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 


 

















 


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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