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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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / 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:
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(4) Date Filed:
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[LOGO]
PRELIMINARY PROXY
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 19, 1999
------------------------
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 19, 1999, commencing at 4:00 p.m., for the
following purposes:
1. To elect eight directors to serve for a one-year term and until their
successors are elected and qualified;
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 amend the Company's Articles of Incorporation to increase the number
of authorized shares of capital stock, $.05 par value, from 50,000,000 to
100,000,000 shares.
4. 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 10, 1999, 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
Bert M. Gross
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 17, 1999
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------------------------
PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS, OCTOBER 19, 1999
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 19, 1999, 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 17, 1999.
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 shares of Common
Stock outstanding as of the close of business on September 10, 1999, 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
Eight directors are to be elected at this annual meeting, each to hold
office for one year until the 2000 annual meeting of shareholders. The Board of
Directors has nominated the eight 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 61 Director
Paul D. Finkelstein 57 President, Chief Executive Officer and Director
Christopher A. Fox 49 Executive Vice President and Director
Thomas L. Gregory 63 Director
Van Zandt Hawn 54 Director
Susan Hoyt 55 Director
David B. Kunin 40 Vice President, The Regis Foundation and Director
Myron Kunin 70 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. Finkelstein has served as President and Chief Executive Officer of the
Company since July 1, 1996, and was Chief Operating Officer of the Company from
December, 1987 until June 30, 1996. He has been a director of the Company since
1987.
Mr. Fox has served as an Executive Vice President of the Company since
August, 1994. He has been a Director of the Company since 1989.
Mr. Gregory was elected a Director of the Company in November, 1996. Mr.
Gregory had been 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., the owner and operator of upscale,
full-service, casual dining restaurants throughout the United States, and
North's Restaurants, Inc., the owner and operator of buffet restaurants in
California, Oregon and Utah.
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. Since 1996, she has
been an 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.
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Mr. David Kunin was elected a Director of the Company in 1997. He is the
Chief Executive Officer of Beautopia, LLC, a manufacturer of hair care products.
He was Vice President, Marketing, of the Company from November, 1992, until
February, 1997, when he became Chief Executive Officer of Beautopia 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 the majority
voting shares of Curtis Squire, Inc., the Company's largest shareholder. He is
also a director of Nortech Systems Incorporated, a manufacturer of wire
harnesses and cable and electromechanical assemblies for commercial and defense
industries.
FUNCTIONING OF BOARD AND COMMITTEES
During the fiscal year ended June 30, 1999, the Board of Directors held four
meetings.
The Company has a standing audit committee, presently composed of Messrs.
Bjelland, Hawn and Gregory and Ms. Hoyt. The committee held two meetings during
the fiscal year ended June 30, 1999. 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 program consists of three key
components: (1) base salary, (2) short-term incentive compensation in the form
of bonuses, and (3) long-term incentive through stock options.
Base Salary: Shortly before 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.
Short-Term Incentives: This component is designed to align executive
compensation with annual performance of the Company. To accomplish this goal,
the Board of Directors has adopted a structured bonus program. Each year the
Board will establish an initial earnings per share target. Bonuses will not be
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<PAGE>
paid until the initial earnings per share target is achieved. After the
designated target is achieved, a percentage of incremental earnings per share
will be allocated to the executive bonus pool. Bonuses will be limited to 40% of
base salary for senior executive officers and 30% to 35% for other corporate
officers.
Long-Term Incentive Stock Options: Stock options provide incentive for the
creation of shareholder value and align the executive officers' interests
directly with those of other shareholders in both the risks and rewards of
ownership of the Company's common stock, and are a significant aid in attracting
and 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. As
all options are granted at 100% of the market value of the Company's stock on
the date of grant, executive officers receive gains from exercised stock options
only to the extent that the market value of the stock has increased since the
date of option grant. No options were granted to any officers of the Company
during fiscal 1999, as the Committee did not make its final determination of
option grants until July 16, 1999, after the beginning of fiscal year 2000.
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 their expectation as to his future
performance in leading the Company. The base salary for Mr. Finkelstein for
fiscal 1999 was $500,000, the same as in fiscal years 1998 and 1997. Under Mr.
Finkelstein's employment agreement (see "Employment Arrangements" below)
effective for fiscal year 1999 and subsequent years, Mr. Finkelstein
participates with other senior executive officers in the Company's structured
bonus program described above. For fiscal 1999, Mr. Finkelstein earned a
$200,000 bonus under this program.
The Compensation Committee does not anticipate that the compensation payable
to any of the executive officers of the Company in the coming year will exceed
the limits and deductibilities set forth in Section162(m) of the Internal
Revenue Code of 1986, as amended. The Compensation Committee has not established
a policy regarding compensation in excess of these limits, but will continue to
monitor this issue.
Van Zandt Hawn, Chair
Rolf F. Bjelland
Susan Hoyt
MEMBERS OF THE COMPENSATION COMMITTEE
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SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
---------------------- --------------------- ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY($) BONUS($)(1) OPTIONS(#) COMPENSATION($)(2)
- --------------------------------------- ----------- --------- ----------- --------------------- -------------------
<S> <C> <C> <C> <C> <C>
Myron Kunin 1999 623,625 -- -- 37,418
Chairman of the Board 1998 613,200 -- -- 41,084
1997 600,000 -- -- 38,636
Paul D. Finkelstein 1999 500,000 200,000 -- 85,446(3)(4)
President and Chief 1998 500,000 100,000 45,000 58,784(3)(4)
Executive Officer 1997 500,000 -- -- 34,581(3)
Christopher A. Fox 1999 260,000 104,000 -- 40,600(4)
Executive Vice President 1998 250,000 100,000 9,000 16,750
1997 245,000 -- 6,000 16,098
Gordon B. Nelson 1999 225,000 90,000 -- 32,250(4)
Senior Vice President, 1998 200,000 80,000 9,000 13,400
Education and Fashion 1997 165,000 -- 6,000 10,459
Bert M. Gross(5) 1999 208,000 83,200 -- 37,480(4)
Senior Vice President, 1998 200,000 80,000 9,000 13,400
General Counsel and Secretary
</TABLE>
- ------------------------
(1) Portions of the bonuses reflected in the Summary Compensation Table were not
actually received as receipt of such amounts was deferred pursuant to the
Company's Compensation Deferral Plan. Participants may elect to defer a
portion of their compensation to be paid out at a future date specified by
the participants. Amounts deferred are subject to the same bankruptcy rules
as are the Company's general debt obligations.
(2) 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.
(3) Includes premiums of $5,541 for each of 1997, 1998 and 1999 paid by the
Company on life insurance where Mr. Finkelstein's spouse is the beneficiary
and $19,743 for 1998 and $24,905 for 1999 which for each year is the dollar
value of the benefit to Mr. Finkelstein of that portion of the premium paid
by the Company on his behalf on a split-dollar life insurance policy.
(4) Includes matching contributions by the Company under the Company's
Compensation Deferral Plan in the following amounts: Messrs. Finkelstein,
Fox and Gross, $25,000; Mr. Nelson, $18,750.
(5) Mr. Gross commenced his employment with the Company as of April 1, 1997.
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STOCK OPTION GRANTS
OPTION GRANTS IN LAST FISCAL YEAR
No stock options were granted by the Company to the named executive officers
in fiscal 1999.
STOCK OPTION EXERCISES AND OPTION VALUES
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth for each of the named executive officers the
value realized from stock options exercised during fiscal 1999 and the number
and value of exercisable and unexercisable stock options held at June 30, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY
AT FISCAL OPTIONS AT FISCAL
YEAR-END(#) YEAR-END($)(1)
--------------------- ---------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------- ----------------- ---------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
Myron Kunin.......................... 0 0 225,000/0 3,017,250/0
Paul D. Finkelstein.................. 0 0 121,495/148,505 1,613,014/1,663,287
Christopher A. Fox................... 0 0 43,799/49,952 514,084/551,931
Gordon B. Nelson..................... 6,750 153,540 36,150/16,201 397,492/73,016
Bert M. Gross........................ 0 0 13,650/14,850 101,267/61,424
</TABLE>
- ------------------------
(1) Value of unexercised in-the-money-options is determined by multiplying the
difference between the exercise price per share and $19.1875, the closing
price per share on June 30, 1999, by the number of shares subject to such
options.
DIRECTOR COMPENSATION
Messrs. Bjelland, Gregory, Hawn, David Kunin and Ms. Hoyt, who are not
employees of the Company, received director fees of $20,000 during the last
fiscal year.
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, 1999,
all applicable Section 16(a) filing requirements were complied with.
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COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Company's stock for the last five 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, 1994 and that dividends, if any, were
reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REGIS S&P 500 PEER GROUP
<S> <C> <C> <C>
1994 $100.00 $100.00 $100.00
1995 $148.08 $126.07 $99.11
1996 $361.91 $158.85 $119.15
1997 $274.61 $213.97 $137.64
1998 $344.80 $278.50 $261.37
1999 $337.14 $341.52 $389.74
</TABLE>
The Peer Group includes the following companies in the retail specialty
business based upon total weighted market capitalization: American Greetings
Corp., Ann Taylor Stores Corporation; Bombay Company, Inc., Braun's Fashions
Corp., Deb Shops, Inc.; Evans, Inc.; Filene's Basement Corp., Gantos, Inc.; The
Gap, Inc.; Lechters, Inc., The Limited, Inc.; Musicland Stores Corporation,
Nordstrom, Inc., Paul Harris Stores, Inc., Perfumania, Inc., Vista Eyecare,
Inc., and Williams-Sonoma, 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.
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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 AND ELIGIBILITY
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. All employees
of the Company and its affiliates are eligible to receive grants under the Plan
at the discretion of the Committee.
PROPOSED AMENDMENT
The Plan currently authorizes the issuance of 3,300,000 shares of the
Company's common stock for options. Currently, only 25,845 shares are available
for future options. 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 by 1,900,000 to 5,200,000, approximately 11.4% of the
Company's fully diluted outstanding shares. Fully diluted shares outstanding,
for this purpose, include issued and outstanding shares of Company stock and
outstanding stock options.
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 withheld or 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.
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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 "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 the 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
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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.
EMPLOYMENT ARRANGEMENTS
The Company's unfunded deferred compensation agreements with its senior
executive officers (excluding the Chairman and Mr. Gross), provide that upon
such executive's retirement after 20 years' service with the Company or after
reaching age 65, or upon such executive's death while disabled or employed by
the Company, such executive officer or his or her designated beneficiary will
receive 240 monthly payments equal to the greater of (i) 40% of such executive's
average monthly base salary for the 60 months immediately preceding the
executive's retirement, disability or death, or (ii) $5,000. The agreements also
provide for payment of a graduated percentage of such compensation if an
executive terminates his or her employment with the Company prior to completing
20 years' service or reaching age 65, with payments to commence when such
executive attains age 55. Further, if such executive becomes disabled while
employed by the Company, the Company will pay such executive the specified
monthly benefit during the period of such disability or until attaining age 65.
Payments are 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.
The deferred compensation agreements provide that the executive officers
shall be entitled to immediate payment of their monthly benefits, without any
reduction based on years of service or early retirement, if their employment
terminates following a "Change in Control" which is defined for purposes of the
agreements as occurring when a party other than Curtis Squire, Inc. becomes the
beneficial owner of 20% or more of the Company's stock, or in the event of a
consolidation or merger of the Company in which the Company is not the
continuing corporation, or in which the shareholders of the Company do not
continue to hold at least a majority of the common stock of the continuing or
surviving corporation, or any sale or other transfer of substantially all of the
assets of the Company, or in the event of certain changes to the composition of
the Company's Board of Directors.
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The Company has entered into an employment agreement with Mr. Finkelstein,
its Chief Executive Officer, effective for fiscal year 1999 and subsequent
years, providing (a) for a base salary of $500,000 per year, increasing annually
by the greater of 4% or the percentage increase in the Consumer Price Index, (b)
that he will participate in the Company's bonus and stock option programs with
other senior executives, and (c) that the Company and Mr. Finkelstein will
participate in a split-dollar insurance program whereby a trust established by
Mr. Finkelstein has acquired a $5 million combined whole-life/term policy
insuring the joint lives of Mr. Finkelstein and his wife. Under this insurance
program, the Company will pay a portion of the annual premiums approximately
equal to the annual increases in the cash value of the policy and Mr.
Finkelstein will transfer funds to the trust for the balance of the premiums.
Upon the death of Mr. Finkelstein and his wife or upon surrender of the policy,
the Company will receive the amount of the premiums paid by the Company and the
trust will receive the remaining proceeds.
Mr. Finkelstein's agreement also provides for deferred compensation
benefits. Upon his retirement after reaching age 65 he will receive lifetime
monthly payments equal to 60% of his average base salary for the 60 months
immediately preceding his retirement, such payments to be adjusted annually in
proportion to any increases in the Consumer Price Index. Upon his death, his
wife, if she survives him, will receive during her life one-half of the benefits
to which Mr. Finkelstein was entitled during his life. If Mr. Finkelstein
voluntarily terminates his employment before reaching age 65, his deferred
compensation benefits will be determined on the same basis as those afforded the
other executive officers. The Company has funded its future obligations under
this agreement through insurance policies on Mr. Finkelstein's life.
CERTAIN TRANSACTIONS
During the last fiscal year, the Company paid Thomas Gregory, a director of
the Company, $100,000 for consulting services. Pursuant to an agreement between
Mr. Gregory and the Company's wholly-owned subsidiary, Supercuts, Inc., 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 September 1, 1999, 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 sole 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. ................................................................ 6,106,502 15.7%
7201 Metro Boulevard
Minneapolis, MN 55439
Myron Kunin(1)
Paul D. Finkelstein................................................................. 456,370 1.2%
Christopher A. Fox.................................................................. 98,408 *
Rolf F. Bjelland.................................................................... 36,000 *
Van Zandt Hawn...................................................................... 37,878 *
Susan Hoyt.......................................................................... 18,750 *
Thomas L. Gregory................................................................... 12,638 *
David B. Kunin...................................................................... 38,287 *
Gordon B. Nelson.................................................................... 36,150 *
Bert M. Gross....................................................................... 33,650 *
All executive officers and directors as a group (fourteen persons)(3)............... 7,017,035 17.4%
</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: 225,000 shares by Mr. Myron Kunin, 121,495 by
Mr. Finkelstein, 43,799 shares by Mr. Fox, 30,937 shares by Mr. Bjelland,
22,500 shares by Mr. Hawn, 15,750 shares by Ms. Hoyt, 10,238 shares by Mr.
Gregory, 38,287 shares by Mr. David Kunin, 36,150 shares by Mr. Nelson,
13,650 shares by Mr. Gross; and 805,382 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 PricewaterhouseCoopers LLP
as the Company's independent accountants for the year ended June 30, 1999 and
for the current year ending June 30, 2000. A representative of
PricewaterhouseCoopers LLP 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
Shareholders who intend to present proposals at the 2000 Annual Meeting, and
who wish to have such proposals included in the Company's Proxy Statement for
the 2000 Annual Meeting, must be certain that such proposals are received by the
Secretary of the Company, 7201 Metro Boulevard, Minneapolis, Minnesota 55439,
not later than July 17, 2000. Such proposals must meet the requirements set
forth in the rules and regulations of the SEC in order to be eligible for
inclusion in the Proxy Statement for the Company's 2000 Annual Meeting.
The proxies solicited on behalf of the Board of Directors confer
discretionary authority upon the holders of such proxies to vote on any matter
presented at the annual meeting if notice of such matter has not been received
by the Company by August 2, 1999. Any such notice should be directed to the
Secretary of the Company at the Company's executive offices noted above.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended June 30, 1999 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, 1999 to the Securities and Exchange Commission, including the financial
statements and schedules thereto. Such request should be directed to Bert M.
Gross, Secretary of the Company, at its address stated herein.
AMENDMENT TO ARTICLES OF INCORPORATION
The Company proposes to amend its Articles of Incorporation to increase the
aggregate number of authorized shares of capital stock, par value $.05, from
50,000,000 shares to 100,000,000 shares. On September 10, 1999, there were
outstanding shares of Common Stock and there were reserved for issuance
shares of Common Stock upon exercise of stock options under the Company's
1991 Stock Option Plan.
The Board of Directors believes that adoption of the amendment is advisable
because it will provide the Company with greater flexibility in connection with
possible future financing transactions, acquisitions of other companies or
business properties, stock dividends or splits, employee benefit plans, and
other proper corporate matters, to issue shares without the expense and delay of
a special meeting of shareholders. Such a delay might deprive the Company of the
flexibility the Board of Directors views as important in facilitating the
effective use of the shares of the Company's capital stock. Except as otherwise
required by applicable law, authorized but unissued shares of capital stock may
be designated and issued at such time, for such purposes, and for such
consideration as the Company's Board of Directors may determine to be
appropriate, without further authorization by shareholders.
14
<PAGE>
The Board of Directors unanimously recommends that shareholders vote FOR the
proposal to approve the amendment to the Company's Articles of Incorporation
increasing the number of shares of the Company's authorized capital stock, $.05
par value, from 50,000,000 to 100,000,000 shares.
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
BERT M. GROSS
SECRETARY
September 17, 1999
15
<PAGE>
Please detach here
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1. Election of directors: 01 Rolf F. Bjelland 02 Paul D. Finkelstein
03 Christopher A. Fox 04 Thomas L. Gregory
05 Van Zandt Hawn 06 Susan Hoyt / / Vote FOR / / Vote WITHHELD
07 David B. Kunin 08 Myron Kunin all nominees from all nominees
</TABLE>
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE --------------------------
FOR ANY INDICATED NOMINEE, WRITE THE NUMBER(S)
OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) --------------------------
2. To increase the number of the Company available under the Company's
1991 Stock Option Plan from 3,300,000 shares to 5,200,000
shares. / / For / / Against / / Abstain
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
3. To amend the Company's Articles of Incorporation to increase
the number of authorized shares of capital stock, $.05 par value, from
50,000,000 to 100,000,000 shares. / / For / / Against / / Abstain
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
4. In their decision, 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.
Address Change? Mark Box / / Indicate changes below: Dated: _________, 1999
-----------------------------
-----------------------------
Signature(s) in Box
(If there are co-owners both must
sign)
Where stock is registered jointly
in the names of the 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.
<PAGE>
REGIS Corporation
PROXY FOR ANNUAL MEETING
OF SHAREHOLDERS
Tuesday, October 19, 1999
4:00 p.m.
Minneapolis Institute of Arts
2400 Third Avenue South
Minneapolis, MN 55404
REGIS CORPORATION
REGIS
7201 METRO BOULEVARD, EDINA, MN, 55439 PROXY
- -------------------------------------------------------------------------------
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING OF
SHAREHOLDERS, OCTOBER 19, 1999.
The undersigned hereby appoints Myron Kunin and Bert M. Gross 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 19, 1999, and at any and all adjournments thereof.
SEE REVERSE FOR VOTING INSTRUCTIONS
