Document:

Exhibit 10.1

 

SUPPORT
AGREEMENT

 

SUPPORT AGREEMENT
(this “Agreement”), dated as of January 10, 2006, between Regis Corporation, a Minnesota corporation
(“Regis”), and the Persons whose names are set forth on
the signature pages hereto under the caption “Stockholders” (each
individually a “Stockholder” and, collectively, the “Stockholders”).

 

WITNESSETH:

 

WHEREAS, concurrently herewith, Alberto-Culver Company, a Delaware
corporation (“Alberto-Culver”), Sally Holdings, Inc., a Delaware
corporation and wholly-owned subsidiary of Alberto-Culver (“Spinco”),
Regis, Roger Merger Inc., a Delaware corporation (“Merger Sub”), and Roger
Merger Subco LLC, a Delaware limited liability company (“Subco”), are
entering into an Agreement and Plan of Merger, dated as of the date hereof (as
amended in accordance with its terms, the “Merger Agreement”) (All
capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Merger Agreement);

 

WHEREAS, concurrently herewith, Alberto-Culver and Spinco are entering
into a Separation Agreement dated as of the date hereof (as amended in
accordance with its terms, the “Separation Agreement”);

 

WHEREAS, the Merger Agreement and Separation Agreement provide for the
distribution of the shares of Spinco to the stockholders of Alberto-Culver,
followed by the merger of Merger Sub with and into Spinco (the “Merger”)
and the merger of the surviving corporation of the Merger with and into Subco,
all upon the terms and subject to the conditions set forth therein;

 

WHEREAS, the Stockholders own, beneficially or of record, the aggregate
number of shares of Alberto-Culver Common Stock set forth on Exhibit A
hereto (such shares of Alberto-Culver Common Stock and any other shares of
Alberto-Culver Common Stock of which the Stockholders acquire beneficial or
record ownership after the date hereof and during the term of this Agreement
are, for so long as such shares are owned by a Stockholder, collectively
referred to herein as the “Subject Shares”); and

 

WHEREAS, as a condition to the willingness of Regis to enter into the
Merger Agreement, Regis has required that the Stockholders enter into this
Agreement.

 

NOW, THEREFORE, to induce Regis to enter into, and in consideration of
Regis’ entering into, the Merger Agreement, the parties agree as follows:

 

 

ARTICLE I

Covenants of the Stockholders

 

Section 1.01           Voting
of Subject Shares. Until the termination of this Agreement in accordance
with Section 4.01, each Stockholder agrees as follows:

 

(a)           At
any meeting (whether annual or special, and whether or not a reconvened or
adjourned meeting) of stockholders of Alberto-Culver, however called, to vote
upon the Alberto-Culver Transaction Approval or any other transaction
contemplated by the Merger Agreement, or in any other circumstances in which a
vote or other approval with respect to the Alberto-Culver Transaction Approval
or any other transaction contemplated thereby is sought, each Stockholder shall
vote all of its Subject Shares in favor of the Alberto-Culver Transaction
Approval and any other transaction contemplated by the Merger Agreement, as
applicable, and shall vote all of its Subject Shares in favor of any other
actions presented to stockholders of Alberto-Culver that are necessary or
desirable in furtherance of the Alberto-Culver Transaction Approval or any
other transactions contemplated by the Merger Agreement.  The agreements set forth in the immediately
preceding sentence shall equally apply if such approvals are sought by the
solicitation of written consents.

 

(b)           At
any meeting of stockholders of Alberto-Culver (including a reconvened or
adjourned meeting) or in any other circumstances in which the Stockholders’
vote, consent or other approval is sought, each Stockholder shall vote all of
its Subject Shares against (i) any Alberto-Culver Acquisition Proposal; or
(ii) any amendment of Alberto-Culver’s certificate of incorporation or
bylaws that is prohibited by the Merger Agreement or any other proposal, action
or transaction involving Alberto-Culver or any of its Subsidiaries, which
amendment or other proposal, action or transaction would reasonably be expected
to in any manner impede, frustrate, prevent or nullify the Merger Agreement,
the Alberto-Culver Transaction Approval, the Merger or any of the other transactions
contemplated by the Merger Agreement or change in any manner the voting rights
of any class of Alberto-Culver capital stock. 
Each Stockholder further agrees not to commit or agree to take any
action inconsistent with the foregoing.

 

(c)           Notwithstanding
anything to the contrary contained herein, if (i) the Board of Directors
of Alberto-Culver shall not have made the Alberto-Culver Recommendation or (ii) the
Board of Directors of Alberto-Culver or a committee thereof shall have made a
Change in the Alberto-Culver Recommendation (or resolved or publicly proposed
to take any such action described in clause (i) or (ii) of
this paragraph), the obligations of the Stockholders under Sections 1.01(a) and
(b) shall be suspended until such time, if any, as the Board of
Directors of Alberto-Culver makes the Alberto-Culver Recommendation or
reinstates the Alberto-Culver Recommendation, as the case may be, and, while
such obligations are suspended, the Stockholders are not bound by such
obligations and may take actions that are inconsistent therewith.

 

Section 1.02           Restrictions
on Voting Arrangements and Transfer. 
From and after the date hereof and until the termination of this
Agreement pursuant to Section 4.01, each Stockholder agrees that it
will not (a) deposit any of its Subject Shares into a voting trust, grant
any proxies, enter into any voting arrangement or understanding, whether by
proxy, voting agreement or otherwise, with respect to its Subject Shares (other
than as provided herein) or (b) except for Permitted Transfers (which
Transfers are not restricted hereby), Transfer (or enter into any agreement,
option or other arrangement with respect to the Transfer of) all or any part of
its Subject Shares if, after giving effect to such Transfer or agreement,
option or other arrangement, the aggregate number of Subject Shares Transferred
by the Stockholders (or covered by such agreements, options or other
arrangements entered into by the Stockholders) between the date hereof and the
Termination Time, when added to the Uncovered Shares, exceeds 3,400,000 (but

 

2

 

Subject Shares converted into
shares of Regis Common Stock pursuant to the Merger Agreement and Subject
Shares Transferred in Permitted Transfers are not counted as Subject Shares
Transferred for this purpose).  For
purposes hereof, (i) “Transfer” means to directly or
indirectly:  sell, transfer, exchange,
pledge, hypothecate, encumber, assign or otherwise dispose of (including by
gift), (ii) “Constructively Owned” means owned actually or
constructively pursuant to Treasury Regulation § 1.355-7(h)(8), (iii) “Code”
means the Internal Revenue Code of 1986, as amended, (iv) “Permitted
Transfer” means any Transfer of Subject Shares to the extent that such Transfer
(A) results from the death of any individual or (B) is not treated as
an acquisition for purposes of Code Section 355(e) (i.e., that there
will be no decrease in percentage ownership of any “controlling shareholder” or
“ten-percent shareholder” within the meaning of Treasury Regulation §1.355-7(h)(3) and
-7(h)(14), respectively), (v) “Foundations” means the Howard and
Carol Bernick Family Foundation and the Lavin Family Foundation, and (vi) “Uncovered
Shares” means the aggregate number of shares of Alberto-Culver Common Stock
Constructively Owned, as of the date hereof, by the Foundations and any Person
whose ownership of Alberto-Culver Common Stock is attributable to any
Stockholder pursuant to Treasury Regulation §§ 1.355-7(h)(8) or -7(h)(14)
; provided, however, that (A) Uncovered Shares shall not include the
Subject Shares as of the date hereof, (B) Uncovered Shares shall not
include shares of Alberto-Culver Common Stock actually owned by Howard B.
Bernick, to the extent that Howard B. Bernick does not actually own more than
600,000 shares of Alberto-Culver Common Stock, and (C) with respect to any
Person who agrees to become bound by the provisions (including, without
limitation, all Transfer restrictions) of this Section 1.02(b) following
the date hereof, Uncovered Shares shall be reduced by (1) the number of
Uncovered Shares that were owned beneficially or of record by such Person on
the date hereof and that are owned beneficially or of record on the date such
Person agrees to become so bound (which Person shall thereupon be considered a
Stockholder for purposes of this Section 1.02(b) only and which
shares shall thereupon be considered Subject Shares for purposes of this Section 1.02(b) only)
and (2) the number of Uncovered Shares Transferred by such Person to a
Stockholder on or after the date hereof and prior to the date such Person
agrees to become so bound if the Transfer of such shares would have been a
Permitted Transfer had such shares been Subject Shares.  Upon entering into any Transfer of its
Subject Shares, the applicable Stockholder shall give Regis substantially
concurrent written notice of such Transfer (and all reasonably relevant
details, including the identity of the transferee, if known).

 

Section 1.03           No
Restraint on Officer or Director Action; Etc.  Notwithstanding anything to the contrary
herein, Regis hereby acknowledges and agrees that no provision in this
Agreement shall limit or otherwise restrict any Stockholder or any other Person
(including any trustee, officer, director, member, manager or partner of any
Stockholder) with respect to any act or omission that such Stockholder or such
other Person may undertake or authorize in his or her capacity as a director,
officer, trustee or other fiduciary of Alberto-Culver, any Subsidiary thereof
or any foundation or employee benefit plan (other than a Stockholder),
including any vote that such individual may make as a director of
Alberto-Culver with respect to any matter presented to the Board of Directors
of Alberto-Culver.  The agreements set
forth herein shall in no way restrict any such director, officer, trustee or
other fiduciary in the exercise of his or her duties as a director, officer,
trustee or other fiduciary of Alberto-Culver, any Subsidiary thereof or any
foundation or employee benefit plan (other than a Stockholder).  Each Stockholder has executed this Agreement
solely in its capacity as the record and/or beneficial owner of its Subject
Shares and no action taken by such Stockholder or any other Person in his or
her

 

3

 

capacity as a director,
officer, trustee or other fiduciary of Alberto-Culver, any Subsidiary thereof
or any foundation or employee benefit plan (other than a Stockholder) shall be
deemed to constitute a breach of any provision of this Agreement.

 

Section 1.04           Confirmation
of Voting.  Each Stockholder shall
deliver a written notice to Regis confirming that it has voted or caused to be
voted all of its Subject Shares in accordance with Section 1.01 at each of
the following times:  (i) no later
than 5:00 pm, Eastern time, on the day that is two Business Days prior to the
date of the Alberto-Culver Stockholders Meeting and (ii) no later than 2
hours prior to the commencement of the Alberto-Culver Stockholders Meeting (but
nothing contained in this Section 1.04 shall eliminate or limit the right
of such Stockholder to rescind or change its vote if such action is consistent
with such Stockholder’s obligations under the other Sections of this
Agreement).

 

ARTICLE II

Representations and Warranties of the Stockholders.

 

Each Stockholder hereby represents and
warrants to Regis that as of the date hereof:

 

Section 2.01           Organization; Authority; Execution and Delivery, Enforceability.    Such Stockholder,
if it is not an individual, is duly organized or formed, validly existing and
(if applicable) in good standing under the laws of the jurisdiction in which it
is organized or formed. Such Stockholder (a) if it is not an individual,
has all requisite power and authority, and (b) if he or she is an
individual, has the legal capacity, in each case to execute and deliver this
Agreement and to consummate the transactions contemplated hereby to be
consummated by such Stockholder.  If such
Stockholder is not an individual, the execution and delivery by such
Stockholder of this Agreement and the consummation by such Stockholder of the
transactions contemplated hereby to be consummated by such Stockholder have
been duly authorized by all necessary action on the part of such Stockholder.  Such Stockholder has duly executed and
delivered this Agreement, and this Agreement constitutes such Stockholder’s
legal, valid and binding obligation, enforceable against him, her or it in
accordance with its terms.  If such
Stockholder is married and the Subject Shares of such Stockholder constitute
community property or otherwise need spousal or other approval for this
Agreement to be legal, valid and binding with respect to such Subject Shares,
the consent of such Stockholder’s spouse has been obtained and this Agreement
is legal, valid and binding with respect to such Subject Shares.  If such Stockholder is a trust, no consent of
any beneficiary is required for the execution and delivery by such Stockholder
of this Agreement or the consummation of the transactions contemplated hereby
to be consummated by such Stockholder.

 

Section 2.02           No Conflicts.    The execution and
delivery by such Stockholder of this Agreement do not, and the consummation by
such Stockholder of the transactions contemplated hereby to be consummated by
such Stockholder will not, conflict with, or result in any Violation under, any
provision of (a) the charter or organizational documents of such
Stockholder, if it is not an individual, (b) any Contract to which such
Stockholder is a party or by which any of its respective properties or assets
is bound or (c) any Applicable Laws applicable to such Stockholder or its
respective properties or assets.

 

4

 

Section 2.03           Ownership
of Shares.  (a) The Stockholders
are the beneficial owners and the owners of record of the Subject Shares, free
and clear of any Lien, (b) the Stockholders
do not own, beneficially or of record, any shares of capital stock of
Alberto-Culver or securities convertible into or exchangeable for shares of
capital stock of Alberto-Culver, other than the Subject Shares, (c) the
Stockholders have the sole right and power to vote and dispose of the Subject
Shares, (d) there are no Contracts or arrangements of any kind, contingent
or otherwise, obligating Stockholders to Transfer,
or cause to be Transferred, any of the Subject Shares and no Person has any contractual or other
right or obligation to purchase or otherwise acquire any Subject Shares, in
either case other than pursuant to the trust instruments of Stockholders that
are trusts, and (e) none of the Subject Shares is subject to any voting
trust or other agreement, arrangement or restriction with respect to the voting
of any of such Subject Shares, except for this Agreement and the organizational
documents or trust instruments of the Stockholders.

 

Section 2.04           Reliance.  Such Stockholder understands and acknowledges
that Regis is entering into the Merger Agreement in reliance upon such
Stockholder’s execution and delivery of this Agreement.

 

ARTICLE III

Assignment; Third Party Beneficiaries.

 

Section 3.01           Assignment;
Third Party Beneficiaries.  Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by Regis (whether by operation of Applicable Law or otherwise)
without the prior written consent of the other parties.  In the event that any Stockholder Transfers
any Subject Shares in accordance with the provisions of Section 1.02,
neither such Stockholder nor the Transferee shall be bound by this Agreement
with respect to the Shares Transferred and the Shares Transferred shall no
longer be Subject Shares; provided, however, that if any Subject Shares are
Transferred by a Stockholder in a Permitted Transfer, the Transferee will be bound
by the terms of this Agreement as are applicable to a Stockholder, such Subject
Shares shall remain Subject Shares and such Transferring Stockholder will
obtain, prior to such Transfer, the written agreement of such Affiliate to be
bound by the terms of this Agreement with respect to such Subject Shares.  Subject to the preceding sentences of this Section 3.01,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.  This Agreement (including the documents and
instruments referred to herein) is not intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.

 

ARTICLE IV

Termination.

 

Section 4.01           Termination.  This Agreement shall terminate, without
further liability or obligation of any party, including liability for damages,
upon the first to occur of (a) the Effective Time and (b) the
termination of the Merger Agreement (the time at which the first of such
times/events occurs, the “Termination Time”).  Notwithstanding the foregoing, the

 

5

 

provisions of Section 5.02
shall survive termination and no party shall be relieved of liability for
breach by it hereunder prior to the Termination Time.

 

ARTICLE V

General Provisions.

 

Section 5.01           Amendments
to this Agreement; Amendments to the Merger Agreement.  No amendment, modification, termination, or
waiver of any provision of this Agreement, and no consent to any departure by a
Stockholder or Regis from any provision of this Agreement, shall be effective
unless it shall be in writing and signed and delivered by the Stockholders and
Regis, and any waiver shall be effective only in the specific instance and for
the specific purpose for which it is given. 
Notwithstanding anything to the contrary in this Agreement, the
Stockholders will not be required to comply with Sections 1.01 or 1.02
of this Agreement if the Merger Agreement is amended (or a provision or
condition of the Merger Agreement is waived) without the prior written consent
of the Stockholders and such amendment or waiver (a) decreases the
Exchange Ratio or (b) alters or modifies, or waives compliance with a
covenant or condition contained in, Section 7.2, 7.21 or 8.3(d) of
the Merger Agreement and has an adverse effect on the Stockholders.

 

Section 5.02           Disclosure.  Each Stockholder hereby consents to
disclosure in the Joint Proxy Statement/Prospectus and in any Schedule 13D
(or other filing required under the Securities Act or the Exchange Act)
relating to this Agreement filed by Regis (including, in each case, all
documents and schedules filed with the SEC) of a general description of the
Stockholders (but not the specific names or identity thereof unless required by
Applicable Law, the NYSE or the SEC), the aggregate ownership of the Subject
Shares (but not the ownership on a per Stockholder basis unless required by
Applicable Law, the NYSE or the SEC) and the nature of the commitments,
arrangements and understandings pursuant to this Agreement and the Shareholders
Agreement; provided, that, in advance of any such disclosure, Carol L.
Bernick (“CLB”), acting on behalf of the Stockholders, shall be afforded a
reasonable opportunity to review and approve (not to be unreasonably withheld,
conditioned or delayed) such disclosure. 
Except as otherwise required by Applicable Law, the NYSE or the SEC,
Regis will not make any other disclosures regarding the Stockholders in any
press release or otherwise without the prior written approval of CLB, acting on
behalf of the Stockholders (such approval not to be unreasonably withheld,
conditioned or delayed); provided, that, in advance of any such
disclosure, CLB, acting on behalf of the Stockholders, shall be afforded a
reasonable opportunity to review and approve (not to be unreasonably withheld,
conditioned or delayed) such disclosure. 
Notwithstanding the foregoing, it will not be unreasonable if CLB
objects to disclosure of the specific names or identity of the Stockholders or
the ownership of the Subject Shares on a per Stockholder basis unless such
disclosure is required by Applicable Law, the NYSE or the SEC.

 

Section 5.03           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the
date of delivery if delivered personally, (b) upon confirmation of receipt
if delivered by telecopy or telefacsimile, (c) on the next Business Day
following the date of dispatch if delivered by a recognized next-day courier
service or (d) on the date of receipt if delivered by registered or
certified mail, return receipt requested, postage prepaid to Regis in
accordance with Section 10.2 of the Merger Agreement and to the

 

6

 

Stockholders at c/o Carol L.
Bernick, 909 Ashland Avenue, River Forest, Illinois 60305 with a copy to: Neal
Gerber & Eisenberg LLP, Two North LaSalle Street, Suite 2200,
Chicago, Illinois 60602, Attention: 
Marshall E. Eisenberg, Facsimile No.: 312-269-1747.

 

Section 5.04           Interpretation.  When a reference is made in this Agreement to
Sections or Articles, such reference shall be to a Section or Article of
this Agreement unless otherwise indicated. 
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.  Wherever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to
be followed by the words “without limitation”.

 

Section 5.05           Waivers.  Except as otherwise specifically provided in
this Agreement, no action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations, warranties,
covenants or agreements contained in this Agreement.  The waiver by any party hereto of a breach of
any provision contained in this Agreement shall not operate or be construed as
a waiver of any prior or subsequent breach of the same or any other provision
contained in this Agreement.

 

Section 5.06           Severability.  Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.  If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.

 

Section 5.07           No
Survival.  None of the
representations, warranties or covenants in this Agreement or in any other
document delivered pursuant to this Agreement shall survive the date this
Agreement is terminated pursuant to Article V (except that the
provisions of Section 5.02 shall survive termination).

 

Section 5.08           Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware (without regard to the conflicts of law principles thereof).

 

Section 5.09           Submission
to Jurisdiction; Waivers.  (a) Each
of parties hereto irrevocably agrees that any legal action or proceeding with
respect to this Agreement, the transactions contemplated hereby, any provision
hereof, the breach, performance, validity or invalidity hereof or for
recognition and enforcement of any judgment in respect hereof brought by
another party hereto or its successors or permitted assigns may be brought and
determined in any federal or state court located in the State of Delaware, and
each of the parties hereto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts.

 

(b)           Each
of parties hereto hereby irrevocably waives, and agrees not to assert, by way
of motion, as a defense, counterclaim or otherwise, in any action or proceeding
with

 

7

 

respect to this Agreement, the
transactions contemplated hereby, any provision hereof or the breach,
performance, enforcement, validity or invalidity hereof, (i) any claim
that it is not personally subject to the jurisdiction of the above-named courts
for any reason other than the failure to lawfully serve process, (ii) that
it or its property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) and (iii) to the fullest
extent permitted by Applicable Laws, that (A) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (B) the
venue of such suit, action or proceeding is improper and (C) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.  EACH PARTY HERETO FURTHER
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE
EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.  EACH PARTY HERETO
CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO IT THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (b) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (c) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY
AND (d) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.09.

 

Section 5.10           Enforcement.  The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms.  It is accordingly agreed that the parties
hereto shall be entitled to pursue specific performance of the terms hereof,
this being in addition to any other remedy to which they are entitled at law or
in equity.

 

Section 5.11           Entire
Agreement.  This Agreement embodies
the entire agreement and understanding of the Stockholders and Regis, and
supersedes all prior agreements or understandings, with respect to the subject
matter of this Agreement.

 

Section 5.12           Fees
and Expenses. All costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such expenses.

 

Section 5.13           Counterparts;
Facsimile.  This Agreement may be
executed in counterparts, all of which shall be considered one and the same
agreement, and shall become effective when counterparts have been signed by
each of the parties and delivered to the other parties, it being understood
that all parties need not sign the same counterpart.  This Agreement may be executed by facsimile
signatures of the parties hereto.

 

Section 5.14           Trustee
Exculpation.  When this Agreement is
executed by the trustee of any trust, such execution is by the trustee, not
individually but solely as trustee in the

 

8

 

exercise of and under the power
and authority conferred upon and invested in such trustee, and it is expressly
understood and agreed that nothing herein contained shall be construed as
creating any liability on any such trustee personally to pay any amounts
required to be paid hereunder, or to perform any covenant, either express or
implied, contained herein, all such liability, if any, being expressly waived
by the parties hereto by their execution hereof.  Any liability hereunder of any Stockholder
which is a trust shall be only that of such trust to the full extent of its
trust estate and shall not be a personal liability of any trustee, grantor or
beneficiary thereof.

 

[SIGNATURE
PAGES TO FOLLOW]

 

9

 

IN WITNESS WHEREOF, this Agreement has been
duly executed and delivered by the parties as of the date hereinabove written.

 

 

	
   

  	
  REGIS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul D. Finkelstein

  	
   

  
	
   

  	
  Name: 
  Paul D. Finkelstein

  
	
   

  	
  Title: 
  President, Chief Executive Officer, and

  
	
   

  	
  Chairman of the Board

  

 

 

	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1947 LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Carol L. Bernick Revocable Trust II, its

  
	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
   

  	
  Carol L. Bernick,
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  2004 CLB GRANTOR ANNUITY TRUST I

  U/A/D 1/9/04

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  2004 CLB GRANTOR ANNUITY TRUST II

  U/A/D 1/9/04

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  2005 CLB GRANTOR ANNUITY TRUST I

  U/A/D 1/10/05

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  2005 CLB GRANTOR ANNUITY TRUST II

  U/A/D 1/10/05

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  2005 CLB GRANTOR ANNUITY TRUST I

  U/A/D 4/28/05

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  2005 CLB GRANTOR ANNUITY TRUST II

  U/A/D 4/28/05

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
						

 

 

	
   

  	
  BERNICE E. LAVIN TRUST U/A/D 12/18/87

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Leonard H. Lavin

  	
   

  
	
   

  	
   

  	
  Leonard H.
  Lavin, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  CAROL L. BERNICK AND CHILDREN GRAT

  TRUST U/A/D 9/18/01

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  CAROL L. BERNICK INVESTMENT TRUST

  U/A/D 7/7/97

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Howard B. Bernick

  	
   

  
	
   

  	
   

  	
  Howard B.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Marshall E. Eisenberg

  	
   

  
	
   

  	
   

  	
  Marshall E.
  Eisenberg, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CAROL L. BERNICK REVOCABLE TRUST II

  U/A/D 4/17/02

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  CAROL L. BERNICK REVOCABLE TRUST

  U/A/D 4/23/93

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  CLB GRAT TRUST U/A/D 9/15/93

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  CRAIG BERNICK PROPERTY TRUST U/A/D

  3/7/99

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  

 

 

	
   

  	
  CRAIG LAVIN BERNICK TRUST U/A/D

  11/14/89

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  ELIZABETH BERNICK PROPERTY TRUST

  U/A/D 3/25/03

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  ELIZABETH CLAIRE BERNICK EXEMPT

  TRUST U/A/D 4/25/95

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  ELIZABETH CLAIRE BERNICK TRUST U/A/D

  11/14/89

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  KSL PROPERTY TRUST II U/A/D 10/31/98

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  LEONARD H. LAVIN TRUST U/A/D 10/20/72

  FBO CAROL MARIE LAVIN

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  LEONARD H. LAVIN TRUST U/A/D 12/18/87

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Leonard H. Lavin

  	
   

  
	
   

  	
   

  	
  Leonard H.
  Lavin, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  

 

 

	
   

  	
  PETER ANDREW BERNICK EXEMPT TRUST

  U/A/D 4/25/95

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  PETER ANDREW BERNICK TRUST U/A/D

  11/14/89

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  PETER BERNICK PROPERTY TRUST U/A/D

  3/21/00

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  PRESTON JAY LAVIN TRUST U/A/D 11/14/89

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Carol L. Bernick

  	
   

  
	
   

  	
   

  	
  Carol L.
  Bernick, Trustee

  

 

 

EXHIBIT A

 

BENEFICIAL
AND RECORD OWNERSHIP OF 

ALBERTO-CULVER COMMON STOCK SHARES

 

 

11,359,788 shares of Alberto-Culver Common StockExhibit 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 

 

2

 

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.

 

3

 

(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.

 

4

 

(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.

 

5

 

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

6

 

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

 

7

 

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.

 

8

 

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

 

9

 

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

  

 

10

 

	
  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;

 

11

 

(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]

12

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

  
	
   

  	
   

  
					

 

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}]]