EXHIBIT 99.5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") dated as of January 25, 1999,
between Regis Corporation (the "Company"), a Minnesota corporation, and Xxxx X.
Xxxxxxx (the "Employee"), a resident of the State of Minnesota.
WHEREAS, the Employee is currently employed as an executive officer of The
Barbers, Hairstyling for Men & Women, Inc. (the "Barbers"); and
WHEREAS, The Company, has agreed to acquire the Barbers through a merger
(the "Merger") of the Barbers with a wholly-owned subsidiary of the Company; and
WHEREAS, the Company desires to retain the services of the Employee
subsequent to the Merger and the Employee desires to be employed by the Company,
on the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual agreements set
forth herein and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT. Effective only on and after the effective time of the
Merger (the "Effective Time"), the Company hereby employs the Employee, and the
Employee accepts such employment and agrees to perform services for the Company,
for the period and upon the other terms and conditions set forth in this
Agreement.
2. TERM. Unless terminated at an earlier date in accordance with
Section 5 of this Agreement, the term of the Employee's employment hereunder
shall be for a period of three years, commencing at the Effective Time.
Thereafter, the term of this Agreement shall be automatically extended for
successive one-year periods unless either party objects to such extension by
written notice to the other party at least 30 days prior to the expiration of
the initial term or any extension term.
3. POSITION AND DUTIES.
(a) SERVICE WITH COMPANY. During the term of the Employee's employment,
the Employee agrees to perform such reasonable employment duties as the Board of
Directors of the Company shall assign to him from time to time. The Employee
also agrees to serve, for any period for which he is elected, as an officer of
the Company. The Employee's title shall initially be as a "Vice President" of
the Company.
(b) PERFORMANCE OF DUTIES. The Employee agrees to serve the Company
faithfully and to the best of his ability and to devote his full time, attention
and efforts to the business and affairs of the Company during his employment by
the Company. The Employee hereby confirms that he is under no contractual
commitments inconsistent with his obligations set forth in this Agreement and
that during the term of this Agreement, he will not render or perform services
for any other corporation, firm, entity or person which are inconsistent with
the provisions of this Agreement. While he remains employed by the Company, the
Employee may participate in reasonable charitable activities and personal
investment activities so long as such activities do not interfere with the
performance of his obligations under this Agreement.
4. COMPENSATION.
(a) BASE SALARY. As compensation in full for all services to be
rendered by the Employee under this Agreement, the Company shall pay to the
Employee a base salary of $80,000, less deductions and withholdings, which
salary shall be paid on a monthly basis in arrears in accordance with the
Company's normal payroll procedures and policies. The compensation payable to
the Employee during each year after the first year of the Employee's employment
shall be established by the Company's Board of Directors following an annual
performance review, but in no event shall the salary for any subsequent year be
less than the salary in effect for the prior year.
(b) BONUS. In addition to the base compensation described in section
4(a), the Company shall also create and maintain an incentive plan in which
Employee shall participate in bonuses on the same basis as it established by the
Company for other, similarly situated executives; provided, however, that
Employee shall be guaranteed a bonus of at least $20,000 per year. In addition
to such bonus plan, Employee shall be entitled to participate in such other
incentive compensation plans as may be established by the Board of Directors of
the Company from time to time and that would be applicable to the Employee or
any executive of the Company with a position similar to Employee.
(c) PARTICIPATION IN BENEFIT PLANS. While he is employed by the
Company, the Employee shall also be eligible to participate in all employee
benefit plans or programs (including vacation time) of the Company to the extent
that the Employee meets the requirements for each individual plan, including, to
the extent appropriate for an executive in a similar position, the Company's
stock option program and including a disability insurance policy designed to
provide benefits equivalent to 60% of Employee's salary.
(d) EXPENSES. The Company will pay or reimburse the Employee for all
reasonable and necessary out-of pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the Company's normal
policies for expense verification. Without limiting the generality of the
foregoing, the Company shall pay the member expenses of Employee in Inner Circle
and the International Franchise Association and shall, to the extent provided to
other executives of the Company, pay the dues of membership of Employee in a
health club chosen by Employee. In addition, the Company shall continue to
provide the Employee with an automobile expense reimbursement allowance for the
automobile leased by the Employee as of the date of this Agreement and for which
the Barbers provides reimbursement, and after termination of such lease, an
automobile allowance of a magnitude equivalent to the allowance provided to
similarly situated executives of the Company.
(e) INDEMNIFICATION AND E & O INSURANCE. The Company will maintain a
policy of indemnification of officers to the maximum extent allowed by Minnesota
Statutes Section 302A.251 and shall maintain a policy of errors and omissions
insurance covering acts by Employee within the scope of his employment.
5. TERMINATION OF EMPLOYMENT.
(a) GROUNDS FOR TERMINATION. The Employee's employment shall terminate
prior to the expiration of the initial term set forth in Section 2 or any
extension thereof in the event that at any time:
(i) The Employee dies,
(ii) The Employee becomes "disabled", so that he cannot
perform the essential functions of his position with or without
reasonable accommodation,
(iii) The Board of Directors of the Company elects to
terminate this Agreement for "cause" and notifies the Employee in
writing of such election,
(iv) The Board of Directors of the Company elects to
terminate this Agreement without "cause" and notifies the Employee in
writing of such election, or
(v) The Employee elects to terminate this Agreement and
notifies the Company in writing of such election.
If this Agreement is terminated pursuant to clause (i), (ii) or (iii) of
this Section 5(a), such termination shall be effective immediately. If this
Agreement is terminated pursuant to clause (iv) or (v) of this Section 5(a),
such termination shall be effective 30 days after delivery of the notice of
termination.
-2-
(b) "CAUSE" DEFINED. "Cause" means:
(i) The Employee has engaged in willful and material
misconduct and has failed to cure such default within 30 days after
receipt of written notice of default from the Company,
(ii) The Employee has committed fraud, misappropriation or
embezzlement in connection with the Company's business, or
(iii) The Employee has been convicted or has pleaded nolo
contendere to criminal misconduct of a type reflecting poorly on the
Company through his relationship therewith.
In the event that the Company terminates the Employee's employment for "cause"
pursuant to clause (i) of this Section 5(b) and the Employee objects in writing
to the Board's determination that there was proper "cause" for such termination
within 20 days after the Employee is notified of such termination, the matter
shall be resolved by arbitration in accordance with the provisions of Section
6(a). If the Employee fails to object to any such determination of "cause" in
writing within such 20-day period, he shall be deemed to have waived his right
to object to that determination. If such arbitration determines that there was
not proper "cause" for termination, such termination shall be deemed to be a
termination pursuant to clause (iv) of Section 5(a) and the Employee's sole
remedy shall be to receive the wage continuation benefits contemplated by
Section 5(f).
(c) EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Employee, in consideration of his employment hereunder to the
date of such termination, shall remain bound by the provisions of this Agreement
which specifically relate to periods, activities or obligations upon or
subsequent to the termination of the Employee's employment.
(d) "DISABLED" DEFINED. "Disabled" means any mental or physical
condition that renders the Employee unable to perform the essential functions of
his position, with or without reasonable accommodation, for a period in excess
of six months.
(e) SURRENDER OF RECORDS AND PROPERTY. Upon termination of his
employment with the Company, the Employee shall deliver promptly to the Company
all records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof that relate in
any way to the business, products, practices or techniques of the Company, and
all other property, trade secrets and confidential information of the Company,
including, but not limited to, all documents that in whole or in part contain
any trade secrets or confidential information of the Company, which in any of
these cases are in his/her possession or under his/her control.
(f) SALARY CONTINUATION. If the Employee's employment by the Company is
terminated by the Company pursuant to clause (ii) or (iv) of Section 5(a), the
Company shall continue to pay to the Employee his base salary (less any payments
received by the Employee from any disability income insurance policy provided to
him by the Company) and shall continue to provide health insurance benefits for
the Employee through the remainder of the term of this Agreement. If this
Agreement is terminated pursuant to clauses (i), (iii) or (v) of Section 5(a),
the Employee's right to base salary and benefits shall immediately terminate,
except as may otherwise be required by applicable law.
In either event, if the Employee's employment by the Company terminates
within six months of the end of any fiscal year of the Company, the Employee
shall also be entitled to receive a pro rata portion (based on the number of
days of employment during that fiscal year) of any bonus payment that would have
been payable to him for that fiscal year pursuant to Section 4(b) if the
Employee had been in the employ of the Company for the full fiscal year. No
bonus will be payable to the Employee with respect to any fiscal year in which
the Employee was employed by the Company for less than six months or with
respect to any fiscal year after the fiscal year in which the Employee's
employment terminated.
-3-
6. SETTLEMENT OF DISPUTES.
(a) ARBITRATION. Except as provided in Section 6(b), any claims or
disputes of any nature between the Company and the Employee arising from or
related to the performance, breach, termination, expiration, application or
meaning of this Agreement or any matter relating to the Employee's employment
and the termination of that employment by the Company shall be resolved
exclusively by arbitration in Minneapolis, Minnesota, in accordance with the
applicable rules of the American Arbitration Association. In the event of
submission of any dispute to arbitration, each party shall, not later than 30
days prior to the date set for hearing, provide to the other party and to the
arbitrator(s) a copy of all exhibits upon which the party intends to rely at the
hearing and a list of all persons each party intends to call at the hearing.
The fees of the arbitrator(s) and other costs incurred by the Employee and the
Company in connection with such arbitration shall be paid by the party that is
unsuccessful in such arbitration.
The decision of the arbitrator(s) shall be final and binding upon both
parties. Judgment of the award rendered by the arbitrator(s) may be entered in
any court of competent jurisdiction.
(b) RESOLUTION OF CERTAIN CLAIMS - INJUNCTIVE RELIEF. Section 6(a)
shall have no application to claims by the Company asserting a violation of
Section 5(e) or seeking to enforce, by injunction or otherwise, the terms of
Section 5(e). Such claims may be maintained by the Company in a lawsuit subject
to the terms of Section 6(c). The Employee acknowledges that it would be
difficult to fully compensate the Company for damages resulting from any breach
by him/her of the provisions of this Agreement. Accordingly, the Employee
agrees that, in addition to, but not to the exclusion of any other available
remedy, the Company shall have the right to enforce the provisions of Sections
5(e) by applying for and obtaining temporary and permanent restraining orders or
injunctions from a court of competent jurisdiction without the necessity of
filing a bond therefor, and without the necessity of proving actual damages, and
the Company shall be entitled to recover from the Employee its reasonable
attorneys' fees and costs in enforcing the provisions of Sections 5(e).
(c) VENUE. Any action at law, suit in equity or judicial proceeding
arising directly, indirectly, or otherwise in connection with, out of, related
to or from this Agreement, or any provision hereof, shall be litigated only in
the courts of the State of Minnesota, County of Hennepin. The Employee and the
Company consent to the jurisdiction of such courts over the subject matter set
forth in Section 5(b). The Employee waives any right the Employee may have to
transfer or change the venue of any litigation brought against the Employee by
the Company.
7. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement (including the exhibits, schedules
and other documents referred to herein) contains the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes any prior understandings, agreements or representations, written or
oral, relating to the subject matter hereof.
(b) COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
shall constitute one and the same agreement, and any party hereto may execute
this Agreement by signing any such counterpart.
(c) SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law but if any provision of this Agreement is held to be invalid,
illegal or unenforceable under any applicable law or rule, the validity,
legality and enforceability of the other provision of this Agreement will not be
affected or impaired thereby. In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of, or business activities
covered by, any provision of this Agreement be in excess of that which is valid
and enforceable under applicable law, then such provision shall be construed to
cover only that duration, extent or activities which may validly and enforceably
be covered. The Employee acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement be given the construction
which renders its provision valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.
-4-
(d) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives and, to the extent permitted by subsection (e), successors and
assigns.
(e) ASSIGNABILITY. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable (including by operation of law) by either party without the prior
written consent of the other party to this Agreement, except that the Company
may, without the consent of the Employee, assign its rights and obligations
under this Agreement to any corporation, firm or other business entity with or
into which the Company may merge or consolidate, or to which the Company may
sell or transfer all or substantially all of its assets, or of which 50% or more
of the equity investment and of the voting control is owned, directly or
indirectly, by, or is under common ownership with, the Company. After any such
assignment by the Company, the Company shall be discharged from all further
liability hereunder and such assignee shall thereafter be deemed to be the
Company for the purposes of all provisions of this Agreement including this
Section 7.
(f) MODIFICATION, AMENDMENT, WAIVER OR TERMINATION. No provision of
this Agreement may be modified, amended, waived or terminated except by an
instrument in writing signed by the parties to this Agreement. No course of
dealing between the parties will modify, amend, waive or terminate any provision
of this Agreement or any fights or obligations of any part under or by reason of
this Agreement. No delay on the part of the Company in exercising any right
hereunder shall operate as a waiver of such right. No waiver, express or
implied, by the Company of any right or any breach by the Employee shall
constitute a waiver of any other right or breach by the Employee.
(g) NOTICES. All notices, consents, requests, instructions, approvals
or other communications provided for herein shall be in writing and delivered by
personal delivery, overnight courier, mail, electronic facsimile or e-mail
addressed to the receiving party at the address set forth herein. All such
communications shall be effective when received.
Xxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Any party may change the address set forth above by notice to each other party
given as provided herein.
(h) HEADINGS. The headings and any table of contents contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
(i) GOVERNING LAW. ALL MATTERS RELATING TO THE INTERPRETATION,
CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO ANY CHOICE
OF LAW PROVISIONS THEREOF.
(j) THIRD-PARTY BENEFIT. Nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights, remedies, obligations or
liabilities of any nature whatsoever.
(k) WITHHOLDING TAXES. The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
-5-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph.
REGIS CORPORATION
By /s/ Xxxx X. Xxxxxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxxxxx
Its: President
/s/ Xxxx Xxxxxxx
---------------------------------------------
XXXX XXXXXXX
-6-
