Exhibit 10(a)

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement) is made by and between Regis
Corporation, a Minnesota corporation (the “Corporation”), and Steven Spiegel
(the “Executive”) as of this 28th day of November, 2012.

 

In consideration of the mutual agreements set forth herein, 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.                                       EMPLOYMENT COMMENCEMENT DATE; PERIOD OF
EMPLOYMENT.

 

(a)                                  Employment Commencement Date.  The
Executive’s employment with the Corporation shall commence at 12:01 a.m. on
December 3, 2012 (the “Employment Commencement Date”).

 

(b)                                 Period of Employment.  The employment of the
Executive by the Corporation pursuant to this Agreement shall be for a period
beginning on the Employment Commencement Date and continuing until Executive’s
employment is terminated as provided in Section 5 herein (the “Employment
Period”).

 

(c)                                  Definitions.  Various terms are defined
either where they first appear underlined in this Agreement or in Section 7.

 

2.                                       DUTIES.  During the Employment Period,
the Executive shall serve as Executive Vice President and Chief Financial
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
as are assigned to him by the Board or committees of the Board.  During the
Employment Period, 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.  The Executive
shall follow applicable policies and procedures adopted by the Corporation from
time to time, including without limitation policies relating to business ethics,
conflicts of interest, non-discrimination, and confidentiality and protection of
trade secrets.  The Executive hereby represents and confirms that he is under no
contractual or legal commitments that would prevent him from fulfilling his
duties and responsibilities as set forth in this Agreement.

 

3.                                       OFFICE FACILITIES.  During the
Employment Period under this Agreement, 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 the Executive with office facilities reasonably
suitable to his position at such location.

 

4.                                       COMPENSATION, BENEFITS AND EXPENSE
REIMBURSEMENTS.  As compensation for his services performed as an officer and
employee of the Corporation, the Corporation shall pay or provide to the
Executive the following compensation, benefits and expense reimbursements during
the Employment Period:

 

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(a)                                  Base Salary.  The Corporation shall pay the
Executive a base salary (the “Base Salary”), initially at the rate of
$400,000.00 per annum, payable monthly, semi-monthly or weekly according to the
Corporation’s general practice for its executives, for the Employment Period. 
For the Corporation’s fiscal year beginning July 1, 2013, such Base Salary may
be revised by the Compensation Committee of the Board (the “Committee”),
provided that the Executive’s Base Salary may not be reduced by the Committee
unless such reduction is part of an across-the-board reduction of base salaries
for all senior executive employees, and provided further that the percentage
reduction in the Executive’s Base Salary is commensurate with the percentage
reduction in the base salaries for all other senior executive employees. 
Thereafter, any then-current Base Salary shall be the “Base Salary” for purposes
of this Agreement.

 

(b)                                 Bonus.  The Corporation shall grant the
Executive an award under the Regis Corporation Short Term Incentive Plan (“Short
Term Plan”) for the fiscal year ending June 30, 2013, with a guaranteed payout
equal to $116,667.00, which is 50% of the Executive’s initial Base Salary,
prorated for the period December 1, 2012 through June 30, 2013 (the “FY13 Bonus
Award”).  For each successive year thereafter during the Employment Period, the
Executive shall be eligible for an annual performance bonus (the “Bonus”) as
determined under the provisions of the then-applicable Short Term Plan, as
amended from time to time, any successor to such plan, or such other annual
incentive compensation program developed for the Corporation’s senior executive
officers, with performance goals and other terms consistent with other senior
executive officers of the Corporation, and with a target payout of no less than
50% of the Executive’s then current Base Salary.  The FY13 Bonus Award and any
Bonus for other years shall be paid at the same time as bonuses are paid to
other senior executive officers of the Corporation under the then-applicable
Short Term Plan.

 

(c)                                  Special One Time Restricted Stock Awards. 
Effective as of the Employment Commencement Date (the “Equity Grant Date”), the
Executive will receive an award of such number of restricted stock units as are
equal to $400,000 divided by the fair market value of a share of the
Corporation’s common stock on the Equity Grant Date.  The award will be granted
under the Regis Corporation 2004 Long Term Incentive Plan (“Long Term Plan”),
subject to the Executive’s execution of a restricted stock unit agreement
approved by the Committee and subject to the terms and conditions of the Long
Term Plan, with such units vesting in full on the five (5) year anniversary of
the Equity Grant Date, provided the Executive is an employee of the Corporation
on that date (except as otherwise provided in the award agreement).

 

(d)                                 Stock Incentive Awards.  Effective as of the
Employment Commencement Date,  the Executive shall receive an equity award
under, and in accordance with the terms and provisions of, the Regis Corporation
2004 Long Term Incentive Plan (“Long Term Plan”) which shall be prorated from
the period December 1, 2012 through June 30, 2013 (the “FY2013 Equity Award”) . 
For the FY2013 Equity Award, the Executive will be awarded equity with a
projected total value of $233,000.00 and comprised of the following: (i) twenty
percent (20% or approximately $47,000) in an award of restricted stock units
vesting ratably over a three (3) year period, (ii) forty percent (40% or
approximately $93,000) in a performance share award that will cliff vest on the
three (3) year anniversary subject to attainment of performance goals during the
first twelve months of the Performance Period, as

 

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determined by the Committee, and (iii) forty percent (40% or approximately
$93,000) in an award of stock appreciation rights vesting ratably over a three
(3) year period.  To determine the number of shares for each type of award, the
projected total value will be multiplied by the applicable percentage, and then,
in the case of the restricted stock units and performance shares, divided by the
fair market value of a share of the Corporation’s stock on the date of grant
and, in the case of the stock appreciation rights, divided by the Black-Scholes
value of a share of the Corporation’s stock on the date of grant.  The
above-described award is subject to the Executive’s execution of applicable
award agreements approved by the Committee and terms and conditions of the Long
Term Plan.  Notwithstanding the foregoing or anything to the contrary in the
Long Term Plan, the Special One Time Restricted Stock Awards referred to in
Section 4(c) and all awards of time-based equity compensation granted to the
Executive during the Employment Period shall provide for full acceleration of
vesting of such awards upon a Change in Control (as defined in the Long Term
Plan), and all awards of performance-based equity compensation shall provide for
full acceleration of vesting at the target level of performance, prorated for
the portion of the performance period prior to such Change in Control, upon such
a Change in Control.

 

(e)                                  Relocation Expenses.  The Corporation shall
reimburse the Executive for the following costs associated with the relocation
of the Executive and his immediate family sharing his household to the
Minneapolis/St. Paul, Minnesota metropolitan area: (i) the actual travel costs
for up to two round trips by the Executive and his spouse or significant other
from Chicago, Illinois to the Minneapolis/St. Paul, Minnesota metropolitan area
(provided such travel arrangements, including airfare and lodging, are made in
accordance with the Corporation’s travel policies and procedures), plus (ii) the
reasonable costs of moving the household goods and personal effects of the
Executive and his immediate family to the Minneapolis/St. Paul, Minnesota
metropolitan area by one or more vendors agreed upon by the Executive and the
Corporation, plus (iii) the reasonable cost for temporary housing for the
Executive and his immediate family for up to six (6) months after the Employment
Commencement Date; plus, (iv) the actual costs of the Executive’s real estate
brokerage and related fees and closing costs in connection with the sale of the
Executive’s current primary residence in Chicago, Illinois, provided the total
amount payable under this Section 4(e) shall not exceed $75,000.00.  The
Corporation’s relocation reimbursement obligations under this Section 4(e) are
subject to any withholdings required under applicable law and the Executive’s
submission of appropriate receipts, and do not include any reimbursement for any
relocation expenses not specifically identified above.

 

(f)                                    Commuting Expenses.  The Corporation
shall reimburse the Executive for the actual airfare expense for one round trip
by the Executive from Chicago, Illinois to Minneapolis, Minnesota for each week
during which such travel is completed during the Executive’s Employment Period,
provided such travel arrangements are made in accordance with the Corporation’s
travel policies and procedures, and provided that such commuting expense
reimbursement obligation shall cease upon the earlier of (i) July 1, 2016 or
(ii) any such time as the Executive moves his permanent residence to
Minneapolis, Minnesota. The Corporation’s relocation reimbursement obligations
under this Section 4(f) are subject to any withholdings required under
applicable law and the Executive’s submission of

 

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appropriate receipts, and do not include any reimbursement for any commuting
expenses not specifically identified in this Section 4(f).

 

(g)                                 Health, Welfare and Retirement Plans;
Vacation.  To the extent the Executive meets the eligibility requirements for
such arrangements, plans or programs, 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
senior executive officers of the Corporation; and

 

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

 

For the sake of clarity, the Corporation may modify its health, welfare,
retirement and other benefit plans and vacation and sick leave policies from
time to time and the Executive’s rights under these plans are subject to change
in the event of any such modifications, provided that he will receive the
benefits generally provided to other senior executive officers of the
Corporation.  In addition, the Executive acknowledges that the Corporation has
frozen its Executive Retirement Savings Plan effective June 30, 2012 and,
therefore, the Executive will have no right to participate in that plan.

 

(h)                                 Other Incentive Plans, Benefits and
Perquisites.  The Executive shall be offered any additional employee benefits
and perquisites the Corporation offers to other senior executive officers of the
Corporation (to the extent the Executive otherwise satisfies the eligibility
criteria for such benefits), including receipt of an annual perquisite account
that includes an automobile allowance of $25,000.  The Executive also 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 senior executive officers and all compensation and other
entitlements earned thereunder shall be in addition to, and shall not in any way
reduce, the amount payable to the Executive as Base Salary and Bonus.

 

(h)                                 Expenses.  During the Employment Period, the
Executive shall be reimbursed for reasonable business expenses incurred in
connection with the performance of his duties hereunder consistent with the
Corporation’s policy regarding reimbursement of such expenses, including
submission of appropriate receipts.  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.                                       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:

 

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

 

(b)                                 Permanent Disability.  In the event of the
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 hereunder
for Cause.

 

(d)                                 Without Cause.  The Corporation may
terminate such employment without Cause (which shall be for any reason not
covered by preceding Sections 5(a) through (c)), with such termination to be
effective upon the date specified by the Corporation in a written notice
delivered to the Executive.

 

(e)                                  By the Executive For Good Reason.  The
Executive may terminate such employment for an applicable Good Reason, subject
to the process described in the Good Reason definition in Section 7.

 

(f)                                    By the Executive Without Good Reason. 
The Executive may terminate such employment for any reason other than Good
Reason upon thirty (30) days advance notice to the Corporation.

 

(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 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 upon which
the Executive’s termination of employment with the Corporation occurs is the
“Date of Termination.”  For purposes of Sections 6(b) and 6(c) of this Agreement
only, with respect to the timing of any payments thereunder, the Date of
Termination shall mean the date on which a “separation from service” has
occurred for purposes of Section 409A(a)(2)(A)(i) of the Internal Revenue Code
of 1986, as amended (the “Code”), and Treas. Reg. Section 1.409A-1(h).

 

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6.                                       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 (A) as specifically provided in this
Agreement or (B) 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 be entitled to payment of all accrued vacation pay.

 

(b)                                 Termination Without Cause or for Good Reason
Prior to a Change in Control or More Than Twenty-Four Months After a Change in
Control. If, prior to a Change in Control or more than twenty-four (24) months
after a Change in Control, the Executive’s employment pursuant to this Agreement
is terminated by the Corporation without Cause or the Executive terminates his
employment for Good Reason, then the Executive shall be entitled to and shall
receive 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 (A) as specifically provided in this
Agreement or (B) 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 be entitled to payment of all accrued vacation pay.

 

(iii)                               Severance Payment.  Subject to the Executive
signing and not revoking a release of claims in a form prescribed by the
Corporation and the Executive remaining in strict compliance with the terms of
this Agreement and any other written agreements between the Corporation and the
Executive, the Executive shall be entitled to receive the following amount as
severance pay, subject to such amount being reduced as provided below (referred
to in this Section 6(b)(iii) as the “Severance Payment”): (A) if the Executive’s
Date of Termination occurs prior to the date the Executive is paid his FY13
Bonus Award, the amount of the Executive’s FY13 Bonus Award payable at the same
time as bonuses for the Corporation’s fiscal year ending June 30, 2013 are paid
to other then-current officers of the Corporation under the then-applicable
Short Term Plan, plus (B) if the Executive’s Date of Termination occurs after
June 30, 2013, an amount equal to the pro rata Bonus for

 

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the fiscal year in which the Date of Termination occurs, determined by pro
rating the Bonus the Executive would have received had the Executive remained
employed through the payment date of any such Bonus (the proration shall be a
fraction whose numerator is the number of days the Executive was employed by the
Corporation that fiscal year through and including the Date of Termination and
the denominator is 365), payable at the same time as bonuses are paid to other
then-current officers of the Corporation under the then-applicable Short Term
Plan for the fiscal year in which the Date of Termination occurs, plus (C) an
amount equal to one times the Executive’s Base Salary as of the Date of
Termination, payable in substantially equal installments in accordance with the
Corporation’s normal payroll policies commencing on the Date of Termination and
continuing for twelve (12) consecutive months; provided, however, that any
installments that otherwise would be paid during the first sixty (60) days after
the Date of Termination will be delayed and included in the first installment
paid to the Executive on the first payroll date that is more than sixty (60)
days after the Date of Termination, and provided further that if the Executive
is considered a “specified employee” (as defined in Treasury Regulation
Section 1.409A-1(i)) as of the Date of Termination, then no payments of deferred
compensation payable due to Executive’s separation from service for purposes of
section 409A of the Code shall be made under this Agreement until the
Corporation’s first regular payroll date that is after the first day of the
seventh (7th) month following the Date of Termination and included with the
installment payable on such payroll date, if any, without adjustment for
interest or earnings during the period of delay.  Furthermore, any Severance
Payment owed to the Executive under subsections (B) or (C) above will be reduced
by the amount of any compensation earned by the Executive for any consulting or
employment services provided on a substantially full-time basis during the
12-month period immediately following the Date of Termination, to the extent
such compensation is payable by an entity unrelated to the Corporation.

 

(iv)                          Benefits Continuation.  Subject to the Executive
signing and not revoking a release of claims in a form prescribed by the
Corporation and the Executive remaining in strict compliance with the terms of
this Agreement and any other written agreements between the Corporation and the
Executive, the Corporation will pay the employer portion of the Executive’s
COBRA premiums for health and dental insurance coverage under the Corporation’s
group health and dental insurance plans for the same period of time the
Executive remains eligible to receive the Severance Payment installments under
Section 6(b)(iii) (up to a maximum of twelve (12) months), provided the
Executive timely elects COBRA coverage.  Notwithstanding the foregoing, the
Corporation will discontinue COBRA premium payments if, and at such time as, the
Executive (A) is covered or eligible to be covered under the health and/or
dental insurance policy of a new employer, (B) ceases to participate, for
whatever reason, in the Corporation’s group insurance plans, or (C) ceases to be
eligible to receive the Severance Payment installments under Section 6(b)(iii).

 

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(c)                                  Termination Without Cause or for Good
Reason Within Twenty-Four Months After a Change in Control. If a Change in
Control occurs during the Employment Period and within twenty-four (24) months
after the Change in Control the Executive’s employment pursuant to this
Agreement is terminated by the Corporation without Cause or the Executive
terminates his employment for Good Reason, then the Executive shall be entitled
to and shall receive 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 (A) as specifically provided in this
Agreement or (B) 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 be entitled to payment of all accrued vacation pay.

 

(iii)                               Severance Payment.  Subject to the Executive
signing and not revoking a release of claims in a form prescribed by the
Corporation and the Executive remaining in strict compliance with the terms of
this Agreement and any other written agreements between the Corporation and the
Executive, the Executive shall be entitled to receive the following amount as
severance pay, subject to such amount being reduced as provided below (referred
to in this Section 6(c)(iii) as the “Severance Payment”): (A) if the Date of
Termination occurs after June 30, 2013,  but prior to the date the Executive is
paid his FY13 Bonus Award, the amount of the Executive’s FY13 Bonus Award
payable no later than 30 days following the Date of Termination, plus (B) an
amount equal to two times the Executive’s Base Salary as of the Date of
Termination, plus (C) an amount equal to two times the Executive’s target Bonus
for the fiscal year in which the Date of Termination occurs.  The Severance
Payment described in subsections (B) and (C) above shall be added together and
will be paid in substantially equal installments in accordance with the
Corporation’s normal payroll policies based on a 24-month payment schedule
commencing on the Date of Termination.  Notwithstanding the forgoing, any
installments that otherwise would be payable on the regular payroll dates
between the Date of Termination and first day of the seventh (7th) month
following the Date of Termination shall be delayed until the Corporation’s first
regular payroll date that is after the first day of the seventh (7th) month
following the Date of Termination and included with the installment payable on
such payroll date, if any, without adjustment for interest or earnings during
the period of delay.  Furthermore, any Severance Payment owed to the Executive
will be reduced by the amount of any compensation earned by the Executive for
any consulting or employment services provided on a substantially full-time
basis for the period to which the corresponding Severance Payment relates.

 

(iv)                              Benefits Continuation.  Subject to the
Executive signing and not revoking a release of claims in a form prescribed by
the Corporation and the

 

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Executive remaining in strict compliance with the terms of this Agreement and
any other written agreements between the Corporation and the Executive, the
Corporation will pay the employer portion of the Executive’s COBRA premiums for
health and dental insurance coverage under the Corporation’s group health and
dental insurance plans for the same period of time the Executive remains
eligible to receive the Severance Payment installments under
Section 6(c)(iii) (up to a maximum of eighteen (18) months), provided the
Executive timely elects COBRA coverage.  Notwithstanding the foregoing, the
Corporation will discontinue COBRA premium payments if, and at such time as, the
Executive (A) is covered or eligible to be covered under the health and/or
dental insurance policy of a new employer, (B) ceases to participate, for
whatever reason, in the Corporation’s group insurance plans, or (C) ceases to be
eligible to receive the Severance Payment installments under Section 6(c)(iii).

 

(d)                                 Termination for Cause or Without Good
Reason.  If the Executive’s employment pursuant to this Agreement is terminated
pursuant to subsection (c) of Section 5 hereof, or the Executive terminates this
Agreement without Good Reason, then the 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 (A) as specifically provided in this
Agreement or (B) 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 be entitled to payment of all accrued vacation pay.

 

(e)                                  Limitation on Change in Control Payments. 
This Section 6(e) applies only in the event the Corporation determines that this
Agreement is subject to the limitations of Code Section 280G, or any successor
provision, and the regulations issued thereunder.  The intent of this
Section 6(e) is to reduce any Change in Control Benefits, as defined below, that
would otherwise be characterized as a “parachute payment” as defined in Code
Section 280G and be subject to an additional excise tax under Code Section 4999
by the minimum amount necessary to avoid characterization as a parachute payment
and avoid the imposition of the excise tax, but only if doing so would provide a
more favorable net after-tax result to the Executive than if the Change in
Control Benefits were not reduced and the Executive were subject to the excise
tax.

 

(i)                                     In the event the Change in Control
Benefits payable to the Executive would collectively constitute a “parachute
payment” as defined in Code Section 280G, and if the “net after-tax amount” of
such parachute payment to the Executive is less than what the net after-tax
amount to the Executive would be if the Change in Control Benefits otherwise
constituting the parachute payment were limited to the maximum “parachute value”
of Change in Control Benefits that the Executive could

 

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receive without giving rise to any liability for any excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then the Change in Control Benefits
otherwise constituting the parachute payment shall be reduced so that the
parachute value of all Change in Control Benefits, in the aggregate, will equal
the maximum parachute value of all Change in Control Benefits that the Executive
can receive without any Change in Control Benefits being subject to the Excise
Tax.  Should such a reduction in Change in Control Benefits be required, the
Executive shall be entitled, subject to the following sentence, to designate
those Change in Control Benefits under this Agreement or the other arrangements
that will be reduced or eliminated so as to achieve the specified reduction in
Change in Control Benefits to the Executive and avoid characterization of such
Change in Control Benefits as a parachute payment.  The Corporation will provide
the Executive with all information reasonably requested by the Executive to
permit the Executive to make such designation.  To the extent that the
Executive’s ability to make such a designation would cause any of the Change in
Control Benefits to become subject to any additional tax under Code
Section 409A, or if the Executive fails to make such a designation within ten
(10) business days of receiving the requested information from the Corporation,
then the Corporation shall achieve the necessary reduction in the Change in
Control Benefits by reducing them in the following order: (A) reduction of cash
payments payable under this Agreement; (B) reduction of other payments and
benefits to be provided to the Executive; (C) cancellation or reduction of
accelerated vesting of equity-based awards that are subject to performance-based
vesting conditions; and (D) cancellation or reduction of accelerated vesting of
equity-based awards that are subject only to service-based vesting conditions. 
If the acceleration of the vesting of the Executive’s equity-based awards is to
be cancelled or reduced, such acceleration of vesting shall be reduced or
cancelled in the reverse order of the date of grant.

 

(ii)                                  For purposes of this Section 6(e), a “net
after-tax amount” shall be determined by taking into account all applicable
income, excise and employment taxes, whether imposed at the federal, state or
local level, including the Excise Tax, and the “parachute value” of the Change
in Control Benefits means the present value as of the date of the Change in
Control for purposes of Code Section 280G of the portion of such Change in
Control Benefits that constitutes a parachute payment under Code
Section 280G(b)(2).

 

(iii)                               For purposes of this Section 6(e), “Change
in Control Benefits” shall mean any payment, benefit or transfer of property in
the nature of compensation paid to or for the benefit of the Executive under any
arrangement which is considered contingent on a Change in Control for purposes
of Code Section 280G, including, without limitation, any and all of the
Corporation’s salary, incentive payments, restricted stock, stock option,
equity-based compensation or benefit plans, programs or other arrangements, and
shall include benefits payable under this Agreement.

 

(iv)                              For clarity, the Corporation shall have no
obligation to provide any “tax gross-up” payment related to the Excise Tax in
the event the Change in Control Benefits that would otherwise be characterized
as a parachute payment are not

 

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reduced as set forth in Section 6(e)(i) above and the Executive is subject to
the Excise Tax.

 

7.                                      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.

 

“Cause” shall mean (a) acts during the Employment Period (i) resulting in a
felony conviction under any Federal or state statute,  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) after
reasonable notice to the Executive and reasonable opportunity (not less than
thirty (30) days) to cease such non-performance, or (b) the Executive willfully
engaging in fraud or gross misconduct which is detrimental to the financial
interests of the Corporation.

 

“Change in Control” shall have the same meaning ascribed to that term in the
Long-Term Plan.

 

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

 

(a)                                 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 a termination of employment by the Executive other than for Good
Reason;

 

(b)                                 a material reduction by the Corporation in
the Executive’s Base Salary then in effect (other than any such reduction that
is part of an across-the-board reduction of base salaries for all senior
executive employees provided the percentage reduction in the Executive’s Base
Salary is commensurate with the percentage reduction in the base salaries for
all other senior executive employees);

 

(c)                                  failure by the Corporation to continue in
effect (without substitution of a substantially equivalent plan or a plan of
substantially equivalent value) any compensation plan, bonus or incentive plan,
stock purchase plan, stock option plan, life insurance plan, health plan,
disability plan or other benefit plan or arrangement in which the Executive is
then participating;

 

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

 

(e)                                  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 11(h); or

 

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

 

provided that the Executive notifies the Corporation of such condition set forth
in clause (a), (b), (c), (d), (e) or (f) within ninety (90) days of its initial
existence and the Corporation fails to remedy such condition within thirty (30)
days of receiving such notice.

 

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8.                                      CONFIDENTIAL INFORMATION.  The Executive
shall not at any time during the Employment Period or 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,
plans, programs 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 8 shall survive the termination of
the Executive’s employment and consulting with the Corporation, provided that
after the termination of the Executive’s employment with the Corporation, the
restrictions contained in this Section 8 shall not apply to any such trade
secret or confidential information which becomes generally known in the trade.

 

9.                                      NON-COMPETITION.

 

(a)                                 Non-competition.  For a period of
twenty-four (24) months immediately following the Executive’s termination of
employment hereunder (the “Non-Competition Period”), the Executive shall not
enter into endeavors that are competitive with the business or operations of the
Corporation in the beauty industry (provided, however, that for this purpose
endeavors that are limited to the distribution of consumer packaged goods which
include beauty products, but which such endeavors do not involve the ownership
or management of beauty salons, shall not be considered endeavors that are
competitive with the Corporation), 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 Corporation.

 

(b)                                 Non-solicitation.  During the
Non-Competition Period, the Executive shall not (i) hire or attempt to hire any
employee of the Corporation, assist in such hiring by any person or encourage
any employee to terminate his relationship with the Corporation; or
(ii) solicit, induce, or influence any proprietor, franchisee, partner,
stockholder, lender, director, officer, employee, joint venturer, investor,
consultant, agent, lessor, supplier, customer or any other person or entity
which has a business relationship with the Corporation or its affiliates at any
time during the Non-Competition Period, to discontinue or reduce or modify the
extent of such relationship with the Corporation or any of its subsidiaries.

 

10.                               ACKNOWLEDGMENT; REMEDIES; LITIGATION EXPENSES.

 

(a)                                 Acknowledgment.  The Executive has carefully
read and considered the provisions of Sections 8 and 9 hereof and agrees that
the restrictions set forth in such sections are fair and reasonable and are
reasonably required for the protection of the interests of the Corporation, its
officers, directors, shareholders, and other employees, for the protection of
the business of the Corporation, and to ensure that the Executive devotes his
entire professional time, energy, and skills to the business of the
Corporation.  The Executive acknowledges that he is qualified to engage in
businesses other than that described in Section 9. It is the belief of the
parties, therefore, that the best protection that can be given to the
Corporation that does not in any way infringe upon the rights of the Executive
to engage in

 

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any unrelated businesses is to provide for the restrictions described in
Section 9. In view of the substantial harm which would result from a breach by
the Executive of Sections 8 or 9, the parties agree that the restrictions
contained therein shall be enforced to the maximum extent permitted by law as
more particularly set forth in Section 10(b) below. In the event that any of
said restrictions shall be held unenforceable by any court of competent
jurisdiction, the parties hereto agree that it is their desire that such court
shall substitute a reasonable judicially enforceable limitation in place of any
limitation deemed unenforceable and that as so modified, the covenant shall be
as fully enforceable as if it had been set forth herein by the parties.

 

(b)                                 Remedies.  If the Executive violates any of
the restrictive covenants set forth in Sections 8 or 9 above, and such violation
continues after the Executive is notified in writing by the Corporation that he
is in violation of the restrictive covenant, then (i) the Corporation shall have
no further obligation to pay any portion of any Severance Payment and all such
future payments shall be forfeited, and (ii) the Executive shall immediately
return to the Corporation any Severance Payment previously paid to the
Executive.  The Executive acknowledges that any breach or threatened breach of
Sections 8 or 9 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.

 

(c)                                  Attorneys Fees.  The Corporation shall be
entitled to receive from the Executive reimbursement for reasonable attorneys’
fees and expenses incurred by the Corporation in successfully enforcing these
provisions to final judgment and the Executive shall be entitled to receive from
the Corporation reasonable attorney’s fees and expenses incurred by the
Executive in the event the Corporation is found to be not entitled to
enforcement of these provisions.

 

11.                               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.

 

(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 the Executive.

 

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(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:

Steven Spiegel

 

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)                                     Tax Withholding.  The Corporation may
withhold from any amounts payable under this Agreement such federal, state and
local income and employment taxes as the Corporation shall determine are
required or authorized to be withheld pursuant to any applicable law or
regulation.

 

(j)                                    Section 409A.  This Agreement is intended
to provide for payments that satisfy, or are exempt from, the requirements of
Sections 409A(a)(2), (3) and (4) of the Code, including current and future
guidance and regulations interpreting such provisions, and should be interpreted
accordingly. Except for any tax amounts withheld by the Corporation from the
payments or other consideration hereunder and any employment taxes required to
be paid by the Corporation, the Executive shall be responsible for payment of
any and all taxes owed in connection with the consideration provided for in this
Agreement.

 

(k)                                 Mandatory Arbitration.  Any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by binding arbitration in the manner set forth in this
Section 11(k).  Either party may submit any claim arising under or in connection
with this Agreement for binding arbitration 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

 

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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.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first set forth above.

 

 

REGIS CORPORATION

 

 

 

By:

/s/ Eric Bakken

 

 

 

 

Its:

EVP

 

 

 

/s/ Steven Spiegel

 

STEVEN SPIEGEL

 

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