COMPENSATION
AND NON-COMPETITION
AGREEMENT
THIS AGREEMENT made and entered into this 7th day of May, 1997, by and
between Regis Corporation, a Minnesota corporation (the "Corporation"), and
Xxxxx Xxxxx ("Xxxxx").
Whereas, Xxxxx has served as an officer of the Corporation continuously
since 1954, and served as Chief Executive Officer of the Corporation from
1965 until June 30, 1996, and
Whereas, Xxxxx continues to serve the Corporation as Chairman of the
Board of Directors, and
Whereas, it is anticipated that Xxxxx will continue to provide valuable
services to the Corporation, and
Whereas, the Board of Directors of the Corporation has determined that
it is appropriate and in the best interests of the Corporation to enter into
this agreement to retain Xxxxx'x services and as a condition of further
engaging Xxxxx'x services as set forth in this Agreement to insure that Xxxxx
will not engage in any businesses competitive with the business carried on by
the Corporation, either during the period services are provided under this
Agreement, or so long as payments are made to Xxxxx under this Agreement.
NOW, THEREFORE, in consideration of the above premises and the mutual
agreements hereinafter contained, the parties hereby agree as follows:
1. SERVICES. Xxxxx shall continue to render services to the Corporation in an
executive capacity, including but not limited to serving as the Corporation's
Chairman (subject to election to such office by the Corporation's Board of
Directors), actively participating in the Corporation's growth and
acquisition strategies and transactions consistent with such services as are
presently being rendered by Xxxxx, and performing such other duties as may be
mutually agreed upon between Xxxxx and the Corporation's Board of Directors
from time to time. Xxxxx'x services will continue for not less than ten (10)
years and for such further period of time as may be mutually agreed upon
between Xxxxx and the Corporation (hereafter referred to as the "Service
Period").
2. COMPENSATION. The Corporation, in consideration of Xxxxx'x services and
his covenant not to compete as hereinafter set forth, shall pay Xxxxx an
annual amount of $600,000 (adjusted as provided in Paragraph 3 below),
payable monthly or at such other times as may be agreed upon between the
parties. The sums payable to Xxxxx as provided herein shall, subsequent to
the end of the Service Period, continue for the remainder of his life,
regardless of whether Xxxxx for any reason is or is not rendering services to
the
Corporation at the time of such payments. The sums payable to Xxxxx as
provided herein shall continue for the remainder of his life although Xxxxx
is not rendering services to the Corporation during the Service Period if (i)
in the opinion of physicians at the Mayo Clinic, Rochester, Minnesota, Xxxxx
is unable adequately to render the services specified in paragraph 1 above
because of extended Illness or other physical or mental disability, or (ii)
his services are terminated by the Corporation on grounds other than for
Cause. For purposes of this Agreement, "Cause" shall mean (i) willful and
gross misconduct resulting in material harm to the business or reputation of
the Company, (ii) any act of willful fraud, embezzlement or misappropriation
of a material nature against the Company or (iii) the conviction of a felony.
The Corporation shall be deemed to have terminated Xxxxx'x services without
Cause at such time as the corporate perquisites and benefits afforded him,
including but not limited to office space and facilities suitable to his
position, are in any manner less favorable than those afforded other senior
executive officers of the Corporation. Monthly payments shall be paid for all
months up to and including the month in which Xxxxx'x death occurs.
3. ADJUSTMENTS TO COMPENSATION. Commencing July 1, 1997, and annually
thereafter, the compensation to be paid to Xxxxx shall be adjusted by
increasing such compensation in proportion to any increase in the consumer
price index from July 1, 1996 to each July 1 thereafter in which payments are
made to Xxxxx pursuant to this agreement. The consumer price index to be used
for purposes of this agreement shall be the "Consumer Price Index for all
Urban Consumers, U.S. City Average for all Items, 1982-1984 = 100" published
by the Bureau of Labor Statistics of the United States Department of Labor.
If publication of such index is discontinued, the parties shall accept
comparable statistics on the cost of living as computed and published by an
agency of the United States or by a responsible financial periodical of
recognized authority. Under no circumstances shall Xxxxx'x compensation be
reduced in any year.
4. NON-COMPETITION. In consideration of the Corporation's obligation set
forth herein, Xxxxx covenants and agrees that during the period for which
payments to Xxxxx are made as provided by this agreement, he will not,
directly or indirectly, render any services of any nature to or become
employed by or participate or engage in any business competitive with any
business conducted by the Corporation.
5. ADVANCEMENT OF EXPENSES. Should Xxxxx become a party to any litigation
involving the validity or interpretation of this Agreement, or any provision
thereof, the Corporation shall advance to Xxxxx the expenses incurred by him,
including reasonable attorneys fees, in connection with such litigation, and
such expenses and fees shall be paid to Xxxxx as incurred by him in advance
of the final disposition of any such proceeding. Such
2
advances shall be repaid by Xxxxx only if he does not prevail in such
proceeding. Xxxxx shall be deemed to have prevailed in any such proceedings
if such proceedings are terminated by settlement.
6. SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and inure to
the benefit of the parties hereto and their successors and assigns. As used
in this agreement, the term "successor" shall include any person, firm,
corporation or other business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets or
business or capital stock of the Corporation.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.
REGIS CORPORATION
By: /s/ Xxxx Xxxxxxxxxxx
-------------------------------------
Xxxx Xxxxxxxxxxx, President
and Chief Executive Officer
/s/ Xxxxx Xxxxx
-------------------------------------
Xxxxx Xxxxx
3
