Exhibit 10.2


 


EMPLOYMENT
AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”),
dated as of the 10th day of January, 2006 is made by and between Regis
Corporation, a Minnesota corporation (the “Corporation”), and Paul D.
Finkelstein (“Executive”).


 


RECITALS


 


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


 


WHEREAS, the Corporation anticipates entering
into a strategic transaction (the “Transaction”) with Alberto-Culver Company (“Alberto-Culver”),
pursuant to which Alberto-Culver will distribute to its stockholders all the
shares of the subsidiary of Alberto-Culver that owns Alberto-Culver’s Sally
Beauty Supply and Beauty Systems Group businesses (“Spinco”), following which a
wholly owned subsidiary of the Corporation shall merge with Spinco and the
Corporation shall issue shares of its common stock to the stockholders of
Spinco; and


 


WHEREAS, the
Transaction is expected to result in a substantial increase in the revenues of
the Corporation; and


 


WHEREAS, subject to and conditioned upon the
closing of the Transaction (the “Closing”), the Corporation and the Executive
desire to terminate the Existing Agreement and to make effective 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 Executive, and Executive agrees to such employment, upon the
following terms and conditions:


 


1.             EFFECTIVE
DATE; PERIOD OF EMPLOYMENT.  This
Agreement shall be effective at 12:01 a.m. on the day immediately
following the Closing (the “Effective Date”). 
The employment of 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.


 


2.             DUTIES.  During the period of employment, 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, Executive shall devote his full time
and attention to the business of the Corporation and the discharge of the
aforementioned 


 





















 


duties, except for permitted
vacations, absences due to illness, and reasonable time for attention to
personal affairs and charitable activities.


 


3.             OFFICE
FACILITIES.  During the period of
employment, 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 Executive the following:


 


(a)           Base
Salary.  The Corporation shall pay
Executive a base salary (the “Base Salary”), calculated at the rate of One
Million Dollars ($1,000,000.00) per annum (which Base Salary may be increased,
but not reduced, by the Board 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 each year by an amount determined by the Board of Directors.  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.  Executive shall be eligible for an annual
performance bonus (the “Bonus”) of up to $2,000,000 (the “Maximum Bonus”) at
the end of each fiscal year in which he remains employed, based upon meeting
the performance-based earnings per share target set by the independent members
of the Board pursuant to the Corporation’s Short-Term Incentive Compensation
Plan.  For the 2006 fiscal year,
Executive shall be entitled to receive a bonus of $1,000,000 at 100% of target;
$375,000 at 85% of target; $1,500,000 at 105% of target and the Maximum Bonus
at 110% or greater of target, with the Bonus calculated by interpolation
between the amounts set forth for the specified percentages.


 


(c)           Other
Incentive Plans.  During the period
of employment, Executive shall be allowed 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,
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.  In addition, on the Effective
Date, the Corporation shall issue to Executive 125,000 share of restricted
stock, pursuant to its Long Term Incentive Plan.  Such shares shall vest ratably on each of the
five successive anniversaries of the Effective Date, provided the Executive is
employed on such vesting dates.


 


(d)           Retirement
Benefit.  Upon the termination of the
period of employment, provided that this Agreement is not renewed or a new
employment agreement is not entered into between the Corporation and Executive,
the Corporation shall pay Executive an annual retirement benefit equal to 60%
of the total of (i) Executive’s Base Salary for the fiscal year in which
the period of employment terminates and (ii) Executive’s average 


 


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Bonus, earned at the end of the
three fiscal years immediately preceding the date of the termination of the
period of employment (the “Annual Retirement Benefit”); provided, however,
that


 


(i) the Annual Retirement Benefit shall
be a minimum of $1,200,000 in the event this Retirement Benefit becomes payable
(x) as a result of a termination under Section 6(d) hereof or for
Good Reason under Section 6(e) hereof, or (y) except as set forth in Section 4(d)(ii),
prior to the time that the Bonus shall have been determined for the first
fiscal year ending subsequent to the Effective Date;


 


(ii) if this Retirement Benefit becomes
payable because Executive terminates employment under Section 6(e) without
Good Reason prior to the third anniversary of the Effective Date, the Annual
Retirement Benefit shall instead be equal to $600,000 if such termination
occurs prior to the first anniversary of the Effective Date, $800,000 if such
termination occurs on or after the first anniversary of the Effective Date but
prior to the second anniversary of the Effective Date, and $1,000,000 if such
termination occurs on or after the second anniversary of the Effective Date but
prior to the third anniversary of the Effective Date; and


 


(iii) except as set forth in Section 4(d)(ii),
in the event this retirement benefit becomes payable prior to the time that the
Bonus for three fiscal years can be determined, but after the Bonus has been
determined for at least one fiscal year, the Annual Retirement Benefit shall be
computed with reference to the Bonus for such one year or, if applicable, the
average Bonus for two years.


 


The Annual Retirement Benefit
shall be payable in equal monthly installments and shall be paid for the
remainder of Executive’s life.  Upon
Executive’s death, if his former spouse, Barbara, has survived him, 50% of the
Annual Retirement Benefit shall be paid to her, in equal monthly installments,
for the balance of her life.


 


(e)           Health,
Welfare and Retirement Plans; Vacation. 
During the period of employment, 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;


 


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


 


In addition to the foregoing, the Corporation
shall reimburse Executive up to $179,000 annually for premiums paid by
Executive with respect to life insurance coverage purchased by Executive.


 


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(f)            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
expenses.  With respect to any benefits
or payments received or owed to Executive hereunder, 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. 
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
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 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.  Such 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 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 Executive becomes entitled to
disability compensation benefits under the Corporation’s long term disability
benefit program 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 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 Executive, may terminate such employment at any time prior to
the expiration of the period of employment hereunder for Cause, which means
that such termination must be due to (1) acts during the term of this
Agreement or the Existing Agreement (A) resulting in a felony conviction
under any Federal or state statute or (B) substantial non-performance of
Executive of his employment duties required by this Agreement or (2) Executive
willfully engaging in dishonesty or gross misconduct injurious to 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 30 days) in the case of
clause (1)(B) to cease substantial non-performance.


 


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(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 subsections (a) through (c)) upon
60 days prior written notice to Executive.


 


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


 


(f)            Notice
of Good Reason.  If 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 10
hereof.  The submission of such a request
by an Executive shall not constitute “Cause” for the Corporation to terminate
Executive under Section 6(c) hereof; and 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 10 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 10(a) and
(b) hereof, then the parties shall promptly submit the claim to binding
arbitration pursuant to Section 10(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 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 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.


 


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7.             PAYMENTS
UPON TERMINATION.


 


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


 


(i)            Accrued
Compensation.  All compensation due
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, 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), and all such compensation accrued as of the date
of such termination but not previously paid shall be paid to Executive at the
time such payment otherwise would be due (the foregoing being hereinafter
referred to as the “Accrued Compensation”).


 


(ii)           Accrued
Obligations.  In addition, Executive
shall also be entitled to the following, which are hereinafter referred to as
the “Accrued Obligations:” (x) a payment equal to the highest Bonus paid or
payable to Executive in respect of the three fiscal years prior to the date of
termination (the “Highest Annual Bonus”), pro rata based on the portion of the
year ended on the date of the termination; (y) 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(d) hereof);
and (z) accrued vacation pay.


 


(iii)          Acceleration
of Vesting.  All options to purchase the
Corporation’s common stock and shares of restricted stock 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 continuation coverage Executive
may have been entitled to receive under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, for three years subsequent to the
termination of employment, Executive shall be entitled to the continuation of
the same or equivalent life, health, hospitalization, dental and disability
insurance coverage and other employee insurance or welfare benefits that he had
received (including equivalent coverage for his spouse and dependent children)
immediately prior to termination of employment, as if he had continued to be an
executive employee of the Corporation. 
In the event that 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 Executive for actual premiums paid for such alternative coverage that
Executive obtains for the payment period. 
If Executive prior to termination of employment hereunder was receiving
any cash-in-lieu payments designed to enable Executive to obtain insurance coverage
of his choosing, the Corporation shall, in addition to any other benefits to be
provided under this Section 7(a)(iv), provide Executive with a lump-sum
payment equal to the amount of such in-lieu payments that Executive would have
been entitled to receive over the payment period, which lump sum payment shall
be


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paid in the year in which the
obligation to make such payment was triggered. 
In addition, if the Corporation maintains any post-retirement welfare
benefit program for senior executives, Executive shall be entitled to
participate in such program.


 


(b)           Termination
Without Cause or for Good Reason.  If
Executive’s employment pursuant to this Agreement is terminated pursuant to subsection (d) of
Section 6 hereof or Executive terminates this Agreement for Good Reason,
then, in addition to the payments required by subsection (a) of this Section 7,
Executive shall be entitled to and shall receive the Accrued Compensation, the
Accrued Obligations, acceleration of vesting as set forth in Section 7(a)(iii) hereof
and benefits as set forth in Section 7(a)(iv) hereof.  In addition, 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 be an amount equal to the product of (x) the sum of Executive’s
Base Salary and the Highest Annual Bonus and (y) 2.  The Severance Payment shall be subject to
required withholding.


 


(c)           Termination
For Cause or Without Good Reason.  If
Executive’s employment pursuant to this Agreement is terminated pursuant to subsection (c) of
Section 6 hereof, Executive terminates this Agreement without Good Reason,
or Executive’s employment hereunder terminates due to the expiration of the
period of employment, Executive shall be entitled to and shall receive the
Accrued Compensation and the Accrued Obligations, except that he shall not be
entitled to, and shall not receive, any payment with respect to the Highest
Annual Bonus.


 


(d)           Tax
Gross-Up.  If any payments received
by 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 payments 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.


 


(e)           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 Section 414 of the Internal
Revenue Code of 1986, as amended (the “Code”), 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


 


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guidance issued by the
Department of the Treasury with respect to the application of such Section 409A,
the payment of the benefits payable 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.             CONFIDENTIAL
INFORMATION.  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 8 shall survive the termination of Executive’s
employment with the Corporation, provided that after the termination of
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:
NON-MITIGATION: LITIGATION EXPENSES.


 


(a)           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 Executive from another employer or
other source.


 


(b)           For
a period of twenty-four months after Executive’s termination of employment
hereunder, Executive shall not enter into endeavors that are competitive with
the business or operations of 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 (expect for passive investments of not
more than a one percent 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)           For
a period of twenty-four months after 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)           The
Corporation shall pay 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.  Executive
acknowledges that any breach or threatened breach of Sections 8, 9(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.


 


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10.           CLAIMS
PROCEDURE.


 


(a)           Executive,
or other person claiming through Executive, must file a written claim for
benefits with the Board as a prerequisite to the payment of benefits under this
Agreement.  The Board shall make all
determinations as to the right of any person to receive benefits under
subsections (a) and (b) of this Section 10. Any denial by the
Board of a claim for benefits by Executive, his heirs or personal
representative (“the claimant”) shall be stated in writing by the Board and
delivered or mailed to the claimant within 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 the claimant prior to the
termination of the initial 10-day period. 
In no event shall such extension exceed a period of 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 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 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 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 Corporation shall advance the filing
fees, arbitrator fees and other costs required to conduct the arbitration, as
well as Executive’s attorney fees (which fees and costs shall not be
recoverable by the Corporation).  The
Corporation shall reimburse all of Executive’s remaining reasonable fees and
expenses.  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


 


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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.


 


11.           MISCELLANEOUS.


 


(a)           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.


 


(b)           The
rights and obligations of Executive under this Agreement are expressly declared
and agreed to be personal, nonassignable and nontransferable during his life,
but upon his death this Agreement shall inure to the benefit of his heirs,
legatees and legal representatives of his estate.


 


(c)           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)           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)           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)            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)           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)           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
  Executive:

  	
   

  	
  Paul D.
  Finkelstein

  
	
   

  	
   

  	
  Regis
  Corporation

  
	
   

  	
   

  	
  7201 Metro
  Boulevard

  
	
   

  	
   

  	
  Edina,
  Minnesota 55439

  



 


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  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)            As
used in this Agreement, the following term has the meaning given:


 


“Good Reason” shall mean the occurrence of any of the
following:


 


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


 


(ii)           a
reduction by the Corporation in Executive’s base salary then in effect;


 


(iii)          failure
by the Corporation to continue in effect (without substitution of a
substantially equivalent plan) 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 Executive is
participating, or the taking of any action by the Corporation which would
adversely affect Executive’s participation in or materially reduce Executive’s
benefits under any of such plans;


 


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


 


(v)           Executive
is excluded (without substitution of a substantially equivalent plan) from
participation in any incentive, compensation, stock option, health, dental,
insurance, pension or other benefit plan generally made available to senior
executives in the Corporation;


 


(vi)          without
Executive’s express written consent, the requirement by the Corporation that
Executive’s principal place of employment be relocated more than twenty-five
(25) miles from Minneapolis, Minnesota;


 


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


 


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(viii)        the
Corporation purports to terminate Executive’s employment other than in
accordance with a notice of termination in accordance with the provisions of
the Employment Agreement.


 


(j)            There
shall be no right of set-off or counterclaim in respect of any claim, debt or
obligation against any payment to or benefit fro the Executive provided for in
this Agreement.


 


(k)           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 and any and all change of control provisions
contained in any agreement, arrangement or plan with or for the benefit of
Executive, all of which are forever irrevocably waived by Executive; provided,
however, that this Agreement shall not supersede any agreements between the
Corporation and Executive regarding currently outstanding options held by
Executive to purchase the Corporation’s common stock or restricted stock,
except for the change of control provisions thereof, which are hereby
superseded.


 


14.           NO
INTERRUPTION OF BENEFITS.  This Agreement
constitutes an amendment and restatement of the Employment Agreement, and
nothing in this Agreement shall be deemed an interruption of 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 Executive harmless, to the fullest extent allowed by law, from and against
any liability, damages, costs, or expenses (including attorney’s fees) in
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 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
Executive for the term of this Agreement and for at least three years
thereafter.


 


[Remainder of Page Intentionally Left Blank]


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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 Bakken

  
	
   

  	
  Name:

  	
  Eric Bakken

  
	
   

  	
  Title:

  	
   

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Paul D. Finkelstein

  
	
   

  	
  Paul D. Finkelstein

  
	
   

  	
   

  
					



 


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