<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
REGIS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 14, 1997
------------------------
TO THE SHAREHOLDERS OF REGIS CORPORATION:
The Annual Meeting of the Shareholders of Regis Corporation ("the Company")
will be held at the Minneapolis Institute of Arts, 2400 Third Avenue South,
Minneapolis, Minnesota, on October 14, 1997, commencing at 4:00 p.m., for the
following purposes:
1. To elect nine directors to serve for a one-year term and until their
successors are elected and qualified; and
2. To consider and vote upon a proposal to increase the number of shares of
the Company available under the Company's 1991 Stock Option Plan; and
3. To transact such other business, if any, as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
Only holders of record of the Company's Common Stock at the close of
business on September 5, 1997, are entitled to notice of and to vote at the
Annual Meeting or any adjournment or postponement thereof.
A list of shareholders entitled to vote at the Annual Meeting will be
available for examination, for any purpose germane to the Annual Meeting, at the
Company's executive offices located at 7201 Metro Boulevard, Edina, Minnesota,
during ordinary business hours for at least ten days prior to the Annual Meeting
and for the duration of the Annual Meeting itself.
Whether or not you plan to attend the Annual Meeting in person, please fill
in, sign and date the enclosed proxy and mail it promptly. Should you
nevertheless attend the Annual Meeting, you may revoke your proxy and vote in
person. A return envelope, which requires no postage if mailed in the United
States, is enclosed for your convenience.
Remember, if your shares are held in the name of a broker, only your broker
can vote your shares and only after receiving your instructions. Please contact
the person responsible for your account and instruct him/her to execute a proxy
card on your behalf.
By Order of the Board of Directors
Frank E. Evangelist
SECRETARY
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE SIGN THE
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
September 16, 1997
<PAGE>
[LOGO]
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS, OCTOBER 14, 1997
This Proxy Statement is furnished to shareholders of REGIS CORPORATION, a
Minnesota corporation (the "Company"), in connection with solicitation on behalf
of the Company's Board of Directors of proxies for use at the annual meeting of
shareholders to be held on October 14, 1997, and at any adjournment thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders.
The address of the principal executive office of the Company is 7201 Metro
Boulevard, Minneapolis, Minnesota 55439. This Proxy Statement and form of Proxy
are being mailed to shareholders of the Company on September 16, 1997.
SOLICITATION AND REVOCATION OF PROXIES
The costs and expenses of solicitation of proxies will be paid by the
Company. In addition to the use of the mails, proxies may be solicited by
directors, officers and regular employees of the Company personally or by
telegraph, telephone or letter without extra compensation.
Proxies in the form enclosed are solicited on behalf of the Board of
Directors. Any shareholder giving a proxy in such form may revoke it at any time
before it is exercised. Such proxies, if received in time for voting and not
revoked, will be voted at the annual meeting in accordance with the
specification indicated thereon.
VOTING RIGHTS
Only shareholders of record of the Company's 23,336,925 shares of Common
Stock outstanding as of the close of business on September 5, 1997, will be
entitled to execute proxies or to vote. Each share of Common Stock is entitled
to one vote. A majority of the outstanding shares must be represented at the
meeting, in person or by proxy, to transact business.
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ELECTION OF DIRECTORS
Nine directors are to be elected at this annual meeting, each to hold office
for one year until the 1998 annual meeting of shareholders. The Board of
Directors has nominated the nine persons named below for election as directors.
All of the nominees are presently directors of the Company.
The enclosed proxy, unless authority to vote is withheld, will be voted for
the election of the nominees named herein as directors of the Company. In the
event any one or more of such nominees shall unexpectedly become unavailable for
reelection, votes will be cast, pursuant to authority granted by the enclosed
proxy, for such person or persons as may be designated by the Board of
Directors. The following table contains certain information with respect to the
nominees:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------- --- ------------------------------------------------------
<S> <C> <C>
Rolf F. Bjelland 59 Director
Frank E. Evangelist 61 Senior Vice President, Finance, Secretary and Director
Paul D. Finkelstein 55 President, Chief Executive Officer and Director
Christopher A. Fox 47 Executive Vice President and Director
Thomas L. Gregory 61 Director
Van Zandt Hawn 52 Director
Susan Hoyt 53 Director
David B. Kunin 38 Chief Executive Officer, Anasazi Exclusive Salon
Products, LLC; Vice President, The Regis Foundation
and Director
Myron Kunin 68 Chairman of the Board of Directors
</TABLE>
Mr. Bjelland was elected a Director of the Company in 1983. Since 1983, Mr.
Bjelland has been the Executive Vice President--Chief Investment Officer of
Lutheran Brotherhood, a fraternal insurance society.
Mr. Evangelist served as Treasurer of the Company from 1968 to 1988, was
elected Secretary and a Director in 1986, and Senior Vice President, Finance, in
1987.
Mr. Finkelstein has served as President and Chief Executive Officer of the
Company since July 1, 1997, and was Chief Operating Officer of the Company from
December, 1987 until June 30, 1997. He has been a director of the Company since
1987.
Mr. Fox was elected Executive Vice President of the Company in August, 1994,
and was Senior Vice President, Real Estate, of the Company from 1988 until
August, 1994. He has been a Director of the Company since 1989.
Mr. Gregory was elected a Director of the Company on November 13, 1996. He
was a director of Supercuts, Inc. from 1991 until Supercuts was acquired by a
subsidiary of the Company on October 25, 1996. He was Chairman of the Board of
Supercuts from January 4, 1996 until October 25, 1996, and served as interim
Chief Executive Officer of Supercuts from January 4, 1996 until January 31,
1996. From 1980 through 1994, Mr. Gregory held various executive positions with
Sizzler International, Inc. and its predecessors, including President, Chief
Executive Officer, Director and Vice Chairman. He is currently a director of the
Cheesecake Factory, Inc. and J J North Restaurants.
3
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Mr. Hawn was elected a Director of the Company in 1991. He is a managing
director and a founder of Goldner Hawn Johnson & Morrison Incorporated, a
private investment firm.
Ms. Hoyt was elected a Director of the Company in 1995. She is Executive
Vice President of Human Resources of Staples, Inc. From 1991 to 1996, she was
Executive Vice President of Store Operations for the Dayton Hudson Department
Stores Division of Dayton Hudson Corporation.
Mr. David Kunin was elected a Director of the Company on February 4, 1997.
He is the Chief Executive Officer of Anasazi Exclusive Salon Products, LLC, an
80%-owned subsidiary of the Company. Since July, 1990, he has been employed at
various positions at Regis Corporation and was Vice President, Marketing, of the
Company from November, 1992, until February 4, 1997, when he was elected Chief
Executive Officer of Anasazi Exclusive Salon Products, LLC, and Vice President
of The Regis Foundation. He is the son of Myron Kunin.
Mr. Myron Kunin is a founder of the Company and has served as a Director
since the Company's formation in 1954. He was President and Chief Executive
Officer from 1965 to June 30, 1996, and has been Chairman of the Board of
Directors since 1983. He is Chairman of the Board and holder of a majority of
the voting shares of Curtis Squire, Inc., the Company's principal shareholder.
He is also a director of Nortech Systems Incorporated, and The Cerplex Group,
Inc.
FUNCTIONING OF BOARD AND COMMITTEES
During the fiscal year ended June 30, 1997, the Board of Directors held five
meetings.
The Company has a standing audit committee, presently composed of Messrs.
Bjelland, Hawn, Gregory and Finkelstein and Ms. Hoyt. The committee held two
meetings during the fiscal year ended June 30, 1997. The committee's primary
responsibilities are to recommend to the Board of Directors the engagement of
the Company's independent auditors, review with the independent auditors the
plan and results of the audit engagement, and review the adequacy of the
Company's internal accounting controls.
The Company has a standing compensation committee composed of Messrs.
Bjelland and Hawn and Ms. Hoyt. The committee's primary responsibilities are to
recommend levels of executive compensation to the Board of Directors and to
consider and recommend the establishment of various compensation plans for the
Company. The compensation committee held two meetings during the last fiscal
year.
The Company does not have a standing nominating committee of the Board of
Directors.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors consists of Mr. Hawn,
Mr. Bjelland and Ms. Hoyt, independent outside Directors. The Compensation
Committee has responsibility for administering the Company's incentive plans and
setting policies that govern annual compensation and long-term incentives for
the principal executive officers of the Company.
The Company's executive compensation policies are intended to permit the
Company to attract and retain talented executives and to align the financial
interests of the Company's management with those of its stockholders.
Historically, the Company has sought to accomplish its objectives of attracting
and retaining executives by providing for competitive salary levels and
occasional cash bonus awards based upon individual performance, subjectively
determined by the Chief Executive Officer. The principal executive officers of
the Company, other than the Chairman of the Board, were permitted in 1988 to
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<PAGE>
purchase substantial numbers of restricted shares of the Company's common stock
under agreements which provide for vesting over time. The loans incurred by such
officers for such purchases were paid from the proceeds of special bonuses to
such officers in 1991, which also included payments of the income taxes incurred
by such officers with respect to such bonuses. As a result of these
transactions, and the grant of certain stock options, all of the Company's
principal executive officers named in the Summary Compensation Table have
substantial ownership positions in the common stock of the Company, aligning
their interests directly with those of the other stockholders in both the risks
and rewards of ownership of the Company's common stock.
The Company's stock option program provides compensation opportunities that
directly link the interests of management and shareholders, and aid in retaining
key executive officers. Executive officers are eligible for annual grants of
stock options. Individual awards are based on the individual's responsibilities
and performance, ability to impact financial performance and future potential.
These factors are not assigned pre-determined relative weights. All individual
stock option grants for non-executive officers are reviewed and approved by the
Committee. All such grants for executive officers are awarded solely by the
Committee, based on recommendations of management. Executive officers receive
gains from exercised stock options only to the extent that the fair market value
of the stock has increased since the date of option grant.
At the beginning of each fiscal year, the Compensation Committee reviews
annual salary recommendations for the Company's executives made by the Chief
Executive Officer and approves, with any modifications it deems appropriate,
such recommendations. The annual salary recommendations are made by the Chief
Executive Officer, and approved or modified by the Compensation Committee, based
upon industry practice and national surveys of compensation packages, as well as
evaluations of the individual executive's responsibilities and past and expected
future performance. The Compensation Committee fixes the salary of the Chief
Executive Officer based on a review of competitive compensation data, and the
Committee's assessment of his past performance and its expectation as to his
future performance in leading the Company. No element of the compensation of the
principal executive officers during the year ended June 30, 1997 was variable or
determined with reference to the performance, financial or otherwise, of the
Company.
During the last fiscal year, the Committee approved a long-term compensation
agreement with Myron Kunin, the Chairman of the Board of Directors. The
agreement provides that he will continue to render services to the Company for
not less than ten years and thereafter as mutually agreed upon between Mr. Kunin
and the Company. Mr. Kunin is a founder of the Company, has served as an officer
of the Company since 1954 and was its Chief Executive Officer from 1965 until
June 30, 1996. In the Committee's view, the scope and depth of Mr. Kunin's
knowledge of the hair care industry is unrivaled and the Committee believes that
it is of the utmost importance for the Company to retain his services for as
long as possible.
Rolf F. Bjelland
Van Zandt Hawn
Susan Hoyt
MEMBERS OF THE COMPENSATION COMMITTEE
5
<PAGE>
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ended June 30, 1997, 1996
and 1995, the cash compensation paid by the Company, as well as certain other
compensation paid or accrued for those years, to the Company's chief executive
officer and each of the other four most highly compensated executive officers of
the Company as of June 30, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS
--------------------------------------------
ANNUAL COMPENSATION ALL OTHER
------------------------ COMPENSATION
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY($) BONUS($) OPTIONS(#) ($)(1)
- ------------------------------ ------------- --------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Myron Kunin 1997 600,000 -- -- 142,107(2)
Chairman of the Board 1996 600,000 -- -- 142,111(2)
1995 600,000 -- 150,000 151,120(2)
Paul D. Finkelstein 1997 500,000 -- -- 28,977
President and Chief 1996 450,000 -- -- 28,977
Executive Officer 1995 400,000 50,000 150,000 25,477
Christopher A. Fox 1997 245,000 -- 4,000 16,098
Executive Vice President 1996 250,000 -- 6,000 16,101
1995 225,000 25,000 6,000 14,330
William E. Halfacre 1997 225,000 -- 4,000 14,488
Senior Vice President, 1996 225,000 -- 6,000 14,488
Retail and Purchasing 1995 175,000 25,000 6,000 11,146
Frank E. Evangelist 1997 205,000 -- -- 12,879
Senior Vice President, 1996 200,000 -- 6,000 12,876
Finance and Secretary 1995 190,000 10,000 6,000 12,101
</TABLE>
- ------------------------
(1) Represents the dollar value of shares of the Company and cash allocated to
such officers pursuant to the Company's Executive Stock Award Plan, based on
the average purchase price for such shares.
(2) Includes life insurance premiums on the life of Mr. Kunin in amounts of
$103,471 for each of 1997 and 1996, and $112,905 for 1995.
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<PAGE>
STOCK OPTION GRANTS
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth for each of the named executives the stock
options granted by the Company in fiscal 1997 and the potential value of these
stock options and stock appreciation rights determined pursuant to Securities
and Exchange Commission requirements.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED ANNUAL
------------------------------ RATES OF STOCK PRICE
% OF TOTAL APPRECIATION FOR OPTION
OPTIONS OPTIONS GRANTED EXERCISE OR TERM
GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION ------------------------
NAME (#) FISCAL YEAR ($/SH) DATE 5%($)(1) 10%($)(1)
- -------------------------------------------- ----------- --------------- ------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Myron Kunin................................. 0
Paul D. Finkelstein......................... 0
Christopher A. Fox.......................... 4,000 1.3% 23.25 6/22/07 58,488 148,214
Frank E. Evangelist......................... 0
William E. Halfacre......................... 4,000 1.3% 23.25 6/22/07 58,488 148,214
</TABLE>
- ------------------------
(1) The hypothetical potential appreciation shown in these columns reflects the
required calculations at annual rates of 5% and 10% set by the Securities
and Exchange Commission, and therefore is not intended to represent either
historical appreciation or anticipated future appreciation of the Company's
Common Stock price.
STOCK OPTION EXERCISES AND OPTION VALUES
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth for each of the named executive officers the
value realized from stock options exercised during fiscal 1997 and the number
and value of exercisable and unexercisable stock options held at June 30, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END(#) YEAR-END($)(1)
--------------------- -------------------
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE $ UNEXERCISABLE UNEXERCISABLE
- ---------------------------------- --------------- --------------- --------------------- -------------------
<S> <C> <C> <C> <C>
Myron Kunin....................... 0 0 45,000/105,000 672,975/1,570,275
Paul D. Finkelstein............... 0 0 45,000/105,000 725,625/1,693,125
Christopher A. Fox................ 0 0 17,100/43,900 251,822/578,723
Frank E. Evangelist............... 0 0 17,100/39,900 251,822/577,004
William E. Halfacre............... 0 0 17,700/23,800 263,127/252,098
</TABLE>
- ------------------------
(1) Value of unexercised in-the-money-options is determined by multiplying the
difference between the exercise price per share and $23.625, the closing
price per share on June 30, 1997, by the number of shares subject to such
options.
7
<PAGE>
DIRECTOR COMPENSATION
Messrs. Bjelland and Hawn, and Ms. Hoyt, who are not employees of the
Company, received fees of $15,000 during the last fiscal year. Mr. Gregory, who
also is not employed by the Company and who became a director on November 13,
1996, received a fee of $11,250 during the last fiscal year. The Company has
granted to each such director options to purchase 3,000 shares of common stock
at an exercise price of $23.25 per share.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the officers
and directors of the Company, and persons who own more than 10% of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Commission. Such officers, directors and
shareholders are required by the Commission's regulations to furnish the Company
with copies of all such reports.
To the knowledge of the Company, based solely on a review of copies of
reports filed with the Commission during the fiscal year ended June 30, 1997,
all applicable Section 16(a) filing requirements were complied with.
APPROVAL OF INCREASE IN AVAILABLE SHARES
UNDER THE COMPANY'S 1991 STOCK OPTION PLAN
PURPOSE OF PLAN
The purpose of the Company's 1991 Stock Option Plan (the "Plan") is to
motivate key personnel to produce a superior return to the Shareholders of the
Company by offering such persons an opportunity to realize stock appreciation,
by facilitating stock ownership, and by rewarding them for achieving a high
level of corporate performance. The Plan is also intended to facilitate
recruiting and retaining key personnel of outstanding ability.
ADMINISTRATION
The Plan is administered by a committee (the "Committee") of three directors
who are not employees of the Company. The Committee has the exclusive power to
grant options under the Plan and to determine when and to whom options will be
granted, and the form, amount and other terms and conditions of each grant,
subject to the provisions of the Plan. The Committee has the authority to
interpret the Plan and any grant or agreement made under the Plan.
ELIGIBILITY AND NUMBER OF SHARES
All employees of the Company and its affiliates are eligible to receive
grants under the Plan at the discretion of the Committee. The total number of
shares of Company common stock available for distribution under the Plan is
2,200,000, increased from 1,650,000 by the Company's Board of Directors on May
6, 1997, subject to Shareholder approval, and subject to adjustment for future
stock splits, stock dividends and similar changes in the capitalization of the
Company. As of August 29, 1997, options were outstanding for approximately
1,385,000 shares, excluding outstanding options, separate from the Plan, for
approximately 160,000 shares resulting from the conversion of Supercuts options
pursuant to the Regis-Supercuts merger. After considering options exercised and
outstanding, only 56,150 shares are currently
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<PAGE>
available for future grants under the Plan. The Committee believes that to
further the purpose of the Plan as the Company continues to grow, the authorized
number of available shares should be increased to 2,200,000, approximately 10%
of the Company's outstanding shares.
TYPES OF GRANTS
The Committee has discretion to determine whether an option grant shall be
an incentive stock option or a non-qualified option. Subject to certain
restrictions applicable to incentive stock options, options will be exercisable
by the recipients at such times as are determined by the Committee, but in no
event may the term of a non-qualified option be longer than 15 years after the
date of grant (ten years with respect to an incentive option and five years with
respect to an incentive option granted to an employee holding 10% or more of the
Company's stock). Both incentive and non-qualified stock options may be granted
to recipients at such exercise prices as the Committee may determine, except
that the exercise price of an incentive stock option shall not be less than 100%
of the fair market value of the stock on the date of grant of such option (110%
in the case of a grant to a 10% or greater Shareholder).
The purchase price payable upon exercise of options may be paid in cash or
by delivering stock already owned by the holder (where the fair market value of
the shares delivered on the date of exercise is equal to the option price of the
stock being purchased), or in a combination of cash and such stock, unless
otherwise provided in the related agreement.
TRANSFERABILITY
During the lifetime of an employee to whom an option has been granted, only
such employee, or such employee's legal representative, may exercise an option.
No options may be sold, assigned, transferred, exchanged, or otherwise
encumbered except to a successor in the event of an option holder's death.
AMENDMENT OR TERMINATION
The Board of Directors may amend or discontinue the Plan at any time, but no
amendment or termination shall be made that would impair the rights of any
holder of any option granted before such amendment or termination.
FEDERAL TAX CONSIDERATIONS
The Company has been advised by its counsel that grants made under the Plan
generally will result in the following tax events for United States citizens
under current United States federal income tax laws.
INCENTIVE STOCK OPTIONS. A recipient will realize no taxable income, and
the Company will not be entitled to any related deduction, at the time an
incentive stock option is granted under the Plan. If certain statutory
employment and holding period conditions are satisfied before the recipient
disposes of shares acquired pursuant to the exercise of such an option, then no
taxable income will result in the exercise of such option and the Company will
not be entitled to any deduction in connection with such exercise. Upon
disposition of the shares after expiration of the statutory holding periods, any
gain or loss realized by recipient will be a capital gain or loss. The Company
will not be entitled to a deduction with respect to a disposition of the shares
by a recipient after the expiration of the statutory holding periods.
Except in the event of death, if shares acquired by a recipient upon the
exercise of an incentive stock option are disposed of by such recipient before
the expiration of the statutory holding periods (a
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<PAGE>
"disqualifying disposition"), such recipient will be considered to have
realized, as compensation taxable as ordinary income in the year of disposition,
an amount, not exceeding the gain realized on such disposition, equal to the
difference between the exercise price and the fair market value of the shares on
the date of exercise of the option. The Company will be entitled to a deduction
at the same time and in the same amount as the recipient is deemed to have
realized ordinary income. Any gain realized on the disposition in excess of the
amount treated as compensation or any loss realized on such disposition will
constitute capital gain or loss, respectively. If the recipient pays the option
price with shares that were originally acquired pursuant to the exercise of an
incentive stock option and the statutory holding periods for such shares have
not been met, the recipient will be treated as having made a disqualifying
disposition of such shares, and the tax consequences of such disqualifying
disposition will be as described above.
The foregoing discussion applies only for regular tax purposes. For
alternative minimum tax purposes an incentive stock option will be treated as if
it were a non-qualified stock option, the tax consequences of which are
discussed below.
NON-QUALIFIED STOCK OPTIONS. A recipient will realize no taxable income,
and the Company will not be entitled to any related deduction, at the time a
non-qualified stock option is granted under the Plan. At the time of exercise of
a non-qualified stock option, the recipient will realize ordinary income, and
the Company will be entitled to a deduction, equal to the excess of the fair
market value of the stock on the date of exercise over the option price. Upon
disposition of the shares, any additional gain or loss realized by the recipient
will be taxed as a capital gain or loss.
VOTING REQUIREMENTS; RECOMMENDATION
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock of the Company entitled to vote on this item and present in
person or by proxy at the Annual Meeting is required for approval of the
proposed amendment to the Plan. Proxies solicited by the Board of Directors will
be voted for approval of the amendment, unless shareholders specify otherwise in
their proxies.
For this purpose, a shareholder voting through a proxy who abstains with
respect to approval of the amendment is considered to be present and entitled to
vote on the approval of the amendment at the Annual Meeting, and is in effect
casting a negative vote, but a shareholder (including a broker) who does not
give authority to a proxy to vote, or withholds authority to vote, on the
approval of the amendment shall not be considered present and entitled to vote
on the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO
INCREASE THE AVAILABLE SHARES UNDER THE 1991 STOCK OPTION PLAN.
10
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Company's stock for the last five fiscal years with the cumulative total return
of the Standard and Poor's 500 Stock Index and the cumulative total return of a
peer group index (the "Peer Group") constructed by the Company. The comparison
assumes the initial investment of $100 in the Company's common stock, the S&P
500 Index, and the Peer Group on June 30, 1992 and that dividends, if any, were
reinvested.
REGIS S & P 500 PEER GROUP
1992 $100.00 $100.00 $100.00
1993 $124.19 $113.63 $94.74
1994 $167.74 $115.23 $99.13
1995 $248.36 $145.27 $100.06
1996 $607.13 $183.04 $119.68
1997 $460.71 $246.32 $128.90
The Peer Group includes the following companies in the retail specialty
business based upon total weighted market capitalization: Ann Taylor Stores
Corporation; The Barbers, Hairstyling for Men & Women, Inc.; Deb Shops, Inc.;
Gantos, Inc.; The Gap, Inc.; The Limited, Inc.; Musicland Stores Corporation;
and Perfumania, Inc. The members of the Peer Group were selected by the Company
because they operate in a similar retail environment and are primarily located
in shopping malls with operations which extend over a wide geographic area. The
Barbers, Hairstyling for Men & Women, Inc., is included because its business of
franchising hair care salons is comparable to the business of the Company's
Supercuts subsidiary.
11
<PAGE>
EMPLOYMENT ARRANGEMENTS
The Company has entered into unfunded deferred compensation agreements with
its senior executive officers (excluding the Chairman). Each of these agreements
provides that (a) if such executive officer becomes disabled while employed by
the Company, the Company will pay to such executive officer $60,000 per year
($100,000 per year in the case of Mr. Finkelstein) during each year that such
executive officer remains disabled until the earlier to occur of age 65 or
death, and (b) upon retirement after 20 years' service with the Company or after
reaching age 65, or death, while disabled or employed by the Company, such
executive officer or his designated beneficiary will receive the annual deferred
compensation amount for 15 years. Payments are further conditioned upon the
officers not rendering services for any competitor of the Company during the
period of the payments. The Company carries insurance on the lives of each of
the persons covered by deferred compensation agreements, is entitled to the cash
values and the death proceeds from these policies, and may, but is not required
to, use cash values or death proceeds from these policies to pay deferred
compensation.
During the last fiscal year, the Company entered into an agreement with
Myron Kunin, its Chairman, providing that Mr. Kunin will continue to render
services to the Company until at least May, 2007, and for such further period as
may be mutually agreed upon between Mr. Kunin and the Company. The Company has
agreed to pay Mr. Kunin an annual amount of $600,000, to be increased annually
in proportion to any increase in the Consumer Price Index from July 1, 1996, for
the remainder of his life. Mr. Kunin has agreed that during the period for which
payments to him are made as provided in the Agreement, he will not engage in any
business competitive with the business conducted by the Company.
In 1994, the Company entered into a survivor benefit agreement with Mr.
Kunin, providing that upon his death the Company shall pay to his wife, if she
survives him, $300,000 annually for the remainder of her life, subject to annual
adjustment based on any increases in the Consumer Price Index from July 1, 1995.
The Company intends to fund its future obligations under this agreement through
insurance policies on Mr. Kunin's life.
CERTAIN TRANSACTIONS
During the last fiscal year, the Company paid Thomas Gregory, a director of
the Company, $66,667 for consulting services. Pursuant to an agreement between
Mr. Gregory and Supercuts, Mr. Gregory will receive $8,333.33 per month through
October, 2000 for his services.
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of August 31, 1997, the ownership of
Common Stock of the Company by each shareholder who is known by the Company to
own beneficially more than 5% of the outstanding shares of the Company, by each
director, by each executive officer identified in the Summary Compensation
Table, and by all executive officers and directors as a group. The parties
listed in the table have the voting and investment powers with respect to the
shares indicated.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENT OF
NAME OF BENEFICIAL OWNER OR IDENTITY OF GROUP OWNED(2) CLASS
- ------------------------------------------------------------------------------------ ----------------- -------------
<S> <C> <C>
Curtis Squire, Inc. ................................................................ 5,625,125 23.5%
7201 Metro Boulevard
Minneapolis, MN 55439
Myron Kunin (1)
Paul D. Finkelstein................................................................. 355,750 1.5%
Christopher A. Fox.................................................................. 92,850 *
Frank E. Evangelist................................................................. 77,850 *
William E. Halfacre................................................................. 24,952 *
Rolf F. Bjelland.................................................................... 19,875 *
Van Zandt Hawn...................................................................... 20,565 *
Susan Hoyt.......................................................................... 5,250 *
Thomas L. Gregory................................................................... 6,550 *
David B. Kunin...................................................................... 16,500 *
All executive officers and directors as a group (fifteen persons) (3)............... 6,315,426 26.4%
</TABLE>
- ------------------------
* less than 1%
(1) Myron Kunin owns a majority of the voting stock of Curtis Squire, Inc., and
thereby has sole voting and investment power with respect to all shares of
the Company owned by Curtis Squire, Inc.
(2) Includes the following shares not currently outstanding but deemed
beneficially owned because of the right to acquire them pursuant to options
exercisable within 60 days as follows: 45,000 shares by each of Messrs.
Myron Kunin and Finkelstein, 17,100 shares by each of Messrs. Fox and
Evangelist, 18,600 shares by Mr. Halfacre, 18,750 shares by Mr. Bjelland,
12,000 shares by Mr. Hawn, 5,250 shares by Ms. Hoyt, 4,950 shares by Mr.
Gregory, 16,500 shares by Mr. David Kunin; and 270,868 shares by all
directors and executive officers as a group.
(3) Includes shares held by Curtis Squire, Inc.
13
<PAGE>
INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of Coopers & Lybrand L.L.P. as
the Company's independent accountants for the year ended June 30, 1997 and for
the current year ending June 30, 1998. A representative of Coopers & Lybrand
L.L.P. is expected to be present at the Annual Meeting, will have an opportunity
to make a statement if he or she desires to do so, and is expected to respond to
appropriate questions.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders intended to be presented at the Company's next
annual meeting of shareholders must be received by the Secretary of the Company
at the Company's executive offices, 7201 Metro Boulevard, Minneapolis, Minnesota
55439, no later than May 12, 1998.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended June 30, 1997 is being
mailed to the shareholders with this proxy statement.
The Company will furnish without charge to any shareholder submitting a
request a copy of the Company's Form 10-K Annual Report for the year ended June
30, 1997 to the Securities and Exchange Commission, including the financial
statements and schedules thereto. Such request should be directed to Frank E.
Evangelist, Secretary of the Company, at its address stated herein.
GENERAL
The Board of Directors knows of no other matter to be acted upon at the
meeting. However, if any other matter is properly brought before the meeting,
the shares covered by your proxy will be voted thereon in accordance with the
best judgment of the persons acting under such proxy.
In order that your shares may be represented if you do not plan to attend
the meeting, please sign, date and return your proxy promptly. In the event you
are able to attend, at your request we will cancel the proxy.
By Order of The Board of Directors
FRANK E. EVANGELIST
SECRETARY
September 16, 1997
14
<PAGE>
[REGIS CORPORATION]
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, OCTOBER 14, 1997
The undersigned hereby appoints Myron Kunin and Frank E. Evangelist and
either of them, proxies for the undersigned, with full power of substitution, to
represent the undersigned and to vote all of the shares of the Common Stock of
Regis Corporation (the Company) which the undersigned is entitled to vote at the
annual meeting of shareholders of the Company to be held on October 14, 1997,
and at any and all adjournments thereof.
1. Election of directors.
NOMINEES: Rolf F. Bjelland, Frank E. Evangelist, Paul D. Finkelstein,
Christopher A. Fox, Thomas L. Gregory, Van Zandt Hawn,
Susan Hoyt, David B. Kunin, Myron Kunin
/ / FOR all nominees above, / / WITHHOLD AUTHORITY to vote
except vote withheld from for all nominees listed above,
individual nominees (if any).
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.
2. To act upon a proposal to increase the number of shares of the Company
available under the Company's 1991 Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
3. In their discretion, on such other matters as may properly come before the
meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS and will be
voted as directed herein. If no direction is given, this proxy will be voted FOR
all the nominees listed in paragraph 1 and FOR the proposal in paragraph 2.
(CONTINUED, AND TO BE COMPLETED AND SIGNED ON THE REVERSE SIDE)
<PAGE>
DATED _____________________ , 1997
__________________________________
(SIGNATURE OF SHAREHOLDERS)
__________________________________
(SIGNATURE OF SHAREHOLDERS)
WHERE STOCK IS REGISTERED JOINTLY
IN THE NAMES OF TWO OR MORE
PERSONS ALL SHOULD SIGN.
SIGNATURE(S) SHOULD CORRESPOND
EXACTLY WITH THE NAME(S) AS SHOWN
ABOVE. PLEASE SIGN AND DATE AND
RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED
STATES.
