Exhibit 10.(aa)

 

SEPARATION AGREEMENT AND RELEASE

 

THIS SEPARATION AGREEMENT AND RELEASE (“Separation Agreement”) is made and
entered into this 13th day of May, 2009, between Kris Bergly (“Employee”) and
Regis Corporation (“Employer”).

 

RECITALS:

 

A.            Employee was employed by Employer between August 10, 1987 and
April 17, 2009, when his employment with Employer was terminated.

 

B.            The parties agree it is in their best interests to sever the
employment relationship.

 

C.            The purpose of this Separation Agreement is to set forth the terms
and conditions under which Employee and Employer will terminate their employment
relationship and to resolve any and all disputes Employee has and/or may have
with Employer.

 

AGREEMENT

 

In consideration of the recitals stated above and the mutual promises made
below, the parties agree as follows:

 

1.             Termination. Employee and Employer agree that Employee’s last day
of work will be April 17, 2009, and that Employee’s termination shall be
effective as of that date (hereinafter “Employment End Date”).

 

2.             Payments. Employer and Employee agree that in consideration for
Employee’s agreement to the terms contained herein, Employer shall make the
following payments to Employee:

 

a.     Employee will receive severance compensation (less customary payroll
deductions) of $443,333.33 (which is equal to fourteen (14) months of base pay)
payable in fourteen equal monthly installments of $31,666.66 commencing on the
first day of the month following expiration of both rescission periods referred
to in paragraphs 5 and 6 provided there has been no rescission under either
paragraph 5 or paragraph 6.

 

b.     In the event Employee elects to continue to participate in Employer’s
medical and dental plans pursuant to the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”), Employer will reimburse Employee for the amounts
paid by Employee for such COBRA coverage for a period of eighteen (18) months. 
Employer’s reimbursement obligations will be paid to Employee on a monthly basis
either by check or direct deposit as requested by Employee.  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
December 31, 2009.

 

c.     Employee will be eligible to receive a pro-rata (291/365) bonus payment
related to the normal bonus plan for Executive Vice Presidents of the Employer
for the fiscal

 

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year ending June 30, 2009.  The appropriate payment, if any, less customary
payroll deductions, will be made to Employee at the same time bonus payments are
made to other bonus plan participants.

 

d.     Employee will have the right to continue using the leased Mercedes SUV
vehicle until March 30, 2012, the end of the lease term.  During the period of
time from the Employment End Date until September 30, 2009, Employer will
continue to pay for the lease payments and Employee’s automobile insurance, and
Employer will reimburse Employee for repairs and maintenance on this vehicle. 
Effective immediately after this Agreement is fully executed, Employer and
Employee agree to assign the lease for the vehicle from Employer to Employee,
such assignment to be effective on October 1, 2009.  From and after the
effective date of the assignment, Employee agrees to insure the vehicle in his
own name and at his sole expense.  Employer’s obligation to provide insurance on
this vehicle will terminate on September 30, 2009.  For the period of time from
October 1, 2009 until March 30, 2012, Employer agrees to pay Employee a monthly
payment of $500.00 to be used by Employee to pay a portion of the vehicle lease
payment.

 

e.     With respect to the Agreement dated January 1, 2004, between Employee and
Employer related to life insurance policy No. 15796248 (“Policy”) insuring
Employee’s life, Employer, in full satisfaction of its obligations under such
Agreement, will continue to pay the annual premiums on the Policy after the
Employment End Date, until such time as Employer has made a total (including all
payments made by Employer prior to the Employment End Date) of ten (10) annual
premium payments on said Policy.  Employer will gross up this benefit to
Employee for Employee’s estimated taxes on this benefit.  Once the ten
(10) annual premium payments referenced above have been made, Employer will not
make any further payments on the Policy.

 

f.      With respect to the prior grants to Employee of restricted stock, in
addition to shares vested as of the date of termination, Employer will
accelerate vesting of 2,500 shares of restricted stock that would otherwise be
unvested as of the Employment End Date.  With respect to Employee’s existing
vested and exercisable stock appreciation rights, Employee shall be allowed to
exercise such stock appreciation rights for a period of ninety (90) days
following the Employment End Date, provided that Employee may not sell any
shares acquired upon exercise until after the date commencing two (2) business
days after Employer releases its third quarter financial statements, which is
expected to occur on April 29, 2009.  With respect to Employer common stock,
Employee agrees not to buy or sell any Employer common stock until two
(2) business days after Employer releases its third quarter financial
statements, which is expected to occur on April 29, 2009.  The purpose of this
paragraph is to require that Employee not trade in Employer common stock during
the current restricted trading period.

 

g.     With respect to Employee’s deferred compensation benefit, pursuant to the
Senior Officer Employment and Deferred Compensation Agreement dated December 31,
2008 between Employee and Employer (the “Agreement’), the parties agree that
Employee is entitled to a Discounted Vested Monthly Benefit, as defined in the
Agreement, based on a sixty percent (60%) Vested Monthly Benefit.  This benefit
will be paid to the Employee in a lump sum pursuant to the terms of the
Agreement.  Separate from, and in addition to, such benefit, the Employer has
agreed to pay, on May 1, 2010, in a single lump sum payment, an amount that is
equal to a forty percent (40%) Vested Monthly Benefit, to be discounted and
calculated as provided

 

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under the terms of the Agreement, and assuming Employee’s Separation From
Service occurs on the Employment End Date.

 

h.     Employer agrees to reimburse Employee for his out of pocket expenses
incurred prior to June 30, 2009 for tax planning advice related to this
Agreement, in an amount not to exceed $2,500.00.

 

3.             Full Compensation. The payments that will be made to Employee for
his benefit pursuant to this Separation Agreement will compensate him for and
extinguish any and all of his claims arising out of his employment with Employer
or his employment termination, including but not limited to his claims for
attorney’s fees and costs, and any and all of his claims for any type of legal
or equitable relief.  These payments are in excess of any sums to which Employee
is entitled absent this Separation Agreement.

 

4.             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.

 

5.           Rights of Rescission Under the ADEA.  This Separation Agreement is
intended to comply with the Older Workers Benefit Protection Act of 1990 with
regard to Employees’ waiver of rights under the federal Age Discrimination in
Employment Act, 29 U.S.C. § 621, et seq., (the “ADEA”).  Employee therefore
acknowledge and agrees that:

 

a.     Employee is specifically waiving rights and claims under the ADEA.

 

b.     Employee’s waiver of rights and claims under the ADEA does not extend to
any rights or claims arising after the date on which he executes this Separation
Agreement.

 

c.     Employer has advised Employee in writing to consult with an attorney
prior to signing this Separation Agreement.  Employee further acknowledges that
he has had the opportunity to consult with an attorney of his choice with
respect to all terms and conditions set forth in this Separation Agreement and
to have the advice of counsel with respect to his decision to sign and enter
into this Separation Agreement.

 

d.     Employer offered Employee at least twenty-one (21) days to consider the
terms and conditions of this Separation Agreement, to consult with counsel of
his choice, and to decide whether to sign and enter into it.

 

e.     Under the ADEA (federal law), Employee may rescind this Separation
Agreement within seven (7) calendar days of his execution of it.  To effectively
rescind this Separation Agreement, Employee agrees that his rescission will be
(1) made in writing and properly addressed and delivered to Employer, in care of
Eric Bakken; (2) mailed and postmarked within the 7-day period; and (3) sent by
certified mail, return receipt requested.  If Employee does not rescind his
acceptance of this Separation Agreement under the ADEA, the Separation Agreement
will become effective for ADEA purposes on the eighth day after Employee signs
it (the “Effective Date”) Employee understand that if he revokes the Separation
Agreement, it shall not be effective or enforceable and he will not receive the
benefits described in paragraph 2.

 

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6.             Notice of Rights of Rescission Under the MHRA. Employer hereby
advises Employee to consult with an attorney of his choice before signing this
Separation Agreement releasing any rights or claims that he believes he 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
the Employer, in care of Eric Bakken, by hand or by mailing it to the Employer
within the 15-day period. If delivered by mail, the rescission must be
(1) postmarked within the 15-day period; (2) properly addressed to the Employer
care of Eric Bakken at the address listed in this paragraph; and (3) sent by
certified mail, return receipt requested.

 

7.             General Release of the Employer.  Employee agrees to release and
discharge Employer, any parent, subsidiaries, affiliates, related companies, 
predecessors, successors, assigns, officers, directors, shareholders, employees,
independent consultants, attorneys, insurers, agents, and/or other
representatives from any and all actions, complaints, causes of actions,
grievances, claims, damages, obligations, debts, promises, losses, demands,
wages, bonuses, benefits, actual damages, compensatory damages, mental anguish,
pain, humiliation, emotional distress, exemplary and/or punitive damages,
statutory penalties, and/or any other liabilities of any kind (including any
other statutory, tort, civil rights, contractual, and/or common law claims)
which have been or could be asserted against Employer arising out of or relating
in any way to Employee’s employment with Employer, and/or any other occurrence
up to and including the date of this Separation Agreement, whether presently
asserted or otherwise, including, but not limited to claims, demands, actions or
liability arising under Title VII of the Civil Rights Act of 1964, as amended,
the Civil Rights Act of 1991, the Age Discrimination and Employment Act
(including the Older Workers Benefit Protection Act),  the Americans with
Disabilities Act, the Family and Medical Leave Act, the Employee Retirement
Income Security Act, the Rehabilitation Act of 1973, 42 U.S.C. Section 1981, the
National Labor Relations Act and/or any other Federal, State or local statute,
ordinance or regulation (including but not limited to claims based on race, sex,
age, color, sexual preference, marital status, religion, national origin,
disability, retaliation, obtainment of benefit plan rights and veterans
status.)  Despite any language to the contrary, nothing in this Separation
Agreement is intended to and/or shall waive any right that Employee cannot by
law waive (e.g., unemployment compensation benefits).

 

8.             General Release of Employee.  Employer releases and forever
discharges Employee from any and all causes of action or claims related to or
arising out of or which could have arisen out of the employment relationship
with Employee.  This release does not include alleged unlawful acts and/or acts
intending to harm Employer.  Despite any language to the contrary, nothing in
this Separation Agreement is intended to and/or shall waive any right that
Employer cannot by law waive.

 

9.             Confidentiality. To the fullest extent permitted by law, the
terms of this Separation Agreement and Release will be treated as confidential
by both Employee and Employer and neither party shall disclose its terms to
anyone except Employee may disclose the terms of this Separation Agreement to
his spouse, legal counsel and accountant, or as required by law and/or
governmental authorities. Employer may disclose the terms of this Separation
Agreement to its officers and directors, outside auditors, and to employees or
agents of it or its parent corporation who have a legitimate need to know the
terms in the course of performing their duties. Employee recognizes and agrees
that this confidentiality provision was a significant inducement for the
Employer to enter into this Separation Agreement. In the event of a breach by
Employee of the terms of this paragraph, all payments to Employee shall cease
and Employee shall reimburse all payments made under this Separation Agreement.

 

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10.           Non-Admission. Nothing in this Separation Agreement is intended to
be, nor will be deemed to be, an admission of liability by the Employer that it
has violated any state or federal statute, local ordinance, or principle of
common law, or that it has engaged in any wrongdoing.

 

11.           Non-Disparagement. To the fullest extent permitted by law, the
parties mutually agree that they shall not disparage or defame each other in any
respect or make any comments concerning the employment relationship between
them. As set forth in this paragraph, Employer’s agreement is limited to its
officers and directors.  To the fullest extent permitted by law, both parties
and their agents covered by this paragraph agree not to make any further
statements concerning their relationships with each other, either in the
employment or personal context.  Notwithstanding the foregoing, Employer agrees,
at the request of Employee, to provide a reference to Employee’s potential
employers.  In this regard, Employee’s reference requests shall be provided to
Eric Bakken who will provide an appropriate reference or refer the party to
someone else in the organization for a response.

 

12.           No unlawful restriction.   Employee  understands and agrees that,
notwithstanding anything to the contrary in this Separation Agreement, nothing
in this Separation Agreement is intended to and/or shall: (a) impose any
condition, penalty, or other limitation affecting Employee’s  right to challenge
this Separation Agreement; (b) constitute an unlawful release or waiver of any
of Employee’s  rights under any laws; or (c) prevent, impede, or interfere with
Employee’s  ability or right to: (i) provide truthful testimony pursuant to
subpoena; (ii) file any charge with, or participate in an investigation or
proceeding conducted by, any governmental entity including the Equal Employment
Opportunity Commission; and/or (iii) respond as otherwise required by law. 
Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement is intended to be or shall be construed to be a violation of any law.

 

13.           Non-Assignment. The parties agree that this Separation Agreement
will not be assignable by either party unless the other party agrees in writing.

 

14.           Interpretation and drafting.  The Parties agree that this
Separation Agreement was drafted with input from both of them, and that it shall
not be construed for or against either Party.  This Separation Agreement shall
also be construed as a whole according to its fair meaning.  Unless the context
indicates otherwise, the term “or” shall be deemed to include the term “and,”
and the singular or plural number shall be deemed to include the other. 
Captions are intended solely for convenience of reference and shall not be used
in the interpretation of this Separation Agreement.  Employee represents and
agrees that Employee has had a full and complete opportunity to decide whether
to sign this Separation Agreement, to review this Separation Agreement, to
request and make changes, and to consider whether to execute this Separation
Agreement.

 

15.           Merger. This Separation Agreement and Release and the employee
benefit plans in which Employee is a participant supersede all prior oral and
written agreements and communications between the parties. Employee agrees that
any and all claims which he might have had against the Employer are fully
released and discharged by this Separation Agreement, and that the only claims
which he may hereafter assert against the Employer will be derived only from an
alleged breach of the terms of the Separation Agreement or of any employee
benefit plan in which Employee is a participant.

 

16.           Entire Agreements. This Separation Agreement and Release and the
employee benefit plans in which Employee is a participant constitute the entire
agreements between the parties with

 

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respect to the termination of Employee’s employment relationship with the
Employer, and the parties agree that there were no inducements or
representations leading to the execution of this Separation Agreement, except as
herein contained.

 

17.           Invalidity. In case any one or more of the provisions of this
Separation Agreement shall be invalid, illegal, or unenforceable in any respect,
the validity, legality, and enforceability of the remaining provisions contained
in this Separation Agreement will not in any way be affected or impaired
thereby.

 

18.           Voluntary and Knowing Action. Employee acknowledges that he has
been advised of his right to be represented by his own attorney, that he has
read and understands the terms of this Separation Agreement, and that he is
voluntarily entering into this Separation Agreement to resolve his disputes
against the Employer.

 

19.           Governing Law.  This Separation Agreement will be construed and
interpreted in accordance with the laws of the State of Minnesota.

 

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

 

 

Dated:

May 13,2009

 

/s/ Kris Bergly

 

 

Kris Bergly

 

 

 

STATE OF MINNESOTA

)

 

)S.S.

COUNTY OF HENNEPIN

)

 

I, Lora J. Martin-Poulos, a Notary Public, do hereby certify that Kris Bergly,
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he signed and delivered the said instrument as his free and voluntary act,
for the uses and purposes therein set forth.

 

Given under my hand and official seal this 13th day of May, 2009.

 

 

 

 

/s/ Lora J. Martin-Poulos

 

 

Notary Public

 

 

 

 

 

EMPLOYER:

 

 

 

 

 

REGIS CORPORATION

 

 

 

 

 

 

Dated:

May 13, 2009

 

By:

/s/Eric A. Bakken

 

 

 

Eric A. Bakken

 

 

 

Its: Senior Vice President & General Counsel

 

 

STATE OF MINNESOTA

)

 

)S.S.

COUNTY OF HENNEPIN

)

 

The foregoing instrument was acknowledged before me this 13 day of May, 2009, by
Eric A. Bakken, the Senior Vice President & General Counsel of Regis
Corporation, a Minnesota corporation, on behalf of the corporation.

 

 

 

/s/ Lora J. Martin-Poulos

 

Notary Public

 

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