Privacy Policy

SALON SUCCESS

Anti-Corruption and Bribery Policy

Salon Success has a mission ‘to change the world of hairdressing by being Number One in any market we enter’. We can only achieve this by building and maintaining our reputation, both with our team, customers, and suppliers, and with the community we interact with both in the UK and overseas. Our reputation’s protection depends on all of us acting with the highest personal, ethical and corporate standards, and ensuring that our decisions and actions support our mission and values. We are founded on principles of integrity and trust, and of ‘good people achieving good things in good ways’. In line with this, both I as Managing Director and the rest of the Executive Management Group are 100% committed to doing what is right. We have a zero tolerance to any unethical or illegal activities. This extends not only to our direct Team, but to our expectations of customers, suppliers and distribution partners.

Simon Tickler
Managing Director

Anti-Corruption and Bribery Policy

JUNE 2011

1. POLICY STATEMENT

1.1 It is our policy to conduct all of our business in an honest and ethical manner. We take a zero tolerance approach to bribery and corruption and are committed to acting professionally, fairly and with integrity in all our business dealings and relationships wherever we operate and implementing and enforcing effective systems to counter bribery.

1.2 We will uphold all laws relevant to countering bribery and corruption. However, we remain bound by the laws of the UK, including the Bribery Act 2010, in respect of our conduct both at home and abroad.

1.3 The purpose of this policy is to:
(a) set out our responsibilities, and of those working for us, in observing and upholding our position on bribery and corruption; and
(b) provide information and guidance to those working for us on how to recognise and deal with bribery and corruption issues.

1.4 Bribery and corruption are punishable for individuals by up to ten years' imprisonment and if we are found to have taken part in corruption we could face an unlimited fine, be excluded from tendering for public contracts and face damage to our reputation. We therefore take our legal responsibilities very seriously.

1.5 We have identified that the following are particular risks for our business:

• Gifts and Hospitality
• Procurement
• Associated Persons

We are not aware of any facilitation payments but we are will inform our distributors of our zero tolerance on bribery and obtain comfort that they operate in the same manner and that they do not make facilitation payments.

1.6 In this policy, third party means any individual or organisation you come into contact with during the course of your work for us, and includes actual and potential clients, customers, suppliers, distributors, business contacts, agents, advisers, and government and public bodies, including their advisors, representatives and officials, politicians and political parties.

2. WHO IS COVERED BY THE POLICY?
This policy applies to all individuals working at all levels and grades, including senior managers, officers, directors, employees (whether permanent, fixed-term or temporary), consultants, trainees, seconded staff, homeworkers, casual workers and agency staff, volunteers, interns, agents, sponsors, or any other person associated with us, or any of our subsidiaries or their employees, wherever located (collectively referred to as Team Members in this policy).

3. WHAT IS BRIBERY?
A bribe is an inducement or reward offered, promised or provided in order to gain any commercial, contractual, regulatory or personal advantage.

Examples:
Offering a bribe
You offer a potential client tickets to a major sporting event, but only if they agree to do business with us. This would be an offence as you are making the offer to gain a commercial and contractual advantage. We may also be found to have committed an offence because the offer has been made to obtain business for us. It may also be an offence for the potential client to accept your offer.

Receiving a bribe
A supplier gives your nephew a job, but makes it clear that in return they expect you to use your influence in our organisation to ensure we continue to do business with them. It is an offence for a supplier to make such an offer. It would be an offence for you to accept the offer as you would be doing so to gain a personal advantage.

Bribing a foreign official
You arrange for the business to pay an additional payment to a foreign official to speed up an administrative process, such as clearing our goods through customs.
The offence of bribing a foreign public official has been committed as soon as the offer is made. This is because it is made to gain a business advantage for us. We may also be found to have committed an offence.

4. GIFTS AND HOSPITALITY
Any and all Gifts and Hospitality will comply with the Gifts and Hospitality Policy in Schedule 2.

5. FACILITATION PAYMENTS AND KICKBACKS
5.1 We do not make, and will not accept, facilitation payments or "kickbacks" of any kind. Facilitation payments are typically small, unofficial payments made to secure or expedite a routine government action by a government official. They are not commonly paid in the UK, but are common in some other jurisdictions.

5.2 If you are asked to make a payment on our behalf, you should always be mindful of what the payment is for and whether the amount requested is proportionate to the goods or services provided. You should always ask for a receipt which details the reason for the payment. If you have any suspicions, concerns or queries regarding a payment, you should raise these with the compliance manager.

5.3 Kickbacks are typically payments made in return for a business favour or advantage. All team members must avoid any activity that might lead to, or suggest, that a facilitation payment or kickback will be made or accepted by us.

6. DONATIONS
We do not make contributions to political parties. We only make charitable donations that are legal and ethical under local laws and practices. No donation must be offered or made without the prior approval of your manager or the compliance manager and must be logged appropriately.

7. YOUR RESPONSIBILITIES
7.1 You must ensure that you read, understand and comply with this policy.

7.2 The prevention, detection and reporting of bribery and other forms of corruption are the responsibility of all those working for us or under our control. All team members are required to avoid any activity that might lead to, or suggest, a breach of this policy.

7.3 You must notify your manager or the compliance manager or the confidential helpline as soon as possible if you believe or suspect that a conflict with this policy has occurred, or may occur in the future. For example, if a client or potential client offers you something to gain a business advantage with us, or indicates to you that a gift or payment is required to secure their business. Further "red flags" that may indicate bribery or corruption are set out in Schedule 1.

7.4 Any employee who breaches this policy will face disciplinary action, which could result in dismissal for gross misconduct. We reserve our right to terminate our contractual relationship with other team members if they breach this policy.

8. RECORD KEEPING
8.1 We must keep financial records and have appropriate internal controls in place which will evidence the business reason for making payments to third parties.

8.2 You must declare and keep a written record of hospitality or gifts accepted or offered in accordance with the Gifts and Hospitality policy in Schedule 2, which will be subject to managerial review.

8.3 You must ensure all expenses claims relating to hospitality, gifts or expenses incurred to third parties are submitted in accordance with our expenses process and specifically record the reason for the expenditure.

8.4 All accounts, invoices, memoranda and other documents and records relating to dealings with third parties, such as clients, suppliers and business contacts, should be prepared and maintained with strict accuracy and completeness. No accounts must be kept "off-book" to facilitate or conceal improper payments.

9. HOW TO RAISE A CONCERN
You are encouraged to raise concerns about any issue or suspicion of malpractice at the earliest possible stage. If you are unsure whether a particular act constitutes bribery or corruption, or if you have any other queries, these should be raised with your line manager or the compliance manager or through the confidential helpline. Concerns should be reported by following the procedure set out in our Whistleblowing Policy or through the confidential helpline. A copy of our Whistleblowing Policy can be found at Section 2.13 of the Team Handbook.

10. WHAT TO DO IF YOU ARE A VICTIM OF BRIBERY OR CORRUPTION
It is important that you tell the compliance manager or the confidential helpline as soon as possible if you are offered a bribe by a third party, are asked to make one, suspect that this may happen in the future, or believe that you are a victim of another form of unlawful activity.

11. PROTECTION
11.1 Team Members who refuse to accept or offer a bribe, or those who raise concerns or report another's wrongdoing, are sometimes worried about possible repercussions. We aim to encourage openness and will support anyone who raises genuine concerns in good faith under this policy, even if they turn out to be mistaken.

11.2 We are committed to ensuring no one suffers any detrimental treatment as a result of refusing to take part in bribery or corruption, or because of reporting in good faith their suspicion that an actual or potential bribery or other corruption offence has taken place, or may take place in the future. Detrimental treatment includes dismissal, disciplinary action, threats or other unfavourable treatment connected with raising a concern. If you believe that you have suffered any such treatment, you should inform the compliance manager immediately. If the matter is not remedied, and you are an employee, you should raise it formally using our Grievance Procedure, which can be found at Section 7.3.2 of the Team Handbook.

12. TRAINING AND COMMUNICATION
12.1 Training on this policy forms part of the induction process for all new Team Members. All existing Team Members will receive regular, relevant training on how to implement and adhere to this policy, through the intranet, team focus meetings and any other meetings required.

12.2 Our zero tolerance approach to bribery and corruption must be communicated to all suppliers, contractors and business partners at the outset of our business relationship with them and as appropriate thereafter.

13. WHO IS RESPONSIBLE FOR THE POLICY?
13.1 The board of directors has overall responsibility for ensuring this policy complies with our legal and ethical obligations, and that all those under our control comply with it.

13.2 The compliance manager has primary and day-to-day responsibility for implementing this policy, and for monitoring its use and effectiveness. Management at all levels are responsible for ensuring those reporting to them are made aware of and understand this policy and are given adequate and regular training on it.

14. MONITORING AND REVIEW
14.1 The compliance manager will monitor the effectiveness and review the implementation of this policy, regularly considering its suitability, adequacy and effectiveness. Any improvements identified will be made as soon as possible. Internal control systems and procedures will be subject to regular audits to provide assurance that they are effective in countering bribery and corruption.

14.2 All Team Members are responsible for the success of this policy and should ensure they use it to disclose any suspected danger or wrongdoing.

14.3 Team Members are invited to comment on this policy and suggest ways in which it might be improved. Comments, suggestions and queries should be addressed to the compliance manager.

This policy does not form part of any employee's contract of employment and it may be amended at any time. Schedule 1 Potential risk scenarios: "red flags" The following is a list of possible red flags that may arise during the course of you working for us and which may raise concerns under various anti-bribery and anti-corruption laws. The list is not intended to be exhaustive and is for illustrative purposes only.

If you encounter any of these red flags while working for us, you must report them promptly to your manager or to the compliance manager or using the procedure set out in the Whistleblowing policy:

• (a) you become aware that a third party engages in, or has been accused of engaging in, improper business practices;
• (b) you learn that a third party has a reputation for paying bribes, or requiring that bribes are paid to them, or has a reputation for having a "special relationship" with foreign government officials;
• (c) a third party insists on receiving a commission or fee payment before committing to sign up to a contract with us, or carrying out a government function or process for us;
• (d) a third party requests payment in cash and/or refuses to sign a formal commission or fee agreement, or to provide an invoice or receipt for a payment made;
• (e) a third party requests that payment is made to a country or geographic location different from where the third party resides or conducts business;
• (f) a third party requests an unexpected additional fee or commission to "facilitate" a service;
• (g) a third party demands lavish entertainment or gifts before commencing or continuing contractual negotiations or provision of services;
• (h) a third party requests that a payment is made to "overlook" potential legal violations;
• (i) a third party requests that you provide employment or some other advantage to a friend or relative;
• (j) you receive an invoice from a third party that appears to be non-standard or customised;
• (k) a third party insists on the use of side letters or refuses to put terms agreed in writing;
• (l) you notice that we have been invoiced for a commission or fee payment that appears large given the service stated to have been provided;
• (m) a third party requests or requires the use of an agent, intermediary, consultant, distributor or supplier that is not typically used by or known to us; and
• (n) you are offered an unusually generous gift or offered lavish hospitality by a third party.

SCHEDULE 2
GIFTS AND HOSPITALITY POLICY

Introduction 1.
This policy is intended to provide advice to all Team Members, who in the course of their day to day work or as result of their employment, either receive offers of gifts and hospitality or provide gifts and hospitality to others on behalf of Salon Success.

2. Further, in order to maintain trust and integrity with our business partners and avoid even the appearance of unethical or illegal conduct or a potential conflict of interest, it is important to be prudent when accepting business courtesies such as the giving and receiving of gifts or entertainment:

3. Team Members are expected to act with integrity when deciding whether to accept a business courtesy (ie anything of value for which the recipient does not pay fair market value, including gifts, services and entertainment). Team Members who are buyers, who influence buying, or who are involved in procurement transactions in any way (eg determining specifications, evaluating bids, choosing vendors or suppliers) must be especially careful when deciding whether or not to accept a business courtesy.

4. This policy does not prohibit normal and appropriate hospitality (given and received) to or from third parties.

Responsibility
5. HR has the ownership of this policy and the ‘Gift and Hospitality registers (received and given). Individual Team Members are responsible for reporting any gifts or hospitality offered or given and whether these have been accepted or declined. HR will record this information on the relevant register.

Gifts and Hospitality Definitions
6. ‘Gift’ means any item, cash, goods, or any service which is offered for the personal benefit at a cost, or no cost, that is less than its commercial value.

7. ‘Hospitality’ means any generous or material welcome or reception that is more than an incidental kind, such as beverage or light refreshment.

Gifts and Hospitality
8. The giving or receipt of Gifts or Hospitality is not prohibited, if the following requirements are met:

• (a) it is not made with the intention of influencing a third party to obtain or retain business or a business advantage, or to reward the provision or retention of business or a business advantage, or in explicit or implicit exchange for favours or benefits;
• (b) it complies with local law;
• (c) it is given in our name, not in your name;
• (d) it does not include cash or a cash equivalent (such as gift certificates or vouchers) without the prior approval of the compliance manager;
• (e) it is appropriate in the circumstances. For example, in the UK it is customary for small gifts to be given at Christmas time;
• (f) taking into account the reason for the Gift, it is of an appropriate type and value and given at an appropriate time;
• (g) it is given openly, not secretly;
• (h) Gifts or Hospitality should not be offered to, or accepted from, government officials or representatives, or politicians or political parties;
• (i) All Gifts given must be logged appropriately i.e. Training & Promotional data entry (where Gifts are products) or ‘Gifts & Hospitality Given’ register, where Gifts/Hospitality do not include products;
• (j) Hospitality given to a third party must be logged on the ‘Gifts & Hospitality Given’ register where the Hospitality provided is above a simple, low cost hospitality such as a working lunch or evening meal compared to a more expensive and elaborate hospitality above £50;
• (k) Gifts or Hospitality received above the value of £50, or where more than one gift from a supplier is received in a year, where the combined value is above £50, must be logged on the ‘Gifts & Hospitality Received’ register. Where the value (or reasonably estimated value) of the Gift or Hospitality received is unclear, these should be logged. Please seek advice before accepting a Gift or Hospitality if unsure; and
• (l) Any Gift or Hospitality exceeding £100 per person must have the approval of the General Counsel of Sally Beauty Holdings, Inc.

9. It is encouraged that any gifts that are accepted be donated to the Annual Christmas Raffle. If you wish to donate a gift, contact HR.

10. We appreciate that the practice of giving business gifts varies between countries and regions and what may be normal and acceptable in one region may not be in another. The test to be applied is whether in all the circumstances the Gift or Hospitality is reasonable and justifiable. The intention behind the Gift or Hospitality should always be considered. All Team Members need to be aware of, and guard against, dangers of misrepresentation or perception of favouritism.

What Is Not Acceptable?
11. It is not acceptable for you (or someone on your behalf) to:

• a) give, promise to give, or offer, a payment, Gift or Hospitality with the expectation or hope that a business advantage will be received, or to reward a business advantage already given;
• b) give, promise to give, offer, or accept a payment, Gift or Hospitality to or from a government official, agent or representative to "facilitate" or expedite a routine procedure (any incidents of this nature which arise must be reported to the Managing Director, Compliance Manager and General Counsel of Sally Beauty Holdings Inc.);
• c) accept payment from a third party that you know or suspect is offered with the expectation that it will obtain a business advantage for them;
• d) accept a Gift or Hospitality from a third party if you know or suspect that it is offered or provided with an expectation that a business advantage will be provided by us in return;
• e) threaten or retaliate against another team member who has refused to commit a bribery offence or who has raised concerns under this policy; or
• f) engage in any activity that might lead to a breach of this policy.