Item 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
On September 8, 2020, Regis Corporation (the "Company") announced that Felipe A.
Athayde will succeed Hugh E. Sawyer as the Company's Chief Executive Officer and
President and will be appointed as a director on the Company's Board of
Directors (the "Board"), effective on October 5, 2020 (the "Start Date"). Mr.
Sawyer has informed the Company that he will retire as Chief Executive Officer
and President of the Company and resign as a member and Chairman of the Board
effective immediately prior to such date (the "Departure Date").
Mr. Athayde, 41, joins the Company from Popeyes Louisiana Kitchen, owned by
Restaurant Brands International, a multinational quick-service restaurant
holding company, where he most recently served as President, Americas between
March 2019 and September 2020. Mr. Athayde has held various positions with
Restaurant Brands International between July 2011 and September 2020, including
President, Latin America and Caribbean for Burger King, and President, US for
Tim Hortons.
Letter Agreement with Mr. Athayde
On September 4, 2020, the Company entered into a letter agreement with Mr.
Athayde (the "Athayde Agreement"), pursuant to which Mr. Athayde will receive a
base salary of $700,000 per year, an annual target bonus opportunity equal to
125% of his annual base salary (up to a maximum payout of 225% of his annual
base salary) and a sign-on bonus of $2,500,000 (which is subject to pro-rata
repayment if Mr. Athayde's employment is terminated under certain circumstances
prior to the first anniversary of the Start Date). Mr. Athayde will also
receive sign-on equity awards to be granted as of the Start Date as follows: (1)
1,100,000 options to purchase shares of the common stock of the Company, granted
under the Company's 2018 Long Term Incentive Plan, which are eligible to vest,
as to the service requirement, on the fourth anniversary of the Start Date,
subject to achievement, prior to the fifth anniversary of the Start Date, of a
volume-weighted average closing price per share of the Company equal to or in
excess of 150% of the closing price per share on the trading day immediately
prior to the date of the announcement of Mr. Athayde's employment with the
Company; and (2) 358,680 restricted stock units with a value equal to $2,500,000
(based on the closing price of a share on September 4, 2020), which are eligible
to vest on the first anniversary of the Start Date based on Mr. Athayde's
continued service and options to purchase 358,680 shares of the Company's common
stock, which are eligible to vest on the fourth anniversary of the Start Date,
each of which may be granted on the Start Date pursuant to the employment
inducement exception of the NYSE rules. All of the stock options will have a per
share exercise price equal to the closing price per share of the Company on the
date of grant and will have a term of ten years. Mr. Athayde will also be
reimbursed for certain relocation expenses, including for temporary housing for
up to twelve (12) months following the Start Date, up to an aggregate amount of
$150,000.
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If Mr. Athayde's employment is terminated either by the Company without Cause or
by Mr. Athayde for Good Reason, Mr. Athayde will be eligible for severance
benefits under the Company's Senior Executive Severance Policy.
The foregoing description is not a complete description of the Athayde Agreement
and is qualified in its entirety by reference to the full text of the Athayde
Agreement, a copy of which is attached hereto as Exhibit 10.1, which is
incorporated herein by reference.
In connection with the execution and entry into the Athayde Agreement, Mr.
Athayde also executed a Non-Compete, Non-Disclosure, Non-Solicitation and
Non-Hire Agreement, a copy of which is attached hereto as Exhibit 10.2, which
is incorporated herein by reference.
Transition Agreement with Mr. Sawyer
On September 4, 2020, Mr. Sawyer and the Company entered into Transition
Services and Release Agreement (the "Transition Agreement"). In connection with
his departure, Mr. Sawyer will receive all wages Mr. Sawyer has earned through
and including the Departure Date and three weeks of unused PTO benefits.
Pursuant to the terms of the Transition Agreement, during the period between the
Departure Date and ending on the twelve month anniversary thereof (the
"Consulting Term"), Mr. Sawyer will serve as an Executive Advisor to the
Company. For his services as an Executive Advisor, Mr. Sawyer will be entitled
to an annual consulting fee of $1,200,000. Mr. Sawyer will also receive
reimbursement for the employer portion of COBRA premiums during the Consulting
Term. Pursuant to the Transition Agreement, Mr. Sawyer agreed to extend the
non-competition and non-solicitation restrictions under that certain Employment
Agreement between Mr. Sawyer and the Company, dated April 17, 2017 (the
"Employment Agreement"), through the period ending twenty-four months after the
end of the Consulting Term. The Consulting Term may be terminated prior to the
expiration of the twelve (12) month term upon Mr. Sawyer's death or disability,
by mutual agreement between the Company and Mr. Sawyer, and in the event of Mr.
Sawyer's breach of certain restrictive covenants in his Employment Agreement and
the Transition Agreement.
The foregoing description is not a complete description of the Transition
Agreement and is qualified in its entirety by reference to the full text of the
Transition Agreement, a copy of which is attached hereto as Exhibit 10.3, which
is incorporated herein by reference.
A copy of the press release announcing the matters described in this Item 5.02
is attached herewith as Exhibit 99.1, and incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit No.
10.1 Offer Letter, between Felipe A. Athayde and Regis Corporation, dated
September 4, 2020.
10.2 Non-Compete, Non-Disclosure, Non-Solicitation and Non-Hire Agreement,
between Felipe A. Athayde and Regis Corporation, dated September 4,
2020.
10.3 Transition Services and Release Agreement, between Hugh E. Sawyer and
Regis Corporation, dated September 4, 2020.
99.1 Regis Corporation News Release dated September 8, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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