Exhibit No. 10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of the 8th day of
February, 2007, is made by and between Regis Corporation, a Minnesota
corporation (the “Corporation”), and Paul D. Finkelstein (the “Executive”).

RECITALS

WHEREAS, the Corporation and the Executive are parties to that certain
Employment and Deferred Compensation Agreement, dated April 14, 1998, as
subsequently amended (the “Existing Agreement”); and

WHEREAS, the Corporation and the Executive also are parties to an Agreement
dated May 24, 2005, as subsequently amended, regarding a policy insuring the
life of the Executive (the “Insurance Agreement”); and

WHEREAS, the Corporation previously entered into a new employment agreement with
the Executive that was to become effective on the closing of a strategic
transaction (the “Proposed Transaction”) with Alberto-Culver Company; and

WHEREAS, the Proposed Transaction has been cancelled and will not occur so that
such new employment agreement will not become effective; and

WHEREAS, the Corporation and the Executive now desire (i) to terminate the
Existing Agreement, (ii) to enter into this Agreement to set out the terms and
conditions of the Executive’s continued service with the Corporation, and (iii)
to consolidate the terms and conditions of the Insurance Agreement in this
Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the provisions of this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Corporation agrees to employ the Executive, and the Executive
agrees to such employment, upon the following terms and conditions:

1.             EFFECTIVE DATE; PERIOD OF EMPLOYMENT.

(a)           Effective Date.  This Agreement shall be effective at 12:01 a.m.
on February 8, 2007 (the “Effective Date”).

(b)           Period of Employment.  The employment of the Executive by the
Corporation pursuant to this Agreement shall be for a period (sometimes referred
to herein as the “period of employment”) beginning on the Effective Date and
continuing, unless sooner terminated as provided in Section 6 herein, until
midnight on the day immediately preceding the fifth anniversary of the Effective
Date.  The Corporation and the Executive recognize and acknowledge that this
Agreement does not provide for any automatic renewal.  Notwithstanding the end
of the Executive’s period of employment, this Agreement shall remain in full
force and effect thereafter for the purpose of determining the Executive’s
entitlement to any payments of his life insurance premiums and his Adjusted
Monthly Benefit as provided under Sections 4(e) and (f) hereof.

(c)           Definitions.  Various terms are defined either where they first
appear underlined in this Agreement or in Section.

2.             DUTIES.  During the period of employment, the Executive shall
serve as President and Chief Executive Officer of the Corporation, and in such
other additional office or offices to which he shall be elected by the Board of
Directors of the Corporation (“Board”) with his approval, performing the duties
of such office or offices held at the time and such other duties not
inconsistent with his position as such an officer or director as are assigned to
him by the Board or committees of the Board.  During the period of employment,
the Executive shall devote his full time and attention to the business of the
Corporation and the discharge of the aforementioned duties, except for
reasonable vacations, absences due to illness, and reasonable time for attention
to personal affairs and charitable activities.

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3.             OFFICE FACILITIES.  During the period of employment, the
Executive shall have his office where the Corporation’s principal executive
offices are located from time to time, which currently are at 7201 Metro
Boulevard, Edina, Minnesota and the Corporation shall furnish Executive with
office facilities reasonably suitable to his position at such location.

4.             COMPENSATION.  As compensation for his services performed
hereunder, the Corporation shall pay or provide to the Executive the following:

(a)           Base Salary.  The Corporation shall pay the Executive a base
salary (the “Base Salary”), calculated at the rate of One MillionOne Hundred
Thousand Dollars ($1,100,000.00) per annum (which Base Salary may be increased,
but not reduced, by the Compensation Committee of the Board (the “Compensation
Committee”) at any time and from time to time in its discretion), payable
monthly, semi-monthly or weekly according to the Corporation’s general practice
for its executives, for the period of employment under this Agreement.  Such
Base Salary may be increased annually by an amount determined by the
Compensation Committee.  Such Base Salary, including such annual increases
(which shall be considered part of the Base Salary), shall not be reduced during
the period of employment hereunder.

(b)           Bonus.  The Executive shall be eligible for an annual performance
bonus (the “Bonus”) as determined under the provisions of the Regis Corporation
2004 Short Term Incentive Compensation Plan, as amended from time to time, any
successor to such plan, or such other annual incentive compensation program
developed for the Corporation’s executive officers.

(c)           Other Incentive Plans.  During the period of employment, the
Executive shall be eligible to participate in such other incentive compensation
programs in accordance with their terms as the Corporation may have in effect
from time to time for its executive personnel (including the Regis Corporation
Long Term Incentive Plan, as amended from time to time, and any successor
thereto), other than any annual cash bonus plan (which is dealt with in Section
4(b) hereof), and all compensation and other entitlements earned thereunder
shall be in addition to, and shall not in any way reduce, the amount payable as
Base Salary and Bonus.

(d)           Restricted StockUnits.  On the Effective Date, the Corporation
shall grant the Executive restricted stock units with respect to One Hundred
Sixty-Five Thousand (165,000) shares of the Corporation’s common stock, subject
to the terms and conditions of the Regis Corporation 2004 Long Term Incentive
Plan, including any amendments made to provide for such awards.  Such restricted
stockunits shall remain unvested and forfeitable until the day immediately
preceding the fifth anniversary of the Effective Date; at such time the
restricted stock units shall become fully (100%) vested, provided the Executive
is employed by the Corporation (or a subsidiary of the Corporation) on such
date.  Payment of such restricted stock units automatically shall be deferred
until January 31 of the calendar year next following the vesting date provided
in the immediately preceding sentence.

(e)           Life Insurance.  Subject to the last sentence of this Section
4(e), the Corporation shall reimburse the Executive the sum of One Hundred
Thousand Dollars ($100,000) annually for premiums payable by the Executive with
respect to life insurance coverage under a policy (issued by the John Hancock
Life Insurance Company) with a face amount of Ten Million Dollars ($10,000,000)
insuring the Executive’s life, or any successor or replacement life insurance
policy; said policy shall be referred to herein as the “Policy.”  During such
time that the Corporation shall be making the premium payments pursuant to the
preceding sentence of this Section 4(e), the Corporation shall, in addition to
each premium payment, pay the Executive an amount determined by the following
formula: (P/1-X)-P, where P equals the Corporation’s premium payment obligation
on the Policy pursuant to this Section 4(e) and X equals the Executive’s
aggregate marginal federal and state income tax bracket for such year.  Such
payments and tax gross-up shall be made during the term of this Agreement and,
if at least ten (10) annual premium payments have not been made by the
Corporation with respect to said Policy, for such additional time (regardless of
whether the Executive continues to be employed by the Corporation) until the
Corporation has made a total of ten (10) annual premium payments on said Policy;
provided, however, that the Corporation’s obligation to make such premium
payments and tax gross-up shall cease upon the Executive’s termination of this
Agreement by reason of his voluntary resignation during the term of this
Agreement.

(f)            Retirement Benefit.  The Corporation shall pay to the Executive,
if living, or to his former spouse Barbara (sometimes referred to as the
Executive’s “Former Spouse”), in the event of his death, the following sums

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(sometimes referred to as his “Retirement Benefit”) upon the terms and
conditions and for the periods hereinafter set forth:

(i)            Payments upon Retirement or Involuntary Termination.  Commencing
upon the last day of the month next following the month in which the Executive
(1) retires from employment with the Corporation after attaining age 65, (2)
reaches age 65 if he is then disabled within the meaning of Section 4(f)(iv), or
(3) is terminated by the Corporation without Cause or by the Executive for Good
Reason, the Corporation shall pay to the Executive a Retirement Benefit equal to
his Adjusted Monthly Benefit and shall continue to pay him such amounts monthly
on the same date of each succeeding month for the remainder of his life.  If the
Executive’s Former Spouse survives him, the Corporation shall pay to such Former
Spouse for the remainder of her life one-half of the Executive’s Adjusted
Monthly Benefit.

(ii)           Early Voluntary Termination.  In the event the Executive
voluntarily terminates his employment with the Corporation before reaching age
65, and prior to any Change in Control, the Corporation shall pay to the
Executive a Retirement Benefit equal to two-thirds of his Discounted Vested
Monthly Benefit commencing upon the last day of the month next following the
month in which the date such termination occurs, and shall continue to pay him
such amount monthly on the same date of each succeeding month for a total of 240
months.  If the Executive dies before receiving all 240 monthly payments
specified herein, the Corporation shall pay to his Designated Beneficiary the
remaining monthly payments as they become due.

(iii)          Former Spousal Payments.  If the Executive dies while employed by
the Corporation, the Corporation shall pay to his Former Spouse one-half of the
Adjusted Monthly Benefit to which the Executive would have been entitled were he
living, such payments to commence within thirty (30) days after the Executive’s
death and to continue monthly for the remainder of her life.

(iv)          Payments During Disability.  In addition to the payments provided
in Sections 4(f)(i) and (ii) should the Executive become disabled while employed
by the Corporation, and such disability continues for a period of six (6)
months,  the Corporation shall pay to the Executive his Monthly Benefit during
each month that the Executive remains disabled until he attains age 65 or until
his death prior to attaining such age, at which time the payments provided in
Sections 4(f)(i), (ii) or (iii) (whichever is applicable) shall begin.  The
first payment under this Section 4(f)(iv) shall be made during the seventh month
of such disability, and each succeeding payment shall be made on the same date
of each succeeding month thereafter.  Payments shall be made under this Section
4(f)(iv) only if the Executive is disabled within the meaning of the disability
clause of the Corporation’s long term disability insurance policy or program as
then in effect.

(v)           Termination for Cause.  If the Executive’s employment with the
Corporation is terminated at any time for Cause (as defined in Section 8), the
Corporation shall have no obligation to make any payments to him under this
Section 4(f) and all such future payments shall be forfeited.

(g)           Health, Welfare and Retirement Plans; Vacation.  During the period
of employment, the Executive shall be entitled to:

(i)            participate in such retirement, health (medical, hospital and/or
dental) insurance, life insurance, disability insurance, flexible benefits
arrangements and accident insurance plans and programs as are maintained in
effect from time to time by the Corporation for its headquarters employees;

(ii)           participate in other non-duplicative benefit programs which the
Corporation may from time to time offer generally to headquarters personnel of
the Corporation; and

(iii)          take vacations and be entitled to sick leave in accordance with
the Corporation’s policy for executive personnel of the Corporation.

(h)           Expenses.  Executive shall be reimbursed for reasonable business
expenses incurred in connection with the performance of his duties hereunder
consistent with the Company’s policy regarding reimbursement of such

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expenses.  With respect to any benefits or payments received or owed to the
Executive hereunder, the Executive shall cooperate in good faith with the
Corporation to structure such benefits or payments in the most tax-efficient
manner to the Corporation.

5.             EFFECT OF DISABILITY AND CERTAIN HAZARDS.  The Executive shall
not be obligated to perform the services required of him by this Agreement
during any period in which he is disabled or his health is impaired to an extent
which would render his performance of such services hazardous to his health or
life, and relief from such obligation shall not in any way affect his rights
hereunder except to the extent that such disability or health impairment may
result in termination of his employment by the Corporation pursuant to Section 6
herein.

6.             TERMINATION OF EMPLOYMENT.  The employment of the Executive by
the Corporation pursuant to this Agreement may be terminated by the Corporation
or the Executive at any time, as follows:

(a)           Death.  In the event of the Executive’s death prior to the
expiration of the period of employment hereunder, such employment shall
terminate on the date of death.

(b)           Permanent Disability.  The Executive’s employment may be
terminated by the Corporation prior to the expiration of the period of
employment hereunder due to Executive’s physical or mental disability or health
impairment which prevents the effective performance by the Executive of his
duties hereunder on a full time basis, with such termination to occur (i) with
respect to disability, on or after the time which the Executive becomes entitled
to disability compensation benefits under the Corporation’s long term disability
insurance policy or program as then in effect or (ii) with respect to health
impairment, after Executive has been unable to substantially perform his
services hereunder for six consecutive months.  Any dispute as to the
Executive’s physical or mental disability or health impairment shall be settled
by the opinion of an impartial physician selected by the parties or their
representatives or, in the event of failure to make a joint selection after
request therefor by either party to the other, a physician selected by the
Corporation, with the fees and expenses of any such physician to be borne by the
Corporation.

(c)           Cause.  The Corporation, by giving written notice of termination
to the Executive, may terminate such employment at any time prior to the
expiration of the period of employment hereunder for “Cause” (as defined in
Section 8).

(d)           Without Cause.  The Corporation may terminate such employment at
any time prior to said date without Cause (which shall be for any reason not
covered by preceding Sections 6(a) through (c)) upon sixty (60) days prior
written notice to the Executive.

(e)           By the Executive.  The Executive may terminate such employment at
any time for an applicable Good Reason (as defined in Section 8), subject to
Section 6(f).  The Executive may also terminate such employment for any other
reason upon prior written notice thereof to the Corporation, and the Executive
agrees to use his reasonable best efforts to provide twelve (12) months’ prior
written notice in such event.

(f)            Notice of Good Reason.  If the Executive believes that he is
entitled to terminate his employment with the Corporation for an applicable Good
Reason, he may apply in writing to the Corporation for confirmation of such
entitlement prior to the Executive’s actual separation from employment, by
following the claims procedure set forth in Section 11 hereof.  The submission
of such a request by the Executive shall not constitute “Cause” for the
Corporation to terminate the Executive under Section 6(c) hereof; and the
Executive shall continue to receive all compensation and benefits he was
receiving at the time of such submission throughout the resolution of the matter
pursuant to the procedures set forth in Section 11 hereof.  If the Executive’s
request for a termination of employment for Good Reason is denied under both the
request and appeal procedures set forth in Sections 11(a) and (b) hereof, then
the parties shall promptly submit the claim to binding arbitration pursuant to
Section 11(c) and use their best efforts to conclude the arbitration within
ninety (90) days after the claim is submitted.

(g)           Notice of Termination.  Any termination of the Executive’s
employment by the Corporation or by the Executive (other than termination based
on the Executive’s death) shall be communicated by a written Notice of
Termination to the other party hereto.  For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in

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reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.  For
purposes of this Agreement, no purported termination shall be effective without
the delivery of such Notice of Termination.

(h)           Date of Termination.  The “date of termination” of the Executive’s
employment shall mean (i) if the Executive is terminated by his death, the date
of his death, (ii) if the Executive’s employment is terminated due to a
permanent disability or health impairment, thirty (30) days after the Notice of
Termination is given (provided that the Executive shall not have returned to the
performance of his duties on a full-time basis during such period), (iii) if the
Executive’s employment is terminated pursuant to a termination for Cause, the
date specified in the Notice of Termination, and (iv) if the Executive’s
employment is terminated for any other reason, the date shall be the later of
thirty (30) days after termination as provided by the Notice of Termination or
the date of the final resolution of the arbitration and claims procedures set
forth in Section 11 hereof, unless otherwise agreed by the Executive and
Corporation or otherwise provided in this Agreement.

7.             PAYMENTS UPON TERMINATION.

(a)           Death or Disability.  If the Executive’s employment is terminated
by reason of his death or permanent disability, he (or the legal representative
of his estate in the event of his death) shall be entitled to the following:

(i)            Accrued Compensation.  All compensation due the Executive under
this Agreement and under each plan or program of the Corporation in which he may
be participating at the time shall cease to accrue as of the date of such
termination, except (1) as specifically provided in this Agreement or (2) in the
case of any such plan or program, if and to the extent otherwise provided in the
terms of such plan or program or by applicable law.  All such compensation
accrued as of the date of such termination but not previously paid shall be paid
to the Executive at the time such payment otherwise would be due.

(ii)           Accrued Obligations.  In addition, the Executive shall also be
entitled to the following: (1) a payment equal to the Highest Annual Bonus, pro
rata based on the portion of the year ended on the date of the termination; (2)
unpaid deferred compensation under the Regis Corporation Non-Qualified Deferred
Compensation Plan, together with all earnings thereon (it being understood that
this is separate from, and in addition to, the Retirement Benefit set forth in
Section 4(f) hereof); and (3) accrued vacation pay.

(iii)          Acceleration of Vesting.  All options to purchase the
Corporation’s common stock and shares of restricted stock and restricted stock
units held by Executive at the time of such termination but still subject to
vesting, shall be fully and immediately vested.  All other benefits or interests
of Executive in any of the Corporation’s long term incentive plans or
arrangements which are subject to vesting shall be fully and immediately vested.

(iv)          Benefits.  In lieu of any continuation coverage the Executive may
have been entitled to receive under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, (“COBRA”)during the period commencing
with the Executive’s termination of employment and continuing through the death
of the survivor of the Executive and any surviving spouse, the Executive shall
be entitled to the continuation of the same or equivalent health,
hospitalization, prescription drug and dental insurance coverage that he had
received immediately prior to termination of employment, as if he had continued
to be an executive employee of the Corporation.  In the event that the Executive
is ineligible under the terms of such insurance to continue to be so covered,
the Corporation shall provide the Executive with substantially equivalent
coverage through other sources or will reimburse the Executive for actual
premiums paid for such alternative coverage (such as Medicare Part A, Part B and
prescription drug coverage) that the Executive obtains for the payment period.

(b)           Termination Without Cause or for Good Reason.  If the Executive’s
employment pursuant to this Agreement is terminated without Cause pursuant to
Section 6(d) hereof or the Executive terminates this Agreement for Good Reason,
then the Executive shall be entitled to and shall receive the following:

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(i)            Accrued Compensation.  All compensation due the Executive under
this Agreement and under each plan or program of the Corporation in which he may
be participating at the time shall cease to accrue as of the date of such
termination, except (1) as specifically provided in this Agreement or (2) in the
case of any such plan or program, if and to the extent otherwise provided in the
terms of such plan or program or by applicable law.  All such compensation
accrued as of the date of such termination but not previously paid shall be paid
to the Executive at the time such payment otherwise would be due.

(ii)           Accrued Obligations.  In addition, the Executive shall also be
entitled to the following: (1) a payment equal to the Highest Annual Bonus, pro
rata based on the portion of the year ended on the date of the termination; (2)
unpaid deferred compensation under the Regis Corporation Non-Qualified Deferred
Compensation Plan, together with all earnings thereon (it being understood that
this is separate from, and in addition to, the Retirement Benefit set forth in
Section 4(f) hereof); and (3) accrued vacation pay.

(iii)          Acceleration of Vesting.  All options to purchase the
Corporation’s common stock and shares of restricted stock and restricted stock
units held by Executive at the time of such termination but still subject to
vesting, shall be fully and immediately vested.  All other benefits or interests
of Executive in any of the Corporation’s long term incentive plans or
arrangements which are subject to vesting shall be fully and immediately vested.

(iv)          Benefits.  In lieu of any continuation coverage the Executive may
have been entitled to receive under COBRA during the period commencing with the
Executive’s termination of employment and continuing through the death of the
survivor of the Executive and any surviving spouse, the Executive shall be
entitled to the continuation of the same or equivalent health, hospitalization,
prescription drug and dental insurance coverage that he had received immediately
prior to termination of employment, as if he had continued to be an executive
employee of the Corporation.  In the event that the Executive is ineligible
under the terms of such insurance to continue to be so covered, the Corporation
shall provide the Executive with substantially equivalent coverage through other
sources or will reimburse the Executive for actual premiums paid for such
alternative coverage (such as Medicare Part A, Part B and prescription drug
coverage) that the Executive obtains for the payment period.

(v)           Severance Payment.  The Executive shall be entitled to and shall
receive a lump sum cash payment (the “Severance Payment”) from the Corporation. 
The amount of the Severance Payment shall equal the product of:

(1) the sum of (A) the Executive’s Base Salary and (B) the Highest Annual Bonus
and

(2) the number of full and partial years (rounded to the next highest month)
remaining during the period of employment at the date of termination, but in no
case (A) more than three (3) or (B) less than two (2).

(c)           Termination for Cause or Without Good Reason.  If the Executive’s
employment pursuant to this Agreement is terminated pursuant to subsection (c)
of Section 6 hereof, the Executive terminates this Agreement without Good
Reason, or the Executive’s employment hereunder terminates due to the expiration
of the period of employment, Executive shall be entitled to and shall receive:

(i)            Accrued Compensation.  All compensation due the Executive under
this Agreement and under each plan or program of the Corporation in which he may
be participating at the time shall cease to accrue as of the date of such
termination, except (1) as specifically provided in this Agreement or (2) in the
case of any such plan or program, if and to the extent otherwise provided in the
terms of such plan or program or by applicable law.  All such compensation
accrued as of the date of such termination but not previously paid shall be paid
to the Executive at the time such payment otherwise would be due.

(ii)           Accrued Obligations.  In addition, Executive shall also be
entitled to the following: (1) unpaid deferred compensation under the Regis
Corporation Non-Qualified Deferred Compensation Plan,

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together with all earnings thereon (it being understood that this is separate
from, and in addition to, the Retirement Benefit set forth in Section 4(f)
hereof); and (2) accrued vacation pay.

(d)           Change in Control.  If, following a Change in Control, (x) the
Executive’s employment pursuant to this Agreement is terminated by the
Corporation (or any successor entity) for any reason or by the Executive for
Good Reason or (y) the Executive’s employment is terminated by the Corporation
(or any successor entity) for any reason or by the Executive for Good Reason
within two (2) years of such Change in Control, then the Executive shall be
entitled to and shall receive the compensation, benefits and other items
described in Sections 7(b)(i) through (v) above.  In addition, upon a Change in
Control the Executive also shall be entitled to the following compensation and
other benefits, upon the terms and conditions described herein:  

(i)            Company Stock Award.  The Executive automatically shall receive
Three Hundred Thousand (300,000) shares of the Corporation’s common stock.  Any
such shares awarded under this Section shall be subject to automatic adjustment
to reflect any Corporation share dividend, share split, combination or exchange
of shares, recapitalization or other change in the capital structure of the
Corporation since the Effective Date.

(ii)           Impact on Retirement Benefit.  Notwithstanding any other
provision of this Agreement, if the Executive’s employment with the Corporation
terminates at any time following a Change in Control, whether such termination
is initiated by the Executive or by the Corporation (unless the termination is
by the Corporation for Cause), the Corporation, within five (5) business days
after such termination, shall commence payment of the Executive’s Adjusted
Monthly Benefit, without any reduction for vesting or for discounting, and shall
continue such payments as provided in Section 4(f) hereof.

(iii)          Retirement Benefit Alternative.  As an alternative to receiving
payments of the Executive’s Adjusted Monthly Benefit under Section 7(d)(ii), the
Executive at his option may request payment in full of his Aggregate Benefit,
which shall be paid by the Corporation to the Executive within five (5) business
days after the Executive gives notice to the Corporation of his election to
receive such Aggregate Benefit in lieu of his Adjusted Monthly Benefits.  For
the purpose of calculating the Executive’s Aggregate Benefit pursuant to this
Section 7(d)(iii), the Executive’s Adjusted Monthly Benefit shall be assumed to
increase annually during the Aggregate Benefit Period by four percent (4%) of
the prior year’s Adjusted Monthly Benefit.  Any such notice shall be given by
the Executive to the Corporation by certified mail or by facsimile transmission
sent to the Corporation’s principal place of business and to the attention of
the Corporation’s chief financial officer, and shall be effective immediately
upon such transmission or two (2) days after such mailing.

(iv)          Life Insurance Premiums.  Within five (5) business days of a
Change in Control, the Corporation shall pay to the Executive a lump sum amount
sufficient to pay a certain number of future annual premiums required with
respect to the Policy described in Section 4(e).  The number of future annual
premiums referenced in the immediately preceding sentence of this Section
7(d)(iv) shall equal (1) ten, reduced by (2) the number of annual premium
payments already made under such policy as of the date of the Change in Control.
In addition, and at the time such payment is made to the Executive, the
Corporation shall pay to the Executive an additional amount determined by the
formula described in the second sentence of Section 4(e).

(e)           Tax Gross-Up.  If any payments (including awards) received by the
Executive pursuant to this Agreement will be subject to the excise tax (the
“Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”), or any successor or similar provision of the Code, the
Corporation shall pay to the Executive additional compensation such that the net
amount received by the Executive after deduction of any Excise Tax (and taking
into account any federal, state and local income taxes payable by the Executive
as a result of the receipt of such gross-up compensation), shall be equal to the
total amounts he would have received had no such Excise Tax (or any interest or
penalties thereon) been paid or incurred.  The Corporation shall pay such
additional compensation at the time when the Corporation withholds such Excise
Tax from any payments to the Executive (or otherwise makes a parachute payment
to Executive).  The calculation of the tax gross-up payment shall be approved by
an independent certified public accounting firm and the Executive’s designated
financial adviser, with the fees in each case payable by the Corporation.

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(f)            Payment Terms.  Unless otherwise specified in this Section 7, all
cash payments to which Executive is entitled pursuant to this Section 7 shall be
made in a lump sum within ten (10) business days of the date of termination.  If
on the date of separation from service with the Corporation and all corporations
or entities with which the Corporation would be considered a single employer
under subsections (b) and (c) of Code, the Executive is a “specified employee”
as defined in Section 416(i) of the Code of a publicly traded company,
determined as of December 31 of each calendar year and applied as of April 1
following such determination in accordance with Section 409A of the Code and the
guidance issued by the Department of the Treasury with respect to the
application of such Section 409A, payments under this Agreement which fall
within the definition of “deferred compensation,” as such term is applied under
such Section 409A, shall commence as of the first day on which payment could be
made without triggering any tax or penalty under such Section 409A.

8.             DEFINITIONS.  Certain terms are defined where they first appear
in this Agreement and are underlined for ease of reference.  In addition, the
following definitions shall apply for purposes of this Agreement.

“Adjusted Monthly Benefit”  shall mean the Executive’s Monthly Benefit increased
annually after the first year during which Monthly Benefits are paid in
proportion to any increase in the Consumer Price Index for the preceding year.

“Aggregate Benefit”  shall mean an amount equal to the Executive’s Adjusted
Monthly Benefit multiplied by the number of months in the Aggregate Benefit
Period, calculated on a gross basis without any discount to present value.

“Aggregate Benefit Period”shall mean the number of months equal to the greater
of (i) 240 months, or (ii) the Joint Life Expectancy of the Executive and his
Former Spouse.

“Cause” shall mean (a) acts during the term of this Agreement or the Existing
Agreement (i) resulting in a felony conviction under any Federal or state
statute, which is materially detrimental to the financial interests of the
Corporation, or (ii) willful non-performance by the Executive of his material
employment duties required by this Agreement (other than by reason of his
physical or mental incapacity) or (b) the Executive willfully engaging in fraud
or gross misconduct which is materially detrimental to the financial interests
of the Corporation during the term of this Agreement or the Existing Agreement,
with “Cause” to be determined in any case by the Board after reasonable written
notice to Executive and an opportunity for Executive to be heard at a meeting of
the Board and with reasonable opportunity (of not less than thirty (30) days) in
the case of clause (a)(ii) to cease substantial non-performance.

“Change in Control” shall be deemed to have occurred at such time as any of the
following events occur: (a) any “person” within the meaning of Section 2(a)(2)
of the Securities Act of 1933 and Section 14(d) of the Securities Exchange Act
of 1934 (the “Exchange Act”), is or has become the “beneficial owner,” as
defined in Rule 13d-3 under the Exchange Act, of twenty percent (20%) or more of
the common stock of the Corporation, or (b) approval by the stockholders of the
Corporation of (i) any consolidation or merger of the Corporation in which the
Corporation is not the continuing or surviving corporation or pursuant to which
shares of stock of the Corporation would be converted into cash, securities or
other property, or (ii) any consolidation or merger in which the Corporation is
the continuing or surviving corporation but in which the common stockholders of
the Corporation immediately prior to the consolidation or merger do not hold at
least a majority of the outstanding common stock of the continuing or surviving
corporation, or (iii) any sale, lease, exchange or other transfer of all or
substantially all the assets of the Corporation, or (c) individuals who
constitute the Corporation’s Board of Directors on the Effective Date (the
“Incumbent Board”) have ceased for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the
Effective Date whose election, or nomination for election by the Corporation’s
stockholders, was approved by a vote of at least three-quarters (75%) of the
directors comprising the Incumbent Board (either by specific vote or by approval
of the proxy statement of the Corporation in which such person is named as
nominee for director) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board.

“Consumer Price Index” shall mean the “Consumer Price Index for all urban
consumers, U.S. city average, for all Items, 1982-1984 equals 100%” published by
the Bureau of Labor Statistics of the United States Department of Labor.  If
publication of such Index is discontinued, the Consumer Price Index shall be
based upon comparable statistics on the cost of living as computed and published
by an agency of the United States or by a responsible financial periodical of
recognized authority. 

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“Designated Beneficiary” shall mean such person or persons as the Executive
shall have designated in writing and as has or have been accepted in writing by
the Corporation, including for this purpose his Former Spouse.

“Discounted Vested Monthly Benefit” shall mean an amount determined by
discounting the Executive’s Vested Monthly Benefit to present value based on the
number of months between (a) the Executive’s age at the date of termination, and
(b) the date of his 65th birthday.  The discount rate to be used for this
purpose shall be equal to the yield to maturity, at the date of termination, of
U.S. Treasury Notes with a maturity date nearest the date of the Executive’s
65th birthday.

“Good Reason”  shall mean the occurrence, without the express written consent of
the Executive, of any of the following:

(a)           the assignment to the Executive of any duties inconsistent with
the Executive’s authorities, positions, duties, responsibilities and status with
the Corporation, or any adverse alteration in the nature of the Executive’s
reporting responsibilities, titles, or offices, or any removal of the Executive
from, or any failure to reelect the Executive to, any such positions, except in
connection with a termination of the employment of the Executive for Cause,
permanent disability, or as a result of the Executive’s death or by the
Executive other than for Good Reason;

(b)           a reduction by the Corporation in the Executive’s Base Salary then
in effect;

(c)           any material breach by the Corporation of any provisions of the
Agreement;

(d)           the requirement by the Corporation that the Executive’s principal
place of employment be relocated more than thirty (30) miles from the
Corporation’s address for notice in Section 12(h); or

(e)           the Corporation’s failure to obtain a satisfactory agreement from
any successor to assume and agree to perform Corporation’s obligations under the
Agreement.

“Highest Annual Bonus” shall mean the highest Bonus paid or payable to the
Executive in respect of the three fiscal years prior to the date of termination.

“Joint Life Expectancy”  shall mean the number of months of life expectancy of
the Executive and his Former Spouse at the time of termination of the
Executive’s employment with the Corporation after a Change in Control, as
determined by reference to the table of Joint Life and Last Survivorship
Expectancy published by the Internal Revenue Service in Publication 590 or any
successor publication.  If publication of such tables is discontinued, Joint
Life Expectancy shall be determined by reference to comparable tables published
by a recognized non-public authority.

“Monthly Benefit” shall mean an amount equal to sixty percent (60%) of the
Executive’s average monthly compensation, excluding bonuses, for the sixty (60)
months immediately preceding his termination of employment or disability.

“Vested Monthly Benefit” shall mean a percentage of the Executive’s Monthly
Benefit determined on the basis of the number of the Executive’s completed years
of service with the Corporation according to the following schedule:

Years of Service

 

Percentage

 

Less than 7 years

 

0

%

7 years

 

5

%

8 years

 

10

%

9 years

 

15

%

10 years

 

20

%

11 years

 

25

%

12 years

 

30

%

13 years

 

35

%

14 years

 

40

%

15 years

 

50

%

16 years

 

60

%

17 years

 

70

%

18 years

 

80

%

19 years

 

90

%

20 or more years

 

100

%

 

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A “year of service” for purposes of vesting shall mean a consecutive twelve
(12)-month period during which the Executive is employed by the Corporation.

9.             CONFIDENTIAL INFORMATION.  The Executive shall not at any time
during the period of employment and thereafter disclose to others or use any
trade secrets or any other confidential information belonging to the Corporation
or any of its subsidiaries, including, without limitation, drawings, plans,
programs, specifications and non-public information relating to customers of the
Corporation or its subsidiaries, except as may be required to perform his duties
hereunder.  The provisions of this Section 9 shall survive the termination of
the Executive’s employment with the Corporation, provided that after the
termination of the Executive’s employment with the Corporation, the restrictions
contained in this Section 9 shall not apply to any such trade secret or
confidential information which becomes generally known in the trade.

10.           NON-COMPETITION: NON-MITIGATION: LITIGATION EXPENSES.

(a)           No Mitigation.  The Executive shall not be required to mitigate
the amount of any termination benefits due him under Section 7 herein, by
seeking employment with others, or otherwise, nor shall the amount of such
benefits be reduced or offset in any way by any income or benefits earned by the
Executive from another employer or other source.

(b)           Non-competition.  For a period of twenty-four (24) months after
the Executive’s termination of employment hereunder, the Executive shall not
enter into endeavors that are competitive with the business or operations of the
Corporation in the beauty industry (including, but not limited to, salons, hair
restoration centers, education and related products),and shall not own an
interest in, manage, operate, join, control, lend money or render financial or
other assistance to or participate in or be connected with, as an officer,
employee, director, partner, member, stockholder (except for passive investments
of not more than a one percent (1%) interest in the securities of a publicly
held corporation regularly traded on a national securities exchange or in an
over-the-counter securities market), consultant, independent contractor, or
otherwise, any individual, partnership, firm, corporation or other business
organization or entity that engages in a business which competes with the
Company.

(c)           Non-solicitation.  For a period of twenty-four (24) months after
the Executive’s termination of employment hereunder, Executive shall not hire or
attempt to hire any employee of the Corporation, assist in such hiring by any
person or encourage any employee to terminate his or her relationship with the
Corporation.

(d)           Remedies.  If the Executive violates any of the restrictive
covenants set forth in Sections 9, 10(b) and (c) above during the first
twenty-four (24) months after such termination of employment, and such violation
continues after the Executive is notified in writing by the Company that he is
in violation of the restrictive covenant, then (i) the Corporation shall have no
further obligation to make any payments to the Executive of the Retirement
Benefit described in Section 4(f) or of any severance payments provided in
Section 7(b) and 7(d) and (ii) all such future payments shall be forfeited.  The
Executive acknowledges that any breach or threatened breach of Sections 9, 10(b)
or (c) would damage the Corporation irreparably and, consequently, the
Corporation, in addition to any other remedies available to it, shall be
entitled to preliminary and permanent injunction, without having to post any
bond or other security.

(e)           Attorneys Fees.  The Corporation shall pay the Executive’s
attorneys’ fees for any proceeding or group of related proceedings to enforce,
construe or determine the validity of the provisions of this Agreement.

11.           CLAIMS PROCEDURE.

(a)           If the payment of benefits under this Agreement shall be disputed
by the Company, the Executive, or other person claiming through the Executive,
must file a written claim with the Board as a prerequisite to the payment of
such benefits.  The Board shall make all determinations as to the right of any
person to receive benefits under subsections (a) and (b) of this Section 11. 
Any denial by the Board of a claim for benefits by the Executive, his heirs or
personal representative (“the claimant”) shall be stated in writing by the Board
and delivered or mailed to the claimant within ten (10) days after receipt of
the claim, unless special circumstances require an extension of time for
processing the claim.  If such an extension is required, written notice of the
extension shall be furnished to

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the claimant prior to the termination of the initial ten (10)-day period.  In no
event shall such extension exceed a period of ten (10) days from the end of the
initial period.  Any notice of denial shall set forth the specific reasons for
the denial, specific reference to pertinent provisions of this Agreement upon
which the denial is based, a description of any additional material or
information necessary for the claimant to perfect his claim, with an explanation
of why such material or information is necessary, and any explanation of claim
review procedures, written to the best of the Board’s ability in a manner that
may be understood without legal or actuarial counsel.

(b)           A claimant whose claim for benefits has been wholly or partially
denied by the Board may request, within ten (10) days following the date of such
denial, in a writing addressed to the Board, a review of such denial.  The
claimant shall be entitled to submit such issues or comments in writing or
otherwise as he shall consider relevant to a determination of his claim, and he
may include a request for a hearing in person before the Board.  Prior to
submitting his request, the claimant shall be entitled to review such documents
as the Board shall agree are pertinent to his claim.  The claimant may, at all
stages of review, be represented by counsel, legal or otherwise, of his choice,
provided that such fees and expenses shall be borne by the Corporation.  All
requests for review shall be promptly resolved.  The Board’s decision with
respect to any such review shall be set forth in writing and shall be mailed to
the claimant not later than ten (10) days following receipt by the Board of the
claimant’s request unless special circumstances, such as the need to hold a
hearing, require an extension of time for processing, in which case the Board’s
decision shall be so mailed not later than twenty (20) days after receipt of
such request.

(c)           A claimant who has followed the procedure in subsections (a) and
(b) of this Section, but who has not obtained full relief on his claim for
benefits, may submit such claim for expedited and binding arbitration of his
claim before an arbitrator in Hennepin County, Minnesota, in accordance with the
commercial arbitration rules of the American Arbitration Association, as then in
effect, or pursuant to such other form of alternative dispute resolution as the
parties may agree (collectively, the “arbitration”).  The arbitrator’s sole
authority shall be to interpret and apply the provisions of this Agreement; the
arbitrator shall not change, add to, or subtract from, any of its provisions. 
The arbitrator shall have the power to compel attendance of witnesses at the
hearing.  Any court having competent jurisdiction may enter a judgment based
upon such arbitration.  The arbitrator shall be appointed by mutual agreement of
the Corporation and the claimant pursuant to the applicable commercial
arbitration rules.  The arbitrator shall be a professional person with a
national reputation for expertise in employee benefit matters and who is
unrelated to the claimant and any employees of the Corporation.  All decisions
of the arbitrator shall be final and binding on the claimant and the
Corporation.

12.           MISCELLANEOUS.

(a)           Successors and Assigns.  This Agreement shall inure to the benefit
of and shall be binding upon the successors and assigns of the Corporation,
including any party with which the Corporation may merge or consolidate or to
which it may transfer substantially all of its assets.  As used in this
Agreement, the term “successor” shall include any person, firm, corporation or
other business entity which at any time, whether by merger, purchase or
otherwise, acquires all or substantially all of the capital stock or assets of
the Corporation.

(b)           Non-assignability and Non-transferability.  The rights and
obligations of the Executive under this Agreement are expressly declared and
agreed to be personal, nonassignable and nontransferable during his life;
provided, however, that one-half of the amount of each payment of his Retirement
Benefit under Section 4(f) (other than payments under Section 4(f)(iii)) may be
assigned by a domestic relations order to the Executive’s Former Spouse in
connection with the dissolution of their marriage, but only if the Board
determines that the order (i) satisfies such requirements of a “qualified
domestic relations order” as are set forth in paragraphs (1) through (3) of Code
Section 414(p), as if this Agreement were a plan described in Code Section
401(a)(13) and (ii) does not provide for the payment or assignment of benefits
under this Agreement to the Executive’s Former Spouse prior to the date that
benefit payments under the Agreement have commenced to the Executive following
his separation from employment with the Corporation.  The federal income and
payroll taxation of any Retirement Benefits assigned as provided in the
immediately preceding sentence shall be governed by Revenue Rulings 2002-22 and
2004-60, or any applicable guidance subsequently published by the Internal
Revenue Service or other applicable federal tax authority.  Notwithstanding the
foregoing, any claim by the Executive’s Former Spouse to benefits under this
Agreement shall be subject to all other applicable federal laws, including
without limitation, Code Section 409A, and to the extent that any claim by the
Executive’s Former Spouse to any rights or benefits under this Agreement is

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determined, in the sole discretion of the Board, to violate such requirements,
such right or benefit may be denied or modified to the extent the Board
determines shall be reasonably required.

(c)           Limitation of Waiver.  The waiver by either party hereto of its
rights with respect to a breach of any provision of this Agreement by the other
shall not operate or be construed as a waiver of any rights with respect to any
subsequent breach.

(d)           Amendments.  No modification, amendment, addition, alteration or
waiver of any of the terms, covenants or conditions hereof shall be effective
unless made in writing and duly executed by the Corporation and Executive.

(e)           Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together will constitute but one and the same agreement.

(f)            Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota, without regard to the
conflicts of law principles thereof.

(g)           Severability.  If any provision of this Agreement is determined to
be invalid or unenforceable under any applicable statute or rule of law, it is
to that extent to be deemed omitted and it shall not affect the validity or
enforceability of any other provision.

(h)           Notices.  Any notice required or permitted to be given under this
Agreement shall be in writing, and shall be deemed given when sent by registered
or certified mail, postage prepaid, addressed as follows:

If to the Executive:

Paul D. Finkelstein

 

Regis Corporation

 

7201 Metro Boulevard

 

Edina, Minnesota 55439

 

 

If to the Corporation:

Regis Corporation

 

7201 Metro Boulevard

 

Edina, Minnesota 55439

 

Attn: General Counsel

or mailed to such other person and/or address as the party to be notified may
hereafter have designated by notice given to the other party in a similar
manner.

(i)            Mandatory Arbitration.  Any dispute or controversy arising under
or in connection with this Agreement, other than claims administered under
Section 11, shall be settled exclusively by binding arbitration in the manner
set forth in Section 10(c).

13.           PRIOR AGREEMENTS SUPERSEDED.  Upon the Effective Date, this
Agreement shall supersede all prior agreements between the parties hereto with
respect to the subject matter hereof, including without limitation the Existing
Agreement, the Insurance Agreement, and any and all change in control provisions
contained in any agreement, arrangement or plan with or for the benefit of
Executive, all of which are forever irrevocably waived by the Executive;
provided, however, that this Agreement shall not supersede any agreements
between the Corporation and the Executive regarding currently outstanding
options held by the Executive to purchase the Corporation’s common stock or
restricted stock, except for the change in control provisions thereof, which are
hereby superseded.

14.           NO INTERRUPTION OF BENEFITS.  Nothing in this Agreement shall be
deemed an interruption of the Executive’s years of service for vesting of the
Corporation’s benefit plans, vesting of options to purchase the Corporation’s
common stock, or otherwise.

15.           INDEMNIFICATION.  The Corporation shall indemnify, defend, and
hold the Executive harmless, to the fullest extent allowed by law, from and
against any liability, damages, costs, or expenses (including attorney’s fees)
in

12

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connection with any claim, cause of action, investigation, litigation, or
proceeding involving him by reason of his having been an officer, director,
employee, or agent of the Corporation or its affiliates, unless it is judicially
determined, in a final, nonappealable order that the Executive was guilty of
gross negligence or willful misconduct.  The Corporation also agrees to maintain
adequate directors and officers liability insurance for the benefit of the
Executive for the term of this Agreement and for at least three (3) years
thereafter.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date and year first above written.

REGIS CORPORATION

 

 

 

 

 

By:

/s/ Eric A. Bakken

 

 

 

Eric A. Bakken, Senior Vice President, General Counsel

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

By:

/s/ Paul D. Finkelstein

 

 

 

Paul D. Finkelstein, Chairman of the Board of Directors,
President and Chief Executive Officer

 

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