SBH Sally Beauty Holdings Inc

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: July 31, 2015

(Date of earliest event reported)

SALLY BEAUTY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

3001 Colorado Boulevard
Denton, Texas 76210
(Address of principal executive offices)

(940) 898-7500
(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:

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

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

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

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

Item 2.02.      Results of Operations and Financial Condition.

On August 6, 2015, Sally Beauty Holdings, Inc. (the “Company”) issued the news release attached hereto as Exhibit 99.1 reporting the financial results of the Company for the quarter ended June 30, 2015 (the “Earnings Release”).

Item 5.02.      Departure of Directors or Certain Officers; Election of Directors; Appointments of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 31, 2015, the Board of Directors (the “Board”) of the Company accepted the resignation of Mr. John R. Golliher from his position as President of Beauty Systems Group, LLC (“Beauty Systems Group”) and appointed Mr. Mark Spinks as President of Beauty Systems Group, each to be effective on July 31, 2015 (the “Transition Date”).  Also pursuant to such executive transition, Mr. Golliher has agreed to continue to serve the Company i) in his role as Director until October 1, 2015 or such earlier date as the Company has elected an independent Board member to fill his position; ii) as Chairman of Beauty Systems Group (and a full-time employee) until September 30, 2015 at his previously-disclosed compensation levels; and iii) has entered into a consulting agreement (the “Consulting Agreement”) with the Company pursuant to which he will continue to provide significant services and advice to the Company in exchange for a monthly consulting fee of $20,833.33. The Consulting Agreement provides for a term commencing on October 1, 2015 and ending on September 30, 2017, unless earlier terminated by either party in accordance with the provisions of the Consulting Agreement. The Consulting Agreement contains confidentiality provisions and covenants regarding non-competition and the non-solicitation of employees and certain customers that apply during the consulting term and for two years thereafter.  The foregoing description of the Consulting Agreement is qualified in its entirety by reference to the Consulting Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.

In connection with Mr. Spinks’ transition to President of Beauty Systems Group, the Compensation Committee approved an increase in Mr. Spinks’ annual salary from $300,000 to $375,000, effective July 31, 2015.  In addition, Mr. Spinks’ target annual bonus under the Company’s Management Incentive Plan will be increased from 55% of his base salary to 60% of his base salary, effective July 31, 2015.  In addition, in connection with his transition to President-BSG, on July 31, 2015, Mr. Spinks will receive an award of restricted stock having a grant date target fair value of $100,000, which award will vest ratably over three years beginning on the first anniversary of the date of grant, subject to Mr. Spinks’ continued employment with the Company on each applicable vesting date and subject to such other terms and conditions of the Company’s Amended and Restated 2010 Omnibus Incentive Plan and the individual award agreements.

Effective July 31, 2015, the Company also entered into a Severance Agreement with Mr. Spinks in connection with his promotion on that day.  The terms of his Severance Agreement are substantially the same as the Company’s Severance Agreements with Messrs. Haltom, Flaherty and Walker, as previously disclosed on the Company’s Current Report on Form 8-K dated as of October 30, 2012, which description is incorporated by reference herein.

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Mr. Spinks is 54 years old and has held a number of positions of increasing responsibility with the Company. Mr. Spinks was most recently the Chief Operating Officer of Beauty Systems Group, a position he has served in since September 2014. Prior to that, Mr. Spinks was the Vice President of Operations/GM for the Company’s Armstrong McCall franchise business, a position he held for five and a half years, and prior to that was the Director of Business Development for the Company for almost four years. With respect to the disclosure required by Item 401(d) of Regulation S-K, there are no family relationships between Mr. Spinks and any director or executive officer of the Company. With respect to Item 404(a) of Regulation S-K, there are no relationships or related transactions between Mr. Spinks and the Company that would be required to be reported.

In connection with his resignation from his position as President of Beauty Systems Group, Mr. Golliher also tendered his resignation as a director of the Company to the Board on July 31, 2015, with such resignation to be effective as of October 1, 2015 or such earlier date as his successor is duly elected.  The Board accepted Mr. Golliher’s resignation on July 31, 2015.  Mr. Golliher’s resignation as a director of the Company did not result from any disagreement with the Company.

Item 5.03.      Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On July 31, 2015, the Board approved certain amendments to the Company’s Bylaws (the “Bylaw Amendments”). The Bylaw Amendments included, among other technical amendments, the following revisions and clarifications, principally to revise certain sections of the Bylaws to adhere more closely to the language found in the Delaware General Corporation Laws (“DGCL”) and to update the advance notice provisions in the Bylaws:

(i)                       revisions to Sections 1.01 and 1.02 to clarify that, as allowed by the DGCL, the annual meeting and any special meeting of stockholders may be held solely by means of remote communication;

(ii)                    revisions to Section 1.05 to provide that the Board may set separate record dates for the determination of stockholders entitled to receive notice of stockholder meetings and for the determination of stockholders entitled to vote at annual meetings. Section 1.06 had previously provided that the record date for the determination of both would be the same date;

(iii)                 revisions to Section 1.06 to delete all references to special meetings of the stockholders, now covered by Section 1.07, and to clarify the advance notice provisions and content requirements for stockholder proposals, including the nomination of members of the Board;

(iv)                the introduction of a new Section 1.07 to cover advance notice provisions for special meetings of the stockholders, including the same advance notice provisions and content requirements for stockholder proposals as in section 1.06;

(v)                   revisions to Section 1.11 to clarify that the method of voting for directors shall be election by a plurality of the votes cast, while approval of all other matters shall

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be by a majority of the votes cast, subject to applicable laws, regulations of the governing documents;

(vi)                the introduction of a new Section 1.12 clarifying that one or more inspectors of elections shall be appointed at the annual meeting of stockholders per the requirements of the DGCL;

(vii)             revisions to Section 1.13 to clarify when the stockholder list must be made available, per the requirements of the DGCL;

(viii)          revisions to Section 2.07 to specify that meetings of the Board may be called by a majority of the authorized directors, rather than any two directors;

(ix)                revisions to Section 2.09 to provide that any meeting of the Board may continue notwithstanding the withdrawal of directors below the threshold for quorum, provided that any actions to be taken are approved by directors constituting a majority of the quorum;

(x)                   revisions to Section 5.01 to align the language regarding maintenance of and access to the Company’s books and records with the relevant provisions of the DGCL; and

(xi)                revisions to Section 7.01 to provide for the sending of notices via electronic transmission, and specifying the form and manner of acceptance for such notices.

The foregoing descriptions of the Bylaw Amendments are qualified in their entirety by reference to the amended and restated Bylaws, which are filed as Exhibit 3.1 to this Current Report on Form 8-K.

Item 7.01.                                        Regulation FD Disclosure.

The Earnings Release also provides an update on the Company’s strategy and business outlook.

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Item 9.01.                                        Financial Statements and Exhibits.

(d)                                 Exhibits.  The following Exhibits are filed herewith as part of this Current Report on Form 8-K.

All of the information furnished in Items 2.02, 7.01 and Exhibit 99.1 attached to this Current Report on Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, unless expressly incorporated by reference therein.

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SIGNATURES

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 hereunto duly authorized.

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EXHIBIT INDEX

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Exhibit 3.1

SIXTH AMENDED AND

RESTATED

BY-LAWS

OF

SALLY BEAUTY HOLDINGS, INC.

JULY 30, 2015

ii

SIXTH AMENDED AND RESTATED
BY-LAWS

OF

SALLY BEAUTY HOLDINGS, INC.

JULY 30, 2015

ARTICLE I

STOCKHOLDERS

Section 1.01. Annual Meeting. An annual meeting of the stockholders of the Corporation, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, or solely by means of remote communication pursuant to Section 211(a)(2) of the Delaware General Corporation Law, as amended (the “DGCL”), on such date, and at such time as the Board of Directors shall each year fix.

Section 1.02. Special Meeting. Special meetings of the stockholders of the Corporation, but only for the purpose or purposes prescribed in the notice of the meeting, may be called only by the Board of Directors pursuant to a resolution adopted by a majority of directors then in office or the Chairman of the Board, Chief Executive Officer or President and shall be held at such place, or solely by means of remote communication pursuant to Section 211(a)(2) of the DGCL, on such date, and at such time as they or he or she shall fix.

Section 1.03. Notice of Meetings, Adjournment. Written notice of the place, date, and time of all meetings of the stockholders shall be given in accordance with this Section 1.03 and Section 7.01, not less than 10 nor more than 60 days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise required by law.

When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, if any, date and time thereof and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than 30 days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, if any, date, and time of the adjourned meeting and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting shall be given in accordance with this Section 1.03 and Section 7.01. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.

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An affidavit of the mailing or other means of giving any notice of any stockholders’ meeting, executed by the Secretary, Assistant Secretary or any transfer agent of the Corporation giving the notice, shall be prima facie evidence of the giving of such notice.

Section 1.04. Quorum. At all meetings of the stockholders of the Corporation, the holders of stock issued and outstanding and entitled to cast a majority of the votes entitled to be cast thereat, present in person or by proxy, shall constitute a quorum for the transaction of any business, except to the extent that the presence of a larger percentage may be required by these By-Laws, by law or by the Third Restated Certificate of Incorporation, as subsequently amended or restated. If such majority (or such larger percentage) shall not be present or represented at any meeting of the stockholders, the Chairman of the meeting or stockholders entitled to cast a majority of the votes entitled to be cast thereat, present in person or by proxy, shall have power to adjourn the meeting to another place, date or time, without notice other than announcement at the meeting.

Section 1.05. Stockholders Entitled to Vote; Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of any meeting of stockholders, nor more than 60 days prior to the time for such other action as hereinbefore described.  If the Board of Directors fixes a record date for determining stockholder entitled to notice of any meeting of stockholders or any adjournment thereof, such date shall also be the record date for determining the stockholders entitled to vote at such meeting, unless the Board of Directors determines at the time it fixes such record date that a later date on or before the date of the meeting shall be the date for determining stockholders entitled to vote at such meeting.  If no record date is fixed by the Board of Directors, (a) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held and (b) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting, and in such case, shall also fix the same or an earlier date as the record date for stockholders entitled to notice of such adjourned meeting.

Section 1.06.  Advance Notice Procedures for Annual Meetings.

(a) The matters to be considered and brought before any annual meeting of

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stockholders of the Corporation shall be limited to only such matters, including the nomination and election of directors, as shall be brought properly before such meeting in compliance with the procedures set forth in this Section 1.06.

(b) Nominations of persons for election to the Board of Directors and the proposal of business to be transacted by the stockholders may only be made at an annual meeting of stockholders:  (i) pursuant to the Corporation’s notice of such meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of record of the Corporation at the time of the giving of the notice required by Section 1.06(c) and on the record date (or dates) for determination of the stockholders entitled to notice of and to vote at such meeting, who is entitled to vote at the meeting and who has complied with the notice procedures set forth in the Section 1.06.  For the avoidance of doubt, the foregoing clause (iii) shall be the exclusive means for a stockholder to make nominations or propose business (other than business included in the Corporation’s proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (such Act, and the rules and regulations promulgated thereunder, the “Exchange Act”) at an annual meeting of stockholders.

(c) For any nomination for election as a director or any other business to be properly brought before an annual meeting by a stockholder of record pursuant to Section 1.06(b)(iii), (i) such nomination or business must be a proper subject for action by stockholders, (ii) the stockholder of record must have given timely notice thereof in writing to the Secretary of the Corporation in accordance with this Section 1.06, (iii) the stockholder of record must provide to the Secretary of the Corporation any updates or supplements to such notice at the times and in the forms specified in this Section 1.06 and (iv) the stockholder of record and the beneficial owner or owners, if any, on whose behalf any such proposal or nomination is made, must have acted in accordance with the representations in the Solicitation Statement (as defined in Section 1.06(d)(ii)(D)).  To be timely, the stockholder’s notice must be received by the Secretary at the principal executive offices of the Corporation not more than 120 days and not less than 90 days prior to the one-year anniversary of the immediately preceding annual meeting, provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or is more than 60 days after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the 90th day prior to such annual meeting or, if later, the 10th day following the day on which public disclosure of the date of such annual meeting was first made.(1)  Notwithstanding anything in the preceding sentence to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there has been no Public Announcement naming all of the nominees for director or indicating the increase in the size of the Board of Directors made by the Corporation at least 10 days before the last day a stockholder of record may deliver a notice of nomination in accordance with the preceding sentence, a notice by a stockholder of record required by this Section 1.06 shall also be considered timely, but only with respect to nominees for any new positions created by such increase in the number of directors, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such Public Announcement is first made by the Corporation. In no event

(1) This is a typical time period under current advance notice bylaws.

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shall an adjournment, or postponement of an annual meeting for which notice has been given, commence a new time period for the giving of a notice by a stockholder of record.

(d)  Other than proposals required to be included in the Corporation’s Proxy Statement pursuant to Rule 14a-8 under the Exchange Act, to be in proper written form, a stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting the following:

(i) a description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and the complete text of any resolutions to be presented at the meeting;

(ii)  as to (1) the stockholder of record giving the notice and (2) the beneficial owner or owners, if any, or other persons on whose behalf the nomination or proposal is made or acting in concert therewith (each, a “party”):

(A) the name and address of each such party;

(B) (1) the class, series, and number of shares of the Corporation that are owned, directly or indirectly, beneficially and of record by each such party, (2) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or providing for a settlement payment or mechanism based on the price of any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by each such party, and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (3) any proxy, contract, arrangement, understanding or relationship pursuant to which any party, either directly or acting in concert with another person or persons, has a right to vote, directly or indirectly, any shares of any security of the Corporation, (4) any short interest or other borrowing arrangement in any security of the Corporation held by each such party (for purposes of this Section 1.6(d), a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (5) any rights to dividends on the shares of the Corporation owned beneficially directly or indirectly by each such party that are separated or separable from the underlying shares of the Corporation, (6) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which any party is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, (7) any performance related fees (other than an asset-based fee) that each such party is directly or indirectly entitled to based on any increase or decrease in the value of shares of the

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Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of each such party’s immediate family sharing the same household, (8) a description of any material interest of each such party and the respective affiliates and associates of such party in such business, (9) a description of any agreement, arrangement or understanding between or among any party and any other person or persons (including their names) in connection with the proposal of such business or who may participate in the solicitation of proxies in favor of such proposal, (10) any other material relationship between each such party, on the one hand, and the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation, on the other hand, and (11) any direct or indirect material interest in any material contract or agreement of each with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation;

(C) any other information relating to each such party that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act (whether or not such party intends to deliver a proxy statement or conduct its own proxy solicitation); and

(D) a statement as to whether or not each such party will deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of voting power of all of the shares of capital stock of the Corporation required under applicable law to carry the proposal or, in the case of a nomination or nominations for election as directors, at least the percentage of voting power of all of the shares of capital stock of the Corporation reasonably believed by the stockholder of record or beneficial owner or owners, as the case may be, to be sufficient to elect the persons proposed to be nominated by the stockholder of record (such statement, a “Solicitation Statement”).

(iii)  in the case of nomination(s) for election as a director, the notice from the stockholder of record must comply with the above-requirements of Section 1.06 and shall also include:

(A) the name, age, business address and residence address of the nominee(s),

(B) the principal occupation or employment of the nominee(s),

(C)  such person’s written consent to serve as a director if elected,

(D) the class or series and number of shares of stock of the Corporation which are owned beneficially or of record by the nominee(s),

(E) a description of all arrangements or understandings among the

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stockholder of record and beneficial owner or owners, if any, and the nominee(s), pursuant to which the nomination(s) are to be made by the stockholder, including, a description of all direct and indirect compensation or other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder of record and beneficial owner or owners, if any, and their respective affiliates and associates, or other persons acting in concert therewith, on the one hand, and each proposed nominee and his or her respective affiliates and associates or other persons acting in concert therewith, on the other hand, including without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder of record making the nomination and any beneficial owner or owners, if any, or other person on whose behalf the nomination is made, or any affiliate or associate thereof or other person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant (for purposes of these By-Laws, a person shall be deemed to be acting in concert with another person if such person knowingly acts toward a common goal relating to the management, governance or control of the Corporation in parallel with such other person where (1) each person is conscious of the other person’s conduct or intent and this awareness is an element in their decision-making process and (2) at least one additional factor suggests that persons intend to act in parallel, which additional factors may include attending meetings, conducting discussions or making or soliciting invitations to act in parallel), and

(F)  such other information as the Corporation may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation or whether such nominee would be independent under applicable Securities and Exchange Commission rules and regulations and New York Stock Exchange rules and the Corporation’s publicly disclosed corporate governance guidelines.

(iv) a stockholder of record providing notice of a nomination of director or other business proposed to be brought before a meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 1.06 shall be true and correct as of the record date for determining the stockholders entitled to notice of the meeting and as of the date that is 10 business days prior to the meeting or any adjournment or postponement thereof, provided that if the record date for determining the stockholders entitled to vote at the meeting is less than 10 business days prior to the meeting or any adjournment or postponement thereof, the information shall be supplemented and updated as of such later date.  Any such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than (A) five business days after the record date for determining the stockholders entitled to notice of the meeting (in the case of the update and supplement required to be made as of the record date for determining the stockholders entitled to notice of the meeting), and (B) not later than eight business days prior to the date for the meeting, or if practicable any adjournment or postponement thereof

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(and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of 10 business days prior to the meeting or any adjournment or postponement thereof).

(e) A person shall not be eligible for election or re-election as a director at an annual meeting unless (i) the person is nominated by a stockholder of record in accordance with Section 1.06(b)(iii); or (ii) the person is nominated by or at the direction of the Board of Directors or a duly authorized committee thereof.  Only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.06.  The Chairman of the meeting shall have the power and duty to determine whether a nomination or any business to be brought before the meeting has been made in accordance with the procedures set forth in these By-Laws, and if any proposed nomination or business is not in compliance with these By-Laws, to declare that such proposed business or nomination shall not be presented for stockholder action at the meeting and shall be disregarded.

(f) For purposes of these By-Laws, “Public Announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(g) Notwithstanding the foregoing provisions of this Section 1.06, a stockholder shall also comply with all applicable requirements of the Exchange Act with respect to matters set forth in this Section 1.06. Nothing in this Section 1.06 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s Proxy Statement pursuant to Rule 14a-8 under the Exchange Act.

Section 1.07  Advance Notice Procedures for Special Meetings.

(a) Special meetings of the stockholders, other than those required by statute, may only be called by the Board of Directors pursuant to a resolution adopted by a majority of directors then in office or the Chairman of the Board, the Chief Executive Officer or the President of the Corporation at such time and for such purpose as the person calling such meeting shall see fit. Special meetings of the stockholders may not be called by any other person or persons.  The Board of Directors and, in the absence thereof, the Chairman of the Board or the Chief Executive Officer, may postpone or reschedule any previously scheduled special meeting. A special meeting of stockholders shall be held at such place within or without the State of Delaware or solely by means of remote communication pursuant to Section 211(a)(2) of the DGCL, on such date, and at such time as designated in the notice of such special meeting.

(b) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting by or at the direction of the Board of Directors or, in the absence thereof, the Chairman of the Board, the Chief Executive Officer or the President.  The notice of such special meeting shall include the purpose for which the meeting is called. If a special meeting of stockholders has been called for the purpose of

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the election of directors, nominations of persons for election to the Board of Directors may be made at such special meeting of stockholders (a) by or at the direction of the Board of Directors or (b) by any stockholder of record, at the time of giving of notice required by Section 1.07(b) and on the record date (or dates) for determination of the stockholders entitled to notice of and to vote at such meeting, who is entitled to vote at the meeting and who delivers a written notice to the Secretary setting forth the information required by Section 1.06(d)(ii) and 1.06(d)(iii) of this Article I and who provides to the Secretary of the Corporation any updates as supplements to such notice at the times and in the forms specified in Section 1.06(d)(iv). Nominations by stockholders of persons for election to the Board of Directors may be made at such a special meeting of stockholders only if such stockholder of record’s notice required by the preceding sentence shall be received by the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to the date of such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or, if the first Public Announcement of the date of such special meeting is less than 100 days prior to the date of such special meeting, the 10th day following the day on which Public Announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall an adjournment, or postponement of a special meeting for which notice has been given, commence a new time period for the giving of a stockholder of record’s notice. A person shall not be eligible for election or reelection as a director at a special meeting unless the person is nominated (i) by or at the direction of the Board of Directors or (ii) by a stockholder of record in accordance with the notice procedures set forth in this Section 1.07.

(c) Notwithstanding the foregoing provisions of this Section 1.07, a stockholder shall also comply with all applicable requirements of the Exchange Act with respect to matters set forth in this Section1.07.  Nothing in this Section 1.07 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

Section 1.08   Presiding Officers of the Meeting.  At all meetings of the stockholders, the Chairman of the Board of Directors, or, in the Chairman’s absence, in such order, the Lead Independent Director, any Vice-Chairman of the Board of Directors, the Chief Executive Officer, the President, or, in the absence of all of the foregoing officers, the most senior Vice-President, shall act as Chairman of the meeting. The Chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts and things as are necessary or desirable for the proper conduct of the meeting, including, without limitation, the establishment of procedures for the dismissal of business not a proper matter for stockholder action or not properly presented, the maintenance of order and safety, limitations on the time allotted to questions or comments on the affairs of the Corporation, restrictions on entry to such meeting after the time prescribed for the commencement thereof, the opening and closing of the voting polls and the adjournment of the meeting, whether or not a quorum is present.

Section 1.09. Proxies. Every stockholder may authorize another individual, partnership, joint venture, corporation, limited liability company, trust, or other organization or entity (a “Person”) or Persons to act for him or her by proxy in all matters

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in which a stockholder is entitled to participate, including waiving any notice of any meeting, voting or participating at a meeting, or expressing consent or dissent without a meeting by an instrument in writing or by an electronic transmission permitted by law filed in accordance with the procedures established for the meeting.  Any copy, facsimile telecommunication or other reliable reproduction of the writing or electronic transmission authorized pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.  No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable, and if and only so long as it is coupled with an interest sufficient in law to support an irrevocable power.

Section 1.10. Voting by Fiduciaries and Pledgors. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held, and Persons whose stock is pledged shall be entitled to vote such shares, unless in the transfer by the pledgor on the books of the Corporation he or she has expressly empowered the pledgee to vote such shares, in which case only the pledgee or his or her proxy may represent said stock and vote thereon.

Section 1.11. Method of Voting. The vote at any election or upon any question at any meeting of stockholders need not be by written ballot, except as required by law. At a duly called or convened meeting of stockholders at which a quorum is present, directors shall be elected by a plurality of the votes cast and all other matters shall be determined by a majority of the votes cast, unless a greater vote or percentage is required by law, the rules and regulations of the New York Stock Exchange, the Third Restated Certificate of Incorporation, as subsequently amended or restated, or these By-Laws for the action proposed.

Section 1.12.  Inspectors of Election.  Before any meeting of stockholders, the Board of Directors shall appoint an inspector or inspectors of election to act at the meeting or its adjournment and make a written report thereof. The number of inspectors shall be either one or three.  If any person appointed as inspector fails to appear or fails or refuses to act, then the chairperson of the meeting may, and upon the request of any stockholder or a stockholder’s proxy shall, appoint a person to fill that vacancy.

Such inspectors shall:

(a) determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies;

(b) receive votes or ballots;

(c) hear and determine all challenges and questions in any way arising in connection with the right to vote;

(d) count all votes;

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(e) determine the result; and

(f) do any other acts that may be proper to conduct the election or vote with fairness to all stockholders.

The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If there are three inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.

Section 1.13. Stockholders List. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class or series of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least 10 days prior to the meeting, (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation.  If the Corporation makes the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders.  If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present.  If a meeting is to be held solely by means of remote communication, then such list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of meeting.  The Corporation shall not be required to include electronic mail addresses or other electronic contact information on the list of stockholders entitled to vote, and such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

Section 1.14. Stockholder Action. No corporate action of stockholders of the Corporation may be taken without a meeting and vote of stockholders.

ARTICLE II

BOARD OF DIRECTORS

Section 2.01. Management of Business; Qualifications of Directors. The business of the Corporation shall be managed by or under the direction of a Board of Directors. Directors need not be stockholders.

Section 2.02. Number and Election. The number of directors which shall constitute the whole Board of Directors shall be 9 or such other number of directors as may be set from time to time by resolution of the Board of Directors.

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(a)                            Board of Directors. Except as provided by the Third Restated Certificate of Incorporation, , as subsequently amended or restated, the directors shall, until the election of directors at the 2016 annual meeting of stockholders be divided into three classes:  Class I, Class II, and Class III.  Commencing with the 2016 annual meeting of stockholders, the classification of the Board of Directors shall cease.

(b)                            Election of Directors.  Successors to directors whose term expires at an annual meeting shall be elected to hold office for a term expiring at the next succeeding annual meeting of stockholders.  Commencing with the 2016 annual meeting of stockholders, all directors shall be elected for a term expiring at the next succeeding annual meeting of stockholders or until their earlier death, resignation, removal or disqualification.

Section 2.03. Chairman of the Board. The directors shall elect from among the members of the Board of Directors a Chairman of the Board. The Chairman of the Board may be deemed an officer of the Corporation and shall have such duties and powers as set forth in these By-Laws or as shall otherwise be conferred upon the Chairman of the Board from time to time by the Board of Directors. The Chairman of the Board shall, if present, preside over all meetings of the stockholders of the Corporation and of the Board of Directors. The Board of Directors shall by resolution establish a procedure to provide for an acting Chairman of the Board in the event the current Chairman of the Board is unable to serve or act in that capacity.

Section 2.04. Removal of Directors. Except as provided by the Third Restated Certificate of Incorporation, as subsequently amended or restated, until the 2016 annual meeting of stockholders, any director may be removed at any time, but only for cause, upon the affirmative vote of the holders of a majority of the combined voting power of the shares of stock of the Corporation then outstanding and entitled to vote generally in the election of the Corporation’s directors. Except as provided by the Third Restated Certificate of Incorporation, as subsequently amended or restated, from and after the 2016 annual meeting of stockholders, directors may be removed at any time, with or without cause, upon the affirmative vote of the holders of a majority of the combined voting power of the then outstanding stock of the Corporation entitled to vote for the election of directors. Any vacancy in the Board of Directors caused by any removal pursuant to this Section 2.04 may be filled only in the manner provided in Section 2.05 of these By-Laws.  No decrease in the number of authorized directors shall shorten the term of any incumbent directors.

Section 2.05. Vacancies and Increases. Except as provided by the Third Restated Certificate of Incorporation, as subsequently amended or restated, any vacancies occurring in the Board of Directors and any newly-created directorships resulting from an increase in the authorized number of directors may only be filled by a majority of the remaining directors (though less than a quorum of the Board of Directors), and any director so chosen shall hold office until (i) the next election of the class for which he or she was chosen, or if no such class exists, as shall be the case beginning with the 2016 annual meeting of stockholders, until the next succeeding annual meeting of stockholders and until his or her successor is duly elected and qualified or (ii) his or her earlier death, resignation, removal or disqualification.

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Section 2.06. Powers. In addition to the powers and authority expressly conferred upon the Board of Directors by law, and except as may otherwise be provided by the Third Restated Certificate of Incorporation, as subsequently amended or restated, or by these By-Laws, the Board of Directors may exercise all the powers of the Corporation and do all such lawful acts and things as may be done by the Corporation which are not in violation of law, or required to be exercised or done by the stockholders.

Section 2.07. Meetings. Regular meetings of the Board of Directors may be held at such times as shall from time to time be determined by the Board of Directors. Special meetings shall be held only when called by the Chairman of the Board, the Chief Executive Officer, the President, the Secretary, an Assistant Secretary or a majority of the number of authorized directors.

Section 2.08. Place of Meetings. Except as otherwise provided in Section 2.09 hereof, meetings of the Board of Directors may be held at such place within or without the State of Delaware as shall be stated in the notice of meeting or waiver thereof.

Section 2.09. Quorum. At all meetings of the Board of Directors, a majority of the authorized number of directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors unless a greater number is required by law, the Third Restated Certificate of Incorporation, as subsequently amended or restated, or these By-Laws. If, at any meeting of the Board of Directors there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum is obtained.  A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action take is approved by at least a majority of the required quorum for that meeting.

Any member or members of the Board of Directors or of any Committee of the Board of Directors established in accordance with Section 3.01 may participate in a meeting of the Board of Directors, or any such Committee, as the case may be, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can speak and hear each other and such participation shall constitute presence in person at such meeting.

Section 2.10. Board of Directors’ Notices. At least twenty-four hours’ notice of each regular or special meeting of the Board of Directors, stating the time and place for the meeting, shall be given to each director, by hand delivery to the recipient thereof, by depositing such notice in the mail, postage paid, by overnight courier such as Federal Express, by facsimile transmission, electronic mail or other similar means of transmission or by personal communication either over the telephone or otherwise, except as otherwise provided in Section 7.02. Any such notice shall be addressed, where applicable, to such director at his or her last known address as the same appears on the books of the Corporation. Notice of a meeting of the Board of Directors need not state the purpose or purposes thereof and shall be deemed given (i) when received by the director in the case of hand delivery or personal communication over the telephone or otherwise, (ii) three business days after depositing such notice in the mail in the case of delivery by mail, (iii)

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one business day after depositing such notice with a courier such as Federal Express (prepaid and specifying next business day delivery) or (iv) when sent in the case of delivery by facsimile transmission, electronic mail or other similar means of transmission.

Section 2.11. Compensation. Directors shall receive such fixed sums and expenses or such compensation for attendance at each meeting of the Board of Directors, or any Committee established in accordance with Section 3.01 as may be determined from time to time by the Board of Directors, provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

Section 2.12. Director Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or of any Committee thereof may be taken without a meeting, if a consent thereto in writing or by electronic transmission is signed by all members of the Board of Directors or of such Committee, as the case may be, and such written consent or electronic transmission is filed with the minutes of proceedings of the Board of Directors or the Committee.

Section 2.13. Resignation and Vacancies. Any director may resign effective on providing notice in writing or by electronic transmission to the Chairman of the Board, the Chief Executive Officer, the President, the Secretary or the Board of Directors, unless the notice specifies a later time for the resignation to become effective. If the resignation of a director is effective at a future time, the Board of Directors may elect a successor to take office when the resignation becomes effective pursuant to Section 2.04 hereof.

ARTICLE III

COMMITTEES

Section 3.01. How Constituted. The Board of Directors shall have an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, an Executive Committee and such other Committees as the Board of Directors may determine (each, a “Committee”). Each of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Executive Committee shall consist of at least 3 members, with the specific number of members fixed by the Board of Directors from time to time, and all members of such committees shall be appointed by the Board. The members of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee shall be independent directors under the rules and regulations of the New York Stock Exchange. Each other Committee shall consist of such number of directors, who shall not be required to be independent directors under the rules and regulations of the New York Stock Exchange, as from time to time may be fixed by the Board of Directors, and any such Committee may be abolished or redesignated from time to time by the Board of Directors.

Except as may otherwise be provided in the Third Restated Certificate of

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Incorporation, as subsequently amended or restated, each Committee shall have the powers and duties delegated to it by the Board of Directors, subject to the limitations set forth in the applicable provisions of the DGCL.  The Board of Directors may elect one or more of its members as alternate members of any Committee who may take the place of any absent or disqualified member or members at any meeting of a Committee, upon request of the Chairman of the Board or the Chairman of such Committee.

Section 3.02. Chairmen of such Committees. The Board shall designate the chairpersons of each Committee.

Section 3.03. Powers. Each Committee, except as otherwise provided in this section, shall have and may exercise such powers of the Board of Directors as may be provided by resolution or resolutions of the Board of Directors. No Committee shall have the power or authority (a) to approve or adopt, or recommend to the stockholders, any action or matter expressly required by the DGCL to be submitted to the stockholders for approval or (b) to adopt, amend or repeal the By-Laws of the Corporation.

Section 3.04. Proceedings. Each Committee may fix its own rules of procedure and may meet at such place (within or without the State of Delaware), if any, at such time and upon such notice, if any, as it shall determine from time to time. Each Committee shall keep minutes of its proceedings and shall report such proceedings to the Board of Directors at the meeting of the Board of Directors next following any such proceedings.

Section 3.05. Quorum and Manner of Acting. Except as may otherwise be provided in the resolution creating a Committee, at all meetings of any Committee, the presence of members (or alternate members) constituting a majority of the total authorized membership of such Committee shall constitute a quorum for the transaction of business. The act of the majority of the members present at any meeting at which aquorum is present shall be the act of such Committee. Any action required or permitted to be taken at any meeting of any Committee may be taken without a meeting, if allmembers of such Committee shall consent to such action in writing or by electronic transmission and such writing, writings or electronic transmission or transmissions are filed with the minutes of the proceedings of the Committee. Such filing shall be in paper form if the minutes are in paper form and shall be in electronic form if the minutes are maintained in electronic form. The members of any Committee shall act only as a Committee, and the individual members of a Committee shall have no power in their individual capacities unless expressly authorized by the Board of Directors.

Section 3.06. Action by Telephonic Communications. Unless otherwise provided by the Board of Directors, members of any Committee may participate in a meeting of such Committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can speak and hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

Section 3.07. Resignations. Any member (and any alternate member) of any Committee may resign at any time by delivering a notice in writing or by electronic transmission of resignation by such member to the Board of Directors or the Chairman of the Board. Unless otherwise specified therein, such resignation shall take effect upon

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delivery.

Section 3.08. Removal. Any member (and any alternate member) of any Committee may be removed at any time, either for or without cause, by resolution adopted by a majority of the entire Board of Directors.

Section 3.09. Vacancies. If any vacancy shall occur in any Committee, by reason of disqualification, death, resignation, removal or otherwise, the remaining members (and any alternate members) shall continue to act, and any such vacancy may be filled by the Board of Directors.

ARTICLE IV

OFFICERS

Section 4.01. General. The officers of the Corporation shall consist of a President, a Secretary and a Treasurer, and, if deemed necessary, expedient, or desirable by the Board of Directors, a Chairman of the Board, one or more Vice-Chairmen of the Board, a Chief Executive Officer, a Chief Operating Officer, a Chief Financial Officer, one or more Executive Vice-Presidents, one or more Group Vice-Presidents, one or more Senior Vice-Presidents or other Vice-Presidents, a Controller, a General Counsel, one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers with such titles as the resolution of the Board of Directors choosing them shall designate. Except as may otherwise be provided in the resolution of the Board of Directors, no officer other than the Chairman or a Vice-Chairman of the Board, if any, need be a director. Any number of offices may be held by the same person, as the directors may determine.

Section 4.02. Term. Unless otherwise provided in these By-Laws or in the resolution choosing him or her, each officer shall be chosen for a term which shall continue until the meeting of the Board of Directors following the next annual meeting of stockholders or until his or her successor shall have been chosen and qualified.

Section 4.03. Duties. All officers of the Corporation shall have such authority and perform such duties in the management and operation of the Corporation as shall be prescribed in the resolutions of the Board of Directors and shall have such additional authority and duties as are assigned to them from time to time by the Chairman of the Board, Chief Executive Officer or President or are incident to their office, except to the extent that the authority and duties may be inconsistent with such resolutions. The Secretary or an Assistant Secretary of the Corporation, or any director or officer of the Corporation acting, at the request of the Board of Directors or a Committee thereof, as secretary of such meeting, shall record all of the proceedings of all meetings and actions in writing of the stockholders, Board of Directors, and Committees of the Board of Directors, and shall exercise such additional authority and perform such additional duties as the Board of Directors shall assign to him or her.

Section 4.04. Removal. Any officer may be removed, with or without cause, by the Board of Directors. Any vacancy in any office may be filled by the Board of Directors.

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Section 4.05. Action with Respect to Securities of Other Corporations. Unless otherwise directed by the Board of Directors, the Chairman of the Board, the Chief Executive Officer, the President, any Vice-Chairman, or any Vice-President, or any other officer of the Corporation authorized by the Chairman of the Board, the Chief Executive Officer or President, shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders or equity holders or with respect to any action of stockholders or equity holders of any other corporation or entity in which the Corporation may hold securities, and otherwise to exercise any and all rights and powers which the Corporation may possess by reason of its ownership of securities in such other corporation or entity, and to dispose of such securities.

ARTICLE V

BOOKS, DOCUMENTS AND ACCOUNTS

Section 5.01. Inspection of Books.  The Corporation shall, either at its principal executive office or at such place or places as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these By-Laws as amended to date, accounting books and other records.

Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during ordinary business hours to inspect for any proper purpose the Corporation’s stock ledger, a list of its stockholders and its other books and records, and to make copies or extracts therefrom.  A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder.  In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent so to act on behalf of the stockholder.  The demand under oath shall be directed to the Corporation at its registered office in Delaware or at its principal executive office.

Any director shall have the right to examine the Corporation’s stock ledger, a list of its stockholders and its other books and records for a purpose reasonably related to his or her position as a director.  The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought.  The Court may summarily order the Corporation to permit the director to inspect any and all books and records, the stock ledger and the stock list and to make copies or extracts therefrom.  The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem proper.

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ARTICLE VI

STOCK

Section 6.01. Stock Certificates. The shares of stock of the Corporation shall be represented by certificates or shall be uncertificated.  Every holder of stock in the Corporation that is certificated shall be entitled to have a certificate signed by, or in the name of the Corporation, by the Chairman of the Board, the President, a Vice-Chairman, or a Vice-President and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him or her in the Corporation. All signatures on any such certificate may be facsimiles. In case any officer or officers, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar, whether because of death, resignation or otherwise, before such certificate is issued, such certificate or certificates may nevertheless be issued and delivered by the Corporation with the same effect as if the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer, transfer agent, or registrar.

Section 6.02. Transfers. Stock of the Corporation shall be transferable in the manner prescribed by law, unless otherwise restricted by agreement between any of the stockholders or any of the stockholders and the Corporation.

Section 6.03. Registered Holders. Except as otherwise restricted by agreement between any of the stockholders or any of the stockholders and the Corporation, the Corporation shall be entitled to treat the person in whose name any share of stock or any warrant, right or option is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share, warrant, right or option on the part of any other person, whether or not the Corporation shall have notice thereof, save as may be expressly provided otherwise by law. Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by a transfer agent or agents designated to transfer shares of the stock of the Corporation.

Section 6.04. New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost or destroyed, and the Board of Directors or the President may, in their discretion, require the owner of the lost or destroyed certificate, or his or her legal representatives, to give the Corporation a bond sufficient (in the sole judgment of the Board of Directors or the President, as the case may be) to indemnify the Corporation against any claim that may be made against it on account of the alleged loss of any such certificate or the issuance of such new certificate.

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ARTICLE VII

NOTICES

Section 7.01. Notices.

(a)  Except as otherwise specifically provided herein or required by law, all notices required to be given by the Corporation to any stockholder, officer, employee or agent shall be provided in writing or by electronic transmission in the manner provided below and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mail, postage paid, or by sending such notice by prepaid courier such as Federal Express or facsimile transmission. Any such notice shall be addressed to such stockholder, officer, employee or agent at his or her last known address as the same appears on the books of the Corporation. The time when such notice is received, if hand delivered or delivered by courier or facsimile transmission shall be the time of the giving of the notice. If mailed, such notice shall be deemed to be given when deposited in United States mail in a sealed envelope addressed to such Person at his or her address as it appears on the records of the Corporation with postage paid thereon. Notices to directors shall be given in accordance with Section 2.10.

(b) Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the Third Restated Certificate of Incorporation, as subsequently amended or restated, or these By-Laws, any notice to stockholders given by the Corporation under any provision of the DGCL, the Third Restated Certificate of Incorporation, as subsequently amended or restated, or these By-Laws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation.

An affidavit of the Secretary or an Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

For purposes of these By-Laws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

Section 7.02. Waivers. A written waiver or a waiver by electronic transmission of any notice, signed by a stockholder, director, officer, employee or agent, or a waiver thereof by electronic transmission by such person, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, director, officer, employee or agent. Neither the business nor the purpose of any meeting need be specified in such a waiver.

Attendance at a meeting of stockholders, Board of Directors, or such Committees as may from time to time be established, shall constitute a waiver of notice of such meeting, except when the stockholder, director or member of such Committee attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

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ARTICLE VIII

INDEMNIFICATION

Section 8.01. Right to Indemnification. Each Person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceedings is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving, at the request of the Corporation, as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section 8.03 with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding initiated by such indemnitee only if such proceeding was authorized by the Board of Directors of the Corporation.

Section 8.02. Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 8.01, the Corporation shall, to the fullest extent not prohibited by applicable law, pay the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Article VIII or otherwise.

The rights to indemnification and to the advancement of expenses conferred in this Article VIII shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators.

Section 8.03. Right of Indemnitee to Bring Suit. If a claim under this Article VIII is not paid in full by the Corporation within 60 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the

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Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Further, in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking by a director or officer, the Corporation shall be entitled to recover such expenses upon a final adjudication that the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VIII or otherwise shall be on the Corporation.

Section 8.04. Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article VIII shall not be exclusive of any other right which any Person may have or hereafter acquire under any statute, the Corporation’s Third Restated Certificate of Incorporation, as subsequently amended or restated, or By-Laws, any agreement, any vote of stockholders or disinterested directors or otherwise.

Section 8.05. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such Person against such expense, liability or loss under the DGCL or otherwise.

Section 8.06. Indemnification of Employees and Agents of the Corporation. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article VIII with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

Section 8.07. Settlement of Claims. The Corporation shall not be liable to indemnify any indemnitee under this Article VIII (a) for any amounts paid in settlement of any action or claim effected without the Corporation’s written consent, which consent shall not be unreasonably withheld or delayed; or (b) for any judicial award if the Corporation was not given a reasonably timely opportunity to participate, at its expense,

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in the defense of such action, but only to the extent that the failure to give such notice prejudiced the Corporation’s ability to defend such action.

Section 8.08. Subrogation. In the event of payment under this Article VIII, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnitee, who shall execute all papers required and shall do everything that may be reasonably necessary to secure such rights, including the execution of such documents reasonably necessary to enable the Corporation effectively to bring suit to enforce such rights.

Section 8.09. No Duplication of Payments. The Corporation shall not be liable under this Article VIII to make any payment in connection with any claim made against the indemnitee to the extent the indemnitee has otherwise actually received payment (under any insurance policy, agreement, or otherwise) of the amounts otherwise indemnifiable hereunder.

ARTICLE IX

MISCELLANEOUS

Section 9.01. Offices. The principal office or place of business of the Corporation in the State of Delaware will be in the City of Wilmington, Delaware. The Corporation may also have offices at other places within and/or without the State of Delaware.

Section 9.02. Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its incorporation and the words “Corporate Seal Delaware.”

Section 9.03. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 9.04. Dividends. Subject to any applicable provisions of law and the Third Restated Certificate of Incorporation, as subsequently amended or restated, dividends upon the shares of the Corporation may be declared by the Board of Directors and any such dividend may be paid in cash, property, or shares of the Corporation’s capital stock.

A member of the Board of Directors, or a member of any Committee designated by the Board of Directors shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or Committees of the Board of Directors, or by any other Person as to matters the Director reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid.

Section 9.05. Reserves. There may be set aside out of any funds of the

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Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall think conducive to the interest of the Corporation, and the Board of Directors may similarly modify or abolish any such reserve.

Section 9.06. Execution of Instruments. The Board of Directors may authorize, or provide for the authorization of, officers, employees or agents to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. Any such authorization may be general or limited to specific contracts or instruments; and unless so authorized or ratified by the Board of Directors or by these By-Laws or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount.

Section 9.07. Corporate Indebtedness. No loan shall be contracted on behalf of the Corporation, and no evidence of indebtedness shall be issued in its name, unless authorized by the Board of Directors. Such authorization may be general or confined to specific instances. Loans so authorized may be effected at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation issued for such loans shall be made, executed and delivered as the Board of Directors shall authorize. When so authorized, any part of or all the properties, including contract rights, assets, business or good will of the Corporation, whether then owned or thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation, and of the interest thereon, by instruments executed and delivered in the name of the Corporation.

Section 9.08. Deposits. Any funds of the Corporation may be deposited from time to time in such banks, trust companies or other depositaries as may be determined by the Board of Directors, the Chairman of the Board or the Chief Executive Officer, or by such officers or agents as may be authorized by the Board of Directors, the Chairman of the Board or the Chief Executive Officer to make such determination.

Section 9.09. Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such agent or agents of the Corporation, and in such manner, as the Board of Directors, the Chairman of the Board or the Chief Executive Officer from time to time may determine.

Section 9.10. Sale, Transfer, etc. of Securities. To the extent authorized by the Board of Directors, the Chairman of the Board or by the Chief Executive Officer, the President, any Vice President, the Secretary or the Treasurer or any other officers designated by the Board of Directors, the Chairman of the Board or the Chief Executive Officer may sell, transfer, endorse, and assign any shares of stock, bonds or other securities owned by or held in the name of the Corporation, and may make, execute and

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deliver in the name of the Corporation, under its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or assignment.

Section 9.11. Amendment of By-Laws. Subject to the provisions of the Third Restated Certificate of Incorporation, as subsequently amended or restated, these By-Laws may be altered, amended or repealed at any meeting of the stockholders (provided such matter is properly brought before the meeting in accordance with Section 1.06) or by the Board of Directors.

Section 9.12. Section Headings. The headings of the Articles and Sections of these By-Laws are inserted for convenience or reference only and shall not be deemed to be a part thereof or used in the construction or interpretation thereof.

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Exhibit 10.1

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”) is made effective as of October 1, 2015 (the “Effective Date”), by and between John Golliher (“Consultant”) and Sally Beauty Holdings, Inc., a Delaware corporation (“SBH”) (collectively, the “Parties”).  Consultant and SBH agree as follows:

1.                                      Services.

i.                                          Consultant will provide professional services and advice, and work on assorted projects and other tasks as shall be directed by SBH, including but expressly not limited to:  (a) executive coaching for the President of Beauty Systems Group LLC (“BSG”) and the Managing Director of Sally Salon Services Limited; (b) proposed and potential acquisitions by BSG; and (c) additional assignments requested by SBH and accepted by Consultant (collectively, the “Services”).  Services can also consist of, but not be limited to, consulting on, and the recollection of facts and opinions related to services Golliher performed as an employee and/or officer of SBH or an SBH Affiliate(1), review of recollection on related matters, and consulting, testifying, etc. on present and future matters in dispute or litigation.  In matters involving the recollection of past events, Consultant shall make every good faith effort to be factual and accurate, and in all circumstances Consultant must remain truthful.  Although it is the intention that most of the Services shall involve the preceding areas, there may be occasions where SBH shall require Consultant to engage in other, related tasks, and Consultant similarly agrees to engage in these tasks.

ii.                                       Consultant understands and acknowledges that the needs of the business related to the provision of Services (including timing and duration) can be erratic and unpredictable.  Consultant shall remain available to provide such Services as may be required by SBH and it is incumbent upon Consultant to be prepared to provide Services as SBH will deem necessary, in its sole discretion.  The prior sentence notwithstanding, SBH shall reasonably attempt to accommodate any scheduling conflict Consultant may have, however, only to an extent that SBH deems reasonably possible, in its sole discretion.  Except in extraordinary SBH circumstances, Consultant shall be provided at least three days’ notice of any direction to appear.  All Services shall be performed solely by Consultant himself.

iii.                                    SBH and Consultant agree and expect that the total hours worked by Consultant pursuant to this Paragraph 1 shall be more than 20% of the average level of services performed by him as an employee of SBH or any SBH Affiliate over the 36-month period immediately preceding the Effective Date, and therefore Consultant shall not be considered to have separated from service with SBH for purposes of Section 409A of the Internal Revenue Code of 1986, in accordance with Treas. Reg. §1.409A-l(h)(1)(ii).

(1)  “SBH Affiliate” for purposes of this agreement shall mean any division, affiliate, subsidiary or other entity which has Sally Beauty Holdings, Inc. (or its predecessor or successor) as the ultimate parent company.  The list of SBH Affiliates currently includes, but is not limited to:   Sally Beauty Supply LLC, Beauty Systems Group LLC, Armstrong-McCall L.P. and Loxa Beauty LLC.

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2.                                      Term of Agreement.  The Term of this Agreement, and the time period during which Consultant will provide the Services, is defined as October 1, 2015 to September 30, 2017 (the “Term”).

3.                                      Fees, Billing. In consideration of the Services provided by Consultant, during the Term, SBH shall pay Consultant for Services at the rate of Twenty Thousand Eight Hundred Thirty-Three Dollars and Thirty-Three Cents ($20,833.33) per month (which equates to $250,000 per year).  Payments for work performed pursuant to this Agreement shall be paid to Consultant within 30 days of Consultant submitting sufficient, accurate invoices to Chris Brickman, President of Sally Beauty Holdings, Inc.  The Parties may agree to have the payments directed electronically to the account of Consultant’s choice.  Direct, out-of-pocket expenses reasonably and necessarily incurred in performing Consultant’s obligations will be invoiced at cost and consistent with SBH guidelines.  Invoices will be addressed as follows: Chris Brickman, CEO and President, Sally Beauty Holdings, Inc., 3001 Colorado Boulevard, Denton, Texas 76210, and sent by either mail or e-mail (sbhbman@sallybeauty.com).  Consultant agrees to complete and execute a Form W-9 or such other tax forms as are reasonably required by SBH. SBH will issue Consultant a Form 1099 for amounts paid, and Consultant will be responsible for payment of all applicable taxes in compliance with state and federal requirements.  Each monthly payment to Consultant for Services under this Paragraph 2 shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.

4.                                      Termination of Agreement.

i.                                          Unless earlier terminated in accordance with the provisions hereof, this Agreement shall terminate at 11:59 p.m. on September 30, 2017 (the “Expiration Date”).  Upon the Expiration Date, this Agreement shall terminate without any liability to or upon SBH other than to pay appropriate outstanding fees for services rendered prior to the Expiration Date.

ii.                                       SBH may terminate this Agreement prior to that date without any liability to or upon SBH other than to pay appropriate outstanding fees for services rendered prior to the date of termination if Consultant engages in behavior or conduct constituting “Cause” is defined, for purposes of this Agreement, as: (i) Consultant’s theft or embezzlement or attempted theft or embezzlement of money or tangible or intangible assets or property of SBH or its employees or business relations; (ii) any act or acts of moral turpitude by Consultant which negatively affects the interest, property, operations, business or reputation of SBH or SBH affiliates; (iii) Consultant’s violation of a federal, state or local law or regulation which negatively affects the interest, property, operations, business or reputation of SBH or any SBH affiliate; (iv) gross negligence or willful misconduct in the performance of Consultant’s services or duties; (v) Consultant’s failure to reasonably perform any of Consultant’s services or duties as requested; and/or (vi) Consultant’s breach of this Agreement.

iii.                                    This Agreement shall terminate without any liability to or upon the Company other than to pay appropriate outstanding fees for services rendered prior to the date of termination on the death or “Disability” of Consultant.  For purposes of this Agreement, “Disability” shall be

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defined as Consultant’s inability, as determined by SBH’s CEO or President or designee in his/her reasonable discretion, in consultation with such health care professionals as he/she deems necessary, due to illness, accident, injury, physical or mental incapacity or other disability, effectively to carry out Employee’s duties and obligations under this Agreement for 90 consecutive days or shorter periods aggregating 90 days (whether or not consecutive) during any 12 month period.

iv.                                   Paragraphs 6, 7, 8, 9, 10, 12, 13, 14, 15, 16, 17, 18 and 19 shall survive the termination or expiration of this Agreement.

5.                                      Devotion of Time. Consultant shall devote such time as is necessary for a satisfactory performance of Consultant’s duties and full and complete provision of Services, as limited in this Agreement.

6.                                      Title to Information. To the fullest extent allowed by applicable law, all information or materials Consultant prepares or works on for SBH or an SBH Affiliate pursuant to this Agreement shall belong to and be the exclusive property of SBH or that SBH Affiliate, free and clear from all claims of any nature relating to contributions and other efforts of Consultant and/or any agents or assistants to Consultant, including the right to copyright and/or patent the work in the name of SBH or the SBH Affiliate as author and proprietor and/or applicant and/or inventor thereof and any termination rights thereto (“SBH Work”). SBH Work includes work done with the use of information, materials, or facilities of SBH or an SBH Affiliate under this Agreement and to any extensions or renewals of this Agreement.

7.                                      Work for Hire. To the fullest extent allowed by applicable law, Consultant and SBH acknowledge that any and all SBH Work that Consultant prepares, completes or works on is being created under the direction and control of SBH or the relevant SBH Affiliate, and agree that any and all SBH Work: (i) shall be deemed a work made for hire by an independent contractor under the United States Copyright Laws (17 U.S.C. Section 101 et seq., and any amendments), and/or a design or other patent belonging to SBH as the party commissioning the design effort under the United States Patent Laws and any amendments; and, (ii) by virtue of this Agreement, is the sole property of SBH or the relevant SBH Affiliate, free and clear from all claims of any nature relating to contributions and other efforts of Consultant and/or any agents or assistants to Consultant, including the right to copyright and/or patent the work in the name of SBH as author and proprietor and/or applicant and/or inventor thereof and any termination rights thereto. Consultant understands and agrees that SBH or the relevant SBH Affiliate: (i) owns all right, title, and interest in any and all SBH Work; and, (b) has the right to register all copyrights or patents therein in its own name, as author or applicant and/or inventor, in the United States of America and in all foreign countries.

8.                                      Assignment. If any SBH Work may not, by operation of law, be works made for hire, Consultant hereby assigns to SBH or the relevant SBH Affiliate all rights in SBH Work. Consultant shall execute such other documents, and provide such assistance as SBH may reasonably request to give full effect to the provisions of this paragraph and this Agreement.

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9.                                      SBH Confidential Information.

i.                                          Consultant agrees that Consultant will receive and have access to materials and information regarding Company’s technologies, know-how, products, services and sales that are proprietary and confidential to Company, and that would give Consultant an unfair competitive advantage in competing with the Company if Consultant’s activities are not restricted as provided for in this Agreement.  Consultant recognizes that these materials and information are an important and valuable asset to SBH and that SBH has a legitimate interest in protecting the confidential and proprietary nature of these materials and information.

ii.                                       SBH will provide Consultant with one or more of the following: (a) access to a portion of SBH’s Confidential Information (through a computer password or other means); (b) authorization to communicate with customers and prospective customers, and reimbursement of customer development expenses in accordance with SBH policy limits, to help Consultant develop goodwill for Company; (c) authorization to communicate with manufacturers/vendors and prospective manufacturers/vendors, and reimbursement of manufacturer/vendor development expenses in accordance with SBH policy limits, to help Consultant develop relationships and/or goodwill for Company; and/or (d) authorization to participate in specialized training related to SBH’s business and customers.  Consultant understands that SBH will provide Consultant with one or more of these items in reliance upon Consultant’s promise to abide by all of the restrictions in this Agreement and that the restrictions are necessary to prevent unfair competition.

iii.                                    Consultant agrees that the information, observations and data obtained by Consultant during the course of Consultant’s providing Services for SBH and any relevant SBH Affiliate are the sole property of SBH or the relevant SBH Affiliate.  Consultant, on behalf of himself and any parents, subsidiaries, affiliates, employees, shareholders and officers and directors (the “Consultant Group”) agrees Consultant and Consultant Group shall not, directly or indirectly, from the date of this Agreement and thereafter, without the express written consent of SBH’s President, disclose to any person or legal entity (collectively, “Entity”) or use for Consultant’s or Consultant Group’s own account or for the benefit of any third party any Confidential Information(2), unless and only to the extent that such Confidential Information becomes generally known to and available for use by the public or in the trade other than as a result of Consultant or any member of Consultant Group’s acts or inaction or the wrongful act of any third party.  The Parties agree that Confidential Information and all elements of it are important, material, confidential and gravely affect the successful conduct of SBH and any relevant SBH Affiliate.

(2)    “Confidential Information” for purposes of this Agreement shall mean any and all information, relating to SBH or any relevant SBH Affiliate that is generally not disclosed outside of SBH or the relevant SBH Affiliate, and shall include but not be limited to:  SBH’s or any relevant SBH Affiliate’s business plans; strategic plans; projections; future product or market developments; marketing activities, plans, promotions, operations, research and development; financial information; information regarding suppliers and costs of products and other supplies; financing programs; information regarding personnel; information regarding operations, overhead and distribution; present or future plans related to real estate and leaseholds (including site selection); contracts with other parties; computer and communication systems, software operating systems and source codes; lawsuits, legal documents, legal strategies and the like.

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iv.                                   Consultant affirms that, after the end of the provision of Services, Consultant will deliver to SBH all memoranda, notes, plans, records, reports, computer disks and memory, and other documentation and copies thereof (however stored or recorded) relating to the business of SBH and any relevant SBH Affiliate, whether or not including SBH Work, and/or which contain Confidential Information, which Consultant then possesses or has custody or control of.

v.                                      Nothing in this Agreement is to be construed to preclude Consultant or any individual from communicating with or reporting issues to the Security and Exchange Commission or other government agencies.

10.                               Unfair Competition.

i.                                          Consultant acknowledges that this agreement with SBH will expose Consultant to Confidential Information about SBH’s business that gives Consultant unique and valuable insights that Consultant would not otherwise have about SBH’s line of business and how it operates.  Consultant further recognizes that by virtue of this agreement, and the Confidential Information (including trade secrets) provided to Consultant, Consultant will gain and/or strengthen relationships with the accounts, customers and clients of SBH, and because of such relationships and the Confidential Information, Consultant would have an unfair competitive advantage if engaged in certain post-employment/post-consulting activities (such as those restricted below) Consultant agrees that activities in violation of the restrictions provided for below would cause SBH great loss, damage, and immediate irreparable harm.  Therefore, the restrictions provided for below are reasonable and necessary for the protection of legitimate business interests of the Company.

ii.                                       In order to protect the substantial and important Confidential Information to which Consultant acknowledges Consultant shall have access during the course of this Agreement, Consultant hereby, on behalf of himself and the Consultant Group agrees they will remain loyal to SBH and shall not, during and for a period of two years after the termination of this Agreement, directly or indirectly, engage in “Unfair Competition.”  It shall be considered “Unfair Competition” to:

a.   be employed in, participate in, provide, supervise, or manage (as an employee, consultant, contractor, officer, owner, director, or otherwise) any activities or services for an entity that competes with SBH or any SBH Affiliate where the position or activity would (a) involve services that are the same as or similar in function or purpose to those Consultant Group performed, supervised, or managed for SBH or any SBH Affiliate (including but expressly not limited to chemical category positioning of new technology and growth and the like) in the last two years of Consultant’s employment with SBH and during two (2) year period preceding the termination of the Agreement or (b) would be likely to involve the use of Confidential Information.

b.  either directly or indirectly, solicit for employment or otherwise interfere with the relationship of SBH or any SBH Affiliate with any natural person who is then-currently employed by or otherwise engaged to perform services for SBH or any SBH Affiliate within the Territory (for purposes of this Agreement, “Territory” is defined as anywhere SBH does business); or,

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c.  interfere with the business relationship between SBH or any SBH Affiliate and one of its customers operating within the Territory or suppliers operating within the Territory, by soliciting, inducing, or otherwise encouraging a customer operating within the Territory or supplier operating within the Territory of SBH or the SBH Affiliate to reduce or stop doing business with SBH or any SBH Affiliate or to instead do business with a competitor of SBH, or engaging any such SBH or SBH Affiliate customer or supplier to do business with or on Consultant’s (or the member of Consultant’s Group’s) behalf; or,

d.  disparage the business or interests of SBH or any SBH Affiliate (provided however, it shall not be deemed “disparagement” for Consultant to comply with its obligations in any written agreement with SBH or any SBH Affiliate); or,

e.  supervise any of the foregoing activities.

iii.                                    During the Term of this Agreement, Consultant will give SBH written notice of any offer that a member of Consultant’s Group receives from a competing business before accepting it. Consultant and Consultant’s Group will also provide SBH at least thirty (30) days’ notice before performing any services for a competing business (such as a business engaged in distribution, retail, wholesale or internet sale of beauty products) doing business within the Territory and meet with an SBH representative to discuss the nature of his new position if SBH requests such a meeting to help avoid unnecessary disputes.  The Parties understand that SBH is not required to request such a meeting and that a failure to resolve disputes through such a meeting will not be considered a waiver of any rights by either Party.

iv.                                   During the Term of this Agreement, SBH may notify any future or prospective third party client of Consultant of the existence of this Agreement.  Consultant stipulates that the harm caused by a violation of this Agreement would be irreparable, cannot be readily and fully remedied through monetary damages, and shall warrant injunctive relief in addition to, and not in place of, any other legal remedies available for any breach, including reasonable attorney’s fees and costs. Consultant understands and agrees that if it or another member of Consultant’s Group is found to have violated one of the restrictions on conduct created by this Agreement, the time period for that restriction will be extended by one day for each day that he is found to have been in violation of the restriction up to a maximum period of nine (9) months.

11.                               General Relationship. The Parties agree that Consultant is an independent contractor, whose professional services have been retained because SBH desires to accomplish certain goals. The means and method to accomplish SBH’s and any relevant SBH Affiliates’ goals in the area of Consultant’s expertise are left to the professional judgment and discretion of Consultant. Consultant alone shall be responsible for the performance of the professional services contracted for under this Agreement.

12.                               Consultant Responsible/Limitation of Authority. Nothing in Consultant’s reporting function, and nothing in this Agreement, is meant by the Parties to change Consultant’s independent contractor status. Consultant is responsible for, and shall indemnify SBH against, all obligations governing Consultant related to any federal or state unemployment or insurance laws, worker’s compensation laws, and payment of payroll and/or income taxes which are ordinarily paid by an independent contractor. Consultant shall not have general authority to assume or

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create any obligation, express or implied, on behalf of SBH or any SBH Affiliate, and Consultant shall have no authority to represent SBH or any SBH Affiliate as an agent, employee, or a party of any other capacity other than an independent contractor. Consultant shall comply with all applicable laws, rules, regulations and ordinances in the performance of this Agreement.

13.                               Savings Clause. Consultant understands that SBH will be irreparably harmed if the provisions of this Agreement are not strictly adhered to and agrees that SBH may apply to any court of competent jurisdiction to enjoin any violation of this Agreement.

14.                               Notices. All notices pertaining to this Agreement shall be in writing and transmitted by personal hand delivery, posting in the United States mail, registered, return receipt requested, or by express delivery service, or e-mail, and shall be effective upon receipt.  All notices to SBH shall be sent to:  President, Sally Beauty Holdings, Inc., 3001 Colorado Boulevard, Denton, Texas 76210, with a mandatory copy to General Counsel, Sally Beauty Holdings, Inc. (same address).  All notices to Consultant shall be sent to:  800 Carriage Court, Southlake, Texas 76092.  Either Party may change its notice address by written notice to the other.

15.                               Prevailing Law and Attorney’s Fees. The validity, interpretation and performance of this Agreement shall be controlled by and construed under the laws of the State of Texas in the same manner as agreements executed and fully performed in the State of Texas.  Any litigation arising out of this Agreement may be brought in an appropriate state and/or federal court serving Denton County, Texas.  In the event of litigation arising between the Parties, the ultimate prevailing party in such litigation shall be entitled to an award of reasonable attorney’s fees and other reasonable costs incurred by the prevailing party.

16.                               Severability. If any part of the Agreement shall be held by a court of competent jurisdiction to be contrary to law or public policy, or otherwise unenforceable, the Parties intend the remaining provisions to remain in full force and effect. If, in the opinion of any court of competent jurisdiction any covenants are not reasonable in any respect, such court shall have the right, power and authority to exercise or modify such provision or provisions of these covenants as to the court shall appear not reasonable and enforce the remainder of these covenants so amended. Provided however, that: (i) as a result of such provisions in this Agreement being declared illegal or unenforceable or their being substantially modified; or, (ii) if Consultant claims, through a lawsuit or otherwise that provisions of this Agreement are illegal, unenforceable or subject to substantial modification; and as a result of such declaration, or if in the event of such claim of Consultant being enforced, SBH loses the benefit of its bargain (such as, without limitation, the ability to procure Services, any limitation in SBH’s right to restrict Unfair Competition, any rights to SBH Work or a compromise of SBH’s rights of confidentiality), SBH shall have no further obligation under this Agreement, the Agreement shall at the option of SBH be declared void, and Consultant shall return any compensation paid for Services performed.

17.                               Miscellaneous. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and other than this Agreement, there are no agreements or understandings with respect to the subject matter thereof.  No representations were made or relied upon by either Party, other than those that are expressly set forth herein and the agreements specifically referenced in this Paragraph.  Nothing contained in this Agreement shall

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be construed to place the Parties in the relationship of partners or joint venturers.  No agent, employee or other representative of either Party is empowered to alter any term of this Agreement unless done in writing and signed by an authorized executive officer of SBH on the one hand, and an officer of Consultant on the other. The right of either Party to require strict performance by the other Party shall not be affected by any previous waiver, forbearance or course of dealing.  Paragraph headings in bold print are for reference only for the convenience of the Parties, and shall not be used to interpret, limit or change the terms of this Agreement.

18.                               Heirs, Successors, Assigns, Trustees.  This Agreement shall be binding upon and inure to the benefit of the Parties’ respective successors and assigns and trustees; provided however that in the event of death or inability to properly continue providing Services of Consultant, any right to receive further Payments shall terminate.

19.                               Internal Revenue Code Section 409A.  This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Internal Revenue Code of 1986, as amended, and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder.

In witness whereof, the Parties have executed this Agreement effective as of the Effective Date.

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Exhibit 99.1

Sally Beauty Holdings, Inc. Announces Fiscal 2015 third quarter results

·                  3Q15 same store sales growth of 3.1% versus 2.1% in 3Q14

·                  3Q15 GAAP net earnings of $62.5 million with earnings per share of $0.39

·                  3Q15 Adjusted net earnings of $65.2 million with earnings per share of $0.41

·                  Adjusted EBITDA of $161 million

DENTON, Texas, August 6, 2015 — Sally Beauty Holdings, Inc. (NYSE: SBH) (the “Company”) today announced financial results for the fiscal 2015 third quarter.  The Company will hold a conference call today at 10:00 a.m. (Central) to discuss these results and its business.

“We are disappointed in the Q3 results for our Sally business, but not discouraged” stated President & CEO Christian Brickman. “It is taking longer than we expected for traffic from the non-Beauty Club Card customer to recover, but we still have great confidence that we are moving in the right direction.  Over the next several quarters, we expect continued progression in our consolidated Sally same store sales back to historical trend levels of 3% to 4% as we plan to complete the execution of our planned initiatives and our customers have the chance to experience these changes in our stores.”

“As we enter Q4, we believe the disruption caused by the recent data security incident is now behind us. We intend to further enhance our systems and culture to ensure the security of our networks and customer data, and our Sally team continues to be laser focused on driving sales progression.  To deliver on this objective, we will invest in national TV for the Sally brand through our sponsorship of Project Runway® which will begin to air early August. We expect to complete the reset of our cash-wrap area, upgrade our channel leading eyelash studio, and significantly improve the look and shopability of the cosmetics section in the stores.  Finally, we plan to continue our store refresh program and refine our recently launched CRM model.” Brickman added.

“Looking forward to fiscal 2016, we now expect that Sally Beauty segment same store sales will continue to improve sequentially and reach historical growth levels of 3% to 4% in the back half of next year.  On the expense side, we anticipate significant labor and rental cost inflation to affect our business as we compete for talent and real estate with other retailers. We plan to offset the bulk of these increases through cost reductions and tactical pricing measures.  However, we now believe that this cost inflation will be a moderate drag on operating earnings growth for next year”.

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FISCAL 2015 THIRD QUARTER FINANCIAL HIGHLIGHTS

Net Sales:  For the fiscal 2015 third quarter, consolidated net sales were $967.9 million, an increase of 2.0% from the fiscal 2014 third quarter.  The fiscal 2015 third quarter sales increase is attributed to same store sales growth and the addition of new stores.  The unfavorable impact from changes in foreign currency exchange rates in the fiscal 2015 third quarter was $26.2 million, or 2.8% of sales.  Consolidated same store sales growth in the fiscal 2015 third quarter was 3.1% versus 2.1% in the prior year quarter.  Consolidated same store sales for fiscal 2015 are now expected to be in the range of 2.5% to 3.0% versus previous expectations of consolidated same store sales growth of slightly above 3%.

Gross Profit:  Consolidated gross profit for the fiscal 2015 third quarter was $481.3 million, an increase of 1.2% over gross profit of $475.7 million for the fiscal 2014 third quarter.  Gross profit as a percentage of sales was 49.7%, a 40 basis point decline from the fiscal 2014 third quarter.  Consolidated gross profit margin for fiscal year 2015 is now expected to be flat when compared to fiscal year 2014 consolidated gross profit margin of 49.6%.  This differs from previous expectations of fiscal year 2015 consolidated gross profit margin expansion of 20 to 30 basis points over the prior year.

Selling, General and Administrative Expenses:  For the fiscal 2015 third quarter, GAAP consolidated selling, general and administrative (SG&A) expenses, including unallocated corporate expenses and share-based compensation, were $327.9 million, or 33.9% of sales, a 10 basis point increase from the fiscal 2014 third quarter GAAP metric of 33.8% of sales and total SG&A expenses of $320.7 million.

Excluding the pre-tax charges from the 2014 and 2015 data security incidents of $3.2 million as well as charges for a restructuring of the Sally Germany business of $1.1 million, adjusted SG&A expenses in the fiscal 2015 third quarter were $323.5 million or 33.4% of sales.  This represented a 10 basis point increase from fiscal 2014 third quarter adjusted metric of 33.3% of sales and total adjusted SG&A expenses of $316.4 million.

Fiscal 2015 third quarter GAAP SG&A expenses increased 2.2% or $7.1 million, primarily due to expenses associated with the opening of new stores, higher expenses related to on-going upgrades to our information technology systems, higher advertising costs in the Sally Beauty Supply segment, charges related to the data security incidents and a charge for the restructuring of the Sally Germany business, which included store closures.

Note: SG&A expenses include unallocated corporate expenses, as detailed in the Company’s segment information on schedule B.

Interest Expense: Interest expense for the fiscal 2015 third quarter was $29.2 million, slightly down from the fiscal 2014 third quarter of $29.3 million.

Provision for Income Taxes:  Income taxes were $39.2 million for the fiscal 2015 third quarter versus $37.9 million in the fiscal 2014 third quarter.  The Company’s effective tax rate in the fiscal 2015 third quarter was 38.5% versus 35.9% in the fiscal 2014 third quarter.  The lower effective tax rate for the three months ended June 30, 2014, when compared to the three months ended June 30, 2015, was primarily due to the reduction of uncertain tax position reserves during the fiscal 2014 third quarter.

Net Earnings and Diluted Net Earnings per Share (EPS):  For the fiscal 2015 third quarter, GAAP net earnings were down 7.8% to $62.5 million, or $0.39 diluted earnings per share, from net earnings of $67.8 million, or $0.42 diluted earnings per share in the year ago quarter.

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Adjusted net earnings for the fiscal 2015 third quarter were down 7.4% to $65.2 million or $0.41 diluted earnings per share when compared to fiscal 2014 adjusted net earnings of $70.4 million or $0.43 diluted earnings per share. Adjusted net earnings for the fiscal 2015 third quarter excludes $2.0 million, net of tax, related to the data security incidents and $0.7 million, net of tax, for charges related to the restructuring of the Sally Germany business.

Adjusted (Non-GAAP) EBITDA(1): Adjusted EBITDA for the fiscal 2015 third quarter was $160.6 million, a decrease of 1.1% from $162.4 million for the fiscal 2014 third quarter.

Financial Position, Capital Expenditures and Working Capital:  Cash and cash equivalents as of June 30, 2015, were $239.0 million.  The Company’s asset-based loan (ABL) revolving credit facility ended the fiscal 2015 third quarter with no outstanding borrowings.  The Company’s debt, excluding capital leases, totaled $1.8 billion as of June 30, 2015.

For fiscal 2015 year-to-date, the Company’s capital expenditures totaled $72.1 million.  Capital expenditures for the fiscal year 2015 are projected to be in the previously stated range of $95 million to $100 million, excluding acquisitions.

Working capital (current assets less current liabilities) increased $179.0 million to $819.6 million at June 30, 2015 compared to $640.6 million at September 30, 2014.  Borrowing capacity on the ABL facility was approximately $476.9 million at the end of the fiscal 2015 third quarter.  The ratio of current assets to current liabilities was 2.79 to 1.00 at June 30, 2015 compared to 2.38 to 1.00 at September 30, 2014.

Inventory as of June 30, 2015 was $874.5 million, an increase of $34.7 million or growth of 4.1% from June 30, 2014 inventory.  This increase is primarily due to sales growth from existing stores, additional inventory from new store openings, and the addition of new brands at the Beauty Systems Group segment.

During the period of April 1, 2015 through June 30, 2015, the Company repurchased (and subsequently retired) 219 thousand shares of its common stock at an aggregate cost of $6.8 million under the repurchase authorization announced on August 20, 2014.  The Board of Directors remains committed to deploying excess cash flow, after investments to grow the business, in the form of stock repurchases.

Business Segment Results:

Sally Beauty Supply

Fiscal 2015 Third Quarter Results for Sally Beauty Supply

·                 Sales of $588.6 million, up 0.7% from $584.5 million in the fiscal 2014 third quarter.  Sales growth was from net new store openings and same store sales growth.  The unfavorable impact of foreign currency exchange on sales was $22.0 million, or 3.8%.

·                 Same store sales growth of 2.0% versus growth of 1.8% in the fiscal 2014 third quarter.

·                 Gross margin of 54.9%, a 50 basis point decline from 55.4% in the fiscal 2014 third quarter.

·                 Segment earnings of $107.3 million, down 6.5% from $114.8 million in the fiscal 2014 third quarter.

·                 Segment operating margin was 18.2%, down 140 basis points when compared to the fiscal 2014 third quarter.

·                 Net store count increased by 135 over the fiscal 2014 third quarter for total store count of 3,655.

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Sales growth in the fiscal 2015 third quarter was driven by new store openings and same store sales; this growth was largely offset by the unfavorable impact of foreign currency exchange.  Gross profit margin declined by 50 basis points primarily due to strong promotional activity in the U.S. in the fiscal 2015 third quarter compared to the positive margin impact of vendor allowances directly linked to promotional activity in the prior year quarter.  Segment operating earnings and margin were unfavorably impacted by lower gross margin and higher SG&A expenses associated with new store openings, higher advertising costs and higher depreciation.

The restructuring of Sally Beauty Supply operations in Germany will include the closing of 16 underperforming retail stores and two supporting administrative offices and is designed to increase the profitability of certain of the Company’s German operations. The Company will continue to operate 17 retail stores in Germany after the completion of the restructuring, which the Company expects to complete by September 30, 2015.  The Company expects to incur estimated pre-tax charges of approximately $7.0 million by the end of fiscal year 2015, of which $1.1 million were incurred in the fiscal 2015 third quarter.

Beauty Systems Group

Fiscal 2015 Third Quarter Results for Beauty Systems Group

·                 Sales of $379.3 million, up 4.0% from $364.8 million in the fiscal 2014 third quarter.  The unfavorable impact of foreign currency exchange on sales was $4.2 million, or 1.1%.

·                 Same store sales growth of 5.6% versus 2.7% in the fiscal 2014 third quarter.

·                 Gross margin of 41.8%, a 10 basis point increase from 41.7% in the fiscal 2014 third quarter.

·                 Segment earnings of $61.1 million, up 6.7% from $57.2 million in the fiscal 2014 third quarter.

·                 Segment operating margin increased by 40 basis points to 16.1% of sales from 15.7% in the fiscal 2014 third quarter.

·                 Net store count was 1,286, an increase of 27 stores over the fiscal 2014 third quarter.

·                 Total BSG distributor sales consultants at the end of the fiscal 2015 third quarter were 952 versus 980 at the end of the fiscal 2014 third quarter.

Sales growth for the Beauty Systems Group was primarily driven by growth in same store sales and new store openings; this growth was partially offset by the unfavorable impact of foreign currency exchange.  Growth in segment operating earnings and margin expansion was primarily due to SG&A leverage improvement and gross margin expansion.

(1)A detailed table reconciling 2015 and 2014 adjusted EBITDA is included in Supplemental Schedule C.

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Conference Call and Where You Can Find Additional Information

As previously announced, at approximately 10:00 a.m. (Central) today the Company will hold a conference call and audio webcast to discuss its financial results and its business.  During the conference call, the Company may discuss and answer one or more questions concerning business and financial matters and trends affecting the Company.  The Company’s responses to these questions, as well as other matters discussed during the conference call, may contain or constitute material information that has not been previously disclosed.  Simultaneous to the conference call, an audio webcast of the call will be available via a link on the Company’s website, investor.sallybeautyholdings.com.  The conference call can be accessed by dialing (800) 230-1074 (International:  (612) 288-0337).  The teleconference will be held in a “listen-only” mode for all participants other than the Company’s current sell-side and buy-side investment professionals.  If you are unable to listen to this conference call, the replay will be available at about 12:00 p.m. (Central) August 6, 2015 through August 20, 2015 by dialing 1-800-475-6701 or if international dial 320-365-3844 and reference the conference ID number 365399.  Also, a website replay will be available on investor.sallybeautyholdings.com

About Sally Beauty Holdings, Inc.

Sally Beauty Holdings, Inc. (NYSE: SBH) is an international specialty retailer and distributor of professional beauty supplies with revenues of $3.8 billion annually.  Through the Sally Beauty Supply and Beauty Systems Group businesses, the Company sells and distributes through 4,900 stores, including approximately 200 franchised units, throughout the United States, the United Kingdom, Belgium, Chile, Colombia, Peru, France, the Netherlands, Canada, Puerto Rico, Mexico, Ireland, Spain and Germany.  Sally Beauty Supply stores offer up to 10,000 products for hair, skin, and nails through professional lines such as Clairol, L’Oreal, Wella and Conair, as well as an extensive selection of proprietary merchandise. Beauty Systems Group stores, branded as CosmoProf or Armstrong McCall stores, along with its outside sales consultants, sell up to 10,000 professionally branded products including Paul Mitchell, Wella, Sebastian, Goldwell, Joico, and Aquage which are targeted exclusively for professional and salon use and resale to their customers.  For more information about Sally Beauty Holdings, Inc., please visit sallybeautyholdings.com.

Cautionary Notice Regarding Forward-Looking Statements

Statements in this news release and the schedules hereto which are not purely historical facts or which depend upon future events may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would,” or similar expressions may also identify such forward-looking statements.

Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were made.  Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including, but not limited to, risks and uncertainties related to: the highly competitive nature of, and the increasing consolidation of, the beauty products distribution industry; anticipating and effectively responding to changes in consumer preferences and buying trends in a timely manner; potential fluctuation in our same store sales and quarterly financial performance; our dependence upon manufacturers who may be unwilling or unable to continue to supply products to us; the possibility

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of material interruptions in the supply of products by our third-party manufacturers or distributors; products sold by us being found to be defective in labeling or content; compliance with current laws and regulations or becoming subject to additional or more stringent laws and regulations; the success of our strategic initiatives including our store refresh program and increased marketing efforts, to enhance the customer experience, drive brand awareness and improve customer loyalty; the success of our e-commerce businesses; product diversion to mass retailers or other unauthorized resellers; the operational and financial performance of our franchise-based business; successfully identifying acquisition candidates and successfully completing desirable acquisitions; integrating acquired businesses; opening and operating new stores profitably; the impact of the health of the economy upon our business; the success of our cost control plans; protecting our intellectual property rights, particularly our trademarks; the risk that our products may infringe on the intellectual property of others or that we may be required to defend our intellectual property rights; conducting business outside the United States; disruption in our information technology systems; a significant data security breach, including misappropriation of our customers’ or employees’ confidential information, and the potential costs related thereto; the negative impact on our reputation and loss of confidence of our customers, suppliers and others arising from a significant data security breach; the costs and diversion of management attention required to investigate and remediate a data security breach and to continuously upgrade our information technology security systems to address evolving cyber security threats; the ultimate determination of the extent or scope of the potential liabilities relating to our data security incidents; our ability to attract or retain highly skilled management and other personnel; severe weather, natural disasters or acts of violence or terrorism; the preparedness of our accounting and other management systems to meet financial reporting and other requirements and the upgrade of our existing financial reporting system; being a holding company, with no operations of our own, and depending on our subsidiaries for cash; our ability to execute and implement our common stock repurchase program; our substantial indebtedness; the possibility that we may incur substantial additional debt, including secured debt, in the future; restrictions and limitations in the agreements and instruments governing our debt; generating the significant amount of cash needed to service all of our debt and refinancing all or a portion of our indebtedness or obtaining additional financing; changes in interest rates increasing the cost of servicing our debt; the potential impact on us if the financial institutions we deal with become impaired; and the costs and effects of litigation.

Additional factors that could cause actual events or results to differ materially from the events or results described in the forward-looking statements can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended September 30, 2014, as filed with the Securities and Exchange Commission. Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein. We assume no obligation to publicly update or revise any forward-looking statements.

Use of Non-GAAP Financial Measures

This news release and the schedules hereto include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures: (1) Adjusted EBITDA; (2) Adjusted net earnings, earnings per share and diluted earnings per share and (3) Adjusted SG&A expenses.  We have provided definitions below for these non-GAAP financial measures and have provided tables in the schedules hereto to reconcile these non-GAAP financial measures to the comparable GAAP financial measures.

Adjusted EBITDA - We define the measure Adjusted EBITDA as GAAP net earnings before depreciation and amortization, interest expense, income taxes, share-based compensation, costs related to the Company’s previously disclosed data security incidents and restructuring of the Sally Germany business.

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Adjusted Net Earnings, Earnings Per Share, Diluted Earnings Per Share and SG&A Expenses — Adjusted net earnings, earnings per share, diluted earnings per share and SG&A expenses are GAAP net earnings, earnings per share, diluted earnings per share and SG&A expenses that exclude costs related to the Company’s previously disclosed management transition plan, data security incidents and restructuring of the Sally Germany business for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures.

We have provided these non-GAAP financial measures as supplemental information to our GAAP financial measures and believe these non-GAAP measures provide investors with additional meaningful financial information regarding our operating performance.  Our management and Board of Directors also use these non-GAAP measures as supplemental measures in the evaluation of our businesses and believe that these non-GAAP measures provide a meaningful measure to evaluate our historical and prospective financial performance.  These non-GAAP measures should not be considered a substitute for or superior to GAAP results.  Furthermore, the non-GAAP measures presented by us may not be comparable to similarly titled measures of other companies.

Supplemental Schedules

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Supplemental Schedule A

SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Earnings

(In thousands, except per share data)

(Unaudited)

(1)         Selling, general and administrative expenses include share-based compensation of $2.9 million and $6.5 million for the three months ended June 30, 2015 and 2014, respectively; and, for the nine months ended June 30, 2015 and 2014, $13.5 million and $18.3 million, respectively. Amounts for the three and nine months ended June 30, 2014 include a charge of $3.5 million in connection with the executive management transition plan disclosed in May 2014.                                               

(2)         Selling, general and administrative expenses include charges of $3.2 million and $0.9 million for the three months ended June 30, 2015 and 2014, respectively; and, for the nine months ended June 30, 2015 and 2014, $5.0 million and $2.0 million, respectively, in connection with the data security incidents disclosed earlier. Amounts for the nine months ended June 30, 2015 reflect a contingent liability of $2.9 million recorded in connection with the data security insident disclosed in March 2014.  

Supplemental Schedule B

SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES

Segment Information

(In thousands)

(Unaudited)

(1)         For the three and nine months ended June 30, 2015, Sally Beauty Supply’s operating profit reflects a charge of $1.1 million in connection with a restructuring of its operations in Germany that was approved by our Board of Directors in June 2015.

(2)         Unallocated expenses consist of corporate and shared costs.

(3)         For the three and the nine months ended June 30, 2014, share-based compensation expense include a charge of $3.5 million in connection with the executive management transition plan disclosed in May 2014.

Supplemental Schedule C

SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES

 Non-GAAP Financial Measures Reconciliations

(In thousands)

(Unaudited)

(1)         For the three months ended June 30, 2015 and 2014, share-based compensation includes $0.0 million and $3.5 million, respectively; and, for the nine months ended June 30, 2015 and 2014, $4.8 million and $8.8 million, respectively, of accelerated expense related to certain retirement-eligible employees who are eligible to continue vesting awards upon retirement. Amounts for the three and nine months ended June 30, 2014 include a charge of $3.5 million in connection with the executive management transition plan disclosed in May 2014. 

(2)         For the three and nine months ended June 30, 2015, selling, general and administrative expenses include a charge of $1.1 million in connection with a restructuring of the Company’s operations in Germany that was approved by our Board of Directors in June 2015. 

(3)         Selling, general and administrative expenses include charges of $3.2 million and $0.9 million for the three months ended June 30, 2015 and 2014, respectively; and, for the nine months ended June 30, 2015 and 2014, $5.0 million and $2.0 million, respectively, in connection with the data security incidents disclosed earlier. Amounts for the nine months ended June 30, 2015 reflect a contingent liability of $2.9 million recorded in connection with the data security insident disclosed in March 2014. 

Supplemental Schedule D

SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES

Non-GAAP Financial Measures Reconciliations, Continued

(1)         For the three months ended June 30, 2014, selling, general and administrative expenses include a share-based compensation charge of $3.5 million in connection with the executive management transition plan disclosed in May 2014. 

(2)         For the three months ended June 30, 2015, selling, general and administrative expenses include a charge of $1.1 million in connection with a restructuring of the Company’s operations in Germany that was approved by our Board of Directors in June 2015. 

(3)         For the three months ended June 30, 2015 and 2014, selling, general and administrative expenses include charges of $3.2 million and $0.9 million, respectively, in connection with the data security incidents disclosed earlier. 

(4)         The tax provision for the adjustments to net earnings was calculated using an estimated effective tax rate of 37.0% and 39.0% for the three months ended June 30, 2015 and 2014, respectively. 

Supplemental Schedule E

SALLY BEAUTY HOLDINGS, INC. AND SUBSIDIARIES

Non-GAAP Financial Measures Reconciliations, Continued