Exhibit 10.(aa)
SEPARATION AGREEMENT AND
RELEASE
THIS SEPARATION AGREEMENT AND
RELEASE (“Separation Agreement”) is made and entered
into this 13th day of May, 2009, between Kris Bergly
(“Employee”) and Regis Corporation
(“Employer”).
RECITALS:
A.
Employee was employed by Employer
between August 10, 1987 and April 17, 2009, when his
employment with Employer was terminated.
B.
The parties agree it is in their
best interests to sever the employment relationship.
C.
The purpose of this Separation
Agreement is to set forth the terms and conditions under which
Employee and Employer will terminate their employment relationship
and to resolve any and all disputes Employee has and/or may have
with Employer.
AGREEMENT
In consideration of the recitals
stated above and the mutual promises made below, the parties agree
as follows:
1.
Termination
. Employee and Employer agree that
Employee’s last day of work will be April 17, 2009, and
that Employee’s termination shall be effective as of that
date (hereinafter “Employment End Date”).
2.
Payments . Employer and Employee agree that in
consideration for Employee’s agreement to the terms contained
herein, Employer shall make the following payments to
Employee:
a. Employee will receive severance compensation
(less customary payroll deductions) of $443,333.33 (which is equal
to fourteen (14) months of base pay) payable in fourteen equal
monthly installments of $31,666.66 commencing on the first day of
the month following expiration of both rescission periods referred
to in paragraphs 5 and 6 provided there has been no rescission
under either paragraph 5 or paragraph 6.
b. In the event Employee elects to continue to
participate in Employer’s medical and dental plans pursuant
to the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”), Employer will reimburse Employee for the
amounts paid by Employee for such COBRA coverage for a period of
eighteen (18) months. Employer’s reimbursement
obligations will be paid to Employee on a monthly basis either by
check or direct deposit as requested by Employee. In
addition, Employee’s participation in Employer’s
executive medical reimbursement plan, wherein participants are
reimbursed for qualified out of pocket medical expenses not to
exceed $7,000.00 in total in any given calendar year, will continue
until December 31, 2009.
c. Employee will be eligible to receive a pro-rata
(291/365) bonus payment related to the normal bonus plan for
Executive Vice Presidents of the Employer for the fiscal
year ending June 30,
2009. The appropriate payment, if any, less customary payroll
deductions, will be made to Employee at the same time bonus
payments are made to other bonus plan participants.
d. Employee will have the right to continue using
the leased Mercedes SUV vehicle until March 30, 2012, the end
of the lease term. During the period of time from the
Employment End Date until September 30, 2009, Employer will
continue to pay for the lease payments and Employee’s
automobile insurance, and Employer will reimburse Employee for
repairs and maintenance on this vehicle. Effective
immediately after this Agreement is fully executed, Employer and
Employee agree to assign the lease for the vehicle from Employer to
Employee, such assignment to be effective on October 1,
2009. From and after the effective date of the assignment,
Employee agrees to insure the vehicle in his own name and at his
sole expense. Employer’s obligation to provide
insurance on this vehicle will terminate on September 30,
2009. For the period of time from October 1, 2009 until
March 30, 2012, Employer agrees to pay Employee a monthly
payment of $500.00 to be used by Employee to pay a portion of the
vehicle lease payment.
e. With respect to the Agreement dated
January 1, 2004, between Employee and Employer related to life
insurance policy No. 15796248 (“Policy”) insuring
Employee’s life, Employer, in full satisfaction of its
obligations under such Agreement, will continue to pay the annual
premiums on the Policy after the Employment End Date, until such
time as Employer has made a total (including all payments made by
Employer prior to the Employment End Date) of ten (10) annual
premium payments on said Policy. Employer will gross up this
benefit to Employee for Employee’s estimated taxes on this
benefit. Once the ten (10) annual premium payments
referenced above have been made, Employer will not make any further
payments on the Policy.
f.
With respect to the prior grants to
Employee of restricted stock, in addition to shares vested as of
the date of termination, Employer will accelerate vesting of 2,500
shares of restricted stock that would otherwise be unvested as of
the Employment End Date. With respect to Employee’s
existing vested and exercisable stock appreciation rights, Employee
shall be allowed to exercise such stock appreciation rights for a
period of ninety (90) days following the Employment End Date,
provided that Employee may not sell any shares acquired upon
exercise until after the date commencing two (2) business days
after Employer releases its third quarter financial statements,
which is expected to occur on April 29, 2009. With
respect to Employer common stock, Employee agrees not to buy or
sell any Employer common stock until two (2) business days
after Employer releases its third quarter financial statements,
which is expected to occur on April 29, 2009. The
purpose of this paragraph is to require that Employee not trade in
Employer common stock during the current restricted trading
period.
g. With respect to Employee’s deferred
compensation benefit, pursuant to the Senior Officer Employment and
Deferred Compensation Agreement dated December 31, 2008
between Employee and Employer (the “Agreement’), the
parties agree that Employee is entitled to a Discounted Vested
Monthly Benefit, as defined in the Agreement, based on a sixty
percent (60%) Vested Monthly Benefit. This benefit will be
paid to the Employee in a lump sum pursuant to the terms of the
Agreement. Separate from, and in addition to, such benefit,
the Employer has agreed to pay, on May 1, 2010, in a single
lump sum payment, an amount that is equal to a forty percent (40%)
Vested Monthly Benefit, to be discounted and calculated as
provided
2
under the terms of the Agreement,
and assuming Employee’s Separation From Service occurs on the
Employment End Date.
h. Employer agrees to reimburse Employee for his
out of pocket expenses incurred prior to June 30, 2009 for tax
planning advice related to this Agreement, in an amount not to
exceed $2,500.00.
3.
Full Compensation
. The payments that will be made to
Employee for his benefit pursuant to this Separation Agreement will
compensate him for and extinguish any and all of his claims arising
out of his employment with Employer or his employment termination,
including but not limited to his claims for attorney’s fees
and costs, and any and all of his claims for any type of legal or
equitable relief. These payments are in excess of any sums to
which Employee is entitled absent this Separation
Agreement.
4.
Benefits . The Employee is a participant in various
employee benefit plans sponsored by Employer. Except as otherwise
provided for herein, the payment of benefits, including the amounts
and timing thereof, will be governed by the terms of the employee
benefit plans. Employer will answer any reasonable questions
that Employee may have from time to time and will offer him the
same assistance given other participants in employee benefit plans
so long as he is entitled to benefits thereunder.
5.
Rights of Rescission Under the
ADEA. This
Separation Agreement is intended to comply with the Older Workers
Benefit Protection Act of 1990 with regard to Employees’
waiver of rights under the federal Age Discrimination in Employment
Act, 29 U.S.C. § 621, et seq., (the “ADEA”).
Employee therefore acknowledge and agrees that:
a. Employee is specifically waiving rights and
claims under the ADEA.
b. Employee’s waiver of rights and claims
under the ADEA does not extend to any rights or claim
