Sally Beauty Supply 2007 Annual Report Download - page 51

employees under Alberto-Culver's deferred compensation plan. As a result, in accordance with the terms of these plans, all outstanding stock options and
restricted shares of Alberto-Culver, including those held by our employees, became fully vested upon completion of the Separation Transactions. Due to the
Separation Transactions, we recorded a charge at that time of approximately $5.3 million, which represents the amount of future compensation expense that
would have been recognized in subsequent periods as the stock options and restricted shares for our employees vested over the original vesting periods. Upon
completion of the Separation Transactions all outstanding Alberto-Culver stock options held by our employees became options to purchase shares of our
common stock.
Senior Secured Credit Facilities
The senior term facility and the ABL facility are secured by substantially all of our assets, those of Investment Holdings, those of our domestic subsidiaries and,
in the case of the ABL facility, those of our Canadian subsidiaries. The senior term facility may be prepaid at our option at any time without premium or penalty
and is subject to mandatory prepayment in an amount equal to 50% of excess cash flow (as defined in the agreement governing the senior term facility) for any
fiscal year (commencing in fiscal year 2008) unless a specified leverage ratio is met and 100% of the proceeds of specified asset sales that are not reinvested in
the business or applied to repay borrowings under the ABL facility.
The Notes are unsecured obligations of Sally Holdings and its co-issuer and are guaranteed on a senior basis (in the case of the senior notes) and on a senior
subordinated basis (in the case of the senior subordinated notes) by each material domestic subsidiary of Sally Holdings (other than the co-issuer), issuer of the
Notes. The Notes carry optional redemption features whereby Sally Holdings has the option to redeem the Notes on or before November 15, 2010 and
November 15, 2011, respectively, at par plus a premium, plus accrued and unpaid interest, and on or after November 15, 2010 and November 15, 2011,
respectively, at par plus a premium declining ratably to par, plus accrued and unpaid interest.
Details of the senior secured credit facilities as of September 30, 2007 are as follows (dollars in thousands):
Amount
Maturity dates
(fiscal year) Interest rates
ABL facility $ 11,400 2012 (i) PRIME and up to 0.50% or;
(ii) LIBOR plus (1.00% to 1.50%)
Term loan A 142,500 2013 (i) PRIME plus (1.00% to 1.50%) or;
(ii) LIBOR plus (2.00% to 2.50%)
Term loan B 910,800 2014 (i) PRIME plus (1.25% to 1.50%) or;
(ii) LIBOR plus (2.25% to 2.50%)
$ 1,064,700
Senior notes $ 430,000 2015 9.25%
Senior subordinated
notes 280,000 2017
10.50%
$ 710,000
Other Information Related to the Separation Transactions
On November 17, 2006, and after giving effect to the conversion of the Class A common stock issued to the CDR Investors into our common stock, we had
180,050,492 shares of common stock issued and outstanding, and our common stock commenced regular way trading on the NYSE under the symbol "SBH."
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Source: Sally Beauty Holding, 10-K, November 29, 2007