Sally Beauty Supply 2006 Annual Report Download - page 113

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affected. No representation has been made to you as to the tax implications of any payment under this letter agreement. You
acknowledge having the opportunity to review this matter with your legal counsel.
Notwithstanding the foregoing, if Sally, or in the event that Sally no longer exists, the successor of Sally (the “Successor Company”),
or you, reasonably and in good faith determine that payment of any amount pursuant to this letter agreement at the time provided for
herein would cause any amount payable under this letter agreement to be subject to Section 409A(a)(1) of the Internal Revenue Code,
as amended (the “Code”) then such amount shall instead be paid at the earliest time at which it may be paid without causing this letter
agreement and the amounts payable hereunder to be subject to Section 409A(a)(1), and all of the provisions of this letter agreement
shall be interpreted in a manner consistent with this paragraph. Sally, or in the event that Sally no longer exists, the Successor
Company, shall have the right to make such amendments, if any, to this letter 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 letter agreement, and shall give prompt notice of any
such amendment to you. If Sally, or in the event that Sally no longer exists, the Successor Company defers payments to you pursuant
to this paragraph and Section 409A of the Code, then such company shall provide you with prompt written notice thereof, including a
reasonable explanation and the estimated date on which it has determined it is permitted to make the payments deferred under this
paragraph. In any event, such amounts will not be paid later than 190 days from the date of termination.
Please acknowledge your agreement with the terms of this letter agreement by signing below where shown. I’ m very happy to have
you on board, Mike, and hope this agreement addresses your concern.
Sincerely,
/s/ Gary Winterhalter
Gary Winterhalter
President
Sally Beauty Company, Inc.
Acknowledged and agreed:
/s/ Michael G. Spinozzi May 30, 2006
Michael G. Spinozzi Date
2