Sally Beauty Supply 2006 Annual Report Download - page 91

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Table of Contents
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Board of Directors of the Company
Composition. Our Board of Directors consists of eleven individuals, in three staggered classes, as nearly equal in number as possible,
with six persons named by Alberto-Culver, including Mr. Winterhalter, at least four of whom qualify as independent of the Company
under the rules of the New York Stock Exchange, and five persons named by CDRS, at least two of whom qualify as independent of
the Company under the rules of the NYSE.
Pursuant to the stockholders agreement among us, CDRS, Parallel Fund and the Lavin family stockholders, following the 2007 annual
meeting of our stockholders until the earlier of the tenth anniversary of the closing date and the termination of the stockholders
agreement, so long as the ownership percentage of CDR investors’ and their affiliates’ and their permitted transferees’ shares of our
common stock in the aggregate equals or exceeds the percentages set forth in the table below, CDRS will have the right to designate
for nomination to our Board of Directors, a number of individuals, to whom we refer as CDRS designees, set forth opposite the
applicable percentage:
Ownership Number of
Percentage Investor Designees
45% or greater five individuals
less than 45% but equal to
or greater than 35% four individuals
less than 35% but equal to
or greater than 25% three individuals
less than 25% but equal to
or greater than 15% two individuals
less than 15% but equal to or greater than 5% one individual
Vacancies. Under the stockholders agreement, any vacancy occurring in our Board of Directors and any newly-created directorships
will be filled by a vote of a majority of the remaining directors, provided that until the earlier of the tenth anniversary of the closing
date and the termination of the stockholders agreement, the CDRS’ designees who are members of the Nominating and Corporate
Governance Committee of our Board of Directors (or if none remain, the remaining CDRS’ designees) have the right to designate for
nomination or appointment to the Board of Directors a replacement in the event of the death, resignation, retirement, disqualification
or removal from office (other than removal for cause) of a CDRS’ designee. Prior to the 2007 annual meeting of stockholders, the
non-CDRS designees have the right to designate appointment to our Board of Directors a replacement in the event of the death,
resignation, retirement, disqualification or removal from office (other than removal for cause) of a non-CDRS designee.
Chairman. Under the stockholders agreement, the Chairman of our Board of Directors is a CDRS’ designee.
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