Exhibit 10(cc)

 

SEPARATION AND NON-DISPARAGEMENT AGREEMENT AND GENERAL RELEASE

 

TO:

Mark Kartarik

 

 

 

 

FROM:

Regis Corporation

VIA EXPRESS COURIER

 

 

 

DATE:

July 21, 2011

 

 

Please read this document carefully.  You are giving up certain legal claims
that you might have against Regis Corporation by signing this agreement.  You
are advised to consult an attorney before signing this agreement.

 

This agreement sets out the terms of your separation from Regis Corporation
(“Regis”).  Under the agreement, Regis will provide you with extra benefits in
exchange for your agreement to waive and release certain past or present legal
claims you may have against Regis.

 

TERMS OF AGREEMENT

 

1.                                       Termination.  Your employment ended
June 30, 2011.

 

2.                                       Compensation and Benefits.  This
agreement terminates the Employer/Employee relationship between you and Regis
and closes out past or present claims as set forth in this agreement that you
might have against Regis arising from that relationship.  In return for your
release of claims, the agreement provides you with benefits to which you
otherwise would not be entitled.  Accordingly, you and Regis agree as follows:

 

a.                                       Whether or not you sign this agreement,
Regis will pay you:

 

1)                                      All compensation you have earned through
and including the last day of your employment;

 

2)                                      Any accrued but unused PTO benefit; and

 

3)                                      Vested profit sharing and deferred
compensation benefits in accordance with the terms and conditions of those
plans.  Payment shall be made in accordance with previously made distribution
elections.

 

By signing this agreement, you agree that you have already been paid all of
those sums set forth in paragraphs 2.a.1) and 2.a.2).  Even if you do not sign
this agreement, you can elect the period of continued health benefits coverage
to which you are entitled under the Consolidated Omnibus Budget Reconciliation
Act (“COBRA”).  A separate COBRA notice is being sent to you.

 

b.                                      In exchange for the General Release set
forth below, Regis agrees to provide:

 

1)                                      Severance compensation in the gross
amount of Nine Hundred Thirty-Three Thousand and 00/100 Dollars ($933,000.00)
(which is equivalent to 24-months of base pay), less statutory payroll
deductions and other legally required withholdings. Payment shall be made as
follows:

 

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a.                                       Payment in the gross amount of Eight
Hundred Fifty-Eight Thousand and 00/100 Dollars ($858,000.00) shall be made in a
single lump sum following receipt of the signed agreement and following the
expiration of the rescission periods referred to in paragraphs 12 and 13; and

 

b.                                      Payment in the gross amount of
Seventy-Five Thousand and 00/100 Dollars ($75,000.00) shall be made immediately
following receipt of the signed agreement.

 

2)                                      Any officer bonus earned in FY11. 
Payment shall be made at the same time bonus payments are customarily made to
officers.  Payment shall be subject to all statutory payroll deductions and
other legally required withholdings.

 

3)                                      A single payment in the gross amount of
Fifty Thousand and 00/100 Dollars ($50,000.00), less statutory payroll
deductions and other legally required withholdings, representing Employee’s
Officer perquisites.  This amount shall be paid in a single lump sum following
receipt of the signed agreement and following the expiration of the rescission
periods set forth in paragraphs 12 and 13.

 

4)                                      Employee and Employee’s Spouse will
continue to receive medical and dental insurance benefits from Employer to the
same extent as other Executive Vice Presidents of the company receive such
insurance, until June 30, 2013, at which time all such benefits shall
terminate.  In addition, Employee’s participation in Employer’s executive
medical reimbursement plan, wherein participants are reimbursed for qualified
out of pocket medical expenses not to exceed $7,000.00 in total in any given
calendar year, will continue until June 30, 2013.  Employer will gross up this
benefit to Employee for Employee’s estimated taxes on this benefit.

 

3.                                       Benefits. The Employee is a participant
in various employee benefit plans sponsored by Employer. Except as otherwise
provided for herein, the payment of benefits, including the amounts and timing
thereof, will be governed by the terms of the employee benefit plans.  Employer
will answer any reasonable questions that Employee may have from time to time
and will offer him the same assistance given other participants in employee
benefit plans so long as he is entitled to benefits thereunder.

 

4.                                       Whole Life Insurance Policy.  The
existing whole life insurance policy in the face amount of $2.5 million dollars
is fully paid.

 

5.                                       Stock Appreciation Rights.  All vested
stock appreciation rights have a strike price that is under water.  Accordingly,
rights to this stock will be extinguished as of the date of termination.

 

6.                                       Unvested Restricted Stock Grants. 
Employer will provide no accelerated vesting for unvested restricted stock
grants.

 

7.                                       Non-Compete Agreement.  Employee
expressly agrees, as a condition to the performance by Regis of its obligations
hereunder, that for a period of 24-months following employee’s separation from
service with Regis and its affiliates, he will not, directly or indirectly, own
any interest in, render any services of any nature to, become employed by, or
participate or engage in the licensed beauty salon business, except with the
prior written consent of Regis.

 

8.                                       General Release.  In exchange for the
benefits promised you in this agreement, you agree to irrevocably and
unconditionally release and discharge Regis, its predecessors, successors, and
assigns, as well as past and present officers, directors, employees, and agents,
from any and all claims, liabilities, or promises, whether known or unknown,
arising out of or relating to your employment with Regis through the date you
sign this agreement.  You waive these claims on behalf of yourself and your
heirs, assigns, and anyone making a claim through you.  The claims waived and
discharged include, but are not limited to:

 

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a.                                       Employment discrimination claims
(including claims for harassment) and retaliation claims under Title VII of the
Civil Rights Act of 1964 or other similar laws;

 

b.                                      Age discrimination claims under the Age
Discrimination in Employment Act or similar discrimination act under any unit of
federal, state, or local government;

 

c.                                       Any claim under the Minnesota Human
Rights Act or similar discrimination act under any unit of federal, state, or
local government;

 

d.                                      Any claim for whistleblowing, public
policy, retaliation, or other similar law;

 

e.                                       Wrongful discharge and/or breach of
contract claims;

 

f.                                         Tort claims, including but not
limited to invasion of privacy, defamation, negligence of any kind, fraud, and
infliction of emotional distress; and

 

g.                                      Any other statutory (including federal,
any state, local, or other unit of government), common law, contract, or tort
claims concerning your employment with Regis, including but not limited to
claims under the Equal Pay Act, the Family and Medical Leave Act, the Americans
with Disabilities Act, the Civil Rights Act of 1991, the Sarbanes Oxley Act, and
42 U.S.C. §§ 1981, 1983, or 1985, to the full extent such claims can be waived.

 

This release does not include claims that cannot, by law, be waived, such as
unemployment compensation.

 

9.                                       Confidentiality and Non-Disparagement. 
To the fullest extent permitted by law, you will not, directly or indirectly,
disclose the terms of this agreement to anyone other than your attorney, spouse,
or significant other, or except as required for accounting, tax, or other
legally-mandated or legally-permitted purposes, provided that, unless there is a
legal reason for the disclosure, any such person to whom disclosure is made
shall, prior to disclosure, specifically agree to keep this agreement
confidential.  To the fullest extent permitted by law, you also agree not to
make or endorse any disparaging or negative remarks or statements (whether oral,
written, or otherwise) concerning Regis or its predecessors, successors, and/or
assigns, as well as past and present officers, directors, agents, and/or
employees.

 

10.                                 Binding Nature of Agreement.  This agreement
is binding on the parties and their heirs, administrators, representatives,
executors, successors, and assigns.

 

11.                                 Return of Corporate Property.  By signing
below, you represent and warrant that all Regis property has been returned to
Regis, and that you have not retained any copies, electronic or otherwise, of
any Regis property.  Notwithstanding this paragraph of this agreement, you may
keep documents pertaining to your compensation and/or benefits.

 

12.                                 Compliance with the Age Discrimination in
Employment Act (“ADEA”) and Notice of Right to Consider and Rescind Agreement.
You understand that this Agreement has to meet certain requirements to validly
release any claims you might have under the ADEA (including under the Older
Workers’ Benefit Protection Act), and you represent that all such requirements
have been satisfied, including that:

 

a.                                       The agreement is written in a manner
that is understandable to you;

 

b.                                      You are specifically waiving ADEA
rights;

 

c.                                       You are not waiving ADEA rights arising
after the date of your signing this agreement;

 

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d.                                      You are receiving valuable consideration
in exchange for execution of this agreement that you would not otherwise be
entitled to receive;

 

e.                                       Regis is hereby, in writing,
encouraging you to consult with an attorney before signing this agreement; and

 

f.                                         You received 21 days to consider this
Agreement and at least 7 days to rescind it (you are actually receiving 15 days
to rescind).

 

13.                                 Compliance with the Minnesota Human Rights
Act and Notice of Right to Consider and Rescind Agreement.  Regis hereby advises
Employee to consult with an attorney of his/her choice before signing this
agreement releasing any rights or claims that he/she believes he/she may have
under the Minnesota Human Rights Act (MHRA).  Once this Separation Agreement is
executed, Employee may rescind this Separation Agreement within fifteen (15)
calendar days to reinstate any claims under the MHRA.  To be effective, any
rescission within the relevant time period must be in writing and delivered to
Employer, in care of Ms. Katherine M. Merrill, 7201 Metro Boulevard,
Minneapolis, MN 55439 by hand or by mail within the fifteen (15) day period.  If
delivered by mail, the rescission must be (1) postmarked within the fifteen (15)
day period; (2) properly addressed to Employer; and (3) sent by certified mail,
return receipt requested.

 

14.                                 No Unlawful Restriction.  You understand
that nothing in this agreement is intended to or shall: (a) impose any
condition, penalty, or other limitation affecting your right to challenge this
agreement; (b) constitute an unlawful release of any of your rights; or
(c) prevent or interfere with your ability and/or right to: (1) provide truthful
testimony if under subpoena to do so; (2) file any charge with or participate in
any investigation or proceeding conducted by the Equal Employment Opportunity
Commission or any other federal, state, and/or local governmental entity; and/or
(3) respond as otherwise provided by law.

 

15.                                 Indemnification.  Regis hereby agrees to and
shall indemnify Employee and hold him harmless, to the full extent permitted by
applicable law, from and against any and all expenses and liabilities actually
and reasonably incurred by Employee in connection with his employment with Regis
Corporation.

 

16.                                 Severability.  The provisions of this
agreement are severable.  If any provision (excluding the General Release above)
is held to be invalid or unenforceable, it shall not affect the validity or
enforceability of any other provision.

 

17.                                 Entire Agreement and Merger.  Except to the
extent that you have an arbitration agreement with Regis, this agreement sets
out the entire agreement between you and Regis and supersedes any and all prior
oral or written agreements or understandings between you and Regis concerning
your termination of employment.  Any arbitration agreement that you have with
Regis will continue in full force and effect.  Employee agrees that any and all
claims which he might have had against Regis are fully released and discharged
by this agreement and that the only claims which he may hereafter assert against
Regis will be derived only from an alleged breach of the terms of the agreement
or of any employee benefit plan of which he is a participant.

 

18.                                 Employee Representations.  You represent
that you:

 

a.                                       you have the right and we have
encouraged you to review all aspects of this agreement with an attorney of your
choice;

 

b.                                      have had the opportunity to consult with
an attorney of your choice and have either done so or freely chosen not to do
so;

 

c.                                       have carefully read and fully
understand all the provisions of this agreement; and

 

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d.                                      are freely, knowingly, and voluntarily
entering into this Separation and Non-Disparagement Agreement and General
Release.

 

19.                                 Effective Date of Agreement.  This agreement
will become effective on the sixteenth day after you sign it, provided that you
have not rescinded the agreement.

 

20.                                 Valid Agreement.  As stated above, you agree
that this agreement and its releases fully comply with the ADEA.  You also agree
that this agreement and its releases fully comply with the Minnesota Human
Rights Act, and all other laws, statutes, ordinances, regulations, and/or
principles of common law governing releases.

 

21.                                 No Admission of Liability.  Regis denies any
and all liability to you.  You understand and agree that this agreement is not
an admission of wrongdoing or liability, including, but not limited to, any
violation of any federal, state, and/or local law, statute, ordinance, contract,
and/or principle of common law by Regis and/or any individuals and/or entities
associated with Regis.

 

22.                                 Attorneys’ Fees.  You agree that you are
responsible for your own attorneys’ fees and costs, if any, incurred in any
respect, including but not limited to in connection: with your employment with
Regis; with the termination of your employment with Regis; and with negotiating
and executing this agreement.

 

23.                                 Governing Law.  This agreement shall be
construed and enforced in accordance with the laws of the State of Minnesota and
the laws of the United States, where applicable.

 

IN WITNESS WHEREOF, the parties hereto have executed this Separation and
Non-Disparagement Agreement and General Release as of the day and year first
above written.

 

 

Dated:

July 22, 2011

 

/s/ MARK KARTARIK

 

 

 

Employee (print name):

Mark Kartarik

 

 

 

Mark Kartarik

 

 

 

 

 

 

 

 

 

 

 

REGIS CORPORATION:

 

 

 

 

Dated:

July 22, 2011

 

By:

/s/ ERIC BAKKEN

 

 

 

 

Eric Bakken

 

 

 

Its:

Executive Vice President, General Counsel and Salon Development

 

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