proposed to be destroyed or disposed of, and (b) if, prior to the scheduled date for such destruction or disposal, the recipient of such notice requests in writing that any of the Information proposed to be destroyed or disposed of be delivered to such requesting party, the party whose Group is proposing to destroy or dispose of such Information promptly will arrange for the delivery of the requested Information to a location specified by, and at the expense of, the requesting party.

Section 6.05 Confidentiality. Subject to the provisions of Section 6.02, which shall govern Privileged Information, for a five-year period after the Distribution Time, each of Alberto-Culver and Spinco shall hold, and shall use its reasonable best efforts to cause members of its Group and its and their Representatives to hold, in strict confidence all Information concerning the other party’s Group or any of its operations, employees, assets or Liabilities, in its possession or control (including Information known to its employees or agents) or furnished to it by such other party’s Group pursuant to the Transaction Agreements or the transactions contemplated thereby and will not use such Information or release or disclose such Information to any other Person, except members of its Group and its and their Representatives, who will be bound by the provisions of this Section 6.05; provided, however, that any member of the Alberto-Culver Group or the Spinco Group may disclose such Information to the extent that (a) disclosure is compelled by judicial or administrative process or, in the opinion of such Person’s counsel, by other requirements of law, regulation or listing standard (in which case the party required to make such disclosure will notify the other party as soon as practicable of such obligation or requirement and cooperate with the other party to limit the Information required to be disclosed and to obtain a protective order or other appropriate remedy with respect to the Information ultimately disclosed) or (b) such Person can show that such Information was (i) available to such Person on a nonconfidential basis (other than from a member of the other party’s Group) prior to its disclosure by such Person; (ii) in the public domain through no fault of such Person; or (iii) lawfully acquired by such Person from another source after the time that it was furnished to such Person by the other party’s Group, and not acquired from such source subject to any confidentiality obligation on the part of such source known to the acquiror, or on the part of the acquiror. Each party acknowledges that it will be liable for any breach of this Section 6.05 by its Representatives to whom such Information is disclosed by such party. Notwithstanding the foregoing, each of Alberto-Culver and Spinco will be deemed to have satisfied its obligations under this Section 6.05 with respect to preserving the confidentiality of any Information (other than Privileged Information) if it exercises the same care with regard to such Information as it takes to preserve confidentiality for its own similar Information.

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ARTICLE VII

TERMINATION

Section 7.01 Termination. Notwithstanding any provision hereof, this Agreement may be terminated by Alberto-Culver and the Distribution may be abandoned prior to the Distribution Time at any time following termination of the Merger Agreement.

Section 7.02 Effect of Termination. In the event of any termination of this Agreement prior to the Distribution Time pursuant to Section 7.01, no party to this Agreement (or any of its directors or officers) shall have any Liability or further obligation to any other party or third party with respect to this Agreement.

ARTICLE VIII

MISCELLANEOUS

Section 8.01 Entire Agreement; Construction. This Agreement, the Merger Agreement and the Ancillary Agreements, including any annexes, schedules and exhibits hereto or thereto, and other agreements and documents referred to herein and therein, will together constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and will supersede all prior negotiations, agreements and understandings of the parties of any nature, whether oral or written, with respect to such subject matter. Notwithstanding any other provisions in the Transaction Agreements to the contrary, in the event and to the extent that there is a conflict between the provisions of this Agreement and the provisions of any Ancillary Agreement, the provisions of such Ancillary Agreement will control other than with respect to the provisions of Article III, in which case this Agreement will control.

Section 8.02 Survival of Agreements. Except as otherwise contemplated by the Transaction Agreements, all covenants and agreements of the parties contained in the Transaction Agreements will remain in full force and effect and survive the Distribution Time.

Section 8.03 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to choice of law principles thereof).

Section 8.04 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii) upon confirmation of receipt if delivered by facsimile, (iii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service or (iv) when received if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a)	If to Alberto-Culver to
	Alberto-Culver Company
	2525 Armitage Avenue
	Melrose Park, Illinois 60160

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	Fax:	(708) 450-2511
	Attention:	Chief Executive Officer Senior Vice President and
		General Counsel (with a separate notice to be sent to each such person)
	with a copy to
	Sidley Austin LLP
	One South Dearborn St.
	Chicago, Illinois 60603
	Fax:	(312) 853-7036
	Attention:	Frederick C. Lowinger, Esq.
		David J. Zampa, Esq.
(b)	If to Spinco to
	Sally Holdings, Inc.
	3001 Colorado Blvd.
	Denton, Texas 76210
	Fax:	(940) 297-4990
	Attention:	Vice President and General Counsel
	With a copy at any time prior to the Effective Time to
	Sidley Austin LLP
	One South Dearborn St.
	Chicago, Illinois 60603
	Fax:	(312) 853-7036
	Attention:	Frederick C. Lowinger, Esq.
		David J. Zampa, Esq.
	And with a copy at any time from and after the Effective Time to
		Regis Corporation
		7201 Metro Blvd.
		Minneapolis, Minnesota 55439
	Fax:	(952) 947-7600
	Attention:	President and Chief Executive Officer
		General Counsel (with a separate notice to be sent to each such person)
	And to
	O’Melveny & Myers LLP
	Times Square Tower
	7 Times Square
	New York, New York 10036
	Fax:	(212) 326-2061
	Attention:	Spencer D. Klein, Esq.
		Paul S. Scrivano, Esq.

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Section 8.05 Expenses. All costs and expenses of Alberto-Culver and Spinco related to the negotiation, preparation, execution and delivery of this Agreement, the Merger Agreement and the Ancillary Agreements, the carrying into effect of the Distribution and the consummation of the transactions contemplated hereby and thereby shall be paid in accordance with the provisions of Section 7.6 of the Merger Agreement.

Section 8.06 Consent to Jurisdiction. Each of Alberto-Culver and Spinco irrevocably agrees that any legal action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or permitted assigns may be brought and determined in any federal or state court located in the State of Delaware, and each of Alberto-Culver and Spinco hereby irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of Alberto-Culver and Spinco hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement, validity or invalidity hereof, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by Applicable Laws, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

Section 8.07 Amendments. This Agreement cannot be amended except by a written agreement executed by Alberto-Culver and Spinco; provided, that unless the Merger Agreement shall have been terminated, (a) any such amendment that would reasonably be expected to adversely affect (after giving effect to the Merger) Regis or its shareholders (it being understood and agreed that any fees and expenses incurred by Regis or any of its Subsidiaries in connection with the review of any such proposed amendment shall not be deemed to adversely affect Regis or its shareholders) executed prior to the Distribution Time shall be subject to the prior written consent of Regis and (b) the parties hereto shall notify Regis and its counsel in writing in accordance with Section 10.2 of the Merger Agreement at least five Business Days prior to the making of any such amendment prior to the Distribution Time.

Section 8.08 Assignment. Neither party to this Agreement will (or permit any of the members of its Group) convey, assign or otherwise transfer any of its rights or obligations under this Agreement, in whole or in part, without the prior written consent of the other party in its sole and absolute discretion; provided, that unless the Merger Agreement shall have been terminated, any such assignment prior to the Distribution Time shall be subject to the prior written consent of Regis. Any conveyance, assignment or transfer requiring the prior written consent of the other party or Regis pursuant to this Section 8.08 that is made without such consent will be void ab initio. No assignment of this Agreement will relieve the assigning party of its obligations hereunder.

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Section 8.09 Captions; Currency. The article, section and paragraph captions herein and the table of contents hereto are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof. Unless otherwise specified, all references herein to numbered articles or sections are to articles and sections of this Agreement and all references herein to schedules are to schedules to this Agreement. Unless otherwise specified, all references contained in this Agreement, in any schedule referred to herein or in any instrument or document delivered pursuant hereto to dollars or “$” shall mean United States Dollars.

Section 8.10 Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and will in no way be affected, impaired or invalidated thereby. If the economic or legal substance of the transactions contemplated hereby is affected in any manner adverse to any party as a result thereof, the parties and Regis will negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

Section 8.11 Parties in Interest. This Agreement is binding upon and is for the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is not made for the benefit of any Person not a party hereto, and no Person other than the parties hereto or their respective successors and permitted assigns will acquire or have any benefit, right, remedy or claim under or by reason of this Agreement, except that (a) the provisions of Sections 4.01, 4.02 and 4.03 shall inure to the benefit of the Persons referred to therein and (b) the provisions of Sections 2.04, 2.05(c), 2.05(d), 2.05(e), 2.08, 3.07, 8.08, 8.10, the proviso in Section 8.07, the proviso in Section 8.13 and this sentence of Section 8.11 shall also inure to the benefit of Regis.

Section 8.12 Schedules. All schedules attached hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Capitalized terms used in the schedules hereto but not otherwise defined therein will have the respective meanings assigned to such terms in this Agreement.

Section 8.13 Waivers; Remedies. Any agreement on the part of a party hereto to waive the performance by the other party of any of its covenants hereunder shall be valid only if set forth in a written instrument signed on behalf of such party provided, that unless the Merger Agreement shall have been terminated, (a) any such waiver that would reasonably be expected to adversely affect (after giving effect to the Merger) Regis or its shareholders (it being understood and agreed that any fees and expenses incurred by Regis or any of its Subsidiaries in connection with the review of any such proposed waiver shall not be deemed to adversely affect Regis or its shareholders) executed prior to the Distribution Time shall be subject to the prior written consent of Regis and (b) the parties hereto shall notify Regis and its counsel in writing in accordance with Section 10.2 of the Merger Agreement at least five Business Days prior to the

29

making of any such waiver prior to the Distribution Time. No failure or delay on the part of either Alberto-Culver or Spinco in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of either Alberto-Culver or Spinco of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor will any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

Section 8.14 Further Assurances. From time to time after the Distribution Time, as and when requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such actions as the requesting party may reasonably request to consummate the transactions contemplated by the Transaction Agreements.

Section 8.15 Counterparts. This Agreement may be executed in separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.

Section 8.16 Performance. Alberto-Culver will cause to be performed and hereby guarantees the performance of all actions, agreements and obligations set forth herein to be performed by any Alberto-Culver Subsidiary. Spinco will cause to be performed and hereby guarantees the performance of all actions, agreements and obligations set forth herein to be performed by any Spinco Subsidiary.

Section 8.17 Interpretation. Any reference herein to any federal, state, local, or foreign law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires, (b) the terms “hereof”, “herein”, and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement and (c) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”.

Section 8.18 Limited Liability. Notwithstanding any other provision of this Agreement, no stockholder, director, employee, officer, Affiliate, agent or Representative of Spinco or Alberto-Culver, in its capacity as such, shall have any liability in respect of or relating to the covenants or obligations of such party under this Agreement or any Ancillary Agreement or in respect of any certificate delivered with respect hereto or thereto and, to the fullest extent legally permissible, each of Spinco and Alberto-Culver, for itself and its stockholders, directors, employees, officers and Affiliates, waives and agrees not to seek to assert or enforce any such liability that any such Person otherwise might have pursuant to applicable law.

Section 8.19 Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to pursue specific performance of the terms hereof, this being in addition to any other remedy to which they are entitled at law or in equity.

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Section 8.20 Mutual Drafting. This Agreement and the Ancillary Agreements shall be deemed to be the joint work product of Alberto-Culver and Spinco and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties as of the date first hereinabove written.

ALBERTO-CULVER COMPANY
By:	/s/ Gary P. Schmidt
Name:	Gary P. Schmidt
Title:	Senior Vice President & General Counsel
SALLY HOLDINGS, INC.
By:	/s/ Gary Winterhalter
Name:	Gary Winterhalter
Title:	President

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EX-2.02

EXHIBIT 2.02

AGREEMENT AND PLAN OF MERGER

DATED AS OF JANUARY 10, 2006

AMONG

ALBERTO-CULVER COMPANY,

SALLY HOLDINGS, INC.,

REGIS CORPORATION,

ROGER MERGER INC.,

AND

ROGER MERGER SUBCO LLC

TABLE OF CONTENTS

			Page
ARTICLE I      DEFINITIONS			2
	SECTION 1.1	Definitions	2
ARTICLE II      THE MERGER			8
	SECTION 2.1	The Merger	8
	SECTION 2.2	Closing	8
	SECTION 2.3	Effective Time	8
	SECTION 2.4	Effects of the Merger	8
	SECTION 2.5	Effect on Capital Stock	8
	SECTION 2.6	Merger Sub Common Stock	9
	SECTION 2.7	Spinco Options	9
	SECTION 2.8	Spinco Organizational Documents	10
	SECTION 2.9	Subsequent Merger.	10
	SECTION 2.10	Dropdown of Spinco	10
	SECTION 2.11	Tax Consequences	11
	SECTION 2.12	Directors and Officers of Spinco	11
ARTICLE III      EXCHANGE OF SHARES			11
	SECTION 3.1	Regis to Make Shares Available	11
	SECTION 3.2	Exchange of Shares.	12
ARTICLE IV      CERTAIN PRE-MERGER TRANSACTIONS			14
	SECTION 4.1	Alberto-Culver/Spinco Ancillary Agreements	14
	SECTION 4.2	Distribution	14
ARTICLE V      REPRESENTATIONS AND WARRANTIES			14
	SECTION 5.1	Representations and Warranties of Regis, Merger Sub and Subco	14
	SECTION 5.2	Representations and Warranties of Alberto-Culver	31
	SECTION 5.3	Representations and Warranties of Spinco	37
ARTICLE VI      COVENANTS RELATING TO CONDUCT OF BUSINESS			50
	SECTION 6.1	Covenants of Regis	50
	SECTION 6.2	Covenants of Alberto-Culver and Spinco	54
	SECTION 6.3	SEC Reports	58

	SECTION 6.4	Control of Other Party’s Business	58
	SECTION 6.5	Interim Financial Information	58
	SECTION 6.6	Rights Agreement	59
ARTICLE VII      ADDITIONAL AGREEMENTS			59
	SECTION 7.1	Preparation of Joint Proxy Statement/Prospectus; Shareholders and Stockholders Meetings.	59
	SECTION 7.2	Regis Organizational Documents; Governance Matters	61
	SECTION 7.3	Access to Information	62
	SECTION 7.4	Reasonable Best Efforts.	63
	SECTION 7.5	Acquisition Proposals.	65
	SECTION 7.6	Fees and Expenses	70
	SECTION 7.7	Sole Stockholder Approvals	70
	SECTION 7.8	Public Announcements	70
	SECTION 7.9	Accounting Matters.	71
	SECTION 7.10	Listing of Shares of Regis Common Stock	71
	SECTION 7.11	Affiliates	71
	SECTION 7.12	Takeover Statutes	71
	SECTION 7.13	Advice of Changes	72
	SECTION 7.14	Regis Guaranty	72
	SECTION 7.15	Private Letter Ruling; Tax-Free Reorganization Treatment; Pre-Distribution Tax Returns.	73
	SECTION 7.16	Obligations under Separation Agreement	73
	SECTION 7.17	Section 16 Matters	74
	SECTION 7.18	Employee Benefits Matters.	74
	SECTION 7.19	Non-Competition; Non-Solicitation.	75
	SECTION 7.20	Financing.	77
	SECTION 7.21	Shareholders Agreement	78
	SECTION 7.22	Transition Services	78
ARTICLE VIII      CONDITIONS PRECEDENT			78
	SECTION 8.1	Conditions to Each Party’s Obligation to Effect the Merger	78
	SECTION 8.2	Additional Conditions to Obligations of Regis and Merger Sub	79
	SECTION 8.3	Additional Conditions to Obligations of Alberto-Culver and Spinco	81

ii

ARTICLE IX TERMINATION AND AMENDMENT			82
	SECTION 9.1	Termination	82
	SECTION 9.2	Effect of Termination.	84
	SECTION 9.3	Amendment	87
	SECTION 9.4	Extension; Waiver	87
ARTICLE X GENERAL PROVISIONS			87
	SECTION 10.1	Non-Survival of Representations, Warranties, Covenants and Agreements	87
	SECTION 10.2	Notices	88
	SECTION 10.3	Interpretation	89
	SECTION 10.4	Counterparts	89
	SECTION 10.5	Entire Agreement; No Third Party Beneficiaries.	89
	SECTION 10.6	Governing Law	89
	SECTION 10.7	Severability	89
	SECTION 10.8	Assignment	89
	SECTION 10.9	Submission to Jurisdiction; Waivers	89
	SECTION 10.10	Enforcement	90
	SECTION 10.11	Disclosure Schedule	90
	SECTION 10.12	Mutual Drafting	91

EXHIBITS

Exhibit A	-	Separation Agreement
Exhibit B	-	Form of Certificate of Incorporation of the Surviving Corporation
Exhibit C	-	Tax Allocation Agreement
Exhibit D	-	Employee Matters Agreement
Exhibit E	-	Form of Regis Charter Amendment
Exhibit F	-	Form of Rule 145 Affiliate Agreement
Exhibit G	-	Form of Shareholders Agreement

iii

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of January 10, 2006 (this “Agreement”), among ALBERTO-CULVER COMPANY, a Delaware corporation (“Alberto-Culver”), SALLY HOLDINGS, INC., a Delaware corporation and wholly owned subsidiary of Alberto-Culver (“Spinco”), REGIS CORPORATION, a Minnesota corporation (“Regis”), ROGER MERGER INC., a Delaware corporation and a direct, wholly owned subsidiary of Regis (“Merger Sub”), and ROGER MERGER SUBCO LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Regis (“Subco”).

W I T N E S S E T H :

WHEREAS, simultaneously with the execution and delivery of this Agreement, Alberto-Culver and Spinco are entering into a separation agreement in the form attached hereto as Exhibit A (as may be amended from time to time in accordance with its terms, the “Separation Agreement”), pursuant to which, among other things, (a) prior to the Distribution Time (as defined in the Separation Agreement), Spinco shall, subject to the terms and conditions of the Separation Agreement, pay to Alberto-Culver, as the sole stockholder of Spinco, a special dividend in the amount of $400,000,000 and (b) prior to the Effective Time, Alberto-Culver shall, subject to the terms and conditions of the Separation Agreement, distribute all of the issued and outstanding shares of common stock, no par value per share, of Spinco (the “Spinco Common Stock”) on a pro rata basis to holders of record of common stock, $0.22 par value per share, of Alberto-Culver (the “Alberto-Culver Common Stock”) as of the Alberto-Culver Record Date, as provided in the Separation Agreement (the “Distribution”);

WHEREAS, the Boards of Directors of Alberto-Culver, Spinco, Regis and Merger Sub deem it advisable and in the best interests of each corporation and its respective stockholders and shareholders that Spinco and Merger Sub enter into a merger transaction in order to advance the long-term strategic business interests of Alberto-Culver, Spinco and Regis;

WHEREAS, the Boards of Directors of Alberto-Culver, Spinco, Regis and Merger Sub have determined to consummate such merger transaction by means of the business combination transaction provided for herein in which, following the Distribution, Merger Sub will, subject to the terms and conditions of this Agreement, merge with and into Spinco (the “Merger”), with Spinco being the surviving corporation (hereinafter sometimes referred to in such capacity as the “Surviving Corporation”) and immediately following the Merger, the Surviving Corporation will merge with and into Subco (the “Subsequent Merger”), with Subco being the surviving entity in the Subsequent Merger; and

WHEREAS, to induce Regis to enter into this Agreement, certain stockholders of Alberto-Culver are simultaneously with the execution and delivery of this Agreement, entering into a support agreement with Regis.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 Definitions. Capitalized terms used in this Agreement have the meanings set forth in this Agreement or, when so indicated, in the applicable Transaction Agreement. As used in this Agreement:

(a) “Affiliate” means (except as specifically otherwise defined), with respect to any specified Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such specified Person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or partnership or other ownership interests, by contract or otherwise.

(b) “Applicable Laws” means all applicable laws, statutes, ordinances, orders, decrees, rules, regulations, policies or guidelines promulgated, or judgments, decisions, orders or arbitration awards entered, by any Governmental Entity.

(c) “Board of Directors” means the Board of Directors of any specified Person.

(d) “Business Day” means any day on which banks are not required or authorized to close in the City of New York.

(e) “Diversion” means the sale of professional beauty products by any Person (the “Selling Person”) to (i) any Person that has not been designated by the manufacturer of such professional beauty products as an approved outlet (an “Unapproved Outlet”) or (ii) any Person that the Selling Person knows will resell or knows is reasonably likely to resell such professional beauty products to an Unapproved Outlet.

(f) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(g) An “ERISA Affiliate” when used with respect to any Person, means any trade or business, whether or not incorporated, that, together with such Person, would be deemed to be a “single employer” within the meaning of Section 4001(b) of ERISA.

(h) “Known” or “Knowledge” means, (i) with respect to Alberto-Culver or Spinco, the actual knowledge of any of the persons set forth on Section 1.1A of the Alberto-Culver Disclosure Schedule and (ii) with respect to Regis, the actual knowledge of any of the persons set forth on Section 1.1A of the Regis Disclosure Schedule.

(i) “Material Adverse Effect” means, with respect to any Person, any effect, change, circumstance or development that, individually or in the aggregate with other such effects, changes, circumstances or developments, is both material and adverse to (i) the ability of such Person to consummate the transactions contemplated by this Agreement or (ii) the business, financial condition, operations, results of operations, properties, assets or liabilities of such

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Person and its Subsidiaries, taken as a whole, other than, in the case of this clause (ii), any effect, change, circumstance or development (A) resulting from the announcement of the transactions contemplated hereby or, except with respect to the representations and warranties in Sections 5.1(c)(iv) and (vi), 5.2(c)(ii) and (iii) and 5.3(c)(ii) and (iv), any action taken in connection with the transactions contemplated hereby pursuant to the terms of this Agreement, (B) relating to any actual or threatened termination, cancellation or limitation of, or any modification or change in, the business relationship of such Person or any of its Subsidiaries with any supplier or group of suppliers, (C) relating to state, national or international political, social, general business or economic conditions, (D) relating in general to the industries in which such Person and its Subsidiaries operate (but only if such Person and its Subsidiaries, taken as a whole, are not disproportionately affected in any material respect as compared to other comparable companies in their industry), (E) relating to any action or omission of Alberto-Culver, Regis, Spinco, Merger Sub, Subco or any Subsidiary of any of them taken with the express prior written consent of each of the other parties hereto, (F) relating to the commencement, occurrence or continuation of any war, armed hostilities or acts of terrorism involving or affecting the United States of America or any other jurisdiction in which such party or any of its Subsidiaries operates, (G) relating to financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (H) relating to changes after the date hereof in United States GAAP or the accounting rules and regulations of the SEC or (I) relating to changes in Applicable Laws.

(j) A “Multiemployer Plan” means any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA.

(k) “NYSE” means The New York Stock Exchange, Inc.

(l) “Person” means an individual, corporation, limited liability company, partnership, association, joint venture, trust, unincorporated organization, other entity or group (as defined in the Exchange Act), including any Governmental Entity.

(m) “Regis Common Stock” means the common stock, par value $0.05 per share, of Regis.

(n) A “Regis Plan” means any employee benefit plan, program, policy, practice or other arrangement providing compensation or benefits to any current or former employee, officer or director of Regis or any of its Subsidiaries or any beneficiary or dependent thereof that is sponsored, maintained or contributed to by Regis or any of its ERISA Affiliates or other Subsidiaries or to which Regis or any of its ERISA Affiliates or other Subsidiaries contributes or is obligated to contribute, whether or not written, including any employee benefit plan within the meaning of Section 3(3) of ERISA (whether or not such plan is subject to ERISA) and any bonus, incentive, deferred compensation, welfare, paid time off, bereavement, tuition, employee assistance, relocation, vacation, stock purchase, stock option, equity or equity-based compensation, severance, termination, employment, change of control or fringe benefit plan, program or agreement.

(o) “Spinco Employee” means any employee of Alberto-Culver or any of its Subsidiaries that devotes substantially all of his or her time to the Spinco Business.

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(p) “Spinco Plan” means any employee benefit plan, program, policy, practice or other arrangement providing compensation or benefits to any current or former Spinco Employee or any beneficiary or dependent thereof that is sponsored, maintained or contributed to by Alberto-Culver or Spinco or any of its other ERISA Affiliates or other Subsidiaries or to which Alberto-Culver or any of its ERISA Affiliates or other Subsidiaries contributes or is obligated to contribute, whether or not written, including any employee benefit plan within the meaning of Section 3(3) of ERISA (whether or not such plan is subject to ERISA) and any bonus, incentive, deferred compensation, welfare, paid time off, bereavement, tuition, employee assistance, relocation, vacation, stock purchase, stock option, equity or equity-based compensation, severance, termination, employment, change of control or fringe benefit plan, program or agreement.

(q) “Subsidiary” means, when used with respect to any Person, any corporation or other organization, whether incorporated or unincorporated, at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries.

(r) “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means any tax, in any sense, including (i) any federal, state, municipal, county, local, foreign or other Governmental Entity net income, gross income, receipts, windfall profit, severance, real, personal, tangible, escheatable, unclaimed or abandoned property, goods and services, value added, estimated, capital stock, production, sales, use, license, excise, franchise, employment, unemployment, social security, payroll, withholding, alternative or add-on minimum, ad valorem, transfer, stamp, or environmental tax, or any other tax, customs, duty or other like assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax or additional amount imposed by any Governmental Entity, including any fines, penalties or interest arising under ERISA; and (ii) any liability for payments of a type described in clause (i) as a result of being a member of an affiliated, consolidated, combined, unitary or similar group.

(s) “Tax Return” means any return, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including any information return, claim for refund, amended return or declaration of estimated Tax.

(t) “Transaction Agreements” means collectively, the Separation Agreement, the Employee Matters Agreement, the Tax Allocation Agreement and the other agreements, if any, entered into or to be entered into in connection with the Distribution.

Each of the following terms is defined in the Section of this Agreement or the agreement set forth opposite such term:

Term	Section
Action	5.1(h)(i)
Agreement	Preamble
Alberto-Culver	Preamble
Alberto-Culver Acquisition Agreement	7.5(b)(i)
Alberto-Culver Acquisition Proposal	7.5(b)(ii)

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Term	Section
Alberto-Culver Business	Separation Agreement
Alberto-Culver Common Stock	Recitals
Alberto-Culver Designees	7.2(b)
Alberto-Culver Disclosure Schedule	5.2
Alberto-Culver Group	Separation Agreement
Alberto-Culver Filed SEC Reports	5.3(d)(iii)
Alberto-Culver Insiders	7.17
Alberto-Culver Lookback Period	9.2(f)
Alberto-Culver Necessary Consents	5.2(c)(iii)
Alberto-Culver Option Plans	5.2(b)(i)(B)
Alberto-Culver Recommendation	7.1(c)
Alberto-Culver Record Date	Separation Agreement
Alberto-Culver Restricted Stock	5.2(b)(i)(A)
Alberto-Culver Restricted Stock Plans	5.2(b)(i)(A)
Alberto-Culver SEC Reports	5.2(d)(i)
Alberto-Culver Stock Options	5.2(b)(i)(B)
Alberto-Culver Stock Plans	5.2(b)(i)(B)
Alberto-Culver Stockholders Meeting	7.1(c)
Alberto-Culver Subsidiary	Separation Agreement
Alberto-Culver Tax Certificate	8.2(c)
Alberto-Culver Transaction Approval	7.1(c)
Alberto-Culver Vote	7.1(c)
Alberto-Culver Voting Debt	5.2(b)(iii)
Certificate of Merger	2.3
Change in the Alberto-Culver Recommendation	7.5(b)(iv)
Change in the Regis Recommendation	7.5(a)(iv)
Closing	2.2
Closing Date	2.2
Code	2.11
Confidentiality Agreement	7.3
Contract	5.1(c)(iv)
Delaware Secretary	2.3
DGCL	2.1
Distribution	Recitals
Distribution Date	Separation Agreement
Distribution Time	Separation Agreement
DOE	5.1(u)(i)
DOJ	7.4(b)
Effective Time	2.3
Employee Matters Agreement	4.1
Environmental Laws	5.1(j)
Environmental Liabilities	5.1(j)
Exchange Act	5.1(c)(vi)
Exchange Agent	3.1
Exchange Fund	3.1

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Term	Section
Exchange Ratio	2.5(a)
Expenses	7.6
Force the Alberto-Culver Vote Notice	7.1(c)
Force the Regis Vote Notice	7.1(b)
Foreign Competition Laws	7.4(a)
Form S-4	7.1(a)
Former Business	Separation Agreement
FTC	5.1(t)(i)
GAAP	5.1(d)(i)
Governmental Entity	5.1(c)(vi)
Hazardous Materials	5.1(j)
HSR Act	5.1(c)(vi)
Independent Director	7.2(b)
Injunction	8.1(b)
Institution	5.1(u)(i)
Intellectual Property	5.1(k)
IRS	5.1(p)(i)
Joint Proxy Statement/Prospectus	7.1(a)
Liens	5.1(a)(iii)
Merger	Recitals
Merger Sub	Preamble
Merger Sub Common Stock	2.6
Newco	2.10
Newco Contribution	2.10
Private Letter Ruling	8.1(i)(i)
Regis	Preamble
Regis Acquisition Agreement	7.5(a)(i)
Regis Acquisition Proposal	7.5(a)(ii)
Regis Charter Amendment	5.1(c)(i)
Regis Charter Approval	7.1(b)
Regis Designees	7.2(b)
Regis Disclosure Schedule	5.1
Regis Filed SEC Reports	5.1(d)(ii)
Regis Financial Statements	5.1(d)(i)
Regis Franchisees	5.1(t)(i)
Regis Lookback Period	9.2(b)
Regis Material Contracts	5.1(o)
Regis Necessary Consents	5.1(c)(vi)
Regis Performance Units	5.1(b)(i)(C)
Regis Permits	5.1(h)(ii)
Regis Preferred Stock	5.1(b)(i)(A)
Regis Recommendation	7.1(b)
Regis Restricted Stock	5.1(b)(i)(A)
Regis Rights	5.1(b)(i)(B)
Regis Rights Agreement	5.1(b)(i)(B)

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Term	Section
Regis SARS	5.1(b)(i)(C)
Regis SEC Reports	5.1(d)(i)
Regis Shareholders Meeting	7.1(b)
Regis Share Issuance	5.1(c)(i)
Regis Share Issuance Approval	7.1(b)
Regis Stock Options	5.1(b)(i)(C)
Regis Stock Plans	5.1(b)(i)(C)
Regis Tax Certificate	8.2(c)
Regis UFOCs	5.1(t)(ii)
Regis Voting Debt	5.1(b)(iii)
Required Approvals	7.4(a)
Required Regis Charter Vote	5.1(g)
Required Regis Share Issuance Vote	5.1(g)
Required Regis Votes	5.1(g)
Restricted Activities	7.19(a)(i)
Restricted Territories	7.19(a)(i)
Sarbanes Act	5.1(d)(i)
SEC	5.1(a)(iii)
Section 16 Information	7.17
Securities Act	5.1(a)(iii)
Separation Agreement	Recitals
Shareholder Designee	Shareholders Agreement
Shareholders	Shareholders Agreement
Shareholders Agreement	7.21
Shareholders Representative	Shareholders Agreement
Spinco	Preamble
Spinco Business	Separation Agreement
Spinco Certificate	2.5(b)
Spinco Common Stock	Recitals
Spinco Disclosure Schedule	5.3
Spinco Dividend	Separation Agreement
Spinco Financial Statements	5.3(d)(i)
Spinco Franchisees	5.3(q)(i)
Spinco Group	Separation Agreement
Spinco Material Contracts	5.3(l)
Spinco Necessary Consents	5.3(c)(iv)
Spinco Permits	5.3(f)(ii)
Spinco Significant Subsidiaries	5.3(a)(ii)
Spinco Stock Option	2.7(a)
Spinco UFOCs	5.3(q)(ii)
Spinco Voting Debt	5.3(b)(ii)
Spinco – Subco Merger	2.10(c)
Subco	Preamble
Subsequent Merger	Recitals
Substitute Option	2.7(a)

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Term	Section
Superior Alberto-Culver Proposal	7.5(b)(iii)
Superior Regis Proposal	7.5(a)(iii)
Surviving Corporation	Recitals
Surviving Entity	2.9(a)
Tax Allocation Agreement	4.1
Termination Agreement	5.3(m)(vi)
Termination Date	9.1(b)
Violation	5.1(c)(iv)

ARTICLE II

THE MERGER

SECTION 2.1 The Merger. Upon the terms and conditions of this Agreement, and in accordance with the General Corporation Law of the State of Delaware (the “DGCL”), at the Effective Time, Merger Sub shall merge with and into Spinco. Spinco shall be the Surviving Corporation in the Merger and shall continue its corporate existence under the laws of the State of Delaware. Upon consummation of the Merger, the separate corporate existence of Merger Sub shall terminate. As a result of the Merger, Spinco shall become a direct, wholly owned Subsidiary of Regis.

SECTION 2.2 Closing. The closing of the Merger (the “Closing”) will take place as soon as practicable, but in any event within three Business Days after the satisfaction or waiver (subject to Applicable Laws) of the conditions (excluding conditions that, by their nature, cannot be satisfied until the Closing Date (as defined below)) set forth in Article VIII, unless this Agreement has been theretofore terminated pursuant to its terms or unless another time or date is agreed to in writing by the parties hereto (the actual time and date of the Closing being referred to herein as the “Closing Date”). The Closing shall be held at the offices of Sidley Austin LLP, One South Dearborn Street, Chicago, Illinois, unless another place is agreed to in writing by the parties hereto.

SECTION 2.3 Effective Time. Subject to the terms and conditions of this Agreement, the Merger shall become effective as set forth in the certificate of merger relating thereto (the “Certificate of Merger”) that shall be filed with the Secretary of State of the State of Delaware (the “Delaware Secretary”) on the Closing Date. The “Effective Time” shall be the date and time set forth in the Certificate of Merger, which shall be immediately after the Distribution Time and immediately prior to the effective time of the Subsequent Merger.

SECTION 2.4 Effects of the Merger. At and after the Effective Time, the Merger shall have the effects set forth in the DGCL.

SECTION 2.5 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holders of any capital stock of Merger Sub or Spinco:

(a) Each share of Spinco Common Stock issued and outstanding immediately prior to the Effective Time, other than shares of Spinco Common Stock to be canceled pursuant to Section 2.5(c), shall be automatically converted into a number of fully paid and nonassessable

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shares of Regis Common Stock, including the corresponding number of Regis Rights, equal to the Exchange Ratio. The “Exchange Ratio” shall equal 0.600. All references in this Agreement to Regis Common Stock to be received in connection with the Merger shall be deemed, from and after the Effective Time, to include the associated Regis Rights.

(b) All shares of Spinco Common Stock converted into Regis Common Stock pursuant to this Article II shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each certificate or book-entry credit previously evidencing any such shares of Spinco Common Stock (a “Spinco Certificate”) shall thereafter evidence only rights with respect to certificates representing the number of whole shares of Regis Common Stock into which the shares of Spinco Common Stock formerly evidenced by such Spinco Certificate have been converted pursuant to this Section 2.5, the right to receive dividends or distributions in accordance with Section 3.2(b) and cash in lieu of fractional shares to be paid pursuant to Section 3.2(d).

(c) Each share of Spinco Common Stock held by Spinco as treasury stock and each share of Spinco Common Stock owned by Regis, if any, in each case immediately prior to the Effective Time, shall be canceled and shall cease to exist and no stock or other consideration shall be delivered in exchange therefor.

SECTION 2.6 Merger Sub Common Stock. At the Effective Time, each share of common stock, par value $0.01 per share, of Merger Sub (“Merger Sub Common Stock”) issued and outstanding immediately prior to the Effective Time shall be automatically converted into one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.

SECTION 2.7 Spinco Options. (a) As of the Effective Time, each option to purchase Spinco Common Stock which was converted from an Alberto-Culver Stock Option pursuant to the terms of the Employee Matters Agreement and is outstanding immediately prior to the Effective Time (a “Spinco Stock Option”) shall become and represent a fully exercisable option to purchase the number of shares of Regis Common Stock (a “Substitute Option”) (decreased to the nearest full share) determined by multiplying (i) the number of shares of Spinco Common Stock subject to such Spinco Stock Option immediately prior to the Effective Time by (ii) the Exchange Ratio, at an exercise price per share of Regis Common Stock (rounded up to the nearest cent) equal to the exercise price per share of Spinco Common Stock under such Spinco Stock Option immediately prior to the Effective Time divided by the Exchange Ratio. After the Effective Time, except as provided above in this Section 2.7(a), each Substitute Option shall be exercisable upon the same terms and conditions as were applicable under the related Spinco Stock Option immediately prior to the Effective Time.

(b) As soon as reasonably practicable after the Effective Time, Regis shall file a registration statement on Form S-8 (or any successor or other appropriate form) with respect to Regis Common Stock subject to Substitute Options or shall cause Substitute Options to be deemed to be issued pursuant to a Regis Stock Plan for which shares of Regis Common Stock have been previously registered pursuant to an appropriate registration form.

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SECTION 2.8 Spinco Organizational Documents. (a) The Certificate of Incorporation of the Surviving Corporation shall be amended in its entirety at the Effective Time to be in the form set forth on Exhibit B until thereafter changed in the Subsequent Merger.

(b) The By-laws of Merger Sub as in effect immediately prior to the Effective Time shall be the By-laws of the Surviving Corporation until thereafter changed in the Subsequent Merger.

SECTION 2.9 Subsequent Merger.

(a) Immediately after the Effective Time, Regis will cause the Surviving Corporation to merge with and into Subco and the separate corporate existence of the Surviving Corporation shall thereupon cease and Subco shall be the surviving entity (the “Surviving Entity”) in the Subsequent Merger.

(b) At the effective time of the Subsequent Merger, the common stock of the Surviving Corporation shall automatically be converted into a $100 fixed value membership interest in the Surviving Entity.

(c) With respect to any time following the Subsequent Merger, references herein to the Surviving Corporation shall refer to the Surviving Entity.

SECTION 2.10 Dropdown of Spinco. At any time prior to 10 Business Days prior to the mailing of the Joint Proxy Statement/Prospectus, Alberto-Culver may, following prior written notice to Regis, contribute all of the shares of Spinco Common Stock to a newly formed, direct, wholly owned Subsidiary of Alberto-Culver that is a Delaware corporation (“Newco”) in exchange for shares of common stock of Newco (the “Newco Contribution”); provided, however, that Alberto-Culver may cause the Newco Contribution to be made only if: (i) consummation of the Newco Contribution would not prevent or materially delay the consummation of the transactions contemplated by this Agreement or the Separation Agreement or otherwise adversely affect Regis or the holders of Regis Common Stock, (ii) all representations and warranties of Spinco in this Agreement (other than those in Section 5.3(b), which would be replaced with the representation set forth in Section 2.10 to the Spinco Disclosure Schedule) would be true and correct with respect to Newco as though Newco rather than Spinco had been a party to this Agreement on the date hereof, (iii) Newco would be in compliance with all covenants and agreements of Spinco in this Agreement and the Transaction Agreements as though Newco rather than Spinco had been a party to this Agreement and the Transaction Agreements on the date hereof, (iv) the Newco Contribution would not require the Distribution to be registered under the Securities Act and (v) the Newco Contribution would not give rise to any violation of Applicable Laws. In the event that Alberto-Culver causes the Newco Contribution to be made:

(a) Merger Sub shall merge in accordance with Section 2.1 with and into Newco, and Newco shall be the Surviving Corporation in the Merger;

(b) Newco shall merge in accordance with Section 2.9 with and into Subco, and Subco shall be the Surviving Entity in the Subsequent Merger;

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(c) Spinco shall merge with and into Subco (the “Spinco-Subco Merger”), and Subco shall be the surviving entity in the Spinco-Subco Merger;

(d) with respect to any time following the Spinco-Subco Merger, (i) references herein to the Surviving Corporation shall refer to Subco, as the surviving entity in the Spinco-Subco Merger and (ii) references herein to the Subsequent Merger shall refer to the mergers described in Section 2.10(b) and (c), collectively;

(e) unless the context otherwise requires, any references herein, in each Transaction Agreement and in each Termination Agreement to Spinco shall be deemed to be to Newco; and

(f) Spinco shall assign to Newco, and Newco shall execute and deliver to Alberto-Culver and Regis a joinder to, this Agreement, each of the Separation Agreement, Employee Matters Agreement and Tax Allocation Agreement and each other Transaction Agreement and each Termination Agreement to which Spinco is a party.

SECTION 2.11 Tax Consequences. It is intended that the Merger and the Subsequent Merger, taken together, shall constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement shall constitute a “plan of reorganization” for the purposes of Sections 354 and 361 of the Code.

SECTION 2.12 Directors and Officers of Spinco. The officers of Merger Sub at the Effective Time shall be the initial officers of the Surviving Corporation and the directors of Merger Sub at the Effective Time, together with a number of Alberto-Culver Designees that will equal a majority of the Board of Directors of the Surviving Corporation, shall be the initial directors of the Surviving Corporation and in the case of each of such officers and directors shall hold office from the Effective Time until their respective successors are duly elected or appointed and qualified in the manner provided in the Certificate of Incorporation or By-laws of the Surviving Corporation or as otherwise provided by Applicable Law.

ARTICLE III

EXCHANGE OF SHARES

SECTION 3.1 Regis to Make Shares Available. From time to time, prior to, at or after the Effective Time (but no later than five Business Days after the Closing Date), Regis shall deposit, or shall cause to be deposited, with a bank or trust company appointed by Regis and reasonably acceptable to Alberto-Culver (the “Exchange Agent”), for the benefit of the holders of record Alberto-Culver Common Stock as of the Alberto-Culver Record Date, for exchange in accordance with this Article III, certificates representing the shares of Regis Common Stock to be issued pursuant to Section 2.5 and delivered pursuant to Section 3.2(a) in exchange for Spinco Certificates, and an amount of cash sufficient to permit the Exchange Agent to make the necessary payments of cash in lieu of fractional shares pursuant to Section 3.2(d) (such cash and shares of Regis Common Stock, together with any dividends or distributions thereon having a record date after the Effective Time and a payment date prior to the delivery of such shares by the Exchange Agent being hereinafter referred to as the “Exchange Fund”). The shares of Spinco Common Stock issued in the Distribution shall be held by the Exchange Agent pursuant to Article III of the Separation Agreement.

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SECTION 3.2 Exchange of Shares.

(a) Regis shall instruct the Exchange Agent to, as soon as practicable after the Effective Time, deliver to each holder of record of Alberto-Culver Common Stock as of the Alberto-Culver Record Date a certificate representing the number of whole shares of Regis Common Stock into which such holder’s shares of Spinco Common Stock shall have been converted pursuant to the provisions of Article II and a check representing the amount of cash in lieu of fractional shares, if any, that such Person shall have become entitled to receive pursuant to the provisions of Articles II and III and the Spinco Certificate as converted shall forthwith be canceled.

(b) Promptly following the delivery of the certificates representing Regis Common Stock, there shall be paid to the holder of shares of Alberto-Culver Common Stock as of the Alberto-Culver Record Date, without interest, the amount of dividends or other distributions with a record date therefor after the Effective Time payable with respect to shares of Regis Common Stock into which such holder’s Spinco Common Stock shall have been converted and not paid. No interest will be paid or accrued on any unpaid dividends and distributions payable to holders of record of Alberto-Culver Common Stock as of the Alberto-Culver Record Date.

(c) All shares of Regis Common Stock issued upon conversion of Spinco Common Stock in accordance with the terms of this Article III (and any cash paid pursuant to Section 3.2(d)) shall be deemed to have been issued (and paid) in full satisfaction of all rights pertaining to shares of Spinco Common Stock converted in the Merger in accordance with Section 2.5. At the Effective Time, there shall be no further transfers on the stock transfer books of Spinco of the shares of Spinco Common Stock that were issued and outstanding immediately prior to the Effective Time. Immediately following the Effective Time, the Spinco Certificates shall be canceled by Regis or the Surviving Corporation or, on the instructions of Regis or the Surviving Corporation, by the Exchange Agent and exchanged for certificates representing shares of Regis Common Stock as provided in this Article III.

(d) Notwithstanding anything to the contrary contained herein, no certificates or scrip representing fractional shares of Regis Common Stock or book-entry credit of the same shall be issued in exchange for Spinco Certificates, no dividend or distribution with respect to Regis Common Stock shall be payable on or with respect to any such fractional share, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a shareholder of Regis. In lieu of the issuance of any such fractional share, cash adjustments will be paid to holders in respect of any fractional share of Regis Common Stock that would otherwise be issuable, and the amount of such cash adjustment shall be equal to the product obtained by multiplying such stockholder’s fractional share of Regis Common Stock that would otherwise be issuable by the closing price per share of Regis Common Stock on the NYSE Composite Tape on the Closing Date.

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(e) Any portion of the Exchange Fund that remains unclaimed by holders of record of Alberto-Culver Common Stock as of the Alberto-Culver Record Date for twelve months after the Effective Time shall be delivered to Regis, and any holders of record of Alberto-Culver Common Stock as of the Alberto-Culver Record Date who have not theretofore complied with this Article III shall thereafter look only to Regis for payment of the shares of Regis Common Stock, cash in lieu of any fractional shares and any unpaid dividends and distributions on the Regis Common Stock deliverable in respect of each share of Spinco Common Stock formerly evidenced by such Spinco Certificates as determined pursuant to this Agreement, without any interest thereon, and Regis shall not charge such holders in connection with the delivery of such shares of Regis Common Stock and cash. Any such portion of the Exchange Fund remaining unclaimed by holders of record of Alberto-Culver Common Stock as of the Alberto-Culver Record Date five years after the Effective Time (or such earlier date immediately prior to such time as such amounts would otherwise escheat to or become property of any Governmental Entity) shall, to the extent permitted by Applicable Laws, become the property of Regis free and clear of any claims or interest of any Person previously entitled thereto.

(f) None of Alberto-Culver, Spinco, Regis, Merger Sub, the Surviving Corporation, the Exchange Agent or any other Person shall be liable to any holder of Alberto-Culver Common Stock as of the Alberto-Culver Record Date for any shares of Regis Common Stock, cash in lieu of fractional shares thereof and any dividend or other distribution with respect thereto delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar Applicable Laws.

(g) The Exchange Agent shall invest any cash included in the Exchange Fund, as directed by Regis, on a daily basis. Any interest and other income resulting from such investments shall become a part of the Exchange Fund, and any amounts in excess of the amounts payable pursuant to this Article III shall be paid to Regis promptly upon request by Regis. If for any reason (including losses) the cash in the Exchange Fund shall be insufficient to fully satisfy all of the payment obligations to be made by the Exchange Agent hereunder, Regis shall promptly deposit cash into the Exchange Fund in an amount which is equal to the deficiency in the amount of cash required to fully satisfy such payment obligations.

(h) Regis or the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Alberto-Culver Common Stock as of the Alberto-Culver Record Date such amounts as Regis or the Exchange Agent is required to deduct and withhold with respect to the making of such payment under the Code, or any provision of state, local or foreign Tax law. To the extent that amounts are so withheld by Regis or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Alberto-Culver Common Stock as of the Alberto-Culver Record Date in respect of which such deduction and withholding was made by Regis or the Exchange Agent.

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ARTICLE IV

CERTAIN PRE-MERGER TRANSACTIONS

The following transactions shall occur prior to the Effective Time:

SECTION 4.1 Alberto-Culver/Spinco Ancillary Agreements. Simultaneously with the execution and delivery of this Agreement, Alberto-Culver and Spinco are entering into a Tax Allocation Agreement in the form attached hereto as Exhibit C (as may be amended from time to time in accordance with its terms, the “Tax Allocation Agreement”) and an Employee Matters Agreement in the form attached hereto as Exhibit D (as may be amended from time to time in accordance with its terms, the “Employee Matters Agreement”).

SECTION 4.2 Distribution. Immediately prior to the Distribution Time, and subject and pursuant to the terms and conditions of the Separation Agreement, Alberto-Culver and Spinco will cause Spinco to be recapitalized, and, immediately prior to the Effective Time, and subject and pursuant to the terms and conditions of the Separation Agreement, Alberto-Culver and Spinco will effect the Distribution and the other transactions contemplated by the Separation Agreement that are not required to be effected prior to such time or after such time.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

SECTION 5.1 Representations and Warranties of Regis, Merger Sub and Subco. Except as set forth in the Regis Disclosure Schedule delivered by Regis to Alberto-Culver and Spinco prior to the execution of this Agreement (the “Regis Disclosure Schedule”) (each section of which, to the extent specified therein, qualifies the correspondingly numbered representation and warranty of Regis contained herein and any disclosure in such section qualifies any other representation and warranty of Regis contained herein to which its application or relevance is reasonably apparent on its face), each of Regis, Merger Sub and Subco represents and warrants to Alberto-Culver and Spinco as of the date hereof and as of the Closing Date (except to the extent that such representations and warranties speak as of another date or dates in which case, as of such other date or dates) as follows:

(a) Organization, Standing and Power; Subsidiaries.

(i) Regis is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. Each of the Subsidiaries of Regis is a corporation or other organization duly organized, validly existing and in good standing (where applicable) under the laws of its jurisdiction of incorporation or organization, and each of Regis and its Subsidiaries has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and as it will be conducted through the Effective Time, except where the failure to be so organized, existing and in good standing or to have such power and authority, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis, and each of Regis and its Subsidiaries is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, other than in such jurisdictions where the failure to so qualify or to be in good standing,

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individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis. True, correct and complete copies of the Articles of Incorporation and By-laws of Regis in effect on the date hereof are attached to Section 5.1(a)(i) of the Regis Disclosure Schedule.

(ii) Merger Sub is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Merger Sub is a direct, wholly owned Subsidiary of Regis. True, correct and complete copies of the Certificate of Incorporation and By-laws of Merger Sub in effect on the date hereof are attached to Section 5.1(a)(ii) of the Regis Disclosure Schedule. Subco is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware. Subco is a direct, wholly owned Subsidiary of Regis. True, correct and complete copies of the Certificate of Formation, limited liability company agreement and other governing documents of Subco in effect on the date hereof are attached to Section 5.1(a)(ii) of the Regis Disclosure Schedule.

(iii) Section 5.1(a)(iii) of the Regis Disclosure Schedule sets forth a list of all the Subsidiaries of Regis which as of the date of this Agreement are Significant Subsidiaries of Regis (as defined in Rule 1-02(w) of Regulation S-X of the Securities and Exchange Commission (the “SEC”)). All the outstanding shares of capital stock of, or other equity interests in, each such Significant Subsidiary have been validly issued and are fully paid and nonassessable and are owned directly or indirectly by Regis, free and clear of all material pledges, claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever (collectively, “Liens”) and free of any other material restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other equity interests, but excluding restrictions under the Securities Act of 1933, as amended (the “Securities Act”)). None of Regis or any of its Subsidiaries directly or indirectly owns any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity (other than Subsidiaries of Regis), that is or would reasonably be expected to be material to Regis and its Subsidiaries taken as a whole.

(b) Capital Structure.

(i) (A) The authorized capital stock of Regis consists of 100,000,000 shares, all issued and outstanding shares of which have been designated as Regis Common Stock and 250,000 shares of which have been designated Series A Junior Participating Preferred Stock (the “Regis Preferred Stock”). As of the close of business on January 6, 2006, 45,354,716 shares of Regis Common Stock were issued and outstanding, including 142,298.775 shares of restricted Regis Common Stock (“Regis Restricted Stock”), and no shares of Regis Preferred Stock were issued and outstanding.

(B) The 250,000 shares of Regis Preferred Stock have been reserved for issuance pursuant to the exercise of the rights to acquire shares of Regis Preferred Stock (the “Regis Rights”) pursuant to the Rights Agreement dated December 23, 1996 between Regis and Wells Fargo Bank, N.A., as Rights Agent (the “Regis Rights Agreement”).

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(C) As of the close of business on January 6, 2006, (1) 3,220,310 shares of Regis Common Stock were reserved for issuance upon exercise of outstanding options to purchase Regis Common Stock (“Regis Stock Options”) under the Regis Corporation 2004 Long Term Incentive Plan, the Regis Corporation 2000 Stock Option Plan and the Regis Corporation 1991 Stock Option Plan (collectively, the “Regis Stock Plans”), (2) 2,549,243 shares of Regis Common Stock were reserved for additional grants under the Regis Stock Plans and (3) 194,250 stock appreciation rights of Regis (“Regis SARS”) were outstanding under the Regis Stock Plans and performance units of Regis (“Regis Performance Units”) having an aggregate value of up to $1,770,000 were outstanding under the Regis Stock Plans.

(ii) As of the close of business on January 6, 2006, except as set forth in clause (i), there are no shares of Regis Common Stock or Regis Preferred Stock issued, available, reserved for issuance or outstanding and, except as set forth in the Regis Stock Plans, there are not any contractual rights the value of which is determined in whole or in part by the value of the capital stock of Regis. Other than the Regis Stock Plans there are no Contracts, plans or arrangements that provide for the issuance, award or granting of (A) capital stock, options, warrants or other rights to acquire capital stock of Regis or (B) stock appreciation rights or other contractual rights, the value of which is determined in whole or in part by the value of the capital stock of Regis. No shares of Regis Common Stock are held by Regis as treasury shares. Since January 6, 2006 to the date of this Agreement, no shares of capital stock of Regis or any other securities of Regis have been issued other than shares of Regis Common Stock issued pursuant to options or rights outstanding as of January 6, 2006 under the Regis Stock Plans. All issued and outstanding shares of capital stock of Regis are duly authorized, validly issued, fully paid and nonassessable, and no class of capital stock of Regis is entitled to preemptive rights. All shares of Regis Common Stock to be issued in connection with the Merger shall be duly authorized, validly issued, fully paid and nonassessable, and shall not be entitled to preemptive rights. There are outstanding as of the date hereof, and there will be outstanding at the Effective Time, no options, warrants, Contracts or other rights to acquire capital stock of Regis other than the Regis Rights and under the Regis Stock Plans.

(iii) No bonds, debentures, notes or other indebtedness of Regis having the right to vote (or convertible into or exchangeable for securities having the right to vote) on any matters on which shareholders of Regis may vote (“Regis Voting Debt”) are issued or outstanding.

(iv) Except as otherwise set forth in this Section 5.1(b), as of the date of this Agreement, there are no, and as of the Effective Time (except as permitted pursuant to Section 6.1) there will not be any, securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Regis or any of its Subsidiaries is a party or by which any of them is bound obligating Regis or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold,

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additional shares of capital stock of Regis or any of its Subsidiaries, Regis Voting Debt, Regis Common Stock or other voting securities of Regis or any of its Subsidiaries or obligating Regis or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Except as provided under the Regis Stock Plans, as of the date of this Agreement, there are no, and as of the Effective Time (except as permitted pursuant to Section 6.1) there will not be any, outstanding obligations of Regis or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Regis or any of its Subsidiaries.

(v) The authorized capital stock of Merger Sub consists of 100 shares of Merger Sub Common Stock, all of which are owned beneficially and of record by Regis and are validly issued, fully paid and nonassessable. All of the membership interests in Subco are owned beneficially and of record by Regis.

(vi) There are no stockholder agreements, voting trusts or other Contracts to which Regis is a party or by which it is bound relating to the voting or transfer of any shares of capital stock of Regis.

(c) Authority; No Conflicts.

(i) Regis has all requisite corporate power and authority to enter into this Agreement and the Transaction Agreements with respect to which Regis is contemplated thereby to be a party and to consummate the transactions contemplated hereby and thereby, subject to the approval by the holders of Regis Common Stock of the issuance of additional shares of Regis Common Stock in connection with the Merger (the “Regis Share Issuance”) and the amendment of the Articles of Incorporation of Regis as set forth in Exhibit E (the “Regis Charter Amendment”) by the Required Regis Share Issuance Vote and the Required Regis Charter Vote, respectively. The execution and delivery of this Agreement and the Transaction Agreements with respect to which Regis is contemplated thereby to be a party by Regis and the consummation by Regis of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Regis, subject to the approval of the Regis Share Issuance and the Regis Charter Amendment by the Required Regis Share Issuance Vote and the Required Regis Charter Vote, respectively. This Agreement has been, and the Transaction Agreements with respect to which Regis is contemplated thereby to be a party will be, duly executed and delivered by Regis and, assuming the due authorization and valid execution and delivery of this Agreement or the applicable Transaction Agreement with respect to which Regis is contemplated thereby to be a party by the other parties hereto and thereto, as applicable, constitutes or will constitute a valid and binding agreement of Regis, enforceable against Regis in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar Applicable Laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

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(ii) Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Merger Sub and the consummation by Merger Sub of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Merger Sub subject to further action by Regis as the sole stockholder of Merger Sub to adopt this Agreement and approve the Merger. The Board of Directors of Merger Sub has approved this Agreement and the Merger and resolved to recommend this Agreement and the Merger to its sole stockholder for approval. This Agreement has been duly executed and delivered by Merger Sub and, assuming the due authorization and valid execution and delivery of this Agreement by the other parties hereto, constitutes a valid and binding agreement of Merger Sub, enforceable against Merger Sub in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar Applicable Laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(iii) Subco has all requisite limited liability company power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Subco and the consummation by Subco of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action on the part of Subco. Regis, as the sole member of Subco, has approved this Agreement, the Merger and the Subsequent Merger. This Agreement has been duly executed and delivered by Subco and, assuming the due authorization and valid execution and delivery of this Agreement by the other parties hereto, constitutes a valid and binding agreement of Subco, enforceable against Subco in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar Applicable Laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(iv) The execution and delivery of this Agreement by Regis, Merger Sub and Subco does not, the execution and delivery by Regis of the Transaction Agreements with respect to which Regis is contemplated thereby to be a party will not, and the consummation by Merger Sub of the Merger and the consummation by Regis, Merger Sub and Subco of the other transactions contemplated hereby and thereby will not, conflict with, or result in any breach or violation of, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to a right of or result by its terms in the termination, amendment, cancellation or acceleration of any obligation or the loss of a benefit under, or the creation of a Lien, charge, “put” or “call” right or other encumbrance on, or the loss of, any assets (any such conflict, breach, violation, default, right of termination, amendment, cancellation or acceleration, loss or creation, a “Violation”) (with or without notice or lapse of time, or both) under: (A) any provision of the Articles of Incorporation or By-laws or similar organizational documents of Regis, Merger Sub, Subco or any Significant Subsidiary of Regis or (B) except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect

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on Regis, subject to obtaining or making the Regis Necessary Consents, (1) any loan or credit agreement, note, instrument, mortgage, bond, indenture real estate or other lease or sublease, benefit plan, license, sublicense, memorandum of understanding, sales order, purchase order, open bid or other contract, agreement or obligation, in each case, including all amendments, modifications and supplements thereto and waivers and consents thereunder (a “Contract”) to which Regis or any of its Subsidiaries is a party or by which any of them or any of their respective properties or assets is bound or (2) any permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Regis or any Subsidiary of Regis or their respective properties or assets.

(v) The execution, delivery and performance by Merger Sub of this Agreement and the consummation by Merger Sub of the transactions contemplated hereby will not contravene or conflict with the Certificate of Incorporation or By-laws of Merger Sub. The execution, delivery and performance by Subco of this Agreement and the consummation by Subco of the transactions contemplated hereby will not contravene or conflict with the Certificate of Formation or other governing documents (if any) of Subco.

(vi) No consent, approval, order or authorization of, or registration, declaration or filing with, any supranational, national, federal, state, municipal, local or foreign government, any instrumentality, subdivision, court, administrative agency, board, commission or other authority thereof, any arbitral tribunal, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority (a “Governmental Entity”) or any other Person is required to be obtained or made by or with respect to Regis or any Subsidiary of Regis in connection with the execution and delivery of this Agreement and the Transaction Agreements with respect to which Regis is contemplated thereby to be a party by Regis, Merger Sub or Subco or the consummation by Regis, Merger Sub and Subco of the Merger and the other transactions contemplated hereby and thereby, except for those required under or in relation to (A) the Required Regis Votes, (B) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (C) state securities or “blue sky” laws, (D) the Securities Act, (E) the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (F) the DGCL with respect to the filing of the Certificate of Merger and the certificate of merger with respect to the Subsequent Merger with the Delaware Secretary of State, (G) the Minnesota Business Corporation Act with respect to the filing of the Regis Charter Amendment with the Minnesota Secretary of State, (H) the rules and regulations of the NYSE, (I) antitrust or other competition laws of other jurisdictions and (J) such consents, approvals, orders, authorizations, registrations, declarations and filings the failure of which to make or obtain, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis. Consents, approvals, orders, authorizations, registrations, declarations and filings required under or in relation to any of the foregoing clauses (A) through (I) or set forth in Section 5.1(c)(vi) of the Regis Disclosure Schedule are hereinafter referred to as the “Regis Necessary Consents”.

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(d) Reports and Financial Statements.

(i) Regis has timely filed all registration statements, prospectuses, reports, schedules, forms, statements and other documents required to be filed by it with the SEC since July 1, 2003 (collectively, including all exhibits thereto, the “Regis SEC Reports”). No Subsidiary of Regis is required to file any form, report, registration statement, prospectus or other document with the SEC. Each of the Regis SEC Reports, at the time it was filed (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing), complied in all material respects with the requirements of the Securities Act, the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes Act”) and the NYSE and the rules and regulations promulgated thereunder, as applicable, and none of such Regis SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Regis Filed SEC Reports contain the audited consolidated balance sheet of Regis and its Subsidiaries as of June 30, 2005 and 2004, and the related audited consolidated statements of income, cash flows and shareholders’ equity for the fiscal years ended June 30, 2005 and 2004 (such statements, together with the notes thereto, the “Regis Financial Statements”). Each of the Regis Financial Statements and each of the other financial statements (including the related notes) included in the Regis SEC Reports fairly presents, in all material respects, the consolidated financial position and consolidated results of operations and cash flows of Regis and its consolidated Subsidiaries as of the respective dates or for the respective periods set forth therein, all in conformity with generally accepted accounting principles (“GAAP”) consistently applied during the periods involved except as otherwise noted therein, and subject, in the case of unaudited interim financial statements, to normal and recurring year-end adjustments. All Regis SEC Reports, as of their respective filing dates (and as of the date of any amendment to the respective Regis SEC Report), complied as to form in all material respects to the extent in effect at the time of filing, with the applicable requirements of the Securities Act, the Exchange Act, the Sarbanes Act and the NYSE and the rules and regulations promulgated thereunder.

(ii) Except as disclosed in the Regis SEC Reports filed after July 1, 2003 and publicly available prior to the date hereof (the “Regis Filed SEC Reports”) or in the Regis Financial Statements, since July 1, 2005, Regis and its Subsidiaries have not incurred any liabilities that are of a nature that would be required to be disclosed on a consolidated balance sheet of Regis and its Subsidiaries or in the footnotes thereto prepared in conformity with GAAP, other than liabilities incurred in the ordinary course of business or that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis.

(iii) Each of the principal executive officer of Regis and the principal financial officer of Regis (or each former principal executive officer of Regis and each former principal financial officer of Regis, as applicable) has made all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes Act with respect to the Regis SEC Reports and the statements contained in such certifications are true, complete and correct. For purposes of this Section 5.1(d), “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes Act.

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(iv) Regis and its Subsidiaries have designed and maintain a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Regis (A) has designed and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information required to be disclosed by Regis in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to Regis’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the principal executive officer and principal financial officer of Regis required under the Exchange Act with respect to such reports and (B) has disclosed, based on its most recent evaluation of such disclosure controls and procedures prior to the date hereof to Regis’s auditors and the audit committee of Regis’s Board of Directors (x) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect in any material respect Regis’s ability to record, process, summarize and report financial information and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in Regis’s internal controls over financial reporting. Regis has delivered to Alberto-Culver and Spinco any such disclosure made by management to Regis’s auditors and the audit committee of Regis’s Board of Directors.

(e) Information Supplied.

(i) None of the information supplied or to be supplied by Regis specifically for inclusion or incorporation by reference in (A) the Form S-4 will, at the time the Form S-4 is filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (B) the Joint Proxy Statement/Prospectus will, on the date it is first mailed to Regis shareholders or Alberto-Culver stockholders or at the time of the Regis Shareholders Meeting or the Alberto-Culver Stockholders Meeting, respectively, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(ii) Notwithstanding the foregoing provisions of this Section 5.1(e), no representation or warranty is made by Regis, Merger Sub or Subco with respect to statements made or incorporated by reference in the Form S-4 or the Joint Proxy Statement/Prospectus based on information supplied by or on behalf of Alberto-Culver or Spinco for inclusion or incorporation by reference therein.

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(f) Board Approval. The Board of Directors of Regis, by resolutions duly adopted at a meeting duly called and held and, other than as provided for in Section 7.5(a)(iv), not subsequently rescinded or modified in any way, has duly (i) determined that this Agreement, the Merger, the Regis Share Issuance and the Regis Charter Amendment are advisable and in the best interests of Regis and its shareholders, (ii) approved this Agreement, the Merger, the Regis Share Issuance and the Regis Charter Amendment and (iii) resolved to recommend that the shareholders of Regis (A) approve the Regis Share Issuance and (B) approve the Regis Charter Amendment and directed that the Regis Share Issuance and the Regis Charter Amendment be submitted for consideration by Regis’s shareholders at the Regis Shareholders Meeting. No “fair price”, “moratorium”, “control share acquisition” or other form of anti-takeover statute or regulation under Minnesota law or any anti-takeover provision in the Articles of Incorporation of Regis, By-laws of Regis or other similar organizational documents of Regis is, or at the Effective Time will be, applicable to the Merger, the Subsequent Merger or the other transactions contemplated hereby or by the Transaction Agreements.

(g) Votes Required. The only votes of the holders of capital stock or other securities of Regis necessary in connection with the Regis Share Issuance, the Regis Charter Amendment, the Merger, the Subsequent Merger and the other transactions contemplated by this Agreement (the “Required Regis Votes”) are the affirmative vote of holders of (i) a majority of the shares of Regis Common Stock represented at the Regis Shareholders Meeting and entitled to vote (provided that a majority of the shares of Regis Common Stock entitled to vote are represented in person or by proxy at such meeting) to approve the Regis Share Issuance (the “Required Regis Share Issuance Vote”) and (ii) a majority of the shares of Regis Common Stock represented at the Regis Shareholders Meeting and entitled to vote (provided that a majority of the shares of Regis Common Stock entitled to vote are represented in person or by proxy at such meeting) to approve the Regis Charter Amendment (the “Required Regis Charter Vote”).

(h) Litigation; Compliance with Laws.

(i) Except as set forth in the Regis Filed SEC Reports or in the Regis Financial Statements, there is no suit, action, arbitration, proceeding, claim, charge, regulatory or accrediting agency investigation or other proceeding (an “Action”) pending or, to the Knowledge of Regis, threatened against Regis or any Subsidiary of Regis or any property or asset of Regis or any Subsidiary of Regis which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Regis, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against Regis or any Subsidiary of Regis which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Regis.

(ii) Except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis, Regis and its Subsidiaries hold all permits, licenses, franchises, variances, exemptions, orders and approvals of all Governmental Entities which are necessary for the operation of the businesses of Regis and its Subsidiaries, taken as a whole (the “Regis Permits”), and no suspension or cancellation of any of the Regis Permits is pending or, to the Knowledge of Regis, threatened, except for suspensions or cancellations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis.

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Regis and its Subsidiaries are in compliance with the terms of the Regis Permits, except where the failure to so comply, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis. None of Regis or any of its Subsidiaries is in violation of, and Regis and its Subsidiaries have not received since July 1, 2003 any written notices of violations with respect to, any Applicable Laws, except for violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis.

(i) Absence of Certain Changes or Events. Except (i) as specifically contemplated or permitted by this Agreement, (ii) as set forth in the Regis Filed SEC Reports or in the Regis Financial Statements or (iii) for changes resulting from the announcement of this Agreement or the transactions contemplated hereby, since July 1, 2005 through the date hereof, (A) Regis and its Subsidiaries have conducted their business only in the ordinary course, consistent with past practice, and (B) there has not been any event, change, circumstance or development (including any damage, destruction or loss whether or not covered by insurance) which, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect on Regis. Since July 1, 2005 through the date of this Agreement, except as set forth in the Regis Filed SEC Reports, none of Regis or any of its Subsidiaries has taken any action that, if taken during the period from the date of this Agreement through the Effective Time, would constitute a breach of Section 6.1 (other than a breach of Section 6.1(c) or (f) (solely with respect to transactions between Regis and a wholly owned Subsidiary of Regis or two wholly owned Subsidiaries of Regis)). Merger Sub has not conducted any activities other than in connection with the organization of Merger Sub on January 5, 2006, the negotiation, execution and performance of this Agreement and the consummation of the transactions contemplated hereby. Subco has not conducted any activities other than in connection with the organization of Subco on January 5, 2006, the negotiation, execution and performance of this Agreement and the consummation of the transactions contemplated hereby. Since July 1, 2003 and prior to the date of this Agreement, to the Knowledge of Regis, Regis and its Subsidiaries have not engaged in any Diversion. Since July 1, 2003 through the date hereof, no supplier of any material quantity of professional beauty products to Regis and its Subsidiaries has cancelled, terminated or materially and adversely modified its supply relationship with Regis and its Subsidiaries.

(j) Environmental Matters. Except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis, (i) the operations of Regis and its Subsidiaries have been and are in compliance with all applicable Environmental Laws and with all Regis Permits required by applicable Environmental Laws, (ii) there are no pending or, to the Knowledge of Regis, threatened, Actions under or pursuant to Environmental Laws against Regis, its Subsidiaries, or, to the Knowledge of Regis, any other Person whose Environmental Liabilities Regis or any of its Subsidiaries has or may have retained or assumed by contract or operation of law, or involving any real property currently or, to the Knowledge of Regis, formerly owned, operated or leased by Regis or its Subsidiaries, and (iii) Regis, its Subsidiaries and, to the Knowledge of Regis, Persons whose Environmental Liabilities Regis or any of its Subsidiaries has or may have retained or assumed by contract or operation of law are not subject to any Environmental Liabilities, and, to the Knowledge of Regis, there are no facts, circumstances or conditions (including the presence, release or threatened release of Hazardous Materials at any location whether or not owned or operated by Regis or its Subsidiaries) which

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would reasonably be expected to result in Environmental Liabilities for Regis, its Subsidiaries, or, to the Knowledge of Regis, any other Person whose Environmental Liabilities Regis or any of its Subsidiaries has or may have retained or assumed by contract or operation of law. The representations and warranties in this Section 5.1(j) constitute the sole representations and warranties of Regis concerning environmental matters in this Agreement.

As used in this Agreement, “Environmental Laws” means any and all foreign, federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decisions, injunctions, orders, decrees, requirements of any Governmental Entity, any and all common law requirements, rules and bases of liability regulating, relating to or imposing liability or standards of conduct, in each case, concerning pollution, Hazardous Materials (as defined below) or protection of human health or the environment, and includes the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Clean Water Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 33 U.S.C. Section 2601 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq. (but solely as it relates to the exposure of Hazardous Materials) and the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq., as such laws have been amended or supplemented, and the regulations promulgated pursuant thereto, and all analogous state or local statutes. As used in this Agreement, “Environmental Liabilities” with respect to any Person means any and all liabilities of or relating to such Person or any of its Subsidiaries (including any entity which is, in whole or in part, a predecessor of such Person or any of such Subsidiaries), whether vested or unvested, contingent or fixed, actual or potential, known or unknown, which (i) arise under or relate to matters covered or regulated by, or for which liability is imposed under, Environmental Laws and (ii) relate to actions occurring or conditions existing on or prior to the Closing Date. As used in this Agreement, “Hazardous Materials” means all substances defined in, regulated under or for which liability is imposed by Environmental Laws, including Hazardous Substances, Oils, Pollutants or Contaminants as defined in the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. § 300.5., asbestos, mold, polychlorinated biphenyls and radioactive materials.

(k) Intellectual Property. Except as set forth in the Regis Filed SEC Reports and except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Regis: (i) Regis and each of its Subsidiaries own, or are licensed to use, all Intellectual Property used in the conduct of their business as currently conducted; (ii) to the Knowledge of Regis, all Intellectual Property owned by and/or licensed to Regis and its Subsidiaries is valid and enforceable and the use of any Intellectual Property by Regis and its Subsidiaries does not infringe upon, misappropriate or otherwise violate the Intellectual Property rights of any Person; (iii) the use by Regis and its Subsidiaries of Intellectual Property which is licensed to Regis or any Subsidiary is in substantial accordance with the terms of the applicable license agreement pursuant to which Regis or its Subsidiaries acquired the right to use such Intellectual Property; (iv) to the Knowledge of Regis, no Person is infringing, misappropriating or otherwise violating any right of Regis or any of its Subsidiaries with respect to any Intellectual Property owned by and/or exclusively licensed to Regis or its Subsidiaries; (v) there is no claim or proceeding pending or, to the Knowledge of Regis, threatened against Regis or any Subsidiary challenging their respective use of Intellectual Property; and (vi) no Intellectual Property owned

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by and/or licensed to Regis or its Subsidiaries is being used by or enforced by Regis or any Subsidiary in a manner that would reasonably be expected to result in the abandonment, cancellation or unenforceability of such Intellectual Property. For purposes of this Agreement, “Intellectual Property” shall mean all intellectual property rights of any nature or forms of protection of a similar nature, including all trademarks, service marks, trade names, certification marks, trade dress and other indications of origin, the goodwill connected with or symbolized by the foregoing, and registrations in any jurisdiction of, and applications in any jurisdiction to register, any of the foregoing, including any extension, modification or renewal of any such registration or application; Internet domain names and the registrations therefor; inventions and discoveries, whether patentable or not, in any jurisdiction; patents, including divisions, continuations and continuations in part, and any reissues or reexaminations thereof, applications for patents and rights to apply for any of the foregoing, in any jurisdiction; tangible and intangible proprietary information and materials, trade secrets, know-how, technology and confidential information to the extent that rights exist in any jurisdiction to limit the use or disclosure thereof by any Person; writings and other works of authorship that are protected by copyright in any jurisdiction (including computer software and databases); registrations and applications for registration of copyrights in any jurisdiction, and any renewals or extensions thereof; maskworks; and any similar intellectual property or proprietary rights.

(l) Title to Properties. Each of Regis and its Subsidiaries has good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of its tangible properties and assets, except where the failure to have such good and valid title, or valid leasehold interest, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Regis.

(m) Opinion of Regis Financial Advisor. Regis has received the opinion of Peter J. Solomon Company, dated January 9, 2006, to the effect that, as of such date, the Exchange Ratio is fair, from a financial point of view, to Regis.

(n) Taxes.

(i) All Tax Returns required to be filed with respect to each of Regis and its Subsidiaries have been timely filed, or requests for extensions to file such Tax Returns have been timely filed, granted and have not expired, and all such Tax Returns are complete and correct, except to the extent that such failures to file, to have extensions granted that remain in effect or to be complete or correct, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis. All material Taxes due with respect to Regis and its Subsidiaries have been paid or accrued. Since the date of the most recent Regis Filed SEC Reports, no Tax liability with respect to Regis and its Subsidiaries has been incurred outside the ordinary course of business or otherwise inconsistent with past custom and practice.

(ii) No deficiencies for any Taxes have been proposed, asserted or assessed in writing in respect of or against Regis or any of its Subsidiaries that are not adequately reserved for on the books of Regis, except for deficiencies that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis. The applicable statutes of limitations have expired for all Tax periods through

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2001 for the federal income Tax Returns of Regis and each of its Subsidiaries consolidated in such Tax Returns. Since July 1, 2000, no written claim has been made to Regis or any of its Subsidiaries by a Governmental Entity in a jurisdiction where Regis or any of its Subsidiaries does not file a Tax Return that any of Regis or its Subsidiaries is or may be subject to a material Tax liability in that jurisdiction.

(iii) None of Regis or any of its Subsidiaries has taken any action, and Regis has no Knowledge of any fact, agreement, plan or other circumstance, that is reasonably likely to prevent the Merger and the Subsequent Merger, taken together, from qualifying as a reorganization within the meaning of Section 368(a) of the Code. To the Knowledge of Regis, the representations set forth in the Regis Tax Certificate, if made on the date hereof (assuming the Distribution and the Merger and the Subsequent Merger, taken together, were consummated on the date hereof and based on reasonable estimates in the case of certain information not available on the date hereof), would be true and correct in all material respects.

(iv) None of Regis or any of its Subsidiaries is a party to any Tax sharing or Tax indemnity agreements entered into after July 1, 2000 (other than agreements between or among Regis and its Subsidiaries) that could reasonably be expected to result in a material Tax liability to Regis or any of its Subsidiaries.

(v) Within the past five years, none of Regis or any of its Subsidiaries has been a “distributing corporation” or a “controlled corporation” in a distribution intended to qualify under Section 355(a) of the Code.

(vi) None of Regis or any of its Subsidiaries is obligated to make any payments, or is a party to any Contract or Regis Plan that could obligate it to make any payments, that would not be deductible by reason of Section 162(m) or Section 280G of the Code.

(vii) None of Regis or any of its Subsidiaries has agreed to make, or is required to make, any material adjustment affecting any open taxable year or period under Section 481(a) of the Code or any similar provision of state, local or foreign law by reason of a change in accounting methods or otherwise.

(viii) Since July 1, 2000, none of Regis or any of its Subsidiaries has been required to reallocate, or is subject to an IRS or other Governmental Entity challenge that would require the reallocation of, gross income, deductions, credits or allowances, or of any item or element affecting taxable income, by reason of Section 482 of the Code.

(ix) Neither Regis nor any of its Subsidiaries has any material liability under Treasury Regulations Section 1.1502-6 (or any comparable or similar provision of federal, state, local or foreign Applicable Laws), as a transferee or successor, pursuant to any contractual obligation, or otherwise for any Taxes of any person other than Regis or any of its Subsidiaries.

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(x) Neither Regis nor any of its Subsidiaries has engaged in a “reportable transaction,” as set forth in Treasury Regulation Section 1.6011-4(b) (not including Treasury Regulation Section 1.6011-4(b)(6)), or any transaction that is the same as or substantially similar to one of the types of transactions the IRS has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a “listed transaction,” as set forth in Treasury Regulation Section 1.6011-4(b)(2).

(o) Certain Contracts. Except as filed as exhibits to the Regis Filed SEC Documents, as of the date hereof, neither Regis nor any of its Subsidiaries is a party to or bound by any Contract that (i) is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC) (other than such Contracts that are compensatory Contracts with or with respect to officers, directors or employees of Regis), (ii) materially limits or otherwise materially restricts Regis or any of its Subsidiaries or that would, after the Effective Time, to the Knowledge of Regis, materially limit or otherwise materially restrict Spinco or any of its Subsidiaries (including the Surviving Corporation and its Subsidiaries) or any successor thereto, from engaging or competing in any material line of business in any geographic area or that contains exclusivity or non-solicitation provisions with respect to customers or suppliers, (iii) limits the ability of Regis or any of its Subsidiaries to incur indebtedness or pay dividends, (iv) requires aggregate payments by Regis or any of its Subsidiaries in excess of $10,000,000 and is not terminable within one year without penalty, (v) guarantees the material obligations of any Person (other than any Subsidiary of Regis), (vi) relates to the settlement of any litigation or dispute and materially restricts the operations of Regis and its Subsidiaries, taken as a whole, (vii) is a loan agreement, credit agreement, note, bond, mortgage, indenture or other agreement or instrument pursuant to which any indebtedness of Regis or any of its Subsidiaries in an aggregate principal amount in excess of $10,000,000 is outstanding or may be incurred or (viii) is a distribution or supply agreement with respect to beauty products pursuant to which payments in excess of $10,000,000 have been made in the previous fiscal year. Each Contract of the type described in this Section 5.1(o) is referred to herein as a “Regis Material Contract.” Neither Regis nor any of its Subsidiaries has Knowledge of, or has received notice of, any violation of or default under (or any condition which with the passage of time or the giving of notice would cause such a violation of or default under) any Regis Material Contract or any other Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Regis. As of the date of this Agreement, neither Regis nor any of its Subsidiaries is a party to any standstill or similar agreement with any Person which relates to any transaction that could constitute a Regis Takeover Proposal.

(p) Employee Benefits.

(i) Section 5.1(p)(i) of the Regis Disclosure Schedule contains a true and complete list of each material Regis Plan. With respect to each material Regis Plan, Regis has made available to Alberto-Culver and Spinco a true, correct and complete copy of: (A) all plan documents, trust agreements, and insurance contracts and other funding vehicles; (B) the two most recent Annual Reports (Form 5500 Series) and accompanying schedules and exhibits, if any; (C) the current summary plan description and any material modifications thereto, if any (in each case, whether or not required to be furnished under

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ERISA); (D) the two most recent annual financial reports, if any; (E) the two most recent actuarial reports, if any; and (F) the most recent determination letter from the Internal Revenue Service (the “IRS”), if any.

(ii) With respect to each Regis Plan, Regis and its ERISA Affiliates and other Subsidiaries have complied with, and are now in compliance with, to the extent applicable, all material provisions of ERISA, the Code and all other Applicable Laws and regulations. Each Regis Plan has been operated and administered, in all material respects, in accordance with its terms. Except as set forth in Section 5.1(p)(ii) of the Regis Disclosure Schedule, no Regis Plan is (or was, during the past six years) subject to Title IV or Section 302 of ERISA. No liability under Title IV or Section 302 of ERISA has been incurred by Regis or any of its ERISA Affiliates and other Subsidiaries that has not been satisfied in full, and no condition exists that presents a material risk to Regis or any of its ERISA Affiliates and other Subsidiaries of incurring any such liability, other than liability for premiums due the Pension Benefit Guaranty Corporation. All premiums due the Pension Benefit Guaranty Corporation have been fully paid on a timely basis. No Regis Plan provides for post-employment welfare benefits, except as required under Applicable Laws and specified in Section 5.1(p)(ii) of the Regis Disclosure Schedule. All Regis Plans subject to the Applicable Laws of any jurisdiction outside of the United States (1) have been maintained in accordance with all applicable requirements, (2) if they are intended to qualify for special Tax treatment meet all requirements for such treatment, and (3) if they are intended to be funded and/or book-reserved are fully funded and/or book-reserved, as appropriate, based upon reasonable actuarial assumptions.

(iii) As of the date hereof, each Regis Plan that is intended to be “qualified” within the meaning of Section 401(a) of the Code, and the trust maintained pursuant thereto, has been determined to be so qualified and exempt from federal income Taxation under Section 501 of the Code by the Internal Revenue Service, and to the Knowledge of Regis, nothing has occurred with respect to the operation of any such Regis Plan that would reasonably be expected to cause the loss of such qualification of exemption from Tax.

(iv) As of the date hereof, none of Regis or any of its Subsidiaries has any liability under or obligation to any Multiemployer Plan and no Regis Plan is a Multiemployer Plan. The Regis Plans provide benefits only to employees and former employees of Regis and its Subsidiaries.

(v) The consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (A) entitle any current or former employee, director or officer of Regis or any of its Subsidiaries to severance pay, unemployment compensation or any other payment or (B) accelerate the time of payment or vesting of benefits, or materially increase the amount of compensation, due any such employee, director or officer.

(vi) Regis and each of the persons listed in Section 5.1(p)(vi) of the Regis Disclosure Schedule have entered into an amendment agreement substantially in the form set forth in Section 5.1(p)(vi) of the Regis Disclosure Schedule. All such agreements have been duly authorized, executed and delivered and are in full force and effect, unamended.

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(q) Labor Relations. As of the date of this Agreement: (i) none of Regis or any of its Subsidiaries is a party to any collective bargaining agreement, work rules or practices, or any other labor-related agreements or arrangements with any labor union, labor organization or works council; there are no labor agreements, collective bargaining agreements, work rules or practices, or any other labor-related agreements or arrangements that pertain to any of the employees of Regis or any of its Subsidiaries; and no employees of Regis or any of its Subsidiaries are represented by any labor organization with respect to their employment with Regis or any of its Subsidiaries; (ii) no labor organization or group of employees of Regis or any of its Subsidiaries has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or, to the Knowledge of Regis, threatened to be brought or filed, with the National Labor Relations Board or any other domestic or foreign labor relations tribunal or authority, and to the Knowledge of Regis, there are no labor union organizing activities with respect to any employees of Regis or any of its Subsidiaries and (iii) since July 1, 2003, there have been no actual, or to the Knowledge of Regis, threatened strikes, work stoppages, slowdowns, lockouts, arbitrations, grievances or other labor disputes against or involving Regis or any of its Subsidiaries.

(r) Insurance. Regis maintains insurance coverage with reputable insurers in such amounts and covering such risks as are in accordance with normal industry practice for companies engaged in businesses similar to that of Regis (taking into account the cost and availability of such insurance).

(s) Liens. No Liens exist on any assets of Regis or any of its Subsidiaries, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Regis.

(t) Franchisees.

(i) Regis has provided to Alberto-Culver a true, correct and complete list of all states in the United States and countries or jurisdictions in which Persons (“Regis Franchisees”) to whom Regis or any of its Subsidiaries have sold a “franchise” or “business opportunity” under the “Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures” rules of the Federal Trade Commission (the “FTC”) or any other Applicable Laws that govern the offer and sale of “franchises” or “business opportunities” are located.

(ii) Regis has delivered to Alberto-Culver true, correct and complete copies of Regis’s and its Subsidiaries’ Uniform Franchise Offering Circulars and any other international disclosure documents (“Regis UFOCs”), which are currently being used in connection with the offers to sell and the sales of its franchises. The Regis UFOCs currently used by Regis and its Subsidiaries and any other offering circulars previously used by Regis and its Subsidiaries do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in

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order to make the statements therein, in light of the circumstances under which they were made, not misleading, except for such untrue statements or omissions that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Regis. Regis and its Subsidiaries are in compliance with all Applicable Laws (including, in the United States, the Uniform Franchise Offering Circular Guidelines adopted by the North American Securities Administrators Association) relating to the offer and sale of Regis Franchises and the relationship between Regis and its Subsidiaries and their respective franchisees, except where the failure to so comply, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Regis.

(iii) The franchise agreements and other agreements of Regis and its Subsidiaries granting rights to a Regis Franchisee do not obligate Regis or any of its Subsidiaries to buy back or otherwise acquire any amount of stock, assets or contractual rights of the Regis Franchisee, where such amounts would, individually or in the aggregate, be material to Regis and its Subsidiaries, taken as a whole. Regis and its Subsidiaries do not (1) guaranty any obligations of any Regis Franchisee that, individually or in the aggregate with such other guaranties, are material to Regis and its Subsidiaries, taken as a whole, or (2) have any Contracts to lend or advance money to a Regis Franchisee that, individually or in the aggregate with such other Contracts, are material to Regis and its Subsidiaries, taken as a whole. Regis has delivered to Alberto-Culver a true, correct and complete copy of the current form or forms of franchise agreement currently used by Regis and its Subsidiaries.

(u) Education Regulatory Compliance.

(i) Section 5.1(u)(i) of the Regis Disclosure Schedule sets forth a true, correct and complete list of each “Institution” (as such term is defined by the U.S. Department of Education (the “DOE”)) and identifies main campuses and other teaching locations with respect thereto (each, an “Institution”). Regis has made available to Alberto-Culver a true, correct and complete copy of each Institution’s current program participation agreement and eligibility and certification approval report issued by the DOE, as well as a true, correct and complete copy of the Application for Approval to Participate in the Federal Student Financial Aid Programs as filed with the DOE at the time such Institution was acquired by Regis or a Subsidiary of Regis.

(ii) Each Institution is certified by the DOE to participate in the federal student loan financial assistance programs authorized under Title IV of the Higher Education Act of 1965, is an eligible proprietary institution pursuant to 20 U.S.C. §1002 and 34 C.F.R. §600.5, and is a party to, and in compliance with, a valid program participation agreement with the DOE, except for such failures to be so certified or eligible, or to be such a party to, or to be in such compliance that would not individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Regis. As of the date hereof, no Institution, or any location thereof, is required to file or maintain a material letter of credit or similar form of surety with the DOE or any accrediting agency or state education authorizing agency.

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(v) Regis Rights Agreement. Regis has amended the Regis Rights Agreement to provide that none of the execution and delivery of this Agreement, the Transaction Agreements and the consummation of the Merger, the Subsequent Merger and the other transactions contemplated by this Agreement and the Transaction Agreements will cause (i) the Regis Rights to become exercisable under the Regis Rights Agreement, (ii) Alberto-Culver, Spinco or any of their respective Affiliates or Associates (each as defined in the Regis Rights Agreement) to be deemed an “Acquiring Person” (as defined in the Regis Rights Agreement) or (iii) the “Shares Acquisition Date” or the “Distribution Date” (each as defined in the Regis Rights Agreement) to occur. Such amendment to the Regis Rights Plan is attached to Section 5.1(v) of the Regis Disclosure Schedule.

(w) Brokers or Finders. No agent, broker, investment banker, financial advisor or other firm or Person is or will be entitled to any broker’s or finder’s fee or any other similar commission or fee in connection with any of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Regis or any of its Subsidiaries, except Peter J. Solomon Company, whose fees and expenses will be paid by Regis.

SECTION 5.2 Representations and Warranties of Alberto-Culver. Except as set forth in the Alberto-Culver Disclosure Schedule delivered to Regis prior to the execution of this Agreement (the “Alberto-Culver Disclosure Schedule”) (each section of which, to the extent specified therein, qualifies the correspondingly numbered representation and warranty of Alberto-Culver herein and any disclosure in such section qualifies any other representation and warranty of Alberto-Culver or Spinco contained herein to which its application or relevance is reasonably apparent on its face), Alberto-Culver represents and warrants to Regis as of the date hereof and as of the Closing Date (except to the extent that such representations and warranties speak as of another date or dates in which case, as of such other date or dates) as follows:

(a) Organization. Alberto-Culver is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Each of Alberto-Culver and the Alberto-Culver Subsidiaries is duly qualified and in good standing under the laws of its jurisdiction of incorporation or organization, and each of Alberto-Culver and the Alberto-Culver Subsidiaries has the requisite power and authority to do business in each jurisdiction in which the property owned, leased or operated by the Spinco Business or the nature of the Spinco Business makes such qualification necessary, other than in such jurisdictions where the failure to so qualify or to be in good standing, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco. True, correct and complete copies of the Certificate of Incorporation and By-laws of Alberto-Culver in effect on the date hereof are attached to Section 5.2(a) of the Alberto-Culver Disclosure Schedule.

(b) Capital Structure.

(i) (A) The authorized capital stock of Alberto-Culver consists of 300,000,000 shares of Alberto-Culver Common Stock. As of the close of business on January 6, 2006, 92,135,473 shares of Alberto-Culver Common Stock were issued and outstanding, including 220,332 shares of restricted Alberto-Culver Common Stock (“Alberto-Culver Restricted Stock”) issued under the Alberto-Culver 2003 Restricted Stock Plan or the Alberto-Culver 1994 Restricted Stock Plan (collectively, the “Alberto-Culver

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Restricted Stock Plans”) and the Alberto-Culver Management Bonus Plan. As of the close of business on January 6, 2006, 6,334,814 shares of Alberto-Culver Common Stock were held in treasury by Alberto-Culver.

(B) As of the close of business on January 6, 2006, (1) 7,874,552 shares of Alberto-Culver Common Stock were available for issuance upon exercise of outstanding options to purchase Alberto-Culver Common Stock (“Alberto-Culver Stock Options”) under the Alberto-Culver Employee Stock Option Plan of 2003, the Alberto-Culver 2003 Stock Option Plan for Non-Employee Directors, the Alberto-Culver 1994 Stock Option Plan for Non-Employee Directors and the Alberto-Culver Employee Stock Option Plan of 1988 (together with the Alberto-Culver Restricted Stock Plans, the “Alberto-Culver Option Plans”), (2) 3,745,107 shares of Alberto-Culver Common Stock were available for additional grants under the Alberto-Culver Option Plans and (3) 652,339 shares of Alberto-Culver Common Stock were available under registration statements declared effective under the Securities Act for the Alberto-Culver 1994 Shareholder Value Incentive Plan, the Alberto-Culver Management Bonus Plan, the Alberto-Culver Management Incentive Plan and the Alberto-Culver Deferred Compensation Plan for Non-Employee Directors (together with the Alberto-Culver Option Plans, the “Alberto-Culver Stock Plans”).

(ii) As of the close of business on January 6, 2006, except as set forth in clause (i), there are no shares of Alberto-Culver Common Stock issued, available, reserved for issuance or outstanding and, except as set forth in the Alberto-Culver Stock Plans, there are not any contractual rights the value of which is determined in whole or in part by the value of the capital stock of Alberto-Culver. Other than the Alberto-Culver Stock Plans there are no Contracts, plans or arrangements that provide for the issuance, award or granting of (A) capital stock, options, warrants or other rights to acquire capital stock of Alberto-Culver or (B) stock appreciation rights or other contractual rights, the value of which is determined in whole or in part by the value of the capital stock of Alberto-Culver. Since January 6, 2006 to the date of this Agreement, no shares of capital stock of Alberto-Culver or any other securities of Alberto-Culver have been issued other than shares of Alberto-Culver Common Stock issued pursuant to options or rights outstanding as of January 6, 2006 under the Alberto-Culver Stock Plans. All issued and outstanding shares of capital stock of Alberto-Culver are duly authorized, validly issued, fully paid and nonassessable, and no class of capital stock of Alberto-Culver is entitled to preemptive rights. There are outstanding as of the date hereof, and there will be outstanding at the Effective Time, no options, warrants or other rights to acquire capital stock of Alberto-Culver other than under the Alberto-Culver Stock Plans. Section 5.2(b)(ii) of the Alberto-Culver Disclosure Schedule sets forth a true, correct and complete list as of a recent date of all outstanding Alberto-Culver Stock Options and the exercise prices thereof held by a Spinco Employee.

(iii) No bonds, debentures, notes or other indebtedness of Alberto-Culver having the right to vote (or convertible into or exchangeable for securities having the right to vote) on any matters on which stockholders of Alberto-Culver may vote (“Alberto-Culver Voting Debt”) are issued or outstanding.

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(iv) Except as otherwise set forth in this Section 5.2(b), as of the date of this Agreement, there are no, and as of the Effective Time (except as permitted pursuant to Section 6.2) there will not be any, securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Alberto-Culver or any of its Subsidiaries is a party or by which any of them is bound obligating Alberto-Culver or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of Alberto-Culver or any of its Subsidiaries, Alberto-Culver Voting Debt, Alberto-Culver Common Stock or other voting securities of Alberto-Culver or any of its Subsidiaries or obligating Alberto-Culver or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Except as provided under the Alberto-Culver Stock Plans, as of the date of this Agreement, there are no, and as of the Effective Time (except as permitted pursuant to Section 6.2) there will not be any, outstanding obligations of Alberto-Culver or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Alberto-Culver or any of its Subsidiaries.

(v) There are no stockholder agreements, voting trusts or other Contracts to which Alberto-Culver is a party or by which it is bound relating to the voting or transfer of any shares of capital stock of Alberto-Culver.

(c) Authority; No Conflicts.

(i) Alberto-Culver has all requisite corporate power and authority to enter into this Agreement and the Transaction Agreements with respect to which Alberto-Culver is contemplated thereby to be a party and to consummate the transactions contemplated hereby and thereby, subject to the further action of the Board of Directors of Alberto-Culver to establish the Alberto-Culver Record Date and the Distribution Date and provided that the effectiveness of the declaration of the Distribution by the Board of Directors of Alberto-Culver is subject to the satisfaction of the conditions set forth in the Separation Agreement. The execution and delivery of this Agreement and the Transaction Agreements with respect to which Alberto-Culver is contemplated thereby to be a party by Alberto-Culver and the consummation by Alberto-Culver of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Alberto-Culver, subject to the further action of the Board of Directors of Alberto-Culver to establish the Alberto-Culver Record Date and the Distribution Date and provided that the effectiveness of the declaration of the Distribution by the Board of Directors of Alberto-Culver is subject to the satisfaction of the conditions set forth in the Separation Agreement. The approval of Alberto-Culver’s stockholders is not required under Applicable Laws to effect the Merger, the Distribution or any of the other transactions contemplated by this Agreement or any Transaction Agreement (it being understood and agreed that notwithstanding the foregoing, the parties have agreed to make it a condition to their respective obligations to effect the Merger that the Alberto-Culver Transaction Approval has been obtained). This Agreement has been, and the Transaction Agreements with respect to which Alberto-Culver is contemplated thereby to be a party will be, duly executed and delivered by Alberto-Culver and, assuming the due authorization and valid execution and delivery of

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this Agreement and the Transaction Agreements with respect to which Alberto-Culver is contemplated thereby to be a party by the other parties hereto and thereto, as applicable (other than Spinco), constitute or will constitute valid and binding agreements of Alberto-Culver, enforceable against Alberto-Culver in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar Applicable Laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(ii) The execution and delivery by Alberto-Culver of this Agreement does not, the execution and delivery by Alberto-Culver of the Transaction Agreements with respect to which Alberto-Culver is contemplated thereby to be a party will not, and the consummation by Alberto-Culver of the Distribution and the other transactions contemplated hereby and thereby will not result in a Violation (with or without notice or lapse of time, or both) under: (A) any provision of the Certificate of Incorporation or By-laws of Alberto-Culver or (B) except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco, or to have a material adverse effect on the ability of Alberto-Culver to consummate the Distribution and the other transactions contemplated by the Transaction Agreements, subject to obtaining or making the Alberto-Culver Necessary Consents, (1) any Contract to which Alberto-Culver, Spinco or any of their respective Subsidiaries is a party or by which any of their respective properties or assets is bound or (2) any permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Alberto-Culver, Spinco or any Subsidiary of Alberto-Culver or Spinco or their respective properties or assets.

(iii) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity or any other Person is required to be obtained or made by or with respect to Alberto-Culver in connection with the execution and delivery of this Agreement and the Transaction Agreements with respect to which Alberto-Culver is contemplated thereby to be a party by Alberto-Culver or the consummation by Alberto-Culver of the Distribution and the other transactions contemplated hereby and thereby, except for those required under or in relation to (A) the HSR Act, (B) state securities or “blue sky” laws, (C) the Securities Act, (D) the Exchange Act, (E) the DGCL with respect to the filing of the Certificate of Merger with the Delaware Secretary, (F) the rules and regulations of the NYSE, (G) antitrust or other competition laws of other jurisdictions, (H) further action of the Board of Directors of Alberto-Culver to establish the Alberto-Culver Record Date and the Distribution Date, and the effectiveness of the declaration of the Distribution by the Board of Directors of Alberto-Culver (which is subject to the satisfaction of the conditions set forth in the Separation Agreement), further action of the Board of Directors of Spinco to establish the record date and payment date for the Spinco Dividend and the effectiveness of the declaration of the Spinco Dividend by the Board of Directors of Spinco, further action of the Board of Directors of Spinco and Alberto-Culver, as the sole stockholder of Spinco, to approve an amendment to the Certificate of Incorporation of Spinco to increase its authorized capital stock as contemplated by the Separation Agreement and the filing with and acceptance by the Secretary of State of the State of Delaware of such amendment,

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and (I) such consents, approvals, orders, authorizations, registrations, declarations and filings the failure of which to make or obtain, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco or to have a material adverse effect on the ability of Alberto-Culver to consummate the Distribution and the other transactions contemplated by the Transaction Agreements. Consents, approvals, orders, authorizations, registrations, declarations and filings required under or in relation to any of the foregoing clauses (A) through (H) are hereinafter referred to as the “Alberto-Culver Necessary Consents”.

(iv) The Board of Directors of Alberto-Culver, by resolution duly adopted at a meeting duly called and held and, other than as provided in Section 7.5(b)(iv), not subsequently rescinded or modified in any way, has duly (i) determined that this Agreement, the Merger and the Distribution are advisable and in the best interests of Alberto-Culver and its stockholders and (ii) resolved to recommend to the stockholders of Alberto-Culver that the stockholders of Alberto-Culver approve the transactions contemplated by this Agreement. No “fair price”, “moratorium”, “control share acquisition” or other form of antitakeover statute or regulation under Delaware law or any anti-takeover provision in the Certificate of Incorporation of Alberto-Culver, By-laws of Alberto-Culver or other similar organizational documents of Alberto-Culver is, or at the Effective Time will be, applicable to the Merger, the Subsequent Merger or the other transactions contemplated hereby or by the Transaction Agreements.

(d) Reports and Financial Statements.

(i) All of the registration statements, prospectuses, reports, schedules, forms, statements and other documents required to be filed by Alberto-Culver and its Subsidiaries with the SEC since October 1, 2003 (collectively, including all exhibits thereto, the “Alberto-Culver SEC Reports”) at the time they were filed (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing), complied in all material respects with the requirements of the Securities Act, the Exchange Act, the Sarbanes Act and the NYSE and the rules and regulations promulgated thereunder, as applicable, and none of such Alberto-Culver SEC Reports contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. All Alberto-Culver SEC Reports, as of their respective filing dates (and as of the date of any amendment to the respective Alberto-Culver SEC Report), complied as to form in all material respects to the extent in effect at the time of filing, with the applicable requirements of the Securities Act, the Exchange Act, the Sarbanes Act and the NYSE and the rules and regulations promulgated thereunder.

(ii) Each of the principal executive officer of Alberto-Culver and the principal financial officer of Alberto-Culver (or each former principal executive officer of Alberto-Culver and each former principal financial officer of Alberto-Culver, as applicable) has made all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes Act with respect to the Alberto-Culver SEC Reports and the statements contained in such certifications are true, complete

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and correct. For purposes of this Section 5.2(d), “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes Act.

(iii) Alberto-Culver and its Subsidiaries have designed and maintain a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Alberto-Culver (A) has designed and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material information required to be disclosed by Alberto-Culver (with respect to Spinco and its Subsidiaries) in the reports that Alberto-Culver files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to Alberto-Culver’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the principal executive officer and principal financial officer of Alberto-Culver required under the Exchange Act with respect to such reports and (B) has disclosed, based on its most recent evaluation of such disclosure controls and procedures prior to the date hereof to its auditors and the audit committee of its Board of Directors (x) any significant deficiencies and material weaknesses in the design or operation of Alberto-Culver’s internal controls over financial reporting (with respect to Spinco and its Subsidiaries) that are reasonably likely to adversely affect in any material respect Alberto-Culver’s ability to record, process, summarize and report financial information (with respect to Spinco and its Subsidiaries) and (y) any fraud, whether or not material, that involves management or other employees of Spinco or its Subsidiaries who have a significant role in Alberto-Culver’s internal controls over financial reporting. Alberto-Culver and Spinco have delivered to Regis any such disclosure made by management to Alberto-Culver’s auditors and the audit committee of Alberto-Culver’s Board of Directors.

(e) Information Supplied.

(i) None of the information supplied or to be supplied by Alberto-Culver for inclusion or incorporation by reference in (A) the Form S-4 will, at the time the Form S-4 is filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (B) the Joint Proxy Statement/Prospectus will, on the date it is first mailed to Regis shareholders or Alberto-Culver stockholders or at the time of the Regis Shareholders Meeting or the Alberto-Culver Stockholders Meeting, respectively, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(ii) Notwithstanding the foregoing provisions of this Section 5.2(e), no representation or warranty is made by Alberto-Culver with respect to statements made or

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incorporated by reference in the Form S-4 or the Joint Proxy Statement/Prospectus based on information supplied by or on behalf of Regis, Merger Sub or Subco for inclusion or incorporation by reference therein.

(f) Brokers or Finders. No agent, broker, investment banker, financial advisor or other firm or Person is or will be entitled to any broker’s or finder’s fee or any other similar commission or fee in connection with any of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Alberto-Culver or any of its Subsidiaries, except Goldman, Sachs & Co. and William Blair & Company, L.L.C.

(g) Opinions of Alberto-Culver Financial Advisors. Alberto-Culver has received the opinion of each of Goldman, Sachs & Co. and William Blair & Company, L.L.C., dated January 9, 2006, to the effect that, as of such date, the Exchange Ratio is fair, from a financial point of view, to the stockholders of Alberto-Culver who will become stockholders of Spinco pursuant to the transactions contemplated by the Separation Agreement.

SECTION 5.3 Representations and Warranties of Spinco. Except as set forth in the Spinco Disclosure Schedule delivered by Spinco to Regis prior to the execution of this Agreement (the “Spinco Disclosure Schedule”) (each section of which, to the extent specified therein, qualifies the correspondingly numbered representation and warranty of Spinco contained herein and any disclosure in such section qualifies any other representation and warranty of Alberto-Culver or Spinco contained herein to which its application or relevance is reasonably apparent on its face), each of Spinco and Alberto-Culver represent and warrant to Regis as of the date hereof and as of the Closing Date (except to the extent that such representations and warranties speak as of another date or dates in which case, as of such other date or dates) as follows:

(a) Organization, Standing and Power; Subsidiaries.

(i) Spinco is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. Each of the Subsidiaries of Spinco is a corporation or other organization duly organized, validly existing and in good standing (where applicable) under the laws of its jurisdiction of incorporation or organization, and Spinco and each of its Subsidiaries has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted and as it will be conducted through the Effective Time, except where the failure to be so organized, existing and in good standing or to have such power and authority, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco, and each of Spinco and its Subsidiaries is duly qualified and in good standing to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary, other than in such jurisdictions where the failure to so qualify or to be in good standing, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco. True, correct and complete copies of the Certificate of Incorporation and By-laws of Spinco in effect on the date hereof are attached to Section 5.3(a)(i) of the Spinco Disclosure Schedule.

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(ii) Section 5.3(a)(ii) of the Spinco Disclosure Schedule sets forth a list of all the Subsidiaries of Spinco which as of the date of this Agreement would be Significant Subsidiaries of Spinco (as defined in Rule 1-02(w) of Regulation S-X of the SEC) if the Distribution had occurred immediately prior to the date hereof (the “Spinco Significant Subsidiaries”). All the outstanding shares of capital stock of, or other equity interests in, each such Spinco Significant Subsidiary have been validly issued and are fully paid and nonassessable and are owned directly or indirectly by Spinco, free and clear of all material Liens and free of any other material restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other equity interests, but excluding restrictions under the Securities Act). None of Spinco or any of its Subsidiaries directly or indirectly owns any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for any equity or similar interest in, any corporation, partnership, joint venture or other business association or entity (other than Subsidiaries of Spinco) that is or would reasonably be expected to be material to Spinco and its Subsidiaries taken as a whole.

(b) Capital Structure.

(i) On the date hereof, the authorized capital stock of Spinco consists of 1,000 shares of Spinco Common Stock, all of which are, as of the date hereof, and at all times prior to the Distribution Time will be, owned of record and beneficially by Alberto-Culver free and clear of any Liens. As of the date hereof there are no and as of the Effective Time (except as permitted pursuant to this Agreement, including Section 6.2, or pursuant to the Transaction Agreements) there will be no other shares of capital stock or other equity securities of Spinco that are authorized or outstanding. Immediately following the Distribution, (A) there will be outstanding a number of shares of Spinco Common Stock equal to the number of shares of Alberto-Culver Common Stock outstanding as of the Alberto-Culver Record Date and (B) no shares of Spinco Common Stock will be held by Spinco in its treasury. All issued and outstanding shares of Spinco Common Stock are duly authorized, validly issued, fully paid and nonassessable, and the shares of Spinco Common Stock are not entitled to preemptive rights. There are outstanding as of the date hereof, and except as provided for in or permitted by this Agreement or the Transaction Agreements, there will be outstanding at the Effective Time, no options, warrants, Contracts or other rights to acquire capital stock of Spinco.

(ii) No bonds, debentures, notes or other indebtedness of Spinco having the right to vote (or convertible into or exchangeable for securities having the right to vote) on any matters on which stockholders of Spinco may vote (“Spinco Voting Debt”) are issued or outstanding.

(iii) Except as otherwise set forth in this Section 5.3(b) or as provided for in the Transaction Agreements, as of the date of this Agreement, there are no, and except as provided for in or permitted by this Agreement or the Transaction Agreements, as of the Effective Time there will not be any, securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Spinco or any of its Subsidiaries is a party or by which any of them is bound obligating Spinco or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold,

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additional shares of capital stock of Spinco or any of its Subsidiaries, Spinco Voting Debt, Spinco Common Stock or other voting securities of Spinco or any of its Subsidiaries or obligating Spinco or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. As of the date of this Agreement, there are no, and except as provided for in or permitted by this Agreement or the Transaction Agreements, as of the Effective Time there will not be any, outstanding obligations of Spinco or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Spinco or any of its Subsidiaries.

(iv) There are no stockholder agreements, voting trusts or other Contracts to which Spinco is a party or by which it is bound relating to the voting or transfer of any shares of capital stock of Spinco.

(c) Authority; No Conflicts.

(i) Spinco has all requisite corporate power and authority to enter into this Agreement and the Transaction Agreements with respect to which Spinco is contemplated thereby to be a party and to consummate the transactions contemplated hereby and thereby, subject to further action by Alberto-Culver as the sole stockholder of Spinco to adopt this Agreement and approve the Merger, further action by the Board of Directors of Spinco and Alberto-Culver, as the sole stockholder of Spinco, to approve the amendment to the Certificate of Incorporation of Spinco to increase its authorized capital stock as contemplated by the Separation Agreement, further action of the Board of Directors of Spinco to establish the record date and payment date for the Spinco Dividend and the effectiveness of the declaration of the Spinco Dividend by the Board of Directors of Spinco. The execution and delivery of this Agreement and the Transaction Agreements with respect to which Spinco is contemplated thereby to be a party by Spinco and the consummation by Spinco of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Spinco. No approval of Spinco’s stockholders after the Distribution Date will be required to effect the transactions contemplated by this Agreement. This Agreement has been, and the Transaction Agreements with respect to which Spinco is contemplated thereby to be a party will be, duly executed and delivered by Spinco and, assuming the due authorization and valid execution and delivery of this Agreement or the applicable Transaction Agreements with respect to which Spinco is contemplated thereby to be a party by the other parties hereto and thereto, as applicable (other than Alberto-Culver), constitute or will constitute valid and binding agreements of Spinco, enforceable against Spinco in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and similar Applicable Laws relating to or affecting creditors generally or by general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(ii) The execution and delivery by Spinco of this Agreement does not, the execution and delivery by Spinco of the Transaction Agreements with respect to which Spinco is contemplated thereby to be a party will not, and the consummation by

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Spinco of the Distribution, the Merger and the other transactions contemplated hereby and thereby will not result in a Violation (with or without notice or lapse of time, or both) under: (A) any provision of the Certificate of Incorporation or By-laws or similar organizational documents of Spinco or any Spinco Significant Subsidiary or (B) except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco, subject to obtaining or making the Spinco Necessary Consents, (1) any Contract to which Spinco or any of its Subsidiaries is a party or by which any of them or any of their respective properties or assets is bound or (2) any permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Spinco or any Subsidiary of Spinco or their respective properties or assets.

(iii) The Board of Directors of Spinco, by resolutions duly adopted by unanimous written consent and not subsequently rescinded or modified in any way, has duly (A) determined that this Agreement, the Merger and the Separation Agreement are advisable and in the best interests of Spinco and its stockholder and (B) approved this Agreement, the Merger and the Separation Agreement.

(iv) No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity or any other Person is required to be obtained or made by or with respect to Spinco or any Subsidiary of Spinco in connection with the execution and delivery by Spinco of this Agreement and the Transaction Agreements with respect to which Spinco is contemplated thereby to be a party or the consummation by Spinco of the Merger and the other transactions contemplated hereby and thereby, except for those required under or in relation to (A) the adoption by the sole stockholder of Spinco of this Agreement, (B) the HSR Act, (C) state securities or “blue sky” laws, (D) the Securities Act, (E) the Exchange Act, (F) the DGCL with respect to the filing of the Certificate of Merger with the Delaware Secretary, (G) the rules and regulations of the NYSE, (H) antitrust or other competition laws of other jurisdictions, (I) further action of the Board of Directors of Alberto-Culver to establish the Alberto-Culver Record Date and the Distribution Date, and the effectiveness of the declaration of the Distribution by the Board of Directors of Alberto-Culver (which is subject to the satisfaction of the conditions set forth in the Separation Agreement), further action of the Board of Directors of Spinco and Alberto-Culver, as the sole stockholder of Spinco, to approve an amendment to the Certificate of Incorporation of Spinco to increase its authorized capital stock as contemplated by the Separation Agreement and the filing with and acceptance by the Secretary of State of the State of Delaware of such amendment and (J) such consents, approvals, orders, authorizations, registrations, declarations and filings the failure of which to make or obtain, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco. Consents, approvals, orders, authorizations, registrations, declarations and filings required under or in relation to any of the foregoing clauses (A) through (I) or set forth in Section 5.3(c)(iv) of the Spinco Disclosure Schedule are hereinafter referred to as the “Spinco Necessary Consents”.

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(d) Reports and Financial Statements.

(i) As of the date hereof, neither Spinco nor any of its Subsidiaries is required to file any form, report, registration statement, prospectus or other document with the SEC. Included in Section 5.3(d)(i) of the Spinco Disclosure Schedule are the consolidated balance sheets of Spinco and its Subsidiaries as of September 30, 2005 and 2004, and the related consolidated statements of income, cash flows and stockholders’ equity for the fiscal years ended September 30, 2005 and 2004, in each case audited by Spinco’s independent public accountants, whose report thereon is included therewith (such statements, together with the notes thereto, the “Spinco Financial Statements”). Each of the Spinco Financial Statements (including the related notes) fairly presents, in all material respects, the consolidated financial position and consolidated results of operations and cash flows of Spinco and its consolidated Subsidiaries as of the respective dates or for the respective periods set forth therein, all in conformity with GAAP consistently applied during the periods involved except as otherwise noted therein.

(ii) Each of the principal executive officer of Spinco and the principal financial officer of Spinco (or each former principal executive officer of Spinco and each former principal financial officer of Spinco, as applicable) have made quarterly back-up certifications to the principal executive officer of Alberto-Culver and the principal financial officer of Alberto-Culver necessary to allow such officers of Alberto-Culver to make all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes Act with respect to the Alberto-Culver SEC Reports and the statements contained in such certifications of such officers of Spinco are true, complete and correct. For purposes of this Section 5.3(d), “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes Act and applying such terms to Spinco as though it were a separate reporting company under the Exchange Act.

(iii) Except as disclosed in the Alberto-Culver SEC Reports filed after October 1, 2003 and publicly available prior to the date hereof (the “Alberto-Culver Filed SEC Reports”) or in the Spinco Financial Statements, since October 1, 2005, Spinco and its Subsidiaries have not incurred any liabilities that are of a nature that would be required to be disclosed on a consolidated balance sheet of Spinco and its Subsidiaries or in the footnotes thereto prepared in conformity with GAAP, other than liabilities incurred in the ordinary course of business or that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco.

(e) Information Supplied. (i) None of the information supplied or to be supplied by Spinco specifically for inclusion or incorporation by reference in (A) the Form S-4 will, at the time the Form S-4 is filed with the SEC, at any time it is amended or supplemented or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (B) the Joint Proxy Statement/Prospectus will, on the date it is first mailed to Regis shareholders or Alberto-Culver stockholders or at the time of the Regis Shareholders Meeting or the Alberto-Culver Stockholders Meeting,

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respectively, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(ii) Notwithstanding the foregoing provisions of this Section 5.3(e), no representation or warranty is made by Spinco with respect to statements made or incorporated by reference in the Form S-4 or the Joint Proxy Statement/Prospectus based on information supplied by or on behalf of Regis, Merger Sub or Subco for inclusion or incorporation by reference therein.

(f) Litigation; Compliance with Laws.

(i) Except as set forth in the Alberto-Culver Filed SEC Reports or in the Spinco Financial Statements, there is no Action pending or, to the Knowledge of Spinco, threatened against Alberto-Culver or any Subsidiary of Alberto-Culver or any property or asset of Alberto-Culver or any Subsidiary of Alberto-Culver which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Spinco, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against Alberto-Culver or any of its Subsidiaries which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Spinco.

(ii) Except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco, Spinco and its Subsidiaries hold all permits, licenses, franchises, variances, exemptions, orders and approvals of all Governmental Entities which are necessary for the operation of the Spinco Business (the “Spinco Permits”), and no suspension or cancellation of any of the Spinco Permits is pending or, to the Knowledge of Spinco, threatened, except for suspensions or cancellations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco. Spinco and its Subsidiaries are in compliance with the terms of the Spinco Permits, except where the failure to so comply, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco. None of Alberto-Culver or any of its Subsidiaries is in violation of, and Alberto-Culver and its Subsidiaries have not received since October 1, 2003 any written notices of violations with respect to, any Applicable Laws, except for violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco.

(g) Absence of Certain Changes or Events. Except (i) as specifically contemplated or permitted by this Agreement, (ii) as set forth in the Alberto-Culver Filed SEC Reports or in the Spinco Financial Statements or (iii) for changes resulting from the announcement of this Agreement or the transactions contemplated hereby, since October 1, 2005 through the date hereof, (A) Spinco and its Subsidiaries have conducted their business only in the ordinary course, consistent with past practice, and (B) there has not been any event, change, circumstance or development (including any damage, destruction or loss whether or not covered by insurance) which, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect on Spinco. Since October 1, 2005 through the date of this

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Agreement, except as set forth in the Alberto-Culver Filed SEC Reports or in the Spinco Financial Statements, none of Alberto-Culver or any of its Subsidiaries has taken any action that, if taken during the period from the date of this Agreement through the Effective Time, would constitute a breach of Section 6.2 (other than a breach of Section 6.2(c) or (f) (solely with respect to transactions between Spinco and a wholly owned Subsidiary of Spinco or two wholly owned Subsidiaries of Spinco)). Since October 1, 2003 and prior to the date of this Agreement, to the Knowledge of Alberto-Culver, Spinco and its Subsidiaries have not engaged in any Diversion. Since October 1, 2003 through the date hereof, no supplier of any material quantity of professional beauty products to Spinco and its Subsidiaries has cancelled, terminated or materially and adversely modified its supply relationship with Spinco and its Subsidiaries.

(h) Environmental Matters. Except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco, (i) the operations of Spinco and its Subsidiaries have been and are in compliance with all applicable Environmental Laws and with all Spinco Permits required by applicable Environmental Laws, (ii) there are no pending or, to the Knowledge of Spinco, threatened, Actions under or pursuant to Environmental Laws against Spinco, its Subsidiaries, or, to the Knowledge of Spinco, any other Person whose Environmental Liabilities Spinco or any of its Subsidiaries has or may have retained or assumed by contract or operation of law, or involving any real property currently or, to the Knowledge of Spinco, formerly owned, operated or leased by Spinco or its Subsidiaries, and (iii) Spinco, its Subsidiaries and, to the Knowledge of Spinco, Persons whose Environmental Liabilities Spinco or any of its Subsidiaries has or may have retained or assumed by contract or operation of law are not subject to any Environmental Liabilities and, to the Knowledge of Spinco, there are no facts, circumstances or conditions (including the presence, release or threatened release of Hazardous Materials at any location whether or not owned or operated by Spinco or its Subsidiaries) which would reasonably be expected to result in Environmental Liabilities for Spinco, its Subsidiaries, or, to the Knowledge of Spinco, any other Person whose Environmental Liabilities Spinco or any of its Subsidiaries has or may have retained or assumed by contract or operation of law. The representations and warranties in this Section 5.3(h) constitute the sole representations and warranties of Alberto-Culver or Spinco concerning environmental matters in this Agreement.

(i) Intellectual Property. Except as set forth in the Alberto-Culver Filed SEC Reports and except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Spinco: (i) Spinco and each of its Subsidiaries own, or are licensed to use, all Intellectual Property used in the conduct of the Spinco Business as currently conducted; (ii) to the Knowledge of Spinco, all Intellectual Property owned by and/or licensed to Spinco and its Subsidiaries is valid and enforceable and the use of any Intellectual Property by Spinco and its Subsidiaries does not infringe upon, misappropriate or otherwise violate the Intellectual Property rights of any Person; (iii) the use by Spinco and its Subsidiaries of Intellectual Property which is licensed to Spinco or any Subsidiary is in substantial accordance with the terms of the applicable license agreement pursuant to which Spinco or its Subsidiaries acquired the right to use such Intellectual Property; (iv) to the Knowledge of Spinco, no Person is infringing, misappropriating or otherwise violating any right of Spinco or any of its Subsidiaries with respect to any Intellectual Property owned by and/or exclusively licensed to Spinco or its Subsidiaries; (v) there is no claim or proceeding pending or, to the Knowledge of Spinco, threatened against Spinco or any Subsidiary challenging their respective use of

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Intellectual Property; and (vi) no Intellectual Property owned by and/or licensed to Spinco or its Subsidiaries is being used by or enforced by Spinco or any Subsidiary in a manner that would reasonably be expected to result in the abandonment, cancellation or unenforceability of such Intellectual Property.

(j) Title to Properties; Assets/Services.

(i) Each of Spinco and its Subsidiaries has good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all of its tangible properties and assets, except where the failure to have such good and valid title, or valid leasehold interest, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Spinco.

(ii) Except (A) for the services listed on Section 7.22 of the Spinco Disclosure Schedule and (B) as otherwise contemplated by this Agreement and the Transaction Agreements, including as permitted pursuant to Section 6.2, the properties, assets and rights owned, leased or licensed by Spinco and its Subsidiaries constitute all of the properties, assets and rights necessary to operate the Spinco Business as currently conducted.

(iii) Since October 1, 2003 through the date hereof, (A) no material assets that relate primarily to the Spinco Business have been transferred from any member of the Spinco Group to any member of the Alberto-Culver Group and (B) no material liabilities, other than those liabilities that relate primarily to the Spinco Business, have been transferred from any member of the Alberto-Culver Group to any member of the Spinco Group.

(iv) As of the date hereof, (A) the members of the Alberto-Culver Group do not provide any material services to any member of the Spinco Group and (B) there are no material assets and properties used by both a member of the Alberto-Culver Group and a member of the Spinco Group.

(k) Taxes.

(i) All Tax Returns required to be filed with respect to each of Alberto-Culver and its Subsidiaries have been timely filed, or requests for extensions to file such Tax Returns have been timely filed, granted and have not expired, and all such Tax Returns are complete and correct, except to the extent that such failures to file, to have extensions granted that remain in effect or to be complete or correct, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Alberto-Culver. All material Taxes due with respect to Alberto-Culver and its Subsidiaries have been paid or accrued. Since the date of the most recent Alberto-Culver Filed SEC Reports, no Tax liability with respect to Alberto-Culver and its Subsidiaries has been incurred outside the ordinary course of business or otherwise inconsistent with past custom and practice.

(ii) No deficiencies for any Taxes have been proposed, asserted or assessed in writing in respect of or against Alberto-Culver or any of its Subsidiaries that

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are not adequately reserved for on the books of Alberto-Culver, except for deficiencies that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Alberto-Culver. The applicable statutes of limitations have expired for all Tax periods through 2001 for the federal income Tax Returns of Alberto-Culver and each of its Subsidiaries consolidated in such Tax Returns. Since October 1, 2000, no written claim has been made to Alberto-Culver or any of its Subsidiaries by a Governmental Entity in a jurisdiction where Spinco or any of its Subsidiaries does not file a Tax Return that any of Spinco or its Subsidiaries is or may be subject to a material Tax liability in that jurisdiction.

(iii) None of Alberto-Culver or its Subsidiaries has taken any action, and Alberto-Culver has no Knowledge of any fact, agreement, plan or other circumstance, that is reasonably likely to prevent the Merger and the Subsequent Merger, taken together, from qualifying as a reorganization within the meaning of Section 368(a) of the Code. To the Knowledge of Alberto-Culver and Spinco, the representations set forth in the Alberto-Culver Tax Certificate, if made on the date hereof (assuming the Distribution and the Merger and the Subsequent Merger, taken together, were consummated on the date hereof and based on reasonable estimates in the case of certain information not available on the date hereof), would be true and correct in all material respects.

(iv) None of Alberto-Culver or any of its Subsidiaries is a party to any Tax sharing or Tax indemnity agreements entered into after October 1, 2000 (other than the Tax Allocation Agreement and any agreements between or among Spinco and its Subsidiaries) that could reasonably be expected to result in a material Tax liability to Spinco or any of its Subsidiaries.

(v) Other than with respect to the Distribution, within the past five years, none of Spinco or any of its Subsidiaries has been a “distributing corporation” or a “controlled corporation” in a distribution intended to qualify under Section 355(a) of the Code.

(vi) None of Spinco or any of its Subsidiaries is obligated to make any payments, or is a party to any Contract or Spinco Plan that could obligate it to make any payments, that would not be deductible by reason of Section 162(m) or Section 280G of the Code.

(vii) None of Spinco or any of its Subsidiaries has agreed to make, or is required to make, any material adjustment affecting any open taxable year or period under Section 481(a) of the Code or any similar provision of state, local or foreign law by reason of a change in accounting methods or otherwise.

(viii) Since October 1, 2000, none of Spinco or any of its Subsidiaries has been required to reallocate, or is subject to an IRS or other Governmental Entity challenge that would require the reallocation of, gross income, deductions, credits or allowances, or of any item or element affecting taxable income, by reason of Section 482 of the Code.

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(ix) Neither Alberto-Culver nor any of its Subsidiaries has any material liability under Treasury Regulations Section 1.1502-6 (or any comparable or similar provision of federal, state, local or foreign Applicable Laws), as a transferee or successor, pursuant to any contractual obligation, or otherwise for any Taxes of any person other than Alberto-Culver or any of its Subsidiaries.

(x) Neither Spinco nor any of its Subsidiaries has engaged in a “reportable transaction,” as set forth in Treasury Regulation Section 1.6011-4(b) (not including Treasury Regulation Section 1.6011-4(b)(6)), or any transaction that is the same as or substantially similar to one of the types of transactions the IRS has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a “listed transaction,” as set forth in Treasury Regulation Section 1.6011-4(b)(2).

(l) Certain Contracts. Except as filed as exhibits to the Alberto-Culver Filed SEC Documents, as of the date hereof, neither Spinco nor any of its Subsidiaries is a party to or bound by any Contract that (i) is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated by the SEC and applying such term to Spinco as though it were a separate reporting company under the Exchange Act for purposes of this Section 5.3(l)) (other than such Contracts that are compensatory Contracts with or with respect to officers or directors of Spinco or any Spinco Employee), (ii) materially limits or otherwise materially restricts Spinco or any of its Subsidiaries or that would, after the Effective Time, to the Knowledge of Spinco, materially limit or otherwise materially restrict Regis or any of its Subsidiaries (including the Surviving Corporation and its Subsidiaries) or any successor thereto, from engaging or competing in any material line of business in any geographic area or that contains exclusivity or non-solicitation provisions with respect to customers or suppliers, (iii) limits the ability of Spinco or any of its Subsidiaries to incur indebtedness or pay dividends, (iv) requires aggregate payments by Spinco or any of its Subsidiaries in excess of $10,000,000 and is not terminable within one year without penalty, (v) guarantees the material obligations of any Person (other than any Subsidiary of Spinco), (vi) relates to the settlement of any litigation or dispute and materially restricts the operations of Spinco and its Subsidiaries, taken as a whole, (vii) is a loan agreement, credit agreement, note, bond, mortgage, indenture or other agreement or instrument pursuant to which any indebtedness of Spinco or any of its Subsidiaries in an aggregate principal amount in excess of $10,000,000 is outstanding or may be incurred, (viii) is a distribution or supply agreement with respect to beauty products pursuant to which payments in excess of $10,000,000 have been made in the previous fiscal year or (ix) pursuant to the Separation Agreement is contemplated to survive the Distribution Time and has as a counter-party any member of the Alberto-Culver Group (excluding purchase orders made in the ordinary course of business consistent with past practice). Each Contract of the type described in this Section 5.3(l) is referred to herein as a “Spinco Material Contracts.” Neither Spinco nor any of its Subsidiaries has Knowledge of, or has received notice of, any violation of or default under (or any condition which with the passage of time or the giving of notice would cause such a violation of or default under) any Spinco Material Contract or any other Contract to which it is a party or by which it or any of its properties or assets is bound, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Spinco. As of the date of this Agreement, neither Alberto-Culver nor any of its Subsidiaries is a party to any standstill or similar agreement with any Person which relates to any transaction that could constitute an Alberto-Culver Takeover Proposal.

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(m) Employee Benefits.

(i) Section 5.3(m)(i) of the Spinco Disclosure Schedule contains a true and complete list of each material Spinco Plan. With respect to each material Spinco Plan, Spinco has made available to Regis a true, correct and complete copy of: (A) all plan documents, trust agreements, and insurance contracts and other funding vehicles; (B) the two most recent Annual Reports (Form 5500 Series) and accompanying schedules and exhibits, if any; (C) the current summary plan description and any material modifications thereto, if any (in each case, whether or not required to be furnished under ERISA); (D) the two most recent annual financial reports, if any; (E) the two most recent actuarial reports, if any; and (F) the most recent determination letter from the IRS, if any.

(ii) With respect to each Spinco Plan, Spinco and its ERISA Affiliates and other Subsidiaries have complied with, and are now in compliance with, to the extent applicable, all material provisions of ERISA, the Code and all other Applicable Laws and regulations. Each Spinco Plan has been operated and administered, in all material respects, in accordance with its terms. Except as set forth in Section 5.3(m)(ii) of the Spinco Disclosure Schedule, no Spinco Plan is (or was, during the past six years) subject to Title IV or Section 302 of ERISA. No liability under Title IV or Section 302 of ERISA has been incurred by Spinco or any of its ERISA Affiliates and other Subsidiaries that has not been satisfied in full, and no condition exists that presents a material risk to Spinco or any of its ERISA Affiliates and other Subsidiaries of incurring any such liability, other than liability for premiums due the Pension Benefit Guaranty Corporation. All premiums due the Pension Benefit Guaranty Corporation have been fully paid on a timely basis. No Spinco Plan provides for post-employment welfare benefits, except as required under Applicable Laws and specified in Section 5.3(m)(ii) of the Spinco Disclosure Schedule. All Spinco Plans subject to the Applicable Laws of any jurisdiction outside of the United States (1) have been maintained in accordance with all applicable requirements, (2) if they are intended to qualify for special Tax treatment meet all requirements for such treatment, and (3) if they are intended to be funded and/or book-reserved are fully funded and/or book-reserved, as appropriate, based upon reasonable actuarial assumptions.

(iii) As of the date hereof, each Spinco Plan that is intended to be “qualified” within the meaning of Section 401(a) of the Code, and the trust maintained pursuant thereto, has been determined to be so qualified and exempt from federal income Taxation under Section 501 of the Code by the Internal Revenue Service, and to the Knowledge of Spinco and Alberto-Culver, nothing has occurred with respect to the operation of any such Spinco Plan that would reasonably be expected to cause the loss of such qualification of exemption from Tax.

(iv) As of the date hereof, none of Spinco or any of its Subsidiaries has any liability under or obligation to any Multiemployer Plan and no Spinco Plan is a Multiemployer Plan. The Spinco Plans provide benefits only to current and former Spinco Employees.

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(v) Except as contemplated by the Employee Matters Agreement or this Agreement, the consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (A) entitle any Spinco Employee to severance pay, unemployment compensation or any other payment or (B) accelerate the time of payment or vesting of benefits, or materially increase the amount of compensation, due any such Spinco Employee.

(vi) Alberto-Culver, Spinco and each of the persons listed in Section 5.3(m)(vi) of the Spinco Disclosure Schedule have entered into a termination agreement substantially in the forms set forth in Section 5.3(m)(vi) of the Spinco Disclosure Schedule (each, a “Termination Agreement”). All such agreements have been duly authorized, executed and delivered and are in full force and effect, unamended.

(n) Labor Relations. As of the date of this Agreement: (i) none of Alberto-Culver (with respect to Spinco Employees), Spinco or any of its Subsidiaries is a party to any collective bargaining agreement, work rules or practices, or any other labor-related agreements or arrangements with any labor union, labor organization or works council; there are no labor agreements, collective bargaining agreements, work rules or practices, or any other labor-related agreements or arrangements that pertain to any of the Spinco Employees; and no Spinco Employees are represented by any labor organization with respect to their employment with Alberto-Culver or any of its Subsidiaries; (ii) no labor organization or group of Spinco Employees has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or, to the Knowledge of Spinco, threatened to be brought or filed, with the National Labor Relations Board or any other domestic or foreign labor relations tribunal or authority, and to the Knowledge of Spinco, there are no labor union organizing activities with respect to any Spinco Employees and (iii) since October 1, 2003, there have been no actual, or to the Knowledge of Spinco, threatened strikes, work stoppages, slowdowns, lockouts, arbitrations, grievances or other labor disputes against or involving Spinco or any of its Subsidiaries.

(o) Insurance. Spinco maintains insurance coverage with reputable insurers in such amounts and covering such risks as are in accordance with normal industry practice for companies engaged in businesses similar to that of Spinco (taking into account the cost and availability of such insurance).

(p) Liens. No Liens exist on any assets of Spinco or any of its Subsidiaries, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Spinco.

(q) Franchisees.

(i) Spinco has provided to Regis a true, correct and complete list of all states in the United States and countries or jurisdictions in which Persons (“Spinco Franchisees”) to whom Spinco or any of its Subsidiaries have sold a “franchise” or

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“business opportunity” under the “Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures” rules of the FTC or any other Applicable Laws that govern the offer and sale of “franchises” or “business opportunities” are located.

(ii) Spinco has delivered to Regis true, correct and complete copies of Spinco’s and its Subsidiaries’ Uniform Franchise Offering Circulars and any other international disclosure documents (“Spinco UFOCs”), which are currently being used in connection with the offers to sell and the sales of its franchises. The Spinco UFOCs currently used by Spinco and its Subsidiaries and any other offering circulars previously used by Regis and its Subsidiaries do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except for such untrue statements or omissions that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Spinco. Spinco and its Subsidiaries are in compliance with all Applicable Laws (including, in the United States, the Uniform Franchise Offering Circular Guidelines adopted by the North American Securities Administrators Association) relating to the offer and sale of Spinco Franchises and the relationship between Spinco and its Subsidiaries and their respective franchisees, except where the failure to so comply, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Spinco.

(iii) The franchise agreements and other agreements of Spinco and its Subsidiaries granting rights to a Spinco Franchisee do not obligate Spinco or any of its Subsidiaries to buy back or otherwise acquire any amount of stock, assets or contractual rights of the Spinco Franchisee, where such amounts would, individually or in the aggregate, be material to Spinco and its Subsidiaries, taken as a whole. Spinco and its Subsidiaries do not (1) guaranty any obligations of any Spinco Franchisee that, individually or in the aggregate with such other guaranties, are material to Spinco and its Subsidiaries, taken as a whole, or (2) have any Contracts to lend or advance money to a Spinco Franchisee that, individually or in the aggregate with such other Contracts, are material to Spinco and its Subsidiaries, taken as a whole. Spinco has delivered to Regis a true, correct and complete copy of the current form or forms of franchise agreement used by Spinco and its Subsidiaries.

(r) No Other Activities of Spinco Business. Since October 1, 2000, Alberto-Culver and its Subsidiaries have not disposed of any Former Business that was prior to the time of such disposition operated or owned by any member of the Spinco Group which Former Business at any time it was owned by Alberto-Culver or its Subsidiaries engaged in a business or operations substantially different from the type engaged in by the businesses that constitute Alberto-Culver’s Sally Beauty Supply and Beauty Systems Group divisions for segment reporting purposes.

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ARTICLE VI

COVENANTS RELATING TO CONDUCT OF BUSINESS

SECTION 6.1 Covenants of Regis. During the period from the date of this Agreement and continuing until the Effective Time, Regis agrees as to itself and its Subsidiaries that (except as required or otherwise expressly contemplated or permitted by this Agreement or Section 6.1 (including its subsections) of the Regis Disclosure Schedule or to the extent that Alberto-Culver shall otherwise consent in writing, which consent (other than with respect to Section 6.1(c)) shall not be unreasonably withheld, delayed or conditioned):

(a) Ordinary Course.

(i) Regis and its Subsidiaries shall carry on their respective businesses in the ordinary course, in substantially the same manner as heretofore conducted, and, except in respect of any matters of the type described in clause (ii)(B) of the definition of Material Adverse Effect, shall use their reasonable best efforts to preserve intact their present business organizations, maintain their material rights, licenses and permits, keep available the services of their current officers and other key employees and preserve their relationships with customers, franchises and others having business dealings with them to the end that their ongoing businesses and goodwill shall not be materially impaired at the Effective Time.

(ii) Other than in connection with acquisitions permitted by Section 6.1(e) or investments permitted by Section 6.1(g), Regis shall not, and shall not permit any of its Subsidiaries to, (A) enter into any new material line of business or (B) incur or commit to any capital expenditures or any obligations or liabilities in connection with any capital expenditures other than capital expenditures and obligations or liabilities in connection therewith incurred or committed to in the ordinary course of business consistent with past practice.

(b) Dividends; Changes in Share Capital. Regis shall not, and shall not permit any of its Subsidiaries to, nor shall Regis or any of its Subsidiaries propose to, (i) declare, set aside or pay any dividends on or make other distributions (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except (A) for the declaration and payment of cash dividends or distributions by any direct or indirect wholly owned Subsidiary of Regis or (B) for the declaration and payment of regular quarterly cash dividends in an amount of $0.04 per each issued and outstanding share of Regis Common Stock with usual record and payment dates for such dividends in accordance with Regis’s past dividend practice, (ii) split, combine or reclassify any of its capital stock, except for any such transaction by a direct or indirect wholly owned Subsidiary of Regis which remains a direct or indirect wholly owned Subsidiary after consummation of such transaction or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable or exchangeable for, or any rights, warrants, calls or options to acquire, any shares of its capital stock other than for such actions described in this clause (iii) that are only in respect of shares of any direct or indirect wholly owned Subsidiary of Regis.

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(c) Issuance of Securities. Regis shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge, dispose of or otherwise encumber, or authorize or propose the issuance, delivery, sale, pledge, disposition or encumbrance of, any shares of its capital stock of any class, any Regis Voting Debt or any securities convertible into or exercisable or exchangeable for, or any rights, warrants, calls or options to acquire, any such shares or Regis Voting Debt, or enter into any commitment, arrangement, undertaking or agreement with respect to any of the foregoing, other than (i) (A) the issuance and delivery of Regis Common Stock upon the exercise of Regis Stock Options outstanding on the date hereof in accordance with their current terms or (B) the delivery of Regis Common Stock upon vesting of Regis Restricted Stock outstanding on the date hereof in accordance with their current terms, (ii) the granting of Regis Stock Options, Regis Restricted Stock or other stock based awards of or awards to acquire not more than 500,000 shares of Regis Common Stock granted under Regis Stock Plans in effect on the date hereof; provided, however, that Regis shall take all actions necessary so that none of such Regis Stock Options shall vest and/or become exercisable and none of such other stock based awards shall entitle any Person to acquire Regis Common Stock at any time prior to the day immediately after the Effective Time; provided, further, that any such grant of Regis Restricted Stock shall be subject to the additional provisions set forth in Section 6.01(c) of the Regis Disclosure Schedule or (iii) issuances, deliveries and sales by a wholly owned Subsidiary of Regis of capital stock of such Subsidiary to such Subsidiary’s parent or another wholly owned Subsidiary of Regis.

(d) Governing Documents. Except to the extent required to comply with its obligations hereunder, Regis shall not amend or propose to amend its Articles of Incorporation, By-laws or other governing documents, Merger Sub shall not amend or propose to amend its Certificate of Incorporation, By-laws or other governing documents and Subco shall not amend or propose to amend its Certificate of Formation, limited liability company agreement or other governing documents.

(e) No Acquisitions. Regis shall not, and shall not permit any of its Subsidiaries to, in a single transaction or series of related transactions, acquire or agree to acquire by merger or consolidation, or by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, limited liability entity, joint venture, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets for consideration in excess of $30,000,000 individually or $100,000,000 in the aggregate, including in each case, the assumption of indebtedness (excluding the acquisition of assets used in the operations of the business of Regis and its Subsidiaries in the ordinary course consistent with past practice, which assets do not constitute a business unit, division or all or substantially all of the assets of the transferor); provided, however, that the foregoing shall not prohibit the creation or merger of new or existing direct or indirect wholly owned Subsidiaries of Regis organized to conduct or continue activities in the ordinary course of business or otherwise permitted by this Agreement; provided, further, that in any event, Regis shall not, and shall not permit any of its Subsidiaries to, make any acquisition, agreement or purchase if it would prevent or materially delay obtaining any consents, approvals or expirations of waiting periods from any Governmental Entity required for the consummation of the transactions contemplated by this Agreement.

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(f) No Dispositions. Other than as may be required by or in conformance with Applicable Laws in order to permit or facilitate the consummation of the transactions contemplated hereby, Regis shall not, and shall not permit any of its Subsidiaries to, in a single transaction or a series of related transactions, sell (including sale-leaseback), lease, license, or otherwise encumber or subject to any Lien or otherwise dispose of to any Person that is not a direct or indirect wholly-owned Subsidiary of Regis, or agree to sell (or engage in a sale-leaseback), lease, license or otherwise encumber or subject to any Lien or otherwise dispose of to any Person that is not a direct or indirect wholly-owned Subsidiary of Regis, any material assets of Regis or any of Regis’s Subsidiaries (including capital stock of Subsidiaries of Regis but excluding inventory and obsolete equipment sold, leased, licensed or otherwise encumbered or subjected to any Lien or otherwise disposed of, in each case, in the ordinary course of business consistent with past practice).

(g) Investments; Indebtedness. Regis shall not, and shall not permit any of its Subsidiaries to, (i) make any loans, advances or capital contributions to, or investments in, any other Person, other than (A) loans, advances, capital contributions to, or investments in Regis or any Subsidiary of Regis, (B) pursuant to any Contract or other legal obligation of Regis or any of its Subsidiaries as in effect at the date of this Agreement (all of which Contracts or other legal obligations are set forth in Section 6.1(g) of the Regis Disclosure Schedule), (C) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice, (D) loans, advances, capital contributions or investments in the ordinary course of business which are not individually in excess of $10,000,000 or in the aggregate in excess of $25,000,000 or (E) loans or advances to customers in connection with the sales of goods to such customers in the ordinary course of business consistent with past practice or (ii) create, incur, assume or suffer to exist any indebtedness, issuances of debt securities, guarantees, loans or advances not in existence as of the date of this Agreement except (1) in the ordinary course of business consistent with past practice which are not individually in excess of $10,000,000 or in the aggregate in excess of $25,000,000 or (2) indebtedness with respect to loans from Regis or any wholly owned Subsidiary of Regis.

(h) Compensation. Except (i) as set forth in Section 6.1(c), (ii) as required by Applicable Laws or by the terms of any collective bargaining agreement or other agreement currently in effect between Regis or any Subsidiary of Regis and any executive officer or employee thereof (all of which collective bargaining agreements or other agreements are set forth in Section 6.1(h) of the Regis Disclosure Schedule) or (iii) in the ordinary course of business consistent with past practice, Regis shall not: (A) materially increase the amount of compensation or employee benefits of any current or former director, officer, consultant or employee of Regis or any Subsidiary or business unit of Regis, (B) pay or agree to pay to any current or former director, officer, consultant or employee of Regis or any Subsidiary or business unit of Regis, any material pension, retirement, savings or profit-sharing allowance or other material employee benefit that is not required by any existing plan or agreement, (C) enter into any new, or amend any existing Contract with any current or former director, officer, consultant or employee of Regis or any Subsidiary or business unit of Regis, regarding his or her employment, compensation or benefits, (D) materially increase or commit to materially increase any employee benefits, adopt, terminate or amend or make any commitment to adopt, terminate or amend any Regis Plan or make any contribution, other than regularly scheduled contributions, to any Regis Plan or (E) terminate the employment of any employee or otherwise agree to

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provide severance benefits with respect to any such employee. Regis shall not accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation, except as required by Applicable Laws or in the ordinary course of business or in accordance with the existing terms of such awards and any option, restricted stock, stock appreciation right or other equity or equity based award committed to be granted or granted after the date hereof shall not accelerate as a result of the approval or consummation of any transaction contemplated by this Agreement.

(i) Accounting Methods. Except as disclosed in the Regis Filed SEC Reports or in the Regis Financial Statements, as required by a Governmental Entity or as required by changes in GAAP as concurred by Regis’s independent public accountants, Regis shall not change its methods of accounting in effect at June 30, 2005 (including procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable).

(j) Certain Agreements and Arrangements. Regis shall not, and shall not permit any of its Subsidiaries to, enter into any Contracts that limit or otherwise restrict Regis or any of its Subsidiaries or any of their respective Affiliates or any successor thereto, or that would, after the Effective Time, limit or restrict Spinco or any of its Subsidiaries or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business in any geographic area other than the entry into franchise agreements in the ordinary course of business consistent with past practice. Regis shall not, and shall not permit any of its Subsidiaries to, except in the ordinary course of business consistent with past practice, modify, amend or terminate any Regis Material Contract to which it is a party or waive, release or assign any material rights or claims it may have under any such Regis Material Contract. Regis and its Subsidiaries shall not Knowingly engage in any Diversion.

(k) Settlement of Litigation. Regis shall not, and shall not permit any of its Subsidiaries to, settle any litigation, investigation, arbitration, proceeding or other claim if Regis or any of its Subsidiaries would be required to pay in excess of $2,500,000 individually or $10,000,000 in the aggregate or if such settlement would obligate Regis or any of its Subsidiaries to take any material action or restrict Regis or any of its Subsidiaries in any material respect from taking any action at or after the Effective Time.

(l) Related Party Agreements. Other than in the ordinary course of business consistent with past practice, Regis shall not, and Regis shall cause its Subsidiaries not to, enter into, waive any material rights under or amend in any material respect any Contract between Regis and its Subsidiaries, on the one hand, and Affiliates of Regis (other than Regis and its Subsidiaries), on the other hand.

(m) Tax Matters. Except as required by Applicable Laws, Regis shall not (i) make, amend or change any material Tax election, (ii) make a request for a material tax ruling or enter into a material closing agreement, (iii) settle or compromise any material Tax liability or material Tax claims, (iv) file any material amendments to any previously filed material Tax Returns or (v) surrender any right to claim any material amount of refund of any Taxes.

(n) No Related Actions. Regis will not, and will not permit any of its Subsidiaries to, agree or commit to do any of the foregoing actions.

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(o) No Merger Sub or Subco Business Activities. Merger Sub and Subco will not conduct any activities other than in connection with the organization of Merger Sub and Subco, the negotiation and execution of this Agreement and the Transaction Agreements and the consummation of the transactions contemplated hereby and thereby.

SECTION 6.2 Covenants of Alberto-Culver and Spinco. During the period from the date of this Agreement and continuing until the Effective Time, Alberto-Culver and Spinco each agrees that (except for the Distribution, as required or otherwise expressly contemplated or permitted by this Agreement, the Transaction Agreements or Section 6.2 (including its subsections) of the Alberto-Culver Disclosure Schedule or the Spinco Disclosure Schedule or to the extent that Regis shall otherwise consent in writing, which consent (other than with respect to Section 6.2(c)) shall not be unreasonably withheld, delayed or conditioned):

(a) Ordinary Course.

(i) The members of the Alberto-Culver Group (solely with respect to the Spinco Business) and Spinco and its Subsidiaries shall carry on their respective businesses in the ordinary course, in substantially the same manner as heretofore conducted, and, except in respect of any matters of the type described in clause (ii)(B) of the definition of Material Adverse Effect, shall use their reasonable best efforts to preserve intact their present business organizations, maintain their material rights, licenses and permits, keep available the services of their current officers and other key employees and preserve their relationships with customers, franchises and others having business dealings with them to the end that their ongoing businesses and goodwill shall not be materially impaired at the Effective Time.

(ii) Other than in connection with acquisitions permitted by Section 6.2(e) or investments permitted by Section 6.2(g), Spinco shall not, and shall not permit any of its Subsidiaries to, (A) enter into any new material line of business or (B) incur or commit to any capital expenditures or any obligations or liabilities in connection with any capital expenditures other than capital expenditures and obligations or liabilities in connection therewith incurred or committed to in the ordinary course of business consistent with past practice.

(b) Dividends; Changes in Share Capital. Alberto-Culver and Spinco shall not, Spinco shall not permit any of its Subsidiaries to, nor shall Spinco or any of its Subsidiaries propose to, declare, set aside or pay any dividends on or make other distributions (whether in cash, stock or property or any combination thereof) in respect of any capital stock of Spinco or any of its Subsidiaries, except (i) for the Distribution, (ii) for the declaration and payment of cash dividends or distributions by any direct or indirect wholly owned Subsidiary of Spinco or (iii) for the declaration and payment of cash dividends payable on the issued and outstanding shares of Spinco Common Stock. Each of Alberto-Culver and Spinco shall not, (A) split, combine or reclassify any of its capital stock, except for any such transaction by a direct or indirect wholly owned Subsidiary of Alberto-Culver (other than Spinco) or of Spinco which remains a direct or indirect wholly owned Subsidiary after consummation of such transaction or (B) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable or

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exchangeable for, or any rights, warrants, calls or options to acquire, any shares of its capital stock except for (1) acceleration of any vesting of Alberto-Culver Stock Options or other equity awards under the Alberto-Culver Stock Plans, (2) redemptions, repurchases and acquisitions by Alberto-Culver of Alberto-Culver Common Stock under the Alberto-Culver Stock Plans and (3) such actions described in this clause (B) that are only in respect of shares of any direct or indirect wholly owned Subsidiary of Alberto-Culver.

(c) Issuance of Securities. Alberto-Culver and Spinco shall not, and Spinco shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge, dispose of or otherwise encumber, or authorize or propose the issuance, delivery, sale, pledge, disposition or encumbrance of, (x) any shares of its capital stock of any class or, with respect to Spinco any capital stock of any class of its Subsidiaries, (y) any Spinco Voting Debt or Alberto-Culver Voting Debt or (z) any securities convertible into or exercisable or exchangeable for, or any rights, warrants, calls or options to acquire, any such shares or Spinco Voting Debt or Alberto-Culver Voting Debt, or enter into any commitment, arrangement, undertaking or agreement with respect to any of the foregoing, other than (i) (A) the issuance, delivery and redemption of Alberto-Culver Common Stock pursuant to equity awards outstanding on the date hereof in accordance with their current terms under the Alberto-Culver Option Plans and the Alberto-Culver Management Bonus Plan or upon acceleration of the vesting of such equity awards in accordance with this Agreement and the Employee Matters Agreement, including in each case elections made or to be made with respect to such awards, or (B) the delivery and redemption of Alberto-Culver Common Stock upon vesting of Alberto-Culver Restricted Stock outstanding on the date hereof in accordance with their current terms or upon acceleration of the vesting of such Alberto-Culver Restricted Stock in accordance with this Agreement and the Employee Matters Agreement, (ii) the granting of Alberto-Culver Stock Options that will not become Substitute Options and will not be exercisable for shares of Alberto-Culver Common Stock that will be entitled to receive shares of Spinco Common Stock in the Distribution, (iii) the automatic granting of Alberto-Culver Stock Options to directors of Alberto-Culver at the time of the annual meeting of stockholders of Alberto-Culver and/or upon the appointment of any person to the Board of Directors of Alberto-Culver under the Alberto-Culver 2003 Stock Option Plan for Non-Employee Directors pursuant to its terms on the date hereof or (iv) issuances, redemptions, deliveries and sales by a wholly owned Subsidiary of Alberto-Culver or Spinco of capital stock of such Subsidiary to such Subsidiary’s parent or another wholly owned Subsidiary of Alberto-Culver or Spinco.

(d) Governing Documents. Except to the extent required to comply with its obligations hereunder or under the Transaction Agreements, Spinco shall not amend or propose to amend its Certificate of Incorporation, By-laws or other governing documents. Except to the extent required to comply with its obligations hereunder, Alberto-Culver will not amend or propose to amend the Certificate of Incorporation or By-laws of Alberto-Culver in any manner that would prevent or delay the consummation of the transactions contemplated hereby.

(e) No Acquisitions. Each of Alberto-Culver (solely with respect to the Spinco Business) and Spinco shall not, and shall not permit any of Spinco’s Subsidiaries to, in a single transaction or series of related transactions, acquire or agree to acquire by merger or consolidation, or by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, limited liability entity, joint venture,

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association or other business organization or division thereof or otherwise acquire or agree to acquire any assets for consideration in excess of $30,000,000 individually or $100,000,000 in the aggregate, including, in each case, the assumption of indebtedness (excluding the acquisition of assets used in the operations of the business of Spinco and its Subsidiaries in the ordinary course consistent with past practice, which assets do not constitute a business unit, division or all or substantially all of the assets of the transferor); provided, however, that the foregoing shall not prohibit the creation or merger of new or existing direct or indirect wholly owned Subsidiaries of Spinco or Alberto-Culver organized to conduct or continue activities in the ordinary course of business or otherwise permitted by this Agreement; provided, further, that in any event, each of Alberto-Culver and Spinco shall not, and shall not permit any of its Subsidiaries to, make any acquisition, agreement or purchase if it would prevent or materially delay obtaining any consents, approvals or expirations of waiting periods from any Governmental Entity required for the consummation of the transactions contemplated by this Agreement or the Transaction Agreements.

(f) No Dispositions. Other than as may be required by or in conformance with Applicable Laws in order to permit or facilitate the consummation of the transactions contemplated hereby or by the Transaction Agreements, Alberto-Culver and Spinco shall not, and shall not permit any of their Subsidiaries to, in a single transaction or a series of related transactions, sell (including sale-leaseback), lease, license or otherwise encumber or subject to any Lien or otherwise dispose of to any Person that is not a direct or indirect wholly-owned Subsidiary of Spinco, or agree to sell (or engage in a sale-leaseback), lease, license or otherwise encumber or subject to any Lien or otherwise dispose of to any Person that is not a direct or indirect wholly-owned Subsidiary of Spinco, any material assets of Spinco or any of Spinco’s Subsidiaries (including capital stock of Spinco and its Subsidiaries, but excluding inventory and obsolete equipment sold, leased, licensed or otherwise encumbered or subjected to any Lien or otherwise disposed of, in each case, in the ordinary course of business consistent with past practice).

(g) Investments; Indebtedness. Spinco shall not, and shall not permit any of its Subsidiaries to, (i) make any loans, advances or capital contributions to, or investments in, any other Person, other than (A) loans or advances to Alberto-Culver and its Subsidiaries, (B) loans, advances, capital contributions to, or investments, in Spinco or any of its Subsidiaries, (C) pursuant to any Contract or other legal obligation of Spinco or any of its Subsidiaries as in effect at the date of this Agreement (all of which Contracts or other legal obligations are set forth in Section 6.2(g) of the Spinco Disclosure Schedule), (D) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice, (E) loans, advances, capital contributions or investments in the ordinary course of business consistent with past practice which are not individually in excess of $10,000,000 or in the aggregate in excess of $25,000,000, (F) the declaration and payment by Spinco to Alberto-Culver of the Spinco Dividend pursuant to the Separation Agreement or (G) loans or advances to customers in connection with the sales of goods to such customers in the ordinary course of business consistent with past practice or (ii) create, incur, assume or suffer to exist any indebtedness, issuances of debt securities, guarantees, loans or advances not in existence as of the date of this Agreement except (1) in the ordinary course of business consistent with past practice which are not individually in excess of $10,000,000 or in the aggregate in excess of $25,000,000, (2) for indebtedness with respect to loans from any member of the Alberto-Culver Group or any member of the Spinco Group and (3) indebtedness incurred in connection with the financing to pay the Spinco Dividend.

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(h) Compensation. Except (i) as set forth in Section 6.2(c), (ii) as required by Applicable Laws or by the terms of any collective bargaining agreement or other agreement currently in effect between Alberto-Culver or any Subsidiary of Alberto-Culver and any Spinco Employee (all of which collective bargaining agreements or other agreements are set forth in Section 6.2(h) of the Alberto-Culver Disclosure Schedule), (iii) as otherwise provided in this Agreement or the Employee Matters Agreement or (iv) in the ordinary course of business consistent with past practice, Spinco shall not: (A) materially increase the amount of compensation or employee benefits of any current or former Spinco Employee or consultant of Spinco or any of its Subsidiaries, (B) pay or agree to pay to any current or former Spinco Employee or consultant of Spinco or any of its Subsidiaries, any material pension, retirement, savings or profit-sharing allowance or other material employee benefit that is not required by any existing plan or agreement, (C) enter into any new, or amend any existing Contract with any current or former Spinco Employee or consultant of Spinco or any of its Subsidiaries, regarding his or her employment, compensation or benefits, (D) materially increase or commit to materially increase any employee benefits for any such person, adopt, terminate or amend or make any commitment to adopt, terminate or amend any Spinco Plan or make any contribution, other than regularly scheduled contributions (including any company match under a qualified plan), to any Spinco Plan or (E) terminate the employment of any employee or otherwise agree to provide severance benefits with respect to any such employee.

(i) Accounting Methods. Except as disclosed in the Alberto-Culver Filed SEC Reports or the Spinco Financial Statements, as required by a Governmental Entity or as required by changes in GAAP as concurred by Spinco’s independent public accountants, Spinco shall not change its methods of accounting in effect at October 1, 2005 (including procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable).

(j) Certain Agreements and Arrangements. Alberto-Culver and Spinco shall not, and Spinco shall not permit any of its Subsidiaries to, enter into any Contracts that limit or otherwise restrict Spinco or any of its Subsidiaries or any of their respective Affiliates or any successor thereto, or that would, after the Effective Time, limit or restrict Spinco or any of its Subsidiaries or any of their respective Affiliates or any successor thereto, from engaging or competing in any line of business in any geographic area other than the entry into franchise agreements in the ordinary course of business consistent with past practice. Each of Alberto-Culver (to the extent it is a party to a Spinco Material Contract) and Spinco shall not, and Spinco shall not permit any of its Subsidiaries, and Alberto-Culver shall not permit any of the Alberto-Culver Subsidiaries (to the extent it is a party to a Spinco Material Contract) to, except in the ordinary course of business consistent with past practice, modify, amend or terminate any Spinco Material Contract to which it is a party or waive, release or assign any material rights or claims it may have under any such Spinco Material Contract. Alberto-Culver and its Subsidiaries will not Knowingly engage in any Diversion.

(k) Settlement of Litigation. Alberto-Culver and Spinco shall not, and Spinco shall not permit any of its Subsidiaries to, settle any litigation, investigation, arbitration,

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proceeding or other claim if Spinco or any of its Subsidiaries would be required to pay in excess of $2,500,000 individually or $10,000,000 in the aggregate or if such settlement would obligate Spinco or the Surviving Corporation or any of its Subsidiaries to take any material action or restrict Spinco or the Surviving Corporation or any of its Subsidiaries in any material respect from taking any action at or after the Effective Time.

(l) Related Party Agreements. Alberto-Culver and Spinco shall not, and Alberto-Culver and Spinco shall cause their respective Subsidiaries not to, enter into, waive any material rights under or amend in any material respect any Contract between Spinco and its Subsidiaries, on the one hand, and Alberto-Culver and its Subsidiaries (other than Spinco and its Subsidiaries), on the other hand, that, pursuant to the Separation Agreement, will survive the Distribution Time. Alberto-Culver and Spinco shall not and shall cause their respective Subsidiaries to not (i) transfer any material assets that relate primarily to the Spinco Business from any member of the Spinco Group to any member of the Alberto-Culver Group or (ii) transfer any material liabilities (other than those liabilities that relate primarily to the Spinco Business) from any member of the Alberto-Culver Group to any member of the Spinco Group.

(m) Tax Matters. Except as required by Applicable Laws, neither Alberto-Culver (with respect to the Spinco Business) nor Spinco shall (i) make, amend or change any material Tax election, (ii) make a request for a material tax ruling (other than the Private Letter Ruling) or enter into a material closing agreement, (iii) settle or compromise any material Tax liability or material Tax claims, (iv) file any material amendments to any previously filed material Tax Returns, or (v) surrender any right to claim any material amount of refund of any Taxes.

(n) No Related Actions. Alberto-Culver (as to Spinco and its Subsidiaries and/or the Spinco Business) will not, and Spinco will not, and will not permit any of its Subsidiaries to, agree or commit to do any of the foregoing actions.

SECTION 6.3 SEC Reports. Each of Alberto-Culver and Regis shall timely file all reports required to be filed by each of them with the SEC between the date of this Agreement and the Effective Time.

SECTION 6.4 Control of Other Party’s Business. Nothing contained in this Agreement shall give Alberto-Culver or Spinco, directly or indirectly, the right to control or direct Regis’s operations prior to the Effective Time. Nothing contained in this Agreement shall give Regis, directly or indirectly, the right to control or direct the operations of the Spinco Business prior to the Effective Time. Prior to the Effective Time, each of Alberto-Culver, Spinco and Regis shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its respective operations.

SECTION 6.5 Interim Financial Information. Each of Alberto-Culver and Spinco on the one hand, and Regis, on the other hand shall, prior to the Effective Time, provide each other within a reasonable period after such party closes its books for the applicable monthly accounting period for the Spinco Business (with respect to Alberto-Culver and Spinco) and for Regis’s business (with respect to Regis), a balance sheet as of the end of such period and statements of income for such period for Spinco and its Subsidiaries, on the one hand, and Regis

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and its Subsidiaries, on the other hand. Such financial information shall be in the same format and prepared on the same basis as the comparable portions of the Spinco Financial Statements (with respect to Alberto-Culver and Spinco) and Regis Financial Statements (with respect to Regis), except that such information may exclude footnotes and is subject to normal year-end adjustments.

SECTION 6.6 Rights Agreement. Except to the extent the Board of Directors of Regis determines in good faith (after consultation with outside legal counsel) that the failure to do so would result in a breach of its fiduciary duties to the holders of Regis Common Stock under Applicable Law, Regis shall not amend, modify or waive any provision of the Regis Rights Agreement or take any action to redeem the Regis Rights or render the Regis Rights inapplicable to any transaction other than the Merger and the transactions contemplated hereby or by the Transaction Agreements; provided, however, that the Board of Directors of Regis may (a) amend the Regis Rights Agreement solely for the purpose of extending the Distribution Date thereunder to that time immediately prior to the consummation of an unsolicited tender offer or exchange offer by a third party and (b) take any action with respect to the Regis Rights Agreement that is required by order of a court of competent jurisdiction.

ARTICLE VII

ADDITIONAL AGREEMENTS

SECTION 7.1 Preparation of Joint Proxy Statement/Prospectus; Shareholders and Stockholders Meetings.

(a) As promptly as practicable following the date hereof, Regis and Alberto-Culver shall prepare a mutually acceptable joint proxy statement/prospectus to be mailed to Regis’s shareholders in connection with the Regis Shareholders Meeting and to Alberto-Culver’s stockholders in connection with the Alberto-Culver Stockholders Meeting (such joint proxy statement/prospectus, and any amendments or supplements thereto, the “Joint Proxy Statement/Prospectus”) and Regis shall prepare (in consultation with Alberto-Culver) and file with the SEC a registration statement on Form S-4 with respect to the Regis Share Issuance (the “Form S-4”). The Joint Proxy Statement/Prospectus will be included in and will constitute a part of the Form S-4. The Form S-4 and the Joint Proxy Statement/Prospectus will comply as to form in all material respects with the requirements of the Exchange Act and the Securities Act and the rules and regulations of the SEC thereunder. Each of Regis and Alberto-Culver shall use their reasonable best efforts to have the Joint Proxy Statement/Prospectus cleared by the SEC as promptly as practicable after filing with the SEC. Regis shall use its reasonable best efforts to have the Form S-4 declared effective by the SEC as promptly as practicable after filing with the SEC and to keep the Form S-4 effective as long as is necessary to consummate the Merger and the transactions contemplated thereby, and Alberto-Culver shall use its reasonable best efforts to assist Regis in this regard. Regis and Alberto-Culver shall each use reasonable best efforts to cause the Joint Proxy Statement/Prospectus to be mailed to Regis’s shareholders and Alberto-Culver’s stockholders, respectively, as promptly as practicable after the Joint Proxy Statement/Prospectus is cleared by the SEC and the Form S-4 is declared effective under the Securities Act. Each of Regis and Alberto-Culver shall, as promptly as practicable after receipt thereof, provide to the other copies of, consult with the other and prepare written responses with respect to, any written comments received from the SEC with respect to the Joint Proxy

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Statement/Prospectus and the Form S-4 and advise the other of any oral comments with respect to the Joint Proxy Statement/Prospectus and the Form S-4 received from the SEC. Notwithstanding any other provision herein to the contrary, no amendment or supplement to the Joint Proxy Statement/Prospectus or the Form S-4 shall be made, and no correspondence filed with the SEC with respect thereto, without the approval of the other party, which approval shall not be unreasonably withheld or delayed. Regis shall take any action (other than qualifying to do business in any jurisdiction in which it is not now so qualified or to file a general consent to service of process) required to be taken under any applicable state securities laws in connection with the Regis Share Issuance and Regis and Alberto-Culver shall furnish all information concerning Regis and Alberto-Culver and the holders of Regis Common Stock and Alberto-Culver Common Stock as may be reasonably requested in connection with any such action. Regis will advise Alberto-Culver and Spinco, promptly after it receives notice thereof, of the time when the Form S-4 has become effective, the issuance of any stop order with respect to the Form S-4, the suspension of the qualification of the Regis Common Stock issuable in connection with the Merger for offering or sale in any jurisdiction, or any request by the SEC for amendment of the Joint Proxy Statement/Prospectus or the Form S-4. If at any time prior to the Effective Time any information relating to Regis, Alberto-Culver or Spinco, or any of their respective Affiliates, officers or directors, should be discovered by Regis, Alberto-Culver or Spinco which should be set forth in an amendment or supplement to the Form S-4 or the Joint Proxy Statement/Prospectus so that any of such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party which discovers such information shall promptly notify the other parties hereto and, to the extent required by Applicable Laws, an appropriate amendment or supplement describing such information shall be promptly filed by Regis and Alberto-Culver with the SEC and disseminated to the shareholders of Regis and the stockholders of Alberto-Culver. Each of Regis and Alberto-Culver shall use its reasonable best efforts to hold the Regis Shareholders Meeting and the Alberto-Culver Stockholders Meeting on the same day.

(b) Regis shall duly take all lawful action to call, give notice of, convene and hold a meeting of its shareholders as promptly as practicable after the date of this Agreement (including any adjournment or postponements thereof, the “Regis Shareholders Meeting”) for the purpose of obtaining (i) the approval of the Regis Share Issuance by the Required Regis Share Issuance Vote (the “Regis Share Issuance Approval”) and (ii) the approval of the Regis Charter Amendment by the Required Regis Charter Vote (the “Regis Charter Approval”) and shall take all lawful action to solicit the Regis Share Issuance Approval and the Regis Charter Approval by the Required Regis Share Issuance Vote and the Required Regis Charter Vote, respectively, and the Board of Directors of Regis (subject to the right of Regis to terminate this Agreement pursuant to Section 9.1(i) and the right of the Board of Directors of Regis to make a Change in the Regis Recommendation pursuant to Section 7.5(a)(iv)) shall declare that this Agreement, the Merger, the Regis Share Issuance and the Regis Charter Amendment are advisable and in the best interests of Regis and its shareholders and recommend to the shareholders of Regis approval of the Regis Share Issuance and the Regis Charter Amendment by the shareholders of Regis (the “Regis Recommendation”). Subject to Section 9.1(i), notwithstanding anything herein to the contrary, if a Change in the Regis Recommendation is made and within 5 Business Days after Alberto-Culver receives notice from Regis of such Change in the Regis Recommendation, Alberto-Culver delivers a written notice (a “Force the Regis Vote Notice”) to Regis that Alberto-Culver

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desires that the Regis Share Issuance and the Regis Charter Amendment be submitted to the shareholders of Regis, then the Regis Share Issuance and the Regis Charter Amendment shall be submitted to the shareholders of Regis at the Regis Shareholders Meeting for the purpose of obtaining the Regis Share Issuance Approval and the Regis Charter Approval and nothing contained herein shall be deemed to relieve Regis of such obligation.

(c) Alberto-Culver shall duly take all lawful action to call, give notice of, convene and hold a meeting of its stockholders as promptly as practicable after the date of this Agreement (including any adjournment or postponements thereof, the “Alberto-Culver Stockholders Meeting”) for the purpose of obtaining the affirmative vote of the holders of a majority of the outstanding shares of Alberto-Culver Common Stock (the “Alberto-Culver Vote”) with respect to the transactions contemplated by this Agreement (the “Alberto-Culver Transaction Approval”) and shall take all lawful action to solicit the approval of the transactions contemplated by this Agreement by the Alberto-Culver Vote, and the Board of Directors of Alberto-Culver (subject to the right of Alberto-Culver to terminate this Agreement pursuant to Section 9.1(j) and the right of the Board of Directors of Alberto-Culver to make a Change in the Alberto-Culver Recommendation pursuant to Section 7.5(b)(iv)) shall declare that this Agreement and the transactions contemplated by this Agreement are advisable and in the best interests of Alberto-Culver and its stockholders and recommend to the stockholders of Alberto-Culver approval of the transactions contemplated by this Agreement by the stockholders of Alberto-Culver (the “Alberto-Culver Recommendation”). Subject to Section 9.1(j), notwithstanding anything herein to the contrary, if a Change in the Alberto-Culver Recommendation is made and within 5 Business Days after Regis receives notice from Alberto-Culver of such Change in the Alberto-Culver Recommendation, Regis delivers a written notice (a “Force the Alberto-Culver Vote Notice”) to Alberto-Culver that Regis desires that the transactions contemplated by this Agreement be submitted to the stockholders of Alberto-Culver, then the transactions contemplated by this Agreement shall be submitted to the stockholders of Alberto-Culver at the Alberto-Culver Stockholders Meeting for the purpose of obtaining the Alberto-Culver Transaction Approval and nothing contained herein shall be deemed to relieve Alberto-Culver of such obligation.

SECTION 7.2 Regis Organizational Documents; Governance Matters. (a) Regis shall take all actions necessary to cause, at the Effective Time, the Articles of Incorporation of Regis to be amended to reflect the Regis Charter Amendment.

(b) Regis shall take all actions necessary to cause (i) the Board of Directors of Regis, effective immediately following the Effective Time and thereafter until changed in accordance with the Articles of Incorporation of Regis, the By-laws of Regis and Applicable Laws, to consist of (A) (1) Howard B. Bernick, Sam J. Susser and John A. Miller, or if any of such three individuals is unable or unwilling to serve as a director of Regis, such other individual or individuals selected by Alberto-Culver and reasonably acceptable to Regis and (2) one individual to be named prior to the Effective Time by the Shareholders, or if such individual is unable or unwilling to serve as a director of Regis, such other individual named by the Shareholders, provided that the individual named by the Shareholders shall not be a person the Shareholders would not be entitled to designate as a Shareholder Designee under Section 1(b) of the Shareholders Agreement, with each of at least three of the individuals described in this clause (A) being Independent Directors (or deemed an Independent Director pursuant to the

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Shareholders Agreement) (the individuals described in clauses (1) and (2) collectively, the “Alberto-Culver Designees”), (B) Paul D. Finkelstein, Rolf F. Bjelland, Van Zandt Hawn and Susan S. Hoyt or if any of such individuals is unable or unwilling to serve as a director of Regis, such other individual or individuals selected by Regis and reasonably acceptable to Alberto-Culver, with three of such individuals being Independent Directors (the “Regis Designees”) and (C) two individuals mutually selected by Regis and Alberto-Culver prior to the Effective Time, each of whom shall (1) be an Independent Director, (2) prior to the Effective Time, have been approved by at least 70% of each of the entire Alberto-Culver Board of Directors and the entire Regis Board of Directors and (3) prior to the Effective Time, have agreed to serve on the Regis Board of Directors; provided, however, that if any of the individuals described in this clause (C) is unable to begin serving as a director of Regis immediately following the Effective Time, the Board of Directors of Regis shall not include such individual until he is able to serve as a director; provided further, that if such individual is unable to serve as a director of Regis immediately following the Effective Time, he shall have agreed to begin to serve within a reasonable period of time thereafter, (ii) effective immediately following the Effective Time until duly changed in accordance with the Articles of Incorporation of Regis, the By-laws of Regis and Applicable Laws the Non-Executive Chairman of the Board of Directors of Regis to be Howard B. Bernick, or if such individual is unable or unwilling to serve as the Non-Executive Chairman of Regis, such other individual mutually agreed upon by Alberto-Culver and Regis and (iii) effective immediately following the Effective Time until duly changed in accordance with the Articles of Incorporation of Regis, the By-laws of Regis and Applicable Laws, the Chairman of the Nominating and Corporate Governance Committee of Regis to be Sam J. Susser, or if such individual is unable or unwilling to serve as the Chairman of the Nominating and Corporate Governance Committee of Regis, such other individual selected by Alberto-Culver (which individual shall be selected from the Alberto-Culver Designees). The term “Independent Director” means an individual who, as a director of the Board of Directors of Regis following the Effective Time, would be independent of Regis under the applicable rules of the NYSE.

(c) The President and Chief Executive Officer of Regis immediately prior to the Effective Time shall be the President and Chief Executive Officer of Regis immediately after the Effective Time until duly changed in accordance with the Articles of Incorporation of Regis, the By-laws of Regis and Applicable Laws.

(d) The name of Regis immediately following the Effective Time shall remain Regis Corporation.

(e) The executive and corporate headquarters of Regis immediately following Effective Time shall be the current executive and corporate headquarters of Regis.

SECTION 7.3 Access to Information. Upon reasonable notice, each of Alberto-Culver, Spinco and Regis shall (and shall cause its Subsidiaries to), during the period prior to the earlier of the Effective Time or the Termination Date, afford to each other and to its respective officers, employees, accountants, counsel, financial advisors and other authorized representatives, reasonable access during normal business hours, to all its books, records, Contracts, properties, plants and personnel (in the case of Alberto-Culver and its Subsidiaries, only with respect to the business of Spinco and its Subsidiaries) and, during such period, such party shall (and shall cause its Subsidiaries to) furnish promptly to the other party (a) notice of

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each material report, schedule, registration statement and other document filed, published, announced or received by Regis or Spinco (as applicable) during such period pursuant to the requirements of Federal or state securities laws, as applicable (other than documents which such party is not permitted to disclose under Applicable Laws) and (b) all information concerning it and its business, properties and personnel as such other party may reasonably request; provided, however, that either party may restrict the foregoing access to the extent that (i) any Applicable Laws or Contract requires such party or its Subsidiaries to restrict or prohibit access to any such properties or information, (ii) disclosure of such information would violate confidentiality obligations to a third party, (iii) disclosure of such information would be reasonably likely to result in significant competitive harm to the disclosing Person if the transactions contemplated by this Agreement were not consummated, it being understood that the parties will provide extracts, or summaries, or aggregations or other information to the greatest extent practicable in a manner that does not result in any such violation or improper disclosure or (iv) in the case of Alberto-Culver and its Subsidiaries, the information is not related to the Spinco Business. The parties will hold any such information obtained pursuant to this Section 7.3 in confidence in accordance with, and will otherwise be subject to, the provisions of the Confidentiality Agreement dated September 9, 2005 between Alberto-Culver and Regis (as it may be amended or supplemented, the “Confidentiality Agreement”). The Confidentiality Agreement shall survive any termination of this Agreement. Any investigation by either Regis, Merger Sub or Subco, on the one hand, or Alberto-Culver or Spinco, on the other hand, shall not affect the representations and warranties contained herein or the conditions to the respective obligations of the parties to consummate the Merger, the Subsequent Merger or the Spinco-Subco Merger.

SECTION 7.4 Reasonable Best Efforts.

(a) Subject to the terms and conditions of this Agreement, each party will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other parties in doing or causing to be done, all things necessary, proper or advisable under this Agreement and Applicable Laws to consummate the Merger and the other transactions contemplated by this Agreement as soon as reasonably practicable after the date hereof, including (i) preparing and filing as promptly as practicable all documentation to effect all necessary applications, notices, petitions, filings and Tax ruling requests and to obtain as promptly as practicable all Regis Necessary Consents, Alberto-Culver Necessary Consents and Spinco Necessary Consents and all other consents, waivers, licenses, orders, registrations, approvals, permits, rulings, authorizations and clearances necessary or advisable to be obtained from any third party and/or any Governmental Entity in order to consummate the Merger or any of the other transactions contemplated by this Agreement (collectively, the “Required Approvals”) and (ii) taking all reasonable steps as may be necessary to obtain all Required Approvals. In furtherance and not in limitation of the foregoing, each party hereto agrees to make (A) an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as reasonably practicable after the date hereof, (B) appropriate filings, if any are required, with the European Commission and/or other foreign regulatory authorities in accordance with applicable competition, merger control, antitrust, investment or similar Applicable Laws (“Foreign Competition Laws”) and (C) all other necessary filings with other Governmental Entities relating to the Merger, and, in each case, to supply as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to such Applicable Laws

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or by such authorities and to use its reasonable best efforts to cause the expiration or termination of the applicable waiting periods under the HSR Act and the receipt of the Required Approvals under such other Applicable Laws or from such authorities as soon as reasonably practicable.

(b) Each of Regis, Merger Sub and Subco, on the one hand, and Alberto-Culver and Spinco, on the other hand, shall, in connection with the efforts referenced in Section 7.4(a) to obtain all Required Approvals, use its reasonable best efforts to (i) cooperate in all respects with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party, (ii) promptly inform the other party of any communication received by such party from, or given by such party to, the Antitrust Division of the Department of Justice (the “DOJ”), the FTC or any other Governmental Entity and of any material communication received or given in connection with any proceeding by a private party, in each case regarding any of the transactions contemplated hereby and (iii) permit the other party to review any communication given by it to, and consult with each other in advance of any meeting or conference with, the DOJ, the FTC or any such other Governmental Entity or, in connection with any proceeding by a private party, with any other Person, and to the extent appropriate or permitted by the DOJ, the FTC or such other applicable Governmental Entity or other Person, give the other party the opportunity to attend and participate in such meetings and conferences.

(c) In furtherance and not in limitation of the covenants of the parties contained in Section 7.4(a) and Section 7.4(b), if any administrative or judicial action or proceeding, including any proceeding by a private party, is instituted (or threatened to be instituted) to prohibit or make illegal the Merger or any of the transactions contemplated hereby, or if any statute, rule, regulation, executive order, decree, injunction or administrative order is enacted, entered, promulgated or enforced by a Governmental Entity which would make the Merger or the other transactions contemplated hereby illegal or would otherwise prohibit or materially impair or delay the consummation of the Merger or the other transactions contemplated hereby, each of Alberto-Culver, Spinco, Merger Sub, Subco and Regis shall cooperate in all respects with each other and use its respective reasonable best efforts, to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Merger or the other transactions contemplated by this Agreement and to have such statute, rule, regulation, executive order, decree, injunction or administrative order repealed, rescinded or made inapplicable so as to permit consummation of the transactions contemplated by this Agreement.

(d) Notwithstanding the foregoing or any other provision of this Agreement, nothing in this Section 7.4 shall (i) limit a party’s right to terminate this Agreement pursuant to Section 9.1(b) or Section 9.1(c) so long as such party has complied with its obligations under this Section 7.4 or (ii) limit Regis’s or Alberto-Culver’s right to make a Change in the Regis Recommendation or a Change in the Alberto-Culver Recommendation, as the case may be, in accordance with Section 7.5.

(e) Nothing in this Section 7.4 shall require any of Regis, Alberto-Culver or Spinco or any of their respective Subsidiaries to take any action or enter into any settlement or other agreement or binding arrangement that limits such Person’s freedom of action with respect

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to or that requires such Person to sell, hold separate or otherwise dispose of any businesses, product lines or assets of Alberto-Culver, Regis or any of their Subsidiaries including the capital stock of any such Subsidiary. This Section 7.4 shall not be deemed to address the obligations of the parties with respect to the Private Letter Ruling, which are addressed in Section 7.15.

SECTION 7.5 Acquisition Proposals.

(a) (i) From and after the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Article IX, Regis shall not, nor shall it permit any of its Subsidiaries to, nor shall it or its Subsidiaries authorize or permit any of their respective officers, directors, employees, representatives or agents to, directly or indirectly, (A) solicit, initiate or knowingly encourage (including by way of furnishing non-public information) any inquiries regarding, or the making of any offer or proposal which constitutes or that would reasonably be expected to lead to, any Regis Acquisition Proposal, (B) enter into any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement, or other agreement related to any Regis Acquisition Proposal (each, a “Regis Acquisition Agreement”) or (C) participate in any discussions or negotiations regarding, or take any other action knowingly to facilitate any inquiries or the making of any offer or proposal that constitutes, or that would reasonably be expected to lead to, any Regis Acquisition Proposal; provided, however, that if, at any time prior to the Regis Shareholders Meeting, and without any breach of the terms of this Section 7.5(a), Regis receives an unsolicited bona fide written Regis Acquisition Proposal from any Person that in the good faith judgment of Regis’s Board of Directors constitutes, or is reasonably likely to lead to, a Superior Regis Proposal, Regis may (x) furnish information (including non-public information) with respect to Regis to any such Person pursuant to a confidentiality agreement containing terms no less restrictive on such Person than those in the Confidentiality Agreement are to Alberto-Culver and (y) participate in negotiations with such Person regarding such Regis Acquisition Proposal.

(ii) For purposes of this Agreement, “Regis Acquisition Proposal” means any inquiry, proposal or offer from any Person with respect to (A) a merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving Regis or any of its Subsidiaries that, if consummated, would result in any Person (or the stockholders of such Person in the aggregate) beneficially owning securities representing 25% or more of the total voting power of Regis then outstanding, (B) any direct or indirect purchase or sale, lease, exchange, transfer or other disposition of 25% or more of the consolidated assets (including stock of Regis’s Subsidiaries) of Regis and its Subsidiaries, taken as a whole, or (C) any direct or indirect purchase or sale of, or tender or exchange offer for, or similar transaction with respect to, the equity securities of Regis that, if consummated, would result in any Person (or the stockholders of such Person in the aggregate) beneficially owning securities representing 25% or more of the total voting power of Regis (or of the surviving parent entity in such transaction) then outstanding, including in the case of each of clauses (A) through (C), any single or multi-step transaction or series of related transactions (other than an inquiry, proposal or offer made by Alberto-Culver or a Subsidiary thereof).

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(iii) For purposes of this Agreement, “Superior Regis Proposal” means an unsolicited, bona fide written proposal or offer described in clause (A), (B) or (C) of the definition of Regis Acquisition Proposal (for purposes of this definition of “Superior Regis Proposal”, references to 25% in the definition of “Regis Acquisition Proposal” shall be deemed to be references to 50%) made by a Person other than a party hereto that is on terms which the Board of Directors of Regis in good faith concludes (after consultation with its outside legal counsel and financial advisors), taking into account, among other things, all legal, financial, regulatory and other aspects of the proposal and the Person making the proposal, (x) would, if consummated, result in a transaction that is more favorable to Regis’s shareholders (in their capacities as shareholders) than the transactions contemplated by this Agreement and (y) is reasonably likely to be completed.

(iv) Neither the Board of Directors of Regis nor any committee thereof shall (A) withdraw, modify or qualify (or propose to withdraw, modify or qualify) the Regis Recommendation (a “Change in the Regis Recommendation”), (B) approve, recommend, agree to or accept, or propose to approve, recommend, agree to or accept, any Regis Acquisition Proposal, or (C) authorize or permit Regis or any of its Subsidiaries to enter into any Regis Acquisition Agreement; provided, however, that at any time prior to the votes on the Regis Share Issuance and the Regis Charter Amendment at the Regis Shareholders Meeting having occurred, the Board of Directors of Regis may make a Change in the Regis Recommendation if and only if Regis has complied with this Section 7.5(a) and in the good faith judgment of the Board of Directors of Regis, after consultation with the outside legal counsel of Regis, the making of such Change in the Regis Recommendation is reasonably necessary to comply with the fiduciary duties of the Board of Directors of Regis to its shareholders under Applicable Laws; provided, further, that the Board of Directors of Regis may take any of the actions described in clauses (A) through (C) in connection with a termination of this Agreement pursuant to Section 9.1(i) if Regis has otherwise complied with this Section 7.5(a). Regis shall verbally notify the Chief Executive Officer and the Chairman of the Board of Directors of Alberto-Culver that a Change in the Regis Recommendation has occurred no later than four hours after a Change in the Regis Recommendation has occurred (which shall be followed by written notice to Alberto-Culver which written notice shall be delivered the same day that a Change in the Regis Recommendation occurs). For the avoidance of doubt, the failure to provide such verbal and/or written notice shall in no way affect Alberto-Culver’s right to terminate this Agreement pursuant to Section 9.1(e).

(v) Nothing contained in this Section 7.5(a) shall prohibit Regis from complying with Rules 14d-9 or 14e-2 promulgated under the Exchange Act with respect to a Regis Acquisition Proposal or from making any disclosure to the shareholders of Regis with respect to a Regis Acquisition Proposal that is not a Change in the Regis Recommendation, if, in the good faith judgment of the Board of Directors of Regis, after consultation with outside legal counsel, such disclosure is reasonably necessary to comply with the fiduciary duties of the Board of Directors of Regis to its shareholders under Applicable Laws; provided, however, that compliance with such rules shall not in any way limit or modify the effect that any action taken pursuant to such rules has under any other provision of this Agreement.

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(vi) Regis agrees that it and its Subsidiaries shall, and Regis shall direct its and its Subsidiaries’ respective officers, directors, employees, representatives and agents to, immediately cease and cause to be terminated any activities, discussions or negotiations being conducted on the date hereof with any Persons with respect to any Regis Acquisition Proposal. Regis agrees that it will notify Alberto-Culver promptly (but no more than 48 hours later) if, to the Knowledge of Regis, any Regis Acquisition Proposal is received by or any discussions or negotiations relating to a Regis Acquisition Proposal are sought to be initiated or continued with, Regis, its Subsidiaries, or their officers, directors, employees, representatives or agents. The notice shall indicate the name of the Person making such Regis Acquisition Proposal or taking such action and the material terms and conditions of any proposals or offers, and thereafter Regis shall keep Alberto-Culver informed, on a current basis, of the status and terms of any such proposals or offers and the status of any such discussions or negotiations.

(vii) Except to the extent the Board of Directors of Regis determines in good faith (after consultation with outside legal counsel) that the taking of an action otherwise required or not taking an action otherwise prohibited by this Section 7.5(a)(vii) would result in a breach of its fiduciary duties to the holders of Regis Common Stock under Applicable Law (provided, however, that failure to take or not to take any of the actions described in clause (A) or (B) based on this exception shall not in any way limit or modify the effect that any such action or inaction has under any other provision of this Agreement), during the period from the date of this Agreement through the Effective Time, Regis shall (A) enforce and shall not terminate, amend, modify or waive any standstill or employee non-solicitation provision of any confidentiality, standstill, employee non-solicitation or similar agreement between Regis and any other Persons which relates to any transaction that could constitute a Regis Acquisition Proposal or that has as a counterparty any Person other than Alberto-Culver and (B) enforce, to the fullest extent permitted under Applicable Law, the provisions of any such agreements, including using its reasonable best efforts to obtain injunctions to prevent any threatened or actual breach of such agreements and to enforce specifically the terms and any provision thereof in any court of the United States or any state thereof having jurisdiction.

(b) (i) From and after the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement in accordance with Article IX, Alberto-Culver shall not, nor shall it permit any of its Subsidiaries to, nor shall it or its Subsidiaries authorize or permit any of their respective officers, directors, employees, representatives or agents to, directly or indirectly, (A) solicit, initiate or knowingly encourage (including by way of furnishing non-public information) any inquiries regarding, or the making of any offer or proposal which constitutes or that would reasonably be expected to lead to, any Alberto-Culver Acquisition Proposal, (B) enter into any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement, or other agreement related to any Alberto-Culver Acquisition Proposal (each, an “Alberto-Culver Acquisition Agreement”) or (C) participate in any discussions or negotiations regarding, or take any other action knowingly to facilitate any inquiries or the making of any offer or proposal that constitutes, or that would reasonably be expected to lead to, any Alberto-Culver Acquisition Proposal; provided, however, that if, at any time prior to the Alberto-Culver Stockholders Meeting, and without any breach of the

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terms of this Section 7.5(b), Alberto-Culver receives an unsolicited bona fide written Alberto-Culver Acquisition Proposal from any Person that in the good faith judgment of Alberto-Culver’s Board of Directors constitutes, or is reasonably likely to lead to, a Superior Alberto-Culver Proposal, Alberto-Culver may (x) furnish information (including non-public information) with respect to Alberto-Culver to any such Person pursuant to a confidentiality agreement containing terms no less restrictive on such Person than those in the Confidentiality Agreement are to Regis and (y) participate in negotiations with such Person regarding such Alberto-Culver Acquisition Proposal.

(ii) For purposes of this Agreement, “Alberto-Culver Acquisition Proposal” means any inquiry, proposal or offer from any Person with respect to (A) a merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving Alberto-Culver or any of its Subsidiaries that, if consummated, would result in any Person (or the stockholders of such Person in the aggregate) beneficially owning securities representing 25% or more of the total voting power of Alberto-Culver then outstanding, (B) any direct or indirect purchase or sale, lease, exchange, transfer or other disposition of 25% or more of the consolidated assets (including stock of Alberto-Culver’s Subsidiaries) of Alberto-Culver and its Subsidiaries, taken as a whole, or (C) any direct or indirect purchase or sale of, or tender or exchange offer for, or similar transaction with respect to, the equity securities of Alberto-Culver that, if consummated, would result in any Person (or the stockholders of such Person in the aggregate) beneficially owning securities representing 25% or more of the total voting power of Alberto-Culver (or of the surviving parent entity in such transaction) then outstanding, including in the case of each of clauses (A) through (C), any single or multi-step transaction or series of related transactions (other than an inquiry, proposal or offer made by Regis or a Subsidiary thereof).

(iii) For purposes of this Agreement, “Superior Alberto-Culver Proposal” means an unsolicited, bona fide written proposal or offer described in clause (A), (B) or (C) of the definition of Alberto-Culver Acquisition Proposal (for purposes of this definition of “Superior Alberto-Culver Proposal”, references to 25% in the definition of “Alberto-Culver Acquisition Proposal” shall be deemed to be references to 50%) made by a Person other than a party hereto that is on terms which the Board of Directors of Alberto-Culver in good faith concludes (after consultation with its outside legal counsel and financial advisors), taking into account, among other things, all legal, financial, regulatory and other aspects of the proposal and the Person making the proposal, (x) would, if consummated, result in a transaction that is more favorable to Alberto-Culver’s stockholders (in their capacities as stockholders) than the transactions contemplated by this Agreement and (y) is reasonably likely to be completed.

(iv) Neither the Board of Directors of Alberto-Culver nor any committee thereof shall (A) withdraw, modify or qualify (or propose to withdraw, modify or qualify) the Alberto-Culver Recommendation (a “Change in the Alberto-Culver Recommendation”), (B) approve, recommend, agree to or accept, or propose to approve, recommend, agree to or accept, any Alberto-Culver Acquisition Proposal or (C) authorize or permit Alberto-Culver or any of its Subsidiaries to enter into any Alberto-Culver Acquisition Agreement; provided, however, that at any time prior to the vote by the

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stockholders of Alberto-Culver on the transactions contemplated by this Agreement at the Alberto-Culver Stockholders Meeting having occurred, the Board of Directors of Alberto-Culver may make a Change in the Alberto-Culver Recommendation if and only if Alberto-Culver has complied with this Section 7.5(b) and in the good faith judgment of the Board of Directors of Alberto-Culver, after consultation with the outside legal counsel of Alberto-Culver, the making of such Change in the Alberto-Culver Recommendation is reasonably necessary to comply with the fiduciary duties of the Board of Directors of Alberto-Culver to its stockholders under Applicable Laws; provided, further, that the Board of Directors of Alberto-Culver may take any of the actions described in clauses (A) through (C) in connection with a termination of this Agreement pursuant to Section 9.1(j) if Alberto-Culver has otherwise complied with this Section 7.5(b). Alberto-Culver shall verbally notify the Chief Executive Officer and the Chairman of the Board of Directors of Regis that a Change in the Alberto-Culver Recommendation has occurred no later than four hours after a Change in the Alberto-Culver Recommendation has occurred (which shall be followed by written notice to Regis which written notice shall be delivered the same day that a Change in the Alberto-Culver Recommendation occurs). For the avoidance of doubt, the failure to provide such verbal and/or written notice shall in no way affect Regis’s right to terminate this Agreement pursuant to Section 9.1(f).

(v) Nothing contained in this Section 7.5(b) shall prohibit Alberto-Culver from complying with Rules 14d-9 or 14e-2 promulgated under the Exchange Act with respect to an Alberto-Culver Acquisition Proposal or from making any disclosure to the stockholders of Alberto-Culver with respect to an Alberto-Culver Acquisition Proposal that is not a Change in the Alberto-Culver Recommendation, if, in the good faith judgment of the Board of Directors of Alberto-Culver, after consultation with outside legal counsel, such disclosure is reasonably necessary to comply with the fiduciary duties of the Board of Directors of Alberto-Culver to its stockholders under Applicable Laws; provided, however, that compliance with such rules shall not in any way limit or modify the effect that any action taken pursuant to such rules has under any other provision of this Agreement.

(vi) Alberto-Culver agrees that it and its Subsidiaries shall, and Alberto-Culver shall direct its and its Subsidiaries’ respective officers, directors, employees, representatives and agents to, immediately cease and cause to be terminated any activities, discussions or negotiations being conducted on the date hereof with any Persons with respect to any Alberto-Culver Acquisition Proposal. Alberto-Culver agrees that it will notify Regis promptly (but no more than 48 hours later) if, to the Knowledge of Alberto-Culver, any Alberto-Culver Acquisition Proposal is received by or any discussions or negotiations relating to an Alberto-Culver Acquisition Proposal are sought to be initiated or continued with, Alberto-Culver, its Subsidiaries, or their officers, directors, employees, representatives or agents. The notice shall indicate the name of the Person making such Alberto-Culver Acquisition Proposal or taking such action and the material terms and conditions of any proposals or offers, and thereafter Alberto-Culver shall keep Regis informed, on a current basis, of the status and terms of any such proposals or offers and the status of any such discussions or negotiations.

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(vii) Except to the extent the Board of Directors of Alberto-Culver determines in good faith (after consultation with outside legal counsel) that the taking of an action otherwise required or not taking an action otherwise prohibited by this Section 7.5(b)(vii) would result in a breach of its fiduciary duties to the holders of Alberto-Culver Common Stock under Applicable Law (provided, however, that failure to take or not to take any of the actions described in clause (A) or (B) based on this exception shall not in any way limit or modify the effect that any such action or inaction has under any other provision of this Agreement), during the period from the date of this Agreement through the Effective Time, Alberto-Culver shall (A) enforce and shall not terminate, amend, modify or waive any standstill or employee non-solicitation provision of any confidentiality, standstill, employee non-solicitation or similar agreement between Alberto-Culver and any other Persons which relates to any transaction that could constitute an Alberto-Culver Acquisition Proposal or that has as a counterparty any Person other than Regis and (B) enforce, to the fullest extent permitted under Applicable Law, the provisions of any such agreements, including using its reasonable best efforts to obtain injunctions to prevent any threatened or actual breach of such agreements and to enforce specifically the terms and any provision thereof in any court of the United States or any state thereof having jurisdiction.

SECTION 7.6 Fees and Expenses. Without in any way limiting Sections 9.2(b) through 9.2(i), whether or not the Merger is consummated, (i) all Expenses (as defined below) incurred by Regis shall be paid by Regis, and (ii) all Expenses incurred by Alberto-Culver and/or Spinco prior to the Effective Time shall be paid 1/3 by Alberto-Culver and 2/3 by Spinco; provided, however, that if the Effective Time occurs, the maximum amount of such Expenses in clause (ii) that Spinco shall be required to pay pursuant to this Section 7.6 shall not exceed $18 million. As used in this Agreement, “Expenses” means all out-of-pocket expenses (including applicable filing and registration fees and all fees and expenses of counsel, accountants, investment bankers, experts and consultants to a party hereto and its Affiliates) incurred by a party hereto or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the Transaction Agreements and the transactions contemplated hereby and thereby, including the preparation, printing, filing and mailing of the Form S-4 and the Joint Proxy Statement/Prospectus and all other matters related to the transactions contemplated hereby (it being understood and agreed that all fees or expenses charged by Persons providing the financing to Spinco and its Subsidiaries to finance the payment of the Spinco Dividend, any interest expenses of the financing to finance the payment of the Spinco Dividend and any reasonable and documented out-of-pocket expenses of Alberto-Culver, Spinco or any of their Subsidiaries incurred in connection with the financing to finance the payment of the Spinco Dividend shall be borne by Regis).

SECTION 7.7 Sole Stockholder Approvals. Promptly (and in any event not later than 24 hours) after the execution of this Agreement, (a) Alberto-Culver, as the sole stockholder of Spinco, shall vote to adopt this Agreement in accordance with the DGCL, and (b) Regis, as the sole stockholder of Merger Sub, shall vote to adopt this Agreement in accordance with the DGCL.

SECTION 7.8 Public Announcements. Regis, Alberto-Culver and Spinco each shall use reasonable best efforts to develop a joint communications plan and each party shall use

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reasonable best efforts (a) to ensure that all press releases and other public statements with respect to the transactions contemplated hereby shall be consistent with such joint communications plan and (b) unless otherwise required by Applicable Laws or by obligations pursuant to any listing agreement with or rules of any securities exchange or automated quotation system, to consult with each other before issuing any press release or, to the extent practicable, otherwise making any public statement with respect to this Agreement or the transactions contemplated hereby.

SECTION 7.9 Accounting Matters.

(a) In connection with the information regarding Regis, Merger Sub and Subco provided by Regis, Merger Sub and Subco specifically for inclusion in the Form S-4, Regis shall use its reasonable best efforts to cause to be delivered to Alberto-Culver two letters from Regis’s independent public accountants, one dated approximately the date on which the Form S-4 shall become effective and one dated the Closing Date, each addressed to Regis, Merger Sub, Subco Alberto-Culver and Spinco, in form and substance reasonably satisfactory to Alberto-Culver and reasonably customary in scope and substance for comfort letters delivered by independent public accountants in connection with registration statements similar to the Form S-4.

(b) In connection with the information regarding Spinco and the Spinco Business provided by Alberto-Culver and Spinco specifically for inclusion in the Form S-4, Alberto-Culver shall use its reasonable best efforts to cause to be delivered to Regis two letters from Alberto-Culver’s and Spinco’s independent public accountants, one dated approximately the date on which the Form S-4 shall become effective and one dated the Closing Date, each addressed to Alberto-Culver, Spinco, Regis, Merger Sub and Subco, in form and substance reasonably satisfactory to Regis and reasonably customary in scope and substance for comfort letters delivered by independent public accountants in connection with registration statements similar to the Form S-4.

SECTION 7.10 Listing of Shares of Regis Common Stock. Regis shall use its reasonable best efforts to cause the shares of Regis Common Stock to be issued in the Merger and the shares of Regis Common Stock to be reserved for issuance upon exercise of the Substitute Options to be approved for listing on the NYSE, subject to official notice of issuance, prior to the Closing Date.

SECTION 7.11 Affiliates. Not less than 30 days prior to the Effective Time, Alberto-Culver shall deliver to Regis a letter identifying all Persons who, in the judgment of Alberto-Culver, may be deemed at the Effective Time, “affiliates” of Spinco for purposes of Rule 145 under the Securities Act and applicable SEC rules and regulations, and such list shall be updated as necessary to reflect changes from the date of delivery thereof. Alberto-Culver shall use its reasonable best efforts to cause each person identified on such list to deliver to Regis not less than 15 days prior to the Effective Time, a written agreement substantially in the form attached hereto as Exhibit F.

SECTION 7.12 Takeover Statutes. If any “fair price”, “moratorium”, “control share acquisition” or other form of antitakeover statute or regulation shall become applicable to

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the transactions contemplated hereby, each of Regis, Alberto-Culver, Spinco, Merger Sub and Subco and their respective Boards of Directors (or member in the case of Subco) shall use its reasonable best efforts to grant such approvals and take such actions as are reasonably necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of such statute or regulation on the transactions contemplated hereby.

SECTION 7.13 Advice of Changes. Each of Regis, Alberto-Culver, Merger Sub, Subco and Spinco shall as promptly as reasonably practicable after becoming aware thereof advise the others of any change or event (a) having, or which would, individually or in the aggregate, reasonably be expected to have, in the case of Regis, a Material Adverse Effect on Regis, and, in the case of Alberto-Culver or Spinco, a Material Adverse Effect on Spinco, or (b) which has resulted, or which, insofar as can reasonably be foreseen, would result, in any of the conditions set forth in Article VIII not being satisfied; provided, however, that no such notification shall alter or affect in any manner the representations, warranties, covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement.

SECTION 7.14 Regis Guaranty. (a) From and after the Effective Time, Regis irrevocably and unconditionally guarantees the full performance of all obligations of Spinco to Alberto-Culver under the Transaction Agreements, subject to the terms and conditions set forth in this Section 7.14. Regis shall make any payment required to be made by it pursuant to this Section 7.14 promptly after the underlying guaranteed obligation is required to be paid in accordance with its terms (such payment to be made by wire transfer of immediately available funds to the account designated by Alberto-Culver or by any other method as shall be agreed upon by Alberto-Culver and Regis).

(b) From and after the Effective Time, Regis irrevocably and unconditionally waives any right to set-off any indebtedness or other liabilities at any time owing by Alberto-Culver or any of its Affiliates to Regis or any of its Affiliates (except for any liabilities owing by Alberto-Culver to Regis or Spinco under this Agreement or any Transaction Agreement) against any obligations or liabilities owed by Regis or any of its Affiliates to Alberto-Culver under this Section 7.14 or any Transaction Agreement.

(c) From and after the Effective Time, Regis irrevocably and unconditionally waives and agrees not to assert any claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice under this Section 7.14 or in respect of any Transaction Agreement, including any of the following: (i) any demand for payment or performance and protest and notice of protest, (ii) any notice of acceptance and (iii) any other notice in respect of any obligations guaranteed under this Section 7.14 or in respect of any Transaction Agreement or any part of them, and any defense arising by reason of any disability or other defense of Spinco. No obligation of Regis pursuant to this Section 7.14 or any Transaction Agreement shall be discharged other than by complete performance.

(d) No failure to exercise, nor any delay in exercising, on the part of Alberto-Culver, any right, power or privilege under this Section 7.14 or in respect of any Transaction Agreement shall operate as a waiver thereof.

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(e) This Section 7.14 shall survive indefinitely.

SECTION 7.15 Private Letter Ruling; Tax-Free Reorganization Treatment; Pre-Distribution Tax Returns.

(a) Alberto-Culver and Regis shall use their respective reasonable best efforts to obtain the Private Letter Ruling as soon as practicable after the date hereof. Alberto-Culver shall (i) use its reasonable best efforts to allow Regis to participate in all meetings and material telephone calls with the IRS with respect to the Private Letter Ruling, (ii) use its reasonable best efforts to allow Regis a reasonable period of time (consistent with IRS requests as to timing) to review and comment on any material written submissions related to the Private Letter Ruling and incorporate any reasonable comments provided by Regis with respect thereto, (iii) provide to Regis a copy of any written submission to the IRS or any written material received from the IRS with respect to the Private Letter Ruling, and (iv) keep Regis informed of the status of IRS review and consult with Regis regarding any material issue that arises during the course of such review.

(b) Neither Regis or any of its Subsidiaries nor Alberto-Culver or any of its Subsidiaries shall take or cause to be taken any action, before the Effective Time, that (i) would result in any failure to obtain the Private Letter Ruling or (ii) would disqualify the transactions contemplated hereby from constituting a tax-free distribution under Section 355 of the Code, including, without limitation, any actions prohibited under the Tax Allocation Agreement. None of Alberto-Culver, Spinco, Regis or any of their respective Subsidiaries shall take or cause to be taken any action, before the Effective Time, that would disqualify the Merger and the Subsequent Merger, taken together, from constituting a tax-free reorganization under Section 368 of the Code.

(c) From the date hereof to the Distribution Time, Alberto-Culver shall timely file or cause to be timely filed all Tax Returns with respect to the Spinco Group on a basis consistent with past practice (unless there has been a change in Applicable Laws). As soon as reasonably practicable after the date hereof, Alberto-Culver shall provide to Regis a list of the Tax Returns it believes in good faith are required to be filed with respect to the Spinco Group between the date hereof and June 30, 2006. With respect to any material Tax Return on such list specifically identified by Regis (or any other material Tax Return identified by Regis in writing), Alberto-Culver shall, from the date it receives written notice from Regis relating to such Tax Return, (A) to the extent commercially reasonable, make available to Regis (or, if such Tax Return can be provided to Regis without undue cost or burden, provide to Regis) for its review and approval (not to be unreasonably withheld or delayed) at least 15 days prior to filing (in the case of any income Tax Return) or as soon as reasonably practicable (in the case of any other Tax Return), and (B) make any reasonable revisions to such Tax Returns that are requested by Regis that affect the amount of Taxes that are allocated to Spinco or any Spinco Subsidiary. Alberto-Culver and Regis agree to cooperate with each other in good faith with respect to Tax matters and to make available Tax information in a manner consistent with Section 7.3.

SECTION 7.16 Obligations under Separation Agreement. Each of Alberto-Culver and Spinco will prior to the Effective Time (a) perform its respective obligations and covenants under the Separation Agreement in accordance with the terms of the Separation Agreement and (b) enforce and preserve its respective rights under the Separation Agreement to the full extent permitted under the Separation Agreement.

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SECTION 7.17 Section 16 Matters. Prior to the Effective Time, provided that Alberto-Culver delivers to Regis the applicable Section 16 Information (as defined below) at least three Business Days prior to the date of the Regis Shareholders Meeting, Regis shall take all steps, including those steps that may be taken in accordance with applicable SEC rules and regulations and interpretations of the SEC staff, as may be required to cause any acquisitions of Regis Common Stock (including derivative securities with respect to Regis Common Stock) resulting from the transactions contemplated by this Agreement by each Person who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Alberto-Culver (“Alberto-Culver Insiders”) to be exempt under Rule 16b-3 promulgated under the Exchange Act. “Section 16 Information” shall mean accurate information regarding Alberto-Culver Insiders, the number of shares of Spinco Common Stock to be held by each such Alberto-Culver Insider immediately following the Distribution and expected to be exchanged for Regis Common Stock in the Merger, and the number and description of the Spinco Stock Options expected to be held by each such Alberto-Culver Insider and expected to be converted into Substitute Options in connection with the Merger.

SECTION 7.18 Employee Benefits Matters.

(a) For a period of at least 12 months after the Effective Time, Regis shall or shall cause the Surviving Corporation to provide employees of the Surviving Corporation and its Subsidiaries with benefits that, in the aggregate, are substantially comparable to those provided under the Spinco Plans immediately prior to the Distribution Time (excluding any such Spinco Plans providing for equity-based compensation); provided, however, that nothing in this Agreement shall be interpreted as limiting the power of Regis or the Surviving Corporation to amend or terminate any such Spinco Plan or any other individual employee benefit plan, program, Contract or policy or as requiring Regis or the Surviving Corporation to offer to continue (other than as required by its terms) any written employment contract.

(b) Regis shall cause each Regis Plan covering employees of Spinco or any of its Subsidiaries to recognize prior service of such employees with, or credited before the Effective Time by, Alberto-Culver, Spinco and their Subsidiaries as service with Regis and its Subsidiaries, without duplication of benefits (i) for purposes of vesting, eligibility and accrual or level of benefits under any such Regis Plan that is not a “pension plan” (as defined in Section 3(2) of ERISA) and (ii) for purposes of eligibility and vesting (but not, for the avoidance of doubt, benefit accrual or level of benefits) under any such Regis Plan that is a “pension plan” (as defined in Section 3(2) of ERISA).

(c) Regis shall, or shall cause the Surviving Corporation to, (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to Spinco Employees and former employees of Spinco and its Subsidiaries under any welfare or fringe benefit plan in which such employees and former employees may be eligible to participate after the Effective Time, other than limitations or waiting periods that are in effect with respect to such employees and former employees and that have not been satisfied under the corresponding welfare or fringe benefit

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plan maintained by Spinco prior to the Effective Time and other than limitations or waiting periods applicable to non-Spinco Employees with the same period of service participating in such plans, and (ii) provide each Spinco Employee and former employee with credit under any welfare plans in which such employee or former employee becomes eligible to participate after the Effective Time for any co-payments and deductibles paid by such Spinco Employee or former employee for the then current plan year and for any out-of-pocket expenditures paid by such Spinco Employee or former employee at any time under the corresponding welfare plans maintained by Spinco prior to the Effective Time, to the extent such payments would have been taken into account under the Spinco Plans with respect to the same time period.

(d) Except as otherwise provided in the Employee Matters Agreement, Regis shall, and hereby does, as of the Effective Time, assume all of the obligations of Alberto-Culver and its Affiliates (i) with respect to all Spinco Employees under the Alberto-Culver Salaried Employees Special Severance Plan and (ii) under each severance agreement between Alberto-Culver and a Spinco Employee and, except to the extent a Spinco Employee agrees otherwise, all severance benefits shall be payable by Regis pursuant to the terms of such plan and agreements. Spinco shall enter into severance agreements substantially in the forms attached to Section 7.18(d) of the Spinco Disclosure Schedule with the individuals named therein and Regis shall assume all such obligations under such agreements.

SECTION 7.19 Non-Competition; Non-Solicitation.

(a) Non-Competition.

(i) Alberto-Culver agrees that for a period of 30 months following the Closing Date it shall not and shall cause its Subsidiaries not to acquire, manage, operate, control or otherwise engage in any business of (A) operating or franchising retail stores within the United States, Canada, Mexico, Puerto Rico, the United Kingdom, Ireland, Germany and/or Japan (the “Restricted Territories”) that sell beauty care products of Alberto-Culver or any third Person or (B) distributing to salons and salon professionals within the Restricted Territories professional beauty care products of any unaffiliated third Person (collectively, “Restricted Activities”).

(ii) Section 7.19(a)(i) shall be deemed not breached as a result of (A) the ownership by Alberto-Culver or any of its Subsidiaries of: (1) less than an aggregate of 5% of any class of capital stock of a Person engaged, directly or indirectly, in Restricted Activities; provided, however, that such capital stock is listed or quoted on a national securities exchange or the Nasdaq National Market or (2) less than 15% in value of any instrument of indebtedness of a Person engaged, directly or indirectly, in Restricted Activities, (B) Alberto-Culver or any of its Subsidiaries acquiring control of any Person or business that for the fiscal year immediately preceding such acquisition derived less than 10% of its revenues from Restricted Activities, (C) Alberto-Culver or any of its Subsidiaries acquiring control of any Person or business that for the fiscal year immediately preceding such acquisition derived more than 10% of its revenues but less than 35% of its revenues from Restricted Activities so long as it shall use its reasonable best efforts to divest such operations as promptly as practicable and in any event within 12 months after the consummation of such acquisition of control, (D) Alberto-Culver or

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any of its Subsidiaries owning an interest acquired as a creditor in bankruptcy or otherwise than by a voluntary investment decision in a Person or business that for the fiscal year immediately preceding the acquisition of such interest by Alberto-Culver or any of its Subsidiaries derived 10% or more of its revenues from Restricted Activities, so long as Alberto-Culver or its applicable Subsidiary shall use its reasonable best efforts to divest such interest as promptly as practicable and in any event within 12 months after the acquisition of such interest; provided, however, that Alberto-Culver and its Subsidiaries shall not be required to divest any such interest acquired pursuant to this clause (D) if its fair market value at the time of such acquisition is less than $1,000,000, (E) Alberto-Culver and its Subsidiaries operating up to ten retail stores that sell beauty care products, (F) Alberto-Culver and its Subsidiaries selling or distributing their branded professional beauty care products directly or through distributors to salons and salon professionals, (G) Alberto-Culver and its Subsidiaries selling or distributing professional beauty care products of any third Person directly to salons and salon professionals within the Restricted Territories if any member of the Alberto-Culver Group as of the date hereof sells and distributes such products and which sales will in no event exceed 2% of the consolidated net sales of Alberto-Culver in any fiscal year or (H) Alberto-Culver and its Subsidiaries operating their company stores in any office, plant or warehouse owned or leased by Alberto-Culver or any of its Subsidiaries (each of which shall not be deemed to be a retail store for purposes of Section 7.19(a)(ii)(E)). For the avoidance of doubt, Alberto-Culver and its Subsidiaries may actively operate, manage and control any Person or business any of them acquire in accordance with clause (B) and/or clause (C).

(iii) Alberto-Culver and Regis agree that the covenants included in Section 7.19(a) are reasonable in their geographic and temporal coverage, and that neither Alberto-Culver nor Regis shall raise any issue of geographic or temporal reasonableness in any proceeding to enforce such covenant; provided, however, that if the provision of Section 7.19(a) should ever be deemed to exceed the time or geographic limitations or any other limitations permitted by Applicable Law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the minimum extent required by Applicable Law to cure such problem. Notwithstanding any other provision of this Agreement, it is understood and agreed that monetary damages would be inadequate in the case of any breach of the covenants contained in Section 7.19(a), and that Regis shall be entitled to seek equitable relief, including the remedy of specific performance, with respect to any breach or attempted breach of such covenants.

(b) Alberto-Culver Non-Solicitation. Alberto-Culver agrees that for a period of 30 months following the Closing Date it will not (i) solicit any Spinco Employee or employee of Regis or any of its Subsidiaries that holds the position of officer or field supervisor or higher to terminate his or her employment relationship with Regis or any of the Regis Subsidiaries, or (ii) employ or retain or attempt to employ or retain any employee of Regis or its Subsidiaries that holds the position of officer or field supervisor or higher; provided, however, that the restrictions in this Section 7.19(b) shall not prohibit (A) a general solicitation (such as an advertisement) not specifically directed to any of the employees described in clause (i) or (ii) or (B) efforts by recruiting or employment agencies, provided that such recruiting or employment agencies are not directed to target employees described in clause (i) or (ii).

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(c) Regis Non-Solicitation. Regis and Spinco each agrees that for a period of 30 months following the Closing Date it will not (i) solicit any employee of Alberto-Culver that holds the position of officer or field supervisor or higher to terminate his or her employment relationship with Alberto-Culver or any of the Alberto-Culver Subsidiaries, or (ii) employ or retain or attempt to employ or retain any employee of Alberto-Culver or its Subsidiaries that holds the position of officer or field supervisor or higher; provided, however, that the restrictions in this Section 7.19(c) shall not prohibit (A) a general solicitation (such as an advertisement) not specifically directed to any of the employees described in clause (i) or (ii) or (B) efforts by recruiting or employment agencies, provided that such recruiting or employment agencies are not directed to target employees described in clause (i) or (ii).

SECTION 7.20 Financing.

(a) Alberto-Culver agrees to and to use its reasonable best efforts to cause its Subsidiaries and their respective officers and employees to provide, all cooperation reasonably requested by Regis in connection with the arrangement of any financing for Spinco and its Subsidiaries in connection with the transactions contemplated by this Agreement and the Separation Agreement, including participation in meetings with rating agencies, due diligence sessions and road shows; provided, however, that none of Alberto-Culver or any Alberto-Culver Subsidiary or any of their respective officers or employees shall be required to execute any document in connection with this Section 7.20(a), none of Alberto-Culver or any of its Subsidiaries or their respective officers or employees shall be required to expend out-of-pocket money in connection with this Section 7.20(a), and none of Spinco or any of its Subsidiaries or any of their respective officers or employees shall be required to or execute any document in connection with this Section 7.20(a) which document would be effective at any time before the time that will be immediately prior to the Distribution Time unless an earlier time would be necessary in order to effect the transactions contemplated by the Separation Agreement and this Agreement in which case the applicable document shall be effective at such earlier time and such document shall expressly provide that if the Distribution does not occur, such document and each of its provisions shall be of no force or effect ab initio; provided further, that nothing herein will require the cooperation of Alberto-Culver or any of its Subsidiaries or any of their respective officers or employees to the extent that it would unreasonably interfere with the business or operations of Alberto-Culver or any of its Subsidiaries.

(b) Regis agrees to and to use its reasonable best efforts to cause its Subsidiaries and their respective officers and employees to provide, all cooperation reasonably requested by Alberto-Culver or Spinco in connection with the arrangement of any financing for Spinco and its Subsidiaries in connection with the transactions contemplated by this Agreement and the Separation Agreement, including participation in meetings with rating agencies, due diligence sessions and road shows; provided, however, that none of Regis or any of its Subsidiaries or their respective officers or employees shall be required to expend out-of-pocket money or execute any document in connection with this Section 7.20(b) which document would be effective at any time before the time that will be immediately prior to the Distribution Time unless an earlier time would be necessary in order to effect the transactions contemplated by the Separation Agreement and this Agreement in which case the applicable document shall be effective at such earlier time and such document shall expressly provide that if the Distribution does not occur, such document and each of its provisions shall be of no force or effect ab initio;

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provided further, that nothing herein will require the cooperation of Regis or any of its Subsidiaries or any of their respective officers or employees to the extent that it would unreasonably interfere with the business or operations of Regis or any of its Subsidiaries.

SECTION 7.21 Shareholders Agreement. Regis shall take all necessary action to, immediately prior to the Effective Time, execute and deliver to the stockholders of Alberto-Culver named therein the shareholders agreement in the form of Exhibit G (the “Shareholders Agreement”).

SECTION 7.22 Transition Services. Following the Effective Time, Alberto-Culver shall provide to Spinco the services described on Section 7.22 of the Spinco Disclosure Schedule for the periods and at the costs set forth thereon.

ARTICLE VIII

CONDITIONS PRECEDENT

SECTION 8.1 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of Regis, Merger Sub, Alberto-Culver and Spinco to effect the Merger are subject to the satisfaction or waiver prior to the Effective Time of the following conditions:

(a) Shareholder and Stockholder Approvals. Regis shall have obtained the Regis Share Issuance Approval and the Regis Charter Approval and Alberto-Culver shall have obtained the Alberto-Culver Transaction Approval.

(b) No Injunctions or Restraints, Illegality. No Applicable Laws shall have been adopted, promulgated or enforced by any Governmental Entity, and no temporary restraining order, preliminary or permanent injunction or other order issued by a court or other Governmental Entity of competent jurisdiction (an “Injunction”) shall be in effect, having the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger.

(c) No Pending Governmental Actions. No proceeding initiated by any Governmental Entity seeking, and which is reasonably likely to result in the granting of, an Injunction having the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger shall be pending.

(d) HSR Act. The waiting period (and any extension thereof) applicable to the Merger under the HSR Act shall have been terminated or shall have expired.

(e) Foreign Competition Laws. All notifications and filings required under any Foreign Competition Laws to be made prior to the Effective Time to any Governmental Entity, and all consents, approvals and authorizations required by Applicable Laws to be obtained prior to the Effective Time under Foreign Competition Laws in order to effect the Merger shall have been made or obtained, and all waiting periods applicable to the Merger under any Foreign Competition Laws, shall have expired or been terminated other than those notifications, filings, consents, approvals and authorizations the failure of which to make or obtain would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Regis and its Subsidiaries, taken as a whole, after giving effect to the Merger or Alberto-Culver and its Subsidiaries, taken as a whole, after giving effect to the Merger.

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(f) NYSE Listing. The shares of Regis Common Stock to be issued in the Merger and to be reserved for issuance upon exercise of the Substitute Options shall have been approved for listing on the NYSE, subject to official notice of issuance.

(g) Effectiveness of the Form S-4. The Form S-4 shall have been declared effective by the SEC in accordance with the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order, and no similar proceedings in respect of the Joint Proxy Statement/Prospectus shall have been initiated or threatened by the SEC and not concluded or withdrawn.

(h) Pre-Merger Transactions. The Distribution shall have been consummated in accordance with the terms of this Agreement and the Separation Agreement (which includes additional conditions to such consummation).

(i) Private Letter Ruling and Tax Opinion.

(i) Alberto-Culver shall have received a private letter ruling from the IRS in form and substance reasonably satisfactory to each of Alberto-Culver and Regis, to the effect that, on the basis of the facts, representations and assumptions set forth in the written request for such ruling which are consistent with the state of facts existing at the Distribution Time, the Distribution will constitute a tax-free distribution under Section 355 of the Code (the “Private Letter Ruling”) and such ruling shall, as of the Effective Time, remain in full force and effect and shall not have been modified or amended in any respect adversely affecting the Tax consequences set forth therein.

(ii) Alberto-Culver shall have received an opinion from Sidley Austin LLP (or other such law firm of national standing), dated the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth in such opinion which are consistent with the state of facts existing at the Distribution Time, the Distribution will constitute a tax-free distribution under Section 355 of the Code. In rendering the opinion referred to in the preceding sentence, Sidley Austin LLP (or such other law firm of national standing) may rely upon the representations contained herein and representations from Alberto-Culver, Spinco and other parties (including, but not limited to, any major stockholders of Alberto-Culver and/or Spinco) as Sidley Austin LLP (or such other law firm of national standing) may reasonably request for purposes of rendering such opinion.

SECTION 8.2 Additional Conditions to Obligations of Regis and Merger Sub. The obligations of Regis and Merger Sub to effect the Merger is subject to the satisfaction or waiver by Regis and Merger Sub prior to the Effective Time of the following additional conditions:

(a) Representations and Warranties. Each of the representations and warranties of Alberto-Culver in Section 5.2(a) (Organization), Section 5.2(b) (Capital Structure), Section 5.2(c)(i) and (iv) (Authority) and Section 5.2(f) (Brokers or Finders) shall be true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth therein) in all material respects, in each case, as of the date of this Agreement and as of the

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Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties speak solely as of another date, in which case, as of such other date) and each of the other representations and warranties of Alberto-Culver set forth in this Agreement shall be true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth therein), in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties speak solely as of another date, in which case, as of such other date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth therein) would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Spinco, and Regis shall have received a certificate of Alberto-Culver executed by an executive officer of Alberto-Culver to such effect. Each of the representations and warranties of Alberto-Culver and Spinco in Section 5.3(a)(i) (Organization), Section 5.3(b) (Capital Structure), Section 5.3(c)(i) and (iii) (Authority; No Conflicts) and Section 5.3(j)(iv) (Assets/Services) shall be true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth therein) in all material respects, in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties speak solely as of another date, in which case, as of such other date) and each of the other representations and warranties of Spinco set forth in this Agreement shall be true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth therein), in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties speak solely as of another date, in which case, as of such other date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth therein) would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Spinco, and Regis shall have received a certificate of Spinco executed by an executive officer of Spinco to such effect.

(b) Performance of Obligations of Alberto-Culver and Spinco. Alberto-Culver shall have performed or complied with all agreements and covenants required to be performed by it under this Agreement at or prior to the Closing Date that are qualified as to materiality or Material Adverse Effect and shall have performed or complied in all material respects with all other agreements and covenants required to be performed by it under this Agreement at or prior to the Closing Date that are not so qualified, and Regis shall have received a certificate of Alberto-Culver executed by an executive officer of Alberto-Culver to such effect. Spinco shall have performed or complied with all agreements and covenants required to be performed by it under this Agreement at or prior to the Closing Date that are qualified as to materiality or Material Adverse Effect and shall have performed or complied in all material respects with all other agreements and covenants required to be performed by it under this Agreement at or prior to the Closing Date that are not so qualified, and Regis shall have received a certificate of Spinco executed by an executive officer of Spinco to such effect.

(c) Tax Opinion. Regis shall have received an opinion from O’Melveny & Myers LLP (or other law firm of national standing), dated the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth in such opinion which are consistent with the state of facts existing at the Effective Time, the Merger and the Subsequent Merger,

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taken together, will constitute a reorganization under Section 368(a) of the Code. In rendering the opinion referred to in the preceding sentence, O’Melveny & Myers LLP (or such other law firm of national standing) may rely upon the representations contained herein and representations from Alberto-Culver and Spinco substantially identical to the representations in the certificate attached to the Alberto-Culver Disclosure Schedules (the “Alberto-Culver Tax Certificate”) and representations from Regis, Merger Sub and Subco substantially identical to the representations in the certificate attached to the Regis Disclosure Schedules (the “Regis Tax Certificate”).

(d) Ancillary Agreements. The Separation Agreement, Employee Matters Agreement and Tax Allocation Agreement shall be in full force and effect.

(e) Material Adverse Effect. Since the date of this Agreement, there shall not have been any Material Adverse Effect on Spinco.

SECTION 8.3 Additional Conditions to Obligations of Alberto-Culver and Spinco. The obligations of Alberto-Culver and Spinco to effect the Merger are subject to the satisfaction or waiver by Alberto-Culver and Spinco prior to the Effective Time of the following additional conditions:

(a) Representations and Warranties. Each of the representations and warranties of Regis, Merger Sub and Subco in Section 5.1(a)(i) and (ii), (Organization), Section 5.1(b) (Capital Structure), Section 5.1(c)(i), (ii), (iii) and (v) (Authority; No Conflicts), Section 5.1(f) (Board Approval), Section 5.1(g) (Votes Required), Section 5.1(v) (Regis Rights Agreement) and Section 5.1(w) (Brokers or Finders) shall be true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth therein) in all material respects, in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties speak solely as of another date, in which case, as of such other date) and each of the other representations and warranties of Regis, Merger Sub and Subco set forth in this Agreement shall be true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth therein), in each case as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent that such representations and warranties speak solely as of another date, in which case, as of such other date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to materiality or Material Adverse Effect set forth therein) would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Regis, and Alberto-Culver and Spinco shall have received a certificate of Regis executed by an executive officer of Regis to such effect.

(b) Performance of Obligations of Regis. Regis shall have performed or complied with all agreements and covenants required to be performed by it under this Agreement at or prior to the Closing Date that are qualified as to materiality or Material Adverse Effect and shall have performed or complied in all material respects with all other agreements and covenants required to be performed by it under this Agreement at or prior to the Closing Date that are not so qualified, and Alberto-Culver and Spinco shall have received a certificate of Regis executed by an executive officer of Regis to such effect.

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(c) Tax Opinion. Alberto-Culver and Spinco shall have received an opinion from Sidley Austin LLP (or other law firm of national standing), dated the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth in such opinion which are consistent with the state of facts existing at the Effective Time, the Merger and the Subsequent Merger, taken together, will constitute a reorganization under Section 368(a) of the Code. In rendering the opinion referred to in the preceding sentence, Sidley Austin LLP (or such other law firm of national standing) may rely upon the representations contained herein and representations from Alberto-Culver and Spinco substantially identical to the representations in the Alberto-Culver Tax Certificate and representations from Regis, Merger Sub and Subco substantially identical to the representations in the Regis Tax Certificate.

(d) Regis Organizational Documents; Board Composition. Regis shall have taken all such actions as shall be necessary so that as of the Effective Time (i) the composition of the Board of Directors and committees of Regis shall be as set forth in Section 7.2 and the Regis Articles of Incorporation (after giving effect to the Regis Charter Amendment) and (ii) the Regis Charter Amendment shall have been duly filed with the Minnesota Secretary of State and shall be in full force and effect.

(e) Material Adverse Effect. Since the date of this Agreement, there shall not have been any Material Adverse Effect on Regis.

ARTICLE IX

TERMINATION AND AMENDMENT

SECTION 9.1 Termination. This Agreement may be terminated at any time prior to the Effective Time, by action taken or authorized by the Board of Directors of the terminating party or parties, and except as provided below, whether before or after the Regis Share Issuance Approval, the Regis Charter Approval or the Alberto-Culver Transaction Approval:

(a) by the mutual written consent of Alberto-Culver and Regis;

(b) by either Alberto-Culver or Regis if the Effective Time shall not have occurred on or before November 30, 2006 (the “Termination Date”); provided, however, that the right to terminate this Agreement under this Section 9.1(b) shall not be available to any party that has breached in any material respect any of its obligations under this Agreement (including such party’s obligations set forth in Section 7.4) that has been the cause of, or resulted in, the failure of the Effective Time to occur on or before the Termination Date;

(c) by either Alberto-Culver or Regis if any Governmental Entity shall have issued an order, decree or ruling or taken any other action (which such party shall have used its reasonable best efforts to resist, resolve or lift, as applicable, in accordance with Section 7.4) permanently restraining, enjoining or otherwise prohibiting the Merger, and such order, decree, ruling or other action shall have become final and nonappealable;

(d) by either Alberto-Culver or Regis if (i) at the Regis Shareholders Meeting either of the Regis Share Issuance Approval or the Regis Charter Approval shall not have been obtained or (ii) at the Alberto-Culver Stockholders Meeting the Alberto-Culver Transaction Approval shall not have been obtained;

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(e) by Alberto-Culver, if (i) (A) the Board of Directors of Regis shall have failed to make the Regis Recommendation or (B) the Board of Directors of Regis or a committee thereof shall have made a Change in the Regis Recommendation (or resolved or publicly proposed to take any such action referred to in clause (A) or (B)), in each case, whether or not permitted by the terms hereof, (ii) Regis shall have breached its obligations under this Agreement by reason of a failure to call and hold the Regis Shareholders Meeting in accordance with Section 7.1(b) or a failure to prepare and mail to its shareholders the Joint Proxy Statement/Prospectus in accordance with Section 7.1(a), (iii) the Board of Directors of Regis or a committee thereof shall have approved, recommended or accepted a Regis Acquisition Proposal (or resolved or publicly proposed to do so) or (iv) a tender or exchange offer relating to securities of Regis shall have been commenced by a Person unaffiliated with Alberto-Culver, and Regis shall not have sent to its shareholders pursuant to Rule 14e-2 under the Exchange Act, within 10 Business Days after such tender or exchange offer is first published, sent or given, a statement that Regis recommends rejection of such tender or exchange offer;

(f) by Regis, if (i) (A) the Board of Directors of Alberto-Culver shall have failed to make the Alberto-Culver Recommendation or (B) the Board of Directors of Alberto-Culver or a committee thereof shall have made a Change in the Alberto-Culver Recommendation (or resolved or publicly proposed to take any such action referred to in clause (A) or (B)), in each case, whether or not permitted by the terms hereof, (ii) Alberto-Culver shall have breached its obligations under this Agreement by reason of a failure to call and hold the Alberto-Culver Stockholders Meeting in accordance with Section 7.1(c) or a failure to prepare and mail to its stockholders the Joint Proxy Statement/Prospectus in accordance with Section 7.1(a), (iii) the Board of Directors of Alberto-Culver or a committee thereof shall have approved, recommended or accepted an Alberto-Culver Acquisition Proposal (or resolved or publicly proposed to do so) or (iv) a tender or exchange offer relating to securities of Alberto-Culver shall have been commenced by a Person unaffiliated with Regis, and Alberto-Culver shall not have sent to its stockholders pursuant to Rule 14e-2 under the Exchange Act, within 10 Business Days after such tender or exchange offer is first published, sent or given, a statement that Alberto-Culver recommends rejection of such tender or exchange offer;

(g) by Alberto-Culver, if Regis shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, such that the conditions set forth in Section 8.3(a) or Section 8.3(b) are not capable of being satisfied on or before the Termination Date;

(h) by Regis, if Alberto-Culver or Spinco shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, such that the conditions set forth in Section 8.2(a) or Section 8.2(b) are not capable of being satisfied on or before the Termination Date;

(i) by Regis if (i) the Board of Directors of Regis authorizes Regis, subject to complying with the terms of this Agreement, to enter into a definitive agreement concerning a transaction that constitutes a Superior Regis Proposal and Regis notifies Alberto-Culver in writing that it intends to enter into such an agreement and (ii) Regis prior to or concurrently with such termination pays to Alberto-Culver in immediately available funds $50,000,000 pursuant to Section 9.2(e). Regis agrees (x) that it will not enter into a definitive agreement referred to in

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clause (i) above until at least the fifth Business Day after it has provided the notice to Alberto-Culver required thereby, and then only if the definitive agreement referred to in clause (i) above continues to constitute a Superior Regis Proposal in light of any amendments that Alberto-Culver has proposed in writing to make to the terms of this Agreement prior to such time, and (y) to notify Alberto-Culver promptly in writing if its intention to enter into a definitive agreement referred to in its notification shall change at any time after giving such notification; or

(j) by Alberto-Culver if (i) the Board of Directors of Alberto-Culver authorizes Alberto-Culver, subject to complying with the terms of this Agreement, to enter into a definitive agreement concerning a transaction that constitutes a Superior Alberto-Culver Proposal and Alberto-Culver notifies Regis in writing that it intends to enter into such an agreement and (ii) Alberto-Culver prior to or concurrently with such termination pays to Regis in immediately available funds $50,000,000 pursuant to Section 9.2(i). Alberto-Culver agrees (x) that it will not enter into a definitive agreement referred to in clause (i) above until at least the fifth Business Day after it has provided the notice to Regis required thereby, and then only if the definitive agreement referred to in clause (i) above continues to constitute a Superior Alberto-Culver Proposal in light of any amendments that Regis has proposed in writing to make to the terms of this Agreement prior to such time, and (y) to notify Regis promptly in writing if its intention to enter into a definitive agreement referred to in its notification shall change at any time after giving such notification.

SECTION 9.2 Effect of Termination.

(a) In the event of termination of this Agreement by either Alberto-Culver or Regis as provided in Section 9.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Regis, Merger Sub, Subco, Alberto-Culver or Spinco or their respective officers or directors under this Agreement, except that (i) the provisions of Section 5.1(w), Section 5.2(f), the second and third sentences of Section 7.3, Section 7.6, this Section 9.2 and Article X shall survive such termination, and (ii) notwithstanding anything to the contrary contained in this Agreement (including Section 7.6), none of Regis, Merger Sub, Subco, Alberto-Culver or Spinco shall be relieved or released from any liabilities or damages arising out of its intentional breach of any provision of this Agreement.

(b) If (i) (A) either Alberto-Culver or Regis shall terminate this Agreement pursuant to Section 9.1(b) without the shareholder votes on the Regis Share Issuance and the Regis Charter Amendment at the Regis Shareholders Meeting having occurred, (B) Alberto-Culver shall terminate this Agreement pursuant to Section 9.1(g) as a result of any intentional breach or failure to perform by Regis (unless covered by clause (d) below) or (C) either Alberto-Culver or Regis shall terminate this Agreement pursuant to Section 9.1(d)(i) and (ii) at any time after the date of this Agreement and before any such termination, a Regis Acquisition Proposal shall have been publicly announced, become publicly known or otherwise been publicly communicated to the senior management, Board of Directors or shareholders of Regis (whether or not conditional), which Regis Acquisition Proposal shall be pending at the Termination Date (in the case of termination pursuant to Section 9.1(b)), at the time of the breach (in the case of termination pursuant to Section 9.1(g)) or at the time of the Regis Shareholders Meeting (in the case of termination pursuant to Section 9.1(d)(i)), or any Person shall have publicly announced or it shall have become publicly known or otherwise been publicly communicated to the senior

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management, Board of Directors or shareholders of Regis (whether or not withdrawn) that, subject to the Regis Share Issuance Approval or the Regis Charter Approval not being obtained or the Regis Share Issuance or Regis Charter Amendment being otherwise rejected or this Agreement being terminated, such Person will make a Regis Acquisition Proposal, then (I) if within twelve months after such termination (the “Regis Lookback Period”), Regis or any of its Subsidiaries consummates any Regis Acquisition Proposal without entering into a definitive agreement with respect to such Regis Acquisition Proposal, Regis shall promptly, but in no event later than the date of such consummation, pay Alberto-Culver an amount equal to $50,000,000 by wire transfer of immediately available funds, and (II) if Regis or any of its Subsidiaries enters into a definitive agreement with respect to a Regis Acquisition Proposal during the Regis Lookback Period, Regis shall promptly, but in no event later than the date of the entry by Regis or any of its Subsidiaries into such definitive agreement, pay Alberto-Culver an amount equal to $25,000,000 and shall pay Alberto-Culver an amount equal to $25,000,000 on the date of the consummation of the Regis Acquisition Proposal described in this clause (II) (including as such Regis Acquisition Proposal is amended, modified, restated or otherwise restructured, including to add, or substitute for the Person who was a party to the definitive agreement described in this clause (II), an Affiliate of such Person) (whether or not the consummation of such Regis Acquisition Proposal occurred during the Regis Lookback Period), in each case, by wire transfer of immediately available funds. For purposes of clauses (I) and (II) of this Section 9.2(b), references to 25% in the definition of Regis Acquisition Proposal shall be deemed to be references to 50%.

(c) If Alberto-Culver shall terminate this Agreement pursuant to Section 9.1(e)(i) and shall not have delivered a Force the Regis Vote Notice, Regis shall promptly, but in no event later than the date of such termination, pay Alberto-Culver an amount equal to $50,000,000 by wire transfer of immediately available funds.

(d) If Alberto-Culver shall terminate this Agreement pursuant to Section 9.1(e)(ii), (iii) or (iv), Regis shall promptly, but in no event later than the date of such termination, pay Alberto-Culver an amount equal to $50,000,000 by wire transfer of immediately available funds.

(e) If Regis shall terminate this Agreement pursuant to Section 9.1(i), Regis shall promptly, but in no event later than the date of such termination, pay Alberto-Culver an amount equal to $50,000,000 by wire transfer of immediately available funds.

(f) If (i) (A) either Alberto-Culver or Regis shall terminate this Agreement pursuant to Section 9.1(b) without the stockholder vote by the stockholders of Alberto-Culver on the transactions contemplated by this Agreement having occurred, (B) Regis shall terminate this Agreement pursuant to Section 9.1(h) as a result of any intentional breach or failure to perform by Alberto-Culver (unless covered by clause (h) below) or (C) either Alberto-Culver or Regis shall terminate this Agreement pursuant to Section 9.1(d)(ii) and (ii) at any time after the date of this Agreement and before any such termination, an Alberto-Culver Acquisition Proposal shall have been publicly announced, become publicly known or otherwise been publicly communicated to the senior management, Board of Directors or stockholders of Alberto-Culver (whether or not conditional), which Alberto-Culver Acquisition Proposal shall be pending at the Termination Date (in the case of termination pursuant to Section 9.1(b)), at the time of the breach

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(in the case of termination pursuant to Section 9.1(h)) or at the time of the Alberto-Culver Stockholders Meeting (in the case of termination pursuant to Section 9.1(d)(ii)), or any Person shall have publicly announced or it shall have become publicly known or otherwise been publicly communicated to the senior management, Board of Directors or stockholders of Alberto-Culver (whether or not withdrawn) that, subject to the Alberto-Culver Transaction Approval not being obtained or the transactions contemplated by this Agreement being otherwise rejected by the stockholders of Alberto-Culver or this Agreement being terminated, such Person will make an Alberto-Culver Acquisition Proposal, then (I) if within twelve months after such termination (the “Alberto-Culver Lookback Period”), Alberto-Culver or any of its Subsidiaries consummates any Alberto-Culver Acquisition Proposal without entering into a definitive agreement with respect to such Alberto-Culver Acquisition Proposal, Alberto-Culver shall promptly, but in no event later than the date of such consummation, pay Regis an amount equal to $50,000,000 by wire transfer of immediately available funds, and (II) if Alberto-Culver or any of its Subsidiaries enters into a definitive agreement with respect to an Alberto-Culver Acquisition Proposal during the Alberto-Culver Lookback Period, Alberto-Culver shall promptly, but in no event later than the date of the entry by Alberto-Culver or any of its Subsidiaries into such definitive agreement, pay Regis an amount equal to $25,000,000 and shall pay Regis an amount equal to $25,000,000 on the date of the consummation of the Alberto-Culver Acquisition Proposal described in this clause (II) (including as such Alberto-Culver Acquisition Proposal is amended, modified, restated or otherwise restructured, including to add, or substitute for the Person who was a party to the definitive agreement described in this clause (II), an Affiliate of such Person) (whether or not the consummation of such Alberto-Culver Acquisition Proposal occurred during the Alberto-Culver Lookback Period), in each case, by wire transfer of immediately available funds. For purposes of clauses (I) and (II) of this Section 9.2(f), references to 25% in the definition of Alberto-Culver Acquisition Proposal shall be deemed to be references to 50%.

(g) If Regis shall terminate this Agreement pursuant to Section 9.1(f)(i) and shall not have delivered a Force the Alberto-Culver Vote Notice, Alberto-Culver shall promptly, but in no event later than the date of such termination, pay Regis an amount equal to $50,000,000 by wire transfer of immediately available funds.

(h) If Regis shall terminate this Agreement pursuant to Section 9.1(f)(ii), (iii) or (iv), Alberto-Culver shall promptly, but in no event later than the date of such termination, pay Regis an amount equal to $50,000,000 by wire transfer of immediately available funds.

(i) If Alberto-Culver shall terminate this Agreement pursuant to Section 9.1(j), Alberto-Culver shall promptly, but in no event later than the date of such termination, pay Regis an amount equal to $50,000,000 by wire transfer of immediately available funds.

(j) The parties acknowledge that the agreements contained in this Section 9.2 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the parties would not enter into this Agreement; accordingly, (i) if Regis fails promptly to pay any amount due pursuant to this Section 9.2, and, in order to obtain such payment, Alberto-Culver commences a suit which results in a judgment against Regis for payment of the fee set forth in this Section 9.2, Regis shall pay to Alberto-Culver its costs and

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expenses (including attorneys’ fees and expenses) in connection with such suit, together with interest on the amount of such fee from the date such payment is required to be made until the date such payment is actually made and (ii) if Alberto-Culver fails promptly to pay any amount due pursuant to this Section 9.2, and, in order to obtain such payment, Regis commences a suit which results in a judgment against Alberto-Culver for the fee set forth in this Section 9.2, Alberto-Culver shall pay to Regis its costs and expenses (including attorneys’ fees and expenses) in connection with such suit, together with interest on the amount of such fee from the date such payment is required to be made until the date such payment is actually made. Interest under this Section 9.2(j) shall be paid at the prime rate of Citibank, N.A. in effect on the date such payment was required to be made. The parties agree that any remedy or amount payable pursuant to this Section 9.2 shall not preclude any other remedy or amount payable hereunder, and shall not be an exclusive remedy, for any willful breach of any provision of this Agreement.

SECTION 9.3 Amendment. Subject to Applicable Law, this Agreement may be amended by the parties hereto, by action taken or authorized by their respective Boards of Directors, at any time before or after approval of the matters presented in connection with this Agreement and the Merger by the shareholders of Regis or the stockholders of Alberto-Culver, but, after any such approval, no amendment shall be made which by law or in accordance with the rules of any relevant stock exchange requires further approval by such shareholders without such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

SECTION 9.4 Extension; Waiver. Subject to Applicable Law, at any time prior to the Effective Time, the parties hereto, by action taken or authorized by their respective Boards of Directors, may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties of other parties contained herein or in any document delivered pursuant hereto and (c) waive compliance with any of the agreements or conditions of other parties contained herein or in any document delivered pursuant hereto. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.

ARTICLE X

GENERAL PROVISIONS

SECTION 10.1 Non-Survival of Representations, Warranties, Covenants and Agreements. This Article X and the agreements of Alberto-Culver, Spinco, Regis, Merger Sub and Subco contained in Sections 2.7 (Spinco Options), 2.9 (Subsequent Merger), 2.10 (Dropdown of Newco), Article III (Exchange of Shares), 7.2 (Regis Organizational Documents; Governance Matters), 7.6 (Fees and Expenses), 7.14 (Regis Guaranty), 7.15(c) (Private Letter Ruling; Tax-Free Reorganization Treatment), 7.18 (Employee Benefit Matters), 7.19 (Non-Competition; Non-Solicitation) and 7.22 (Transition Services) shall survive the Effective Time. All other representations, warranties, covenants and agreements in this Agreement shall not survive the Effective Time.

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SECTION 10.2 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, (b) upon confirmation of receipt if delivered by telecopy or telefacsimile, (c) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (d) on the date received if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a)	if to Alberto-Culver or Spinco to:
	Alberto-Culver Company
	2525 Armitage Avenue
	Melrose Park, Illinois 60160
	Fax:	(708) 450-2511
	Attention:	Chief Executive Officer
		Senior Vice President and General Counsel (with a separate notice to each such person)
	with a copy to:
	Sidley Austin LLP
	One S. Dearborn Street
	Chicago, Illinois 60603
	Fax:	(312) 853-7036
	Attention:	Frederick C. Lowinger, Esq.
		David J. Zampa, Esq.
(b)	if to Regis, Merger Sub or Subco to:
	Regis Corporation
	7201 Metro Boulevard
	Edina, Minnesota 55439
	Fax:	(952) 947-7600
	Attention:	President and Chief Executive Officer
		General Counsel (with a separate notice to each such person)
	with a copy to:
	O’Melveny & Myers LLP
	Times Square Tower
	7 Times Square
	New York, New York 10036
	Fax:	(212) 326-2061
	Attention:	Spencer D. Klein, Esq.
		Paul S. Scrivano, Esq.

or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above.

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SECTION 10.3 Interpretation. When a reference is made in this Agreement to Sections, Exhibits or Schedules, such reference shall be to a Section of or Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.

SECTION 10.4 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that the parties need not sign the same counterpart.

SECTION 10.5 Entire Agreement; No Third Party Beneficiaries.

(a) This Agreement, the Confidentiality Agreement, the Transaction Agreements and the exhibits and schedules hereto and thereto and the other agreements and instruments of the parties delivered in connection herewith and therewith constitute the entire agreement and supersede all prior agreements, understandings, representations and warranties, both written and oral, among the parties with respect to the subject matter hereof and thereof. Notwithstanding the foregoing, if the Closing occurs, Sections 7.19(b) and (c) supersede the corresponding provisions in the Confidentiality Agreement.

(b) This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

SECTION 10.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to choice of law principles thereof).

SECTION 10.7 Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon any such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

SECTION 10.8 Assignment. Except as provided in Section 2.10(f), this Agreement shall not be assignable by operation of law or otherwise and any purported assignment in violation of this Agreement is null and void.

SECTION 10.9 Submission to Jurisdiction; Waivers. (a) Each of Regis, Alberto-Culver, Spinco, Merger Sub and Subco irrevocably agrees that any legal action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof, the

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breach, performance, validity or invalidity hereof or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or permitted assigns may be brought and determined in any federal or state court located in the State of Delaware, and each of Regis, Alberto-Culver, Spinco, Merger Sub and Subco hereby irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts.

(b) Each of Regis, Alberto-Culver, Spinco, Merger Sub and Subco hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement, validity or invalidity hereof, (i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (ii) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by Applicable Laws, that (A) the suit, action or proceeding in any such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper and (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. EACH PARTY FURTHER ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (d) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.9.

SECTION 10.10 Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to pursue specific performance of the terms hereof, this being in addition to any other remedy to which they are entitled at law or in equity.

SECTION 10.11 Disclosure Schedule. The mere inclusion of an item in the relevant Disclosure Schedule as an exception to a representation, warranty or covenant shall not be deemed an admission by a party that such item represents a material exception or material fact, event or circumstance or that such item has had or would have a Material Adverse Effect with respect to Alberto-Culver, Regis, Spinco, Merger Sub, Subco or any Subsidiary of the foregoing, as applicable.

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SECTION 10.12 Mutual Drafting. This Agreement shall be deemed to be the joint work product of Regis, Merger Sub, Subco, Alberto-Culver and Spinco and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.

ALBERTO-CULVER COMPANY
By:	/s/ Gary P. Schmidt
Name:	Gary P. Schmidt
Title:	Senior Vice President and General Counsel
SALLY HOLDINGS, INC.
By:	/s/ Gary Winterhalter
Name:	Gary Winterhalter
Title:	President
REGIS CORPORATION
By:	/s/ Paul D. Finkelstein
Name:	Paul D. Finkelstein
Title:	President, Chief Executive Officer, and Chairman of the Board
ROGER MERGER INC.
By:	/s/ Paul D. Finkelstein
Name:	Paul D. Finkelstein
Title:	President
ROGER MERGER SUBCO LLC
By:	/s/ Paul D. Finkelstein
Name:	Paul D. Finkelstein
Title:	President and Chief Executive Officer of Regis Corporation, as sole member

92

EX-10.01

EXHIBIT 10.01

TAX ALLOCATION AGREEMENT

dated as of January 10, 2006

between

ALBERTO-CULVER COMPANY

and

SALLY HOLDINGS, INC.

TABLE OF CONTENTS

	Page
ARTICLE I
DEFINITIONS	2
SECTION 1.01. General	2
ARTICLE II
TAX RETURNS, TAX PAYMENTS AND TAX SHARING OBLIGATIONS	6
SECTION 2.01. Obligations to File Tax Returns	6
SECTION 2.02. Obligation to Remit Taxes	6
SECTION 2.03. Tax Sharing Obligations and Prior Agreements.	7
SECTION 2.04. Restructuring Taxes; Other Taxes Relating to the Distribution	7
SECTION 2.05. Period that Includes the Date of Distribution .	8
SECTION 2.06. Tax Attributes	8
SECTION 2.07. Carryback Provisions	9
SECTION 2.08. Allocation of Tax Liability.	9
SECTION 2.09. Audit or Redetermination of U.S. Federal Income Tax Liability or U.S. State, Local or Municipal Consolidated, Combined or Unitary Income Tax Liability.	10
SECTION 2.10. Amended Tax Returns	12
ARTICLE III
TAX AUDITS	12
SECTION 3.01. Controlling Party	12
SECTION 3.02. Indemnified Claims in General	12
SECTION 3.03. Certain Tax Claims	13
SECTION 3.04. Payments with Respect to Claims	13
ARTICLE IV
COOPERATION	14
SECTION 4.01. Inconsistent Actions	14

SECTION 4.02. Prohibited Acts.	15
SECTION 4.03. Cooperation with Respect to Tax Return Filings, Examinations and Tax Related Controversies	16
SECTION 4.04. Cooperation with Respect to Particular Tax Return Filings	16
ARTICLE V
RETENTION OF RECORDS; ACCESS	17
ARTICLE VI
DISPUTES	17
ARTICLE VII
SURVIVAL OF LIABILITIES	17
ARTICLE VIII
MISCELLANEOUS	18
SECTION 8.01. Entire Agreement; Construction	18
SECTION 8.02. Survival of Agreements	18
SECTION 8.03. Effectiveness	18
SECTION 8.04. Governing Law	18
SECTION 8.05. Notices	18
SECTION 8.06. Payments	19
SECTION 8.07. Consent to Jurisdiction	20
SECTION 8.08. Amendments	20
SECTION 8.09. Assignment	20
SECTION 8.10. Captions; Currency	20
SECTION 8.11. Severability	21
SECTION 8.12. Parties in Interest	21
SECTION 8.13. Schedules	21
SECTION 8.14. Waivers; Remedies	21
SECTION 8.15. Counterparts	21

SECTION 8.16. Performance	21
SECTION 8.17. Interpretation	22
SECTION 8.18. Mutual Drafting	22

TAX ALLOCATION AGREEMENT

TAX ALLOCATION AGREEMENT (this “Agreement”), dated as of January 10, 2006 between Alberto-Culver Company, a Delaware corporation (“Alberto-Culver”), and Sally Holdings, Inc., a Delaware corporation (“Spinco”), and, as of the date hereof, a wholly owned subsidiary of Alberto-Culver.

RECITALS

WHEREAS, Alberto-Culver is the common parent of an affiliated group of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “Code”), which currently files consolidated federal income Tax Returns;

WHEREAS, pursuant to the Separation Agreement dated as of the date hereof between Alberto-Culver and Spinco (as may be amended from time to time in accordance with its terms, the “Separation Agreement”), Alberto-Culver will distribute to its stockholders all of the issued and outstanding shares of common stock, no par value of Spinco (“Spinco Common Stock”), on a pro rata basis (as described more fully in the Separation Agreement, the “Distribution”);

WHEREAS, Alberto-Culver, Spinco, Regis Corporation, a Minnesota corporation (“Regis”), Roger Merger Inc., a Delaware corporation and a direct, wholly owned Subsidiary of Regis (“Merger Sub”), and Roger Merger Subco LLC, a Delaware limited liability company and direct, wholly owned Subsidiary of Regis (“Subco”), have entered into the Agreement and Plan of Merger dated as of the date hereof (the “Merger Agreement”) pursuant to which, immediately following the Distribution, Merger Sub will be merged with and into Spinco (the “Merger”), with Spinco being the surviving corporation and immediately following the Merger the surviving corporation in the Merger will merge with and into Subco;

WHEREAS, the parties to this Agreement intend that the Distribution qualify under Section 355 of the Code, as a tax-free distribution;

WHEREAS, after the Distribution Date (as defined in the Separation Agreement), neither Spinco nor any of the Spinco Subsidiaries (as hereinafter defined) that prior to the Distribution Date was a member of the Alberto-Culver Affiliated Group (as hereinafter defined) for federal income Tax purposes will continue to be a member of the Alberto-Culver Affiliated Group for federal income Tax purposes; and

WHEREAS, the Spinco Group and the Alberto-Culver Group (as hereinafter defined) desire on behalf of themselves and their successors to set forth their rights and obligations with respect to Taxes due for periods before, on and after the Distribution Date.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. General. Capitalized terms used in this Agreement have the meanings set forth in this Agreement, or, when not so defined, in the Separation Agreement or the Merger Agreement. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Affiliate” has the meaning set forth in the Separation Agreement; provided that the term “Affiliate” shall not include any Shareholder.

“Agreement” means this Tax Allocation Agreement as the same may be amended from time to time.

“Alberto-Culver” has the meaning set forth in the preamble.

“Alberto-Culver Affiliated Group” means the domestic corporations included in the affiliated group, as defined in Section 1504 of the Code, of which Alberto-Culver is the common parent, and any successor group.

“Alberto-Culver Factual Representation” means any factual descriptions or factual representations with respect to the Alberto-Culver Group, the Alberto-Culver Business, the Spinco Group or the Spinco Business made in writing to the IRS in connection with the Private Letter Ruling Request or made in connection with the Tax Opinion, except that such term shall not include (a) any representation that is a legal conclusion regarding business purpose, lack of device, or Code Section 355(e), (b) any description of the transactions contemplated by the Merger Agreement or any of the Transaction Agreements or (c) any facts or representations provided by Regis or which are not solely with respect to the Alberto-Culver Group, the Alberto-Culver Business, the Spinco Group or the Spinco Business.

“Alberto-Culver Group” means Alberto-Culver and the Alberto-Culver Subsidiaries.

“Alberto-Culver Subsidiary” means each direct and indirect Subsidiary of Alberto-Culver (other than Spinco and the Spinco Subsidiaries).

“Alberto-Culver Tainting Act” means:

(a) any inaccuracy of any Alberto-Culver Factual Representation;

(b) any action (or failure to take any reasonably available action) by Alberto-Culver or any Alberto-Culver Subsidiary other than an action contemplated by the Merger Agreement or any of the Transaction Agreements;

(c) any acquisition or other transaction involving the capital stock of Alberto-Culver or any Affiliate of Alberto-Culver (other than the distribution of the Spinco Common Stock in the Distribution, Regis’s acquisition of Spinco in the Merger, or any action taken by the Shareholders); or

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(d) any Prohibited Act performed by Alberto-Culver or an Affiliate of Alberto-Culver.

“Alberto-Culver Taxes” means any Taxes (excluding Restructuring Taxes) that are attributable to Alberto-Culver or any Alberto-Culver Subsidiary pursuant to the allocation principles of Sections 2.05, 2.08 and 2.09.

“Claim” has the meaning set forth in Section 3.03.

“Controlling Party” has the meaning set forth in Section 3.01.

“Distribution” has the meaning set forth in the second recital.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Estimated Retained Tax Amount” has the meaning set forth in Section 2.08(a).

“Final Determination” means with respect to any issue (a) a decision, judgment, decree or other order by any court of competent jurisdiction, which decision, judgment, decree or other order has become final and not subject to further appeal, (b) a closing agreement (whether or not entered into under Section 7121 of the Code) or any other binding settlement agreement (whether or not with the IRS) entered into in connection with or in contemplation of an administrative or judicial proceeding, or (c) the completion of the highest level of administrative proceedings if a judicial contest is not or is no longer available.

“Final Retained Tax Amount” has the meaning set forth in Section 2.08(b).

“Final Tax Amount Determination” has the meaning set forth in Section 2.08(c).

“Indemnitor” has the meaning set forth in Section 3.02.

“Indemnifiable Losses” has the meaning set forth in the Separation Agreement.

“Independent Expert” has the meaning set forth in Section 2.08(b).

“Independent Firm” has the meaning set forth in Article VI.

“IRS” means the United States Internal Revenue Service.

“Merger Agreement” has the meaning set forth in the third recital.

“Objection Notice” has the meaning set forth in Section 2.08(b).

“Person” has the meaning set forth in the Merger Agreement.

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“Post-Distribution Period” means any Taxable year or other Taxable period beginning after the Distribution Date and, in the case of any Taxable year or other Taxable period that begins on or before and ends after the Distribution Date, that part of the Taxable year or other Taxable period that begins at the beginning of the day after the Distribution Date.

“Pre-Distribution Period” means any Taxable year or other Taxable period that ends on or before the Distribution Date and, in the case of any Taxable year or other Taxable period that begins on or before and ends after the Distribution Date, that part of the Taxable year or other Taxable period through the close of the Distribution Date.

“Private Letter Ruling” means any private letter ruling received from the IRS to the effect that, on the basis of the facts, representations and assumptions set forth in the written request for such ruling which are consistent with the state of facts existing at the Distribution Time, the Distribution will constitute a tax-free distribution under Section 355 of the Code.

“Prohibited Acts” has the meaning specified in Section 4.02(b).

“Proposed Retained Tax Amount” has the meaning set forth in Section 2.08(a).

“Regis Factual Representation” means any factual descriptions or factual representations provided by Regis and made in writing by Alberto-Culver to the IRS in connection with the Private Letter Ruling Request or made in connection with the Tax Opinion except that such term shall not include (a) any representation that is a legal conclusion regarding business purpose, lack of device, or Code Section 355(e), (b) any description of the transactions contemplated by the Merger Agreement or any of the Transaction Agreements or (c) any facts or representations provided by any member of the Alberto-Culver Group or which are not solely with respect to Regis.

“Restricted Period” has the meaning specified in Section 4.02(a).

“Restructuring Taxes” means any Taxes (and other liabilities, including, without limitation, liability to stockholders and the costs of defending against the imposition of such Taxes and other liabilities) imposed as a result of a Final Determination that (a) the Distribution failed to constitute a tax-free distribution under Section 355 of the Code, or (b) any stock or securities of Spinco failed to qualify as “qualified property” within the meaning of Section 355(c)(2) or Section 361(c)(2) of the Code because of the application of Section 355(d) or Section 355(e) of the Code to the Distribution.

“Retained Tax Amount” has the meaning set forth in Section 2.08(a).

“Ruling Request” means the ruling request and any other materials (including the attachments and supplemental submissions to the IRS) delivered or deliverable by Alberto-Culver and others in connection with the issuance by the IRS of the Private Letter Ruling.

“Separation Agreement” has the meaning set forth in the second recital.

“Shareholder” has the meaning assigned to such term in the Shareholders Agreement.

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“Spinco” has the meaning set forth in the preamble and shall include any successor to Spinco.

“Spinco Group” means Spinco and the Spinco Subsidiaries.

“Spinco Subsidiary” means each direct and indirect Subsidiary of Spinco.

“Spinco Tainting Act” means:

(a) any inaccuracy of any Regis Factual Representation;

(b) any action (or failure to take any reasonably available action) by Spinco or any Affiliate of Spinco after the Distribution Date other than an action contemplated by the Merger Agreement or any of the Transaction Agreements;

(c) any acquisition or other transaction involving the capital stock of Spinco or any Affiliate of Spinco (other than the distribution of the Spinco Common Stock in the Distribution and Regis’s acquisition of Spinco in the Merger or any action taken by the Shareholders); or

(d) any Prohibited Act performed by Spinco or any Affiliate of Spinco after the Distribution Date.

“Spinco Taxes” means any Taxes (excluding Restructuring Taxes and any Taxes related to an excess loss account or a deferred intercompany gain) that are attributable to Spinco or any Spinco Subsidiary pursuant to the allocation principles of Sections 2.05, 2.08 and 2.09.

“Subsidiary” means, when used with respect to any Person, any corporation or other organization, whether incorporated or unincorporated, at least a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries.

“Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means any tax, in any sense, including (a) any federal, state, municipal, county, local, foreign or other Governmental Entity net income, gross income, receipts, windfall profit, severance, real, personal, tangible, escheatable, unclaimed or abandoned property, goods and services, value added, estimated, capital stock, production, sales, use, license, excise, franchise, employment, unemployment, social security, payroll, withholding, alternative or add-on minimum, ad valorem, transfer, stamp, or environmental tax, or any other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, addition to tax or additional amount imposed by any Governmental Entity, including any fines, penalties or interest arising under ERISA; and (b) any liability of either party for the payment of amounts with respect to payments of a type described in clause (a) as a result of being a member of an affiliated, consolidated, combined or unitary group.

“Tax Carryover Attribute” has the meaning specified in Section 2.07.

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“Tax Opinion” means the tax opinion described in Section 8.1(i) of the Merger Agreement.

“Tax Return” means any return, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax.

“Transaction Taxes” has the meaning set forth in Section 2.04(b).

ARTICLE II

TAX RETURNS, TAX PAYMENTS AND TAX SHARING OBLIGATIONS

SECTION 2.01. Obligations to File Tax Returns. (a) From and after the Distribution Time, Alberto-Culver shall timely file or cause to be timely filed all income Tax Returns with respect to the Spinco Group that include any Pre-Distribution Period and are filed on a consolidated, combined or unitary basis and include Spinco or any Spinco Subsidiary, on the one hand, and Alberto-Culver or any Alberto-Culver Subsidiary, on the other hand. From and after the Distribution Time, Spinco shall timely file or cause to be timely filed any other Tax Return with respect to any member of the Spinco Group. From and after the Distribution Time, subject to the terms and limitations in the Merger Agreement, at Spinco’s request and cost as provided in Section 7.22 of the Merger Agreement, Alberto-Culver shall prepare or cause to be prepared all Tax Returns of Spinco, which have been previously prepared or caused to be prepared by Alberto-Culver on behalf of Spinco, for all Pre-Distribution Periods where such Tax Returns are due after the Distribution Date.

(b) Alberto-Culver shall timely file or cause to be timely filed all Tax Returns with respect to the Alberto-Culver Group.

(c) Any consolidated, combined or unitary Tax Return filed on or after the Distribution Date that includes Spinco or any Spinco Subsidiary for a Pre-Distribution Period shall be prepared on a basis consistent with the elections, methods of accounting, positions, conventions and principles of taxation and the manner in which any Tax item or other information is reported as reflected in comparable income Tax Returns filed before the date of this Agreement. The preceding sentence shall not apply (i) to the extent otherwise contemplated or required by the Ruling Request or Private Letter Ruling, or (ii) if there has been a change in Applicable Laws. Alberto-Culver shall (A) make available each Tax Return described in this Section 2.01(c) to Spinco for its review and approval (not to be unreasonably withheld or delayed) at least 15 days prior to filing, and (B) make any reasonable revisions to such Tax Returns that are requested by Spinco that affect the amount of Taxes that are allocated to Spinco or any Spinco Subsidiary.

(d) Alberto-Culver agrees to comply with the requirements of Section 7.15(c) of the Merger Agreement.

SECTION 2.02. Obligation to Remit Taxes. Following the Distribution Date, Alberto-Culver and Spinco shall each remit or cause to be remitted any Taxes due in respect of any Tax Return it is required to file or cause to be filed pursuant to Section 2.01.

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SECTION 2.03. Tax Sharing Obligations and Prior Agreements.

(a) From and after the Distribution Time, Spinco shall, in a manner consistent with Article IV of the Separation Agreement (including the principles of Section 4.05 of the Separation Agreement), indemnify, defend, and hold harmless Alberto-Culver and the Alberto-Culver Indemnified Parties from and against, any and all Indemnifiable Losses incurred or suffered by Alberto-Culver or one or more of the Alberto-Culver Indemnified Parties in connection with, relating to, arising out of, or due to, directly or indirectly, (i) any Spinco Taxes (including, for the avoidance of doubt, any Spinco Taxes arising from a redetermination thereof from an audit or examination); and (ii) any amount determined to be Spinco’s liability under Section 2.04. Any amount payable by Spinco to Alberto-Culver with respect to any Tax pursuant to this Section 2.03(a) shall be reduced by any direct or indirect payments made by Spinco or any Spinco Affiliate with respect to such Tax after the Distribution Date to any Alberto-Culver Indemnified Party. From and after the Distribution Time, Spinco shall be entitled to any refund of or credit for Taxes for which Spinco is responsible under this Agreement.

(b) From and after the Distribution Time, Alberto-Culver shall, in a manner consistent with Article IV of the Separation Agreement (including the principles of Section 4.05 of the Separation Agreement), indemnify, defend, and hold harmless Spinco and the Spinco Indemnified Parties from and against, any and all Indemnifiable Losses incurred or suffered by Spinco or one or more of the Spinco Indemnified Parties in connection with, relating to, arising out of, or due to, directly or indirectly, (i) any Alberto-Culver Taxes (including, for the avoidance of doubt, any Alberto-Culver Taxes arising from a redetermination thereof from an audit or examination); and (ii) any amount determined to be Alberto-Culver’s liability under Section 2.04. Any amount payable by Alberto-Culver to Spinco with respect to any Tax pursuant to this Section 2.03(b) shall be reduced by any direct or indirect payments made by Alberto-Culver or any Alberto-Culver Affiliate with respect to such Tax after the Distribution Date to any Spinco Indemnified Party. From and after the Distribution Time, Alberto-Culver shall be entitled to any refund of or credit for Taxes for which Alberto-Culver is responsible under this Agreement.

(c) Except as set forth in this Agreement or the Separation Agreement and in consideration of the mutual indemnities and other obligations of this Agreement, any and all prior Tax sharing agreements or practices between Alberto-Culver or any Alberto-Culver Subsidiary, on the one hand, and Spinco or any Spinco Subsidiary, on the other hand, shall be terminated as of the Distribution Date.

SECTION 2.04. Restructuring Taxes; Other Taxes Relating to the Distribution. (a) Spinco shall be liable for 60% and Alberto-Culver shall be liable for 40% of any Restructuring Taxes that are imposed as a result of neither a Spinco Tainting Act nor an Alberto-Culver Tainting Act. In the case of the imposition of a Restructuring Tax where there is both a Spinco Tainting Act and an Alberto-Culver Tainting Act, and each of the Spinco Tainting Act and the Alberto-Culver Tainting Act would alone be sufficient to result in the imposition of such Restructuring Tax, Spinco shall be liable for 60% and Alberto-Culver shall be liable for 40% of such Restructuring Tax. In the case of a Restructuring Tax that would not have been imposed but for the existence of both a Spinco Tainting Act and an Alberto-Culver Tainting Act, Spinco

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and Alberto-Culver shall be liable for such Restructuring Tax to the extent the Spinco Tainting Act and the Alberto-Culver Tainting Act, respectively, contributed to the imposition of such Restructuring Tax. Spinco shall be liable for Restructuring Taxes imposed solely as a result of a Spinco Tainting Act, and Alberto-Culver shall be liable for Restructuring Taxes imposed solely as a result of an Alberto-Culver Tainting Act. In the case of a Tainting Act that results from a Prohibited Act, the party that committed or whose Affiliate committed such Prohibited Act shall be liable for Restructuring Taxes imposed without regard to whether an opinion or supplemental ruling pertaining to such Prohibited Act pursuant to Section 4.02 was obtained, and without regard to whether the other party gave its consent to such action pursuant to Section 4.02 or otherwise.

(b) Spinco shall be liable for 66 ²/3% and Alberto-Culver shall be liable for 33 ¹/3% of any sales, transfer, value added or other similar Taxes or fees (including all real estate, patent, copyright and trademark transfer Taxes and real estate recording fees but excluding patent, copyright, and trademark recording fees (which are governed by Section 7.6 of the Merger Agreement) and excluding Restructuring Taxes) payable in connection with the transactions contemplated by the Separation Agreement (the “Transaction Taxes”). The parties agree to timely sign and deliver such certificates or forms as are requested by the other party and may be necessary or appropriate to enable such party to file promptly and timely the Tax Returns for such Transaction Taxes with the appropriate Taxing authorities and remit payment of the Transaction Taxes.

SECTION 2.05. Period that Includes the Date of Distribution. To the extent permitted or required by Applicable Laws or administrative practice, the Taxable year of the Spinco Group shall be treated as closing at the close of the Distribution Date taking into account the principles of Treasury Regulation Section 1.1502-76(b) or of a corresponding provision under the laws of an applicable state, local, municipal or foreign jurisdiction, except that no “ratable allocation election” for extraordinary items as defined thereunder will be made. Notwithstanding the foregoing, the parties agree that, to the extent permissible by Applicable Laws, they shall allocate Expenses for which Tax benefits are available (such as immediate deductions, amortization or depreciation, increased basis or otherwise) to Spinco’s Post-Distribution Period to the extent that Expense is borne by Spinco or any post-Distribution Affiliate of Spinco; and to the extent such an allocation is not permissible by Applicable Laws, Alberto-Culver agrees to pay over any amount of Tax benefit it determines in good faith that Alberto-Culver realized as a result of such Expenses being allocated to the Pre-Distribution Period. To the extent the Taxable year of the Spinco Group is not permitted or required to be closed by Applicable Laws or administrative practice, such Taxable year shall be deemed to close at the close of the Distribution Date for all purposes under this Agreement. For the avoidance of doubt, any deduction arising by reason of any compensation paid to an employee of Spinco on the Distribution Date (including compensation arising from the exercise of options or the vesting of restricted stock) shall be allocable to the Taxable year ending on the Distribution Date.

SECTION 2.06. Tax Attributes. Tax benefit carryforwards to Post-Distribution Periods, including net operating loss carryforwards, net capital loss carryforwards, foreign Tax credit carryforwards and research and development credit carryforwards shall be computed and allocated between the Alberto-Culver Group and the Spinco Group based on the group that generated such item, except to the extent otherwise provided under Applicable Laws.

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SECTION 2.07. Carryback Provisions. Unless the parties otherwise agree in writing, Spinco shall elect and shall cause each of the Spinco Subsidiaries to elect, where permitted by Applicable Laws, to carry forward any loss, credit or similar Tax attribute (“Tax Carryover Attribute”) arising in a Post-Distribution Period that could, in the absence of such election, be carried back to a Pre-Distribution Period. Any refund or credit of Taxes resulting from the required carryback of any Tax Carryover Attribute attributable to Spinco arising in a Post-Distribution Period shall be for the account and benefit of Spinco; provided, however, that Alberto-Culver shall only be required to pay such amount to Spinco at the time such amount is actually realized in cash, credit, refund or offset by the Alberto-Culver Group after taking into account all other Tax attributes of the Alberto-Culver Affiliated Group. Any refund, credit or offset of Taxes resulting from the carryback of any Tax Carryover Attribute attributable to Alberto-Culver arising in a Post-Distribution Period shall be for the account and benefit of Alberto-Culver. If Spinco or any Spinco Subsidiary recognizes a Tax Carryover Attribute that, under Applicable Laws, must be carried back to a Pre-Distribution Period during which Spinco or any Spinco Subsidiary joined in filing a Tax Return on a consolidated, combined, or unitary basis with one or more of Alberto-Culver or any Alberto-Culver Subsidiary, Alberto-Culver shall, at Spinco’s expense, file appropriate refund claims within a reasonable period after being requested by Spinco to do so.

SECTION 2.08. Allocation of Tax Liability.

(a) Responsibility for Unpaid Taxes as of the Distribution Date. For purposes of this Agreement, the “Retained Tax Amount” shall equal (i) all accrued and unpaid income Taxes, net of overpaid income Taxes, of Spinco or any of its Subsidiaries for the Pre-Distribution Period that are payable, or refundable, with Tax Returns due after the Distribution Date (other than combined, consolidated or unitary Tax Returns of Spinco or any of its Subsidiaries to the extent such Tax Returns include Alberto-Culver or any Alberto-Culver Subsidiary, which will be paid by, or refundable to, Alberto-Culver or a member of the Alberto-Culver Group) and (ii) an amount equal to $3.9 million as full compensation for Taxes attributable to Pre-Distribution Periods for which Tax Returns have already been filed as of the Distribution Date. Alberto-Culver shall deliver to Spinco, not later than five Business Days prior to the Distribution Date, an estimate of the Retained Tax Amount (the “Estimated Retained Tax Amount”), which amount, subject to mutually agreed upon changes prior to the Distribution Date, shall be subtracted from the amount to be distributed by Spinco to Alberto-Culver as set forth in Section 2.05(c) of the Separation Agreement. Within 120 days following the Distribution Date, Alberto-Culver shall prepare and provide to Spinco the proposed final calculation of the Retained Tax Amount and all supporting documents and workpapers (the “Proposed Retained Tax Amount”). The Estimated Retained Tax Amount and the Proposed Retained Tax Amount shall be prepared in accordance with generally accepted accounting principles as consistently applied by the Alberto-Culver Group and the Spinco Group in accordance with past practice as of the Distribution Date, with the exception that deferred Taxes shall not be taken into account, applying the principles set forth in Section 2.09. For the avoidance of doubt, that portion of the Retained Tax Amount described in clause (i) shall not be determined by reference to any Taxes other than income Taxes and Spinco shall be fully responsible for any non-income Taxes imposed on Spinco or any Spinco Subsidiary.

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(b) Disputes. Within 60 days following the delivery of the Proposed Retained Tax Amount to Spinco, Spinco shall notify Alberto-Culver in writing of any objections that Spinco may have to the Proposed Retained Tax Amount, stating in reasonable detail the basis for any such objections (an “Objection Notice”). If Spinco fails to deliver an Objection Notice to Alberto-Culver within such 60-day period, Spinco will be deemed to have concurred with the calculation of the Proposed Retained Tax Amount and such amount shall become final and binding on the parties. If Spinco timely delivers an Objection Notice to Alberto-Culver in accordance with this Section 2.08(b), then the Proposed Retained Tax Amount shall become final and binding upon the parties on the earlier of (i) the date Spinco and Alberto-Culver resolve in writing any differences that they have with respect to any matter specified in the Objection Notice and (ii) the date any matters properly in dispute are finally resolved in writing by the Independent Expert, as defined below. During the 30 days immediately following the delivery of an Objection Notice, Spinco and Alberto-Culver shall, together with their respective accountants, promptly consult with each other in good faith and exercise reasonable efforts to attempt to resolve differences in their respective analyses of the Proposed Retained Tax Amount. If Spinco and Alberto-Culver are unable to resolve their differences within such 30-day period, the matter shall be promptly referred to an independent nationally recognized accounting firm selected by Spinco and Alberto-Culver (the “Independent Expert”) which shall be instructed to resolve such differences within 30 days after the matter is referred to it. The Independent Expert shall make its determination based solely on presentations by Spinco and Alberto-Culver. The Independent Expert shall act as an expert and not as an arbitrator, and shall resolve only the matters in dispute. The amount agreed to by the parties or determined by the Independent Expert shall be the “Final Retained Tax Amount”.

(c) Payments. Once the Final Retained Tax Amount has been determined, either by agreement of the parties or pursuant to determination by the Independent Expert (the “Final Tax Amount Determination”), (a) if the Final Retained Tax Amount exceeds the Estimated Retained Tax Amount, then Alberto-Culver shall pay to Spinco an amount equal to the excess of the Final Retained Tax Amount over the Estimated Retained Tax Amount, and (b) if the Estimated Retained Tax Amount exceeds the Final Retained Tax Amount, then Spinco shall pay to Alberto-Culver an amount equal to the excess of the Estimated Retained Tax Amount over the Final Retained Tax Amount. Any payments required under this Section 2.08(c) shall be made within 15 days of the Final Tax Amount Determination.

(d) Fees and Expenses. Each of Spinco and Alberto-Culver shall bear the fees and expenses of its respective accountants incurred in performing services pursuant to this Section 2.08. If an Independent Expert is selected to resolve differences between Spinco and Alberto-Culver in accordance with Section 2.08(b), Spinco and Alberto-Culver shall each pay one-half of the fees and expenses, including any retainers, of such firm in performing such services.

SECTION 2.09. Audit or Redetermination of U.S. Federal Income Tax Liability or U.S. State, Local or Municipal Consolidated, Combined or Unitary Income Tax Liability.

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(a) With respect to an audit or redetermination of the consolidated federal income Tax liability of the Alberto-Culver Affiliated Group for any Pre-Distribution Period, the amount of federal income Taxes constituting Spinco Taxes (other than with respect to Restructuring Taxes) shall be determined on a separate company basis with respect to the Spinco Group. Thus, Spinco’s share of such Taxes will generally equal the Tax liability or refund that the Spinco Group would have had if they had filed a separate return for the relevant period. Spinco shall pay to Alberto-Culver any reduction in the separate company liability of Spinco or any Spinco Subsidiary resulting from the absorption of losses, credits or other Tax attributes of Alberto-Culver or any Alberto-Culver Subsidiary that would have otherwise actually been used by Alberto-Culver or any Alberto-Culver Subsidiary. Conversely, Spinco shall be entitled to payment from Alberto-Culver to the extent that the absorption of Spinco or any Spinco Subsidiary’s losses, credits, or other Tax attributes that would have otherwise actually been used by Spinco or any Spinco Subsidiary reduces the Alberto-Culver Affiliated Group’s consolidated federal income Tax liability.

(b) The amount of any other income Taxes (other than Restructuring Taxes) resulting from an audit or redetermination constituting Spinco Taxes determined on a combined, consolidated or unitary basis with Alberto-Culver or any Alberto-Culver Subsidiary shall be determined on a separate company basis with respect to the Spinco Group. Thus, Spinco’s share of such Taxes will generally equal the Tax liability or refund that the Spinco Group would have had if they had filed a separate return for the relevant period. Spinco shall pay to Alberto-Culver any reduction in the separate company liability of Spinco or any Spinco Subsidiary resulting from the absorption of losses, credits or other Tax attributes of Alberto-Culver or any Alberto-Culver Subsidiary that would have otherwise actually been used by Alberto-Culver or any Alberto-Culver Subsidiary. Conversely, Spinco shall be entitled to payment from Alberto-Culver to the extent that the absorption of Spinco or any Spinco Subsidiary’s losses, credits, or other Tax attributes that would have otherwise actually been used by Spinco or any Spinco Subsidiary reduces the separate company Tax liability of Alberto-Culver or any Alberto-Culver Subsidiary.

(c) To the extent required by Applicable Laws, with respect to any income Tax audit or redetermination of any foreign Tax credit claimed with respect to any Pre-Distribution Period, in the determination of foreign source income, the research and development expenses, interest expenses, and other general administrative expenses shall be allocated to the foreign source income which gave rise to such expense allocation.

(d) Notwithstanding any other provision of this Agreement to the contrary, any excess foreign Tax credit as computed on IRS Form 1118 of an originally filed U.S. consolidated federal income Tax Return of the Alberto-Culver Affiliated Group for any Pre-Distribution Period which results in a carryback of such excess foreign Tax credit to another Pre-Distribution Period shall be considered to be on account of and for the benefit of the Alberto-Culver Group whether such foreign Tax credit carryback is ultimately realized through the filing of an amended U.S. consolidated federal income Tax Return or included in an audit report or other redetermination issued by the IRS after the Distribution Date, but only to the extent such filings are made prior to the Distribution Date. Only a further adjustment, resulting from an IRS audit or redetermination of the U.S. federal Tax payable with respect to any Pre-Distribution Period, to the original computation of any excess foreign Tax credit reported on an originally filed U.S.

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consolidated federal income Tax Return of the Alberto-Culver Affiliated Group shall be allocable under this Section 2.09 for purposes of computing the Tax liability or Tax refund attributable to either the Alberto-Culver Group or the Spinco Group resulting from an IRS audit or other redetermination of the U.S. federal income Tax payable with respect to any Pre-Distribution Period.

(e) For the avoidance of doubt, any adjustment to or redetermination of the income Tax liability of the Spinco Group or the Alberto-Culver Group under this Section 2.09 shall be made only with respect to Pre-Distribution Period income Taxes related to a consolidated, combined or unitary income Tax Return which become due after the Distribution Date arising only by reason of an audit, redetermination or examination concluding after the Distribution Date.

SECTION 2.10. Amended Tax Returns. From and after the Distribution Time, Alberto-Culver shall not, and shall not permit any of its Affiliates to, file any amended Tax Return for any Pre-Distribution Period that includes Spinco or any Spinco Subsidiary without the prior written consent of Spinco (such consent not to be unreasonably withheld) unless such amended Tax Return does not affect the liability or any attributes of Spinco or any of its Affiliates under this Agreement or the Merger Agreement (including the ability of Spinco to carry back a Tax attribute in accordance with Section 2.07).

ARTICLE III

TAX AUDITS

The following provisions shall apply from and after the Distribution Time.

SECTION 3.01. Controlling Party. Except as otherwise provided in this Agreement, each of Spinco and Alberto-Culver (as the case may be, the “Controlling Party”) shall have sole responsibility for all audits or other proceedings with respect to Tax Returns that it is required to file under Section 2.01. Except as provided in Section 3.03, the Controlling Party shall have the sole right to contest the audit or proceeding and to employ advisors of its choice at its expense.

SECTION 3.02. Indemnified Claims in General. Alberto-Culver or Spinco shall promptly notify the other in writing upon the receipt of any notice of audit, examination, redetermination or other like proceeding by the relevant Taxing authority that could reasonably result in liability of the other party (the “Indemnitor”) under this Agreement. If the Indemnitor is not also the Controlling Party, the Controlling Party shall provide the Indemnitor with information about the nature and progress of the audit, examination, redetermination or other like proceeding and, subject to additional rights of the Indemnitor in certain circumstances under Section 3.03, shall permit the Indemnitor to participate in the proceeding at the Indemnitor’s own expense (including without limitation the right to participate in material conference calls and meetings and to have reasonable comments incorporated in any written submission or response submitted to the relevant Tax authority to the extent such items bear on the Tax for which the Indemnitor could be liable). The Controlling Party shall be liable for any failure to notify or provide such information to the Indemnitor, except to the extent the Indemnitor is not materially prejudiced thereby.

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SECTION 3.03. Certain Tax Claims. Any issue raised by the relevant Taxing authority in any Tax inquiry, audit, redetermination, examination, investigation, dispute, litigation or other proceeding that would result in liability to the Indemnitor under this Agreement is defined as a Claim (a “Claim”). Notwithstanding any other provision of this Agreement that may be construed to the contrary, the Controlling Party agrees to contest any Claim for which the Controlling Party is not reasonably likely to have any liability at the direction of the Indemnitor and not to settle any Claim without prior written consent of the Indemnitor, provided that (i) within 30 days after notice of a Claim is received by the Indemnitor, the Indemnitor shall request in writing that such Claim be contested and, (ii) the Indemnitor shall agree to pay (and shall pay) on demand all reasonable out-of-pocket costs, Indemnifiable Losses (including, but not limited to, legal and accounting fees) paid or incurred by the Controlling Party in connection with contesting such Claim. The Indemnitor, at its option, may select as lead counsel of such defense any legal counsel reasonably satisfactory to the Controlling Party. In contesting any Claim in accordance with the foregoing, the Indemnitor shall, after reasonable consultation with the Controlling Party, determine the nature of all actions to be taken to contest such Claim, including (x) whether any action to contest such Claim shall initially be by way of judicial or administrative proceeding, or both, (y) whether any such Claim shall be contested by resisting payment thereof or by paying the same and seeking a refund thereof (provided that the Indemnitor will provide funds on an interest-free basis for payment in the case of the latter course consistent with Section 3.04(b) below), and (z) the court or other judicial body before which judicial action, if any, shall be commenced. To the extent the Indemnitor is not participating, the Controlling Party shall keep the Indemnitor (and, upon request by the Indemnitor, its counsel) informed as to the progress of the contest. In the case of Restructuring Taxes for which liability is shared under Section 2.04(a), each party shall pay a portion (based on each party’s share of such Restructuring Taxes) of the reasonable expenses (including legal and accounting fees) incurred in connection with contesting such Restructuring Tax dispute. In the case of a Claim for which both the Controlling Party and the Indemnitor may bear liability, each party shall bear its own expenses in contesting such a Claim, and the parties agree to use reasonable best efforts to separate the issues for resolution, to the extent possible. To the extent the issues cannot be separated, the parties shall, in good faith, use reasonable best efforts to jointly control the contesting of such a Claim (including the selection of lead counsel), although the party with the greater liability at stake shall ultimately have control over the settlement or other disposition of such Claim after affording the other party the right to participate fully in contesting the Claim (including without limitation the right to attend material conference calls and meetings and to have reasonable comments incorporated in any written submission or response submitted to the relevant Tax authority to the extent such items bear on the Tax for which the other party could be liable).

SECTION 3.04. Payments with Respect to Claims

(a) If the Indemnitor requests that the Controlling Party accept a settlement of a Claim offered by the relevant Taxing authority and if such Claim may, in the reasonable discretion of the Controlling Party, be settled without prejudicing any claims the relevant Taxing authority may have with respect to matters unrelated to the Claim, the Controlling Party shall either accept such settlement offer or agree with the Indemnitor that the Indemnitor’s liability with respect to such Claim shall be limited to the lesser of (i) an amount calculated on the basis of such settlement offer plus interest owed to the relevant Taxing authority on the date of eventual payment or (ii) the amount calculated on the basis of a Final Determination.

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(b) If it is determined that the Controlling Party shall pay the Tax claimed and seek a refund, the Indemnitor shall lend sufficient funds on an interest-free basis to the Controlling Party (with no net after-Tax cost to the Controlling Party), to cover any applicable indemnity obligations of the Indemnitor under this Agreement. To the extent such refund claim is ultimately disallowed, the loan or portion thereof equal to the amount of the refund claim so disallowed shall be applied against the Indemnitor’s obligation to make indemnity payments pursuant to this Agreement. To the extent such refund claim is allowed, the Controlling Party shall pay to the Indemnitor all amounts advanced to the Controlling Party with respect to the indemnity obligation within 10 days of the receipt of such refund (or if the Controlling Party would have received such refund but for the existence of a counterclaim or other claim not indemnified by the Indemnitor under this Agreement, within 10 days of the final resolution of the contest), plus an amount equal to any interest received (or that would have been received) from the relevant Taxing authority that is properly attributable to such amount.

(c) Except as provided below, the Controlling Party shall not settle a Claim that the Indemnitor is entitled to require the Controlling Party to contest under Section 3.03 without the prior written consent of the Indemnitor. At any time, whether before or after commencing to take any action pursuant to this Article III with respect to any Claim, the Controlling Party may decline to take action with respect to such Claim and may settle such Claim without the prior written consent of the Indemnitor by notifying the Indemnitor in writing that the Indemnitor is released from its obligations to indemnify the Controlling Party with respect to such Claim (which notification shall release the Indemnitor from such obligations except to the extent the Indemnitor has agreed in writing that it would be willing to have its liability calculated on the basis of a settlement offer, as provided in Section 3.04(a), at that point in the contest) and with respect to any Claim related to such Claim or based on the outcome of such Claim. If the Controlling Party settles any Claim or otherwise takes or declines to take any action pursuant to this paragraph, the Controlling Party shall pay to the Indemnitor any amounts paid or advanced by the Indemnitor with respect to such Claim (other than amounts payable by the Indemnitor in connection with a settlement offer pursuant to Section 3.04(a)), plus interest attributable to such amounts.

(d) If any party required to make a payment hereunder fails to make such payment when required by this Agreement (or, if no required time period is specified, within 10 Business Days of written request by the party to whom the payment is due), the amount due shall bear interest at a rate equal to the prime rate of Citibank, N.A. in effect on the date such payment was required to be made plus 2%.

ARTICLE IV

COOPERATION

The following provisions shall apply from and after the Distribution Time.

SECTION 4.01. Inconsistent Actions. Each party hereto agrees to, and to cause each of its Affiliates to, (a) report the Distribution as a tax-free distribution under Section 355 of the Code and the Merger as a reorganization described in Section 368 of the Code on all Tax

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Returns and other filings, and (b) comply with and take no action inconsistent with the representations and covenants provided to the IRS in connection with obtaining the Private Letter Ruling, and (c) not fail to be engaged in the conduct of the active trade or business relied upon for purposes of satisfying the requirements of Section 355(b) of the Code for purposes of the Private Letter Ruling. For all Post-Distribution Periods, each party to this Agreement agrees to, and to cause each of its Affiliates to, in the absence of a controlling change in Applicable Laws or circumstances, report on all Tax Returns, the Tax consequences of the transactions undertaken pursuant to the Transaction Agreements and the Merger Agreement in accordance with the positions taken with respect to such transactions to the extent reported on Tax Returns filed with respect to all Pre-Distribution Periods in respect of such transactions.

SECTION 4.02. Prohibited Acts.

(a) Other than pursuant to the transactions contemplated by the Merger Agreement (including the merger of Spinco with Merger Sub), Spinco and its Affiliates agree that for 24 months following the Distribution Date (the “Restricted Period”) they will not (i) merge or consolidate any Spinco Subsidiary with or into any other Person, (ii) liquidate or partially liquidate any Spinco Subsidiary (within the meaning of such terms as defined in Section 346 and Section 302, respectively, of the Code), or (iii) sell or transfer all or substantially all of the assets of Spinco or any Spinco Subsidiary in a single transaction or series of related transactions, or sell, transfer or otherwise dispose of any portion of the assets of Spinco or any Spinco Subsidiary that would violate the “continuity of business enterprise” requirement of Treasury Regulation Section 1.368-1(d).

(b) In addition, during the Restricted Period Alberto-Culver and its Affiliates, on the one hand, and Spinco and its Affiliates, on the other hand, agree that they will not (i) redeem or otherwise repurchase any capital stock of Alberto-Culver or Regis other than pursuant to open market stock repurchase programs meeting the requirements of Section 4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B. 696, or (ii) enter into any agreements or arrangements with respect to transactions or events (including, but not limited to, capital contributions or acquisitions, entering into any partnership or joint venture arrangements, stock issuances, option grants, or a series of such transactions or events (but excluding the Distribution)), in the case of each of clauses (i) and (ii) above that may cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly stock of Spinco or Alberto-Culver representing a “50-percent or greater interest” therein within the meaning of Section 355(d)(4) of the Code (the acts described in Sections 4.01 and 4.02(a) hereof, and clauses (i) and (ii) above, collectively, the “Prohibited Acts”).

(c) Notwithstanding the foregoing, a party may take any of the Prohibited Acts, subject to Section 2.04, if, (i) in the case of Spinco and its Affiliates, (A) Spinco first obtains (at its expense) an opinion in form and substance reasonably acceptable to Alberto-Culver of O’Melveny & Myers LLP or another nationally recognized law firm reasonably acceptable to Alberto-Culver, which opinion may be based on usual and customary factual representations, or (B) at Spinco’s request, Alberto-Culver (at the expense of Spinco) obtains a supplemental ruling from the IRS, or, (ii) in the case of Alberto-Culver and its Affiliates, (A) Alberto-Culver first obtains (at its expense) an opinion in form and substance reasonably acceptable to Spinco of Sidley Austin LLP or another nationally recognized law firm reasonably acceptable to Spinco,

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which opinion may be based on usual and customary factual representations or (B) Alberto-Culver (at the expense of Alberto-Culver) obtains a supplemental ruling from the IRS, in each case that such Prohibited Act(s), and any transaction related thereto, will not affect any of the conclusions set forth in the Private Letter Ruling or Tax Opinion, including (i) the qualification of the Distribution under Section 355 of the Code, and (ii) the nonrecognition of gain to Alberto-Culver in the Distribution. A party may also take any of the Prohibited Acts, subject to Section 2.04, with the consent of the other party in the other party’s sole and absolute discretion. During the Restricted Period, the parties shall provide, and shall cause their respective Affiliates to provide, all information reasonably requested by the other party relating to any transaction involving an acquisition (directly or indirectly) of that party’s stock within the meaning of Section 355(e) of the Code. The parties hereto agree that the payment of monetary compensation would not be an adequate remedy to a breach of the obligations described in the Prohibited Acts, and each party consents to the issuance and entry of an injunction to prevent a breach of the obligations contained in the Prohibited Acts, subject to the waiver and consent described in the preceding sentence.

SECTION 4.03. Cooperation with Respect to Tax Return Filings, Examinations and Tax Related Controversies. In addition to any obligations imposed pursuant to the Separation Agreement, each party shall fully cooperate with the other party and its representatives, in a prompt and timely manner, in connection with (i) the preparation and filing of and (ii) any inquiry, audit, redetermination, examination, investigation, dispute, or litigation involving, any Tax Return required to be filed by such other party pursuant to this Agreement. Such cooperation shall include, but not be limited to, (x) the execution and delivery to such other party of any power of attorney required to allow such other party and its counsel to participate in or control any inquiry, audit or other administrative proceeding and to assume the defense or prosecution, as the case may be, of any suit, action or proceeding pursuant to the terms of and subject to the conditions set forth in Article III, and (y) making available, during normal business hours, and within 15 days of any written request therefor, all books, records and information, and the assistance of all officers and employees, necessary or useful in connection with any Tax inquiry, audit, redetermination, examination, investigation, dispute, litigation or any other matter. Any recoveries by Alberto-Culver, Spinco or any of their respective Affiliates against third parties (including awards for damages) relating to Restructuring Taxes shall be shared and allocated by the parties consistently with the allocation of the underlying Restructuring Taxes.

SECTION 4.04. Cooperation with Respect to Particular Tax Return Filings. With respect to each loss of any Spinco Subsidiary disclosed by Alberto-Culver on Schedule 4.04 of this Agreement for which an Treasury Regulation Section 1.1503-2T(g)(2) election has or will be made for Pre-Distribution Periods, Alberto-Culver shall timely file or cause to be timely filed a closing agreement with the IRS pursuant to Treasury Regulation Section 1.1503-2(g)(2)(iv)(B)(3)(i). Spinco shall cause any Spinco Affiliate required to execute such closing agreement to actually execute such closing agreement, cooperate with the completion and timely filing of the closing agreement and accept and assume the Tax obligations related to the closing agreement. Alberto-Culver shall, in a manner consistent with Article IV of the Separation Agreement (including the principles of Section 4.05 of the Separation Agreement), indemnify, defend, and hold harmless Spinco and the Spinco Indemnified Parties from and against, any and all Indemnifiable Losses incurred or suffered by Spinco or one or more of the Spinco Indemnified Parties in connection with, relating to, arising out of, or due to, directly or indirectly any inaccuracy of any item disclosed on Schedule 4.04.

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ARTICLE V

RETENTION OF RECORDS; ACCESS

The Alberto-Culver Group and the Spinco Group shall retain all Information in accordance with Section 6.04 of the Separation Agreement.

ARTICLE VI

DISPUTES

From and after the Distribution Time, if Alberto-Culver and Spinco cannot agree on the calculation of any liability under this Agreement, or the interpretation or application of any provision under this Agreement, either party may provide to the other party written notice of intent to invoke the dispute resolution procedures of this Article VI. Within 10 days following the receipt of such written notice, Alberto-Culver and Spinco shall jointly retain a nationally recognized law firm or “big four” accounting firm, which firm is independent of both parties (the “Independent Firm”), to resolve the dispute. If the parties cannot jointly agree on an Independent Firm to resolve the dispute within the 10 day period, then each party shall select a nationally recognized law firm or “big four” accounting firm, which firm is independent of both parties, and both law or accounting firms shall jointly select an Independent Firm which shall make the determination under this Article VI. The Independent Firm shall act as an arbitrator to resolve all points of disagreement and its decision shall be final and binding upon all parties involved. The Independent Firm shall determine the appropriate outcome based upon this Agreement with respect to each disputed item. The Independent Firm shall have 90 days from the date that it is selected in which to make such determinations, unless Alberto-Culver and Spinco mutually agree on an extension of such period or the Independent Firm, in its discretion, determines that an extension of such period is warranted by exceptional circumstances. Alberto-Culver and Spinco shall provide the Independent Firm with such information or documentation as the Independent Firm deems in its discretion to be necessary for it to make the determinations requested of it. Any determination by the Independent Firm shall be in writing. Following the decision of the Independent Firm, Alberto-Culver and Spinco shall each take or cause to be taken any action necessary to implement the decision of the Independent Firm. The fees and expenses relating to the Independent Firm shall be borne by the party that such Independent Firm determines has lost the dispute. Notwithstanding the foregoing, this Article VI shall not apply to any dispute arising under Section 2.04 with respect to the respective liability of the parties in the event Restructuring Taxes are imposed.

ARTICLE VII

SURVIVAL OF LIABILITIES

Notwithstanding any other provision in this Agreement, any liabilities under this Agreement shall survive for 60 days following any applicable statute of limitation; provided, however, that each party may continue to demand the full amount of payment to be made with respect to any such liabilities under this Agreement and such liabilities shall continue to survive until paid in full in accordance with this Agreement.

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ARTICLE VIII

MISCELLANEOUS

SECTION 8.01. Entire Agreement; Construction. This Agreement, the Separation Agreement, the Merger Agreement and the Ancillary Agreements, including any annexes, schedules and exhibits hereto or thereto, and other agreements and documents referred to herein and therein, will together constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and will supersede all prior negotiations, agreements and understandings of the parties of any nature, whether oral or written, with respect to such subject matter. Notwithstanding any other provisions in this Agreement to the contrary, in the event and to the extent that there is a conflict relating to Taxes between the provisions of this Agreement and the provisions of the Separation Agreement, the Merger Agreement or any other Ancillary Agreements the provisions of this Agreement will control.

SECTION 8.02. Survival of Agreements. Except as otherwise contemplated by this Agreement, all covenants and agreements of the parties contained in this Agreement will remain in full force and effect and survive the Distribution Time.

SECTION 8.03. Effectiveness. All covenants and agreements of the parties contained in this Agreement shall be subject to and conditioned upon the Distribution becoming effective.

SECTION 8.04. Governing Law. This Agreement will be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

SECTION 8.05. Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii) upon confirmation of receipt if delivered by telecopy or telefacsimile, (iii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service or (iv) on the date of receipt if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a)	If to Alberto-Culver to
	Alberto-Culver Company
	2525 Armitage Avenue
	Melrose Park, Illinois 60160
	Fax:	(708) 450-2511
	Attention:	Chairman and Senior Vice President,
		General Counsel (with a separate notice to be sent to each such person)
	with a copy to
	Sidley Austin LLP

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	One South Dearborn St.
	Chicago, Illinois 60603
	Fax:	(312) 853-7036
	Attention:	Frederick C. Lowinger, Esq.
		David J. Zampa, Esq.
(b)	If to Spinco to
	Sally Holdings, Inc.
	3001 Colorado Blvd.
	Denton, TX 76210
	Fax:	(940) 297-4990
	Attention:	Vice President and General Counsel
	With a copy at any time prior to the Effective Time to
	Sidley Austin LLP
	One South Dearborn St.
	Chicago, Illinois 60603
	Fax:	(312) 853-7036
	Attention:	Frederick C. Lowinger, Esq.
		David J. Zampa, Esq.
	And with a copy at any time from and after the Effective Time to
		Regis Corporation
		7201 Metro Blvd.
		Minneapolis, MN 55439
	Fax:	(952) 947-7600
	Attention:	President and Chief Executive Officer
		General Counsel (with a separate notice to be sent to each such person)
	And to
	O’Melveny & Myers LLP
	Times Square Tower
	7 Times Square
	New York, New York 10036
	Fax:	(212) 326-2061
	Attention:	Spencer D. Klein, Esq.
		Paul S. Scrivano, Esq.

SECTION 8.06. Payments. Any payment that may be due under this Agreement is to be made by wire transfer of immediately available funds to the account designated by Alberto-Culver or Spinco in such notice or by any other method as shall be agreed upon by Alberto-Culver and Spinco.

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SECTION 8.07. Consent to Jurisdiction. Each of Alberto-Culver and Spinco irrevocably agrees that any legal action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or permitted assigns may be brought and determined in any federal or state court located in the State of Delaware, and each of Alberto-Culver and Spinco hereby irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of Alberto-Culver and Spinco hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement, validity or invalidity hereof, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by Applicable Laws, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

SECTION 8.08. Amendments. This Agreement cannot be amended except by a written agreement executed by Alberto-Culver and Spinco; provided, that unless the Merger Agreement shall have been terminated, (a) any such amendment that would reasonably be expected to adversely affect (after giving effect to the Merger) Regis or its shareholders (it being understood and agreed that any fees and expenses incurred by Regis or any of its Subsidiaries in connection with the review of any such proposed amendment shall not be deemed to adversely affect Regis or its shareholders) executed prior to the Distribution Time shall be subject to the prior written consent of Regis and (b) the parties hereto shall notify Regis and its counsel in writing in accordance with Section 10.2 of the Merger Agreement at least five Business Days prior to the making of any such amendment prior to the Distribution Time.

SECTION 8.09. Assignment. Neither party to this Agreement will convey, assign or otherwise transfer any of its rights or obligations under this Agreement, in whole or in part, without the prior written consent of the other party in its sole and absolute discretion. Any conveyance, assignment or transfer requiring the prior written consent of the other party pursuant to this Section 8.09 which is made without such consent will be void ab initio. No assignment of this Agreement will relieve the assigning party of its obligations hereunder.

SECTION 8.10. Captions; Currency. The article, section and paragraph captions herein and the table of contents hereto are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof. Unless otherwise specified, all references herein to numbered articles or sections are to articles and sections of this Agreement and all references herein to schedules are to schedules to this Agreement. Unless otherwise specified, all references contained in this Agreement, in any schedule referred to herein or in any instrument or document delivered pursuant hereto to dollars or “$” shall mean United States Dollars.

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SECTION 8.11. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and will in no way be affected, impaired or invalidated thereby. If the economic or legal substance of the transactions contemplated hereby is affected in any manner adverse to any party as a result thereof, the parties will negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

SECTION 8.12. Parties in Interest. This Agreement is solely for the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is not made for the benefit of any Person not a party hereto, and no Person other than the parties hereto or their respective successors and permitted assigns will acquire or have any benefit, right, remedy or claim under or by reason of this Agreement.

SECTION 8.13. Schedules. All schedules attached hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Capitalized terms used in the schedules hereto but not otherwise defined therein will have the respective meanings assigned to such terms in this Agreement.

SECTION 8.14. Waivers; Remedies. Any agreement on the part of a party hereto to waive the performance by the other party of any of its covenants hereunder shall be valid only if set forth in a written instrument signed on behalf of such party; provided, that unless the Merger Agreement shall have been terminated, (a) any such waiver that would reasonably be expected to adversely affect (after giving effect to the Merger) Regis or its shareholders (it being understood and agreed that any fees and expenses incurred by Regis or any of its Subsidiaries in connection with the review of any such proposed waiver shall not be deemed to adversely affect Regis or its shareholders) executed prior to the Distribution Time shall be subject to the prior written consent of Regis and (b) the parties hereto shall notify Regis and its counsel in writing in accordance with Section 10.2 of the Merger Agreement at least five Business Days prior to the making of any such waiver prior to the Distribution Time. No failure or delay on the part of either Alberto-Culver or Spinco in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any waiver on the part of either Alberto-Culver or Spinco of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor will any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

SECTION 8.15. Counterparts. This Agreement may be executed in separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.

SECTION 8.16. Performance. Alberto-Culver will cause to be performed and hereby guarantees the performance of all actions, agreements and obligations set forth herein to be performed by any Alberto-Culver Subsidiary. Spinco will cause to be performed and hereby guarantees the performance of all actions, agreements and obligations set forth herein to be performed by any Spinco Subsidiary.

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SECTION 8.17. Interpretation. Any reference to any federal, state, local, or foreign law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires, (b) the terms “hereof”, “herein”, and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement and (c) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”.

SECTION 8.18. Mutual Drafting. This Agreement shall be deemed to be the joint work product of Alberto-Culver and Spinco and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties as of the date first hereinabove written.

ALBERTO-CULVER COMPANY
By:	/s/ Gary P. Schmidt
	Name: Gary P. Schmidt
	Title: Senior Vice President & General Counsel
SALLY HOLDINGS, INC.
By:	/s/ Gary Winterhalter
	Name: Gary Winterhalter
	Title: President

SCHEDULE 4.04 to the Tax Allocation Agreement

Sally Beauty (Canada) Corporation has the following dual consolidated losses:

1. $344,348 for fiscal year ended September 30, 2004.

2. $386,295 estimated for fiscal year ended September 30, 2005.

3. Approximately $300,000 forecast for the period beginning October 1, 2005 and ending on the Distribution Date.

EX-10.02

EXHIBIT 10.02

EMPLOYEE MATTERS AGREEMENT

This Employee Matters Agreement, dated as of January 10, 2006, is between Alberto-Culver Company, a Delaware corporation (“Alberto-Culver”), and Sally Holdings, Inc., a Delaware corporation (“Spinco”).

RECITALS

WHEREAS, Alberto-Culver and Spinco have entered into a Separation Agreement dated as of the date hereof (the “Separation Agreement”) pursuant to which Alberto-Culver will distribute to the holders of common stock, $0.22 par value per share, of Alberto-Culver (“Alberto-Culver Common Stock”) all of the outstanding shares of common stock, no par value per share, of Spinco (“Spinco Common Stock”) on a pro rata basis (the “Distribution”);

WHEREAS, immediately following the Distribution, pursuant to the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of the date hereof, among Alberto-Culver, Spinco, Regis Corporation, a Minnesota corporation (“Regis”), Roger Merger Inc., a Delaware corporation and a direct, wholly owned Subsidiary of Regis (“Merger Sub”) and Roger Merger Subco LLC, a Delaware limited liability company and a wholly owned subsidiary of Regis (“Subco”), Merger Sub will merge with and into Spinco with Spinco continuing as the surviving corporation (the “Merger”) and immediately following the Merger, Spinco will merge with and into Subco (the “Subsequent Merger”); and

WHEREAS, in connection with the Distribution, Alberto-Culver and Spinco desire to enter into this Employee Matters Agreement (the “Agreement”).

NOW, THEREFORE, in consideration of the mutual agreements contained herein and in the Separation Agreement, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings set forth in the Separation Agreement.

1.01 “Alberto-Culver Option” means an option to acquire shares of Alberto-Culver Common Stock.

1.02 “Alberto-Culver Option Plan” means (a) the Alberto-Culver Employee Stock Option Plan of 2003 and (b) the Alberto-Culver Employee Stock Option Plan of 1988.

1.03 “Alberto-Culver Pre-Distribution Stock Price” means the closing price per share of Alberto-Culver Common Stock on the last full Business Day (as defined in the Merger Agreement) occurring before (i) the Distribution Date or (ii) if earlier, the date on which Alberto-Culver Common Stock begins to trade “ex-dividend.”

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1.04 “Benefit Plans” means Pension Plans, Welfare Plans and Non-ERISA Benefit Arrangements.

1.05 “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at Part 6 of Subtitle B of Title I of ERISA and at section 4980B of the Code.

1.06 “Code” means the U.S. Internal Revenue Code of 1986, as amended.

1.07 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §1001, et seq.

1.08 “Former Spinco Employee” means an individual whose employment with the Spinco Group was terminated prior to the Distribution Time and who, subsequent to such termination, was not employed by the Alberto-Culver Group.

1.09 “Intrinsic Value” means, in the case of an Alberto-Culver Option prior to the Distribution Date, the excess, if any, of the Alberto-Culver Pre-Distribution Stock Price over the exercise price per share of Alberto-Culver Common Stock subject to such Alberto-Culver Option, multiplied by the number of shares of Alberto-Culver Common Stock subject to such Alberto-Culver Option.

1.10 “IRS” means the U.S. Internal Revenue Service.

1.11 “Non-ERISA Benefit Arrangement” means each contract, agreement, policy, practice, program, plan, trust or arrangement, other than a Pension Plan or Welfare Plan, providing for benefits, perquisites or compensation of any nature to any Spinco Employee or Former Spinco Employee, or to any family member, dependent or beneficiary of any such Spinco Employee or Former Spinco Employee, including, without limitation, disability, severance, health, dental, life, accidental death and dismemberment, travel and accident, tuition reimbursement, supplemental unemployment, vacation, sick, personal or bereavement days, holidays, retirement, deferred compensation, profit sharing, bonus, stock-based compensation or other forms of incentive compensation.

1.12 “Pension Plan” means any pension plan as defined in section 3(2) of ERISA, without regard to sections 4(b)(4) or 4(b)(5) of ERISA.

1.13 “Restricted Stock” means shares of Alberto-Culver Common Stock held by Spinco Employees that are subject to transfer restrictions, other than by reason of applicable securities laws, and a substantial risk of forfeiture, including shares granted pursuant to (a) the Alberto-Culver 2003 Restricted Stock Plan and (b) the Alberto-Culver 1994 Restricted Stock Plan.

1.14 “Spinco Employee” means any individual who, at the Distribution Time, is either actively employed by, or on an approved leave of absence from, a member of the Spinco Group. For purposes of clarity, the person set forth on Schedule A shall be neither a “Spinco Employee” nor a “Former Spinco Employee.”

1.15 “Spinco Option” means an option to acquire shares of Spinco Common Stock.

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1.16 “Spinco Post-Distribution Stock Price” means the value of one share of Spinco Common Stock, which shall be equal to the product of (i) the Exchange Ratio (as defined in the Merger Agreement) and (ii) the closing price per share of Regis Common Stock (as defined in the Merger Agreement) on the last full Business Day occurring before (A) the Distribution Date or (B) if earlier, the date on which Alberto-Culver Common Stock begins to trade “ex-dividend.”

1.17 “U.S.” means the United States of America.

1.18 “Welfare Plan” means any employee welfare plan as defined in section 3(1) of ERISA, without regard to sections 4(b)(4) or 4(b)(5) of ERISA.

ARTICLE II

SPINCO EMPLOYEE MATTERS

2.01 Employment. Each Spinco Employee shall be an employee of a member of the Spinco Group immediately following the Distribution Time.

2.02 Severance Obligations.

(a) It is not intended that any Spinco Employee or Former Spinco Employee will be entitled to termination or severance benefits solely as a result of the Distribution, Merger, Subsequent Merger or any other transaction contemplated by this Agreement or the Merger Agreement (other than payments or benefits with respect to Spinco Employees who separate from service in connection with such transactions). Alberto-Culver shall indemnify and hold harmless Spinco in the event that any Spinco Employee or Former Spinco Employee obtains a final, nonappealable judgment from a Governmental Entity declaring that such Spinco Employee or Former Spinco Employee is entitled to severance benefits under an Alberto-Culver severance plan or agreement solely as a result of the Distribution, Merger, Subsequent Merger or any other transaction contemplated by this Agreement or the Merger Agreement; provided, however, that, for the avoidance of doubt, Alberto-Culver shall be under no such obligation with respect to any Spinco Employee whose employment with the Spinco Group or Regis or any of its Affiliates terminates after the Distribution. For purposes of this Section 2.02(a), Alberto-Culver shall determine in its sole discretion whether any judgment or determination by a Governmental Entity shall be appealed, shall notify Spinco in writing of such determination, and shall pay or reimburse each member of the Spinco Group for its reasonable expenses incurred in connection with any such appeal. If Alberto-Culver notifies Spinco in writing that a judgment or determination by a Governmental Entity shall not be appealed, such determination shall be deemed a final, nonappealable judgment from a Governmental Entity as set forth in the first sentence of this Section 2.02(a).

(b) Except as otherwise provided in Section 2.02(a) and Section 2.02(c), from and after the Distribution Time, Spinco shall assume and be fully responsible for, and neither Alberto-Culver nor any of its Affiliates shall have any liability or responsibility for, any termination or severance payment or benefit obligations with respect to Spinco Employees or Former Spinco Employees payable after the Distribution Time, including any severance payments owed, but not yet paid, to any Former Spinco Employee.

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(c) Alberto-Culver shall retain and be fully responsible for, and no member of the Spinco Group shall have any liability or responsibility for, any termination or severance payments or benefit obligations (i) with respect to the person set forth on Schedule A or (ii) that become payable in connection with a termination of employment that occurs, or a notice of employment termination that is provided, at or prior to the Distribution Time under a Termination Agreement among Alberto-Culver, Spinco and each of the Spinco Employees listed on Schedule B.

2.03 Personnel Records.

(a) Subject to Applicable Laws, all information and records regarding employment and personnel matters of Spinco Employees and Former Spinco Employees shall be retained after the Distribution Time by Spinco in accordance in all material respects with Applicable Laws relating to the collection, storage, retention and disclosure of such records. Access to such records after the Distribution Time will be provided to Alberto-Culver in accordance with Article VI of the Separation Agreement. Notwithstanding the foregoing, Alberto-Culver shall retain reasonable access, in accordance with Applicable Laws, to those records necessary to Alberto-Culver’s continued administration of any plans or programs on behalf of Spinco Employees and Former Spinco Employees after the Distribution Time or as otherwise required by Applicable Laws for so long as said administration continues pursuant to this Agreement or such longer period as required by Applicable Laws. Alberto-Culver shall also retain copies of any confidentiality and non-compete agreements with any Spinco Employee or Former Spinco Employee in which Alberto-Culver has an interest.

(b) Alberto-Culver shall retain all information and records regarding employment and personnel matters of Spinco Employees and Former Spinco Employees and in Alberto-Culver’s possession immediately after the Distribution Time, but only to the extent Alberto-Culver is required to do so under Applicable Laws relating to the collection, storage, retention and disclosure of such records. Access to such records after the Distribution Time will be provided to Spinco in accordance with Article VI of the Separation Agreement. Notwithstanding the foregoing, Spinco shall retain reasonable access, in accordance with Applicable Laws, to those records necessary to Spinco’s continued administration of any plans or programs on behalf of Spinco Employees and Former Spinco Employees after the Distribution Time or as otherwise required by Applicable Laws for so long as said administration continues pursuant to this Agreement or such longer period as required by Applicable Laws. Spinco shall also retain any confidentiality and non-compete agreements with any Spinco Employee or Former Spinco Employee.

ARTICLE III

WELFARE PLANS

3.01 Cessation of Participation in Alberto-Culver Welfare Plans. Except as specifically provided in this Agreement, each member of the Spinco Group shall cease to be a participating employer in all Welfare Plans sponsored by Alberto-Culver (the “Alberto-Culver Welfare Plans”), and participation in the Alberto-Culver Welfare Plans will cease for all Spinco Employees and Former Spinco Employees, if any, no later than at the Distribution Time.

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3.02 Spinco’s Welfare Plans. To the extent applicable to any welfare plans in which Spinco Employees or Former Spinco Employees participate after the Distribution Time that provide benefits similar to the benefits that had been provided to such employees under an Alberto-Culver Welfare Plan immediately prior to the Distribution Time (the “Spinco Welfare Plans”), Spinco shall cause the Spinco Welfare Plans to recognize all coverage and contribution elections made by Spinco Employees and Former Spinco Employees under the Alberto-Culver Welfare Plans in effect for the period immediately prior to the Distribution Time and shall apply such elections under the Spinco Welfare Plans for the remainder of the period or periods for which such elections are by their terms applicable, in each case to the extent practicable. All beneficiary designations made by Spinco Employees and Former Spinco Employees under the Alberto-Culver Welfare Plans shall, to the extent applicable, be transferred to, and be in full force and effect under, the Spinco Welfare Plans until such beneficiary designations are replaced or revoked by the Spinco Employee or Former Spinco Employee who made the beneficiary designation.

3.03 Welfare Plan Liabilities.

(a) Spinco Liabilities. Spinco shall retain, and be solely responsible for, all Liabilities incurred with respect to any Spinco Employee or Former Spinco Employee after the Distribution Time under the Spinco Welfare Plans, and neither Alberto-Culver nor the Alberto-Culver Welfare Plans shall assume or retain any such Liabilities.

(b) Alberto-Culver Liabilities. Alberto-Culver shall continue to be solely responsible, after the Distribution Time, for all claims for welfare benefits (and for any Liabilities arising as a result of such claims), other than severance plan benefits, incurred by any Spinco Employee or Former Spinco Employee, if any, under the Alberto-Culver Welfare Plans at or prior to the Distribution Time, whether such claims have been paid or remain unpaid as of such date, and neither Spinco nor the Spinco Welfare Plans shall assume or retain any such Liabilities. Claims for health benefits shall be considered to be incurred prior to the Distribution Time if the services related to such claims were provided prior to the Distribution Time. Claims for all other welfare benefits shall be considered to be incurred prior to the Distribution Time if the date of loss occurred prior to the Distribution Time.

(c) COBRA and HIPAA Liabilities. From and after the Distribution Time, Spinco shall assume, and be solely responsible for, the continuation coverage requirements under COBRA and the portability requirements under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) with respect to all Spinco Employees and Former Spinco Employees and their qualified beneficiaries, which for purposes of clarity shall exclude the person set forth on Schedule A.

3.04 Flexible Spending Accounts. From and after the Distribution Time, Spinco shall retain, and be solely responsible for, all Liabilities incurred by any Spinco Employee or Former Spinco Employee under the flexible spending account plan sponsored by Spinco, and Alberto-Culver shall not assume or retain any such Liabilities.

3.05 Short-Term Disability Benefits. From and after the Distribution Time, Spinco shall retain, and be solely responsible for, all short-term disability benefits payable to Spinco Employees at or after the Distribution Time, and Alberto-Culver shall not assume or retain any such Liabilities.

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3.06 Long-Term Disability Benefits. From and after the Distribution Time, Alberto-Culver shall retain, and be solely responsible for, all long-term disability benefits payable, at or after the Distribution Time, to (a) Spinco Employees receiving long-term disability benefits prior to the Distribution Time, and (b) Former Spinco Employees, and Spinco shall not assume or retain any such Liabilities.

ARTICLE IV

COMPENSATION MATTERS

AND NON-ERISA BENEFIT ARRANGEMENTS

4.01 Cessation of Participation in Alberto-Culver Non-ERISA Benefit Arrangements. Except as specifically provided in this Agreement, each member of the Spinco Group shall cease to be a participating employer in all Alberto-Culver Non-ERISA Benefit Arrangements, and participation in the Alberto-Culver Non-ERISA Benefit Arrangements will cease for all Spinco Employees and Former Spinco Employees at the Distribution Time.

4.02 Assumption of Employee Related Obligations. From and after the Distribution Time, Spinco shall assume or retain (as applicable), and be solely responsible for, all Liabilities related to the agreements and obligations described in Section 4.02(a) through Section 4.02(f) and none of Alberto-Culver or any Affiliate of Alberto-Culver or the Alberto-Culver Non-ERISA Benefit Arrangements shall retain or have any further liability with respect to such Liabilities.

(a) Agreements entered into between the Alberto-Culver Group and Spinco Employees and Former Spinco Employees, except as otherwise provided in this Agreement. For purposes of clarity, Alberto-Culver shall retain all Liabilities related to the Key Executive Deferred Compensation Agreement, Severance Agreement and Termination Agreement, each between Alberto-Culver and the person set forth on Schedule A. No Spinco Employee or Former Spinco Employee is a party to a Key Executive Deferred Compensation Agreement with Alberto-Culver.

(b) Agreements entered into between the Alberto-Culver Group and independent contractors providing services to the extent they are related to the Spinco Business.

(c) All confidentiality and non-compete agreements between the Alberto-Culver Group and Spinco Employees, Former Spinco Employees and independent contractors; provided, however, that Alberto-Culver and Spinco shall both enjoy the rights and benefits under such agreements, with respect to such party’s and its Affiliates’ business operations.

(d) All wages, salary, ordinary compensation and commissions payable to Spinco Employees or Former Spinco Employees after the Distribution Time, whether earned before or after the Distribution Time; provided that no such amounts were earned for services as an employee of a member of the Alberto-Culver Group. For purposes of clarity, Alberto-Culver shall retain, and be solely responsible for, all wages, salary, ordinary compensation and commissions payable to Spinco Employees or Former Spinco Employees to the extent such amounts were earned for services as an employee of a member of the Alberto-Culver Group.

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(e) All bonus and incentive compensation payment obligations, if any, payable after the Distribution Time to Spinco Employees; provided, however, that Spinco’s payment obligations with respect to the Alberto-Culver 1994 Shareholder Value Incentive Plan and the Alberto-Culver Management Incentive Plan are set forth exclusively in Section 4.03(a), and not pursuant to this Section 4.02(e).

(f) All Liabilities and obligations whatsoever of the Spinco Business with respect to claims made by or with respect to Spinco Employees or Former Spinco Employees relating to Non-ERISA Benefit Arrangements with respect to the Spinco Business and not specifically assumed or retained by Alberto-Culver pursuant to this Agreement. The term “Liabilities” under this Section 4.02(f) expressly excludes any payment of any kind, including insurance coverage, indemnification rights and common law rights, for the acts or omissions of or by any Spinco officer, director, employee or agent, which are covered by the Separation Agreement.

The parties agree to negotiate in good faith with applicable third parties to have the foregoing obligations assumed by Spinco on terms no less favorable to Spinco than those that apply to Alberto-Culver. Subject to the foregoing, if any of the foregoing obligations cannot be assumed by Spinco for a reason beyond the control of the parties hereto, including the refusal of any such third party to agree to such an assumption, then Spinco shall reimburse the Alberto-Culver Group for any such obligation paid by the Alberto-Culver Group, in accordance with Section 7.03, as though it had been assumed and paid by Spinco.

4.03 Certain Incentive Plans; Nonqualified Deferred Compensation.

(a) From and after the Distribution Time, Spinco shall assume and thereafter be solely responsible for all bonus and incentive compensation payment obligations earned by Spinco Employees as of the Effective Time (as defined in the Merger Agreement) under the Alberto-Culver 1994 Shareholder Value Incentive Plan and the Alberto-Culver Management Incentive Plan. Each such plan shall be treated as though a Change in Control, as defined in such plan, occurred as of the Effective Time with respect to all Spinco Employees. Not later than 28 days after the Effective Time, Alberto-Culver shall (i) determine all bonus and incentive payment obligations earned by Spinco Employees under the 1994 Shareholder Value Incentive Plan and the Alberto-Culver Management Incentive Plan as of the Effective Time, if any, and (ii) transfer to Spinco a cash payment equal to 62% of such amounts, which represents the after-tax cost to Spinco of paying such amounts.

(b) From and after the Distribution Time, Spinco shall assume and thereafter be solely responsible for all deferred compensation payment obligations credited to the accounts of all Spinco Employees and Former Spinco Employees as of the Effective Time under the Alberto-Culver Executive Deferred Compensation Plan. Such plan shall be treated as though a Change in Control, as defined in such plan, occurred as of the Effective Time with respect to all Spinco Employees and Former Spinco Employees, and, subject to the transfer set forth in the next sentence, as soon as reasonably practicable after the Effective Time, or at such other time as

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shall be required to comply with section 409A of the Code, Spinco shall pay to each such Spinco Employee and Former Spinco Employee the amount credited to his or her account under such plan as of the Effective Time. As soon as reasonably practicable after the Effective Time, Alberto-Culver shall (i) determine all deferred compensation payment obligations credited to the accounts of all Spinco Employees and Former Spinco Employees under the Alberto-Culver Executive Deferred Compensation Plan as though a Change in Control occurred as of the Effective Time, and (ii) transfer to Spinco a cash payment equal to 62% of such amounts, which represents the after-tax cost to Spinco of paying such amounts.

4.04 Equity Compensation Plans.

(a) Options Held by Spinco Employees. Each Alberto-Culver Option held by a Spinco Employee that is outstanding as of the Distribution Time shall be converted into a Spinco Option, effective immediately after the Distribution Time.

(i) The number of shares of Spinco Common Stock subject to a Spinco Option and the exercise price per share of Spinco Common Stock subject to a Spinco Option shall be determined, as of the Distribution Time, in accordance with the following conversion formula (to be interpreted and applied in such a way as to minimize any adverse consequences of any possible application of FAS 123R and Section 409A of the Code to such conversions):

(A) The Intrinsic Value of each Alberto-Culver Option shall be maintained under each corresponding Spinco Option by setting the option exercise price of the Spinco Option and/or the number of shares subject to such Spinco Option to ensure that the aggregate difference between the Spinco Post-Distribution Stock Price and the exercise price of the Spinco Option equals such Intrinsic Value.

(B) The ratio of the per share option exercise price of the Spinco Option to the Spinco Post-Distribution Stock Price shall be fixed in such a way that does not increase the ratio of the per share exercise price of the related Alberto-Culver Option to the Alberto-Culver Pre-Distribution Stock Price.

(ii) Each Spinco Option shall have the same terms and conditions as the corresponding Alberto-Culver Option to which it relates (except as adjusted as provided herein) and shall continue to be subject to the same terms and conditions as the applicable Alberto-Culver Option Plan; provided, however, that for purposes of the Spinco Options, unless the context otherwise requires, all references to “Alberto-Culver” therein shall, after the Distribution Time, be deemed to be to “Spinco” and all references to Alberto-Culver Common Stock shall be deemed to be to Spinco Common Stock. Alberto-Culver and Spinco shall each take such actions as may be necessary to effectuate the provisions of this Section.

Spinco Options shall become fully vested and exercisable and shall be converted into options to purchase shares of Regis Common Stock (as defined in the Merger Agreement) pursuant to the terms of the Merger Agreement.

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(b) Restricted Stock. The Alberto-Culver Board of Directors shall take all actions reasonably necessary to ensure that, not later than the Distribution Time, the Spinco Employees shall be fully vested in any shares of Restricted Stock that they hold. At the Distribution Time, all shares of Alberto-Culver Restricted Stock shall be treated the same as all other outstanding shares of Alberto-Culver Common Stock in the Distribution, in accordance with the provisions of the Separation Agreement.

4.05 Vacation and Leaves of Absence Programs. From and after the Distribution Time, Spinco shall recognize and assume all Liabilities for vacation, holiday, flex days and personal days off to the extent accrued by Spinco Employees before the Distribution Time in accordance with the written policies in effect with regard to such Liabilities during the period over which they were accrued. Spinco shall also honor the written terms of any approved leaves of absence with an expected duration of not more than 12 months (other than for military or other leave protected by Applicable Law, which shall not be subject to such limitation) after the Distribution Time to the extent such leaves are in effect with regard to Spinco Employees at the Distribution Time.

ARTICLE V

QUALIFIED RETIREMENT PLANS

5.01 Defined Contribution Plans.

(a) Spinco 401(k) Plan. From and after the Distribution Time, Spinco shall retain, and be solely responsible for, all existing and future employer Liabilities related to the Sally Beauty Company, Inc. 401(k) Savings Plan (the “Spinco 401(k) Plan”) and the administration thereof, and Alberto-Culver shall not assume or retain any such Liabilities.

(b) Profit Sharing Plan.

(i) Establishment of Spinco Profit Sharing Plan. As soon as administratively practicable after the Distribution Time, Spinco Employees shall be eligible to participate in either (A) a defined contribution plan and trust adopted, established and maintained by Spinco and qualified under section 401(a) and section 501(a) of the Code or (B) a qualified profit sharing plan sponsored by a member of the Regis Group (the “Spinco Profit Sharing Plan”). Subject to the asset transfers described in Section 5.01(b)(ii), Spinco shall assume and thereafter be solely responsible for all then existing or future employer Liabilities on behalf of Spinco Employees and Former Spinco Employees related to the Spinco Profit Sharing Plan and the administration thereof and Alberto-Culver shall not assume or retain any such Liabilities. As soon as practicable after the adoption or designation of the Spinco Profit Sharing Plan, Spinco shall, to the extent applicable, submit an application to the IRS for a determination regarding the qualification of the Spinco Profit Sharing Plan and shall take any actions not inconsistent with Spinco’s other general commitments contained in this Agreement and make any amendments necessary to receive a favorable determination letter.

(ii) Transfer of Account Balances. As soon as administratively practicable, and in no event later than 180 days, after the Distribution Time, Alberto-Culver

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and Spinco shall cooperate to cause the Alberto-Culver Profit Sharing Plan to transfer to the Spinco Profit Sharing Plan assets having a value as of the applicable valuation date that are equal to the value of the account balances of, and Liabilities with respect to, all Spinco Employees and Former Spinco Employees with an account balance, whether or not vested, under the Alberto-Culver Profit Sharing Plan as of such valuation date. Such transferred assets shall consist of cash, Alberto-Culver Common Stock, Regis Common Stock (as defined in the Merger Agreement) and promissory notes for outstanding participant loans, and shall be in accordance with section 414(l) of the Code. Liabilities under any qualified domestic relations orders (as defined in section 414(p) of the Code) received with respect to any assets transferred to the Spinco Profit Sharing Plan shall be transferred to Spinco at the time such assets are transferred.

(iii) Past Service Credit and Vesting. With respect to all Spinco Employees and without duplication of benefits, the Spinco Profit Sharing Plan shall (i) recognize, to the extent applicable, all service, compensation and other determinations that, at the Distribution Time, were recognized under the Alberto-Culver Profit Sharing Plan for purposes of determining eligibility, participation, vesting, and calculation of benefits for Spinco Employees, and (ii) maintain the vesting schedule applicable under the Alberto-Culver Profit Sharing Plan for accounts transferred from the Alberto-Culver Profit Sharing Plan.

(iv) Elections and Designations. To the extent applicable, all participant elections and beneficiary designations made by Spinco Employees or Former Spinco Employees under the Alberto-Culver Profit Sharing Plan shall be transferred to, and be in full force and effect under, the Spinco Profit Sharing Plan until such participant elections and beneficiary designations are replaced or revoked by the Spinco Employee or Former Spinco Employee who made the election or designation.

(c) Alberto-Culver Stock Funds. Spinco shall, subject to the fiduciary and other requirements of ERISA, and any other Applicable Laws, take such actions as are reasonably necessary to ensure that any liquidation of the shares of Alberto-Culver Common Stock held in the Spinco 401(k) Plan and Spinco Profit Sharing Plan is orderly and periodic. During the 24-month period beginning on the Distribution Date (or such shorter period as Spinco reasonably determines may be required under Applicable Laws), Spinco may prohibit future purchases of Alberto-Culver Common Stock under the Spinco 401(k) Plan and Spinco Profit Sharing Plan but shall not require that such funds of Alberto-Culver Common Stock be liquidated.

5.02 Further Cooperation. Alberto-Culver and Spinco will cooperate in good faith in the filing of documents required by the transfer of assets and liabilities described in this Agreement to generally effect the purposes of this Agreement and to resolve any discrepancies or obtain any missing data for purposes of determining benefit eligibility, participation, vesting and calculation of benefits with respect to any Spinco Employees or Former Spinco Employees.

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ARTICLE VI

FOREIGN PLANS

At the Distribution Time, or such later date as may be required by Applicable Laws, each Benefit Plan maintained by a member of the Spinco Group that covers only Spinco Employees employed outside the U.S. (the “Spinco Foreign Plans”) shall be the sole responsibility of the Spinco Group and no member of the Alberto-Culver Group shall have any Liability with respect to such Spinco Foreign Plan. For purposes of this Article VI, “employed outside the U.S.” means compensated under a payroll which is administered outside the 50 United States and the District of Columbia. For purposes of clarity, no Spinco Employee or Former Spinco Employee employed outside the U.S. is covered by a Benefit Plan maintained, sponsored or contributed to by Alberto-Culver or a member of the Alberto-Culver Group.

ARTICLE VII

GENERAL PROVISIONS

7.01 Preservation of Rights to Amend. The rights of Alberto-Culver or Spinco to amend or terminate any plan referred to herein shall not be limited in any way by this Employee Matters Agreement.

7.02 Administrative Complaints/Litigation. At and after the Distribution Time, Spinco shall assume, and be solely liable for, the handling, administration, investigation, and defense of actions, including, without limitation, ERISA, occupational safety and health, employment standards, union grievances, wrongful dismissal, discrimination or human rights and unemployment compensation claims, asserted at any time against Alberto-Culver or Spinco by any Spinco Employee, Former Spinco Employee or any other person arising out of or relating to employment with the Spinco Business or Spinco. Any Liabilities arising from such actions shall be deemed Spinco Liabilities under the Separation Agreement. Alberto-Culver reserves the right to participate, at its own expense, in the investigation, defense or settlement of any matter to the extent it deems reasonably necessary.

7.03 Reimbursement and Indemnification. The parties hereto agree to reimburse each other, within 30 days of receipt from the other party of appropriate verification, for all Indemnifiable Losses that each may incur on behalf of the other as a result of any of the Benefit Plans or any of the termination or severance obligations set forth in Section 2.02. All Liabilities retained, assumed or indemnified against by Spinco pursuant to this Agreement shall be deemed Spinco Liabilities, and all Liabilities retained, assumed or indemnified against by Alberto-Culver pursuant to this Agreement shall be deemed Alberto-Culver Liabilities, and in each case shall be subject to the indemnification provisions of Article IV of the Separation Agreement.

7.04 Payment of and Accounting Treatment for Expenses. Except as specifically provided in the Separation Agreement or as Spinco and Alberto-Culver otherwise mutually agree, all expenses (and the accounting treatment related thereto) through the Distribution Time regarding matters addressed herein shall be handled and administered by Alberto-Culver and Spinco in accordance with past Alberto-Culver and Spinco, as applicable, accounting and financial practices and procedures pertaining to such matters.

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7.05 Sharing of Participant Information. Alberto-Culver and Spinco shall share, Alberto-Culver shall cause each applicable member of the Alberto-Culver Group to share, and Spinco shall cause each applicable member of the Spinco Group to share, with each other and their respective agents and vendors all participant information necessary for the efficient and accurate administration of each of the Alberto-Culver Benefit Plans and the Spinco Benefit Plans following the Distribution Time. Alberto-Culver and Spinco and their respective authorized agents shall, subject to Applicable Laws and understandings regarding confidentiality, be given reasonable and timely access to, and may make copies of, all information relating to the subjects of this Agreement in the custody of the other party, to the extent necessary for such administration. Spinco and Alberto-Culver shall also cooperate to share all such information regarding any issue relating to the compensation of Spinco Employees as may be required in order to satisfy any requirements related to federal, state and/or local income tax reporting (including, for purposes of preparing a Form W-2 for each such employee) and withholding, all in accordance with the terms of the Tax Allocation Agreement.

7.06 Audit Rights. Subject to the requirements of Article VI of the Separation Agreement, for a period of 36 months from and after the Distribution Time, each of Alberto-Culver and Spinco, and their duly authorized representatives, shall have the right to conduct audits at mutually agreed times upon reasonable prior notice, at their own expense, with respect to all information provided to it or to any record keeper or third party administrator by the other party that is relevant to this Agreement. The auditing party shall have the right to make copies of any records at its expense, subject to the confidentiality provisions set forth in the Separation Agreement, which are incorporated by reference herein. The party being audited shall provide the auditing party’s representatives with reasonable access during normal business hours to its operations, computer systems and paper and electronic files, and provide work space to its representatives. After any audit is completed, the party being audited shall have the right to review a draft of the audit findings and to comment on those findings in writing within fifteen Business Days after receiving such draft.

The auditing party’s audit rights under this Section 7.06 shall include the right to audit, or participate in an audit facilitated by the party being audited, of any Subsidiaries and Affiliates of the party being audited and of any benefit providers and third parties with whom the party being audited has a relationship, or agents of such party, to the extent any such persons are affected by or addressed in this Agreement (collectively, the “Non-parties”). The party being audited shall, upon written request from the auditing party, provide an individual (at the auditing party’s expense) to supervise any audit of any such benefit provider or third party. The auditing party shall be responsible for supplying, at its expense, additional personnel sufficient to complete the audit in a reasonably timely manner.

7.07 Effect If Distribution Does Not Occur. If the Distribution does not occur, then all actions and events that are, under this Agreement, to be taken or occur effective as of the Distribution Date, the Distribution Time, or otherwise in connection with the Distribution, shall not be taken or occur except to the extent otherwise specifically agreed in writing by Spinco and Alberto-Culver.

7.08 Relationship of Parties. Nothing in this Agreement shall be deemed or construed by the parties or any third party as creating the relationship of principal and agent,

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partnership or joint venture between the parties, it being understood and agreed that no provision contained herein, and no act of the parties, shall be deemed to create any relationship between the parties other than the relationship set forth herein.

7.09 No Right to Continued Employment. Nothing contained in this Agreement shall confer on any Spinco Employee any right to continued employment with Spinco or any member of the Spinco Group, except as expressly provided in any individual employment agreements to which Spinco is a party, under which any Spinco Employee has any such rights.

7.10 Cooperation. Alberto-Culver and Spinco shall each cooperate in good faith, including by making personnel available to the other at mutually agreed times, as necessary or appropriate to carry out the purposes of this Agreement.

7.11 No Duplication of Benefits. It is the intention of the parties that nothing in this Agreement shall allow for any Spinco Employee to receive duplicative benefits. Accordingly, Alberto-Culver and Spinco shall agree on methods and procedures to prevent Spinco Employees from receiving duplicative benefits.

ARTICLE VIII

MISCELLANEOUS

8.01 Entire Agreement. This Agreement, the Merger Agreement, the Separation Agreement and other Ancillary Agreements, including any annexes, schedules and exhibits hereto or thereto, and other agreements and documents referred to herein and therein, will together constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and will supersede all prior negotiations, agreements and understandings of the parties of any nature, whether oral or written, with respect to such subject matter.

8.02 Survival of Agreements. Except as specifically contemplated by this Agreement, all covenants and agreements of the parties contained in this Agreement will remain in full force and effect and survive the Distribution Time.

8.03 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to choice of law principles thereof).

8.04 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, (ii) upon confirmation of receipt if delivered by facsimile, (iii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service or (iv) when received if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a)	If to Alberto-Culver to
	Alberto-Culver Company
	2525 Armitage Avenue
	Melrose Park, Illinois 60160

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	Fax:	(708) 450-2511
	Attention:	Chief Executive Officer Senior Vice President and
		General Counsel (with a separate notice to be sent to each such person)
	with a copy to
	Sidley Austin LLP
	One South Dearborn St.
	Chicago, Illinois 60603
	Fax:	(312) 853-7036
	Attention:	Frederick C. Lowinger, Esq.
		David J. Zampa, Esq.
(b)	If to Spinco to
	Sally Holdings, Inc.
	3001 Colorado Blvd.
	Denton, Texas 76210
	Fax:	(940) 297-4990
	Attention:	Vice President and General Counsel
	With a copy at any time prior to the Effective Time to
	Sidley Austin LLP
	One South Dearborn St.
	Chicago, Illinois 60603
	Fax:	(312) 853-7036
	Attention:	Frederick C. Lowinger, Esq.
		David J. Zampa, Esq.
	And with a copy at any time from and after the Effective Time to
		Regis Corporation
		7201 Metro Blvd.
		Minneapolis, Minnesota 55439
	Fax:	(952) 947-7600
	Attention:	President and Chief Executive Officer
		General Counsel (with a separate notice to be sent to each such person)
	And to
	O’Melveny & Myers LLP
	Times Square Tower
	7 Times Square
	New York, New York 10036
	Fax:	(212) 326-2061
	Attention:	Spencer D. Klein, Esq.
		Paul S. Scrivano, Esq.

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8.05 Consent to Jurisdiction. Each of Alberto-Culver and Spinco irrevocably agrees that any legal action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof, the breach, performance, validity or invalidity hereof or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or permitted assigns may be brought and determined in any federal or state court located in the State of Delaware, and each of Alberto-Culver and Spinco hereby irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of Alberto-Culver and Spinco hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, the transactions contemplated hereby, any provision hereof or the breach, performance, enforcement, validity or invalidity hereof, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to lawfully serve process, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by Applicable Laws, that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

8.06 Amendments. This Agreement cannot be amended except by a written agreement executed by Alberto-Culver and Spinco; provided, that unless the Merger Agreement shall have been terminated, (a) any such amendment that would reasonably be expected to adversely affect (after giving effect to the Merger) Regis or its shareholders (it being understood and agreed that any fees and expenses incurred by Regis or any of its Subsidiaries in connection with the review of any such proposed amendment shall not be deemed to adversely affect Regis or its shareholders) executed prior to the Distribution Time shall be subject to the prior written consent of Regis and (b) the parties hereto shall notify Regis and its counsel in writing, in accordance with Section 10.2 of the Merger Agreement, at least five Business Days prior to the making of any such amendment prior to the Distribution Time.

8.07 Assignment. Neither party to this Agreement will (or permit any of its Subsidiaries to) convey, assign or otherwise transfer any of its rights or obligations under this Agreement, in whole or in part, except as contemplated in Section 2.10 of the Merger Agreement or with the prior written consent of the other party in its sole and absolute discretion; provided, that unless the Merger Agreement shall have been terminated, any such assignment prior to the Distribution Time shall be subject to the prior written consent of Regis. Any conveyance, assignment or transfer requiring the prior written consent of the other party pursuant to this Section 8.07 that is made without such consent will be void ab initio. No assignment of this Agreement will relieve the assigning party of its obligations hereunder. For purposes of clarity, Spinco may perform any responsibility or exercise any right under this Agreement by causing such responsibility or right to be undertaken or exercised, without limitation, by a Spinco Subsidiary; provided, however, that Spinco shall be fully responsible to Alberto-Culver for ensuring compliance by Spinco and the Spinco Group with the applicable terms of this Agreement.

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8.08 Captions; Currency. The article, section and paragraph captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof. Unless otherwise specified, all references herein to numbered articles or sections are to articles and sections of this Agreement and all references herein to schedules are to schedules to this Agreement. Unless otherwise specified, all references contained in this Agreement, in any schedule referred to herein or in any instrument or document delivered pursuant hereto to dollars or “$” shall mean United States Dollars.

8.09 Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and will in no way be affected, impaired or invalidated thereby. If the economic or legal substance of the transactions contemplated hereby is affected in any manner adverse to any party as a result thereof, the parties will negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties, and, if the parties are unable to agree upon a suitable and equitable substitute provision to effect the original intent of the parties, prior to the Distribution Time, the party so materially and adversely affected may terminate this Agreement.

8.10 Parties in Interest. This Agreement is binding upon and is for the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement is not made for the benefit of any Person not a party hereto, and no Person other than the parties hereto or their respective successors and permitted assigns will acquire or have any benefit, right, remedy or claim under or by reason of this Agreement.

8.11 Schedules. All schedules attached hereto are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Capitalized terms used in the schedules hereto but not otherwise defined therein will have the respective meanings assigned to such terms in this Agreement.

8.12 Waivers; Remedies. Any agreement on the part of a party hereto to waive the performance by the other party of any of its covenants hereunder shall be valid only if set forth in a written instrument signed on behalf of such party; provided, that unless the Merger Agreement shall have been terminated, (a) any such waiver that would reasonably be expected to adversely affect (after giving effect to the Merger) Regis or its shareholders (it being understood and agreed that any fees and expenses incurred by Regis or any of its Subsidiaries in connection with the review of any such proposed waiver shall not be deemed to adversely affect Regis or its shareholders) executed prior to the Distribution Time shall be subject to the prior written consent of Regis and (b) the parties hereto shall notify Regis and its counsel in writing, in accordance with Section 10.2 of the Merger Agreement, at least five Business Days prior to the making of any such waiver prior to the Distribution Time. No failure or delay on the part of either Alberto-Culver or Spinco in exercising any right, power or privilege hereunder will operate as a waiver

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thereof, nor will any waiver on the part of either Alberto-Culver or Spinco of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor will any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

8.13 Further Assurances. From time to time after the Distribution Time, as and when requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such actions as the requesting party may reasonably request to consummate the transactions contemplated by this Agreement.

8.14 Counterparts. This Agreement may be executed in separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.

8.15 Performance. Alberto-Culver will cause to be performed and hereby guarantees the performance of all actions, agreements and obligations set forth herein to be performed by any Alberto-Culver Subsidiary. Spinco will cause to be performed and hereby guarantees the performance of all actions, agreements and obligations set forth herein to be performed by any Spinco Subsidiary.

8.16 Interpretation. Any reference herein to any federal, state, local, or foreign law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. For the purposes of this Agreement, (a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires, (b) the terms “hereof”, “herein”, and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement and (c) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”.

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IN WITNESS WHEREOF, the parties have caused this agreement to be executed in their names by a duly authorized officer as of the date first written above.

ALBERTO-CULVER COMPANY
By:	/s/ Gary P. Schmidt
	Name: Gary P. Schmidt
	Title: Senior Vice President & General Counsel
SALLY HOLDINGS, INC.
By:	/s/ Gary Winterhalter
	Name: Gary Winterhalter
	Title: President

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Schedule A

1. Michael Renzulli

Schedule B

1. Richard Dowd

2. Bennie Lowery

3. James Maher

4. Gary Robinson

5. Raal Roos

6. Gary Winterhalter

EX-10.03

Exhibit 10.03

SEVERANCE AGREEMENT AMENDMENT

This Amendment (this “Amendment”) is entered into as of the Effective Date by and between Alberto-Culver Company, a Delaware corporation (the “Company”), and Carol Bernick (the “Executive”) and shall be deemed to be effective on the date the last party signs this Amendment (the “Effective Date”).

WHEREAS, the Company and the Executive have entered into the Severance Agreement dated as of December 1, 1996, as amended as of May 28, 1999 (the “Severance Agreement”), pursuant to which the Executive would be entitled to payments and benefits in the event that the Executive’s employment were terminated under the circumstances set forth in the Severance Agreement following, among other things, the approval by the stockholders of the Company of a transaction that constitutes a Change in Control (as defined in the Severance Agreement);

WHEREAS, the Company and Regis Corporation, a Minnesota corporation (“Regis”), may enter into a transaction whereby Regis or a subsidiary of Regis would be merged with Sally Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“SHI” and such transaction, the “Transaction”);

WHEREAS, the Company intends to treat the Transaction as though it constitutes a Change in Control for the purposes of, and as such term is defined under, the Employee Stock Option Plan of 2003, Employee Stock Option Plan of 1988, 2003 Restricted Stock Plan and 1994 Restricted Stock Plan and accordingly accelerate the vesting of all options to purchase, and restricted shares of, common stock of the Company issued under such plans, including those held by the Executive;

WHEREAS, in respect of the Company’s Management Incentive Plan and the 1994 Shareholder Value Incentive Plan (the “SVIP”), the Company intends to treat the Transaction as though it constitutes a Change in Control (as such term is defined therein) for the participants in such plans, including the Executive; and

WHEREAS, the Company and the Executive desire to enter into this Amendment pursuant to which the Company and the Executive agree to amend the Severance Agreement upon the terms and subject to the conditions contained herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, and in order to induce the Company to enter into the Transaction, the Company and the Executive hereby agree as follows:

1. No Deemed Change in Control. The Company and the Executive acknowledge that the Transaction is currently contemplated to take the following form: the shares of SHI owned by the Company would be distributed to the Company’s stockholders pursuant to a tax-free spin-off of SHI and, immediately thereafter, SHI would be merged with Regis or a subsidiary of Regis and those SHI shares would be converted into shares of common stock of Regis. As a result of the Transaction under such form, SHI would become a wholly owned subsidiary of Regis. In order to resolve all issues that could arise with respect to the Severance Agreement by reason of the Transaction, the Executive, on behalf of the Executive and any person claiming through the Executive, and the Company hereby agree that the Transaction, however effected, including any actions taken in respect thereof or in connection

therewith, shall not be deemed to constitute a Change in Control for purposes of the Severance Agreement. This Amendment shall not apply or extend to any right the Executive may in the future have to any payments or benefits pursuant to the Severance Agreement by reason of the occurrence of a Change in Control unrelated to the Transaction with Regis and its affiliates.

2. Effective Date; Termination of Agreement. This Amendment shall be effective on the Effective Date. This Amendment shall terminate and be of no further force or effect, except in respect of Section 6 hereto, if and only if (a) the principal agreements related to the Transaction are not signed by the Company and Regis on or prior to March 31, 2006, or (b) such principal agreements are terminated prior to the consummation of the Transaction.

3. Scope of Agreement. Nothing in this Amendment shall be deemed to entitle the Executive to continued employment with the Company or its subsidiaries.

4. Counterparts. This Amendment may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.

5. Miscellaneous. Capitalized terms not defined herein shall have the meanings assigned to them in the Severance Agreement. This Amendment and the Severance Agreement constitute the entire understanding and agreement between the Company and the Executive with respect to the subject matter hereof and thereof and supersedes all other prior agreements and understandings between the Executive and the Company with respect to such subject matter. The Severance Agreement, as amended by this Amendment, shall remain in full force and effect in accordance with its terms.

6. Addition of Provision Relating to Certain Taxation Matters. The following provision shall be added as new Section 3(e) of the Severance Agreement:

(e) Application of Section 409A. Notwithstanding the foregoing, if the Company, or in the event that the Company no longer exists, the Successor Company, or the Executive reasonably and in good faith determines that payment of any amount pursuant to this Agreement at the time provided for such payment would cause any amount so payable to be subject to Section 409A(a)(1) of the Code, then such amount shall instead be paid at the earliest time at which it may be paid without causing this Agreement to be subject to Section 409A(a)(1) and all of the provisions of this Agreement shall be interpreted in a manner consistent with this Section 3(e). The Company, or in the event that the Company no longer exists, the Successor Company, shall have the right to make such amendments, if any, to this Agreement as shall be necessary to avoid the application of Section 409A(a)(1) of the Code to the payments of amounts pursuant to this Agreement, and shall give prompt notice of any such amendment to the Executive. If the Company or in the event that the Company no longer exists, the Successor Company, defers payments to the Executive pursuant to this Section 3(e), then such company shall provide Executive with prompt written notice thereof, including reasonable explanation and the estimated date on which it has determined it is permitted to make the payments deferred under this Section 3(e). In any event, the payments will not take longer than 190 days from the Date of Termination, provided however that benefits provided under Section 3(c) shall extend beyond this period

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pursuant to the terms of such benefits. Provided further that to the extent it is determined that Section 409A would apply to such benefits if provided immediately after the Date of Termination, such benefit shall commence as soon as possible without being subject to 409A.

For purposes of this Section 3(e), (i) the term Agreement shall be deemed to refer to this Agreement and any amendments thereto, (ii) the term “Successor Company” shall mean, in the event of any reorganization, merger, consolidation or any sale or other disposition of assets that results in a Change in Control, (A) the surviving or resulting Person or the Person acquiring the assets of the Company, and (B) the Affiliates of such Person, (iii) the term “Affiliate” shall have the meaning set forth in Rule 12b-2 of the Securities Exchange Act of 1934 and (iv) the term “Person” shall mean any individual, entity or group, including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934.

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by a duly authorized officer of the Company and the Executive has executed this Amendment as of the dates set forth below.

ALBERTO-CULVER COMPANY
By:	/s/ Gary P. Schmidt
Name:	Gary P. Schmidt
Its:	Senior Vice President and General Counsel
Date:	January 10, 2006
Carol Bernick
/s/ Carol Bernick
Date:	January 10, 2006

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EX-10.04

Exhibit 10.04

SEVERANCE AGREEMENT AMENDMENT

This Amendment (this “Amendment”) is entered into as of the Effective Date by and between Alberto-Culver Company, a Delaware corporation (the “Company”), and William Cernugel (the “Executive”) and shall be deemed to be effective on the date the last party signs this Amendment (the “Effective Date”).

WHEREAS, the Company and the Executive have entered into the Severance Agreement dated as of December 1, 1996, as amended as of May 28, 1999 and February 24, 2004 (the “Severance Agreement”), pursuant to which the Executive would be entitled to payments and benefits in the event that the Executive’s employment were terminated under the circumstances set forth in the Severance Agreement following, among other things, the approval by the stockholders of the Company of a transaction that constitutes a Change in Control (as defined in the Severance Agreement);

WHEREAS, the Company and Regis Corporation, a Minnesota corporation (“Regis”), may enter into a transaction whereby Regis or a subsidiary of Regis would be merged with Sally Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“SHI” and such transaction, the “Transaction”);

WHEREAS, the Company intends to treat the Transaction as though it constitutes a Change in Control for the purposes of, and as such term is defined under, the Employee Stock Option Plan of 2003, Employee Stock Option Plan of 1988, 2003 Restricted Stock Plan and 1994 Restricted Stock Plan and accordingly accelerate the vesting of all options to purchase, and restricted shares of, common stock of the Company issued under such plans, including those held by the Executive;

WHEREAS, in respect of the Company’s Management Incentive Plan and the 1994 Shareholder Value Incentive Plan (the “SVIP”), the Company intends to treat the Transaction as though it constitutes a Change in Control (as such term is defined therein) for the participants in such plans, including the Executive; and

WHEREAS, the Company and the Executive desire to enter into this Amendment pursuant to which the Company and the Executive agree to amend the Severance Agreement upon the terms and subject to the conditions contained herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, the Company and the Executive hereby agree as follows:

1. No Deemed Change in Control. The Company and the Executive acknowledge that the Transaction is currently contemplated to take the following form: the shares of SHI owned by the Company would be distributed to the Company’s stockholders pursuant to a tax-free spin-off of SHI and, immediately thereafter, SHI would be merged with Regis or a subsidiary of Regis and those SHI shares would be converted into shares of common stock of Regis. As a result of the Transaction under such form, SHI would become a wholly owned subsidiary of Regis. In order to resolve all issues that could arise with respect to the Severance Agreement by reason of the Transaction, the Executive, on behalf of the Executive and any person claiming through the Executive, and the Company hereby agree that the

Transaction, however effected, including any actions taken in respect thereof or in connection therewith, shall not be deemed to constitute a Change in Control for purposes of the Severance Agreement. This Amendment shall not apply or extend to any right the Executive may in the future have to any payments or benefits pursuant to the Severance Agreement by reason of the occurrence of a Change in Control unrelated to the Transaction with Regis and its affiliates.

2. Consideration for Amendment. In consideration for entering into this Amendment, the Company and the Executive agree that in the event of the termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason during the period commencing on the Effective Date and ending on the second anniversary of the closing of the Transaction, the Executive shall be entitled to the payments and benefits set forth on Schedule A hereto.

If the Executive shall be entitled to any payments or benefits pursuant to the Severance Agreement, other than by reason of this Amendment, in connection with a Change in Control unrelated to the Transaction with Regis and its affiliates, then the Executive shall not be entitled to any payments or benefits hereunder.

For purposes of this Section 2, the terms Cause and Good Reason shall have the meaning assigned to such terms in the Severance Agreement, provided that (i) the Effective Date (as defined in this Amendment) shall be substituted for the term “Change in Control” each place such term appears in such definitions and (ii) with respect to the definition of Good Reason, clause 5 of Section 1(g) shall be deleted in its entirety.

3. Effective Date; Termination of Agreement. This Amendment shall be effective on the Effective Date. This Amendment shall terminate and be of no further force or effect, except in respect of (i) Section 8 hereto and (ii) any benefits then accrued by the Executive hereunder, if and only if (a) the principal agreements related to the Transaction are not signed by the Company and Regis on or prior to March 31, 2006, or (b) such principal agreements are terminated prior to the consummation of the Transaction.

4. Scope of Agreement. Nothing in this Amendment shall be deemed to entitle the Executive to continued employment with the Company or its subsidiaries.

5. Notice of Termination. A written notice of the Executive’s termination of employment during the period described in Section 2 by the Company or the Executive, as the case may be, to the other shall (i) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment and (ii) specify the termination date (which date shall be not less than 15 days after the giving of such notice). The failure by the Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

6. Counterparts. This Amendment may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.

7. Miscellaneous. Capitalized terms not defined herein shall have the meanings assigned to them in the Severance Agreement. This Amendment and the Severance

Agreement constitute the entire understanding and agreement between the Company and the Executive with respect to the subject matter hereof and thereof and supersedes all other prior agreements and understandings between the Executive and the Company with respect to such subject matter. The Severance Agreement, as amended by this Amendment, shall remain in full force and effect in accordance with its terms.

8. Addition of Provision Relating to Certain Taxation Matters. The following provision shall be added as new Section 3(e) of the Severance Agreement and shall apply with equal force to the Severance Agreement and this Amendment:

(e) Application of Section 409A. Notwithstanding the foregoing, if the Company, or in the event that the Company no longer exists, the Successor Company, or the Executive reasonably and in good faith determines that payment of any amount pursuant to this Agreement at the time provided for such payment would cause any amount so payable to be subject to Section 409A(a)(1) of the Code, then such amount shall instead be paid at the earliest time at which it may be paid without causing this Agreement to be subject to Section 409A(a)(1) and all of the provisions of this Agreement shall be interpreted in a manner consistent with this Section 3(e). The Company, or in the event that the Company no longer exists, the Successor Company, shall have the right to make such amendments, if any, to this Agreement as shall be necessary to avoid the application of Section 409A(a)(1) of the Code to the payments of amounts pursuant to this Agreement, and shall give prompt notice of any such amendment to the Executive. If the Company or in the event that the Company no longer exists, the Successor Company, defers payments to the Executive pursuant to this Section 3(e), then such company shall provide Executive with prompt written notice thereof, including reasonable explanation and the estimated date on which it has determined it is permitted to make the payments deferred under this Section 3(e). In any event, the payments will not take longer than 190 days from the Date of Termination, provided however that benefits provided under Section 3(c) shall extend beyond this period pursuant to the terms of such benefits. Provided further that to the extent it is determined that Section 409A would apply to such benefits if provided immediately after the Date of Termination, such benefit shall commence as soon as possible without being subject to 409A.

For purposes of this Section 3(e), (i) the term Agreement shall be deemed to refer to this Agreement and any amendments thereto, (ii) the term “Successor Company” shall mean, in the event of any reorganization, merger, consolidation or any sale or other disposition of assets that results in a Change in Control, (A) the surviving or resulting Person or the Person acquiring the assets of the Company, and (B) the Affiliates of such Person, (iii) the term “Affiliate” shall have the meaning set forth in Rule 12b-2 of the Securities Exchange Act of 1934 and (iv) the term “Person” shall mean any individual, entity or group, including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934.

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by a duly authorized officer of the Company and the Executive has executed this Amendment as of the dates set forth below.

ALBERTO-CULVER COMPANY
By:	/s/ Gary P. Schmidt
Name:	Gary P. Schmidt
Its:	Senior Vice President and General Counsel
Date:	January 10, 2006
WILLIAM CERNUGEL
/s/ William Cernugel
Date:	January 10, 2006

SCHEDULE A TO

SEVERANCE AGREEMENT AMENDMENT

Lump Sum Payment

Within 30 days following the Date of Termination, provided that the Company has received a customary release signed by the Executive, the Company shall pay to the Executive a lump sum payment equal to 2 times the Executive’s current annual base salary from the Company and its affiliated companies, plus 2 times the average of the dollar amount of the Executive’s actual or annualized (for any fiscal year consisting of less than 12 full months or with respect to which the Executive has been employed by the Company for less than 12 full months) annual bonus, paid or payable, including by reason of any deferral, to the Executive by the Company and its affiliated companies in respect of the five fiscal years of the Company (or such portion thereof during which the Executive performed services for the Company if the Executive shall have been employed by the Company for less than such five fiscal year period) immediately preceding the fiscal year in which the Date of Termination occurs.

Benefits

Medical Insurance Continuation. For a period of 18 months commencing on the Date of Termination, the Company shall continue to keep in full force and effect all policies of medical insurance with respect to the Executive and his or her dependents with the same level of coverage, upon the same terms and otherwise to the same extent as such policies shall have been in effect immediately prior to the Date of Termination (such coverage, the “Date of Termination Coverage”) or, if more favorable to the Executive, as provided generally with respect to other peer executives of the Company and its affiliated companies, and the Company and the Executive shall share the costs of the continuation of such insurance coverage in the same proportion as such costs were shared immediately prior to the Date of Termination, provided, however, that the Company’s obligation to continue to provide this benefit shall terminate at such time that the Executive commences employment with another employer and becomes eligible to receive medical insurance coverage under an employer-provided plan that is generally comparable to the Date of Termination Coverage. The coverage provided hereunder shall be applied toward the satisfaction of, and shall not supplement, the Executive’s right to continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or any similar state law.

Executive Outplacement. The Company will pay for and provide to the Executive outplacement services with an outplacement firm of Executive’s choosing, provided that the Company shall not be responsible to pay for such services to the extent such services (i) exceed $12,000 or (ii) are provided more than one year following the Date of Termination.

EX-10.05

Exhibit 10.05

SEVERANCE AGREEMENT AMENDMENT

This Amendment (this “Amendment”) is entered into as of the Effective Date by and between Alberto-Culver Company, a Delaware corporation (the “Company”), and James Marino (the “Executive”) and shall be deemed to be effective on the date the last party signs this Amendment (the “Effective Date”).

WHEREAS, the Company and the Executive have entered into the Severance Agreement dated as of December 14, 1998, as amended as of May 28, 1999 and February 24, 2004 (the “Severance Agreement”), pursuant to which the Executive would be entitled to payments and benefits in the event that the Executive’s employment were terminated under the circumstances set forth in the Severance Agreement following, among other things, the approval by the stockholders of the Company of a transaction that constitutes a Change in Control (as defined in the Severance Agreement);

WHEREAS, the Company and Regis Corporation, a Minnesota corporation (“Regis”), may enter into a transaction whereby Regis or a subsidiary of Regis would be merged with Sally Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“SHI” and such transaction, the “Transaction”);

WHEREAS, the Company intends to treat the Transaction as though it constitutes a Change in Control for the purposes of, and as such term is defined under, the Employee Stock Option Plan of 2003, Employee Stock Option Plan of 1988, 2003 Restricted Stock Plan and 1994 Restricted Stock Plan and accordingly accelerate the vesting of all options to purchase, and restricted shares of, common stock of the Company issued under such plans, including those held by the Executive;

WHEREAS, in respect of the Company’s Management Incentive Plan and the 1994 Shareholder Value Incentive Plan (the “SVIP”), the Company intends to treat the Transaction as though it constitutes a Change in Control (as such term is defined therein) for the participants in such plans, including the Executive; and

WHEREAS, the Company and the Executive desire to enter into this Amendment pursuant to which the Company and the Executive agree to amend the Severance Agreement upon the terms and subject to the conditions contained herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, the Company and the Executive hereby agree as follows:

1. No Deemed Change in Control. The Company and the Executive acknowledge that the Transaction is currently contemplated to take the following form: the shares of SHI owned by the Company would be distributed to the Company’s stockholders pursuant to a tax-free spin-off of SHI and, immediately thereafter, SHI would be merged with Regis or a subsidiary of Regis and those SHI shares would be converted into shares of common stock of Regis. As a result of the Transaction under such form, SHI would become a wholly owned subsidiary of Regis. In order to resolve all issues that could arise with respect to the Severance Agreement by reason of the Transaction, the Executive, on behalf of the Executive and any person claiming through the Executive, and the Company hereby agree that the Transaction, however effected, including any actions taken in respect thereof or in connection therewith, shall not be deemed to constitute a Change in Control for purposes of the Severance Agreement. This Amendment shall not apply or extend to any right the Executive may in the future have to any payments or benefits pursuant to the Severance Agreement by reason of the occurrence of a Change in Control unrelated to the Transaction with Regis and its affiliates.

2. Consideration for Amendment. In consideration for entering into this Amendment, the Company and the Executive agree that in the event of the termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason during the period commencing on the Effective Date and ending on the second anniversary of the closing of the Transaction, the Executive shall be entitled to the payments and benefits set forth on Schedule A hereto.

If the Executive shall be entitled to any payments or benefits pursuant to the Severance Agreement, other than by reason of this Amendment, in connection with a Change in Control unrelated to the Transaction with Regis and its affiliates, then the Executive shall not be entitled to any payments or benefits hereunder.

For purposes of this Section 2, the terms Cause and Good Reason shall have the meaning assigned to such terms in the Severance Agreement, provided that (i) the Effective Date (as defined in this Amendment) shall be substituted for the term “Change in Control” each place such term appears in such definitions and (ii) with respect to the definition of Good Reason, clause 5 of Section 1(g) shall be deleted in its entirety.

3. Effective Date; Termination of Agreement. This Amendment shall be effective on the Effective Date. This Amendment shall terminate and be of no further force or effect, except in respect of (i) Section 8 hereto and (ii) any benefits then accrued by the Executive hereunder, if and only if (a) the principal agreements related to the Transaction are not signed by the Company and Regis on or prior to March 31, 2006, or (b) such principal agreements are terminated prior to the consummation of the Transaction.

4. Scope of Agreement. Nothing in this Amendment shall be deemed to entitle the Executive to continued

employment with the Company or its subsidiaries.

5. Notice of Termination. A written notice of the Executive’s termination of employment during the period described in Section 2 by the Company or the Executive, as the case may be, to the other shall (i) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment and (ii) specify the termination date (which date shall be not less than 15 days after the giving of such notice). The failure by the Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

6. Counterparts. This Amendment may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.

7. Miscellaneous. Capitalized terms not defined herein shall have the meanings assigned to them in the Severance Agreement. This Amendment and the Severance Agreement constitute the entire understanding and agreement between the Company and the Executive with respect to the subject matter hereof and thereof and supersedes all other prior agreements and understandings between the Executive and the Company with respect to such subject matter. The Severance Agreement, as amended by this Amendment, shall remain in full force and effect in accordance with its terms.

8. Addition of Provision Relating to Certain Taxation Matters. The following provision shall be added as new Section 3(e) of the Severance Agreement and shall apply with equal force to the Severance Agreement and this Amendment:

(e) Application of Section 409A. Notwithstanding the foregoing, if the Company, or in the event that the Company no longer exists, the Successor Company, or the Executive reasonably and in good faith determines that payment of any amount pursuant to this Agreement at the time provided for such payment would cause any amount so payable to be subject to Section 409A(a)(1) of the Code, then such amount shall instead be paid at the earliest time at which it may be paid without causing this Agreement to be subject to Section 409A(a)(1) and all of the provisions of this Agreement shall be interpreted in a manner consistent with this Section 3(e). The Company, or in the event that the Company no longer exists, the Successor Company, shall have the right to make such amendments, if any, to this Agreement as shall be necessary to avoid the application of Section 409A(a)(1) of the Code to the payments of amounts pursuant to this Agreement, and shall give prompt notice of any such amendment to the Executive. If the Company or in the event that the Company no longer exists, the Successor Company, defers payments to the Executive pursuant to this Section 3(e), then such company shall provide Executive with prompt written notice thereof, including reasonable explanation and the estimated date on which it has determined it is permitted to make the payments deferred under this Section 3(e). In any event, the payments will not take longer than 190 days from the Date of Termination, provided however that benefits provided under Section 3(c) shall extend beyond this period pursuant to the terms of such benefits. Provided further that to the extent it is determined that Section 409A would apply to such benefits if provided immediately after the Date of Termination, such benefit shall commence as soon as possible without being subject to 409A.

                For purposes of this Section 3(e), (i) the term Agreement shall be deemed to refer to this Agreement and any amendments thereto, (ii) the term “Successor Company” shall mean, in the event of any reorganization, merger, consolidation or any sale or other disposition of assets that results in a Change in Control, (A) the surviving or resulting Person or the Person acquiring the assets of the Company, and (B) the Affiliates of such Person, (iii) the term “Affiliate” shall have the meaning set forth in Rule 12b-2 of the Securities Exchange Act of 1934 and (iv) the term “Person” shall mean any individual, entity or group, including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934.

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by a duly authorized officer of the Company and the Executive has executed this Amendment as of the dates set forth below.

ALBERTO-CULVER COMPANY
By:	/s/    Gary P. Schmidt
	Name: Gary P. Schmidt Its: Senior Vice President and General Counsel
	Date: January 10, 2006
JAMES MARINO
/s/    James Marino
	Date: January 10, 2006

SCHEDULE A TO

SEVERANCE AGREEMENT AMENDMENT

Lump Sum Payment

Within 30 days following the Date of Termination, provided that the Company has received a customary release signed by the Executive, the Company shall pay to the Executive a lump sum payment equal to 2 times the Executive’s current annual base salary from the Company and its affiliated companies, plus 2 times the average of the dollar amount of the Executive’s actual or annualized (for any fiscal year consisting of less than 12 full months or with respect to which the Executive has been employed by the Company for less than 12 full months) annual bonus, paid or payable, including by reason of any deferral, to the Executive by the Company and its affiliated companies in respect of the five fiscal years of the Company (or such portion thereof during which the Executive performed services for the Company if the Executive shall have been employed by the Company for less than such five fiscal year period) immediately preceding the fiscal year in which the Date of Termination occurs.

Benefits

Medical Insurance Continuation. For a period of 18 months commencing on the Date of Termination, the Company shall continue to keep in full force and effect all policies of medical insurance with respect to the Executive and his or her dependents with the same level of coverage, upon the same terms and otherwise to the same extent as such policies shall have been in effect immediately prior to the Date of Termination (such coverage, the “Date of Termination Coverage”) or, if more favorable to the Executive, as provided generally with respect to other peer executives of the Company and its affiliated companies, and the Company and the Executive shall share the costs of the continuation of such insurance coverage in the same proportion as such costs were shared immediately prior to the Date of Termination, provided, however, that the Company’s obligation to continue to provide this benefit shall terminate at such time that the Executive commences employment with another employer and becomes eligible to receive medical insurance coverage under an employer-provided plan that is generally comparable to the Date of Termination Coverage. The coverage provided hereunder shall be applied toward the satisfaction of, and shall not supplement, the Executive’s right to continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or any similar state law.

Executive Outplacement. The Company will pay for and provide to the Executive outplacement services with an outplacement firm of Executive’s choosing, provided that the Company shall not be responsible to pay for such services to the extent such services (i) exceed $12,000 or (ii) are provided more than one year following the Date of Termination.

EX-10.06

Exhibit 10.06

SEVERANCE AGREEMENT AMENDMENT

This Amendment (this “Amendment”) is entered into as of the Effective Date by and between Alberto-Culver Company, a Delaware corporation (the “Company”), and                              (the “Executive”) and shall be deemed to be effective on the date the last party signs this Amendment (the “Effective Date”).

WHEREAS, the Company and the Executive have entered into the Severance Agreement dated as of December 1, 1996, as amended as of May 28, 1999 (the “Severance Agreement”), pursuant to which the Executive would be entitled to payments and benefits in the event that the Executive’s employment were terminated under the circumstances set forth in the Severance Agreement following, among other things, the approval by the stockholders of the Company of a transaction that constitutes a Change in Control (as defined in the Severance Agreement);

WHEREAS, the Company and Regis Corporation, a Minnesota corporation (“Regis”), may enter into a transaction whereby Regis or a subsidiary of Regis would be merged with Sally Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“SHI” and such transaction, the “Transaction”);

WHEREAS, the Company intends to treat the Transaction as though it constitutes a Change in Control for the purposes of, and as such term is defined under, the Employee Stock Option Plan of 2003, Employee Stock Option Plan of 1988, 2003 Restricted Stock Plan and 1994 Restricted Stock Plan and accordingly accelerate the vesting of all options to purchase, and restricted shares of, common stock of the Company issued under such plans, including those held by the Executive;

WHEREAS, in respect of the Company’s Management Incentive Plan and the 1994 Shareholder Value Incentive Plan (the “SVIP”), the Company intends to treat the Transaction as though it constitutes a Change in Control (as such term is defined therein) for the participants in such plans, including the Executive; and

WHEREAS, the Company and the Executive desire to enter into this Amendment pursuant to which the Company and the Executive agree to amend the Severance Agreement upon the terms and subject to the conditions contained herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, the Company and the Executive hereby agree as follows:

1. No Deemed Change in Control. The Company and the Executive acknowledge that the Transaction is currently contemplated to take the following form: the shares of SHI owned by the Company would be distributed to the Company’s stockholders pursuant to a tax-free spin-off of SHI and, immediately thereafter, SHI would be merged with Regis or a subsidiary of Regis and those SHI shares would be converted into shares of common stock of Regis. As a result of the Transaction under such form, SHI would become a wholly owned subsidiary of Regis. In order to resolve all issues that could arise with respect to the Severance Agreement by reason of the Transaction, the Executive, on behalf of the Executive and any person claiming through the Executive, and the Company hereby agree that the

Transaction, however effected, including any actions taken in respect thereof or in connection therewith, shall not be deemed to constitute a Change in Control for purposes of the Severance Agreement. This Amendment shall not apply or extend to any right the Executive may in the future have to any payments or benefits pursuant to the Severance Agreement by reason of the occurrence of a Change in Control unrelated to the Transaction with Regis and its affiliates.

2. Consideration for Amendment. In consideration for entering into this Amendment, the Company and the Executive agree that in the event of the termination of the Executive’s employment by the Company without Cause or by the Executive for Good Reason during the period commencing on the Effective Date and ending on the second anniversary of the closing of the Transaction, the Executive shall be entitled to the payments and benefits set forth on Schedule A hereto.

If the Executive shall be entitled to any payments or benefits pursuant to the Severance Agreement, other than by reason of this Amendment, in connection with a Change in Control unrelated to the Transaction with Regis and its affiliates, then the Executive shall not be entitled to any payments or benefits hereunder.

For purposes of this Section 2, the terms Cause and Good Reason shall have the meaning assigned to such terms in the Severance Agreement, provided that (i) the Effective Date (as defined in this Amendment) shall be substituted for the term “Change in Control” each place such term appears in such definitions and (ii) with respect to the definition of Good Reason, clause 5 of Section 1(g) shall be deleted in its entirety.

3. Effective Date; Termination of Agreement. This Amendment shall be effective on the Effective Date. This Amendment shall terminate and be of no further force or effect, except in respect of (i) Section 8 hereto and (ii) any benefits then accrued by the Executive hereunder, if and only if (a) the principal agreements related to the Transaction are not signed by the Company and Regis on or prior to March 31, 2006, or (b) such principal agreements are terminated prior to the consummation of the Transaction.

4. Scope of Agreement. Nothing in this Amendment shall be deemed to entitle the Executive to continued employment with the Company or its subsidiaries.

5. Notice of Termination. A written notice of the Executive’s termination of employment during the period described in Section 2 by the Company or the Executive, as the case may be, to the other shall (i) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment and (ii) specify the termination date (which date shall be not less than 15 days after the giving of such notice). The failure by the Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

6. Counterparts. This Amendment may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.

7. Miscellaneous. Capitalized terms not defined herein shall have the meanings assigned to them in the Severance Agreement. This Amendment and the Severance

Agreement constitute the entire understanding and agreement between the Company and the Executive with respect to the subject matter hereof and thereof and supersedes all other prior agreements and understandings between the Executive and the Company with respect to such subject matter. The Severance Agreement, as amended by this Amendment, shall remain in full force and effect in accordance with its terms.

8. Addition of Provision Relating to Certain Taxation Matters. The following provision shall be added as new Section 3(e) of the Severance Agreement and shall apply with equal force to the Severance Agreement and this Amendment:

(e) Application of Section 409A. Notwithstanding the foregoing, if the Company, or in the event that the Company no longer exists, the Successor Company, or the Executive reasonably and in good faith determines that payment of any amount pursuant to this Agreement at the time provided for such payment would cause any amount so payable to be subject to Section 409A(a)(1) of the Code, then such amount shall instead be paid at the earliest time at which it may be paid without causing this Agreement to be subject to Section 409A(a)(1) and all of the provisions of this Agreement shall be interpreted in a manner consistent with this Section 3(e). The Company, or in the event that the Company no longer exists, the Successor Company, shall have the right to make such amendments, if any, to this Agreement as shall be necessary to avoid the application of Section 409A(a)(1) of the Code to the payments of amounts pursuant to this Agreement, and shall give prompt notice of any such amendment to the Executive. If the Company or in the event that the Company no longer exists, the Successor Company, defers payments to the Executive pursuant to this Section 3(e), then such company shall provide Executive with prompt written notice thereof, including reasonable explanation and the estimated date on which it has determined it is permitted to make the payments deferred under this Section 3(e). In any event, the payments will not take longer than 190 days from the Date of Termination, provided however that benefits provided under Section 3(c) shall extend beyond this period pursuant to the terms of such benefits. Provided further that to the extent it is determined that Section 409A would apply to such benefits if provided immediately after the Date of Termination, such benefit shall commence as soon as possible without being subject to 409A.

For purposes of this Section 3(e), (i) the term Agreement shall be deemed to refer to this Agreement and any amendments thereto, (ii) the term “Successor Company” shall mean, in the event of any reorganization, merger, consolidation or any sale or other disposition of assets that results in a Change in Control, (A) the surviving or resulting Person or the Person acquiring the assets of the Company, and (B) the Affiliates of such Person, (iii) the term “Affiliate” shall have the meaning set forth in Rule 12b-2 of the Securities Exchange Act of 1934 and (iv) the term “Person” shall mean any individual, entity or group, including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934.

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by a duly authorized officer of the Company and the Executive has executed this Amendment as of the dates set forth below.

ALBERTO-CULVER COMPANY

By:

Name:

Its:

Date:                     

EXECUTIVE

Date:                     

SCHEDULE A TO

SEVERANCE AGREEMENT AMENDMENT

Lump Sum Payment

Within 30 days following the Date of Termination, provided that the Company has received a customary release signed by the Executive, the Company shall pay to the Executive a lump sum payment equal to [2][1.5] times the Executive’s current annual base salary from the Company and its affiliated companies, plus [2][1.5] times the average of the dollar amount of the Executive’s actual or annualized (for any fiscal year consisting of less than 12 full months or with respect to which the Executive has been employed by the Company for less than 12 full months) annual bonus, paid or payable, including by reason of any deferral, to the Executive by the Company and its affiliated companies in respect of the five fiscal years of the Company (or such portion thereof during which the Executive performed services for the Company if the Executive shall have been employed by the Company for less than such five fiscal year period) immediately preceding the fiscal year in which the Date of Termination occurs.

Benefits

Medical Insurance Continuation. For a period of 18 months commencing on the Date of Termination, the Company shall continue to keep in full force and effect all policies of medical insurance with respect to the Executive and his or her dependents with the same level of coverage, upon the same terms and otherwise to the same extent as such policies shall have been in effect immediately prior to the Date of Termination (such coverage, the “Date of Termination Coverage”) or, if more favorable to the Executive, as provided generally with respect to other peer executives of the Company and its affiliated companies, and the Company and the Executive shall share the costs of the continuation of such insurance coverage in the same proportion as such costs were shared immediately prior to the Date of Termination, provided, however, that the Company’s obligation to continue to provide this benefit shall terminate at such time that the Executive commences employment with another employer and becomes eligible to receive medical insurance coverage under an employer-provided plan that is generally comparable to the Date of Termination Coverage. The coverage provided hereunder shall be applied toward the satisfaction of, and shall not supplement, the Executive’s right to continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or any similar state law.

Executive Outplacement. The Company will pay for and provide to the Executive outplacement services with an outplacement firm of Executive’s choosing, provided that the Company shall not be responsible to pay for such services to the extent such services (i) exceed $12,000 or (ii) are provided more than one year following the Date of Termination.

EX-10.07

Exhibit 10.07

TERMINATION AGREEMENT

This Termination Agreement (this “Agreement”) is entered into as of this 10th day of January 2006 (the “Agreement Date”) by and between Alberto-Culver Company, a Delaware corporation (the “Company”), and Michael H. Renzulli (the “Executive”).

WHEREAS, the Company and the Executive have entered into the Severance Agreement dated as of December 1, 1996, as amended as of May 28, 1999 (the “Severance Agreement”), pursuant to which the Executive would be entitled to payments and benefits in the event that the Executive’s employment were terminated under the circumstances set forth in the Severance Agreement following, among other things, the approval by the stockholders of the Company of a transaction that constitutes a Change in Control (as defined in the Severance Agreement);

WHEREAS, the Company and Regis Corporation, a Minnesota corporation (“Regis”), may enter into a transaction whereby Regis or a subsidiary of Regis would be merged with Sally Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“SHI” and such transaction, the “Transaction”);

WHEREAS, the Company will treat the Transaction as though it constitutes a Change in Control for the purposes of, and as such term is defined under, the Employee Stock Option Plan of 2003, Employee Stock Option Plan of 1988, 2003 Restricted Stock Plan and 1994 Restricted Stock Plan and accordingly accelerate the vesting of all options to purchase, and restricted shares of, common stock of the Company issued under such plans, including those held by the Executive;

WHEREAS, in respect of the Company’s Management Incentive Plan and the 1994 Shareholder Value Incentive Plan, the Company will treat the Transaction as though it constitutes a Change in Control (as such term is defined therein) for the participants in such plans, including the Executive; and

WHEREAS, the Company and the Executive desire to enter into this Agreement pursuant to which the Severance Agreement shall be terminated, and the Executive’s employment shall terminate, upon the terms and subject to the conditions contained herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, the Company and the Executive hereby agree as follows:

1. Termination of Severance Agreement. The Company and the Executive acknowledge that the Transaction is currently contemplated to take the following form: the shares of SHI owned by the Company would be distributed to the Company’s stockholders pursuant to a tax-free spin-off of SHI and, immediately thereafter, SHI would be merged with Regis or a subsidiary of Regis and those SHI shares would be converted into shares of common stock of Regis. As a result of the Transaction under such form, SHI would become a wholly owned subsidiary of Regis. In addition, the Company and the Executive agree that at the time of the spin-off of SHI (the “Effective Time”), the Executive will cease to be an employee of the Company or any of its subsidiaries, including Sally Beauty, Inc. (“Sally”). In order to resolve all issues that could arise with respect to the Severance Agreement by reason of the Transaction and the Executive’s termination of employment, the Executive, on behalf of the Executive and any person claiming through the Executive, and the Company hereby (i) agree that the Transaction,

however effected, shall not be deemed to constitute a Change in Control for purposes of the Severance Agreement and (ii) terminate effective immediately prior to the Effective Time the Severance Agreement and any and all rights the Executive may have to any payments or benefits pursuant to the Severance Agreement.

2. Consideration.

In consideration for the Executive’s entering into this Agreement, the Company and the Executive agree that upon the termination of the Executive’s employment by the Company, as agreed to in Section 1, at the Effective Time, the Executive shall become entitled to the payments and benefits set forth in Schedule I hereto, subject to any conditions (including the execution of a release) identified on Schedule I.

If the Executive shall be entitled to any payments or benefits pursuant to the Severance Agreement in connection with a Change in Control unrelated to the Transaction with Regis and its affiliates, then the Executive shall not be entitled to any payments or benefits hereunder.

3. Position at Company. While employed by the Company, the Executive (i) shall continue to serve as the Chairman of the Board of Sally and shall have all customary powers and duties associated with such office, consistent with prior practice and (ii) the Executive shall be eligible for and receive compensation, benefits and perquisites in the ordinary course in a manner consistent with past practice during such period when the Executive has served as Chairman of the Board of Sally.

4. Limitations on Payments to the Executive. Solely for the purposes of the computation of benefits under this Agreement and notwithstanding any other provisions hereof, payments to the Executive under this Agreement shall be reduced (but not below zero) so that the present value, as determined in accordance with Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the “Code”), of such payments plus any other payments that must be taken into account for purposes of any computation relating to the Executive under Section 280G(b)(2)(A)(ii) of the Code, shall not, in the aggregate, exceed 2.99 times the Executive’s “base amount,” as such term is defined in Section 280G(b)(3) of the Code. Notwithstanding any other provision hereof, no reduction in payments under the limitation contained in the immediately preceding sentence shall be applied to payments hereunder which do not constitute “excess parachute payments” within the meaning of the Code. Any payments in excess of the limitation of this Section 4 or otherwise determined to be “excess parachute payments” made to the Executive hereunder shall be deemed to be overpayments which shall constitute an amount owing from the Executive to the Company with interest from the date of receipt by the Executive to the date of repayment (or offset) at the applicable federal rate under Section 1274(d) of the Code, compounded semi-annually, which shall be payable upon demand; provided, however, that no repayment shall be required under this sentence if in the written opinion of tax counsel satisfactory to the Executive and delivered to the Executive and the Company such repayment does not allow such overpayment to be excluded for federal income and excise tax purposes from the Executive’s income for the year of receipt or afford the Executive a compensating federal income tax deduction for the year of repayment.

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5. Agreement Date; Termination of Agreement. This Agreement shall be effective on the Agreement Date. This Agreement shall terminate and be of no further force or effect if and only if (a) the principal agreements related to the Transaction are not signed by the Company and Regis on or prior to January 31, 2006, or (b) such principal agreements are terminated prior to the consummation of the Transaction.

6. Withholding Taxes. The Company may withhold from all payments due to the Executive (or the Executive’s estate or beneficiaries) hereunder all taxes which, by applicable federal, state, local or other law, are required to be withheld therefrom.

7. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with the Company after the Effective Time.

8. Successors. This Agreement shall inure to the benefit of and be enforceable by, and binding upon, the Company and its respective successors and assigns, and by the Executive and the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.

9. Notices. All notices and other communications given in connection with this Agreement shall be in writing and shall be duly given upon receipt when delivered by United States mail, certified and return receipt requested, postage prepaid, addressed (i) if to the Executive, to the Executive’s most recent address as it appears in the records of the Company, with a copy to Michael Nemeroff, Esq. of Vedder Price, 222 North LaSalle Street, Chicago, Illinois 60601, Facsimile: 312/609-5005 and if to the Company, to Alberto-Culver Company, 2525 Armitage Avenue, Melrose Park, Illinois, 60160, attention of the General Counsel (the “Committee”), or (ii) to such other address as any party may have furnished to the other parties in writing in accordance herewith.

10. Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

11. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and which together shall constitute one and the same instrument.

12. Application of Section 409A. Notwithstanding the foregoing, if the Company or the Executive reasonably and in good faith determines that payment of any amount pursuant to this Agreement at the time provided for such payment would cause any amount so payable to be subject to Section 409A(a)(1) of the Code, then such amount shall instead be paid at the earliest time at which it may be paid without causing this Agreement to be subject to

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Section 409A(a)(1) and all of the provisions of this Agreement shall be interpreted in a manner consistent with this Section 12. The Company shall have the right to make such amendments, if any, to this Agreement as shall be necessary to avoid the application of Section 409A(a)(1) of the Code to the payments of amounts pursuant to this Agreement, and shall give prompt notice of any such amendment to the Executive. If the Company defers payments to the Executive pursuant to this Section 12, then the Company shall provide Executive with prompt written notice thereof, including reasonable explanation and the estimated date on which it has determined it is permitted to make the payments deferred under this Section 12. In any event, the payments will not take longer than 190 days from the Effective Time, provided however that the medical insurance coverage to be provided under Schedule I shall extend beyond this period pursuant to the terms of Schedule I and provided further that to the extent it is determined that Section 409A would apply to such benefit if provided immediately after the Effective Time, such benefit shall commence as soon as possible without being subject to 409A, or the parties shall mutually agree on a mechanism to permit the benefit to be so provided.

13. Non-Disparagement.

(a) The Company will not, nor will it cause or assist any other person to, make any statement to a third party or take any action which is intended to or would reasonably have the effect of disparaging or harming the Executive or his business reputation; provided however that this provision shall not preclude such truthful disclosure or testimony as may be required before any tribunal or administrative agency, or under any applicable law, regulation or rule or by any listing requirements of any securities exchange on which any securities of the Company are listed, provided further that no damages shall be awarded pursuant to this section unless the basis therefor is established in a court of competent jurisdiction.

(b) The Executive will not, nor will he cause or assist any other person to, make any statement to a third party or take any action which is intended to or would reasonably have the effect of disparaging or harming the Company or the business reputation of the Company; provided, however that this provision shall not preclude such truthful disclosure or testimony as may be required before any tribunal or administrative agency, or under any applicable law, regulation or rule or by any listing requirements of any securities exchange on which any securities of the Company are listed, provided further that no damages shall be awarded pursuant to this section unless the basis therefor is established in a court of competent jurisdiction.

14. Professional Fees. The Company shall pay Executive’s legal and other professional fees incurred in connection with the completion of this Agreement not to exceed $50,000.

15. Treatment of Options. The Executive holds options to purchase shares of the common stock of the Company, par value $0.22 per share, issued under, and subject to the terms of, the Company’s equity plans. The Company’s Board of Directors (including its Compensation and Leadership Development Committee) shall not take any action to cause such options to be converted, and shall not allow such options to be converted, into options to purchase equity securities of Regis, as a result of the Transaction or otherwise. The number of shares subject to such options and the exercise price thereof will be adjusted on the same basis as the options held by all of the employees of the Company.

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16. Miscellaneous. Capitalized terms not defined herein shall have the meanings assigned to them in the Severance Agreement. No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Company.

17. Recitals. The recitals to this Agreement are hereby incorporated by reference into, and are deemed an integral part of, this Agreement.

18. Release by Company. The Company, on behalf of itself and anyone claiming through it (the “Company Releasing Parties”), hereby agrees not to sue the Executive based upon facts that are known on the date of this Agreement by any director of the Company as of the date of this Agreement (“Known Facts”), and agrees to release and discharge, fully, finally and forever, the Executive from any and all claims, causes of action, lawsuits, liabilities, debts, accounts, covenants, contracts, controversies, agreements, promises, sums of money, damages, judgments and demands of any nature whatsoever, in law or in equity, asserted or not asserted, foreseen or unforeseen, which the Company Releasing Parties ever had or may presently have against the Executive arising from the beginning of time up to and including the effective date of this Agreement, including, without limitation, all matters in any way related to Executive’s employment by the Company or his service as an officer of the Company or the terms and conditions thereof, but only to the extent such claims, causes of action, lawsuits, liabilities, debts, accounts, covenants, contracts, controversies, agreements, promises, sums of money, damages, judgments and demands are based upon Known Facts; provided, however, that nothing contained in this Section 18 shall apply to, or release the Executive from, any obligation or commitment of Executive contained in this Agreement.

19. Employment by Company. For purposes of this Agreement, employment by the Company shall include employment with the Company or any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the dates set forth below.

ALBERTO-CULVER COMPANY
By:	/s/ Gary P. Schmidt
Name:	Gary P. Schmidt
Its:	Senior Vice President, General Counsel and Secretary
	Date: January 10, 2006
MICHAEL H. RENZULLI
/s/ Michael H. Renzulli
Date: January 10, 2006

[Signature Page to Michael H. Renzulli Termination Agreement]

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SCHEDULE I

TO

TERMINATION AGREEMENT

Provided that the Company has received a release in the form attached hereto as Exhibit A signed by the Executive (the “Release”) at or after the Effective Time, the Executive shall, pursuant and subject to the terms and conditions of this Agreement, be entitled to the following benefits:

Lump Sum Payment

Within 30 days following the Company’s receipt of the Release, the Company shall pay to the Executive a lump sum payment equal to $3,641,034.

Continued Medical Coverage

For a period of 36 months commencing at the Effective Time, the Company shall continue to keep in full force and effect all group medical benefits covering the Executive and his dependents with the same level of coverage, upon the same terms and otherwise to the same extent as such benefits shall have been in effect immediately prior to the Effective Time (such coverage, the “Date of Termination Coverage”) or, if more favorable to the Executive, as provided generally with respect to other peer executives of the Company and its affiliated companies, and the Company and the Executive shall share the costs of the continuation of such coverage in the same proportion as such costs were shared immediately prior to the Effective Time, provided that the Executive shall have the right, thereafter and for his lifetime, following such 36-month period, to elect to continue to participate, at the Executive’s sole cost at the applicable COBRA rate, in the applicable medical plan or plans.

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EXHIBIT A

RELEASE

Alberto-Culver Company (the “Company”) and Michael H. Renzulli (the “Executive”) enter into this Release (this “Release”) on the      day of             , 2006.

W I T N E S S E T H

WHEREAS, the Company and Executive are parties to a Termination Agreement dated January     , 2006 (the “Agreement”);

WHEREAS, as a condition for the receipt of certain benefits to be paid following the date of this Release (the “Benefits”) under the Agreement, Executive has agreed to execute this Release.

NOW THEREFORE, in consideration of the covenants and mutual promises herein contained, it is agreed as follows:

(a) General Release. The Executive, on behalf of the Executive and anyone claiming through the Executive, hereby agrees not to sue the Company or any of its divisions, subsidiaries, affiliates or other related entities of the above specified entities (whether or not such entities are wholly owned) or any of the past, present or future directors, officers, administrators, trustees, fiduciaries, employees, agents or attorneys of the Company or any of such other entities, or the predecessors, successors or assigns of any of them (hereinafter referred to as the “Released Parties”), and agrees to release and discharge, fully, finally and forever, the Released Parties from any and all claims, causes of action, lawsuits, liabilities, debts, accounts, covenants, contracts, controversies, agreements, promises, sums of money, damages, judgments and demands of any nature whatsoever, in law or in equity, both known and unknown, asserted or not asserted, foreseen or unforeseen, which the Executive ever had or may presently have against any of the Released Parties arising from the beginning of time up to and including the date on which this Release is signed and delivered to the Company, including, without limitation, all matters in any way related to the Executive’s employment by the Company, the terms and conditions thereof, the Severance Agreement (as such term is defined in the Agreement), any failure to promote the Executive and the termination or cessation of the Executive’s employment with the Company, and including, without limitation, any and all claims arising under the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, the Family and Medical Leave Act, the Americans With Disabilities Act, the Employee Retirement Income Security Act of 1974, the Illinois Human Rights Act, the Cook County Human Rights Ordinance, the City of Chicago Human Rights Ordinance or any other federal, state, local or foreign statute, regulation, ordinance or order, or pursuant to any common law doctrine; provided, however, that nothing contained in this Release shall apply to, or release the Company from, any obligation of the Company contained in the Agreement or any vested or accrued benefit pursuant to any employee benefit or equity plan of the Company (including, but not limited to, the Company’s Key Executive Deferred Compensation Agreement and Executive Deferred Compensation Plan).

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The Executive acknowledges that the consideration offered in connection with the Agreement was and is in part for this Release and such portion of such consideration is accepted by the Executive as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and the Executive expressly agrees that the Executive is not entitled to, and shall not receive, any further recovery of any kind from the Company or any of the other Released Parties, and that in the event of any further proceedings whatsoever based upon any matter released herein, neither the Company nor any of the other Released Parties shall have any further monetary or other obligation of any kind to the Executive, including any obligation for any costs, expenses or attorneys’ fees incurred by or on behalf of the Executive, except as provided in the Agreement.

(b) EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS RELEASE REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. § 621 (“ADEA”). EXECUTIVE FURTHER AGREES: (A) THAT EXECUTIVE’S WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKER’S BENEFIT PROTECTIVE ACT OF 1990; (B) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (C) THAT CERTAIN BENEFITS CALLED FOR IN THE AGREEMENT TO BE PAID FOLLOWING THE DATE OF THIS RELEASE WOULD NOT BE PROVIDED TO ANY EXECUTIVE TERMINATING HIS OR HER EMPLOYMENT WITH THE COMPANY WHO DID NOT SIGN A RELEASE SIMILAR TO THIS RELEASE, THAT SUCH BENEFITS WOULD NOT HAVE BEEN PROVIDED IN THEIR ENTIRETY HAD EXECUTIVE NOT SIGNED THIS RELEASE, AND THAT SUCH BENEFITS ARE IN EXCHANGE IN PART FOR THE SIGNING OF THIS RELEASE; (D) THAT EXECUTIVE HAS BEEN ADVISED IN WRITING BY THE COMPANY TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (E) THAT THE COMPANY HAS GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (F) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVE’S EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND (G) THAT THIS RELEASE SHALL BE VOID AND OF NO FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS RELEASE THEN BECOMES EFFECTIVE AND ENFORCEABLE.

(c) To the maximum extent permitted by law, Executive covenants not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or court against any of the Released Parties regarding any of the claims released in this Release. Notwithstanding the foregoing, nothing herein shall prevent Executive or any of the Released Parties from instituting any action required to enforce the terms of the Agreement and this Release.

ALBERTO-CULVER COMPANY	EXECUTIVE
By:
Name:	Michael H. Renzulli
Title:

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EX-10.08

Exhibit 10.08

TERMINATION AGREEMENT

This Termination Agreement (this “Agreement”) is entered into as of this 10th day of January 2006 (the “Agreement Date”) by and between Alberto-Culver Company, a Delaware corporation (the “Company”), and Howard B. Bernick (the “Executive”).

WHEREAS, the Company and the Executive have entered into the Severance Agreement dated as of December 1, 1996, as amended as of May 28, 1999 (the “Severance Agreement”), pursuant to which the Executive would be entitled to payments and benefits in the event that the Executive’s employment were terminated under the circumstances set forth in the Severance Agreement following, among other things, the approval by the stockholders of the Company of a transaction that constitutes a Change in Control (as defined in the Severance Agreement);

WHEREAS, the Company and Regis Corporation, a Minnesota corporation (“Regis”), may enter into a transaction whereby Regis or a subsidiary of Regis would be merged with Sally Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“SHI” and such transaction, the “Transaction”);

WHEREAS, the Company will treat the Transaction as though it constitutes a Change in Control for the purposes of, and as such term is defined under, the Employee Stock Option Plan of 2003, Employee Stock Option Plan of 1988, 2003 Restricted Stock Plan and 1994 Restricted Stock Plan and accordingly accelerate the vesting of all options to purchase, and restricted shares of, common stock of the Company issued under such plans, including those held by the Executive;

WHEREAS, in respect of the Company’s Management Incentive Plan and the 1994 Shareholder Value Incentive Plan, the Company will treat the Transaction as though it constitutes a Change in Control (as such term is defined therein) for the participants in such plans, including the Executive; and

WHEREAS, the Company and the Executive desire to enter into this Agreement pursuant to which the Severance Agreement shall be terminated, and the Executive’s employment shall terminate, upon the terms and subject to the conditions contained herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, the Company and the Executive hereby agree as follows:

1. Termination of Severance Agreement. The Company and the Executive acknowledge that the Transaction is currently contemplated to take the following form: the shares of SHI owned by the Company would be distributed to the Company’s stockholders pursuant to a tax-free spin-off of SHI and, immediately thereafter, SHI would be merged with Regis or a subsidiary of Regis and those SHI shares would be converted into shares of common stock of Regis. As a result of the Transaction under such form, SHI would become a wholly owned subsidiary of Regis. In addition, the Company and the Executive agree that at the time of the spin-off of SHI (the “Effective Time”), the Executive will cease to be an employee or director of the Company or any of its subsidiaries. In order to resolve all issues that could arise with respect to the Severance Agreement by reason of the Transaction and the Executive’s termination of employment, the Executive, on behalf of the Executive and any person claiming through the Executive, and the Company hereby (i) agree that the Transaction, however effected,

shall not be deemed to constitute a Change in Control for purposes of the Severance Agreement and (ii) terminate effective immediately prior to the Effective Time the Severance Agreement and any and all rights the Executive may have to any payments or benefits pursuant to the Severance Agreement.

2. Consideration.

In consideration for the Executive’s entering into this Agreement, the Company and the Executive agree that upon the termination of the Executive’s employment by the Company, as agreed to in Section 1, at the Effective Time, the Executive shall become entitled to the payments and benefits set forth in Schedule I hereto, subject to any conditions (including the execution of a release) identified on Schedule I.

If the Executive shall be entitled to any payments or benefits pursuant to the Severance Agreement in connection with a Change in Control unrelated to the Transaction with Regis and its affiliates, then the Executive shall not be entitled to any payments or benefits hereunder.

3. Position at Company. While employed by the Company, the Executive (i) shall continue to serve as the Chief Executive Officer of the Company and shall have all customary powers and duties associated with such office, consistent with prior practice and (ii) the Executive shall be eligible for and receive compensation, benefits and perquisites in the ordinary course in a manner consistent with past practice.

4. Limitations on Payments to the Executive. Solely for the purposes of the computation of benefits under this Agreement and notwithstanding any other provisions hereof, payments to the Executive under this Agreement shall be reduced (but not below zero) so that the present value, as determined in accordance with Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the “Code”), of such payments plus any other payments that must be taken into account for purposes of any computation relating to the Executive under Section 280G(b)(2)(A)(ii) of the Code, shall not, in the aggregate, exceed 2.99 times the Executive’s “base amount,” as such term is defined in Section 280G(b)(3) of the Code. Notwithstanding any other provision hereof, no reduction in payments under the limitation contained in the immediately preceding sentence shall be applied to payments hereunder which do not constitute “excess parachute payments” within the meaning of the Code. Any payments in excess of the limitation of this Section 4 or otherwise determined to be “excess parachute payments” made to the Executive hereunder shall be deemed to be overpayments which shall constitute an amount owing from the Executive to the Company with interest from the date of receipt by the Executive to the date of repayment (or offset) at the applicable federal rate under Section 1274(d) of the Code, compounded semi-annually, which shall be payable upon demand; provided, however, that no repayment shall be required under this sentence if in the written opinion of tax counsel satisfactory to the Executive and delivered to the Executive and the Company such repayment does not allow such overpayment to be excluded for federal income and excise tax purposes from the Executive’s income for the year of receipt or afford the Executive a compensating federal income tax deduction for the year of repayment.

5. Agreement Date; Termination of Agreement. This Agreement shall be effective on the Agreement Date. This Agreement shall terminate and be of no further force or

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effect if and only if (a) the principal agreements related to the Transaction are not signed by the Company and Regis on or prior to January 31, 2006, or (b) such principal agreements are terminated prior to the consummation of the Transaction.

6. Withholding Taxes. The Company may withhold from all payments due to the Executive (or the Executive’s estate or beneficiaries) hereunder all taxes which, by applicable federal, state, local or other law, are required to be withheld therefrom.

7. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with the Company after the Effective Time.

8. Successors. This Agreement shall inure to the benefit of and be enforceable by, and binding upon, the Company and its respective successors and assigns, and by the Executive and the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.

9. Notices. All notices and other communications given in connection with this Agreement shall be in writing and shall be duly given upon receipt when delivered by United States mail, certified and return receipt requested, postage prepaid, addressed (i) if to the Executive, to the Executive’s most recent address as it appears in the records of the Company, with a copy to Michael Nemeroff, Esq. of Vedder Price, 222 North LaSalle Street, Chicago, Illinois 60601, Facsimile: 312/609-5005 and if to the Company, to Alberto-Culver Company, 2525 Armitage Avenue, Melrose Park, Illinois, 60160, attention of the General Counsel (the “Committee”), or (ii) to such other address as any party may have furnished to the other parties in writing in accordance herewith.

10. Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

11. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and which together shall constitute one and the same instrument.

12. Application of Section 409A. Notwithstanding the foregoing, if the Company or the Executive reasonably and in good faith determines that payment of any amount pursuant to this Agreement at the time provided for such payment would cause any amount so payable to be subject to Section 409A(a)(1) of the Code, then such amount shall instead be paid at the earliest time at which it may be paid without causing this Agreement to be subject to Section 409A(a)(1) and all of the provisions of this Agreement shall be interpreted in a manner consistent with this Section 12. The Company shall have the right to make such amendments, if

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any, to this Agreement as shall be necessary to avoid the application of Section 409A(a)(1) of the Code to the payments of amounts pursuant to this Agreement, and shall give prompt notice of any such amendment to the Executive. If the Company defers payments to the Executive pursuant to this Section 12, then the Company shall provide Executive with prompt written notice thereof, including reasonable explanation and the estimated date on which it has determined it is permitted to make the payments deferred under this Section 12. In any event, the payments will not take longer than 190 days from the Effective Time, provided however that the medical insurance coverage to be provided under Schedule I shall extend beyond this period pursuant to the terms of Schedule I and provided further that to the extent it is determined that Section 409A would apply to such benefit if provided immediately after the Effective Time, such benefit shall commence as soon as possible without being subject to 409A, or the parties shall mutually agree on a mechanism to permit the benefit to be so provided.

13. Non-Disparagement.

(a) The Company will not, nor will it cause or assist any other person to, make any statement to a third party or take any action which is intended to or would reasonably have the effect of disparaging or harming the Executive or his business reputation; provided however that this provision shall not preclude such truthful disclosure or testimony as may be required before any tribunal or administrative agency, or under any applicable law, regulation or rule or by any listing requirements of any securities exchange on which any securities of the Company are listed, provided further that no damages shall be awarded pursuant to this section unless the basis therefor is established in a court of competent jurisdiction.

(b) The Executive will not, nor will he cause or assist any other person to, make any statement to a third party or take any action which is intended to or would reasonably have the effect of disparaging or harming the Company or the business reputation of the Company; provided, however that this provision shall not preclude such truthful disclosure or testimony as may be required before any tribunal or administrative agency, or under any applicable law, regulation or rule or by any listing requirements of any securities exchange on which any securities of the Company are listed, provided further that no damages shall be awarded pursuant to this section unless the basis therefor is established in a court of competent jurisdiction.

14. Professional Fees. The Company shall pay Executive’s legal and other professional fees incurred in connection with the completion of this Agreement not to exceed $75,000.

15. Treatment of Options. The Executive holds options to purchase shares of the common stock of the Company, par value $0.22 per share, issued under, and subject to the terms of, the Company’s equity plans. The Company’s Board of Directors (including its Compensation and Leadership Development Committee) shall not take any action to cause such options to be converted, and shall not allow such options to be converted, into options to purchase equity securities of Regis, as a result of the Transaction or otherwise. The number of shares subject to such options and the exercise price thereof will be adjusted on the same basis as the options held by all of the employees of the Company.

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16. Miscellaneous. Capitalized terms not defined herein shall have the meanings assigned to them in the Severance Agreement. No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Company.

17. Recitals. The recitals to this Agreement are hereby incorporated by reference into, and are deemed an integral part of, this Agreement.

18. Release by Company. The Company, on behalf of itself and anyone claiming through it (the “Company Releasing Parties”), hereby agrees not to sue the Executive based upon facts that are known on the date of this Agreement by any director of the Company (not including the Executive) as of the date of this Agreement (“Known Facts”), and agrees to release and discharge, fully, finally and forever, the Executive from any and all claims, causes of action, lawsuits, liabilities, debts, accounts, covenants, contracts, controversies, agreements, promises, sums of money, damages, judgments and demands of any nature whatsoever, in law or in equity, asserted or not asserted, foreseen or unforeseen, which the Company Releasing Parties ever had or may presently have against the Executive arising from the beginning of time up to and including the effective date of this Agreement, including, without limitation, all matters in any way related to Executive’s employment by the Company or his service as an officer or director of the Company or the terms and conditions thereof, but only to the extent such claims, causes of action, lawsuits, liabilities, debts, accounts, covenants, contracts, controversies, agreements, promises, sums of money, damages, judgments and demands are based upon Known Facts; provided, however, that nothing contained in this Section 18 shall apply to, or release the Executive from, any obligation or commitment of Executive contained in this Agreement.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the dates set forth below.

ALBERTO-CULVER COMPANY
By:	/s/ Gary P. Schmidt
Name:	Gary P. Schmidt
Its:	Senior Vice President, General Counsel and Secretary
Date:	January 10, 2006

HOWARD B. BERNICK
/s/ Howard B. Bernick
Date:	January 10, 2006

[Signature Page to Howard Bernick Termination Agreement]

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SCHEDULE I

TO

TERMINATION AGREEMENT

Provided that the Company has received a release in the form attached hereto as Exhibit A signed by the Executive (the “Release”) at or after the Effective Time, the Executive shall, pursuant and subject to the terms and conditions of this Agreement, be entitled to the following benefits:

Lump Sum Payment

Within 30 days following the Company’s receipt of the Release, the Company shall pay to the Executive a lump sum payment equal to $6,723,200.

Continued Medical Coverage

For a period of 36 months commencing at the Effective Time, the Company shall continue to keep in full force and effect all group medical benefits covering the Executive and his dependents with the same level of coverage, upon the same terms and otherwise to the same extent as such benefits shall have been in effect immediately prior to the Effective Time (such coverage, the “Date of Termination Coverage”) or, if more favorable to the Executive, as provided generally with respect to other peer executives of the Company and its affiliated companies, and the Company and the Executive shall share the costs of the continuation of such coverage in the same proportion as such costs were shared immediately prior to the Effective Time, provided that the Executive shall have the right, thereafter and for his lifetime, following such 36-month period, to elect to continue to participate, at the Executive’s sole cost at the applicable COBRA rate, in the applicable medical plan or plans.

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EXHIBIT A

RELEASE

Alberto-Culver Company (the “Company”) and Howard Bernick (the “Executive”) enter into this Release (this “Release”) on the      day of             , 2006.

W I T N E S S E T H

WHEREAS, the Company and Executive are parties to a Termination Agreement dated January __, 2006 (the “Agreement”);

WHEREAS, as a condition for the receipt of certain benefits to be paid following the date of this Release (the “Benefits”) under the Agreement, Executive has agreed to execute this Release.

NOW THEREFORE, in consideration of the covenants and mutual promises herein contained, it is agreed as follows:

(a) General Release. The Executive, on behalf of the Executive and anyone claiming through the Executive, hereby agrees not to sue the Company or any of its divisions, subsidiaries, affiliates or other related entities of the above specified entities (whether or not such entities are wholly owned) or any of the past, present or future directors, officers, administrators, trustees, fiduciaries, employees, agents or attorneys of the Company or any of such other entities, or the predecessors, successors or assigns of any of them (hereinafter referred to as the “Released Parties”), and agrees to release and discharge, fully, finally and forever, the Released Parties from any and all claims, causes of action, lawsuits, liabilities, debts, accounts, covenants, contracts, controversies, agreements, promises, sums of money, damages, judgments and demands of any nature whatsoever, in law or in equity, both known and unknown, asserted or not asserted, foreseen or unforeseen, which the Executive ever had or may presently have against any of the Released Parties arising from the beginning of time up to and including the date on which this Release is signed and delivered to the Company, including, without limitation, all matters in any way related to the Executive’s employment by the Company, the terms and conditions thereof, the Severance Agreement (as such term is defined in the Agreement), any failure to promote the Executive and the termination or cessation of the Executive’s employment with the Company, and including, without limitation, any and all claims arising under the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, the Family and Medical Leave Act, the Americans With Disabilities Act, the Employee Retirement Income Security Act of 1974, the Illinois Human Rights Act, the Cook County Human Rights Ordinance, the City of Chicago Human Rights Ordinance or any other federal, state, local or foreign statute, regulation, ordinance or order, or pursuant to any common law doctrine; provided, however, that nothing contained in this Release shall apply to, or release the Company from, any obligation of the Company contained in the Agreement or any vested or accrued benefit pursuant to any employee benefit or equity plan of the Company (including, but not limited to, the Company’s Key Executive Deferred Compensation Agreement and Executive Deferred Compensation Plan).

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The Executive acknowledges that the consideration offered in connection with the Agreement was and is in part for this Release and such portion of such consideration is accepted by the Executive as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and the Executive expressly agrees that the Executive is not entitled to, and shall not receive, any further recovery of any kind from the Company or any of the other Released Parties, and that in the event of any further proceedings whatsoever based upon any matter released herein, neither the Company nor any of the other Released Parties shall have any further monetary or other obligation of any kind to the Executive, including any obligation for any costs, expenses or attorneys’ fees incurred by or on behalf of the Executive, except as provided in the Agreement.

(b) EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS RELEASE REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. § 621 (“ADEA”). EXECUTIVE FURTHER AGREES: (A) THAT EXECUTIVE’S WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKER’S BENEFIT PROTECTIVE ACT OF 1990; (B) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (C) THAT CERTAIN BENEFITS CALLED FOR IN THE AGREEMENT TO BE PAID FOLLOWING THE DATE OF THIS RELEASE WOULD NOT BE PROVIDED TO ANY EXECUTIVE TERMINATING HIS OR HER EMPLOYMENT WITH THE COMPANY WHO DID NOT SIGN A RELEASE SIMILAR TO THIS RELEASE, THAT SUCH BENEFITS WOULD NOT HAVE BEEN PROVIDED IN THEIR ENTIRETY HAD EXECUTIVE NOT SIGNED THIS RELEASE, AND THAT SUCH BENEFITS ARE IN EXCHANGE IN PART FOR THE SIGNING OF THIS RELEASE; (D) THAT EXECUTIVE HAS BEEN ADVISED IN WRITING BY THE COMPANY TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (E) THAT THE COMPANY HAS GIVEN EXECUTIVE A PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (F) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVE’S EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND (G) THAT THIS RELEASE SHALL BE VOID AND OF NO FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS RELEASE THEN BECOMES EFFECTIVE AND ENFORCEABLE.

(c) To the maximum extent permitted by law, Executive covenants not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or court against any of the Released Parties regarding any of the claims released in this Release. Notwithstanding the foregoing, nothing herein shall prevent Executive or any of the Released Parties from instituting any action required to enforce the terms of the Agreement and this Release.

ALBERTO-CULVER COMPANY		EXECUTIVE
By:	/s/ Gary P. Schmidt	/s/ Howard B. Bernick
Name:	Gary P. Schmidt	Howard B. Bernick
Title:	Senior Vice President, General Counsel and Secretary

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EX-10.09

Exhibit 10.09

TERMINATION AGREEMENT

This Termination Agreement (this “Agreement”) is entered into as of the Agreement Date by and among Alberto-Culver Company, a Delaware corporation (the “Company”), Sally Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“SHI”) and Gary G. Winterhalter (the “Executive”) and shall be deemed to be effective on the date the last party signs this Agreement (the “Agreement Date”).

WHEREAS, the Company and the Executive have entered into the Severance Agreement dated as of December 1, 1996, as amended as of June 18, 1999 and February 24, 2004 (the “Severance Agreement”), pursuant to which the Executive would be entitled to payments and benefits in the event that the Executive’s employment were terminated under the circumstances set forth in the Severance Agreement following, among other things, the approval by the stockholders of the Company of a transaction that constitutes a Change in Control (as defined in the Severance Agreement);

WHEREAS, the Company and Regis Corporation, a Minnesota corporation (“Regis”), may enter into a transaction whereby Regis or a subsidiary of Regis would be merged with SHI (such transaction, the “Transaction”);

WHEREAS, the Company intends to treat the Transaction as though it constitutes a Change in Control for the purposes of, and as such term is defined under, the Employee Stock Option Plan of 2003, Employee Stock Option Plan of 1988, 2003 Restricted Stock Plan and 1994 Restricted Stock Plan, and accordingly accelerate the vesting of all options to purchase, and restricted shares of, common stock of the Company issued under such plans, including those held by the Executive, and the options to purchase shares of common stock of the Company held by the Executive shall, effective upon the closing of the Transaction, be converted into options to purchase shares of common stock of Regis;

WHEREAS, in respect of the Company’s Management Incentive Plan and the 1994 Shareholder Value Incentive Plan, the Company intends to treat the Transaction as though it constitutes a Change in Control (as such term is defined therein) for the participants in such plans, including the Executive; and

WHEREAS, the Company, SHI and the Executive desire to enter into this Agreement pursuant to which the Severance Agreement shall be terminated upon the terms and subject to the conditions contained herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements contained herein, the Company, SHI and the Executive hereby agree as follows:

1. Termination of Severance Agreement. The Company and the Executive acknowledge that the Transaction is currently contemplated to take the following form: the shares of SHI owned by the Company would be distributed to the Company’s stockholders pursuant to a tax-free spin-off of SHI and, immediately thereafter, SHI would be merged with Regis or a subsidiary of Regis and those SHI shares would be converted into shares of common stock of Regis. As a result of the Transaction under such form, SHI would become a wholly owned subsidiary of Regis. In addition, the Company and the Executive acknowledge that at the

time of the spin-off of SHI (the “Effective Time”), the Executive will cease to be an employee of the Company or any of its subsidiaries. In order to resolve all issues that could arise with respect to the Severance Agreement by reason of the Transaction, the Executive, on behalf of the Executive and any person claiming through the Executive, and the Company hereby (a) agree that the Transaction, however effected, shall not be deemed to constitute a Change in Control for purposes of the Severance Agreement and (b) terminate effective immediately prior to the Effective Time the Severance Agreement and any and all rights the Executive may have to any payments or benefits pursuant to the Severance Agreement.

2. Consideration for Termination.

(a) In consideration for the termination of the Severance Agreement, SHI and the Executive agree that in the event of the termination of the Executive’s employment without Cause by SHI or by the Executive for Good Reason on or after the Agreement Date and prior to the second anniversary of the Effective Time, the Executive shall be entitled to the payments and benefits set forth in Schedule I hereto. For purposes of clarity, a termination by reason of disability does not constitute a termination by SHI of the Executive’s employment without Cause.

(b) As additional consideration for the termination of the Severance Agreement, SHI agrees that it will enter into the agreement with the Executive substantially in the form attached hereto as Exhibit A, which shall become effective at the Effective Time.

If the Executive shall be entitled to any payments or benefits pursuant to the Severance Agreement in connection with a Change in Control unrelated to the Transaction with Regis and its affiliates, then the Executive shall not be entitled to any payments or benefits hereunder.

For purposes of this Section 2, the term “Cause” shall have the meaning assigned to it in the Severance Agreement, provided that (i) the Agreement Date shall be substituted for the term “Change in Control” each place such term appears in such definition, (ii) the term “Company” shall, to the extent the context requires, be deemed to also refer to SHI and its affiliates, including Regis. “Good Reason” shall mean, without the Executive’s consent, the occurrence of any of the following circumstances during the period beginning on the Agreement Date and ending on the second anniversary of the Effective Time unless such circumstances are fully corrected prior to the expiration of the fifteen (15) calendar day period following delivery to SHI and its parent corporation of the Executive’s notice of intention to terminate his employment for Good Reason describing such circumstances in reasonable detail:

(A) any of (1) the assignment to the Executive of any duties inconsistent in any material respect with the Executive’s position(s), duties, responsibilities or status immediately prior to the Agreement Date, (2) a change in the Executive’s reporting responsibilities as in effect immediately prior to the Agreement Date or (3) any removal or involuntary termination of the Executive otherwise than as expressly permitted by this Agreement;

(B) a reduction in the Executive’s rate of annual base salary as in effect immediately prior to the Agreement Date or as the same may be increased from time to time thereafter;

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(C) any requirement that the Executive be based anywhere other than within a 20 mile radius of the facility where the Executive is located as of the Agreement Date; or

(D) the failure of SHI or any of its affiliated companies to (1) continue in effect any employee benefit plan or compensation plan in which the Executive is participating immediately prior to the Agreement Date, unless the Executive is permitted to participate in other plans providing the Executive with substantially comparable benefits, or the taking of any action by SHI or any of its affiliated companies which would adversely affect the Executive’s participation in or materially reduce the Executive’s benefits under any such plan, (2) provide the Executive and the Executive’s dependents welfare benefits in accordance with the plans, practices, programs and policies as in effect generally at any time with respect to other peer executives of SHI, (3) provide fringe benefits in accordance with the plans, practices, programs and policies as in effect generally at any time with respect to other peer executives of SHI, (4) provide the Executive with paid vacation in accordance with the plans, policies, programs and practices as in effect generally at any time with respect to other peer executives of SHI, or (5) reimburse the Executive promptly for all reasonable employment expenses incurred by the Executive in accordance with the policies, practices and procedures as in effect generally at any time with respect to other peer executives of SHI.

The Executive shall be deemed to have waived his rights to terminate his employment hereunder for circumstances constituting Good Reason if he shall not have provided to SHI and its parent corporation a notice of termination within fifty (50) calendar days following the occurrence of the Good Reason event.

3. Limitations on Payments to the Executive. Solely for the purposes of the computation of benefits under this Agreement and notwithstanding any other provisions hereof, payments to the Executive under this Agreement shall be reduced (but not below zero) so that the present value, as determined in accordance with Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the “Code”), of such payments plus any other payments that must be taken into account for purposes of any computation relating to the Executive under Section 280G(b)(2)(A)(ii) of the Code, shall not, in the aggregate, exceed 2.99 times the Executive’s “base amount,” as such term is defined in Section 280G(b)(3) of the Code. Notwithstanding any other provision hereof, no reduction in payments under the limitation contained in the immediately preceding sentence shall be applied to payments hereunder which do not constitute “excess parachute payments” within the meaning of the Code. Any payments in excess of the limitation of this Section 3 or otherwise determined to be “excess parachute payments” made to the Executive hereunder shall be deemed to be overpayments which shall constitute an amount owing from the Executive to SHI with interest from the date of receipt by the Executive to the date of repayment (or offset) at the applicable federal rate under Section 1274(d) of the Code, compounded semi-annually, which shall be payable upon demand; provided, however, that no repayment shall be required under this sentence if in the written opinion of tax counsel satisfactory to the Executive and delivered to the Executive and SHI such repayment does not allow such overpayment to be excluded for federal income and excise tax purposes from the Executive’s income for the year of receipt or afford the Executive a compensating federal income tax deduction for the year of repayment.

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4. Withholding Taxes. SHI may withhold from all payments due to the Executive (or the Executive’s estate or beneficiaries) hereunder all taxes which, by applicable federal, state, local or other law, are required to be withheld therefrom.

5. Agreement Date; Termination of Agreement. This Agreement shall be effective on the Agreement Date. This Agreement shall terminate and be of no further force or effect, except in respect of any benefits then accrued by the Executive hereunder, if and only if (a) the principal agreements related to the Transaction are not signed by the Company and Regis on or prior to March 31, 2006, or (b) such principal agreements are terminated prior to the consummation of the Transaction.

6. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with the Company or SHI.

7. Successors; Binding Agreement.

(a) This Agreement shall inure to the benefit of and be enforceable by the Company and SHI and their respective successors and assigns, and by the Executive and the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die after terminating employment pursuant to Section 2(a) while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.

(b) This Agreement shall not be terminated by any merger or consolidation of SHI whereby SHI is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of SHI. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.

8. Notices. (a) For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be duly given upon receipt when delivered by United States mail, certified and return receipt requested, postage prepaid, addressed (i) if to the Executive, to the Executive’s most recent address as it appears in the records of the Company, if to the Company, to Alberto-Culver Company, 2525 Armitage Avenue, Melrose Park, Illinois, 60160, attention of the President, with a copy to the General Counsel, and if to SHI, to Sally Holdings, Inc., 3001 Colorado Boulevard, Denton, TX 76210, attention of the President, with a copy to the General Counsel, or (ii) to such other address as any party may have furnished to the other parties in writing in accordance herewith.

(b) A written notice of the Executive’s termination of employment by SHI or by the Executive, as the case may be, shall (i) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment and (ii) specify the termination date (which date shall be not less than 15 days after the giving of such notice). The failure by the Executive or SHI to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or SHI hereunder or preclude the Executive or SHI from asserting such fact or circumstance in enforcing the rights of the Executive or SHI hereunder.

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9. Employment with Subsidiaries. Employment with SHI for purposes of this Agreement shall include (a) in the period prior to the Effective Time, employment with the Company or any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors and (b) in the period at or after the Effective Time, employment with Regis or any corporation or other entity in which Regis has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors.

10. Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Illinois without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

11. Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

12. Miscellaneous. Capitalized terms not defined herein shall have the meanings assigned to them in the Severance Agreement. No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of each of the Company and SHI, provided that after the Effective Time, a modification or waiver of this Agreement will not require the agreement of the Company. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive, the Company or SHI to insist upon strict compliance with any provision of this Agreement or to assert any right the Executive, the Company or SHI may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right under this Agreement. The rights of, and benefits payable to, the Executive (or the Executive’s estate or beneficiaries) pursuant to this Agreement are in addition to any rights of, or benefits payable to, the Executive (or the Executive’s estate or beneficiaries) under any other employee benefit plan or compensation program of the Company or SHI.

13. Application of Section 409A. Notwithstanding the foregoing, if SHI or the Executive reasonably and in good faith determines that payment of any amount pursuant to this Agreement at the time provided for such payment would cause any amount so payable to be subject to Section 409A(a)(1) of the Code, then such amount shall instead be paid at the earliest time at which it may be paid without causing this Agreement to be subject to Section 409A(a)(1) and all of the provisions of this Agreement shall be interpreted in a manner consistent with this Section 13. SHI shall have the right to make such amendments, if any, to this Agreement as shall be necessary to avoid the application of Section 409A(a)(1) of the Code to the payments of amounts pursuant to this Agreement, and shall give prompt notice of any such amendment to the Executive. If SHI defers payments to the Executive pursuant to this Section 13, then SHI shall

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provide Executive with prompt written notice thereof, including reasonable explanation and the estimated date on which it has determined it is permitted to make the payments deferred under this Section 13. In any event, the payments will not take longer than 190 days from the Date of Termination, provided however that the medical insurance coverage and executive outplacement services to be provided under Schedule I shall extend beyond this period pursuant to the terms of Schedule I and provided further that to the extent it is determined that Section 409A would apply to such benefits if provided immediately after the Date of Termination, such benefit shall commence as soon as possible without being subject to Section 409A.

14. Amendment. This Agreement cannot be amended except pursuant to a writing signed: (a) before the Effective Time, by the Executive, SHI, the Company and, unless the Agreement has terminated pursuant to Section 5, Regis; provided that Regis shall not unreasonably withhold its written consent to any such amendment; and (b) on or after the Effective Time, by the Executive, SHI and Regis; provided that any amendment that adversely affects the Company in any manner shall be subject to the written consent of the Company.

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IN WITNESS WHEREOF, the Company and SHI have each caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the dates set forth below.

ALBERTO-CULVER COMPANY
By:	/s/ Gary P. Schmidt
Name:	Gary P. Schmidt
Its:	Sr. V.P. and General Counsel
Date: 1/10/2006
SALLY HOLDINGS, INC.
By:	/s/ Gary Winterhalter
Name:
Its:
Date: 1/9/2006
EXECUTIVE
/s/ Gary Winterhalter
Date: 1/9/2006

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SCHEDULE I

TO

TERMINATION AGREEMENT

Lump Sum Payment

Provided the Executive executes a reasonable and customary release prescribed by SHI within 21 days, or such longer period of time allowed by SHI, after the date on which the Executive’s employment terminates pursuant to Section 2(a) of the Agreement (the “Termination Date”) (which release shall extend to all claims against the Company, SHI, Regis and their customary service providers, affiliates and agents), then as soon as administratively practicable, but in no event later than 30 days, after such release becomes effective and irrevocable, SHI shall pay to the Executive a lump sum payment equal to 2 times the Executive’s current base salary from SHI or its affiliated companies, plus 2 times the average of the Executive’s actual or annualized (for any fiscal year consisting of less than 12 full months or with respect to which the Executive has been employed by the Company and its affiliated companies or SHI and its affiliated companies for less than 12 full months) annual bonus, paid or payable, including by reason of any deferral, to the Executive by the Company and its affiliated companies or SHI and its affiliated companies in respect of the five fiscal years of the Company or SHI (or such portion thereof during which the Executive performed services for the Company and its affiliated companies or SHI and its affiliated companies if the Executive shall have been employed by the Company and its affiliated companies or SHI and its affiliated companies for less than such five fiscal year period) immediately preceding the fiscal year in which the Termination Date occurs.

Benefits

Medical Insurance Continuation. For a period of 18 months commencing on the Termination Date, SHI shall allow the Executive and his eligible dependents to participate in the group medical coverage made available by SHI or one of its affiliates to active employees of SHI during such 18-month period (such coverage, the “SHI Coverage”) and SHI and the Executive shall share the costs of the continuation of such medical coverage in the same proportion as such costs were shared immediately prior to the Termination Date, provided, however, that SHI’s obligation to continue to provide this benefit shall terminate at such time that the Executive commences employment with another employer and becomes eligible to receive medical insurance coverage under an employer-provided plan that is generally comparable to the SHI Coverage. The coverage provided hereunder shall be applied toward the satisfaction of, and shall not supplement, the Executive’s right to continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or any similar state law.

Executive Outplacement. SHI will pay for and provide to the Executive outplacement services with an outplacement firm reasonably selected by the Executive, provided that SHI shall not be responsible to pay for such services to the extent such services (i) exceed $12,000 or (ii) are provided more than one year following the Termination Date.

EXHIBIT A

TO

TERMINATION AGREEMENT

SEVERANCE AGREEMENT

THIS AGREEMENT is entered into as of                     , 2006 (the “Effective Date”) by and between Regis Corporation, a Minnesota corporation, and Gary Winterhalter (the “Executive”).

WHEREAS, on the Effective Date, a wholly owned subsidiary of the Company (as defined in Section 1) was merged with Sally Holdings, Inc. (“SHI”), a Delaware corporation and wholly-owned subsidiary of Alberto-Culver Company, a Delaware corporation (“ACC”), pursuant to an Agreement and Plan of Merger by and among the Company, ACC, SHI and a subsidiary of the Company dated as of                                 , 2006 (such transaction, the “Transaction”); and

WHEREAS, immediately prior to the Effective Time, the Executive served as a key employee of SHI 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, as an executive of a subsidiary of ACC, the Executive was party to a Severance Agreement with ACC substantially similar to this Agreement and the entry into this Agreement was sought by ACC in connection with the Transaction; and

WHEREAS, the Board (as defined in Section 1) has determined that it is in the best interests of the Company and its shareholders 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.

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:

(1) The occurrence of any one or more of the following events:

(A) The acquisition by any individual, entity or group, including any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act but specifically excluding Curtis Squire, Inc. or the present shareholders of Curtis Squire, Inc. (a “Person”), of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act of 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”); provided, however, that a Change in Control shall not result from an acquisition of Outstanding Company Voting Securities:

(i) directly from the Company, except as otherwise provided in Section 1(c)(2)(A);

(ii) by the Company, except as otherwise provided in Section 1(c)(2)(B);

(iii) by an employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or

(iv) 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 1(h)) to constitute at least a majority of the Board.

(C) Consummation of a reorganization, merger or consolidation unless, in any such case, immediately after such reorganization, merger or consolidation:

(i) more than 50% 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) 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

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unit of the Company or (y) to a corporation with respect to which, immediately after such sale or other disposition:

(i) more than 50% 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 shareholders of the Company of a plan of complete liquidation or dissolution of the Company.

(2) Notwithstanding the provisions of Section 1(c)(1)(A):

(A) no acquisition of Outstanding 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 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 Outstanding Company Voting Securities by the Company, become the beneficial owner of 20% or more of the combined voting power of the Outstanding Company Voting Securities, and such Person shall, after such acquisition of Outstanding 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.

(3) For purposes of clarity, the Transaction, however effected, shall not (whether alone or in combination with any other event) constitute or be deemed to constitute a Change in Control for purposes of this Agreement.

(d) “Company” means Regis Corporation, a Minnesota 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.

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(f) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(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 within a 20 mile radius of the facility where the Executive is located at the time of the Change in Control; or

(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.

For purposes of this Agreement, an action which is remedied by the Company promptly after receipt of notice thereof given by the Executive shall not constitute Good Reason.

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(h) “Incumbent Board” means those individuals who, as of                 ,         , 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 shareholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board 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 or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board shall be deemed to have been a member of the Incumbent Board.

(i) “Nonqualifying Termination” means a termination of the Executive’s employment (1) by the Company for Cause, (2) by the Executive for any reason other than a Good Reason, (3) as a result of the Executive’s death or (4) by the Company due to the Executive’s absence from his duties with the Company on a full-time basis for at least 180 consecutive days as a result of the Executive’s incapacity due to physical or mental illness.

(j) “Termination Period” means the period of time beginning with a Change in Control and ending on the earlier to occur of (1) two years following such Change in Control or (2) the Executive’s death.

2. Obligations of the Executive. The Executive agrees that in the event of a Change in Control, he shall not voluntarily leave the employ of the Company without Good Reason until 90 days following such Change in Control. The Executive further agrees that in the event that any person or group attempts a Change in Control, he shall not voluntarily leave the employ of the Company during such attempted Change in Control unless an event occurs which would have constituted Good Reason had it occurred following a Change in Control (for purposes of determining whether such an event would have constituted Good Reason had it occurred following a Change in Control, the definition of Good Reason shall be interpreted as if a Change in Control had occurred when such attempted Change in Control became known to the Board). The Executive acknowledges that if he leaves the employ of the Company for any reason prior to a Change in Control, he shall not be entitled to any payment or benefit pursuant to this Agreement.

3. Payments Upon Termination of Employment.

(a) If during the Termination Period the employment of the Executive shall terminate, other than by reason of a Nonqualifying Termination, then the Company shall pay to the Executive (or the Executive’s beneficiary or estate) within 30 days following the Date of Termination, as compensation for services rendered to the Company:

(1) a cash amount equal to the sum of (i) the Executive’s base salary from the Company and its affiliated companies through the Date of Termination, to the extent not theretofore paid, (ii) an amount equal to the Executive’s annual bonus in an amount determined in accordance with the terms of the Company’s annual incentive plan, multiplied by a fraction,

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the numerator of which is the number of days in the Company’s fiscal year prior to the Date of Termination and the denominator of which is 365 (which amount, notwithstanding the foregoing, shall be paid when and as bonuses under such plan are ordinarily paid), and (iii) any compensation previously deferred for the benefit of the Executive (together with any interest and earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid; plus

(2) a lump-sum cash amount which, when added to any other payments that must be taken into account for purposes of any computation relating to the Executive under Section 280G(b)(2)(A)(ii) of the Internal Revenue Code of 1986, as amended (the “Code”), equals, in the aggregate, 2.99 times the Executive’s “base amount,” as such term is defined in Section 280G(b)(3) of the Code; provided, that any amount paid pursuant to this Section 3(a)(2) shall be paid in lieu of any other amount of severance relating to salary or bonus continuation to be received by the Executive upon termination of employment of the Executive under any severance plan, policy or arrangement of the Company.

(b) In addition to the payments to be made pursuant to Section 3(a) hereof, any stock options granted to the Executive under the Company’s 2004 Long Term Incentive Plan shall be treated in accordance with the terms of such plan.

(c) For a period of 36 months commencing on the Date of Termination, the Company shall continue to keep in full force and effect all policies of medical, accident, disability and life insurance with respect to the Executive and his dependents with the same level of coverage, upon the same terms and otherwise to the same extent as such policies shall have been in effect immediately prior to the Date of Termination or as provided generally with respect to other peer executives of the Company and its affiliated companies, and the Company and the Executive shall share the costs of the continuation of such insurance coverage in the same proportion as such costs were shared immediately prior to the Date of Termination.

(d) If during the Termination Period the employment of the Executive shall terminate by reason of a Nonqualifying Termination, then the Company shall pay to the Executive within 30 days following the Date of Termination, a cash amount equal to the sum of (1) the Executive’s full annual base salary from the Company through the Date of Termination, to the extent not theretofore paid and (2) any compensation previously deferred by the Executive (together with any interest and earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid.

4. Limitations on Payments by the Company. Solely for the purposes of the computation of benefits under this Agreement and notwithstanding any other provisions hereof, payments to the Executive under this Agreement shall be reduced (but not below zero) so that the present value, as determined in accordance with Section 280G(d)(4) of the Code, of such payments plus any other payments that must be taken into account for purposes of any computation relating to the Executive under Section 280G(b)(2)(A)(ii) of the Code, shall not, in the aggregate, exceed 2.99 times the Executive’s “base amount,” as such term is defined in Section 280G(b)(3) of the Code. Notwithstanding any other provision hereof, no reduction in payments under the limitation contained in the immediately preceding sentence shall be applied to payments hereunder which do not constitute “excess parachute payments” within the meaning

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of the Code. Any payments in excess of the limitation of this Section 4 or otherwise determined to be “excess parachute payments” made to the Executive hereunder shall be deemed to be overpayments which shall constitute an amount owing from the Executive to the Company with interest from the date of receipt by the Executive to the date of repayment (or offset) at the applicable federal rate under Section 1274(d) of the Code, compounded semi-annually, which shall be payable to the Company upon demand; provided, however, that no repayment shall be required under this sentence if in the written opinion of tax counsel satisfactory to the Executive and delivered to the Executive and the Company such repayment does not allow such overpayment to be excluded for federal income and excise tax purposes from the Executive’s income for the year of receipt or afford the Executive a compensating federal income tax deduction for the year of repayment.

5. Withholding Taxes. The Company may withhold from all payments due to the Executive (or his beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.

6. Reimbursement of Expenses. If any contest or dispute shall arise under this Agreement involving termination of the Executive’s employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse the Executive, on a current basis, for all legal fees and expenses, if any, incurred by the Executive in connection with such contest or dispute, together with interest in an amount equal to the prime rate from time to time in effect, as published under “Money Rates” in The Wall Street Journal, but in no event higher than the maximum legal rate permissible under applicable law, such interest to accrue from the date the Company receives the Executive’s statement for such fees and expenses through the date of payment thereof; provided, however, that in the event the resolution of any such contest or dispute includes a finding denying, in total, the Executive’s claims in such contest or dispute, the Executive shall be required to reimburse the Company, over a period of 12 months from the date of such resolution, for all sums advanced to the Executive pursuant to this Section 6.

7. Operative Event. Notwithstanding any provision herein to the contrary, no amounts shall be payable hereunder unless and until there is a Change in Control at a time when the Executive is employed by the Company.

8. Termination of Agreement.

(a) This Agreement shall be effective on the Effective Date and shall continue until terminated by the Company as provided in Section 8(b); provided, however, that this Agreement shall terminate in any event upon the first to occur of (i) termination of the Executive’s employment with the Company prior to a Change in Control or (ii) the Executive’s death.

(b) The Company shall have the right prior to a Change in Control, in its sole discretion, pursuant to action by the Board, to approve the termination of this Agreement, which termination shall not become effective until the date fixed by the Board for such termination, which date shall be at least 120 days after notice thereof is given by the Company to the Executive in accordance with Section 11; provided, however, that no such action shall be taken by the Board during any period of time when the Board has knowledge that any person has taken

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steps reasonably calculated to effect a Change in Control until, in the opinion of the Board, such person has abandoned or terminated its efforts to effect a Change in Control; and provided further, that in no event shall this Agreement be terminated in the event of a Change in Control.

9. Scope of Agreement. Nothing in this Agreement shall be deemed to entitle the Executive to continued employment with the Company or its subsidiaries, and if the Executive’s employment with the Company shall terminate prior to a Change in Control, then the Executive shall have no further rights under this Agreement; provided, however, that any termination of the Executive’s employment following a Change in Control shall be subject to all of the provisions of this Agreement.

10. Successors; Binding Agreement.

(a) This Agreement shall not be terminated by any merger or consolidation of the Company whereby the Company is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of the Company. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement shall be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred.

(b) The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in Section 10(a), it will cause any successor or transferee unconditionally to assume, by written instrument delivered to the Executive (or his beneficiary or estate), all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption prior to the effectiveness of any such merger, consolidation or transfer of assets shall be a breach of this Agreement and shall entitle the Executive to compensation and other benefits from the Company in the same amount and on the same terms as the Executive would be entitled hereunder if the Executive’s employment were terminated following a Change in Control other than by reason of a Nonqualifying Termination. For purposes of implementing the foregoing payment of compensation and benefits to the Executive, the date on which any such merger, consolidation or transfer becomes effective shall be deemed the Date of Termination.

(c) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die after a termination of employment during the Termination Period (other than a Nonqualifying Termination) while any amounts would be payable to the Executive hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by the Executive to receive such amounts or, if no person is so appointed, to the Executive’s estate.

11. Notice.

(a) For purposes of this Agreement, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or five days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed (1) if to the Executive, to his most recent address as it

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appears in the records of the Company, and if to the Company, to Regis Corporation, [7201 Metro Boulevard, Edina, Minnesota], attention of the [President], with a copy to the [General Counsel] or (2) to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

(b) A written notice of the Executive’s Date of Termination by the Company or the Executive, as the case may be, to the other, shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) specify the termination date (which date shall not be less than 15 days after the giving of such notice). The failure by the Executive or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company hereunder or preclude the Executive or the Company from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

12. Full Settlement; Resolution of Dispute. The Company’s obligation to make any payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and, such amounts shall not be reduced whether or not the Executive obtains other employment.

13. Employment with Subsidiaries. Employment with the Company for purposes of this Agreement shall include employment with any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities of such corporation or other entity entitled to vote generally in the election of directors.

14. Governing Law; Validity. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Minnesota without regard to the principle of conflicts of laws. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

15. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.

16. Miscellaneous. No provision of this Agreement may be modified or waived unless such modification or waiver is agreed to in writing and signed by the Executive and by a duly authorized officer of the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar

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provisions or conditions at the same or at any prior or subsequent time. Failure by the Executive or the Company to insist upon strict compliance with any provision of this Agreement or to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. The rights of, and benefits payable to, the Executive, his estate or his beneficiaries pursuant to this Agreement are in addition to any rights of, or benefits payable to, the Executive, his estate or his beneficiaries under any other employee benefit plan or compensation program of the Company.

17. Application of Section 409A. Notwithstanding the foregoing, if the Company or the Executive reasonably and in good faith determines that payment of any amount pursuant to this Agreement at the time provided for such payment would cause any amount so payable to be subject to Section 409A(a)(1) of the Code, then such amount shall instead be paid at the earliest time at which it may be paid without causing this Agreement to be subject to Section 409A(a)(1) and all of the provisions of this Agreement shall be interpreted in a manner consistent with this Section 17. The Company shall have the right to make such amendments, if any, to this Agreement as shall be necessary to avoid the application of Section 409A(a)(1) of the Code to the payments of amounts pursuant to this Agreement, and shall give prompt notice of any such amendment to the Executive. If the Company defers payments to the Executive pursuant to this Section 17, then the Company shall provide the Executive with prompt written notice thereof, including reasonable explanation and the estimated date on which it has determined it is permitted to make the payments deferred under this Section 17. In any event, the payments will not take longer than 190 days from the date of employment termination, provided however that the continuation of benefits pursuant to Section 3(c) shall extend beyond this period pursuant to the terms of Section 3(c) and provided further that to the extent it is determined that Section 409A would apply to such benefits if provided immediately after the date of employment termination, such benefits shall commence as soon as possible without being subject to Section 409A.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a duly authorized officer of the Company and the Executive has executed this Agreement as of the Effective Date.

REGIS CORPORATION
By:
	President and Chief Executive Officer
EXECUTIVE:
By:
	Executive

Subscribed and Sworn to before me

this          day of                     , 2006.

Notary Public

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EX-10.10

Exhibit 10.10

ALBERTO-CULVER COMPANY

2525 Armitage Avenue

Melrose Park, Illinois 60160

January 10, 2006

To: Stockholders (as defined below)

c/o Carol L. Bernick

909 Ashland Avenue

River Forest, IL 60305

Re: Amendments to or Waivers of Merger Agreement

Ladies and Gentlemen:

As you are aware, Alberto-Culver Company, a Delaware corporation (“Alberto-Culver”), Sally Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of Alberto-Culver, Regis Corporation, a Minnesota corporation, Roger Merger Inc., a Delaware corporation, and Roger Merger Subco LLC, a Delaware limited liability company, desire to enter into an Agreement and Plan of Merger (such agreement, as executed and as amended in accordance with its terms, the “Merger Agreement”). Capitalized terms that are used herein without definition shall have the meanings set forth in the Merger Agreement.

In connection with the Merger Agreement, certain stockholders of Alberto-Culver are being asked to enter into a support agreement pursuant to which such stockholders would agree to, among other things, vote their Alberto-Culver shares in favor of the transactions contemplated by the Merger Agreement, upon the terms and subject to the conditions contained therein (such agreement, as executed and as amended in accordance with its terms, the “Support Agreement” and the Persons that are “Stockholders” under the Support Agreement from time to time, collectively, the “Stockholders”).

In order to induce the Stockholders to enter into the Support Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Alberto-Culver hereby agrees that, without the prior written consent of Carol L. Bernick (which consent will not be unreasonably withheld, delayed or conditioned), acting on behalf of the Stockholders, Alberto-Culver will not amend, alter, modify or waive Section 7.2, 7.17, 7.21 or 8.3(d) of the Merger Agreement or any condition of the Merger Agreement as it pertains to any such section.

Very truly yours,
ALBERTO-CULVER COMPANY, a Delaware corporation
By:	/s/ Gary P. Schmidt
Name:	Gary P. Schmidt
Title:	Senior Vice President and General Counsel