NON-COMPETITION AGREEMENT
This Non-competition Agreement (this "Agreement") is made as of February 3,
1999, by and between Regis Corporation, a Minnesota corporation ("Regis"), and
Xxxxxxxx X. Xxxxxxx ("Xxxxxxx").
RECITALS
A. Concurrently with the execution and delivery of this Agreement, Regis is
acquiring all of the outstanding shares (the "Shares") of common stock, par
value $.10 per share, of The Barbers, Hairstyling for Men & Women, Inc. (the
"Company") pursuant to the terms and conditions of an Agreement and Plan of
Merger made as of January 25, 1999, (the "Merger Agreement").
X. Xxxxxxx is presently the Chairman of the Board of Directors the Company, has
been a member of the Board of Directors of the Company since 1989, is a major
shareholder of the Company, and has directed public relations and franchisee
relations for the Company since 1988.
C. It is of the utmost importance to the future business operations of Regis and
the Company after the merger that Xxxxxxx not enter into a competitive business.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement shall have the
meanings ascribed to them in the Merger Agreement.
2. ACKNOWLEDGMENTS BY XXXXXXX
Xxxxxxx acknowledges that (a) she has occupied a position of trust and
confidence with the Company prior to the date hereof and has become familiar
with the following, any and all of which constitute confidential information of
the Company, (collectively the "Confidential Information"): (i) any and all
trade secrets concerning the business and affairs of the Company, product
specifications, data, past, current and planned research and development,
current and planned manufacturing and distribution methods and processes,
customer lists, current and anticipated customer requirements, price lists,
market studies, business plans, computer software and programs, methods and
information of the Company and any other information, however documented, of the
Company that is a trade secret; (ii) any and all information concerning the
business and affairs of the Company (which includes historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials) however documented; and (iii)
any and all notes, analysis, compilations, studies, summaries, and
other material prepared by or for the Company containing or based, in whole or
in part, on any information included in the foregoing, (b) the business of the
Company is international in scope, (c) its products and services are marketed
throughout the World; (d) the Company competes with other businesses that are or
could be located in any part of the World; (e) Regis has required that Xxxxxxx
make the covenants set forth in Sections 3 and 4 of this Agreement as a
condition to the Merger Agreement; (f) the provisions of Sections 3 and 4 of
this Agreement are reasonable and necessary to protect and preserve the Company'
business, and (g) the Company would be irreparably damaged if Xxxxxxx were to
breach the covenants set forth in Sections 3 and 4 of this Agreement.
3. CONFIDENTIAL INFORMATION
Xxxxxxx acknowledges and agrees that all Confidential Information known or
obtained by Xxxxxxx, whether before or after the date hereof, is the property of
the Company. Therefore, Xxxxxxx agrees that she will not, at any time, disclose
to any unauthorized Persons or use for her own account or for the benefit of any
third party any Confidential Information, whether Xxxxxxx has such information
in her memory or embodied in writing or other physical form, without Regis'
written consent, unless and to the extent that the Confidential Information is
or becomes generally known to and available for use by the public other than as
a result of Xxxxxxx' fault or the fault of any other Person bound by a duty of
confidentiality to Regis or the Company.
4. NON-COMPETITION
As an inducement for Regis to enter into the Merger Agreement and the
consideration to be paid under this Agreement, Xxxxxxx agrees that:
(a) For a period of eight (8) years after the Closing:
(i) Xxxxxxx will not, directly or indirectly, engage or invest
in, own, manage, operate, finance, control, or participate in the
ownership, management, operation, financing, or control of, be employed
by, associated with, or in any manner connected with, or render
services or advice to, any business whose products or activities
compete in whole or in part with the products or activities of Regis or
the Company, anywhere in the World; provided, however, that the
purchase or other shares acquisition and ownership by Xxxxxxx of
securities not aggregating more than 5% of the outstanding capital
stock of any corporation listed on a national securities exchange or
Nasdaq shall not constitute a breach of this Section 4(a).
(ii) Xxxxxxx will not, directly or indirectly, either for
herself or any other Person, (A) induce or attempt to induce any
employee of the Company or Regis to leave the employ of the Company or
Regis, (B) in any way interfere with the relationship between the
Company or Regis and any employee of the Company or Regis, or (C)
induce or attempt to induce any customer, supplier, licensee, or
business relation of the Company or Regis to cease doing business with
the Company or Regis, or in any way interfere with the relationship
between any customer, supplier, licensee, or business
2
relation of the Company or Regis.
(b) Xxxxxxx will not, at any time during or after the eight year
period, disparage Regis or the Company, or any of their shareholders, directors,
officers, employees, or agents; provided, however, that nothing in this Section
4(b) shall prohibit Xxxxxxx from testifying when legally compelled to do so or
when required to enforce her rights under this Agreement or other Agreements
between Xxxxxxx and the Company or Regis, and no such testimony shall be deemed
a breach hereunder.
5. COMPENSATION
As consideration for the covenants in Section 4 of this Agreement, Regis will
pay Xxxxxxx the sum of Five Hundred Eighty Thousand and 00/100 Dollars
($580,000.00) over a period of five years, payable in equal and successive
monthly installments of $9,666.67.
6. REMEDIES
If Xxxxxxx breaches the covenants set forth in Sections 3 or 4 of this
Agreement, Regis will be entitled to the following remedies:
(a) Damages from Xxxxxxx;
(b) To discontinue payment of any and all amounts owing to Xxxxxxx
under Section 5 of this Agreement; and
(c) In addition to its right to damages and any other rights it
may have, to obtain injunctive or other equitable relief to restrain any breach
or threatened breach or otherwise to specifically enforce the provisions of
Sections 3 and 4 of this Agreement, it being agreed that money damages alone
would be inadequate to compensate Regis and would be an inadequate remedy for
such breach.
(d) The rights and remedies of the parties to this Agreement are
cumulative and not alternative.
7. SUCCESSORS AND ASSIGNS
This Agreement will be binding upon Regis and Xxxxxxx and will inure to the
benefit of Regis and its affiliates, successors and assigns and Xxxxxxx and
Xxxxxxx' assigns, heirs and legal representatives.
8. WAIVER
The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power, or privilege under this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial
3
exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement.
9. GOVERNING LAW
This Agreement will be governed by the laws of the State of Minnesota without
regard to conflicts of laws principles.
10. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement may be brought against any of the parties
in the courts of the State of Minnesota, County of Hennepin, or, if it has or
can acquire jurisdiction, in the United States District Court for the District
of Minnesota, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
11. SEVERABILITY
Whenever possible each provision and term of this Agreement will be interpreted
in a manner to be effective and valid but if any provision or term of this
Agreement is held to be prohibited by or invalid, then such provision or term
will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement. If any
of the covenants set forth in Section 4 of this Agreement are held to be
unreasonable, arbitrary, or against public policy, such covenants will be
considered divisible with respect to scope, time, and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Xxxxxxx.
12. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
4
13. NOTICES
All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by facsimile (with
written confirmation of receipt), provided that a copy is mailed by certified
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and facsimile numbers set forth below (or
to such other addresses and facsimile numbers as a party may designate by notice
to the other parties):
To Xxxxxxxx X. Xxxxxxx:
Xxxxxxxx X. Xxxxxxx
c/o The Barbers, Hairstyling for Men & Women, Inc.
000 Xxxxxxxxxx Xxxxxxxxx X.X.
Xxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx, Esq.
Xxxxxx & Whitney
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
To Regis Corporation:
Regis Corporation
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Attention: President
Facsimile No: (000) 000-0000
With a copy to:
Xxxx X. Xxxxx, Esq.
Regis Corporation
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Facsimile No: (000) 000-0000
5
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
REGIS CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxxxxx, President
/s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxxx
6
