8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 28, 2007

REGIS CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota	0-11230	41-0749934
(State or Other Jurisdiction	(Commission File Number)	(I.R.S. Employer
of Incorporation)		Identification No.)

7201 Metro Boulevard

Edina, MN 55439

(Address of principal executive offices including Zip Code)

(952) 947-7000

(Registrant’s telephone number, including area code)

(Not applicable)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)           As of June 28, 2007, Fraser Clarke, the President and Chief Executive Officer of the Hair Club for Men and Women, ceased employment with Regis Corporation (the "Company") and its subsidiaries. Darryl Porter, previously Chief Operating Officer of the Hair Club for Men and Women, has assumed this position.

(e)On June 29, 2007, the Company entered into amended and restated employment agreements with each of Myron Kunin, the Company’s Vice-Chairman of the Board (the “Kunin Agreement”) and Gordon Nelson, the Company’s Executive Vice President of Fashion, Education and Marketing (the “Nelson Agreement”) (collectively, the “Agreements”).  Set forth below is a brief description of the terms and conditions of each of the Agreements.

The Kunin Agreement

Under the terms of the Kunin Agreement, Mr. Kunin will continue to act as the Vice-Chairman of the Board of the Company.  Mr. Kunin is entitled to receive annual compensation in the base amount of $600,000 per year (starting July 1, 1996), which amount will be increased (but not decreased) in proportion to any increase in the consumer price index. Such amount will be paid to Mr. Kunin on a monthly basis for his lifetime.

In the event of a change in control of the Company, the Kunin Agreement provides certain change in control benefits.  Within thirty days after a change in control, Mr. Kunin will receive a lump sum payment equal to the excess of (i) the sum of the future payments to which he is entitled as of the date of the change in control, without application of a discount for present value, increased by four percent for each year of the joint life expectancy of Mr. Kunin and his spouse as determined by reference to the table of Joint Life and Last Survivorship Expectancy published by the Internal Revenue Service in Publication 590 or any successor publication (the “Joint Life Expectancy”), over (ii) the present value of the sum of the future payments to which he is entitled as of the date of the change in control.  To determine the present value, the discount rate applied will equal the yield to maturity, on the date of the change in control, of U.S. Treasury Notes with a maturity equal to the Joint Life Expectancy of Mr. Kunin and his spouse.  In addition, Mr. Kunin will receive 200,000 shares of the Company’s common stock, free of any restrictions on exercisability, deliverable upon the change in control.  The number of shares of common stock delivered is subject to adjustment for share dividends, splits, combinations, exchanges, recapitalizations or other changes to the capital structure of the Company.

Should Mr. Kunin’s employment with the Company cease for any reason following a change in control of the Company, except if such termination is by the Company for cause, the Company will pay Mr. Kunin a single lump sum equal to the then present value of the future monthly payments to which Mr. Kunin is entitled within five days after Mr. Kunin’s termination.  For this purpose, the discount rate applied will equal the yield to maturity, on the date of Mr. Kunin’s termination of employment with the Company, of U.S. Treasury Notes with a maturity equal to the Joint Life Expectancy of Mr. Kunin and his spouse.  If, within two years after a change in control, Mr. Kunin’s services are terminated by the Company without cause or if Mr. Kunin resigns from his employment for good reason, Mr. Kunin will receive a single lump sum amount equal to three times his then current annual base salary within thirty days after the date of his separation from the Company.  In the event of the application of any excise taxes pursuant to Section 4999 of the Internal Revenue Code (or any comparable and applicable state law) on Mr. Kunin, he will receive a payment from the Company so that the net after-tax amount received by Mr. Kunin pursuant to his change in control benefits or any other amounts that are subject to such excise taxes is equal to the amount he would have received without the application of such taxes.

Mr. Kunin is bound by non-competition restrictions during the period in which payments are made pursuant to the Kunin Agreement.

The Nelson Agreement

Under the terms of the Nelson Agreement, Mr. Nelson will continue to act as the Executive Vice President of Fashion, Education and Marketing of the Company until Mr. Nelson’s employment is terminated by either the Company or Mr. Nelson.  During his employment, Mr. Nelson will receive a base salary as mutually agreed upon by the Company and Mr. Nelson.  Upon Mr. Nelson’s retirement at or after reaching age 65 or if Mr. Nelson is disabled upon reaching the age of 65, he will receive 240 monthly payments, such payments to be equal to a percentage (determined by his completed years of service with the Company) of the greater of (i) 40% of his average monthly compensation (excluding bonuses) for the sixty months immediately preceding such termination or disability plus $2,500 (unless Mr. Nelson is terminated on or before February 8, 2012 by the Company for cause or if Mr. Nelson resigns without good reason on or before such date), and (ii) $5000 (such monthly amount, the “Vested Monthly Benefit”).  If Mr. Nelson dies before receiving all 240 monthly payments, the payments will be made to his surviving spouse or his designee.  If Mr. Nelson dies during his employment with the Company his surviving spouse or his designee will receive the greater of (i) 40% of his average monthly compensation (excluding bonuses) for the sixty months immediately preceding such termination or disability plus $2,500 (unless Mr. Nelson is terminated on or before February 8, 2012 by the Company for cause or if Mr. Nelson resigns without good reason on or before such date), and  (ii) $5000 for 240 months following Mr. Nelson’s death (such monthly amount, the “Monthly Benefit”).  If Mr. Nelson becomes disabled during his employment and such disability continues for six months, the Company will pay the Monthly Benefit, beginning the seventh month after such disability, until he attains age 65 or until his death prior to attaining age 65, at which time his surviving spouse or designee will receive the Monthly Benefit for 240 months.

If Mr. Nelson’s services are terminated by the Company without cause, or by reason of death or disability before age 65, he will receive 240 Vested Monthly Benefit Payments, provided that for this purpose, such amount will be discounted to present value based on the number of months between (a) the later of (i) Mr. Nelson’s age at the time of his or her termination of employment or (ii) the date on which Mr. Nelson turns 55, and (b) the date of Mr. Nelson’s 65th birthday (such monthly payment, as discounted, the “Discounted Monthly Benefit”).  The discount rate to be used is the yield to maturity of U.S. Treasury Notes, at the date of Mr. Nelson’s termination, with a date of maturity nearest Mr. Nelson’s 65th birthday.  If Mr. Nelson dies before receiving all 240 payments, such payments will be made to his surviving spouse or his written designee.  Mr. Nelson has the option to make a written election 12 months prior to being entitled to receive such payments to elect to receive the Vested Monthly Benefit as opposed to the Discounted Monthly Benefit.  If such election is made, Mr. Nelson will receive his first payment upon reaching age 65 or 5 years after his termination, whichever is later.  If Mr. Nelson is terminated for any reason after February 8, 2012 (unless he has reached age 65) or if he is terminated on or prior to February 8, 2012 by the Company without cause, if he resigns for good reason or if his employment terminates for death or disability, then, during the period starting on such termination and continuing through Mr. Nelson’s attainment of age 65 (or, his wife’s attainment of age 65), Mr. Nelson and his wife shall receive continuing health, hospitalization, prescription drug, and dental insurance coverage as if Mr. Nelson continued to be an employee of the Company.  If Mr. Nelson’s employment is terminated for cause at any time, the Company will have no obligations to make any payments to Mr. Nelson pursuant to the Nelson Agreement.

In the event of a change in control of the Company, the Nelson Agreement provides certain change in control benefits.  Mr. Nelson will be entitled to receive 40,000 shares of the Company’s common stock, free of any restrictions on exercisability, deliverable upon the change in control.  The number of shares of common stock delivered is subject to adjustment for share dividends, splits, combinations, exchanges, recapitalizations or other changes to the capital structure of the Company.  If within two years of a change in control, Mr. Nelson’s services are terminated by the Company without cause or Mr. Nelson resigns for good reason, the Company will pay Mr. Nelson a single lump sum amount equal to three times the sum of his annual base salary and his largest annual bonus within the previous 36 months.  If within two years of a change in control, Mr. Nelson’s employment with the Company ends, for any reason other than a termination by the Company for cause, Mr. Nelson will be entitled to receive a payment equal to the product of his Monthly Benefit and 240, payable in a lump sum within 5 days after such termination. If Mr. Nelson’s employment with the Company ends after two years following a change in control, Mr. Nelson will be entitled to receive the Monthly Benefit, payable each month over 240 months.

In the event of the application of any excise taxes imposed by Section 4999 of the Internal Revenue Code (or any comparable and applicable state law) on Mr. Nelson, he shall receive a payment from the Company so that the net after-tax amount received by Mr. Nelson pursuant to his change in control benefits or any other amounts that are subject to such excise taxes is equal to the amount he would have received without the application of such taxes.

Under the terms of the Nelson Agreement, Mr. Nelson is bound by non-compete restrictions during the term of the Nelson Agreement and during the period that he receives any payments provided for by the Nelson Agreement.  If Mr. Nelson voluntarily terminates his employment and violates his non-competition covenant during the first twenty-four months after such termination of employment, and such violation continues for thirty days after the Company notifies Mr. Nelson in writing that he is in violation of his non-compete restriction, then Mr. Nelson will forfeit all future payments pursuant to the Nelson Agreement.  If, however, the violation of the non-compete restriction occurs after twenty four months of Mr. Nelson’s voluntary termination, and such violation continues for thirty days after notice of such violation is provided by the Company, Mr. Nelson will forfeit one month of his Vested Monthly Benefit for each month that he is in violation of the covenant.  Furthermore, if Mr. Nelson’s employment is terminated by the Company without cause, and if he at any time following such termination continues to violate the non-compete restriction, and such violation continues for thirty days after notice of such violation is provided by the Company, Mr. Nelson will forfeit one month of his Vested Monthly Benefit for each month that he is in violation of the covenant.

Within sixty days after Mr. Nelson’s termination of employment with the Company for any reason other than for cause, by reason of death or disability, or, on or prior to February 8, 2012, if Mr. Nelson resigns without good reason, the Company and Mr. Nelson will enter into a three-year consulting agreement, on such terms and conditions to be reasonably and mutually agreed.

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The foregoing descriptions of the Kunin Agreement and the Nelson Agreement are summaries of their respective terms and conditions do not purport to be complete, and are qualified in their entirety by reference to the individual Agreements which are attached as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits:

Exhibit No.	Document
10.1	Amended and Restated Compensation Agreement by and between Regis Corporation and Myron Kunin, dated June 29, 2007.
10.2	Amended and Restated Senior Officer Employment and Deferred Compensation Agreement by and between Regis Corporation and Mr. Nelson, dated as of June 29, 2007.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	REGIS CORPORATION
	(Registrant)
Dated:  July 5, 2007	By:	/s/ Eric Bakken
	Name:	Eric Bakken
	Title:	Senior Vice President

EXHIBIT INDEX

Exhibit No.	Document
10.1	Amended and Restated Compensation Agreement by and between Regis Corporation and Myron Kunin, dated June 29, 2007.
10.2	Amended and Restated Senior Officer Employment and Deferred Compensation Agreement by and between Regis Corporation and Mr. Nelson, dated as of June 29, 2007.

EX-10.1

Exhibit 10.1

AMENDED AND RESTATED COMPENSATION AGREEMENT

FOR MYRON KUNIN

This Amended and Restated Compensation Agreement (the “Restated Agreement”) is hereby entered into by and between Regis Corporation, a Minnesota corporation (the “Corporation”), and Myron Kunin (“Kunin”), this 29th day of June, 2007 (the “Effective Date”).  (The Corporation and Kunin shall be referred to herein together as “the Parties.”)

WHEREAS, the Parties previously entered into a Compensation and Non-Competition Agreement (the “Agreement”), dated May 7, 1997; and

WHEREAS, the Agreement has been amended from time to time, including an amendment entered into by the Parties, dated February 9, 2000, entitled the Second Amendment to the Compensation and Non-Competition Agreement (the “Second Amendment”), which amendment added enhancements to the benefits provided Kunin under the Agreement should the Corporation undergo a Change in Control (as defined in the Second Amendment).  (The Agreement and all amendments thereto shall be referred to herein collectively as the “Agreement.”); and

WHEREAS, the Parties wish to restate the Agreement to set forth its terms in one document and to revise the Agreement in certain respects.

The Parties hereby agree as follows:

1.Continued Compensation Payments.  The Corporation shall continue to pay Kunin the amount specified under the Agreement, that is, $600,000 per year, increased each year, commencing July 1, 1997, in proportion to any increase in the consumer price index (as defined in the Agreement) from July 1, 1996, to each July 1 thereafter in which payments are made to Kunin under the Agreement.  Such amount shall be paid to Kunin on a monthly basis for his lifetime.  Under no circumstances shall the annual amount payable to Kunin pursuant to this paragraph 1 be decreased in any year.  Notwithstanding the foregoing, if Kunin’s services with the Corporation cease at any time following a Change in Control (as defined in the Second Amendment), whether such cessation is initiated by Kunin or by the Corporation (unless the cessation is by the Corporation for Cause (within the meaning of the Agreement), then in lieu of the monthly payments described above, the Corporation shall pay to Kunin within five (5) days after such cessation of services, a single lump sum payment equal to the then present value of the future monthly payments described above.  The discount rate to be used for this purpose shall be equal to the yield to maturity, at the date of cessation of Kunin’s services, of U.S. Treasury Notes with a maturity date nearest the joint life expectancy (as defined in the Second Amendment) of Kunin and his spouse.

2.Reimbursement for Expenses in Litigating Agreement.  Should Kunin become a party to any litigation involving the validity or interpretation of this Agreement, or any provisions thereof, at any time during his lifetime, the Corporation shall advance to Kunin the legal expenses incurred by him, including reasonable attorneys fees, in connection with such litigation, and such expenses shall be paid to Kunin as incurred by him in advance of the final disposition of any such proceeding no later than the last day of Kunin’s taxable year following his taxable year in which the expenses were incurred.  Such expenses shall be repaid by Kunin only if he does not prevail in such proceedings.  Kunin shall be deemed to have prevailed in any such proceedings if such proceedings are terminated by settlement.  The amount of the expenses eligible for reimbursement during one taxable year of Kunin shall not affect the expenses eligible for reimbursement in another taxable year.

3.Non-competition Covenant.  In consideration of the Corporation’s obligations under paragraphs 1 and 2, above,  for the period during which payments are made to Kunin under such paragraphs, Kunin shall be, and shall continue to remain, bound by the non-competition covenant set forth in the Agreement, as amended on November 21, 1997.

4.Agreement Grandfathered under 409A.  The Parties agree that the service requirement and non-competition covenant set forth in the Agreement has not at any time, and in particular as of December 31, 2004, constituted a substantial risk of forfeiture to Kunin, or a requirement by Kunin to perform further services for the Corporation within the meaning of Section 409A of the Internal Revenue Code (the “Code”).  Accordingly, the obligations of the Corporation under the Agreement (other than under the Second Amendment), as set forth in paragraphs 1 through 3, above, are grandfathered under, and not subject to, Section 409A of the Code.

5.Change in Control Benefits.  The benefits provided to Kunin under the Second Amendment shall be revised as set forth in this paragraph 5:

In addition to the benefits payable to Kunin under other provisions of this Restated Agreement, in the event a Change in Control of the Corporation occurs at any time prior to Kunin’s death, the Corporation shall provide to Kunin the benefits described in (a), (b), (c), and (d), below:

(a)In the event that Kunin’s services with the Corporation are discontinued by the Corporation for reasons other than Cause or Kunin ceases his services with the Corporation for Good Reason within two years following a Change in Control, the Corporation shall pay to Kunin an amount equal to three times the annual compensation described in paragraph 1, above, for the 12-month period immediately preceding the Change in Control.  Such amount shall be paid to Kunin in a single sum

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within thirty (30) days after the date on which the discontinuance or cessation occurs.

(b)The excess of:  (i) Kunin’s “adjusted annual compensation” multiplied by the joint life expectancy (as defined in the Second Amendment) of Kunin and his spouse, as determined as of the date of the Change in Control, with no discount for present value; over (ii) the present value of the future monthly benefits payable to Kunin pursuant to paragraph (1), above (without regard to the last sentence thereof), as of the date of the Change in Control.  Such amount shall be paid to Kunin in a single sum within thirty (30) days following the date of the Change in Control.  For purposes of this subparagraph (b), Kunin’s “adjusted annual compensation” shall mean the annual amount payable to Kunin pursuant to paragraph 1, above (without regard to the last sentence thereof), as of the date of the Change in Control, increased by four percent (4%) for each year in the joint life expectancy.

(c)200,000 shares of the Corporation’s common stock free of any restrictions on exercisability (except as may be imposed by law), deliverable to Kunin upon the Change in Control.  Any such shares awarded under this subparagraph 5(c) shall be subject to automatic adjustment by the appropriate Board committee or its delegate to reflect any Corporation share dividend, share split, combination or exchange of shares, recapitalization or other change in the capital structure of the Corporation since the date hereof.

(d)An amount equal to any excise tax imposed on Kunin by Section 4999 of the Code and by any comparable and applicable state law (collectively, “Excise Taxes”), as a result of the payments and stock grant provided under subparagraphs (a), (b) and (c) of this paragraph 5, and as a result of any accelerated vesting of Kunin’s options to acquire shares of the Corporation, and shall further pay to Kunin on a “grossed-up” basis all additional federal and state income taxes and Excise Taxes payable by Kunin as a result of the payments provided in this subparagraph 5(d), so that the net after-tax amount received by Kunin pursuant to this paragraph 5 is equal to the amount that Kunin would have received if no Excise Taxes had been imposed on income received by or imputed to him by reason of the payments or stock grant pursuant to this paragraph 5 or by reason of accelerated vesting of Kunin’s options.  All amounts payable to Kunin pursuant to this subparagraph 5(d) shall be paid by the end of his taxable year next following his taxable year in which the related taxes are remitted to the taxing authority.

6.Definitions.  For purposes of paragraph 5 of this Restated Agreement, the following terms when capitalized shall have the meanings set forth below:

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(a)“Cause” shall mean:  (i) (A) a felony conviction under any Federal or state statute which is materially detrimental to the financial interests of the Corporation, or (ii) willful non-performance by Kunin of his material duties other than by reason of his physical or mental incapacity after reasonable written notice to Kunin and reasonable opportunity (not less than thirty (30) days) to cease such non-performance; or (ii) Kunin willfully engaging in fraud or gross misconduct which is materially detrimental to the financial interests of the Corporation.

(b)A “Change in Control” shall be deemed to have occurred at such time as any of the following events occur:  (i) any “person” within the meaning of Section 2(a)(2) of the Securities Act of 1933 and Section 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), is or has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of twenty percent (20%) or more of the common stock of the Corporation, or (ii) approval by the stockholders of the Corporation of (A) any consolidation or merger of the Corporation in which the Corporation is not the continuing or surviving corporation or pursuant to which shares of stock of the Corporation would be converted into cash, securities or other property, or (B) any consolidation or merger in which the Corporation is the continuing or surviving corporation but in which the common stockholders of the Corporation immediately prior to the consolidation or merger do not hold at least a majority of the outstanding common stock of the continuing or surviving corporation, or (C) any sale, lease, exchange or other transfer of all or substantially all the assets of the Corporation, or (iii) individuals who constitute the Corporation’s Board of Directors on the Effective Date (the “Incumbent Board”) have ceased for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the Effective Date whose election, or nomination for election by the Corporation’s stockholders, was approved by a vote of at least three-quarters (75%) of the directors comprising the Incumbent Board (either by specific vote or by approval of the proxy statement of the Corporation in which such person is named as nominee for director) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board.

(c)“Good Reason” shall mean shall mean the occurrence, without the express written consent of Kunin, of any of the following: (i) any adverse alteration in the nature of Kunin’s reporting responsibilities, titles, or offices, or any removal of Kunin from, or any failure to reelect Kunin to, any such positions, except in connection with a cessation of Kunin’s services for Cause, permanent disability, or as a result of Kunin’s death or a cessation of services by Kunin other than for Good Reason; (ii) a

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reduction by the Corporation in Kunin’s compensation as then in effect; (iii) failure by the Corporation to continue in effect (without substitution of a substantially equivalent plan or a plan of substantially equivalent value) 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 Kunin is then participating; (iv) any material breach by the Corporation of any provisions of this Restated Agreement; (v) the requirement by the Corporation that Kunin’s principal place of rendering services to the Corporation be relocated outside of a thirty (30) mile radius from its existing location; or (vi) the Corporation’s failure to obtain a satisfactory agreement from any successor to assume and agree to perform Corporation’s obligations under this Restated Agreement; provided that Kunin notifies the Corporation of such condition set forth in clause (i), (ii), (iii), (iv), (v) or (vi) within 90 days of its initial existence and the Corporation fails to remedy such condition within thirty (30) days of receiving such notice.

7.Six-Month Delay.  Notwithstanding anything in this Restated Agreement to the contrary, should any payment under this Restated Agreement be considered “deferred compensation” payable to a “specified employee” due to his “separation from service,” with the Corporation, as those terms are defined in Section 409A of the Code, then distribution of that payment will not be made until six (6) months following the separation.

8.Successors and Assigns.  This Restated Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns.  As used in this Restated Agreement, the term “successors” 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 the assets or business or capital stock of the Corporation.

9.Agreement Superseded.  Except as specifically set forth herein, this Restated Agreement shall replace and supersede the terms of the Agreement in all respects.

IN WITNESS WHEREOF, the Parties hereto have executed this Restated Agreement as of the day and year first above written.

	REGIS CORPORATION
By:	/s/ Paul D. Finkelstein
	Its President
	/s/ Myron Kunin
	Myron Kunin

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EX-10.2

Exhibit 10.2

AMENDED AND RESTATED

SENIOR OFFICER EMPLOYMENT AND

DEFERRED COMPENSATION AGREEMENT

This SENIOR OFFICER EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENT (this “Agreement”), is hereby amended and restated as of June 29, 2007 (the “Effective Date”), between REGIS CORPORATION, hereinafter referred to as the “Corporation,” and Gordon Nelson, hereinafter referred to as “Employee.”

WHEREAS, this Agreement was initially entered into as of April 14, 1998; and

WHEREAS, Employee and the Corporation wish to amend and restate this Agreement as of the date hereof to incorporate and supersede all prior amendments hereto;

NOW, THEREFORE, IN CONSIDERATION of the mutual agreements hereinafter contained, the parties hereby agree as follows:

1.Definitions.

“Aggregate Benefit” shall be an amount equal to the Employee’s Monthly Benefit multiplied by 240.

“Cause” shall mean: (a) (i) a felony conviction under any Federal or state statute which is materially detrimental to the financial interests of the Corporation, or (ii) willful non-performance by Employee of his material employment duties other than by reason of his physical or mental incapacity after reasonable written notice to Employee and reasonable opportunity (not less than thirty (30) days) to cease such non-performance; or (b) Employee willfully engaging in fraud or gross misconduct which is materially detrimental to the financial interests of the Corporation.

“Change in Control” shall be deemed to have occurred at such time as any of the following events occur: (a) any “person” within the meaning of Section 2(a)(2) of the Securities Act of 1933 and Section 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), is or has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of twenty percent (20%) or more of the common stock of the Corporation, or (b) approval by the stockholders of the Corporation of (i) any consolidation or merger of the Corporation in which the Corporation is not the continuing or surviving corporation or pursuant to which shares of stock of the Corporation would be converted into cash, securities or other property, or (ii) any consolidation or merger in which the Corporation is the continuing or surviving corporation but in which the common stockholders of the Corporation immediately prior to the consolidation or merger do not hold at least a majority of the outstanding

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common stock of the continuing or surviving corporation, or (iii) any sale, lease, exchange or other transfer of all or substantially all the assets of the Corporation, or (c) individuals who constitute the Corporation’s Board of Directors on the Effective Date (the “Incumbent Board”) have ceased for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the Effective Date whose election, or nomination for election by the Corporation’s stockholders, was approved by a vote of at least three-quarters (75%) of the directors comprising the Incumbent Board (either by specific vote or by approval of the proxy statement of the Corporation in which such person is named as nominee for director) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board.

“Discounted Vested Monthly Benefit” shall be an amount determined by discounting Employee’s Vested Monthly Benefit to present value based on the number of months between (a) the later of (i) Employee’s age at the time of his or her termination of employment or (ii) the date on which Employee attains age 55, and (b) the date of Employee’s 65th birthday.  The discount rate to be used for this purpose shall be equal to the yield to maturity, at the date of termination of Employee’s employment, of U.S. Treasury Notes with a maturity date nearest the date of the Employee’s 65th birthday.

“Good Reason”  shall mean the occurrence, without the express written consent of Employee, of any of the following: (a) any adverse alteration in the nature of Employee’s reporting responsibilities, titles, or offices, or any removal of Employee from, or any failure to reelect Employee to, any such positions, except in connection with a termination of the employment of Employee for Cause, permanent disability, or as a result of Employee’s death or a termination of employment by Employee other than for Good Reason; (b) a reduction by the Corporation in Employee’s base salary as then in effect; (c) failure by the Corporation to continue in effect (without substitution of a substantially equivalent plan or a plan of substantially equivalent value) 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 Employee is then participating; (d) any material breach by the Corporation of any provisions of the Agreement; (e) the requirement by the Corporation that Employee’s principal place of employment be relocated outside of a thirty (30) mile radius from its existing location; or (f) the Corporation’s failure to obtain a satisfactory agreement from any successor to assume and agree to perform Corporation’s obligations under the Agreement; provided that Employee notifies the Corporation of such condition set forth in clause (a), (b), (c), (d), (e) or (f) within 90 days of its initial existence and the Corporation fails to remedy such condition within 30 days of receiving such notice.

“Monthly Benefit” shall be an amount equal to the greater of (i) forty percent (40%) of Employee’s average monthly compensation, excluding bonuses, for the sixty

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(60) months immediately preceding Employee’s termination of employment or disability (provided that for purposes of such calculation the Monthly Benefit shall be increased by Two Thousand Five Hundred Dollars ($2,500.00) unless Employee’s employment terminates on or before February 8, 2012 by the Company for Cause or by Employee without Good Reason), and (ii) Five Thousand Dollars ($5,000.00).

“Vested Monthly Benefit” shall be a percentage of Employee’s Monthly Benefit determined on the basis of the number of Employee’s completed years of service with the Corporation according to the following schedule:

Years of Service	Percentage
Less than 7 years	0	%
7 years	5	%
8 years	10	%
9 years	15	%
10 years	20	%
11 years	25	%
12 years	30	%
13 years	35	%
14 years	40	%
15 years	50	%
16 years	60	%
17 years	70	%
18 years	80	%
19 years	90	%
20 or more years	100	%

A year of service for purposes of vesting shall be a consecutive 12-month period during which Employee is employed by the Corporation.

2.Employment.  The Corporation agrees to continue to employ Employee, and Employee agrees to continue to serve the Corporation, upon the terms and conditions hereinafter set forth.

3.Term.  The employment of Employee pursuant to this Agreement has commenced as of the date of this Agreement and shall continue until terminated by either of the parties hereto. The parties agree and acknowledge that the employment of Employee pursuant to this Agreement is at will and may be terminated by either party without notice.  Notwithstanding the termination of employment of Employee, this Agreement shall remain in full force and effect during such time as Employee is or may be entitled to any Monthly Benefit under this Agreement.

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4.Duties.  Employee agrees to serve the Corporation faithfully and to the best of his or her ability under the direction of the President and the Board of Directors of the Corporation, devoting his or her entire business time, energy and skill to such employment, and to perform from time to time such services and act in such office or capacity as the President and the Board of Directors shall request.

5.Compensation.  The Corporation agrees to pay to Employee during the term of his or her employment hereunder as salary for his or her full time active services such compensation as may be mutually agreed upon from time to time.

6.Deferred Compensation.  The Corporation shall pay to Employee, if living, or to his or her designee(s) in the event of his or her death, the following sums upon the terms and conditions and for the periods hereinafter set forth:

a]Payments upon Retirement.  Commencing upon the last day of the month next following the month in which Employee retires from employment with the Corporation at or after age 65, or upon the last day of the month next following the month in which he or she reaches age 65 if he or she is then disabled within the meaning of paragraph 6(c), the Corporation shall pay to Employee his or her Vested Monthly Benefit and shall continue to pay him or her the same amount monthly on the same date of each succeeding month thereafter until a total of 240 monthly payments have been made.  If Employee dies before receiving all 240 monthly payments specified herein, the Corporation shall pay to Employee’s surviving spouse, or to such other person or persons as Employee shall have designated in writing, the remaining unpaid monthly payments as they become due as provided above.

b]Payments upon Death before Retirement.  If Employee dies while employed by the Corporation, the Corporation shall pay to Employee’s surviving spouse, or to such other person or persons as Employee shall have designated in writing, Employee’s Monthly Benefit for 240 months. The first payment shall be due within thirty (30) days after Employee’s death with the remaining payments payable according to the terms of paragraph 6(a) above.

c]Payments during Disability.  In addition to the payments provided in subparagraphs (a) and (b), should Employee become disabled while employed by the Corporation, and such disability continues for a period of six months, the Corporation shall pay to Employee his or her Monthly Benefit during each month that Employee remains disabled until he attains age 65 or until his or her death prior to attaining such age, at which time the payments provided in subparagraph (b) shall

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begin.  The first payment under this subparagraph (c) shall be made during the seventh month of such disability, and each succeeding payment shall be made on the same date of each succeeding month thereafter.  Payments shall be made under this subparagraph (c) only if Employee is disabled within the meaning of the disability clause of an applicable policy’s waiver of premium provision and within the meaning of “disability” as set forth in Treas. Reg. § 1.409A–3(i)(4).

d]Early Termination.

(i)In the event Employee terminates his or her employment with the Corporation before reaching age 65 (unless such employment termination is for Cause, by reason of disability pursuant to subparagraph 6(c), or by reason of death), then commencing upon the last day of the month next following the month in which his employment terminates (or if later, upon attainment of age 55), unless Employee has been terminated by the Corporation for Cause, the Corporation shall pay to Employee his or her Discounted Vested Monthly Benefit and shall continue to pay him or her the same amount monthly on the same date of each succeeding month thereafter until a total of 240 monthly payments have been made.  If Employee dies before receiving all 240 monthly payments specified herein, the Corporation shall pay to Employee’s surviving spouse, or to such other person or persons as Employee shall have designated in writing, the remaining unpaid monthly payments as they become due as provided above.  Notwithstanding the foregoing in this subparagraph 6(d)(i), Employee shall be entitled, by written election to the Corporation’s Board of Directors, to receive, in connection with a termination of employment prior to age 65, his Vested Monthly Benefit rather than the Discounted Vested Monthly Benefit, provided (x) Employee makes such written election more than 12 months before Employee otherwise would have received the Discounted Vested Monthly Benefit, (y) such election is not effective for 12 months, and (z) if Employee’s employment terminates prior to age 65, the first installment of the Vested Monthly Benefit is paid on the later of (A) Employee’s attainment of age 65, and (B) five years after the month next following the month of such employment termination (or if earlier, upon death or disability pursuant to subparagraphs 6(b) and 6(c), respectively).

(ii)If Employee’s employment is terminated (i) for any reason after February 8, 2012 but before reaching age 65, or (ii) on or prior to February 8, 2012 by Employee with Good Reason, due to death or Disability, or by the Corporation without Cause, then in satisfaction

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of any continuation coverage Employee may be entitled to receive under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), during the period commencing on such termination of employment and continuing through Employee’s attainment of age 65 (or with respect to Employee’s wife, Beverly A. Nelson (“Employee’s wife”), through her attainment of age 65), Employee and Employee’s wife shall each be entitled to the continuation of the same or equivalent health, hospitalization, prescription drug and dental insurance coverage that each had received immediately prior to Employee’s termination of employment, as if Employee had continued to be an executive employee of the Corporation.  In the event that Employee or Employee’s wife is ineligible under the terms of such health or other insurance or applicable law to continue to be so covered without the imposition of adverse tax consequences on Employee, the Corporation, at its option, shall provide Employee or Employee’s wife with substantially equivalent coverage through other sources or will reimburse Employee or Employee’s wife (as applicable) for actual premiums paid for such alternative coverage (such as Medicare Part A, Part B and prescription drug coverage) that Employee obtains for the payment period.  Any such reimbursement shall be paid by December 31 of the calendar year following the year in which Employee pays such premiums.

e]Termination for Cause.  If Employee’s employment with the Corporation is terminated at any time for Cause, the Corporation shall have no obligation to make any payments to Employee under this Agreement and all future payments shall be forfeited.

The Corporation is the owner and beneficiary of certain insurance policies on Employee’s life and insuring against Employee’s disability.  No payments shall be required under subparagraphs (a), (b), (c) or (d)(i) of this paragraph, if because of any act by Employee, either (i) the applicable policy is canceled by the insurance company issuing such policy or (ii) the insurance company refuses to pay the proceeds of said policy.  The provisions of the preceding sentence shall be inapplicable and of no further force or effect upon and after a Change in Control.

Notwithstanding the foregoing provisions of this paragraph 6 or paragraph 7, to the extent required in order to be made without triggering any tax or penalty under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury regulations promulgated thereunder (“Section 409A”) if an Employee is a “specified employee” for purposes of Section 409A, amounts that would otherwise be payable under this paragraph 6 during the six-month period immediately following the employment termination date shall instead be paid on

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the first business day after the date that is six months following Employee’s “separation from service” within the meaning of Section 409A, or, if earlier, the date of Employee’s death.

7.Change in Control.

(a)Notwithstanding any other provision of the Agreement, in the event that Employee’s employment is terminated by the Corporation without Cause or by Employee with Good Reason within two years after a Change in Control, Employee shall be paid, within thirty (30) days after such employment termination, an amount equal to three times the sum of (i) Employee’s annual base salary, and (ii) the largest annual bonus paid to or earned by Employee during the thirty-six (36) months immediately preceding the Change in Control.

(b)Notwithstanding any other provision of the Agreement: (A) if Employee’s employment with the Corporation terminates within two years following a Change in Control, whether such termination is initiated by Employee or by the Corporation (unless the termination is by the Corporation for Cause), the Corporation, within five (5) days after such termination and in lieu of Employee’s Monthly Benefit, shall pay in full Employee’s Aggregate Benefit, without any reduction for vesting or for discounting, to Employee; (B) if Employee’s employment with the Corporation terminates more than two years following a Change in Control, the Corporation, within thirty (30) days after such termination, shall commence payment of Employee’s Monthly Benefit, without any reduction for vesting or for discounting, and shall continue such payments as provided in paragraph 6 hereof.

(c)Upon a Change in Control, Employee automatically shall receive 40,000 shares of the Corporation’s common stock free of any restrictions on exercisability (except as may be imposed by law).  Any such shares awarded under this subparagraph 7(c) shall be subject to automatic adjustment by the appropriate Board committee or its delegate to reflect any Corporation share dividend, share split, combination or exchange of shares, recapitalization or other change in the capital structure of the Corporation since the date hereof.

(d)In addition to the payments and stock grant provided in subparagraphs 7(a), (b) and (c) above, and at the time such payments and grant are made to Employee, the Corporation shall pay to Employee an amount equal to any excise tax imposed on Employee by Section 4999 of the Code and by any comparable and applicable state tax law (collectively, “Excise Taxes”), as a result of the payments and stock grant

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provided in subparagraphs 7(a), (b) and (c) and as a result of any accelerated vesting of Employee’s options to acquire shares of the Corporation, and shall further pay to Employee on a “grossed-up” basis all additional federal and state income taxes and Excise Taxes payable by Employee as a result of the payments provided in this subparagraph 7(d), so that the net after-tax amount received by Employee pursuant to this paragraph 7 is equal to the amount that Employee would have received if no Excise Taxes had been imposed on income received by or imputed to Employee by reason of the payments or stock grant pursuant to paragraph 7 hereof or by reason of accelerated vesting of Employee’s options.  All amounts payable pursuant to this subparagraph 7(d) shall be paid by the end of Employee’s taxable year next following Employee’s taxable year in which the related taxes are remitted to the taxing authority.

All payments required by this paragraph 7 shall be in addition to, and not in lieu of, any other payments to which Employee is entitled under any other agreement with the Corporation.

The amounts paid to Employee pursuant to this paragraph shall be in consideration of Employee’s past services to the Corporation and Employee’s continued services from the date of this amendment.  The payments required hereunder shall not be reduced or offset by any future earnings by Employee.

8.Restrictive Covenant.

a]Employee expressly agrees, as a condition to the performance by the Corporation of its obligations hereunder, that during the term of this Agreement and during the further period that such payments to him or her are provided by this Agreement, he or she will not, directly or indirectly, own any interest in, render any services of any nature to, become employed by, or participate or engage in the licensed beauty salon business, except with the prior written consent of the Corporation.

b]If Employee voluntarily terminates his or her employment with the Corporation, and Employee violates the restrictive covenant set forth in subparagraph a] above during the first twenty-four (24) months after such termination of employment, and such violation continues for thirty (30) days after Employee is notified in writing by the Corporation that Employee is in violation of the restrictive covenant, then the Corporation shall have no further obligation to make any payments to Employee under this Agreement and all such future payments shall be forfeited.  If such violation occurs after twenty-four (24) months after such termination and continues for thirty (30) days after notice as provided

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hereinabove, Employee shall forfeit one (1) month of Employee’s Vested Monthly Benefit for each month that Employee is in violation of the restrictive covenant.

c]If Employee’s employment with the Corporation is terminated by the Corporation without Cause, and if Employee at any time after such termination continues to violate the restrictive covenant for thirty (30) days after being notified in writing by the Corporation that Employee is in violation of the restrictive covenant, Employee shall forfeit one (1) month of Employee’s Vested Monthly Benefit for each month or portion of a month that Employee continues in violation of the restrictive covenant.

d]The provisions of paragraph 8 of the Agreement shall be inapplicable and of no further force or effect upon and after a Change in Control.

9.Trust Agreement.  The Corporation has established a Trust Agreement under the Regis Corporation Deferred Compensation Agreement and said Trust Agreement is hereby incorporated by reference into this Agreement and made a part hereof.

10.Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Minnesota.

11.Arbitration.  All controversies or claims arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in Minneapolis, Minnesota, administered by the American Arbitration Association under its then current Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in the District Court of Hennepin County, Minnesota.

12.Prohibition against Assignment.  Employee agrees, on behalf of himself or herself and his or her personal representatives, and any other person claiming any benefits under him or her by virtue of this Agreement, that this Agreement and the rights, interests and benefits hereunder shall not be assigned, transferred or pledged in any way by Employee or any person claiming under him or her by virtue of this Agreement, and shall not be subject to execution, attachment, garnishment or similar process.

13.Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successor of the Corporation, and any successor shall be deemed substituted for the Corporation under the terms of this Agreement.  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 capital stock or assets of the Corporation.

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14.Prior Agreements.  This Agreement supersedes all prior Employment and Deferred Compensation Agreements, and any amendments or supplements thereto, between the parties to this Agreement.

15.Consulting Arrangement.  Within 60 days after Employee’s termination of employment with the Corporation (other than for Cause, by reason of death or Disability, or, on or prior to February 8, 2012, by Employee without Good Reason), the Corporation and Employee shall enter into a three-year consulting agreement with regard to the Corporation’s DVD training program (or its successor) on terms to be reasonably and mutually agreed.

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

REGIS CORPORATION
By:	/s/ Paul D. Finkelstein
	Paul D. Finkelstein, President
	/s/ Gordon Nelson
	Gordon Nelson

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