<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____________ to _____________
Commission File Number 1-8769
R. G. BARRY CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Ohio 31-4362899
------------------------------- -------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
13405 Yarmouth Road, N.W., Pickerington, Ohio 43147
--------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (614) 864-6400
--------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------------------ -----------------------
Common Shares, Par Value $1.00 American Stock Exchange
(5,544,847 shares outstanding on March 15, 1995)
Securities registered pursuant to Section 12(g) of the Act: None
----
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
----- --------
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/
Based upon the closing price reported on the American Stock
Exchange on March 15, 1995, the aggregate market value of the
Common Shares of the Registrant held by non-affiliates on that
date was $61,351,406.25.
Documents Incorporated by Reference:
(1) Portions of the Registrant's Annual Report to
Shareholders for the fiscal year ended December 31,
1994, are incorporated by reference into Part II of
this Annual Report on Form 10-K.
(2) Portions of the Registrant's definitive Proxy Statement
for its Annual Meeting of Shareholders to be held on
May 10, 1995, are incorporated by reference into
Part III of this Annual Report on Form 10-K.
Index to Exhibits begins on Page 59.
Page 1 of 212 Pages.
<PAGE> 2
PART I
Item 1. Business.
Principal Products
R. G. Barry Corporation (the "Registrant") is organized under the laws
of the State of Ohio. The Registrant and its subsidiaries (collectively, the
"Company") design, manufacture and market specialized comfort footwear for men,
women and children. The Company is in the business of responding to consumer
demand for comfortable footwear combined with attractive appearance. The Company
also designs, manufactures and markets thermal comfort products in the food
preservation, comfort therapy and cold weather categories. Comfort is the
dominant influence in the Company's brand lines.
Historically, the Company's primary products have been foam-soled,
soft washable slippers for men, women and children. The Company developed and
introduced women's Angel Treads*, the world's first foam-soled, washable
slipper, in 1947. Since that time, the Company has introduced additional
slipper-type brand lines for men, women and children based upon the concept of
comfort, softness and washability. These footwear products are sold, for the
most part, under various brand names including, but not limited to, Angel
Treads*, Dearfoams*, Dearfoams* for Kids, Dearfoams* for Men, Madye's*, Snug
Treds* and Soft Notes*. The Company has also marketed certain of its
slipper-type footwear under licensed trademarks. See "Trademarks and Licenses".
The Company's foam-soled footwear lines have fabric uppers made of
terry cloths, velours, fleeces, satins, nylons and other washable materials.
Different brand lines are marketed for men, women and children with a variety of
styles, colors and ornamentation.
The marketing strategy for the Company's slipper-type brand lines has
been to expand counter space for its products by creating and marketing brand
lines to different segments of the consumer market. Retail prices for the
Company's footwear range from approximately $4 to $30 per pair, depending on the
style of footwear, type of retail outlet and retailer mark-up.
Since 1988, the Company has manufactured and marketed the Soft Notes*
foam cushioned casual slipper line. The Company
------------------------
* Hereinafter denotes a trademark of the Company registered in the United States
Department of Commerce Patent and Trademark Office.
<PAGE> 3
believes that this brand line is a bridge between slippers and casual footwear.
The marketing strategy with respect to this product emphasizes the fashion,
comfort and versatility provided by the Soft Notes* foam cushioned casual
slippers.
The Company believes that many consumers of its slippers are loyal to
the Company's brand lines, usually own more than one pair of slippers and have a
history of repeat purchases. Substantially all of the slipper brand lines are
displayed on a self-selection basis in see-through packaging at the point of
purchase and have appeal to the "impulse" buyer. The Company believes that many
of the slippers are purchased as gifts for others.
Many styles of slipper-type footwear have become standard in the
Company's brand lines and are in demand year after year. For many of these
styles, the most significant changes made in response to fashion changes are in
ornamentation, fabric and/or color. The Company also introduces new, updated
styles of slippers with a view toward enhancing the fashion appeal and freshness
of its products. The Company anticipates that it will continue to introduce new
styles in future years responsive to fashion changes.
It is possible to fit most consumers of the Company's slipper-type
footwear within a range of four or five sizes. This allows the Company to carry
lower levels of inventories in these lines in comparison with other footwear
styles.
In 1994, the Company introduced on a national basis its thermal comfort
products featuring MICROCORE(TM) microwave-activated technology developed by
the Company. On July 14, 1994, the Registrant also acquired all of the
outstanding stock of Vesture Corporation ("Vesture"), the originators of
microwave-heated comfort care products, in consideration of the issuance of
319,362 common shares of the Registrant which were valued by the Registrant at
$5 million.
The Company's thermal comfort products generally fall within three
categories -- food preservation products such as breadwarmer baskets; comfort
therapy products such as heating pads and backwarmers; and cold weather
products such as heated seat cushions, booties, scarves and ear muffs. Retail
prices for the Company's thermal comfort products range from approximately $12
to $30, depending on the product, type of retail outlet and retailer mark-up.
The Company believes that the food preservation and comfort therapy thermal
products are not weather sensitive and have a year-round sales appeal while the
cold weather portion of the thermal comfort product line is more seasonal and
affected by weather changes.
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The thermal comfort products are sold under the major brand lines of
Dearfoams*, Vesture* and Lava*.
The Company has six manufacturing facilities. The Company operates
sewing plants in Nuevo Laredo, Ciudad Acuna, and Zacatecas, Mexico. The Company
also operates a cutting plant in Laredo, Texas and a sole molding operation in
San Angelo, Texas. The Company also has the exclusive rights to the
manufacturing output of a factory in Shenzhen, People's Republic of China. The
Company produces thermal comfort products at its manufacturing facilities in
Asheboro, North Carolina and Nuevo Laredo, Mexico. The Company operates
distribution centers in Asheboro and Goldsboro, North Carolina and San Angelo
and Laredo, Texas.
Marketing
The Company's brand lines are sold to department, chain and specialty
stores; through mass merchandising channels of distribution such as discount
stores, drug and variety chain stores, and supermarkets; and to independent
retail establishments. The Company's brand lines are marketed primarily through
Company salespersons and, to a lesser extent, through independent sales
representatives. The Company does not finance its customers' purchases.
Each spring and autumn, new designs and styles are presented to buyers
representing the Company's retail customers at regularly scheduled showings.
Company designers also produce new styles and experimental designs throughout
the year which are evaluated by the Company's sales and marketing personnel.
Buyers for department stores and other large retail customers attend the spring
and autumn showings and make periodic visits to the Company's showrooms in New
York and Los Angeles. Company salespersons regularly visit retail customers.
The Company also regularly makes catalogs available to its current and potential
customers and periodically follows up with such current and potential customers
by telephone. In addition, the Company participates in trade shows, both
regionally and nationally.
Sales during the last six months of each year have historically been
greater than during the first six months. The Company's inventory is largest in
early autumn in order to accommodate the retailers' fall selling seasons. See
"Backlog of Orders".
The Company advertises principally in the print media. The Company
also tested television advertising of its thermal comfort products in six
markets during the fourth quarter of 1994 and intends to expand this television
advertising to incorporate
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markets on a more nationwide basis in 1995. The Company's promotional efforts
are often conducted in cooperation with customers. The Company's products are
displayed at the retail- store level on a self-selection and gift-purchase
basis.
The Company operates an European sales and marketing organization in
London, England and markets its products in Canada, Mexico and several other
countries around the world. In 1994, the Company's foreign sales compromised
approximately 5% of its total sales.
Due to the more seasonal nature of the cold weather portion of the
thermal comfort product line, in 1995, the Company intends to place more
emphasis in the thermal comfort product mix on the comfort therapy and food
preservation categories. The Company intends to develop and introduce a variety
of new products using thermal technology in 1995. In May 1994, the Company
announced a strategic alliance with Battelle Memorial Institute ("Battelle"),
the world's largest independent scientific research institute which is based in
Columbus, Ohio, to continually advance the state of art of thermal technology
and broadly expand commercialization of the technology. Under the alliance, the
Company has assigned to Battelle a pending patent relating to
microwave-activated thermal storage materials technology. Battelle will provide
expertise to the Company in advancing thermal technologies and products, the
Company will have royalty-free exclusive rights to the technology covering a
major category of consumer products and Battelle and the Company will share all
income from licensing of thermal comfort products.
Research and Development
Most of the Company's research efforts are undertaken in connection
with the design and consumer appeal of new styles of slipper-type footwear and
thermal comfort products. During fiscal years 1994, 1993 and 1992, the amounts
spent by the Company in connection with the research and design of new products
and the improvement or redesign of existing products were approximately $3.3
million, $2.8 million and $2.9 million, respectively. Substantially all of the
foregoing activities were Company-sponsored. Approximately 55 employees were
engaged full time in research and design during the 1994 fiscal year.
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Materials
The principal raw materials used by the Company in the manufacture of
its slipper and thermal comfort brand lines are textile fabrics, threads, foams
and other synthetic products. All are available domestically from a wide range
of suppliers. The Company has experienced no difficulty in obtaining raw
materials from suppliers and anticipates no future difficulty. In addition, in
the manufacture of its thermal comfort products, the Company uses proprietary
patent pending materials developed with Battelle.
Trademarks and Licenses
Approximately 95% of the Company's sales are represented by brand
items sold under trademarks owned by the Company. The Company is the holder of
many trademarks which identify its products. The trademarks which are most
widely used by the Company include Angel Treads*, Dearfoams*, Dearfoams* for
Kids, Dearfoams* for Men, Madye's*, Snug Treds*, Soft Notes*, Vesture*, Lava
Pak*, Lava Buns* and Lava Booties*. The Company believes that its products are
identified by its trademarks and, thus, its trademarks are of significant value.
Each trademark has a duration of 20 years and is subject to an indefinite number
of renewals for a like period upon appropriate application. The Company intends
to continue the use of and to renew each of its trademarks.
The Company also has sold comfort footwear under various names as
licensee under license agreements with the owners of those names. In the 1994,
1993 and 1992 fiscal years, 5%, 6% and 7%, respectively, of the Company's
total footwear sales were represented by footwear sold under these names.
In 1989, the Company entered into a licensing agreement with
Fieldcrest Cannon, Inc., the largest marketer of bed and bath products in the
United States, which allows the Company to manufacture and sell a line of
mid-priced slippers under the Cannon** trademark in the mass merchandise
channels of the Company's business. The Company continued its distribution and
marketing of the Cannon** line of slippers in the 1994 fiscal year. The term of
the Company's license to use the Cannon** trademark expires in June, 1996;
however, the term may be extended for such period as may be mutually agreed upon
by the Company and Fieldcrest Cannon, Inc.
--------------------
** Denotes a trademark of the licensor registered in the United States
Department of Commerce Patent and Trademark Office.
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In 1992, the Company entered into a licensing agreement with Jordache
Enterprises, Inc. which allows the Company to manufacture and sell a line of
mid-priced slippers under the Jordache** trademark in the mass merchandise
channels of the Company's business. The Company's license to use the Jordache**
trademark expires on February 28, 1998; however, such license may be renewed by
the Company annually through February 28, 2003, provided the Company meets
certain levels of sales of the Jordache** slippers.
Customers
The only customers of the Company which accounted for 10% or more of
the Company's consolidated revenues in fiscal year 1994 were Wal Mart Stores,
Inc. and J.C. Penney Company, Inc., which accounted for approximately 15% and
12%, respectively. The only customers of the Company which accounted for 10%
or more of the Company's consolidated revenues in fiscal year 1993 were
Hutcheson Shoe Co., a division of Wal Mart Stores, Inc., and J.C. Penney
Company, Inc., which accounted for approximately 15% and 10%, respectively. The
only customers of the Company which accounted for more than 10% of the Company's
consolidated revenues in fiscal year 1992 were Hutcheson Shoe Co., a division of
Wal Mart Stores, Inc., J.C. Penney Company, Inc. and Dayton-Hudson Corporation
and its subsidiaries and affiliated companies, which accounted for approximately
10%, 10% and 12%, respectively.
Backlog of Orders
The Company's backlog of orders at the close of fiscal year 1994 was
$12.2 million and at the end of fiscal year 1993 was $9.5 million. It is
anticipated that a large percentage of the orders as of the end of the Company's
last fiscal year will be filled during the current fiscal year.
Generally, the Company's backlog of unfilled sales orders is largest
after the spring and autumn showings of the Company. For example, the Company's
backlog of unfilled sales orders following the conclusion of such showings
during the last two years were as follows: August, 1994 - $74.1 million;
August, 1993 - $56.1 million; February, 1994 - $11.5 million; and February,
1993 - $11.7 million. The Company's backlog of unfilled sales orders reflects
the seasonal nature of the Company's sales - approximately 80% of such sales
occur during the autumn as compared to approximately 20% during the spring.
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Inventory
While the styles of some of the Company's slipper brand lines change
little from year to year, the Company has also introduced, and intends to
continue to introduce, new, updated styles in an effort to enhance the comfort
and fashion appeal of its products. As a result, the Company anticipates that
some of its slipper styles will change from year to year, particularly in
response to fashion changes. The Company has introduced, and intends to
continue to introduce, a variety of new thermal comfort products to compliment
its existing products in response to consumer demand. The Company believes that
it will be able to control the level of its obsolete inventory. The Company
traditionally has had a limited exposure to obsolete inventory.
Competition
The Company operates in the slipper portion of the footwear industry.
The Company believes that it is a small factor in the highly competitive
footwear industry. The Company also believes that it is a significant factor in
the slipper portion of the footwear industry. The Company also operates in an
area where it provides portable warmth through its line of thermal comfort
products. The Company competes primarily on the basis of the value, quality and
comfort of its products, service to its customers, and its marketing expertise.
The Company knows of no reliable published statistics which indicate its current
relative position in the footwear or any other industry or in the slipper
portion of the footwear industry.
Effect of Environmental Regulation
Compliance with federal, state and local provisions regulating the
discharge of materials into the environment, or otherwise relating to the
protection of the environment, has not had a material effect upon the capital
expenditures, earnings or competitive position of the Company. The Company
believes that the nature of its operations has little, if any, environmental
impact. The Company, therefore, anticipates no material capital expenditures for
environmental control facilities for its current fiscal year or for the
foreseeable future.
Employees
At the close of the 1994 fiscal year, the Company employed
approximately 3,000 persons.
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Item 2. Properties.
The Company owns a warehouse facility in Goldsboro, North Carolina,
containing approximately 120,000 square feet. The Company also owns a 52,800
square foot manufacturing facility in Del Rio, Texas (the "Del Rio Facility").
The Company leases the Del Rio Facility to a third party pursuant to a lease
with a current term expiring in December, 1995. The lessee has an option to
renew the term of the lease through December, 2000.
The Company leases two facilities pursuant to lease agreements with
local governments which issued industrial revenue bonds to construct and equip
these facilities. The Company has the right to purchase each facility at a
nominal sum upon retirement of the bonds issued in respect thereof. These
transactions have been treated as purchases for accounting and tax purposes. See
Note (6) to the Company's Consolidated Financial Statements set forth on pages
20 and 21 of the Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1994. The following table describes the facilities leased by
the Company under the terms of industrial revenue bonds issued by the local
governments specified:
<TABLE>
<CAPTION>
Average
Annual Lease
Location Use Square Feet Rental Expires
-------- --- ----------- ------ -------
<S> <C> <C> <C> <C> <C>
1. Fairfield County, Administrative 55,000 $150,000 1999
Ohio (Leased from and Executive
County of Offices
Fairfield, Ohio)
2. Conway, Arkansas (1) 40,000 $ 90,000 1998
(Leased from City
of Conway, Arkansas)
</TABLE>
_________________
(1) The Company subleases the manufacturing facility in Conway,
Arkansas to a third party under a sublease with a current
term expiring on May 31, 1995. Payments under this sublease
approximate the Company's rental obligations under its lease
with the City of Conway, Arkansas. The sublessee has the
right to purchase the facility from the Company after the
Company exercises its purchase option.
In addition to the leased properties described above, the Company
leases space aggregating approximately 970,000 square feet at an approximate
aggregate annual rental of $2.3 million. The following table sets forth certain
information with respect to the Company's principal leased properties which were
not in the preceding table:
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<TABLE>
<CAPTION>
Approximate Approximate
Square Annual Lease
Location Use Feet Rental Expire Renewal
-------- --- ----------- ----------- ------ -------
<S> <C> <C> <C> <C> <C>
Distribution Shipping, 48,400 $ 16,000(1) 1999 None
Center Warehouse,
Goldsboro, N.C. Office
Empire State Sales Office 4,300 $117,000 1999 None
Building
New York City,
N.Y.
2800 Loop 306 Manufacturing, 145,800 $166,000(1) 2000 5 years
San Angelo, Texas Office,
Warehouse
Distribution Shipping, 172,800 $432,000(1) 2007 15 years
Center Warehouse
San Angelo, Texas
Cesar Lopez Manufacturing, 90,200 $168,000 1999 5 years
de Lara Ave. Office
Nuevo Laredo,
Mexico
Ciudad Acuna Manufacturing, 64,700 $254,000 1999 5 years
Industrial Park Office
Ciudad Acuna,
Mexico
Airport Road Manufacturing, 165,000 $386,000(1) 2000 2 terms
Laredo, Texas Warehouse, of 5
Office years
each
San Gabriel Warehouse 181,500 $345,000(1) 1997 6 years
Street
Laredo, Texas
Zacatecas, Mexico Manufacturing 27,500 $ 58,000 1999 5 years
Asheboro, North Manufacturing, 57,500 $ 84,000(1) 1999 None
Carolina Office,
Warehouse
</TABLE>
________________
(1) Net lease.
The Company believes that all of the buildings owned or
leased by it are well maintained, in good operating condition,
and suitable for their present uses.
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Item 3. Legal Proceedings.
The Registrant has been named as a defendant in three related putative
class action lawsuits styled as Gerber, et al. v. R. G. Barry Corporation, et
al., Case No. C2-94-1190 (filed December 8, 1994), Culveyhouse v. R. G. Barry
Corporation, et al., Case No. C2-94-1250 (filed December 27, 1994), and Knopf,
et al. v. R. G. Barry Corporation, et al., Case No. C2-95-50, (filed January 17,
1995) in the United States District Court for the Southern District of Ohio.
Plaintiffs allege that public statements made by the Registrant in 1994 were
false and misleading and that these disclosures and non-disclosures violated
federal securities laws. One complaint also asserts common law fraud.
Plaintiffs seek to recover on behalf of a class of purchasers of stock of the
Registrant who purchased between approximately April and early December, 1994
and claim they are entitled to the per share difference between their purchase
price and the price subsequent to certain press releases issued by the
Registrant on December 5 and 6 which reduced estimated earnings for the
Registrant. These lawsuits are presently pending.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive Officers of the Registrant.
The following table lists the names and ages of the executive officers
of the Registrant as of the date of this Annual Report on Form 10-K, the
positions with the Registrant presently held by each such executive officer and
the business experience of each such executive officer during the past five
years. Unless otherwise indicated, each person has held his principal occupation
for more than five years. All executive officers serve at the pleasure of the
Board of Directors of the Registrant.
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<TABLE>
<CAPTION>
Position(s) Held with the
Registrant and Principal
Name Age Occupation(s) for Past Five Years
---- --- ---------------------------------
<S> <C> <C>
Gordon Zacks 62 Chairman of the Board and Chief
Executive Officer since 1979,
President since 1992, and Director
since 1959, of the Registrant.
Richard L. Burrell 62 Senior Vice President-Finance since
1992, Treasurer and Secretary since
1976, Vice President-Finance from
1976 to 1992, and Director since
1984, of the Registrant.
Christian Galvis 53 Executive Vice President-Operations
and Director since 1992, and Vice
President-Operations from 1991 to
1992, of the Registrant; Executive
Vice President-Manufacturing of
Work Wear Corporation, Greensboro,
North Carolina, apparel
manufacturers, from 1990 to 1991.
Charles E. Ostrander 46 Executive Vice President-Sales &
Marketing and Director since 1992,
Vice President-Sales & Marketing
from 1990 to 1992, and Vice
President-Marketing from 1987 to
1990, of the Registrant.
Daniel D. Viren 48 Senior Vice President-
Administration since 1992, and Vice
President-Controller from 1988 to
1992, of the Registrant.
Harry Miller 52 Vice President-Human Resources of
the Registrant since 1993; Director
of Human Resources, Bassett-Walker,
a division of VF Corporation, from
1986 to 1993.
</TABLE>
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PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
In accordance with General Instruction G(2), the information called
for in this Item 5 is incorporated herein by reference to page 10 of the
Registrant's Annual Report to Shareholders for the fiscal year ended December
31, 1994.
Item 6. Selected Financial Data.
In accordance with General Instruction G(2), the information called
for in this Item 6 is incorporated herein by reference to pages 8 and 9 of the
Registrant's Annual Report to Shareholders for the fiscal year ended December
31, 1994.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation.
In accordance with General Instruction G(2), the information called
for in this Item 7 is incorporated herein by reference to pages 11 through 14 of
the Registrant's Annual Report to Shareholders for the fiscal year ended
December 31, 1994.
Item 8. Financial Statements and Supplementary Data.
The Consolidated Balance Sheets of the Registrant and its subsidiaries
as of December 31, 1994 and January 1, 1994, the related Consolidated Statements
of Earnings, Shareholders' Equity and Cash Flows for each of the fiscal years in
the three-year period ended December 31, 1994, the related Notes to Consolidated
Financial Statements and the Independent Auditors' Report, appearing on pages
15 through 27 of the Registrant's Annual Report to Shareholders for the fiscal
year ended December 31, 1994, are incorporated herein by reference. Quarterly
Financial Data set forth on page 10 of the Registrant's Annual Report to
Shareholders for the fiscal year ended December 31, 1994, are also incorporated
herein by reference.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
None.
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<PAGE> 14
PART III
Item 10. Directors and Executive Officers of the Registrant.
In accordance with General Instruction G(3), the information called
for in this Item 10 is incorporated herein by reference to the Registrant's
definitive Proxy Statement, to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A of the General Rules and Regulations
under the Securities Exchange Act of 1934, relating to the Registrant's Annual
Meeting of Shareholders to be held on May 10, 1995, under the captions "SHARE
OWNERSHIP," "ELECTION OF DIRECTORS" and "COMPENSATION OF EXECUTIVE OFFICERS AND
DIRECTORS--Employment Contracts and Termination of Employment and Change-in-
Control Arrangements." In addition, certain information concerning the
executive officers of the Registrant called for in this Item 10 is set forth in
the portion of Part I of this Annual Report on Form 10-K entitled "Executive
Officers of the Registrant" in accordance with General Instruction G(3). The
Registrant is not required to make any disclosure pursuant to Item 405 of
Regulation S-K.
Item 11. Executive Compensation.
In accordance with General Instruction G(3), the information called
for in this Item 11 is incorporated herein by reference to the Registrant's
definitive Proxy Statement, to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A of the General Rules and Regulations
under the Securities Exchange Act of 1934, relating to the Registrant's Annual
Meeting of Shareholders to be held on May 10, 1995, under the captions
"COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS" and "COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION." Neither the report of the Compensation
Committee of the Registrant on executive compensation nor the performance graph
included in the Registrant's definitive Proxy Statement relating to the
Registrant's Annual Meeting of Shareholders to be held on May 10, 1995, shall
be deemed to be incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
In accordance with General Instruction G(3), the information called
for in this Item 12 is incorporated herein by reference to the Registrant's
definitive Proxy Statement, to be filed
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<PAGE> 15
with the Securities and Exchange Commission pursuant to Regulation 14A of the
General Rules and Regulations under the Securities Exchange Act of 1934,
relating to the Registrant's Annual Meeting of Shareholder to be held on May 10,
1995, under the captions "SHARE OWNERSHIP" and "COMPENSATION OF EXECUTIVE
OFFICERS AND DIRECTORS -- Employment Contracts and Termination of Employment and
Change-in-Control Arrangements."
Item 13. Certain Relationships and Related Transactions.
In accordance with General Instruction G(3), the information called
for in this Item 13 is incorporated herein by reference to the Registrant's
definitive Proxy Statement, to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A of the General Rules and Regulations
under the Securities Exchange Act of 1934, relating to the Registrant's Annual
Meeting of Shareholders to be held on May 10, 1995, under the captions "SHARE
OWNERSHIP," "ELECTION OF DIRECTORS" and "COMPENSATION OF EXECUTIVE OFFICERS AND
DIRECTORS."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a)(1) Financial Statements.
For a list of all financial statements incorporated by
reference in this Annual Report on Form 10-K, see
"Index to Financial Statements" at page 22.
(a)(2) Financial Statement Schedules.
For a list of all financial statement schedules
included in this Annual Report on Form 10-K, see "Index
to Financial Statements" at page 22.
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<PAGE> 16
(a)(3) Exhibits.
Exhibits filed with this Annual Report on
Form 10-K are attached hereto. For list of
such exhibits, see "Index to Exhibits" at
page 59. The following table provides
certain information concerning executive
compensation plans and arrangements required
to be filed as exhibits to this Annual Report
on Form 10-K.
Executive Compensation Plans and Arrangements
<TABLE>
<CAPTION>
Exhibit
No. Description Location
------- ----------- --------
<S> <C> <C>
10(a) R. G. Barry Corporation Pages 66 through 137 of this
Salaried Employees' Annual Report on Form 10-K
Pension Plan (as Amended
and Restated Effective
January 1, 1989)
10(b) R. G. Barry Corporation Incorporated herein by
Supplemental Retirement reference to the
Plan Registrant's Annual Report
on Form 10-K for the fiscal
year ended December 29,
1990 (File No. 0-12667)
[Exhibit 10(b)]
10(c) R. G. Barry Corporation Incorporated herein by
1984 Incentive Stock reference to the
Option Plan for Key Registrant's Current Report
Employees on Form 8-K dated June 22,
1984, filed June 26, 1984
(File No. 1-7231) [Exhibit
10(d)]
10(d) R. G. Barry Corporation Incorporated herein by
Incentive Plan for Key reference to the
Employees Registrant's Annual Report
on Form 10-K for the fiscal
year ended December 29,
1984 (File No. 0-12667)
[Exhibit 10(e)]
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
Exhibit
No. Description Location
------- ----------- --------
<S> <C> <C>
10(e) Employment Agreement, Pages 138 through 155 of this
dated July 1, 1994, Annual Report on Form 10-K
between the Registrant
and Gordon Zacks
10(f) Agreement, dated Incorporated herein by
September 27, 1989, reference to the
between the Registrant Registrant's Current Report
and Gordon Zacks on Form 8-K dated
October 11, 1989, filed
October 12, 1989 (File No.
0-12667) [Exhibit 28.1]
10(g) Amendment No. 1, dated Incorporated herein by
as of October 12, 1994, reference to the Amendment
between the Registrant No. 14 to Schedule 13D,
and Gordon Zacks dated January 27, 1995,
filed by Gordon Zacks on
February 13, 1995
[Exhibit 5]
10(h) Split Dollar Insurance Incorporated herein by
Agreement, dated reference to the
September 29, 1989, Registrant's Annual Report
between the Registrant on Form 10-K for the fiscal
and Gordon Zacks year ended December 30,
1989 (File No. 0-12667)
[Exhibit 10(h)]
10(i) R. G. Barry Corporation Incorporated herein by
Leveraged Employee Stock reference to the
Ownership Plan Registrant's Annual Report
on Form 10-K for the fiscal
year ended December 29,
1990 (File No. 0-12667)
[Exhibit 10(j)]
10(j) R. G. Barry Corporation Incorporated herein by
1988 Stock Option Plan reference to the
(Reflects amendments Registrant's Registration
through May 11, 1993) Statement on Form S-8,
filed August 18, 1993
(Registration No. 33-67594)
[Exhibit 4(r)]
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
Exhibit
No. Description Location
------- ----------- --------
<S> <C> <C>
10(k) Description of Incentive Incorporated herein by
Bonus Program reference to the
Registrant's Annual Report
on Form 10-K for the fiscal
year ended December 28,
1991 (File No. 1-8769)
[Exhibit 10(k)]
10(l) R. G. Barry Corporation Incorporated herein by
Employee Stock Purchase reference to the
Plan (Reflects Registrant's Registration
amendments and revisions Statement on Form S-8,
for stock dividends and filed August 18, 1993
stock splits through (Registration No. 33-67596)
May 11, 1993) [Exhibit 4(r)]
10(m) R. G. Barry Corporation Incorporated herein by
1994 Stock Option Plan reference to the
(Reflects stock splits Registrant's Registration
through June 22, 1994) Statement on Form S-8,
filed August 24, 1994
(Registration No. 33-83252)
[Exhibit 4(q)]
10(n) Executive Employment Pages 156 through 167 of this
Agreement, dated Annual Report on Form 10-K
July 1, 1994, between
the Registrant and
Christian Galvis
10(o) Agreement, dated Pages 168 through 177 of this
July 1, 1994, between Annual Report on Form 10-K
the Registrant and
Richard L. Burrell
10(p) Agreement, dated Pages 178 through 187 of this
July 1, 1994, between Annual Report on Form 10-K
the Registrant and
Daniel D. Viren
10(q) Agreement, dated Pages 188 through 198 of this
July 1, 1994, between Annual Report on Form 10-K
the Registrant and
Harry Miller
</TABLE>
18
<PAGE> 19
(b) Reports on Form 8-K
There were no Current Reports on Form 8-K filed
during the fiscal quarter ended December 31, 1994.
(c) Exhibits
Exhibits filed with this Annual Report on Form
10-K are attached hereto. For a list of such
exhibits, see "Index to Exhibits" at page 59.
(d) Financial Statement Schedules
Financial Statement Schedules included with this
Annual Report on Form 10-K are attached hereto.
See "Index to Financial Statements" at page 22.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
R. G. BARRY CORPORATION
Date: March 29 , 1995 By /s/ Richard L. Burrell
---- -----------------------
Richard L. Burrell,
Senior Vice President-Finance,
Secretary and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Date Capacity
------------------------- ---- --------------------------
<S> <C> <C>
*Gordon Zacks * Chairman of the Board,
President, Chief Executive
Officer and Director
*Richard L. Burrell * Senior Vice President-
Finance, Secretary,
Treasurer, Principal
Financial and Accounting
Officer and Director
*Christian Galvis * Executive Vice President-
Operations and Director
Charles E. Ostrander Executive Vice President-
Sales & Marketing and
Director
*Leopold Abraham II * Director
*Philip G. Barach * Director
*William Giovanello * Director
*Harvey M. Krueger * Director
*Edward M. Stan * Director
*By /s/ Richard L. Burrell
-----------------------
Richard L. Burrell,
Attorney-in-Fact
Date: March 29, 1995
</TABLE>
20
<PAGE> 21
R. G. BARRY CORPORATION
__________________________________
Financial Statements
December 31, 1994, January 1, 1994
and January 2, 1993
For Inclusion in Form 10-K
To Securities and Exchange Commission
<PAGE> 22
R. G. BARRY CORPORATION
Index to Financial Statements
The consolidated balance sheets of R. G. Barry Corporation and subsidiaries as
of December 31, 1994 and January 1, 1994 and the related consolidated
statements of earnings, shareholders' equity and cash flows for each of the
fiscal years in the three-year period ended December 31, 1994, together with
the opinion thereon of KPMG Peat Marwick LLP dated February 14, 1995,
appearing on pages 15 through 27 of the accompanying 1994 annual report to
shareholders are incorporated by reference in this Form 10-K annual report.
The following additional financial data should be read in conjunction with
the consolidated financial statements in such 1994 fiscal year annual report
to shareholders. Schedules not included with this additional financial data
have been omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes
thereto.
ADDITIONAL FINANCIAL DATA:
Independent Auditors' Report on Financial Statement Schedules
Schedules for the fiscal years ended December 31, 1994, January 1, 1994 and
January 2, 1993:
II Reserves
<PAGE> 23
Five Year Review of Selected Financial Data
R.G. Barry Corporation and Subsidiaries
--------------------------------------------------------------------------------
SUMMARY OF OPERATIONS (thousands)
Net Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Provision for restructuring
Interest expense, net
Royalty income
Earnings (loss) before income taxes and extraordinary credit
Income tax expense (benefit)
Earnings (loss) before extraordinary credit
Extraordinary credit - utilization of net operating loss carryforward
Net earnings (loss)
ADDITIONAL DATA
Earnings (loss) per share before extraordinary credit*
Net earnings (loss) per share after extraordinary credit*
Book value per share*
Annual % change in net sales
Annual % change in net earnings (loss)
Net earnings (loss) as a percentage of beginning shareholders' equity
Average number of shares outstanding (in thousands)*
FINANCIAL SUMMARY (thousands)
Current assets
Current liabilities
Working capital
Long-term debt and capital leases
Net shareholders' equity
Net property, plant and equipment
Total assets
Capital expenditures, net of disposals
Depreciation and amortization of property, plant and equipment
See also Management's Discussion & Analysis of Financial Condition & Results of
perations.
*Retroactively restated to reflect 4 for 3 share split distributed June 22,
1994.
**Fiscal year includes fifty-three weeks.
8
<PAGE> 24
<TABLE>
<CAPTION>
1994 1993 1992** 1991 1990
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$116,720 $101,172 $101,823 $102,791 $108,929
69,975 59,795 60,890 69,093 72,551
46,745 41,377 40,933 33,698 36,378
39,375 34,322 34,453 32,978 39,664
-- -- -- -- 5,124
(1,701) (1,474) (2,128) (2,408) (2,720)
333 400 400 400 616
6,002 5,981 4,752 (1,288) (10,514)
2,191 2,183 1,711 (24) (3,470)
3,811 3,798 3,041 (1,264) (7,044)
-- -- 300 -- --
$3,811 $3,798 $3,341 $(1,264) $(7,044)
$0.72 $0.76 $0.61 $(0.25) $(1.42)
$0.72 $0.76 $0.67 $(0.25) $(1.42)
$7.41 $6.19 $5.40 $4.70 $4.88
15.4% (0.6%) (0.9%) (5.6%) (11.3%)
0.3% 13.7% 364.3% 82.1% (288.1%)
12.1% 13.9% 14.2% (5.1%) (22.4%)
5,294 5,024 5,023 5,099 4,968
$56,399 $39,974 $35,786 $34,105 $40,679
17,332 12,119 10,607 11,462 13,981
39,067 27,855 25,179 22,643 26,698
16,445 9,745 11,625 12,990 14,525
41,054 31,483 27,232 23,562 24,863
13,785 13,410 14,050 14,733 14,430
76,961 55,635 51,132 49,732 55,885
2,235 967 1,174 2,474 1,794
1,905 1,607 1,857 2,171 2,317
</TABLE>
9
<PAGE> 25
Market and Dividend Information
<TABLE>
<CAPTION>
R.G. Barry Corporation and Subsidiaries
MARKET VALUE (Restated to reflect share split of June 22, 1994)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
QUARTER HIGH LOW
1994 FIRST $14.63 $10.59
SECOND 17.06 10.41
THIRD 22.38 15.00
FOURTH 24.63 10.00
1993 First $6.47 $4.78
Second 6.28 5.06
Third 7.50 5.53
Fourth 12.28 6.56
</TABLE>
Stock Exchange: American Stock Exchange
Stock Ticker Symbol: RGB
Wall Street Journal Listing: BarryRG
Approximate Number of Registered Shareholders: 1,300
A four for three share split was distributed on June 22, 1994 to shareholders of
record on June 1, 1994.
No cash dividends were paid during the periods noted. While the Company has no
current intention to pay cash dividends, it is currently able to pay cash
dividends, and is subject to the restrictions contained in the various loan
agreements. See also Note 5 to Consolidated Financial Statements, and
Management's Discussion & Analysis of Financial Condition & Results of
Operations.
Quarterly Financial Data
<TABLE>
<CAPTION>
R.G. Barry Corporation and Subsidiaries
1994 FISCAL QUARTERS in thousands, except net earnings (loss) per share
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST SECOND THIRD FOURTH
NET SALES $13,456 $9,406 $37,115 $56,743
GROSS PROFIT 5,818 4,457 14,406 22,064
NET EARNINGS (LOSS) (942) (2,010) 2,586 4,177
NET EARNINGS (LOSS) PER SHARE $(0.18) $(0.40) $0.48 $0.75
1993 Fiscal Quarters
First Second Third Fourth
Net sales $11,158 $8,737 $29,412 $51,865
Gross profit 5,749 4,592 11,564 19,472
Net earnings (loss) (1,181) (2,133) 2,039 5,073
Net earnings (loss) per share $(0.23) $(0.43) $0.41 $1.01
</TABLE>
See also Management's Discussion & Analysis of Financial Condition & Results of
Operations.
10
<PAGE> 26
Management's Discussion & Analysis of
Financial Condition & Results of Operations
-------------------------------------------------------------------------------
ACQUISITION OF VESTURE CORPORATION
During July 1994, the Company purchased all the outstanding stock of Vesture
Corporation, which manufactures and markets thermal comfort products. The
purchase was paid entirely by the issuance of approximately 319 thousand
treasury shares of the Company valued at $5 million. As a result of the purchase
the Company recognized approximately $4.6 million in goodwill which is being
amortized over a forty year period. The operating results of Vesture are
included in the consolidated financial statements for the period following the
acquisition by the Company.
FOUR FOR THREE SHARE SPLIT
On May 13, 1994, the Company declared a 4 for 3 share split. The share split was
distributed on June 22, 1994, to shareholders of record as of June 1, 1994. All
per share calculations have been retroactively restated to give effect to the 4
for 3 share split.
LIQUIDITY AND CAPITAL RESOURCES
The assets used by the Company in the development, production, marketing,
warehousing and distribution, and sale of its products consist mainly of current
assets such as cash, receivables, inventory, and prepaid expenses; and net
property, plant and equipment. Most of the Company's assets are current assets.
At year end 1994, 73.3 percent of the Company's assets were current, compared
with 71.9 percent at the end of 1993. Substantially all the remaining assets of
the Company are net property, plant and equipment.
At year end 1994, the Company had $39.1 million in net working capital,
comprised of $56.4 million in current assets, less $17.3 million in current
liabilities. At year end 1993, the Company had $27.9 million in net working
capital. About $7.4 million of the increase in net working capital is derived
from additional long-term debt that the Company borrowed in July, 1994 (see also
the discussion that follows regarding long-term borrowings). An additional $5.1
million of the increase has been generated by current year's operation. In
previous years, most of the increase in net working capital was generated from
operations.
The Company ended 1994, with $2.4 million in cash on hand, $21.0 million in
trade receivables and $26.1 million in inventories. This compares with $1.5
million in cash at year end 1993, $13.5 million in trade receivables and $17.8
million in inventories.
Substantially all the increase in trade receivables is attributable to the
increase in net sales during the fourth quarter of the year. Net sales increased
9.2 percent, during the fourth quarter, from $51.9 million in 1993 to $56.7
million in 1994.
Inventories at the end of 1994, increased by $8.3 million from the prior
year. Throughout much of the third quarter, the Company purchased additional raw
materials, and worked overtime hours to increase its level of finished goods
inventory in anticipation of shipping that inventory in the fourth quarter. In
early December, 1994, the Company received cancellations on about $3.5 million
in orders for thermal comfort products. The Company had already purchased the
raw materials, and produced the finished goods inventory and was prepared to
ship the orders; but unusually warm weather in the fall of 1994, prompted
retailers to place cancellations on orders for thermal products. This left the
Company with additional inventory. The Company expects to utilize this added
inventory to satisfy expected customer orders for fall of 1995.
A portion of the increase in inventory is attributable to Vesture Corporation
which the Company purchased in 1994. In addition, inventory generally maintained
throughout the Company has increased from 1993 to 1994. The Company believes
that it has some excess inventory on hand at the end of the year. There has
traditionally been little risk of markdown or obsolescence to the Company from
this inventory. Throughout 1995, the Company plans to systematically reduce the
amount of excess inventory on hand.
Other receivables at year end 1994 amounted to $2.4 million, compared with
$3.5 million at year end 1993. In both years, other receivables were comprised
mainly of recoverable customs duties, and balances that the Company expects to
collect from its supplier in the orient.
The Company traditionally leases most of its facilities. During 1994, a
warehouse was leased in Laredo, Texas, to handle the storage and distribution of
thermal comfort products. Also, late in 1994, the Company leased a facility in
Asheboro, North Carolina to combine the operating facilities of Vesture
Corporation into one location.
In 1993, the Company leased a manufacturing plant in Zacatecas, Mexico.
The operations of the Company have historically been funded by internally
generated capital. In recent years, the Company has relied on its Revolving
Credit Agreement ("Revolver") to provide any additional capital requirements,
including seasonal working capital needs.
11
<PAGE> 27
Management's Discussion & Analysis of
Financial Condition & Results of Operations
continued
----------------------------------------------------------------------------
During 1994, the Company issued a $15 million, 9.7% Note, due in 2004. The
Note has certain covenants which the Company believes are normally found in
agreements of this type. The Note places restrictions on the amount of future
borrowings the Company may incur, and contains other financial covenants. The
Note requires semi-annual interest payments beginning in 1995, with principal
repayments commencing in 1998. A portion of the proceeds of the Note was used to
prepay the $2.8 million outstanding balance of 10 3/8% Notes due in 1997. The
balance of the proceeds were used to repay long-term borrowings under the
Revolver of $5.5 million, and to add about $7.4 million to the net working
capital of the Company.
The Company and its lending banks have modified certain covenants of the
Revolver several times in the last few years in order to meet the Company's
needs. During 1993, the Revolver was amended to extend its term through June 30,
1995, and in February 1994, it was amended to modify certain other covenants.
The Company has discussed, with its banks, the need to renew and extend the
Revolver. During 1995, the Company intends to seek a multiyear extension of the
term of the Revolver in order to better meet the Company's anticipated financing
needs for a longer period. The Company is in compliance with all covenants of
the Revolver and all other debt agreements.
The Revolver provides the Company with a seasonally adjusted available line
of credit ranging from $5.5 million as of December 31st annually, to a peak of
$38.0 million during the months of July through November. The Revolver contains
certain restrictions relating to net working capital, tangible net worth,
additional seasonal borrowings, gross sales and maximum annual capital
expenditures, all as explained in the Revolver.
During 1994, the maximum amount that the Company borrowed under the
Revolver was $26 million. At the end of 1994, $2 million in notes were
outstanding and classified as short-term notes in the accompanying consolidated
financial statements. During 1993, the maximum amount that the Company borrowed
under the Revolver, was $35.0 million, including $5.5 million, which at the end
of 1993 was classified as long-term debt in the accompanying consolidated
financial statements.
In June, 1994, the Company distributed a four for three share split, as
discussed above. The Company last paid cash dividends in 1981. While the
Company's various loan agreements, at year end 1994, permit the payment of
dividends and the repurchase of common shares for treasury, the Company has no
current plans to resume the payment of cash dividends. Subject to certain
limitations contained in various loan agreements, the Company may borrow
additional long term debt, should that be necessary. See Note 5 to the
Consolidated Financial Statements for additional information.
The Company believes that it has a strong balance sheet, with good financial
ratios. At year end 1994, the Company's total capitalization amounted to $57.5
million. It was comprised of 28.6 percent long-term debt and capital lease
obligations and 71.4 percent equity. This compares with total capitalization of
$41.2 million at year end 1993, with a ratio of 23.6 percent long-term debt and
capital lease obligations and 76.4 percent equity. The Company's current ratio,
a relationship of current assets to current liabilities, was 3.25 to 1 at year
end 1994, compared with 3.30 to 1 at year end 1993.
IMPACT OF MEXICAN PESO DEVALUATION
In late December 1994, the Mexican Peso suffered increasing devaluation pressure
on world currency markets. When compared with its value throughout most of 1994,
by early March 1995, the Peso had declined in value versus the US Dollar by
approximately 50 percent. The Company believes that the longer term exchange
value of the Peso will not be clear for several months, as world currency
markets settle upon a new exchange value.
The Company believes that, during 1995, the devaluation will have a positive
impact on its cost of manufacturing, and a negative impact of its sales to
Mexican customers. The magnitude of the impact is not readily determinable, as
it is dependent upon a number of factors. Those factors include: i) the ultimate
exchange value of the Peso, and ii) the impact of offsetting potential
inflationary increases in the cost of the wages, goods and services that the
Company purchases in Mexico. While none of these are known currently, the
Company believes the net effect in 1995 will be favorable.
EFFECT OF NEW ACCOUNTING STANDARDS
FINANCIAL ACCOUNTING STANDARDS NO. 109 - "ACCOUNTING FOR INCOME TAXES"
In 1992, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". Statement 109
requires a change from the deferred method of accounting for income taxes of APB
Opinion 11 to the asset and liability method of accounting for income taxes.
Under the asset and liability method of Statement 109, deferred tax assets and
liabilities are recognized for the future tax
12
<PAGE> 28
Management's Discussion & Analysis of
Financial Condition & Results of Operations
continued
-------------------------------------------------------------------------------
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to be recovered or settled. Under Statement 109, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
The Company adopted Statement 109 on the first day of fiscal 1993. The
cumulative effect of this change in accounting method for income taxes had no
material impact on the consolidated statement of operations. Prior periods'
financial statements have not been restated to apply the provisions of Statement
109.
In order to realize the deferred tax asset established, the Company will need
to generate future taxable income or be able to carryback taxable income to
1994, 1993 or 1992, totaling $7.8 million. The Company's income before taxes and
taxable income history is as follows (in thousands):
<TABLE>
<CAPTION>
1994 1993 1992
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Pretax book income $6,002 5,981 4,752
Taxable income $5,353 5,229 4,417
</TABLE>
The Company believes the existing net deductible temporary differences will
reverse during periods in which the Company generates net taxable income, or in
periods in which a carryback to 1994, 1993 or 1992 is available. Further, the
Company believes it has available certain alternate tax planning strategies,
principally related to the LIFO method of accounting for inventory, that could
be implemented, if necessary, to supplement taxable income from operations. The
Company has considered the above factors in concluding that it is more likely
than not that the Company will realize the benefits of existing deferred tax
assets. There can be no assurance, however, that the Company will generate any
specific level of continuing earnings. See also Note 7 to the Consolidated
Financial Statements for additional information concerning Income Taxes.
RESULTS OF OPERATIONS
1994 SALES AND OPERATIONS COMPARED WITH 1993
During 1994, the Company successfully expanded the net sales of thermal comfort
products, providing substantially all of the growth in net sales from 1993. The
acquisition of Vesture Corporation, the originators of thermal comfort products,
in July 1994, enhanced the Company's growth in the thermal comfort products
marketplace.
During 1994, net sales grew 15.4 percent to $116.7 million from $101.2
million during 1993. Substantially all the growth in net sales occurred in
thermal comfort products. As a result of unseasonably warm fall and early winter
weather throughout much of the United States, the Company received order
cancellations of approximately $3.5 million in thermal comfort products from
department store cold weather departments. Had it not been for those
cancellations, net sales would have been near $120 million.
Gross profit for the year increased to $46.7 million from $41.7 million in
1993. Gross profit as a percent of net sales declined slightly in 1994 to 40.0
percent, having been 40.9 percent in 1993. The reasons for the slight decline
include the added costs the Company incurred following the implementation of a
fully integrated manufacturing control software system. As a result of the
implementation of this system, which occurred during the second quarter, the
Company experienced delays in production, resulting in lost slipper production
and adverse manufacturing variances, during the final nine months of the year.
Manufacturing variances were also incurred as the Company increased head-counts
to catch up on production. This increased spending lowered efficiencies and
adversely affected gross profit for the year. The lost production also adversely
affected slipper deliveries in 1994.
Selling, general and administrative expenses increased by 14.7 percent during
1994, to $39.4 million from $34.3 million in 1993. Much of the increase is in
the area of marketing, selling and promotional support programs put into place
to support increases in net sales.
Royalty income in 1994, declined from 1993. The royalty agreement in place
for many years, was terminated at the request of the licensee. The Company is in
the process of negotiating a new agreement, at a reduced royalty, to replace the
previous agreement.
Net interest expense in 1994, increased to $1.7 million from $1.4 million in
1993. The primary cause of the increased interest was the increase in the amount
of long-term debt that the Company carried since borrowing $15 million in July
1994. During 1994, the average short-term bank borrowings amounted to $12.5
million, compared with $14.2 million during 1993. Interest rates on short term
seasonal borrowings in 1994 averaged 5.7 percent, compared with 4.9 percent in
1993.
13
<PAGE> 29
Management's Discussion & Analysis of
Financial Condition & Results of Operations
continued
-----------------------------------------------------------------------------
For the year, earnings before income taxes amounted to $6.0 million, up
slightly from prior year's pretax earnings of $5.98 million. Net earnings after
taxes amounted to $3.81 million up slightly from the prior year's net earnings
of $3.80 million. Earnings per common share amounted to $0.72 in 1994 compared
with $0.76 in 1993. The principle cause of the decline in earnings per share
results from the additional shares outstanding following the purchase of Vesture
Corporation. All per share calculations have been retroactively restated to give
effect to the 4 for 3 share split distributed to shareholders on June 22, 1994.
1993 SALES AND OPERATIONS COMPARED WITH 1992
Net sales in 1993 totaled $101.2 million, which was slightly less than net sales
of $101.8 million in 1992. During the first half of 1993, net sales were about
$600 thousand less than in the first six months of 1992. During the second six
months of both 1992 and 1993, net sales were essentially flat at $81.3 million.
During the fall of 1993, the Company test marketed a microwave heated seat
cushion in several cities. The test results were very encouraging. The test in
1993 had no material impact on the net sales or results of operations for 1993.
Gross profit improved in 1993 compared with the prior year. Gross profit as a
percent of net sales amounted to 40.9 percent in 1993, increasing from 40.2
percent in 1992. Improved manufacturing efficiencies, and the increased use of
computer aided cutting of materials were positive influences on holding
manufacturing costs in line for the year. Many cost reduction plans, begun in
earlier years, contributed to improved gross profit margins.
Selling, general and administrative expenses of $34.3 million in 1993, were
essentially flat with those incurred in 1992 of $34.5 million.
Interest expense in 1993 was substantially lower than in 1992, principally
resulting from lower long-term debt outstanding and from lower short-term
interest rates incurred by the Company. In 1993, short-term rates were about 1.3
percent lower than in 1992. During 1993, the Company's average short-term
borrowings amounted to $14.2 million compared with average short-term borrowings
in 1992 of $14.7 million.
Earnings before income taxes were $6.0 million for 1993, compared with $4.8
million in 1992. Net earnings after taxes amounted to $3.8 million for 1993, or
$0.76 per share. For 1992, earnings before an extraordinary credit from the
utilization of a net operating loss carryforward, amounted to $3.0 million, or
$0.61 per share. Net earnings after the extraordinary credit amounted to $3.3
million or $0.67 per share. No similar extraordinary credit was available in
1993.
1992 SALES AND OPERATIONS COMPARED WITH 1991
The operations of the Company returned to profitability in 1992. The
implementation of previous years' restructuring decisions had been largely
completed, and the operations of the Company benefited from restructuring.
For 1992, the Company's net sales were $101.8 million, slightly less than net
sales for 1991 of $102.8 million. The Company anticipated that the economy would
not improve during 1992 and operated accordingly.
Gross profit of the Company improved during 1992 to 40.2 percent, compared
with gross profit of 32.8 percent during 1991. Nearly all the gross profit
improvement resulted from cost reductions, directly related to the cost
reduction strategies implemented following the restructuring that began in early
1991.
Selling, general and administrative expenses increased in 1992 to $34.4
million from $33.0 million in 1991. During 1991, the Company pared back many of
its marketing and sales programs. The restoration of these programs, in 1992,
coupled with cost increases resulted in increased selling, general and
administrative expenses for the year.
Net interest expense declined during 1992 to $2.1 million, from $2.4 million
in 1991. Most of the decline resulted from lower interest rates in 1992,
although the improved profitability of the Company translated into lower average
borrowings during the year.
As a result of the improved operating performance of the Company for the
year, the Company earned a pretax profit of $4.8 million compared with a pretax
loss in 1991 of $1.3 million. After taxes and before an extraordinary credit, in
1992, the Company earned $3.0 million, or $0.61 per share, compared with an
after tax loss in 1991 of $1.3 million, or a loss of $0.25 per share. As a
result of the losses that the Company incurred in 1991, the Company had
available a net operating loss carryforward that was used in 1992. The financial
impact of utilization of the carryforward, was the realization of an
extraordinary credit for the tax impact of the carryforward equal to $300
thousand. After taxes and the extraordinary credit, the Company earned $3.3
million, or $0.67 per share in 1992.
14
<PAGE> 30
Consolidated Balance Sheets
R.G. Barry Corporation and Subsidiaries
<TABLE>
<CAPTION>
DECEMBER 31, 1994 January 1, 1994
---------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash (note 5) $2,360 $1,483
Accounts and note receivable:
Trade (less allowance for doubtful receivables, returns and
promotions of $4,100,000 and $5,166,000, respectively) 20,972 13,522
Other 2,440 3,520
Inventory (note 3) 26,062 17,751
Deferred federal income taxes (note 7) 2,635 2,457
Prepaid expenses 1,930 1,241
------- -------
Total current assets 56,399 39,974
------- -------
Property, plant and equipment, at cost (notes 4 and 6) 35,663 33,479
Less accumulated depreciation and amortization 21,878 20,069
------- -------
Net property, plant and equipment 13,785 13,410
------- -------
Deferred federal income taxes (note 7) 324 324
Goodwill (less accumulated amortization of $48,000) (note 2) 4,578 --
Other assets 1,875 1,927
------- -------
$76,961 $55,635
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current installments of long-term debt and capital lease
obligations (notes 5 and 6) $677 $1,373
Short-term note payable (note 5) 2,000 --
Accounts payable 8,174 4,878
Accrued expenses (note 8) 6,481 5,868
------- -------
Total current liabilities 17,332 12,119
------- -------
Accrued supplemental retirement plan (note 9) 2,130 2,288
Long-term debt and capital lease obligations, excluding current installments:
Long-term debt (note 5) 15,700 8,820
Capital lease obligations (note 6) 745 925
------- -------
Long-term debt and capital lease obligations 16,445 9,745
------- -------
Total liabilities 35,907 24,152
------- -------
SHAREHOLDERS' EQUITY (NOTES 5, 10 AND 11):
Preferred shares, $1 par value. Authorized 4,000,000 Class A,
500,000 Class B, and 500,000 Series I Junior Participating
Class B shares; none issued -- --
Common shares, $1 par value. Authorized 7,500,000 shares;
issued 5,543,000 and 3,815,000 shares (excluding treasury
shares of 537,000 and 821,000, respectively) 5,543 3,815
Additional capital in excess of par value 16,770 12,905
Deferred compensation -- (167)
Retained earnings 18,741 14,930
------- -------
Net shareholders' equity 41,054 31,483
------- -------
$76,961 $55,635
======= =======
Commitments and contingencies (notes 6, 12 and 13)
See accompanying notes to consolidated financial statements.
</TABLE>
15
<PAGE> 31
Consolidated Statements of Earnings
R.G. Barry Corporation and Subsidiaries
<TABLE>
<CAPTION>
DECEMBER 31, 1994 January 1, 1994 January 2, 1993
----------------------------------------------------------------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C>
Net sales $116,720 $101,172 $101,823
Cost of sales 69,975 59,795 60,890
-------- -------- --------
Gross profit 46,745 41,377 40,933
Selling, general and administrative expenses 39,375 34,322 34,453
-------- -------- --------
Operating income 7,370 7,055 6,480
Royalty income 333 400 400
Interest expense, net of interest income of $152,000,
$19,000 and $17,000, respectively (1,701) (1,474) (2,128)
-------- -------- --------
Earnings before income taxes and
extraordinary credit 6,002 5,981 4,752
Income tax expense (note 7) 2,191 2,183 1,711
-------- -------- --------
Earnings before extraordinary credit 3,811 3,798 3,041
Extraordinary credit--utilization of net operating
loss carryforward -- -- 300
-------- -------- --------
Net earnings $3,811 $3,798 $3,341
-------- -------- --------
Earnings per common share:
Earnings before extraordinary credit $ .72 $.76 $.61
Extraordinary credit -- -- .06
-------- -------- --------
Net earnings $ .72 $.76 $.67
======== ======== ========
</TABLE>
Consolidated Statements of Shareholders' Equity
R.G. Barry Corporation and Subsidiaries
<TABLE>
<CAPTION>
Additional
capital in
Common excess of Deferred Retained
shares par value compensation earnings
----------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C>
Balance at December 28, 1991 $3,761 $12,615 $(605) $7,791
Net earnings -- -- -- 3,341
Tender of 21,000 shares (note 10) (21) (106) -- --
Stock options exercised, 42,000 shares issued 42 143 -- --
Amortization of deferred compensation (note 10) -- -- 271 --
------ ------- ----- -------
Balance at January 2, 1993 3,782 12,652 (334) 11,132
Net earnings -- -- -- 3,798
Stock options exercised, 63,000 shares issued 63 331 -- --
Amortization of deferred compensation (note 10) -- -- 167 --
Purchase of 30,000 shares (note 10) (30) (199) -- --
Tax benefit associated with the activity
under various stock plans -- 121 -- --
------ ------- ----- -------
Balance at January 1, 1994 3,815 12,905 (167) 14,930
Net earnings -- -- -- 3,811
Stock options exercised, 84,000 shares issued 84 367 -- --
Amortization of deferred compensation (note 10) -- -- 167 --
Four-for-three stock split (including
$8,000 paid for fractional shares) 1,275 (1,283) -- --
Issuance of 319,000 shares in the Vesture
Corporation acquisition (note 2) 319 4,681 -- --
Issuance of 86,000 shares in connection
with the employee stock purchase plan 86 245 -- --
Purchase of 30,000 shares (note 10) (30) (488) -- --
Tender of 6,000 shares (note 10) (6) (98) -- --
Tax benefit associated with the activity
under various stock plans -- 441 -- --
------ ------- ----- -------
Balance at December 31, 1994 $5,543 $16,770 $-- $18,741
====== ======= ===== =======
</TABLE>
See accompanying notes to consolidated financial statements.
16
<PAGE> 32
Consolidated Statements of Cash Flows
R.G. Barry Corporation and Subsidiaries
<TABLE>
<CAPTION>
DECEMBER 31, 1994 January 1, 1994 January 2, 1993
-----------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $3,811 $3,798 $3,341
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Tax benefit associated with the activity under
various stock plans 441 121 --
Depreciation and amortization of property,
plant and equipment 1,905 1,607 1,857
Amortization of goodwill 48 -- --
Deferred federal income tax provision (credit) (178) 105 (428)
Loss (gain) on disposal of property, plant and equipment (15) 57 20
Amortization of deferred compensation 167 167 271
Net (increase) decrease in:
Accounts and note receivable (6,157) (5,275) (1,158)
Inventory (7,552) (1,612) (1,696)
Prepaid expenses (688) (247) 489
Refundable income taxes -- -- 1,093
Other assets 58 (939) (94)
Net increase (decrease) in:
Accounts payable 2,903 1,677 (1,485)
Accrued expenses 348 (206) 2,410
Accrued supplemental retirement plan (158) 620 240
------ ------ -------
Net cash provided by (used in) operating activities (5,067) (127) 4,860
------ ------ -------
Cash flows from investing activities:
Additions to property, plant and equipment (2,234) (1,034) (1,195)
Proceeds from disposal of property, plant and equipment 14 10 1
------ ------
Net cash used in investing activities (2,220) (1,024) (1,194)
====== ====== =======
Cash flows from financing activities:
Repayment of long-term debt, capital lease obligations
and short-term note payable (6,996) (1,839) (3,435)
Proceeds from borrowing debt 15,000 -- --
Proceeds from stock options exercised 782 394 185
Purchase of common shares for treasury (622) (229) (127)
------ ------ -------
Net cash provided by (used in) financing activities 8,164 (1,674) (3,377)
------ ------ -------
Net increase (decrease) in cash 877 (2,825) 289
Cash at beginning of year 1,483 4,308 4,019
------ ------ -------
Cash at end of year $2,360 $1,483 $4,308
====== ====== =======
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $1,351 $1,633 $2,063
------ ------ -------
Income taxes paid (refunded) $1,770 $1,853 $(1,150)
====== ====== =======
</TABLE>
See accompanying notes to consolidated financial statements.
17
<PAGE> 33
Notes to Consolidated Financial Statements
R.G. Barry Corporation and Subsidiaries
--------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of Consolidation and Industry Information
The consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation. The Company
operates in the comfort products industry.
In 1994, two customers accounted for approximately 26% of the Company's
net sales. In 1993, two customers accounted for approximately 25% of
the Company's net sales. In 1992, three customers accounted for
approximately 33% of net sales. Substantially, all the Company's sales
are to customers involved in the retail industry.
(b) Inventory
Inventory is valued at the lower of cost or market. Substantially all
ending inventory costs in 1993 and 1992 are determined on the last in,
first out (LIFO) basis and the remainder are determined on the first
in, first out (FIFO) basis. Approximately 76% of the 1994 ending
inventory costs are determined on the LIFO basis.
(c) Depreciation and Amortization
Depreciation and amortization have been provided substantially on the
double declining-balance method over the estimated useful lives of the
assets prior to September 30, 1991. On or after October 1, 1991, the
Company adopted the straight-line method of depreciation on its
machinery and equipment for all property acquired after October 1,
1991. Similar equipment placed in service prior to October 1, 1991
continues to be depreciated by the double declining-balance method.
The Company has capitalized hardware and software costs related to its
new computer system and is amortizing such costs on a straight-line
basis over a five-year period. At December 31, 1994, costs related to
the hardware and software are included in machinery and equipment.
Substantially all construction in progress (see note 4) at January 1,
1994 is related to the new computer system.
(d) Revenue Recognition
The Company recognizes revenue when the goods are shipped to customers.
(e) Income Taxes
In February 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes. Statement 109 requires a change from the deferred method
of accounting for income taxes of APB Opinion 11 to the asset and
liability method of accounting for income taxes. Under the asset and
liability method of Statement 109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes
the enactment date.
Effective January 3, 1993, the Company adopted Statement 109. The
cumulative effect of that change was immaterial to the 1993
consolidated statement of earnings.
Pursuant to the deferred method under APB Opinion 11, which was applied
in 1992 and prior years, deferred income taxes are recognized for
income and expense items that are reported in different years for
financial reporting purposes and income tax purposes using the tax rate
applicable for the year of the calculation. Under the deferred method,
deferred taxes are not adjusted for subsequent changes in tax rates.
(f) Preferred Shares
Each Class A Preferred share is entitled to one-tenth of one vote,
while each Class B Preferred share, including the Series I Junior
Participating shares, is entitled to ten votes. The preferred shares
are entitled to a preference in liquidation. The Series I Junior
Participating Class B Preferred shares are entitled to cumulative
dividends at a quarterly rate of five cents per share. None of these
shares have been issued.
(g) Employee Retirement Plans
Retirement plan expense is determined in accordance with Statement of
Financial Accounting Standards No. 87, Employers' Accounting for
Pensions (FAS 87).
18
<PAGE> 34
Notes to Consolidated Financial Statements
R.G. Barry Corporation and Subsidiaries
continued
--------------------------------------------------------------------------------
(h) Per-Share Information
Earnings per common share have been computed using the average number
of shares outstanding each year (5,294,000; 5,024,000; and 5,023,000 in
1994, 1993 and 1992, respectively). There is no material dilution in
the per-share information as a result of outstanding stock options. The
average number of shares in 1993 and 1992 have been adjusted to reflect
the four-for-three stock split.
(i) Reclassification
Certain amounts in the 1993 financial statements have been reclassified
to conform to the 1994 presentation.
(2) ACQUISITION
Effective July 14, 1994, the Company acquired all of the outstanding stock
of Vesture Corporation of Randleman, North Carolina. Vesture Corporation
manufactures and markets microwave heated comfort products. The
acquisition has been accounted for by the purchase method of accounting.
The purchase price was paid by the issuance of approximately 319,000
common shares of the Company held in treasury, valued at $5,000,000. As a
result of the purchase, the Company recognized approximately $4,600,000 in
goodwill which is being amortized on a straight-line basis over 40 years.
The acquisition did not result in a significant business combination
within the definition provided by the Securities and Exchange Commission
and therefore, pro forma financial information has not been presented.
(3) INVENTORY
If the FIFO method had been used to value inventory, inventory would have
been $2,669,000, $2,915,000, and $2,933,000 higher than that reported at
the end of 1994, 1993 and 1992, respectively. Because LIFO inventory is
valued using the dollar value method, it is impracticable to separate
inventory values between raw materials, work-in-process and finished
goods.
(4) PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
DECEMBER 31, January 1, Estimated
1994 1994 life in years
----------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Land and improvements $572 $572 8-15
Buildings and improvements 5,943 5,915 40-50
Machinery and equipment 22,456 18,794 3-10
Leasehold improvements 6,221 5,958 5-20
-----
Construction in progress 471 2,240
------- -------
$35,663 $33,479
======= =======
See note 6 for a summary of property and equipment, included above,
representing capitalized leases.
(5) LONG-TERM DEBT AND RESTRICTIONS
DECEMBER 31, January 1,
1994 1994
------------ ----------
(in thousands)
<S> <C> <C>
9.7% note, due July 2004 $15,000 $ --
9 3/4% Subordinated Sinking Fund Debentures due April 1996 1,197 1,693
10 3/8% notes, due July 1997 -- 2,830
Revolving Credit Notes -- 5,500
------- -------
Total long-term debt 16,197 10,023
Less current installments 497 1,203
------- -------
Long-term debt, excluding current installments $15,700 $8,820
======= =======
</TABLE>
On July 5, 1994, the Company issued a $15 million 9.7% note, due July
2004. The note requires semi-annual interest payments, with annual
principal repayments commencing in 1998. A portion of the proceeds of the
note was used to prepay $2.83 million of 10 3/8% notes due July 1997.
In December 1993, the Company amended the revolving credit agreement with
its banks. The new agreement provides the Company with a seasonally
adjusted amount of credit that has a minimum availability of $5.5
million and a peak availability of $38 million, with interest at
prevailing rates (8.5% in 1994 and 5% in 1993). Advances under the
revolving credit agreement are due June 30, 1995. At December 31, 1994,
$2 million was outstanding.
19
<PAGE> 35
Notes to Consolidated Financial Statements
R.G. Barry Corporation and Subsidiaries
continued
----------------------------------------------------------------------------
The indentures related to the Subordinated Sinking Fund Debentures require
annual payments to the trustee sufficient to redeem approximate annual
principal amounts as follows: $497,000 in 1995 and $700,000 in 1996. The 9
3/4% debentures are redeemable in whole or in part without premium.
Under the most restrictive covenants of the various loan agreements, the
Company is (1) required to maintain a seasonally adjusted minimum working
capital, as defined; (2) required to maintain a minimum seasonally
adjusted tangible net worth, as defined; (3) required to restrict the
annual acquisition of fixed assets; (4) required to achieve a seasonally
adjusted minimum amount of gross sales and open orders, as defined; and
(5) restricted with regard to the amount of additional borrowings,
purchase of treasury shares and payment of dividends. At December 31,
1994, approximately $7,700,000 of retained earnings was available for the
payment of cash dividends and the purchase of treasury shares (see also
note 10). There were no covenant violations during fiscal 1994 and 1993.
The Company maintains compensating cash balances, which are not legally
restricted, to defray the costs of other banking services provided.
(6) LEASED ASSETS AND LEASE COMMITMENTS
The Company has lease agreements with local governments which issued
Industrial Development Revenue Bonds to construct and purchase office and
plant facilities and equipment. The leases expire in 1998 and 1999, at
which time the Company has the right to acquire (at nominal amounts) the
property under these lease agreements. The Company also has the option to
acquire these leased assets prior to the expiration of the leases for
amounts approximating the outstanding bonds, plus accrued interest. The
outstanding bonds bear interest from 6.5% to 6.6%.
At December 31, 1994, minimum lease payments due under these capital
leases are:
<TABLE>
<CAPTION>
Fiscal year Amount
-----------------------------------------------------------------
(in thousands)
<S> <C>
1995 $238
1996 236
1997 239
1998 235
1999 144
-----
Total minimum lease payments 1,092
Less amount representing interest 167
-----
Present value of minimum lease payments $925
=====
</TABLE>
The present value of minimum capital lease payments are reflected in the
balance sheets:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 January 1, 1994
---------------------------------------
(in thousands)
<S> <C> <C>
Current $180 $170
Noncurrent 745 925
---- ------
$925 $1,095
==== ======
</TABLE>
These leased assets are capitalized in property, plant and equipment:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 January 1, 1994
---------------------------------------
(in thousands)
<S> <C> <C>
Land and improvements $424 $424
Buildings and improvements 3,067 3,036
Machinery and equipment 287 279
------ ------
3,778 3,739
Less accumulated amortization 2,324 2,249
------ ------
Net book value $1,454 $1,490
====== ======
</TABLE>
20
<PAGE> 36
Notes to Consolidated Financial Statements
R.G. Barry Corporation and Subsidiaries
continued
--------------------------------------------------------------------------------
The Company occupies certain manufacturing, warehousing, operating and
sales facilities and uses certain equipment under other cancelable and
noncancelable operating lease arrangements. A summary of the noncancelable
operating lease commitments at December 31, 1994 follows:
<TABLE>
<CAPTION>
Fiscal year Amount
-----------------------------------------------------------------
(in thousands)
<S> <C>
1995 $2,996
1996 2,958
1997 2,372
1998 1,817
1999 1,535
2000-2004 2,964
2005-2007 1,445
-------
$16,087
=======
</TABLE>
Substantially all of these operating lease agreements are renewable for
periods of 3 to 15 years and require the Company to pay insurance, taxes
and maintenance expenses. Rent expense under cancelable and noncancelable
operating lease arrangements in 1994, 1993 and 1992 amounted to
$3,480,000, $2,619,000, and $2,665,000, respectively.
(7) INCOME TAXES
Effective January 3, 1993, the first day of fiscal 1993, the Company
adopted Financial Accounting Standards Board Statement 109, Accounting for
Income Taxes (FASB 109). The cumulative effect of this change determined
as of January 3, 1993, had no material impact on the consolidated
statement of earnings. The 1992 financial statements have not been
restated to apply the provisions of FASB 109.
Income tax expense (benefit) consists of:
<TABLE>
<CAPTION>
1994 1993 1992
----------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Current expense:
Federal $2,083 $1,714 $1,502
Foreign 50 129 31
State 236 235 306
------ ------ ------
2,369 2,078 1,839
Deferred federal expense (benefit) (178) 105 (428)
Charge equivalent to utilization of
net operating loss carryforward -- -- 300
------ ------ ------
$2,191 $2,183 $1,711
====== ====== ======
</TABLE>
The differences between income taxes computed by applying the statutory
federal income tax rate (34%) and income tax expense in the consolidated
financial statements are:
<TABLE>
1994 1993 1992
---------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Computed "expected" tax expense $2,041 $2,034 $1,616
State income taxes, net of federal income taxes 156 155 202
Foreign income tax expense 50 129 31
Adjustment of estimated income tax liabilities
for prior years (181) (252) --
Other, net 125 117 (138)
------ ------ ------
$2,191 $2,183 $1,711
====== ====== ======
</TABLE>
21
<PAGE> 37
Notes to Consolidated Financial Statements
R.G. Barry Corporation and Subsidiaries
continued
-------------------------------------------------------------------------------
The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities as of
December 31, 1994 and January 1, 1994 are presented below:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 January 1, 1994
---------------------------------------
(in thousands)
<S> <C> <C>
Deferred tax assets:
Accounts receivable, principally due to allowances for returns,
promotions and doubtful accounts $1,555 $1,548
Inventories, principally due to additional costs inventoried for
tax purposes 599 456
Package design costs not currently deductible for tax purposes 284 321
Certain accounting accruals, including such items as
self-insurance costs, vacation costs, and others, not currently
deductible for tax purposes 481 399
Pension costs not currently deductible for tax purposes 742 632
Deferred compensation not currently deductible for tax purposes -- 54
------ ------
Total deferred tax assets 3,661 3,410
Deferred tax liabilities--
Basis differences and differing methods of depreciation
for book and tax purposes (702) (629)
------ ------
Net deferred tax assets $2,959 $2,781
====== ======
</TABLE>
For the fiscal year 1992, deferred income tax expense (benefit) results
from temporary differences in the recognition of revenues and expenses for
financial accounting and income tax purposes. Components of the deferred
tax expense (benefit) were:
<TABLE>
<CAPTION>
(in thousands)
--------------
<S> <C>
Corporate restructuring costs currently deductible $123
Net operating loss not currently realized (300)
Pension plans cost currently deductible for tax purposes 29
Change in return and promotional allowances not currently deductible for tax purposes (54)
Inventory costs not currently deductible for tax purposes (42)
Deferred compensation not currently deductible for tax purposes (92)
Package design costs not currently deductible for tax purposes (92)
Tax depreciation over book depreciation 32
Self-insurance costs currently deductible for tax purposes 26
Contribution carryforward utilized for tax purposes 40
Franchise and other taxes not currently deductible for tax purposes (83)
Other, net (15)
-----
$(428)
=====
(8) ACCRUED EXPENSES
DECEMBER 31, 1994 January 1, 1994
---------------------------------------
(in thousands)
<S> <C> <C>
Salaries and wages $893 $1,169
Income taxes 2,222 2,145
Pensions, medical and other benefits 548 698
Taxes, other than income taxes 685 782
Other 2,133 1,074
------ ------
$6,481 $5,868
====== ======
22
</TABLE>
<PAGE> 38
Notes to Consolidated Financial Statements
R.G. Barry Corporation and Subsidiaries
continued
--------------------------------------------------------------------------------
(9) EMPLOYEE RETIREMENT PLANS
The Company and its domestic subsidiaries have noncontributory retirement
plans for the benefit of salaried and nonsalaried employees (the Plans).
The employees covered under the Plans are eligible to participate upon the
completion of one year of service. Salaried retirement plan benefits are
based upon a formula applied to a participant's final average salary and
years of service, which is reduced by a certain percentage of the
participant's social security benefits. Nonsalaried retirement plan
benefits are based on a fixed amount for each year of service. The Plans
provide reduced benefits for early retirement. The Company intends to fund
the minimum amounts required under the Employee Retirement Income Security
Act of 1974.
The funded status of the salaried retirement plan and the prepaid
retirement cost recognized at December 31, 1994 and January 1, 1994
are:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 January 1, 1994
----------------------------------------
(in thousands)
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefit of
$6,550,000 and $6,226,000, respectively $6,744 $6,449
Projected effect of increase in compensation levels 1,178 1,378
------ ------
Projected benefit obligation (PBO) 7,922 7,827
Plan assets at fair value 9,520 9,409
------ ------
Plan assets in excess of PBO 1,598 1,582
Unrecognized net loss from past experience different from that
assumed and effects of changes in actuarial assumptions 1,076 1,055
Unamortized net asset existing at the date of adoption of
FAS No. 87, which is being amortized over approximately 12 years (688) (838)
Unrecognized prior service cost (853) (712)
------ ------
Prepaid retirement cost recognized in the accompanying
consolidated balance sheets $1,133 $1,087
------ ------
</TABLE>
The funded status of the nonsalaried retirement plan and the accrued
retirement cost recognized at December 31, 1994 and January 1, 1994 are:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 January 1, 1994
----------------------------------------
(in thousands)
<S> <C> <C>
Actuarial present value of benefit obligations--
Accumulated benefit obligation, including vested benefit of
$8,291,000 and $8,202,000, respectively $ 8,442 $ 8,350
Plan assets at fair value 7,442 7,462
------- -------
Accumulated benefit obligation greater than plan assets (1,000) (888)
Unrecognized net gain from past experience different from that
assumed and effects of changes in actuarial assumptions (387) (387)
Unamortized net asset existing at the date of adoption of
FAS No. 87, which is being amortized over approximately 12 years (266) (365)
Unrecognized prior service cost 488 581
------- -------
Accrued retirement cost recognized in the accompanying
consolidated balance sheets $(1,165) $(1,059)
======= =======
</TABLE>
The Company also has a Supplemental Retirement Plan (SRP) for certain
officers of the Company as designated by the Board of Directors. The SRP
is unfunded, noncontributory, and provides for the payment of monthly
retirement benefits. Benefits are based on a formula applied to the
recipients' final average monthly compensation, reduced by a certain
percentage of their social security benefits.
23
<PAGE> 39
Notes to Consolidated Financial Statements
R.G. Barry Corporation and Subsidiaries
continued
--------------------------------------------------------------------------------
The funded status of the SRP and the accrued retirement cost recognized at
December 31, 1994 and January 1, 1994 are:
<TABLE>
<CAPTION>
DECEMBER 31, 1994 January 1, 1994
----------------------------------------
(in thousands)
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefit of
$2,172,000 and $2,492,000, respectively $ 2,212 $ 2,537
Projected effect of increase in compensation levels 526 275
------- -------
Projected benefit obligation (PBO) 2,738 2,812
Plan assets at fair value -- --
------- -------
PBO in excess of plan assets (2,738) (2,812)
Unrecognized net loss (gain) from past experience different from
that assumed and effects of changes in actuarial assumptions (194) 303
Unamortized net obligation existing at the date of adoption of
FAS No. 87, which is being amortized over approximately 12 years 315 364
Unrecognized prior service cost 414 198
Adjustment required to recognize minimum liability (34) (591)
------- -------
Accrued retirement cost recognized in the accompanying
consolidated balance sheets (including current portion of
$107,000 and $250,000 in 1994 and 1993, respectively) $(2,237) $(2,538)
========= ========
</TABLE>
The weighted-average discount rate and the rate of increase in future
compensation levels (salaried and SRP plans only) used in determining the
actuarial present value of the PBO for the Plans was 8.0% in 1994 and
7.5% in 1993, and 5% in 1994 and 1993, respectively. The expected
long-term rate of return on assets for the Plans was 9% in 1994 and
1993. The Plans' assets consist primarily of stocks and corporate bonds
listed on national exchanges, and U.S. government obligations.
The components of net pension cost for the salaried, nonsalaried and
supplemental retirement plans were:
<TABLE>
<CAPTION>
1994 1993 1992
-------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Service cost-benefits earned during the period $643 $509 $504
Interest cost on PBO 1,397 1,262 1,227
Actual return on plan assets (1,355) (1,253) (1,522)
Net amortization and deferral (166) (200) 86
------ ------ ------
$519 $318 $295
====== ====== ======
</TABLE>
The Company adopted an Employee Stock Ownership Plan (ESOP) in 1986. The
rate of contribution to the ESOP is discretionary with the Company's
Board of Directors. There was no charge to earnings for the ESOP in
1994, 1993 and 1992.
(10) SHAREHOLDERS' EQUITY
Effective June 22, 1994, the Board of Directors of the Company approved a
four-for-three share split, distributed in the form of a share dividend,
to shareholders of record on June 1, 1994. All references below to the
number of shares and per share amounts have been retroactively restated
to reflect the split.
The Company has various stock option plans, which have granted incentive
stock options exercisable for periods of up to 10 years from date of grant
at prices not less than 100% of the fair market value at date of grant.
Stock appreciation rights may be issued on certain options subject to
certain limitations. Information with respect to options under these
plans is:
24
<PAGE> 40
Notes to Consolidated Financial Statements
R.G. Barry Corporation and Subsidiaries
continued
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 1994 January 1, 1994
Number Option price Number Option price
of shares per share of shares per share
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Outstanding at beginning
of year 413,400 $2.63 - 6.65 376,200 $2.63 - 6.56
Granted 242,300 11.63 - 23.38 164,000 5.34 - 5.88
Exercised (98,900) 2.82 - 6.56 (84,400) 2.63 - 6.56
Canceled/expired (14,100) 3.09 - 14.06 (42,400) 3.10 - 6.56
------- ------------- ------- ------------
Outstanding at end of year 542,700 $2.63 - 23.38 413,400 $2.63 - 6.56
======= ============= ======= ============
At end of year:
Average option price per share $9.20 $4.75
======= =======
Options currently exercisable 121,700 156,300
======= =======
Shares reserved for future issuance 811,500 643,700
======= =======
Remaining shares available for grant 217,700 230,300
======= =======
</TABLE>
At December 31, 1994, the options outstanding under these plans were held
by 81 employees and had expiration dates ranging from 1995 to 2004.
During 1994, the Company granted approximately 51,000 nonqualified stock
options to three officers. The shares will become exercisable over a
five-year period starting in 1995 at an option price of $14.06.
During 1992, an outstanding nonqualified stock option for 19,800 shares
was exercised by an executive at $4.26 per share. This exercise price
represents 110% of the fair market value on the date the option was
granted.
Pursuant to the terms of the various stock option plans, optionees may
tender shares previously owned in exchange for the exercise of options
under the plans. The 6,000 and 21,000 treasury shares acquired by the
Company in fiscal 1994 and 1992, respectively, were acquired in
conjunction with the exercise of options.
The Company has an employee stock purchase plan in which approximately 600
employees are eligible to participate. Under the terms of the plan,
employees receive options to acquire common shares at the lower of 85% of
the fair market value on their enrollment date or the termination date of
the plan term. At December 31, 1994, there were options to purchase
approximately 41,000 common shares outstanding held by 264 employees at
$18.49 per share, with an expiration date of September 1996; $92,000 had
been paid in to the plan, and 165,000 shares are reserved for issuance.
During 1994, options were exercised by 107 employees to purchase
approximately 86,000 common shares at $3.84 per share.
The Company had previously issued 359,000 restricted common shares
pursuant to employment agreements with two key executives. These shares
may not otherwise be disposed of or transferred by the holder until the
restrictions lapse; however, the shares are entitled to full voting and
dividend rights. The restrictions, with certain exceptions, lapse at a
rate of 10% per year through 1995; provided, however, that the restricted
shares may be forfeited if the executives terminate their employment under
certain circumstances. During 1992, the employment agreement with one
executive relating to 59,000 of these restricted shares was terminated,
and the restrictions lapsed on the remaining shares. Provisions as set
forth in the agreements, allow for accelerated release of the restrictions
on the shares upon achievement of specified earnings levels by the
Company. Charges to earnings relating to these plans were $167,000 in
1994, $167,000 in 1993, and $271,000 in 1992. The agreements also provide
for separation compensation in the event of certain early termination.
Without regard to any debt covenant limitations, the Company is obligated
under one of the agreements relating to 300,000 restricted shares, to
purchase up to 50% of the unrestricted shares presented by the key
executive. The purchase price shall be at the market value on the date the
transfer restrictions on such shares lapse. No shares were presented or
purchased in 1992 and 1991. In March 1994 and January 1993, the Company
purchased 30,000 unrestricted shares presented by the key executive at
$17.25 and $7.63 per share, respectively, which represented the market
price on the date of purchase.
In the event that shares received through the various stock plans are sold
within one year of exercise, the Company is entitled to a tax deduction.
The deduction is not reflected in the consolidated statement of earnings
but is reflected as an increase in additional capital in excess of par
value.
25
<PAGE> 41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
R.G. Barry Corporation and Subsidiaries
continued
-------------------------------------------------------------------------------
(11) PREFERRED SHARE PURCHASE RIGHTS
The Company's Board of Directors previously declared a dividend of one
Preferred Share Purchase Right (Right) on each outstanding common share of
the Company. Under certain conditions, each Right may be exercised to
purchase a unit consisting of 1/10 of a share of Series I Junior
Participating Class B Preferred Shares, par value $1 per share, at an
initial exercise price of $20 per unit. The Rights may not be exercised
until the earlier of 15 days after a public announcement that a person or
group has acquired, or obtained the right to acquire, 25% or more of the
Company's outstanding common shares (Share Acquisition Date) or 10
business days after the commencement of a tender or exchange offer that
would result in a person or group owning 30% or more of the Company's
outstanding common shares.
In the event that, at any time following the Share Acquisition Date, the
Company is acquired in a merger or other business combination transaction
in which the Company is not the surviving corporation or 50% or more of
the Company's assets or earning power is sold or transferred, each holder
of a Right will be entitled to buy the number of shares of common stock of
the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right. If, after the
Share Acquisition Date, the Company is the surviving corporation in a
merger with the acquiring person or group, or if a person or group
acquires 30% or more of the Company's common shares under certain
circumstances, then each holder of a Right will be entitled to buy common
shares of the Company having a market value of two times the exercise
price of the Right.
The Rights, which do not have any voting rights, expire on March 16, 1998,
and may be redeemed by the Company at a price of $0.01 per Right at any
time until 15 days following the Share Acquisition Date.
(12) RELATED PARTY OBLIGATION
The Company and a key executive have entered into an agreement pursuant to
which the Company is obligated for up to one year after the death of the
key executive to purchase, if the estate elects to sell, up to $4 million
of the Company's common shares, at their fair market value on the date of
purchase, held by the key executive. To fund its potential obligation to
purchase such shares, the Company has purchased a $5 million life
insurance policy on the key executive, the cash surrender value of which
is included in other assets in the accompanying balance sheet. In
addition, for a period of 24 months following the key executive's death,
the Company will have a right of first refusal to purchase any shares of
the Company owned by the key executive at the time of his death if his
estate elects to sell such shares. The Company would have the right to
purchase such shares on the same terms and conditions as the estate
proposes to sell such shares.
(13) CONTINGENT LIABILITIES
In 1994, the Company and several of its officers and directors were named
as defendants in three purported class actions presently pending in the
United States District Court for the Southern District of Ohio, Eastern
Division. The complaints generally allege that the Company made several
false and misleading statements in violation of certain provisions of the
federal securities laws. One complaint also alleges claims arising under
state law. The Company believes that these actions are without merit and
that it has meritorious defenses. The Company intends to defend itself
vigorously against these actions. Management does not expect the
resolution of this matter to have a material adverse effect on the
Company's financial position or results of operations.
The Company has been named as defendant in various lawsuits arising from
the ordinary course of business. In the opinion of management, the
resolution of such matters is not expected to have a material adverse
effect on the Company's financial position or results of operations.
26
<PAGE> 42
INDEPENDENT AUDITORS' REPORT
R.G. Barry Corporation and Subsidiaries
-------------------------------------------------------------------------------
The Board of Directors and Shareholders
R.G. Barry Corporation:
We have audited the accompanying consolidated balance sheets of R.G. Barry
Corporation and subsidiaries (the Company) as of December 31, 1994 and January
1, 1994, and the related consolidated statements of earnings, shareholders'
equity, and cash flows for each of the fiscal years in the three-year period
ended December 31, 1994. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of R.G. Barry
Corporation and subsidiaries as of December 31, 1994 and January 1, 1994, and
the results of their operations and their cash flows for each of the fiscal
years in the three-year period ended December 31, 1994, in conformity with
generally accepted accounting principles.
As discussed in notes 1 and 7, the Company changed its method of accounting for
income taxes in fiscal 1993 to adopt the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes."
KPMG Peat Marwick LLP
Columbus, Ohio
February 14, 1995
27
<PAGE> 43
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES
The Board of Directors and Shareholders
R. G. Barry Corporation:
Under date of February 14, 1995, we reported on the consolidated balance sheets
of R. G. Barry Corporation and subsidiaries as of December 31, 1994 and January
1, 1994, and the related consolidated statements of earnings, shareholders'
equity and cash flows for each of the fiscal years in the three-year period
ended December 31, 1994, as contained in the fiscal 1994 annual report to
shareholders. These consolidated financial statements and our report thereon
are incorporated by reference in the annual report on Form 10-K for the fiscal
year 1994. In connection with our audits of the aforementioned consolidated
financial statements, we also audited the related consolidated financial
statement schedules as listed in the accompanying index. These financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statement schedules
based on our audits.
In our opinion, such financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.
As discussed in notes 1 and 7 to the consolidated financial statements, the
Company changed its method of accounting for income taxes in fiscal 1993 to
adopt the provisions of the Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes."
KPMG Peat Marwick LLP
Columbus, Ohio
February 14, 1995
<PAGE> 44
Schedule II
-----------
<TABLE>
R. G. BARRY CORPORATION AND SUBSIDIARIES
Reserves
Fiscal year ended December 31, 1994
<CAPTION>
Column A Column B Column C Column D Column E
-------------------- ---------- ---------- ---------- ----------
Additions
charged
Balance at to costs Balance at
beginning and end of
Description of period expenses Deductions period
----------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C>
Reserves deducted from accounts
receivable:
Allowance for doubtful
receivables $ 253,000 239,000 332,000(1) 160,000
Allowance for returns 2,487,000 1,537,000 2,487,000(2) 1,537,000
Allowance for promotions 2,426,000 2,403,000 2,426,000(3) 2,403,000
----------- --------- ---------- ---------
$ 5,166,000 4,179,000 5,245,000 4,100,000
=========== ========== ========== ==========
Reserve for costs of restructuring $ 58,000 - 58,000(4) -
=========== ========== ========== ==========
<FN>
__________________________________
(1) Write-off of uncollectible accounts.
(2) Represents the impact on fiscal 1994 operations of fiscal year 1993 sales
returns reserved for in 1993.
(3) Represents the impact on fiscal 1994 operations of fiscal 1993 promotions
reserved for in 1993.
(4) Represents reduction of reserve during fiscal 1994.
</TABLE>
<PAGE> 45
Schedule II
-----------
R. G. BARRY CORPORATION AND SUBSIDIARIES
Reserves
Fiscal year ended January 1, 1994
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
---------- ---------- ---------- ---------- ----------
Additions
charged
Balance at to costs Balance at
beginning and end of
Description of period expenses Deductions period
----------- --------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Reserves deducted from accounts
receivable:
Allowance for doubtful
receivables $ 239,000 265,000 251,000(1) 253,000
Allowance for returns 2,632,000 2,487,000 2,632,000(2) 2,487,000
Allowance for promotions 2,223,000 2,426,000 2,223,000(3) 2,426,000
--------- --------- --------- ---------
$ 5,094,000 5,178,000 5,106,000 5,166,000
========= ========= ========= =========
Reserve for costs of restructuring $ 121,000 - 63,000(4) 58,000
========= ========= =========== =========
<FN>
__________________________________
(1) Write-off of uncollectible accounts.
(2) Represents the impact on fiscal 1993 operations of fiscal year 1992 sales
returns reserved for in 1992.
(3) Represents the impact on fiscal 1993 operations of fiscal 1992 promotions
reserved for in 1992.
(4) Represents costs paid during fiscal 1993.
</TABLE>
<PAGE> 46
Schedule II
-----------
R. G. BARRY CORPORATION AND SUBSIDIARIES
Reserves
Fiscal year ended January 2, 1993
<TABLE>
<CAPTION>
Column C
----------
Column B Additions Column E
---------- charged ----------
Column A Balance at to costs Column D Balance at
---------- beginning and ---------- end of
Description of period expenses Deductions period
----------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
Reserves deducted from accounts
receivable:
Allowance for doubtful
receivables $ 241,000 147,000 149,000(1) 239,000
Allowance for returns 2,478,000 2,632,000 2,478,000(2) 2,632,000
Allowance for promotions 3,020,000 2,223,000 3,020,000(3) 2,223,000
--------- --------- --------- ---------
$ 5,739,000 5,002,000 5,647,000 5,094,000
========= ========= ========= =========
Reserve for costs of restructuring $ 482,000 - 361,000(4) 121,000
========= ========= ========= =========
<FN>
__________________________________
(1) Write-off of uncollectible accounts.
(2) Represents the impact on fiscal 1992 operations of fiscal year 1991 sales
returns reserved for in 1991.
(3) Represents the impact on fiscal 1992 operations of fiscal 1991 promotions
reserved for in 1991.
(4) Represents costs paid during fiscal 1993.
</TABLE>
<PAGE> 47
R. G. BARRY CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1994
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ------------------------- -------------------------
<S> <C> <C>
3(a) Articles of Incorporation Incorporated herein by
of Registrant, as amended reference to Registrant's
Annual Report on Form
10-K for the fiscal year
ended December 31, 1988
(File No. 0-12667)
[Exhibit 3(a)(ii)]
3(b) Regulations of Incorporated herein by
Registrant, as amended reference to Registrant's
Annual Report on Form
10-K for the fiscal year
ended January 2, 1988
(File No. 0-12667)
[Exhibit 3(b)]
4(a) Trust Indenture, dated as Incorporated herein by
of July 1, 1972, by and reference to Registrant's
between Registrant and Registration Statement on
The Huntington National Form S-1, filed June 27,
Bank of Columbus, as 1972 (Registration No.
Trustee 2-44432) [Exhibit 4(a)]
4(b) First Supplemental Trust Incorporated herein by
Indenture, dated as of reference to Registrant's
May 2, 1975, by and Registration Statement on
between Registrant and Form S-7, filed March 3,
The Huntington National 1978 (Registration No.
Bank of Columbus, as 2-60888) [Exhibit
Trustee 2(b)(ii)]
4(c) Second Supplemental Trust Incorporated herein by
Indenture, dated as of reference to Registrant's
April 1, 1978, by and Registration Statement on
between Registrant and Form S-7, filed March 3,
The Huntington National 1978 (Registration No.
Bank of Columbus, as 2-60888) [Exhibit
Trustee 2(b)(iii)]
</TABLE>
<PAGE> 48
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ------------------------- -------------------------
<S> <C> <C>
4(d) Third Supplemental Incorporated herein by
Indenture, dated as of reference to Registrant's
June 22, 1984, between Current Report on Form
Registrant and The 8-K dated June 22, 1984,
Huntington National Bank, filed June 26, 1984 (File
as Trustee No. 1-7231) [Exhibit
4(d)]
4(e) Fourth Supplemental Trust Incorporated herein by
Indenture, dated as of reference to Registrant's
February 27, 1985, Annual Report on Form
between Registrant and 10-K for the fiscal year
The Huntington National ended December 29, 1984
Bank, as Trustee (File No. 0-12667)
[Exhibit 4(e)]
4(f) Revolving Credit Incorporated herein by
Agreement, dated as of reference to Registrant's
June 30, 1991, by and Quarterly Report on Form
among Registrant, The 10-Q for the fiscal
Bank of New York and The quarter ended June 22,
Huntington National Bank 1991 (File No. 0-12667)
[Exhibit 4(a)]
4(g) First Amendment to Incorporated herein by
Revolving Credit reference to Registrant's
Agreement, dated as of Annual Report on Form
October 16, 1991, by and 10-K for the fiscal year
among Registrant, The ended December 28, 1991
Bank of New York and The (File No. 1-8769)
Huntington National Bank [Exhibit 4(k)]
4(h) Second Amendment to Incorporated herein by
Revolving Credit reference to Registrant's
Agreement, dated as of Annual Report on Form
December 11, 1991, by and 10-K for the fiscal year
among Registrant, The ended December 28, 1991
Bank of New York and The (File No. 1-8769)
Huntington National Bank [Exhibit 4(l)]
4(i) Third Amendment to Incorporated herein by
Revolving Credit reference to Registrant's
Agreement, dated as of Annual Report on Form
February 21, 1992, by and 10-K for the fiscal year
among Registrant, The ended December 28, 1991
Bank of New York and The (File No. 1-8769)
Huntington National Bank [Exhibit 4(m)]
</TABLE>
<PAGE> 49
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ------------------------- -------------------------
<S> <C> <C>
4(j) Fourth Amendment to Incorporated herein by
Revolving Credit reference to Registrant's
Agreement, dated as of Annual Report on Form
March 20, 1992, by and 10-K for the fiscal year
among Registrant, The ended December 28, 1991
Bank of New York and The (File No. 1-8769)
Huntington National Bank [Exhibit 4(n)]
4(k) Fifth Amendment to Incorporated herein by
Revolving Credit reference to Registrant's
Agreement, dated as of Quarterly Report on Form
June 3, 1992, by and 10-Q for the fiscal
among Registrant, The quarter ended June 27,
Bank of New York and The 1992 (File No. 1-8769)
Huntington National Bank [Exhibit 4(a)]
4(l) Sixth Amendment to Incorporated herein by
Revolving Credit reference to Registrant's
Agreement, dated as of Quarterly Report on Form
June 8, 1993, by and 10-Q for the fiscal
among Registrant, The quarter ended June 26,
Bank of New York and The 1993 (File No. 1-8769)
Huntington National Bank [Exhibit 4(a)]
4(m) Seventh Amendment to Incorporated herein by
Revolving Credit reference to Registrant's
Agreement and Note Annual Report on
Amendment Agreement, Form 10-K for the fiscal
dated as of December 20, year ended January 1,
1993, by and among 1994 (File No. 1-8769)
Registrant, The Bank of [Exhibit 4(q)]
New York and The
Huntington National Bank
4(n) Eighth Amendment to Incorporated herein by
Revolving Credit reference to Registrant's
Agreement, dated as of Annual Report on
February 14, 1994, by and Form 10-K for the fiscal
among Registrant, The year ended January 1,
Bank of New York and The 1994 (File No. 1-8769)
Huntington National Bank [Exhibit 4(r)]
4(o) Note Agreement, dated Incorporated herein by
July 5, 1994, between reference to Registrant's
Registrant and Registration Statement on
Metropolitan Life Form S-3, filed July 21,
Insurance Company 1994 (Registration No. 33-
81820) [Exhibit 4(t)]
</TABLE>
<PAGE> 50
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ------------------------- -------------------------
<S> <C> <C>
4(p) Rights Agreement, dated Incorporated herein by
as of February 29, 1988, reference to Registrant's
between Registrant and Current Report on Form
The Huntington National 8-K dated March 14, 1988,
Bank filed March 15, 1988
(File No. 0-12667)
[Exhibit 4]
9 Zacks Voting Trust and Incorporated herein by
amendments thereto reference to Registrant's
Annual Report on Form
10-K for the fiscal year
ended January 2, 1993
(File No. 1-8769)
[Exhibit 9]
10(a) R. G. Barry Corporation Pages 66 through 137
Salaried Employees'
Pension Plan (as Amended
and Restated Effective
January 1, 1989)
10(b) R. G. Barry Corporation Incorporated herein by
Supplemental Retirement reference to Registrant's
Plan Annual Report on
Form 10-K for the fiscal
year ended December 29,
1990 (File No. 0-12667)
[Exhibit 10(b)]
10(c) R. G. Barry Corporation Incorporated herein by
1984 Incentive Stock reference to Registrant's
Option Plan for Key Current Report on Form
Employees 8-K dated June 22, 1984,
filed June 26, 1984 (File
No. 1-7231) [Exhibit
10(d)]
10(d) R. G. Barry Corporation Incorporated herein by
Incentive Plan for Key reference to Registrant's
Employees Annual Report on Form
10-K for the fiscal year
ended December 29, 1984
(File No. 0-12667)
[Exhibit 10(e)]
</TABLE>
<PAGE> 51
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ------------------------- -------------------------
<S> <C> <C>
10(e) Employment Agreement, Pages 138 through 155
dated July 1, 1994,
between Registrant and
Gordon Zacks
10(f) Agreement, dated Incorporated herein by
September 27, 1989, reference to Registrant's
between Registrant and Current Report on Form
Gordon Zacks 8-K dated October 11,
1989, filed October 12,
1989 (File No. 0-12667)
[Exhibit 28.1]
10(g) Amendment No. 1, dated as Incorporated herein by
of October 12, 1994, reference to the
between Registrant and Amendment No. 14 to
Gordon Zacks Schedule 13D, dated
January 27, 1995, filed
by Gordon Zacks on
February 13, 1995
[Exhibit 5]
10(h) Split Dollar Insurance Incorporated herein by
Agreement, dated reference to Registrant's
September 29, 1989, Annual Report on Form
between Registrant and 10-K for the fiscal year
Gordon Zacks ended December 30, 1989
(File No. 0-12667)
[Exhibit 10(h)]
10(i) R. G. Barry Corporation Incorporated herein by
Leveraged Employee Stock reference to Registrant's
Ownership Plan Annual Report on Form
10-K for the fiscal year
ended December 29, 1990
(File No. 0-12667)
[Exhibit 10(j)]
10(j) R. G. Barry Corporation Incorporated herein by
1988 Stock Option Plan reference to Registrant's
(Reflects amendments Registration Statement on
through May 11, 1993) Form S-8, filed
August 18, 1993
(Registration No.
33-67594) [Exhibit 4(r)]
</TABLE>
<PAGE> 52
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ------------------------- -------------------------
<S> <C> <C>
10(k) Description of Incentive Incorporated herein by
Bonus Program reference to Registrant's
Annual Report on Form
10-K for the fiscal year
ended December 28, 1991
(File No. 1-8769)
[Exhibit 10(k)]
10(l) R. G. Barry Corporation Incorporated herein by
Employee Stock Purchase reference to Registrant's
Plan (Reflects amendments Registration Statement on
and revisions for stock Form S-8, filed
dividends and stock August 18, 1993
splits through May 11, (Registration No.
1993) 33-67596) [Exhibit 4(r)]
10(m) R. G. Barry Corporation Incorporated herein by
1994 Stock Option Plan reference to Registrant's
(Reflects stock splits Registration Statement on
through June 22, 1994) Form S-8, filed August
24, 1994 (Registration
No. 33-83252) [Exhibit
4(q)]
10(n) Executive Employment Pages 156 through 167
Agreement, dated July 1,
1994, between Registrant
and Christian Galvis
10(o) Agreement, dated July 1, Pages 168 through 177
1994, between Registrant
and Richard L. Burrell
10(p) Agreement, dated July 1, Pages 178 through 187
1994, between Registrant
and Daniel D. Viren
10(q) Agreement, dated July 1, Pages 188 through 198
1994, between Registrant
and Harry Miller
</TABLE>
<PAGE> 53
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ------------------------- -------------------------
<S> <C> <C>
13 Registrant's Annual Incorporated herein by
Report to Shareholders reference to the
for the fiscal year ended financial statements
December 31, 1994 (Not portion of this Annual
deemed filed except for Report on Form 10-K
the portions thereof beginning at page 21
which are specifically
incorporated by reference
into this Annual Report
on Form 10-K)
21 Subsidiaries of Pages 199 and 200
Registrant
23 Consent of Independent Page 201
Certified Public
Accountants
24 Powers of Attorney Pages 202 through 210
27 Financial Data Schedule Pages 211 and 212
</TABLE>
<PAGE> 1
Exhibit 10(a)
R. G. Barry Corporation Salaried Employees'
Pension Plan (as Amended and Restated
Effective January 1, 1989)
<PAGE> 2
R. G. BARRY CORPORATION
SALARIED EMPLOYEES' PENSION PLAN
(As Amended and Restated
Effective January 1, 1989)
<PAGE> 3
R. G. BARRY CORPORATION
SALARIED EMPLOYEES' PENSION PLAN
(As Amended and Restated Effective January 1, 1989)
<TABLE>
<CAPTION>
CONTENTS
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<S> <C>
ARTICLE I. THE PLAN
1.1 Establishment and Amendment of the Plan 1
1.2 Applicability of Plan 1
ARTICLE II. DEFINITIONS
2.1 Definitions 2
2.2 Construction 9
ARTICLE III. PARTICIPATION AND SERVICE
3.1 Active Participation 10
3.2 Participation Status; Membership; Reemployment 10
3.3 Transferred Employees 11
3.4 Vesting Service 12
3.5 Benefit Service 15
3.6 Prior Service 15
3.7 Hours of Service 16
3.8 Special Provisions Relating to Acquired Businesses 17
3.9 Leased Employees 17
3.10 Special Provisions for Participants Who Enter the Armed Forces 17
3.11 Special Provisions for Class A Commissioned Sales Representatives 18
ARTICLE IV. BENEFITS
4.1 Normal Retirement Benefits 19
4.2 Late Retirement Benefits 19
4.3 Early Retirement Benefits 20
4.4 Disability Retirement Benefits 21
4.5 Vested Retirement Benefits 22
4.6 Death Benefit 23
</TABLE>
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R. G. BARRY CORPORATION
SALARIED EMPLOYEES' PENSION PLAN
(As Amended and Restated Effective January 1, 1989)
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<S> <C>
4.7 Preretirement Surviving Spouse's Benefit 23
4.8 Automatic Joint and Surviving Spouse Annuity 24
4.9 Normal and Optional Methods of Benefit Payments 26
4.10 Adjustment for In-Service Payments 28
4.11 Maximum Annual Benefits 28
4.12 Plan in Effect at Termination of Employment Controls 31
4.13 Optional Direct Rollovers of Eligible Rollover Distributions 31
ARTICLE V. COMMENCEMENT OF BENEFIT PAYMENTS AND DURATION
5.1 Commencement and Duration 34
5.2 Required and Minimum Distribution Rules 35
5.3 Reemployment After Benefit Commencement but Prior to Normal Retirement Age 37
5.4 Reemployment After Benefit Commencement and After Attaining Normal Retirement Age 38
5.5 Suspension of Benefits Notice and Procedures 38
ARTICLE VI. PLAN ADMINISTRATION
6.1 Appointment of Committee 40
6.2 Compensation and Expenses 40
6.3 Manner of Action 41
6.4 Chairman, Secretary, and Employment of Specialists 41
6.5 Delegation of Responsibilities 41
6.6 Records 42
6.7 Rules 42
6.8 Administration 42
6.9 Appeals from Denial of Claims 43
6.10 Notice of Address and Missing Persons 43
6.11 Application for Benefits and Data 44
6.12 Indemnity for Liability 44
</TABLE>
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R. G. BARRY CORPORATION
SALARIED EMPLOYEES' PENSION PLAN
(As Amended and Restated Effective January 1, 1989)
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ARTICLE VII. FINANCING
7.1 Funding 46
7.2 Contributions 46
ARTICLE VIII. AMENDMENT AND TERMINATION
8.1 Amendment and Termination 47
8.2 Limitations on Amendments 48
8.3 Distribution on Termination 49
8.4 Effect of Contingencies Affecting the Employer 50
8.5 Temporary Restrictions on Benefits for Members of Each Employer 50
8.6 Restrictions on Benefits and Distributions to Certain Members 51
ARTICLE IX. PARTICIPATION IN AND WITHDRAWAL FROM THE PLAN BY AN EMPLOYER
9.1 Participation in the Plan 53
9.2 Withdrawal from the Plan 53
ARTICLE X. MISCELLANEOUS
10.1 Nonalienation 55
10.2 Incompetency 55
10.3 Merger, Consolidation, or Transfer 55
10.4 Litigation 56
10.5 Effect of Mistake 56
10.6 No Enlargement of Employee Rights 56
10.7 No Guarantee 56
10.8 Internal Revenue Service Approval 57
10.9 Exclusive Benefit; Nonreversion 57
10.10 Applicable Law 58
10.11 Severability 58
10.12 Effective Dates for Certain Provisions 58
</TABLE>
iii
<PAGE> 6
<TABLE>
R. G. BARRY CORPORATION
SALARIED EMPLOYEES' PENSION PLAN
(As Amended and Restated Effective January 1, 1989)
<CAPTION>
CONTENTS
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<S> <C>
ARTICLE XI. TOP-HEAVY PROVISIONS
11.1 Application of Top-Heavy Provisions 61
11.2 Definitions 61
11.3 Vesting Requirements 64
11.4 Minimum Benefit 64
11.5 Limit on Annual Additions; Combined Plan Limit 65
</TABLE>
iv
<PAGE> 7
ARTICLE I. THE PLAN
1.1 ESTABLISHMENT AND AMENDMENT OF THE PLAN
R. G. Barry Corporation ("Sponsor") heretofore established effective January 1,
1973, and presently maintains a defined benefit plan for the benefit of its
Eligible Employees and their surviving Spouses or Beneficiaries and Eligible
Employees and their surviving Spouses or Beneficiaries of participating
Affiliates. Said plan was last previously restated effective January 1, 1984 and
was amended thereafter from time to time. Said plan is hereby further amended
and restated as set forth herein to reflect certain clarifications and
additional provisions. Subject to Section 10.12, said plan shall also generally
be effective as of January 1, 1989 and shall be known as the R. G. Barry
Corporation Salaried Employees' Pension Plan ("Plan").
1.2 APPLICABILITY OF PLAN
The provisions of this Plan as set forth herein are applicable only to the
Eligible Employees and their surviving Spouses or Beneficiaries of the Employer
in current employment on or after January 1, 1989. The restated Plan shall
preserve all benefits accrued and not forfeited by Members under the terms of
the Plan prior to this restatement.
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<PAGE> 8
ARTICLE II. DEFINITIONS
2.1 DEFINITIONS
Whenever used in the Plan, the following terms shall have the respective
meanings set forth below unless otherwise expressly provided herein, and when
the defined meaning is intended the term is capitalized.
(a) "ACTUARIAL EQUIVALENT" means a benefit having the same value as the
benefit which it replaces, computed on the basis of the 1971 Group Annuity
Mortality Table for Males projected to 1990 by Scale D with an age setback
of four years for the Participant and two years for any Spouse or
Beneficiary and a 7 percent annual interest rate assumption, except as
otherwise specified in the document. For purposes of determining the
Actuarial Equivalent present value and single sum amount of a Member's
monthly Retirement Benefit, subject to the limitations of Sections 4.9 and
8.2, such determination shall be made using an interest rate not greater
than--
(1) The "applicable interest rate" if the present value of such Benefit
(using such rate) is not in excess of $25,000; or
(2) 120 percent of the "applicable interest rate" if the present value of
such Benefit exceeds $25,000 (as determined under (1) above). In no
event shall the present value determined under this Section 2.1(a)(2)
be less than $25,000.
For purposes of this Section 2.1(a), "applicable interest rate" shall mean
the interest rate or rates which would be used by the Pension Benefit
Guaranty Corporation for purposes of determining the present value of a
Member's lump sum benefit under the Plan if the Plan had terminated on the
date distribution commences with insufficient assets to provide benefits
guaranteed by the Pension Benefit Guaranty Corporation on such date,
provided, that the "applicable interest rate" shall be determined as of
the second calendar month preceding the month in which the single sum is
payable rather than as of the date distribution commences.
(b) "ACTUARY" means the actuary for the Plan who is appointed or selected by
the Committee but is independent of the Sponsor. The Actuary designated
shall serve for so long as shall be mutually agreeable to the Committee
and the Actuary. The Actuary shall be a person who is an "enrolled
actuary" under ERISA, or shall be an actuarial consulting firm or
corporation which employs or has on its staff such an enrolled actuary.
2
<PAGE> 9
(c) "AFFILIATE" means--
(1) Any corporation other than the Sponsor, i.e., either a
subsidiary corporation or an affiliated or associated
corporation of the Sponsor, which together with the
Sponsor is a member of a "controlled group" of
corporations (as defined in Code Section 414(b));
(2) Any organization which together with the Sponsor is under
"common control" (as defined in Code Section 414(c));
(3) Any organization which together with the Sponsor is an
"affiliated service group" (as defined in Code Section
414(m));
(4) Any organization required to be aggregated with an
Employer pursuant to Code Section 414(o); or
(5) Any other corporation or entity designated as an
Affiliate by resolution of the Board of Directors of the
Sponsor.
(d) "ANNUITY STARTING DATE" means, in the case of benefits payable
in the form of an annuity, the earlier of the first day of the
first period for which a benefit is payable under the Plan, or
the date on which a Member, surviving Spouse, or Beneficiary
begins to receive benefits under the Plan. In the case of a
benefit payable in the form of a single sum payment, Annuity
Starting Date means the date on which all events have occurred
which entitle the Member to receive such benefit.
(e) "AUTOMATIC JOINT AND SURVIVING SPOUSE ANNUITY" means the
annuity form of benefit payments described in Section 4.8.
(f) "BENEFICIARY" means the person or persons designated under
Section 4.9(c).
(g) "BENEFIT SERVICE" means the service of a Participant, as
determined under Section 3.5.
(h) "BOARD OF DIRECTORS" means the Board of Directors of the
Sponsor.
(i) "CODE" means the Internal Revenue Code of 1986 and the
regulations issued thereunder, as amended from time to time.
(j) "COMMITTEE" means the committee which is responsible for the
administration of the Plan, as provided in Article VI.
(k) "COMPENSATION" means a Participant's pay, determined as
follows:
(1) For all purposes under the Plan, except as otherwise
specified, Compensation means:
(A) For Plan Years beginning on or after January 1, 1991,
the Participant's salary and excludes overtime, cash
bonuses, and sales incentive payments.
(B) For Plan Years beginning before January 1, 1991, the
Participant's salary and commissions, but shall
exclude
3
<PAGE> 10
overtime and cash bonuses as well as commissions while
a Class A salesman.
(2) For purposes of applying the limitations described in
Section 4.11 and the provisions of Article XI,
Compensation means the Member's "compensation" as defined
in Code Section 415(c)(3), as determined by the
Committee.
Notwithstanding the foregoing provisions of this Section
2.1(k), the Compensation of each Employee that may be taken
into account under the Plan shall not exceed the first
"applicable dollar amount" of an Employee's annual
Compensation; provided, however, that such annual dollar
limitation shall not apply to Compensation for purposes of
Section 4.11. For purposes of this Section 2.1(k), the term
"applicable dollar amount" means the maximum annual
compensation limit which is $150,000 as adjusted for the cost
of living in accordance with Code Section 401(a)(17)(B) for
Plan Years beginning on or after January 1, 1994; provided,
however, such limit shall be $200,000 as adjusted annually for
increases in the cost of living in accordance with Code Section
415(d) for Plan Years beginning on or after January 1, 1989 and
before January 1, 1994. For purposes of applying the limitation
in the two preceding sentences, the rules of Code Section
414(q)(6) shall apply to the determination of an Employee's
annual Compensation; provided, however, that in applying such
rules (which relate to the Compensation paid to certain family
members of certain Highly Compensated Employees), the term
"family" shall only include the Spouse of the Employee and any
lineal descendants of the Employee who have not attained age 19
before the close of the annual measurement period.
(l) "EFFECTIVE DATE" means January 1, 1989. The original effective
date of this Plan is January 1, 1973.
(m) "ELIGIBILITY SERVICE" means the service of an Employee, as
determined under Section 3.1.
(n) "ELIGIBLE EMPLOYEE" means any Employee of an Employer
compensated by a salary paid on a biweekly basis.
(o) "EMPLOYEE" means an employee who is employed by the Sponsor or
an Affiliate; excluding, however, any person who is an
independent contractor or leased employee as defined in Section
3.9.
(p) "EMPLOYER" means the Sponsor or any Affiliate which has elected
to become a participating Employer under the Plan in accordance
with Article IX.
(q) "EMPLOYMENT COMMENCEMENT DATE" shall mean the first day on
which an Employee is credited with an Hour of Service with the
4
<PAGE> 11
Employer or an Affiliate or, if applicable, the first day
following a Break in Service on which an Employee is credited
with an Hour of Service with the Employer or an Affiliate.
(r) "ERISA" means the Employee Retirement Income Security Act of
1974 and the regulations issued thereunder, as amended from
time to time.
(s) "FINAL AVERAGE COMPENSATION" means one-sixtieth of the
Participant's total Compensation for the highest five
consecutive Plan Years out of the last 10 consecutive Plan
Years of employment with an Employer; provided that if he has
fewer than five Plan Years of employment with an Employer, then
his Final Average Compensation shall be determined using such
Participant's total period of employment with the Employer and
the actual number of months worked. With respect to a
reemployed Participant, the period during which he is not
employed by an Employer shall not be considered an interruption
for purposes of the meaning of "consecutive".
(t) "HIGHLY COMPENSATED EMPLOYEE" means, with respect to any Plan
Year, any Employee who at any time during the preceding Plan
Year--
(1) was a 5-percent owner (as determined under Code
Section 416(i)(1)),
(2) received Compensation from the Employers and
Affiliates in excess of $75,000,
(3) received Compensation from the Employers and
Affiliates in excess of $50,000 and was in the
top-paid 20 percent of Employees, or
(4) was an officer who received Compensation in excess of
50 percent of the amount in effect under Code Section
415(b)(1)(A) for such Plan Year.
Highly Compensated Employee also means, with respect to any
Plan Year, any Employee who, at any time during such Plan Year,
met the descriptions contained in (2), (3) or (4) above and was
among the top-paid 100 Employees or any Employee who was a
5-percent owner. In applying the provisions of (2), (3) and (4)
above, the dollar amounts described therein shall automatically
be adjusted annually pursuant to Code Section 415(d). If an
Employee is a family member of either a 5-percent owner who is
an active or former Employee or a Highly Compensated Employee
who is one of the 10 most Highly Compensated Employees ranked
on the basis of Compensation, then the family member and the
5-percent owner or top-ten Highly Compensated Employee shall be
aggregated to the
5
<PAGE> 12
extent required by the Code. The term "family member" includes
the spouse, lineal ascendants and descendants of the Employee
or former Employee, and the spouses of such lineal ascendants
and descendants. In determining the Highly Compensated
Employees of the Employer, the provisions of this Section
2.1(t) shall be applied in accordance with the provisions of
Code Section 414(q) and related guidance, including in the
discretion of the Committee (and pursuant to the appropriate
election) any simplified method or the calendar year
calculation election.
(u) "HOUR OF SERVICE" means the hours for which an Employee shall
receive credit for various purposes under the Plan, as
described in Section 3.7.
(v) "LEAVE OF ABSENCE" means any absence without pay, authorized on
a nondiscriminatory basis by an Employer or nonparticipating
Affiliate under its standard personnel practices (which may be
granted for reasons other than termination of employment,
discharge, retirement, or death), such as illness, accident,
emergency or other unusual condition affecting the Employee or
persons dependent upon him or for any reason sufficient in the
discretion of the Sponsor; provided, however, that in granting
leaves of absence, all Employees shall be treated alike.
(w) "MEMBER" means an Active Participant, an Inactive Participant
or a Former Participant who is entitled to receive a Retirement
Benefit under the Plan, as provided in Section 3.2.
(x) "PARTICIPANT" means an "Active Participant" or "Inactive
Participant", as such terms are defined in Section 3.2. The
term "Former Participant" shall have the meaning provided for
in Section 3.2.
(y) "PLAN" means the R. G. BARRY CORPORATION SALARIED EMPLOYEES'
PENSION PLAN, as amended and restated effective as of January
1, 1989, and as may be subsequently amended from time to time.
(z) "PLAN YEAR" means the 12-consecutive-month period beginning
January 1 of a year and ending on December 31 of the same year.
(aa) "PRERETIREMENT SURVIVING SPOUSE'S BENEFIT" means the monthly
benefit payable to a Member's surviving Spouse, as described in
Section 4.7.
(bb) "PRIMARY SOCIAL SECURITY BENEFIT" means the estimated monthly
primary insurance amount to which a Participant would be
entitled at age 65 if not otherwise disqualified under the
Federal Social Security Act as amended, whether or not he
applies for or actually receives such benefit. For purposes of
the Plan, such estimated
6
<PAGE> 13
amount prior to his Normal Retirement Date shall be determined
based upon the method of calculations described below.
In determining the Primary Social Security Benefit under this
Plan, the Social Security Act as in effect on January 1 of the
then current calendar year shall be applied. Wage history prior
to employment with the Employer shall be estimated by applying
a salary scale with the salary scale to be the actual change in
the average national wages as determined by the Social Security
Administration. For any year in which the Social Security
Administration has not published the increase in national
average wages, a 6 percent increase shall be assumed. Wages for
future years shall be assumed to be the same as the wages
received in the last full calendar year of employment.
Provided, however, that any Participant shall be permitted to
have his actual salary history used as of the date of the
calculation if the Participant supplies documentation of that
history. Such documentation must be provided no later than a
reasonable period of time (as established by the Committee)
following the later of the date of separation from service (by
retirement or otherwise) and the time when the Participant is
notified of the benefit to which he is entitled. To the extent
required by applicable law, the Committee shall furnish each
Member with a written notice of his right to supply actual past
wages and the financial effect of his failure to supply such
actual wage information.
Post-separation increases in a Member's Social Security benefit
shall not affect the Retirement Benefits determined under this
Plan.
(cc) "RETIREMENT AGE" means a Member's Normal Retirement Age, Early
Retirement Age or Vested Retirement Age, whichever is
applicable, as follows:
(1) "NORMAL RETIREMENT AGE" means the sixty-fifth birthday
of a Participant.
(2) "EARLY RETIREMENT AGE" means a Member's age when he
has attained his fifty-fifth birthday (but not his
sixty- fifth birthday) and he is credited with at
least 10 years of Vesting Service.
(3) "VESTED RETIREMENT AGE" means a Member's age when he
is credited with at least five years of Vesting
Service but has not attained his Early Retirement Age.
(dd) "RETIREMENT BENEFIT" means the monthly benefit payment to which
a Member is entitled under whichever of the following is
applicable to the Member:
7
<PAGE> 14
(1) "NORMAL RETIREMENT BENEFIT" means the monthly benefit
described in Section 4.1.
(2) "LATE RETIREMENT BENEFIT" means the monthly benefit
described in Section 4.2.
(3) "EARLY RETIREMENT BENEFIT" means the monthly benefit
described in Section 4.3.
(4) "DISABILITY RETIREMENT BENEFIT" means the monthly benefit
described in Section 4.4.
(5) "VESTED RETIREMENT BENEFIT" means the monthly benefit
described in Section 4.5.
(ee) "RETIREMENT DATE" means a Member's Normal Retirement Date, Late
Retirement Date, or Early Retirement Date, whichever is
applicable, as follows:
(1) "NORMAL RETIREMENT DATE" means the first day of the
calendar month coincident with or next following the date
on which a Member attains his Normal Retirement Age.
(2) "LATE RETIREMENT DATE" means the first day of the
calendar month coincident with or next following the date
a Participant terminates his employment as an Employee
after his Normal Retirement Date.
(3) "EARLY RETIREMENT DATE" means the first day of the
calendar month coincident with or next following the date
a Participant terminates his employment as an Employee on
or after attaining his Early Retirement Age but before
his Normal Retirement Age. An Early Retirement Date may
also be such later date as provided in Section 5.1(a)(2).
(4) "VESTED RETIREMENT DATE" means for a Participant who
terminates his employment as an Employee on or after he
attains his Vested Retirement Age, and who is not
eligible for a Normal Retirement Benefit, Early
Retirement Benefit or Disability Retirement Benefit as a
result of such termination of employment, the
Participant's Normal Retirement Date; provided, however,
if such Participant was credited with at least 10 years
of Vesting Service prior to the termination of his
employment as an Employee, his Vested Retirement Date
shall be the first day of any calendar month coincident
with or next following his fifty-fifth birthday for which
he makes application for his Vested Retirement Benefit to
begin, but in no event later than his Normal Retirement
Date.
(ff) "SOCIAL SECURITY RETIREMENT AGE" means the "social security
retirement age" of a Member, as determined under Code Section
415(b)(8).
8
<PAGE> 15
(gg) "SPONSOR" means R. G. BARRY CORPORATION, or any successor thereto.
(hh) "SPOUSE" means the person to whom a Member is legally married on any
relevant date or who is treated as if married to the Member pursuant to
a qualified domestic relations order as defined in Code Section 414(p).
(ii) "TRUST AGREEMENT" means any agreement in the nature of a trust, or in
the nature of a custodial or funding agreement (including any group
annuity contract and/or funding investment contract issued pursuant
thereto) between the Sponsor and the Trustee and/or insurer, that is
established to form a part of the Plan to receive, hold, invest, and
dispose of the Trust Fund.
(jj) "TRUSTEE" means the Trustee or Trustees named in the Trust Agreement
and/or the insurer named in any other funding agreement, and any
additional or successor Trustee or Trustees from time to time acting as
Trustee or Trustees of the trust assets under the Plan, or the insurer
acting in the capacity of a custodian or funding agent of such trust
assets.
(kk) "TRUST FUND" or "Trust" means the funds or assets which are held and
administered by the Trustee pursuant to the Trust Agreement and the
Plan.
(ll) "VESTING SERVICE" means the service of an Employee, as determined under
Section 3.4.
2.2 CONSTRUCTION
Unless the context clearly requires otherwise, (a) the masculine pronoun
whenever used shall include the feminine and neuter pronoun, and the singular
shall include the plural, and (b) headings of Articles and Sections herein are
included solely for convenience and if there is any conflict between such
headings and the text of the Plan, the text shall control.
9
<PAGE> 16
ARTICLE III. PARTICIPATION AND SERVICE
3.1 ACTIVE PARTICIPATION
Each individual who was a Participant in the Plan on December 31, 1988, in
accordance with the terms of the version of the Plan in effect on said date
shall continue to be a Participant, subject to the provisions of this Plan. Each
other Employee shall become an Active Participant under the Plan on the January
1 nearest to the latest to occur of--
(a) The date he is employed as an Eligible Employee,
(b) The date on which he is credited with at least one year of Eligibility
Service (defined below), or
(c) The date, on or after the Effective Date, that the Plan was made
applicable to the Employer of the individual;
provided he is employed as an Eligible Employee on such January 1. For the
purpose of determining eligibility to participate, one year of "Eligibility
Service" shall mean the first 12-consecutive-month period, beginning on the
Employee's Employment Commencement Date, during which the Employee completes
1,000 or more Hours of Service. If he does not actually have 1,000 or more Hours
of Service during the 12-month period beginning with his Employment Commencement
Date, but he actually has 1,000 or more Hours of Service during any Plan Year
(beginning with the Plan Year in which such initial 12-month period ends), then
he shall become an active Participant on the first day of the Plan Year
immediately following such Plan Year.
An Employee who satisfies the eligibility requirements of Section 3.1(a), (b),
and (c) but who is not employed as an Eligible Employee on the applicable entry
date shall become an Active Participant under the Plan upon his reemployment as
an Eligible Employee following such entry date; provided, however, that if he is
not credited with at least one year of Vesting Service at the time of such
reemployment, he shall become an Active Participant in accordance with the
second sentence of this Section 3.1.
3.2 PARTICIPATION STATUS; MEMBERSHIP; REEMPLOYMENT
A Participant shall either be an "Active Participant" or an "Inactive
Participant" under the Plan. An Eligible Employee who has become an Active
Participant, as provided in Section 3.1, shall continue his status as an "Active
Participant" so long as he remains employed as an Eligible Employee. An Employee
who has become an Active Participant under the Plan, as provided in Section 3.1,
shall be an "Inactive Participant" during
10
<PAGE> 17
any period when he is employed as an Employee but not as an Eligible Employee.
Such an Inactive Participant shall resume the status of an "Active Participant"
at the time he resumes employment as an Eligible Employee. An Active Participant
or Inactive Participant who ceases employment as an Employee shall become a
"Former Participant". A Former Participant shall become an "Inactive
Participant" upon his reemployment as an Employee or shall become an "Active
Participant" upon his reemployment as an Eligible Employee; provided, however,
that if such Eligible Employee is not credited with at least one year of Vesting
Service at the time of his reemployment as an Eligible Employee, he shall become
an Active Participant in accordance with the provisions of Section 3.1. As
provided in Section 2.1(w), an individual shall be classified as a "Member"
under the Plan so long as he is an Active Participant, an Inactive Participant
or a Former Participant who is entitled to receive a Retirement Benefit under
the Plan. A Participant who terminates his employment as an Employee and who is
not entitled to receive a Retirement Benefit under the Plan shall cease to be a
Member covered under the Plan.
3.3 TRANSFERRED EMPLOYEES
(a) TRANSFER TO NONPARTICIPATING AFFILIATE. Should a Participant cease to be
an Eligible Employee as defined in Section 2.1(n), but remain an
Employee of the Sponsor or an Affiliate, the following provisions will
apply:
(1) No Benefit Service shall be credited during such period, and any
benefit he may become entitled to under the Plan shall be
determined using the benefit formula under the Plan in effect at
the time of transfer and his Final Average Compensation, Primary
Social Security Benefit, and Compensation and Benefit Service
while he was an Active Participant in the Plan;
(2) A Participant shall continue to accrue Vesting Service during such
period;
(3) If such person again becomes an Eligible Employee, he shall become
an Active Participant in the Plan the first of the calendar month
coinciding with or next following his reclassification;
(4) Should the status of an Affiliate change so that it is
disassociated with the Sponsor, the Participant will then be
considered to have terminated his or her employment and shall be
entitled to receive his Retirement Benefit as provided in Article
IV of the Plan.
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<PAGE> 18
(b) TRANSFER TO ANOTHER PARTICIPATING EMPLOYER. It is anticipated that an
Employee may be transferred between participating Employers, and in the
event of any such transfer, the Employee involved shall carry with him
his accumulated Benefit Service and Vesting Service. No such transfer
shall effect a termination of employment hereunder, and the Employer to
which the Employee is transferred shall thereupon become obligated
hereunder with respect to such Employee in the same manner as was the
Employer from whom the Employee was transferred. For the Plan Year of
the transfer, both Employers shall pay their proportionate share of the
cost, if any, of the Plan with respect to the transferring Employee for
that Plan Year. Appropriate adjustments shall be made between
participating Employers to reflect the transfers of employment.
(c) MULTIPLE PLAN BENEFITS. The benefits under this Plan and under the
Retirement Income Plan for Non-Salaried Employees of R. G. Barry
Corporation shall be determined independently; provided, however, that
no more than 30 years of Benefit Service shall be considered in
determining total benefits under both plans. Notwithstanding any Plan
provisions to the contrary, if the sum of a Participant's years of
Benefit Service under both plans exceeds 30, then the benefit from the
plan with the more generous accrual (generally, this Plan) shall be
offset by a fraction of the amount of the benefit from the other plan.
The numerator of said fraction shall equal the difference between (1)
total years of Benefit Service in both plans and (2) 30, and the
denominator shall be the years of Benefit Service under the less
generous plan.
3.4 VESTING SERVICE
A Member's eligibility for benefits under the Plan shall be determined by his
period of Vesting Service. Vesting Service means a Member's period or periods of
employment by the Employers and Affiliates determined in accordance with
reasonable and uniform standards and policies adopted by the Committee from time
to time, which standards and policies shall be consistently observed. A Member
will be credited with years of Vesting Service in accordance with the following
provisions:
(a) Vesting Service prior to the Effective Date: For a Member as of the
Effective Date, who had been covered under the prior provisions of the
Plan, the Member's period of employment with the Employer prior to the
Effective Date shall be counted as Vesting Service in accordance with
Section 3.6.
(b) Vesting Service from and after the Effective Date: Subject to the Break
in Service provisions, a year of Vesting Service means any
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Plan Year during which the Member has at least 1,000 Hours of Service. A
Member shall be credited with Vesting Service in whole and fractional
years of such Member's period(s) of employment (whether or not such
period(s) of employment were consecutive) which are not disregarded as a
result of the application of the break rules of Section 3.4(d).
Nonsuccessive periods of employment must be aggregated, and less than
whole year periods of employment (whether or not consecutive) shall be
aggregated on the basis that each fractional year of Vesting Service is
rounded to the nearest one hundredth. Hours of Service for this purpose
shall also include periods of vacation, regular holidays, illness,
incapacity, layoff, jury duty, military duty, or Leave of Absence. An
Employee shall receive credit for Vesting Service from his Employment
Commencement Date until his Break in Service. No more than one year of
Vesting Service shall be credited to a Member under this Plan in any
Plan Year.
(c) Vesting Service shall not be deemed to have been broken--
(1) By any transfer of employment of an Employee between Affiliates
regardless of whether the Affiliate is an Employer hereunder; or
(2) During such period as an Employee is receiving credit for Hours of
Service under Section 3.7.
(d) If an Employee who has had a Break in Service is subsequently reemployed
as an Employee--
(1) If he is reemployed before a One-Year Break in Service occurs
after such Break in Service, the Vesting Service he had at such
Break in Service shall be reinstated from such Employee's most
recent Employment Commencement Date after the Employee completes a
year of Vesting Service following the Break in Service.
(2) If he is reemployed after a One-Year Break in Service occurs after
such Break in Service, he shall be considered a new Employee for
purposes of the Plan, except--
(A) If at such Break in Service he had a vested interest in
any portion of his accrued benefit, Vesting Service he had
at such Break in Service shall be reinstated from such
Employee's most recent Employment Commencement Date after
the Employee completes a year of Vesting Service following
the One-Year Break in Service.
(B) If Section 3.4(d)(2)(A) as provided above is not
applicable, and if the number of consecutive One-Year
Breaks in Service does not equal or exceed the greater of
five or the
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number of years of Vesting Service he had before such Break in
Service, the years of Vesting Service he had at such Break in
Service shall be reinstated from such Employee's most recent
Employment Commencement Date after the Employee completes a
year of Vesting Service following the One-Year Break in
Service.
(e) In determining an Employee's Vesting Service pursuant to this Section 3.4,
the following terms shall apply:
(1) "BREAK IN SERVICE" shall mean the earlier of (A) or (B) below:
(A) The date the Employee quits, retires, is discharged or dies; or
(B) The first anniversary of the first day of an Employee's absence
from employment as an Employee (with or without pay) for any
reason other than in (A) above, such as vacation, sickness,
Leave of Absence, layoff or military service, or special leave
of absence as provided in Section 3.10. An Employee who fails
to return to employment as an Employee at the expiration of
such absence shall be deemed to have had a Break in Service on
the first to occur of the expiration of his absence or the
first anniversary of the first day of his absence.
(2) A "ONE-YEAR BREAK IN SERVICE" shall mean each Plan Year beginning
with the Plan Year which includes the date an Employee incurs a
Break in Service, provided that the Employee is credited with 500 or
fewer Hours of Service during such period. Solely for purposes of
determining whether a One-Year Break in Service has occurred, in the
case of an Employee who is absent from work beyond the first
anniversary of the first date of an absence and the absence is for
one of the following reasons, the date the Employee incurs a Break
in Service shall be the second anniversary of the Employee's absence
from employment:
(A) The pregnancy of the Employee;
(B) The birth of a child of the Employee;
(C) The adoption of a child by the Employee; or
(D) Caring for such child for a period immediately following
birth or adoption.
The period between the first and second anniversary of the
first date of absence shall not constitute Vesting Service.
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3.5 BENEFIT SERVICE
The amount of the benefit payable to or on behalf of a Member shall be
determined on the basis of his Benefit Service, in accordance with the
following:
(a) BENEFIT SERVICE PRIOR TO THE EFFECTIVE DATE. For a Member as of the
Effective Date, who had been covered under the prior provisions of the
Plan, the amount of Benefit Service to be credited for employment prior to
the Effective Date shall be determined in accordance with Section 3.6.
(b) BENEFIT SERVICE FROM AND AFTER THE EFFECTIVE DATE. The Member's Benefit
Service shall be equal to his Vesting Service reduced by--
(1) any period of Vesting Service prior to the date on which the Member
first became a Participant under the Plan (or the Plan as in effect
prior to January 1, 1989) during which the Member was not an Eligible
Employee of the Employer,
(2) any period of Vesting Service from and after the date on which the
Member first became a Participant under the Plan (or the Plan as in
effect prior to January 1, 1989) during which the Member was not an
Eligible Employee of the Employer, including, but not limited to any
period between a Break in Service, as defined in Section 3.4(e)(1) and
reemployment as an Eligible Employee and any period during which he
was an Inactive Participant, and
(3) any period of Vesting Service reinstated pursuant to the provisions of
Section 3.4(d) if the Member was entitled, upon such termination, to a
monthly Retirement Benefit under the Plan, and the full Actuarial
Equivalent value of such Retirement Benefit had been paid on behalf of
such Member under the provisions of Section 4.9(c)(3) or 5.1(a)(5).
No more than one year of Benefit Service shall be credited to a Member under
this Plan in any Plan Year.
3.6 PRIOR SERVICE
For periods prior to January 1, 1989, an Employee's service shall consist of his
years and fractions of a year of Vesting Service and Benefit Service as
reflected in the Employer's records. Such service shall be subject to the effect
of any Break in Service incurred under provisions of the Plan in effect prior to
January 1, 1989, and shall be determined in accordance with the prior provisions
of the Plan including rules which relate to required minimum hours or other
length of service.
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<PAGE> 22
3.7 HOURS OF SERVICE
Hours of Service shall be determined by including the following:
(a) Each Hour of Service for which the Employer or Affiliate, either directly
or indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Committee credits Hours of
Service under this paragraph (a) to the Employee for the computation
period in which the Employee performs the duties, irrespective of when
paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of damages,
to which the Employer or Affiliate has agreed or for which the Employee
has received an award. The Committee credits Hours of Service under this
paragraph (b) to the Employee for the computation period(s) to which the
award or the agreement pertains rather than for the computation period in
which the award, agreement or payment is made;
(c) Each Hour of Service for which the Employer or Affiliate, either directly
or indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties during a
computation period, such as Leave of Absence, vacation, holiday, sick
leave, illness, incapacity, layoff, jury duty or military duty. The
Committee will credit no more than 501 Hours of Service under this
paragraph (c) to an Employee on account of any single continuous period
during which the Employee does not perform any duties (whether or not such
period occurs during a single Plan Year). The Committee credits Hours of
Service under this paragraph (c) in accordance with the rules of
paragraphs (b) and (c) of Labor Reg. Section 2530.200b-2, which the Plan,
by this reference, specifically incorporates in full within this paragraph
(c). The Committee will not credit an Hour of Service under more than one
of the above paragraphs. A computation period for purposes of this Section
3.7 is the calendar year. The Committee will resolve any ambiguity with
respect to the crediting of an Hour of Service in favor of the Employee;
and
(d) In the case of an Employee whose hours are not required to be counted
under applicable Federal wage and hours laws and where Compensation is not
determined solely on the basis of certain amounts for each hour worked
during a given period, such Employee shall be credited with Hours of
Service on the basis of an assumed 45 Hours of Service per week for each
week for which the Employee would have received at least one Hour of
Service in accordance with this definition to the extent it does not
result in
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<PAGE> 23
crediting Hours of Service more than once with respect to any period.
3.8 SPECIAL PROVISIONS RELATING TO ACQUIRED BUSINESSES
In any case in which an individual becomes an Employee upon the acquisition of
all or a portion of the business of his former employer by an Employer or an
Affiliate, whether by merger, acquisition of assets or stock, or otherwise, his
service and compensation with such acquired employer prior to the date on which
such employer became an Affiliate (or part of an Affiliate) shall not be taken
into account under the Plan for purposes of calculating his Vesting Service,
Benefit Service, and Compensation under the Plan, except to the extent that such
service is required to be recognized under Code Section 414(a).
3.9 LEASED EMPLOYEES
A person who is not an Employee and who performs services for an Employer or an
Affiliate pursuant to an agreement between the Employer or Affiliate and a
leasing organization shall be considered a "leased employee" if such person
performed the services on a substantially full-time basis for at least one year
and the services are of a type historically performed by employees. A person who
is considered a "leased employee" of an Employer shall not be considered an
Employee for purposes of the Plan. If such a person becomes a Participant under
the Plan as a result of subsequent employment as an Employee with an Employer,
he shall receive credit for his service as a leased employee in calculating his
Vesting Service under the Plan but not for calculating his Benefit Service.
3.10 SPECIAL PROVISIONS FOR PARTICIPANTS WHO ENTER THE ARMED FORCES
If a Participant is absent from employment for voluntary or involuntary military
service with the armed forces of the United States, does not receive a
dishonorable discharge, and returns to employment as an Employee within the
period required under the law pertaining to veterans' reemployment rights, he
shall receive Vesting Service and Benefit Service for the period of his absence
from employment. If an Employee shall voluntarily enlist or reenlist in military
service at a time when the armed forces of the United States are not actively
engaged in military hostilities with another country, or such Employee is not
required to serve under the laws of conscription in time of peace, then the
provisions of this Section 3.10 shall not apply and the Employee's employment
shall be broken at the time of his enlistment or reenlistment unless prohibited
by applicable federal laws.
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3.11 SPECIAL PROVISIONS FOR CLASS A COMMISSIONED SALES REPRESENTATIVES
If a Class A commissioned sales representative of the Employer becomes a
Participant under the Plan as a result of subsequent employment as an Eligible
Employee with an Employer, he shall receive credit for his service as a Class A
commissioned sales representative in calculating his Vesting Service under the
Plan, but such service shall be considered Benefit Service only with respect to
Plan Years beginning on or after January 1, 1991; provided, however, that
despite the provisions of Section 2.1(k), commissions earned while a person is a
Class A commissioned sales representative of the Employer shall not be
considered to be Compensation for purposes of this Plan.
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ARTICLE IV. BENEFITS
4.1 NORMAL RETIREMENT BENEFITS
(a) ELIGIBILITY. A Participant who attains his Normal Retirement Age while
employed as an Employee and retires on or before his Normal Retirement
Date shall be eligible to receive a Normal Retirement Benefit commencing
on his Normal Retirement Date. Upon attaining his Normal Retirement Age,
such Participant shall have a nonforfeitable right to his Normal
Retirement Benefit.
(b) AMOUNT. A Participant who terminates his employment as an Employee and who
is eligible for a Normal Retirement Benefit under Section 4.1(a) shall be
entitled to a Normal Retirement Benefit commencing on his Normal
Retirement Date. Such Normal Retirement Benefit shall be calculated based
on his years of Benefit Service, Final Average Compensation, and his
Primary Social Security Benefit as of his Normal Retirement Date. The
monthly amount of a Participant's Normal Retirement Benefit payable for
the lifetime of the Participant shall be equal to 45 percent of the
Participant's Final Average Compensation reduced by 50 percent of his
Primary Social Security Benefit if the Participant has accrued at least 30
years of Benefit Service. If the Participant has less than 30 years of
Benefit Service at his Normal Retirement Date, then the resulting amount
shall be multiplied by a fraction, the denominator of which is 30 and the
numerator of which is the Participant's years, including partial years, of
Benefit Service.
Notwithstanding any Plan provision to the contrary, a Retirement Benefit
shall not be reduced below the value of the benefit determined as of
December 31, 1993 (or, if greater, December 31, 1988) due to the effects
of any changes in the limits of recognizable Compensation under Code
Section 401(a)(17). There shall be no duplication of benefits. The Normal
Retirement Benefit under this Section 4.1(b) shall in no event be less
than the largest Early Retirement Benefit which the Participant would have
been entitled to receive under Section 4.3 by retiring at any time after
meeting early retirement eligibility requirements for an Early Retirement
Benefit.
4.2 LATE RETIREMENT BENEFITS
(a) ELIGIBILITY. A Participant who attains his Normal Retirement Age while
employed as an Employee shall be eligible to receive a Late
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Retirement Benefit under the Plan, commencing on his Late Retirement Date.
(b) AMOUNT. A Participant who terminates his employment as an Employee and who
is eligible for a Late Retirement Benefit under Section 4.2(a) shall be
entitled to a monthly Late Retirement Benefit commencing on his Late
Retirement Date. Such Late Retirement Benefit shall be computed in the
same manner as a Normal Retirement Benefit under Section 4.1(b), except
that it shall be based on his years of Benefit Service, his Final Average
Compensation, his Primary Social Security Benefit, and the provisions of
the Plan as in effect at his Late Retirement Date.
The benefits of a Participant shall not be determined based on a formula
which became effective after his separation from service. If a Member
continues in employment beyond his Normal Retirement Age at a rate such
that his Normal Retirement Benefits are suspended pursuant to Section
5.1(a), his benefit upon retirement shall be calculated using the Plan
formula in effect when he actually terminates employment. If a Member
continues in employment beyond his Normal Retirement Age at a rate such
that his Normal Retirement Benefits are payable during such employment
pursuant to Section 5.1(a), his benefit shall be calculated using the Plan
formula in effect when his benefit payments begin.
4.3 EARLY RETIREMENT BENEFITS
(a) ELIGIBILITY. A Participant who attains his Early Retirement Age while
employed as an Employee shall be eligible to receive an Early Retirement
Benefit under the Plan, commencing on his Early Retirement Date.
(b) AMOUNT. A Participant who terminates his employment as an Employee and who
is eligible for an Early Retirement Benefit under Section 4.3(a) shall be
entitled to a monthly Early Retirement Benefit under the Plan. Application
for commencement prior to his Normal Retirement Date must be made in
writing to the Committee at least 30 days but not more than 90 days prior
to the date he elects to have distributions commence. Such Early
Retirement Benefit shall be an amount equal to the product of: (1) the
Normal Retirement Benefit as described in Section 4.1 to which the Member
would have been entitled on his Normal Retirement Date if his employment
as an Employee had continued without change until he attained Normal
Retirement Age, and using his Final Average Compensation, his Primary
Social Security Benefit, and the provisions of the Plan in
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<PAGE> 27
effect at his termination of employment as an Eligible Employee in lieu of
the corresponding amounts determined as of this Normal Retirement Date
multiplied by (2) a fraction the numerator of which is the Member's
Benefit Service as of such termination date and the denominator of which
is the Benefit Service which he would accrue as of his Normal Retirement
Date. If the Retirement Benefit thus determined commences prior to the
Member's Normal Retirement Age, it shall be reduced as of the date the
first Early Retirement Benefit payment commences by 5/9 of one percent for
each of the first 60 months and 5/18 of one percent for each of the next
60 months, as applicable, by which his Early Retirement Benefit payment
precedes his Normal Retirement Age.
The Early Retirement Benefit under this Section 4.3(b) will in no event be
less than the largest Early Retirement Benefit which the Member would have
been entitled to receive under this Section 4.3 by retiring at any time
after meeting Early Retirement eligibility requirements.
4.4 DISABILITY RETIREMENT BENEFITS
(a) ELIGIBILITY. A Participant who is actively employed as an Employee, who
has completed at least 15 years of Vesting Service, who has attained at
least age 50 but not his Normal Retirement Age, who incurs a Disability,
as defined below, while so employed, and who terminates his employment as
an Employee as a result of such Disability shall be eligible to receive a
Disability Retirement Benefit under the Plan, commencing on his Normal
Retirement Date. For purposes of this Section 4.4, "Disability" means that
the Employee is so totally and permanently incapacitated as established by
a licensed physician selected by the Committee that he is not able to
perform his job or any job for the Employer for which he is reasonably
suited as a result of his education, training, and experience and that the
Employee qualifies for Social Security disability benefits. A Member who
commences Disability Retirement Benefit payments under the Plan shall not
be eligible to receive any other Retirement Benefit under the Plan while
he is receiving Disability Retirement Benefit payments.
(b) AMOUNT. A Member who has terminated employment as an Employee and who is
eligible for a Disability Retirement Benefit under Section 4.4(a) shall be
entitled to a monthly Disability Retirement Benefit commencing on his
Normal Retirement Date. Such Disability Retirement Benefit shall be an
amount equal to the
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product of: (1) the Normal Retirement Benefit as described in Section 4.1
to which the Member would have been entitled on his Normal Retirement Date
if his employment as an Employee had continued without change until he
attained Normal Retirement Age, and using his Final Average Compensation,
his Primary Social Security Benefit, and the provisions of the Plan in
effect at his termination of employment as an Employee due to Disability
in lieu of the corresponding amounts determined as of this Normal
Retirement Date multiplied by (2) a fraction the numerator of which is the
Member's Benefit Service as of such termination date and the denominator
of which is the Benefit Service which he would accrue as of his Normal
Retirement Date.
4.5 VESTED RETIREMENT BENEFITS
(a) ELIGIBILITY. A Member who attains his Vested Retirement Age shall be
eligible to receive a Vested Retirement Benefit under the Plan, commencing
on his Vested Retirement Date. If the terminated Member dies before the
date he would have been eligible to receive a Vested Retirement Benefit,
no benefit shall be paid to or for him except under the terms of Sections
4.6, 4.7 and 4.8.
(b) AMOUNT. A Member who has terminated his employment as an Employee, who is
eligible for a Vested Retirement Benefit under Section 4.5(a) and who is
not eligible for another Retirement Benefit under the Plan at the time of
such termination of employment shall be entitled to a monthly Vested
Retirement Benefit commencing on his Vested Retirement Date. Application
for commencement prior to his Normal Retirement Date must be made in
writing to the Committee at least 30 days but not more than 90 days prior
to the date he elects to have distributions commence. Such Vested
Retirement Benefit shall be an amount equal to the product of: (1) the
Normal Retirement Benefit as described in Section 4.1 to which the Member
would have been entitled on his Normal Retirement Date if his employment
as an Employee had continued without change until he attained Normal
Retirement Age, and using his Final Average Compensation, his Primary
Social Security Benefit, and the provisions of the Plan in effect at his
termination of employment as an Eligible Employee in lieu of the
corresponding amounts determined as of this Normal Retirement Date
multiplied by (2) a fraction the numerator of which is the Member's
Benefit Service as of such termination date and the denominator of which
is the Benefit Service which he would accrue as of his Normal Retirement
Date. If the Vested Retirement Benefit thus determined
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<PAGE> 29
commences prior to the Member's Normal Retirement Age, it shall be reduced
as of the date the first Vested Retirement Benefit payment commences by
5/9 of one percent for each of the first 60 months and 5/18 of one percent
for each of the next 60 months, as applicable, by which his Vested
Retirement Benefit payment precedes his Normal Retirement Age.
(c) FORFEITURES. To the extent that the present lump sum value of a Member's
vested accrued benefit derived from Employer contributions is zero at the
time he ceases to be an Employee, the Member shall be deemed to have
received a distribution of such vested accrued benefit, and such Member's
Benefit Service shall be disregarded for purposes of accrual of benefits
under the Plan unless such Member resumes covered employment with the
Employer before the Member accrued a period of five (5) or more
consecutive One-Year Breaks in Service (as defined in Section 3.4(e)(2)),
in which event the Member's accrued benefit derived from Employer
contributions shall be restored to the amount of such accrued benefit on
the date of the deemed distribution.
4.6 DEATH BENEFIT
Except as provided under Section 4.7, 4.8, or 4.9, no benefit shall be payable
to any person after the death of a Member. Sections 4.7 and 4.8 will not apply
with respect to Participants who terminated employment prior to September 2,
1974.
4.7 PRERETIREMENT SURVIVING SPOUSE'S BENEFIT
(a) ELIGIBILITY. In the case of a Member who (1) is eligible for a Vested
Retirement Benefit; (2) has a surviving Spouse; and (3) dies prior to his
Annuity Starting Date for his Retirement Benefit (whether or not such
Member is employed as an Employee), there shall be payable to his
surviving Spouse a Preretirement Surviving Spouse's Benefit as described
in Section 4.7(b) and (c).
(b) AMOUNT. The deceased Member's surviving Spouse who is eligible to receive
a Preretirement Surviving Spouse's Benefit shall receive a monthly benefit
payable for the life of such Spouse equal to--
(1) If the Member died on or before the earliest date upon which he could
have received Retirement Benefit payments under the Plan ("Earliest
Commencement Date"), 50 percent of the monthly Retirement Benefit
amount the Member would have received had he terminated employment as
an Employee on the date of his death (if he had not already terminated
such
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employment), survived to his Earliest Commencement Date, elected to
begin receiving Retirement Benefit payments on his Earliest
Commencement Date with the automatic form of payment under Section 4.8
in effect, and died on the day after his Earliest Commencement Date;
or
(2) If the Member died after his Earliest Commencement Date, 50 percent of
the monthly Retirement Benefit amount the Member would have received
had he retired on the day before his death, with his Retirement
Benefit payable in the automatic form of payment under Section 4.8 on
the date preceding the day on which he died.
(c) COMMENCEMENT. Payment of the Preretirement Surviving Spouse's Benefit to a
Member's surviving Spouse shall, unless otherwise elected by such Spouse,
commence on the later of the Member's Earliest Commencement Date or the
first day of the month following the Member's death. In no event shall the
payment of such Benefit commence later than the later of the date the
Member would have attained his Normal Retirement Date or the first day of
the month following the Member's death.
4.8 AUTOMATIC JOINT AND SURVIVING SPOUSE ANNUITY
(a) ELIGIBILITY AND CONDITIONS. In lieu of the monthly Retirement Benefit
otherwise payable under Section 4.1, 4.2, 4.3, 4.4, or 4.5, a married
Member who has terminated employment as an Employee and who is eligible
for a Retirement Benefit payable under said Sections shall be deemed to
have automatically elected a reduced amount of such monthly Retirement
Benefit payable to him for his life with the provision that if his
surviving Spouse shall be living on his Annuity Starting Date and also at
his death after such automatic election shall have become effective, a
surviving Spouse benefit (as described in Section 4.8(b)(2)) shall be
payable to his surviving Spouse. Such automatic election is subject to the
following conditions:
(1) The automatic election provided in this Section 4.8 shall become
effective as of his Annuity Starting Date for the payment of the
Member's reduced monthly Retirement Benefit under the automatic
election.
(2) A Member may prevent the automatic election provided in this Section
4.8 from becoming effective only by executing a specific written
rejection of such election on a form approved by the Committee and
filing it with the Committee. This written rejection of the automatic
election shall not be effective unless
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(A) the Spouse of the Member consents in writing to such rejection,
(B) such rejection designates a form of benefit payment which may not
be changed without written spousal consent (or the consent of the
Spouse expressly permits designations by the Member without any
requirement of further consent by the Spouse), and (C) the Spouse's
consent acknowledges the financial consequences of such consent and
designation and is witnessed by a Plan representative or a notary
public. Such spousal consent shall not be required if the Member
establishes to the satisfaction of the Committee that such consent
may not be obtained because there is no Spouse, because the Spouse
cannot be located, or because of such other circumstances as the
Secretary of the Treasury may prescribe by regulation. Such rejection
must be filed during the "election period" described in Section
4.8(a)
(3) If the Member has filed a specific written rejection of such
automatic election, he may revoke such rejection at any time during
the "election period" described in Section 4.8(a)(3) by executing a
specific revocation thereof on a form approved by the Committee and
filing it with the Committee. Further, a subsequent specific written
rejection of the automatic election may then be made in accordance
with the preceding provisions of this Section 4.8(a)(2). (3) For
purposes of this Section 4.8(a), the Member's "election period" shall
be the 90-day period ending on his Annuity Starting Date. The
Committee shall provide (or cause to be provided) to each Member a
written explanation regarding the election and rejection of the
Automatic Joint and Surviving Spouse Annuity. Such written
explanation shall include the information as required by Code Section
417 relating to qualified joint and survivor annuities, and shall be
provided at such times as required by such regulations.
(4) For purposes of this Section 4.8, a Member shall be considered to be
a "married Member" if he has a Spouse on the Member's Annuity
Starting Date. If the Spouse becomes divorced from the Member after
his benefits commence, the Automatic Joint and Surviving Spouse
Annuity shall still be payable to the divorced former Spouse, except
as otherwise provided in the divorce decree.
(b) AMOUNT OF BENEFITS.
(1) For a Member who is deemed to have made the automatic election
pursuant to this Section 4.8 (and who does not reject it
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<PAGE> 32
as provided in Section 4.8(a)(2)), the reduced amount of his monthly
Retirement Benefit referred to in Section 4.8(a) shall be the
Actuarial Equivalent of the Retirement Benefit otherwise payable to
such Member under Section 4.1, 4.2, 4.3, 4.4 or 4.5, based on the
Member's age and his Spouse's age as of the Member's and Spouse's
nearest birthday prior to the Annuity Starting Date of his Retirement
Benefit, after giving effect to the increased costs of the automatic
election under this Section 4.8.
(2) The surviving Spouse benefit payable to the surviving Spouse of a
Member who is deemed to have made an automatic election pursuant to
this Section 4.8 and who dies after such election becomes effective,
shall be a monthly benefit of 50 percent of the reduced amount of
such Member's monthly Retirement Benefit as determined in Section
4.8(b)(1).
(c) COMMENCEMENT AND DURATION. The monthly surviving Spouse benefit shall be
payable to the surviving Spouse for life, beginning as of the first day
of the calendar month coincident with or next following the Member's
death.
4.9 NORMAL AND OPTIONAL METHODS OF BENEFIT PAYMENTS
(a) NORMAL FORM FOR UNMARRIED MEMBERS. In the case of an unmarried Member who
is not subject to the automatic election under Section 4.8, the normal
form of benefit payment of the monthly Retirement Benefit payable under
Section 4.1, 4.2, 4.3, 4.4, or 4.5 shall be a single life annuity option,
so the Member would receive a monthly payment for the remainder of his
lifetime or until payment is suspended pursuant to Section 5.3. Such
unmarried Member may elect to receive payment of the monthly Retirement
Benefit payable to him in one of the optional forms of benefit payment
described in Section 4.9(c). To make such election, such unmarried Member
must file a specific written rejection with the Committee (on a form
approved by the Committee) of the normal form of benefit payment
applicable to him and elect such optional form of benefit payment within
the 90-day period ending on his Annuity Starting Date ("election
period"). If the unmarried Member has filed a specific written rejection
of such normal form of benefit payment, he may revoke such rejection at
any time during such election period by executing a specific revocation
thereof on a form approved by the Committee. Further, a subsequent
specific written rejection of the normal form of benefit payment
applicable to the unmarried Member may then be made in accordance with
the preceding provisions of this Section 4.9(a).
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(b) NORMAL FORM FOR MARRIED MEMBERS. In the case of a married Member who is
subject to the automatic election under Section 4.8, the normal form of
benefit payment of the monthly Retirement Benefit payable under Section
4.1, 4.2, 4.3, 4.4, or 4.5 shall be the automatic form of benefit payment
described in Section 4.8. A married Member who has rejected the automatic
election of the Automatic Joint and Surviving Spouse Annuity as provided
in Section 4.8 may elect to receive payment of the monthly Retirement
Benefit payable to him in one of the optional forms of benefit payment
described in Section 4.9(c). The rejection of the Automatic Joint and
Surviving Spouse Annuity and the election of such optional form of
benefit payment shall be made in accordance with the provisions of
Section 4.8 and the applicable provisions of this Section 4.9.
(c) OPTIONAL FORMS OF BENEFIT. The election of an optional form of benefit
payment shall be made in writing on a form approved by the Committee and,
to the extent required, with spousal consent in the manner provided in
Section 4.8. Such election shall be considered made as of the date on
which the application is received by the Committee. The option shall not
become effective until the Annuity Starting Date for the payment of the
Member's monthly Retirement Benefit under the option. After the election
has been made by such Member, and prior to the effective date of the
option, it may be canceled by the Member at any time. A new option may be
elected to replace the canceled option, subject to the option becoming
effective on the Annuity Starting Date and subject to Section 4.8. After
the effective date of the option it may not be canceled by such Member,
but it shall be automatically canceled if such Member (or his contingent
annuitant under option 2) dies before the effective date of the option.
If the contingent annuitant dies before the effective date, then the
Member shall be permitted to select another contingent annuitant or
optional form of benefit, subject to applicable spousal consent
requirements. Any optional form of benefit must be the Actuarial
Equivalent of the benefit payable to the Member as a single life annuity.
The optional forms of benefit payment provided under this Section 4.9 are
as follows:
(1) SINGLE LIFE ANNUITY OPTION. A Member may elect a monthly Retirement
Benefit payable for the life of the Member, with no further
payments made after his death.
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(2) JOINT AND SURVIVOR BENEFIT OPTION. A Member may elect an actuarially
reduced monthly Retirement Benefit payable for his lifetime with
all, two-thirds, or one-half of the reduced amount of monthly
benefit continued after his death to his designated Beneficiary as a
contingent annuitant. A Member electing this option must designate
one person individually as Beneficiary to whom the survivor's
benefit under this option is to be paid upon the Member's death.
Such designation shall be made in accordance with Section 4.8, if
applicable. Each such designation shall be made on a form provided
by the Committee, shall be effective only when filed in writing with
the Committee prior to the death of the Member, and shall revoke all
prior designations of a Beneficiary. Upon the death of the
designated Beneficiary, no alternate Beneficiary can be substituted
unless the Member executes a new election prior to his Annuity
Starting Date. All benefit payments shall cease under this option
upon the death of the Member and his surviving Spouse or other
designated Beneficiary.
(3) LUMP SUM OPTION. A Member may elect to receive a single sum in the
amount of the Actuarial Equivalent value of his accrued Retirement
Benefit if such value is less than or equal to $3,500 and shall have
no further interest in this Plan.
In no event shall any optional method of benefit payment reduce the value
of the Retirement Benefit otherwise payable to the Member by an amount
greater than the amount permitted under Section 5.2(h). In addition,
benefit payments with respect to a Member's Retirement Benefit shall be
subject to the provisions of Section 5.2.
4.10 ADJUSTMENT FOR IN-SERVICE PAYMENTS
In the case of a Participant whose benefit payments commence prior to the date
of his termination of employment as an Employee pursuant to Section 5.2, amounts
payable after the date of his termination of employment as an Employee shall be
reduced to reflect the Actuarial Equivalent value of amounts paid prior to such
termination of employment.
4.11 MAXIMUM ANNUAL BENEFITS
(a) Notwithstanding any other provisions of the Plan to the contrary, in no
event may the annual benefit provided under the Plan (together with that
provided by all other defined benefit plans of the
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Employers or any Affiliate) for any Member for a "Limitation Year", which
shall be the Plan Year, exceed the lesser of--
(1) $90,000 or
(2) 100 percent of the Member's average annual Compensation over the
three consecutive years of active participation during which he had
the greatest aggregate Compensation from the Employers and all
Affiliates.
If the Member has completed less than ten years of participation, the
limitation in Section 4.11(a)(1) shall be multiplied by a fraction, the
numerator of which is the Member's number of years (or part thereof) of
participation in the Plan, and the denominator of which is 10. If the
Member has completed less than ten years of Vesting Service, the
limitation in Section 4.11(a)(2), Code Section 415(b)(4) and Section
4.11(d) shall be adjusted by multiplying such amounts by a fraction, the
numerator of which is the Member's number of years of Vesting Service (or
part thereof), and the denominator of which is 10. In no event shall the
adjustments in the two preceding sentences reduce the limitations in
Section 4.11(a)(1) and (2), Code Section 415(b)(4) and Section 4.11(d) to
an amount less than one-tenth of the applicable limitation (determined
without regard to such adjustments).
(b) The maximum benefit permitted under Section 4.11(a) shall be in the form
of a single life annuity (with no ancillary benefits) under a plan to
which Employees do not contribute and under which no rollover
contributions are made. If the form of retirement benefits payable to a
Member is other than a single life annuity or a joint and survivor
annuity in which the contingent annuitant is the Member's Spouse, the
Member's annual retirement benefit shall not exceed the Actuarial
Equivalent (using an interest rate not less than 5 percent) of the
maximum benefit permitted under Section 4.11(a) payable in the form of a
single life annuity.
(c) If the retirement benefit of a Member commences before the Member's
Social Security Retirement Age, the amount in Section 4.11(a)(1) shall be
adjusted so that it is the Actuarial Equivalent (using an interest rate
not less than 5 percent) of an annual benefit in such amount, beginning
at the Social Security Retirement Age. The adjustment provided for in the
preceding sentence shall be made in the following manner:
(1) The dollar limitation for benefits commencing on or after age 62 is
determined by reducing the defined benefit dollar limitation by 5/9
of 1 percent for each of the first 36 months and 5/12 of 1 percent
for any additional months (up to 24
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<PAGE> 36
months) by which the benefits commence before the month in which the
Member attains his Social Security Retirement Age, and
(2) If the annual benefit of a Member commences before age 62, the
defined benefit dollar limitation shall be the Actuarial
Equivalent of an annual benefit beginning at age 62 as
determined above, reduced for each month by which benefits
commence before the month in which the Member attains age 62;
provided, however, that the mortality decrement shall not be
applied to the extent that benefits will not be forfeited upon
the death of the Member.
If the retirement benefit of a Member commences after the Member's
Social Security Retirement Age, the amount in Section 4.11(a)(1)
shall be adjusted so that it is the Actuarial Equivalent (using an
interest rate no greater than 5 percent) of an annual benefit in
such amount, beginning at the Social Security Retirement Age.
(d) If a Member's annual benefit does not exceed $10,000 and if he did
not participate in any defined contribution plan maintained by the
Employers or any Affiliate, the limitation described in Section
4.11(a) shall not apply.
(e) The amount in Section 4.11(a)(1), and the amount in Section
4.11(a)(2) for a Member who has terminated his employment with the
Employers and Affiliates, shall be automatically adjusted annually
for increases in the cost of living as provided in Code Section
415(d).
(f) In applying the limitations on benefits under this Section 4.11, the
qualified plans of any employer which is an Affiliate shall be
aggregated with the Plan or any other plan of the Employers or an
Affiliate if the employer would be an Affiliate if the phrase "at
least 80 percent" in Code Section 1563(a)(1), in applying such
Section to Code Sections 414(b) or 414(c), were replaced with "more
than 50 percent".
(g) In the event that any Member is a participant in a defined
contribution plan or plans of the Employers or any Affiliate, the
sum of the "defined benefit plan fraction" and the "defined
contribution plan fraction" (as such terms are defined in Code
Section 415(e)) for any Limitation Year with respect to such Member
shall not exceed one. If such sum would otherwise exceed one, then
the Member's Retirement Benefit under the Plan shall be reduced to
comply with the requirements of this Section 4.11(g), unless such
reduction is provided for under the terms of such defined
contribution plan or plans. It is intended to reduce the benefits
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payable under any defined benefit plan to the extent possible, if
necessary, to prevent the sum of the defined benefit plan fraction
and the defined contribution plan fraction from exceeding 1.0 before
reducing contributions to any defined contribution plan. In applying
the foregoing provisions, the transition rules of Section
1106(i)(3), (4) and (6) of the Tax Reform Act of 1986 shall be
applicable.
4.12 PLAN IN EFFECT AT TERMINATION OF EMPLOYMENT CONTROLS
The terms and provisions of the Plan shall not apply in determining the benefits
payable to any Employee whose employment relationship as an Employee was severed
(for any reason) prior to January 1, 1989. In such event, the terms and
provisions of the Plan in effect on the date when his employment relationship as
an Employee was terminated shall apply.
4.13 OPTIONAL DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
(a) IN GENERAL. This Section 4.13 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to
the contrary, a "Distributee" may elect to have any portion of an
"Eligible Rollover Distribution" paid directly to an "Eligible
Retirement Plan" specified by the "Distributee" in a "Direct
Rollover" to the extent permitted by Code Section 401(a)(31). Terms
in quotation marks are defined in Section 4.13(b) below.
(b) DEFINITIONS.
(1) "DIRECT ROLLOVER" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
(2) "DISTRIBUTEE" means each of the following persons who may
elect a Direct Rollover of an Eligible Rollover Distribution
of the Member's Retirement Benefit:
(A) The Member;
(B) The Member's Beneficiary, if the Beneficiary was married
to the Member on the date of his death; and
(C) An alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), if that person
is the Spouse or former Spouse of the Member.
(3) "ELIGIBLE RETIREMENT PLAN" means an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a qualified
trust described in Code Section 401(a), that accepts the
Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the surviving
Spouse, an
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"Eligible Retirement Plan" is an individual retirement
account or an individual retirement annuity, as such terms
are defined in the preceding sentence.
(4) "ELIGIBLE ROLLOVER DISTRIBUTION" means any distribution of
all or any portion of the Retirement Benefit payable to the
Distributee, except that an "Eligible Rollover Distribution"
does not include:
(A) any distribution that is one of a series
of substantially equal periodic payments (not
less frequently than annually) made for the life
for life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the
Distributee or the Distributee's designated
Beneficiary, or for a specified period of 10
years or more;
(B) any distribution to the extent such distribution is
required under Code Section 401(a)(9);
(C) the portion of any distribution that is not includible
in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect
to employer securities); and
(D) any other amounts which are not considered "Eligible
Rollover Distributions" under Code Section 401(a)(31).
(c) No amount shall be directly rolled over pursuant to this
Section 4.13 unless and until it would otherwise be distributed
to the Distributee and all consents and written elections
required to make the distribution have been obtained. Nothing
in this Section 4.13 shall be construed to permit a Distributee
to select more than one of the optional forms of benefit
described in Section 4.9 or elsewhere in the Plan.
(d) The Committee shall provide notice to each Distributee who will
receive an Eligible Rollover Distribution of the Distributee's
right to elect a Direct Rollover in accordance with Code
Section 401(a)(31). The Committee shall provide such notice at
the time and in the manner required by regulations.
(e) The Distributee shall notify the Committee in writing by such
deadline as the Committee shall prescribe whether or not he
wishes to have any part of the Eligible Rollover Distribution
directly rolled over. If the Distributee fails to elect a
Direct Rollover by the deadline established by the Committee,
then the entire amount of the Eligible Rollover Distribution
shall be distributed directly to the Distributee.
(f) A Distributee may elect that either of the following amounts
shall be directly rolled over:
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(1) The entire amount of the Eligible Rollover Distribution;
or
(2) Such portion of the Eligible Rollover Distribution as the
Distributee specifies (in accordance with rules
established by the Committee).
(g) The Distributee may only request a Direct Rollover to one
Eligible Retirement Plan.
(h) No amount will be directly rolled over pursuant to this Section
4.13 unless the Distributee provides the Committee, by such
deadline as the Committee shall prescribe, such information as
it shall require--
(1) To determine that the amount directly rolled over will be
received by an Eligible Retirement Plan that will
accept the Direct Rollover; and
(2) To make the Direct Rollover and make such reports and
keep such records as are required under applicable law.
The Committee may rely on all such information provided
by the Distributee and shall not be required to verify
any such information.
(i) The Committee shall select the manner in which to make the
Direct Rollover.
(j) Any amount directly rolled over in accordance with this Section
4.13 shall be a distribution from this Plan and shall discharge
any liability to the Distributee under this Plan to the same
extent as a payment directly to the Distributee.
(k) This Plan shall not accept Eligible Rollover Distributions from
any plan.
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ARTICLE V. COMMENCEMENT OF BENEFIT PAYMENTS AND DURATION
5.1 COMMENCEMENT AND DURATION
(a) The monthly Retirement Benefit payments to which an eligible
Member is entitled under Section 4.1, 4.2, 4.3, 4.4, or 4.5 shall
begin as described below:
(1) NORMAL AND LATE RETIREMENT BENEFITS. A Member entitled to a
Retirement Benefit under Section 4.1 or 4.2 shall start
receiving such Benefit as of the retired Member's Normal
Retirement Date (in the case of a Normal Retirement
Benefit), the retired Member's Late Retirement Date (in the
case of a Late Retirement Benefit) or on the first day of
the month following the month that he is employed at a rate
at which he will work fewer than eight days during any
calendar month. A Member who continues in employment as an
Employee after attaining his Normal Retirement Age at a
greater rate shall have his Normal Retirement Benefit or
his Late Retirement Benefit (as the case may be) suspended
in the manner described in Section 5.4, and he shall
receive the notice described in Section 5.5.
(2) EARLY RETIREMENT BENEFITS. A Member entitled to a
Retirement Benefit under Section 4.3 shall start receiving
such Retirement Benefit as of the retired Member's Early
Retirement Date if he has given the Committee not less than
30 days' written notice of his intention to take early
retirement. If the Member does not elect immediate
distribution, then he may elect to defer commencement until
a later date which is not later than his Normal Retirement
Date provided that he gives the Committee not less than 30
nor more than 90 days' notice of such later commencement
date.
(3) DISABILITY RETIREMENT BENEFITS. A Member entitled to a
Retirement Benefit under Section 4.4 shall start receiving
such Retirement Benefit as of the terminated Member's
Normal Retirement Date.
(4) VESTED RETIREMENT BENEFITS. A Member entitled to a
Retirement Benefit under Section 4.5 shall start receiving
such Retirement Benefit as of the terminated Member's
Vested Retirement Date. Application for commencement prior
to his Normal Retirement Date must be made at least 30 days
but not more than 90 days prior to the date he elects to
have distribution commence.
(5) PAYMENT OF SMALL AMOUNTS. Notwithstanding any Plan
provisions to the contrary, if the Actuarial Equivalent
value of any benefit payable under the Plan (including a
benefit payable
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in a form as described in Sections 4.8 or 4.9) is less than
or equal to $3,500, the Member may elect to have such
benefit paid to him in a single lump sum payment as soon as
administratively practicable following such Member's
termination of employment as an Employee. For purposes of
this Section 5.1(a), the lump sum present value shall be
computed according to the interest rate and mortality
assumptions used to calculate the Actuarial Equivalent.
(b) Notwithstanding the provisions of Section 5.1(a), if the value of
a Member's nonforfeitable Retirement Benefit exceeds $3,500, then
payment of the Member's Retirement Benefit shall not commence at
any time before the Member attains his Normal Retirement Age
without his written consent (or where the Member has died and a
Spouse's benefit is to be paid to his surviving Spouse, the
written consent of such Spouse).
(c) Unless the Member otherwise elects, the commencement of a Member's
Retirement Benefit payments shall begin not later than the
sixtieth day after the latest to close of the Plan Year in which--
(1) the Member attains or would have attained his Normal
Retirement Age,
(2) the tenth anniversary of the year in which the Member
commenced participation in the Plan occurs, or
(3) the Member's termination of employment as an Employee
occurs.
5.2 REQUIRED AND MINIMUM DISTRIBUTION RULES
Notwithstanding any of the preceding provisions of this Article V, the following
provisions shall apply to the payment of Retirement Benefits:
(a) In no event may the payment of a Member's Retirement Benefit
commence later than the April 1 of the calendar year following the
calendar year in which the Member attains age 70-1/2; provided,
however, that in the case of a Member who attained age 70-1/2
prior to January 1, 1988, and who is not a "5-percent owner" (as
defined in Code Section 416(i)(1)(B) and as further described
under the regulations under Code Section 401(a)(9)) such payment
shall be required to be commenced on or before the April 1 of the
calendar year following the calendar year in which the Member
terminates employment as an Employee or, if earlier, April 1 of
the calendar year following the calendar year in which the Member
becomes such a "5-percent owner"; and, provided further, that in
the case of a Member who attained age 70- 1/2 during the 1988
calendar year and who is not such a "5-percent owner", such
payment shall be required to commence by no later than April 1,
1990.
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(b) A Member's Retirement Benefit shall be distributed by a method of
benefit payment beginning not later than the date required
pursuant to Section 5.2(a), over the life of the Member or over
the lives of such Member and a designated Beneficiary or surviving
Spouse, or within or over a period not extending beyond the life
expectancy of such Member or the life expectancy of such Member
and a designated Beneficiary or surviving Spouse.
(c) If the payment of a Member's Retirement Benefit has begun in
accordance with Section 5.2(a) and the Member dies before his
entire interest has been paid to him, the remaining portion of the
Member's Retirement Benefit shall be paid at least as rapidly as
under the method of benefit payment being used under Section
5.2(b) as of the date of his death.
(d) If a Member dies prior to the commencement of the payment of his
Retirement Benefit, any survivor benefit paid with respect to the
Member's Retirement Benefit shall be paid within five years after
the death of such Member, except as permitted under Sections
5.2(e) and (f).
(e) If--
(1) any portion of the Member's Retirement Benefit is payable
to his surviving Spouse,
(2) such portion is to be paid over the life of such surviving
Spouse or within or over a period not extending beyond the
life expectancy of the surviving Spouse, and
(3) such payments begin not later than one year after the date
of the Member's death, or such later date as the Secretary
of the Treasury may by regulations prescribe,
the portion referred to in Section 5.2(e)(1) shall be treated as
distributed within the time required under Section 5.2(d).
(f) The date on which payments are required to begin under Section
5.2(e)(3) shall not be earlier than the date on which the Member
would have attained age 70-1/2.
(g) In addition to the foregoing provisions of this Section 5.2, all
distributions of or with respect to any Retirement Benefit shall
be made in accordance with Code Section 401(a)(9) (including the
regulations thereunder), and the provisions of the Plan relating
to the payment of such distributions shall be interpreted and
applied in accordance with Code Section 401(a)(9). The provisions
of such Code Section 401(a)(9) shall control over any distribution
option or other provision of the Plan which is inconsistent with
the provisions of Code Section 401(a)(9).
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(h) In any case where the payment of a Member's Retirement Benefit is
payable in a joint and survivor annuity form, the periodic survivor
annuity payment payable to the Member's contingent annuitant shall
not exceed the "applicable percentage" of the annuity payments
payable to the Member. In addition, if the payment of a Member's
Retirement Benefit is payable in either a life annuity or joint and
survivor annuity form with an associated period certain guaranteed
payment feature, the period certain shall not exceed the "applicable
divisor" period determined by reference to the Member's age at the
time his benefit payments commence. The foregoing limitations of
this Section 5.2(h) shall not apply if the contingent annuitant or
designated Beneficiary of the Member is the Member's surviving
Spouse. The "applicable percentage" and "applicable divisor" shall
be the "applicable percentage" and "applicable divisor" determined
pursuant to regulations issued by the Secretary of the Treasury
under Code Section 401(a)(9).
5.3 REEMPLOYMENT AFTER BENEFIT COMMENCEMENT BUT PRIOR TO NORMAL RETIREMENT AGE
If a Member whose Retirement Benefit has commenced is reemployed as an Eligible
Employee before attaining his Normal Retirement Age, his Retirement Benefit
payments shall be suspended and shall not be paid or accrue during the period of
such reemployment, his previous election of form of benefit payment shall be
canceled, and he shall have the Vesting Service and Benefit Service he had at
the time of his retirement reinstated. Upon his subsequent termination of
employment as an Employee, his eligibility for a Retirement Benefit and the
amount of such Retirement Benefit shall be determined, calculated, and paid as
if he were then first retired based upon such reinstated Vesting Service and
Benefit Service, plus Vesting Service and Benefit Service earned following the
date of reemployment, but such Retirement Benefit shall be actuarially reduced
to account for any Retirement Benefit payments he may have received prior to his
reemployment. In no event shall a Member's Retirement Benefit at his subsequent
termination of employment as an Employee be less than his Retirement Benefit at
his prior termination of employment. The foregoing notwithstanding, if a Member
reemployed as described above subsequently reaches his Normal Retirement Age and
is employed at a rate at which he will work fewer than eight days during any
calendar month, the Member may continue to receive any benefits which he is
receiving at the time of reemployment. Such payments shall continue every month
thereafter until his employment is at a rate at which he would work eight or
more days per calendar month, at which time his benefits shall be suspended
under the terms and
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conditions described in Section 5.4. The foregoing notwithstanding, if an
Employee is rehired on a "temporary" basis (i.e., expected duration of
employment is three months or less), his Retirement Benefit payments shall
continue to be paid during such period of temporary employment.
5.4 REEMPLOYMENT AFTER BENEFIT COMMENCEMENT AND AFTER ATTAINING NORMAL
RETIREMENT AGE
If a Member is reemployed as an Eligible Employee after attaining his Normal
Retirement Age at a rate at which he would work eight or more days in a calendar
month, his Retirement Benefit payments shall be suspended and shall not be paid
or accrue during the period of such reemployment, his previous election of form
of benefit payment shall be canceled, and he shall have the Vesting Service and
Benefit Service he had at the time of his retirement reinstated. Such suspension
of benefits shall be done in accordance with Department of Labor Regulation
Section 2530.203-3 and shall include the notice described in Section 5.5. Upon
his subsequent termination of employment as an Employee, his eligibility for a
Retirement Benefit and the amount of such Retirement Benefit shall be
determined, calculated, and paid as if he were then first retired based upon
such reinstated Vesting Service and Benefit Service, plus Vesting Service and
Benefit Service earned following the date of reemployment, but such Retirement
Benefit shall be actuarially reduced to account for any Retirement Benefit
payments he may have received prior to his reemployment. In no event shall a
Member's Retirement Benefit at subsequent termination of employment as an
Employee be less than his Retirement Benefit at his prior termination of
employment. If a Member is reemployed as an Employee after attaining his Normal
Retirement Age at a rate at which he would not work at least eight days during a
calendar month, he shall receive the same type and amount of Retirement Benefit
payment he was entitled to receive preceding his reemployment during such period
of reemployment. Such payments shall continue every month thereafter until his
employment is at a rate at which he would work eight days during a calendar
month, at which time his Retirement Benefit shall be suspended as described
above. The foregoing notwithstanding, if an Employee is rehired on a "temporary"
basis (i.e., expected duration of employment is three months or less), his
Retirement Benefit payments shall continue to be paid during such period of
temporary employment.
5.5 SUSPENSION OF BENEFITS NOTICE AND PROCEDURES
If an Employee's Retirement Benefit payments are to be suspended as a result of
his continued employment or reemployment, the Plan shall notify
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the Employee, by personal delivery or first class mail during the first calendar
month in which the Plan withholds payments, that his Retirement Benefit payments
are suspended. The notice shall contain--
(a) a general description of the reasons why payments are suspended;
(b) a general description of the Plan provisions relating to the suspension
of benefits;
(c) a copy of such Plan provisions;
(d) a statement that a review of the suspension may be requested under the
claims procedure found in the Plan;
(e) if the Plan requires a benefit resumption notice, the procedure and
forms; and
(f) if the Plan requires verification by the Employee that his benefits
should not be suspended, the procedure and forms for such verification.
The Plan shall adopt a procedure whereby an individual may request a
determination of whether specific contemplated employment will result in a
suspension of benefits.
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ARTICLE VI. PLAN ADMINISTRATION
6.1 APPOINTMENT OF COMMITTEE
The Sponsor shall be the "plan administrator" with respect to the Plan and a
"named fiduciary" with respect to the Plan and Trust Fund, as such terms are
defined under ERISA. The Board of Directors of the Sponsor shall appoint a plan
administration committee ("Committee") to administer the Plan and to handle the
day-to-day administrative responsibilities with respect to the Plan. The
Committee shall have all powers necessary to accomplish such purposes. The
Committee shall be composed of three or more members as the Board of Directors
may appoint from time to time, and such members shall hold office at the
pleasure of the Board of Directors. Each member or successor must signify
acceptance of this position in writing. Any member of the Committee may resign
at any time by delivering his written resignation to the Sponsor and to the
Chairman of the Committee to take effect on a date specified therein, or upon
delivery to the Sponsor, if no date is specified. Termination of employment of
an Employee who is a member of the Committee shall automatically constitute a
resignation. The Board of Directors may remove any member of the Committee with
or without cause by so notifying the member and the Chairman of the Committee in
writing to take effect not less than 30 days after delivery thereof, unless such
notice shall be waived. Vacancies on the Committee shall be filled by action of
the Sponsor. In the event no successor member is appointed, the remaining
member(s) or if none remain the Sponsor shall function as the Committee until a
new Committee has been appointed and has accepted such appointment.
6.2 COMPENSATION AND EXPENSES
(a) A member of the Committee shall serve without compensation for
services as such if he is receiving full-time pay as an Employee.
Any other member of the Committee may receive compensation for
services as a member. Any member of the Committee may receive
reimbursement of expenses properly and actually incurred. Any such
compensation or reimbursement shall be paid in accordance with the
provisions of Section 6.2(b).
(b) All expenses incident to the administration, termination, or
protection of the Plan and Trust including, but not limited to,
fees of actuaries, accountants, premiums payable to the PBGC,
counsel, and other specialists, and other costs of administering
the Plan shall be paid by, and constitute a charge upon, the Trust
Fund, except to the extent that
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such expenses, or any portion thereof, may have been paid by the
Employer in its sole and absolute discretion.
6.3 MANNER OF ACTION
A majority of the members of the Committee at that time in office shall
constitute a quorum for the transaction of business. All resolutions adopted,
and other actions taken by the Committee at any meeting, shall be by the vote of
a majority of those present at any such meeting. Upon concurrence in writing of
a majority of the members at that time in office, action of the Committee may be
taken otherwise than at a meeting.
6.4 CHAIRMAN, SECRETARY, AND EMPLOYMENT OF SPECIALISTS
The members of the Committee shall elect one of their number as Chairman and
shall elect a Secretary who is an employee of the Employer and may, but need
not, be a member of the Committee. They may authorize one or more of their
number or any agent to execute or deliver any instrument or instruments on their
behalf, and may employ such counsel, auditors, and other specialists, and such
clerical, medical, actuarial, and other services as they may require in carrying
out the provisions of the Plan. Such expenses shall be paid in accordance with
the provisions of Section 6.2(b).
The Committee and the Employer shall be entitled to rely conclusively upon the
tables, valuations, certificates, and reports furnished by an actuary or
accountant employed by the Committee or an insurer issuing life insurance
contracts under this Plan and/or upon opinions of counsel or other experts; and
such members, and each of them, shall be fully protected as to any action taken
or allowed by them in good faith and reliance upon any such tables, valuations,
certificates, reports or opinions; and all actions taken or allowed by them
shall be conclusive upon all persons having or claiming any interest under the
Plan.
6.5 DELEGATION OF RESPONSIBILITIES
The Committee may appoint one or more individuals and delegate such of its power
and duties as it deems desirable to any such individual, in which case every
reference herein made to the Committee shall be deemed to mean or include the
individuals as to matters within their jurisdiction. Such individuals shall be
such officers or other Employees of the Employers and such other persons as the
Committee may appoint.
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6.6 RECORDS
All resolutions, proceedings, acts, and determinations of the Committee shall be
recorded by the Secretary thereof or under his supervision, and all such records
together with such documents and instruments as may be necessary for the
administration of the Plan, shall be preserved in the custody of the Secretary
or his delegate(s).
6.7 RULES
Subject to the limitations contained in the Plan, the Committee shall be
empowered from time to time in its discretion to adopt bylaws and establish
rules for the conduct of its affairs and the exercise of the duties imposed upon
it under the Plan.
6.8 ADMINISTRATION
The Committee shall be responsible for the administration of the Plan. The
Committee shall have all such powers as may be necessary to carry out the
provisions of the Plan and may from time to time establish rules for the
administration of the Plan and the transaction of the Plan's business. In making
any such determination or rule, the Committee shall pursue uniform policies as
from time to time established by the Committee and shall not discriminate in
favor of or against any Member. The Committee shall have the exclusive right to
make any finding of fact necessary or appropriate for any purpose under the Plan
including, but not limited to, the determination of the eligibility for and the
amount of any benefit payable under the Plan. The Committee shall have sole and
absolute discretion to interpret the terms and provisions of the Plan and to
determine any and all questions arising under the Plan or in connection with the
administration thereof, including, without limitation, the right to remedy or
resolve possible ambiguities, inconsistencies, or omissions, by general rule or
particular decision. The Committee shall make, or cause to be made, such reports
as are required by law. To the extent permitted by law, all findings of fact,
determinations, interpretations, and decisions of the Committee in respect of
any matter or question arising under the Plan shall be final, conclusive and
binding upon all persons having or claiming to have any interest or right under
the Plan and shall be given the maximum possible deference allowed by law. If
challenged in court, any decision of the Committee shall not be subject to DE
NOVO review and shall not be overturned unless proven to be arbitrary and
capricious under the evidence considered at the time of such decision.
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6.9 APPEALS FROM DENIAL OF CLAIMS
If any claim for benefits under the Plan is wholly or partially denied, the
claimant shall be given notice in writing of such denial within a reasonable
period of time (not to exceed 90 days after receipt of the claim, or if special
circumstances require an extension of time, written notice of the extension
shall be furnished to the claimant and an additional 90 days will be considered
reasonable) setting forth the following information:
(a) The specific reason or reasons for the denial;
(b) Specific reference to pertinent Plan provisions on which the
denial is based;
(c) A description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why
such material or information is necessary;
(d) An explanation that a full and fair review by the Committee of the
decision denying the claim may be requested by the claimant or his
authorized representative by filing with the Committee, within 60
days after such notice has been received, a written request for
such review; and
(e) If such request is so filed, the claimant or his authorized
representative may review pertinent documents and submit issues
and comments in writing within the same 60-day period specified in
Section 6.9(d).
The decision of the Committee shall be made promptly, and not later than 60 days
after the Committee's receipt of the request for review, unless special
circumstances require an extension of time for processing, in which case the
claimant shall be so notified and a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of the request for review.
The claimant shall be given a copy of the decision promptly. The decision shall
be in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision is based.
6.10 NOTICE OF ADDRESS AND MISSING PERSONS
Each person entitled to benefits under the Plan must file with the Committee, in
writing, his post office address and each change of post office address. Any
communication, statement, or notice addressed to such a person at his latest
reported post office address will be binding upon him for all purposes of the
Plan and neither the Committee nor the Employers or Trustee shall be obliged to
search for or ascertain his whereabouts. In the event that such person cannot be
located, after reasonable efforts to locate such person have been made, the
Committee may direct that such
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benefits and all further benefits with respect to such person shall be
discontinued, all liability for the payment thereof shall terminate and such
person's remaining accrued benefit under the Plan shall be deemed a forfeiture;
provided, however, that in the event of the subsequent reappearance of such
person prior to the termination of the Plan, the benefits which were due and
payable and which such person missed shall be paid in a single sum without
interest and the future benefits due such person shall be reinstated in full.
6.11 APPLICATION FOR BENEFITS AND DATA
All persons claiming benefits under the Plan must make application and furnish
to the Committee or its designated agent, such documents, evidence, or
information as the Committee or its designated agent considers necessary or
desirable for the purpose of administering the Plan; and each such person must
furnish such information promptly and sign such documents as the Committee or
its designated agent may require before any benefits become payable under the
Plan.
6.12 INDEMNITY FOR LIABILITY
The Sponsor or any Employer may indemnify and hold harmless the members of the
Committee, members of the Board of Directors, any administrator, and any other
person who is deemed to be a "fiduciary" under either statutory or common law
and who is also an Employee, officer, or director of the Employer from and
against any damages, judgments, settlements, costs, charges or expenses incurred
in connection with the defense of any action, suit or proceeding to which any
such person may be a party or which may be threatened against any such person or
in connection with any appeal therefrom by virtue of any wrongful act or
omission in their respective capacities for the Plan; provided, however, that
notwithstanding anything to the contrary herein, the foregoing indemnification
shall extend and be effective only to the extent that the same shall be valid
and enforceable under all applicable laws. The extent of such indemnification
shall be expressed in a resolution by the Board of Directors.
When making a determination or calculation, the Committee shall be entitled to
rely conclusively upon, and shall be fully protected by the Employer in any
action it may suffer in reliance upon, information furnished by the Employer.
The Employer and the Committee shall be entitled to rely upon all certificates
and reports furnished by any consultant
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and actuary and upon all opinions given by legal counsel selected by the
Employer and Committee.
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ARTICLE VII. FINANCING
7.1 FUNDING
A Trustee shall be designated by the Sponsor, and a Trust Agreement maintained
between the Sponsor and the Trustee, under the terms of which a Trust Fund shall
be established to receive and hold contributions payable by the Employer,
interest and other income, and to pay the benefits provided by the Plan. The
Sponsor may, by appropriate action and in accordance with any terms of the Trust
Agreement, employ an investment manager to invest and manage all or any
specified portion of the Trust Fund. Said investment manager shall designate in
writing that he is a fiduciary with respect to Trust assets under his control,
and the Trustee shall not be liable for nor have any responsibility in
connection with acts or omissions of the investment manager with regard to any
assets subject to his management. Any Trust Agreement entered into shall be
deemed to form a part of the Plan, and any and all rights and benefits which may
accrue to any person under the Plan shall be subject to all the terms and
provisions of such Trust Agreement. The Sponsor may modify the Trust Agreement
from time to time to accomplish the purpose of the Plan and may replace any
Trustee and appoint a successor Trustee or Trustees.
7.2 CONTRIBUTIONS
The Employer shall make such contributions to the Trust Fund as shall be
determined by the Actuary to be required under accepted actuarial principles to
at least be sufficient to maintain the Plan as a qualified employee defined
benefit pension plan meeting the plan qualification requirements of the Code and
the minimum funding standard requirements of the Code and ERISA for the Employer
contributions for any Plan Year. In no event shall an Employer make a
contribution to the Plan on behalf of any Member which is not otherwise
deductible by the Employer under Code Section 404. Forfeitures arising under the
Plan for any reason shall be used as soon as possible to reduce Employer
contributions under the Plan. Employee contributions under the Plan shall
neither be required nor permitted. All benefits under the Plan shall payable
only from the Trust Fund and no liability for the payment of benefits under the
Plan shall be imposed upon the Employer, the Committee, officers, directors, or
shareholders of the Employer.
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ARTICLE VIII. AMENDMENT AND TERMINATION
8.1 AMENDMENT AND TERMINATION
(a) The Sponsor does hereby expressly and specifically reserve the sole and
exclusive right at any time, and from time to time, by action of the Board
of Directors to amend, modify, or terminate the Plan to the extent that it
may deem advisable; provided, however, the Board of Directors may delegate
to the Committee or any other party it deems appropriate the authority to
amend, modify, or terminate the Plan in all respects or with regard to
specified limited powers. Any amendment, modification, or termination as
aforesaid shall not require the assent, concurrence, or any other action
by any Employer or the Trustee notwithstanding that such action by the
Sponsor may relate in whole or in part to persons in the employ of any
Employer. The amendments or modifications made to the Plan by the Sponsor
shall apply to the Plan as a whole, except to the extent any such
amendment or modification is made to the Plan as it relates to any
particular Employer and is made on the basis of information communicated
to the Sponsor by the Employer and approved by the Sponsor.
(b) While each Employer contemplates carrying out the provisions of the Plan
indefinitely with respect to its Employees, no Employer shall be under any
obligation or liability whatsoever to maintain the Plan for any minimum or
other period of time.
(c) Any action taken to amend, modify or terminate the Plan shall be evidenced
by a written instrument duly executed and/or certified by an officer of
the Sponsor. Any such instrument evidencing an amendment to the Plan shall
be delivered by the Sponsor to the Committee, the Trustee, and any
Employer involved.
(d) Upon any termination of the Plan (full or partial), the Sponsor shall give
written notice thereof to the Committee, the Trustee, and any Employer
involved. Each of the affected Members shall have a fully vested and
nonforfeitable interest in his accrued benefit to the extent funded.
(e) Upon a complete or partial termination of the Plan (within the meaning of
Code Section 411(d)(3)), the right of each affected Member to benefits
accrued to the date of such termination or partial termination shall
become nonforfeitable to the extent such benefits are funded as of such
date; provided, however, a Member's recourse towards satisfaction of his
nonforfeitable benefits shall be limited to the assets of the Trust Fund
and the benefits of certain Members shall be further restricted as
provided in Sections 4.11, 8.5 and 8.6.
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(f) Upon any termination of the Plan, no Employer with respect to whom the
Plan is terminated (including the Sponsor) shall thereafter be under any
obligation, liability, or responsibility whatsoever to make any
contribution or payment to the Trust Fund, the Plan, any Member, any
Beneficiary, or any other person or trust or fund whatsoever, for any
purpose whatsoever under or in connection with the Plan.
8.2 LIMITATIONS ON AMENDMENTS
The provisions of this Article VIII relating to amendments to the Plan shall be
subject to and limited by the following restrictions:
(a) No amendment shall operate either directly or indirectly to give any
Employer any interest whatsoever in any funds or property held by the
Trustee under the terms the Plan, or to permit the corpus or income of the
Trust Fund to be used for or diverted to purposes other than the exclusive
benefit of Members, their surviving Spouses or Beneficiaries or the
payment of the reasonable expenses of administering the Plan.
(b) No such amendment shall operate either directly or indirectly to deprive
any Member, surviving Spouse or Beneficiary of his vested and
nonforfeitable interest as of the time of such amendment. Any amendment
which modifies the vesting provisions under the Plan shall either provide
for a rate of vesting which is more rapid than the vesting schedule
previously in effect, or provide that any Participant with at least three
years of Vesting Service may elect, in writing, to remain under the
vesting schedule in effect prior to the amendment. Such election must be
made within 60 days after the latest of (1) the day the amendment is
adopted, (2) the day the amendment becomes effective, or (3) the day the
Participant has received notice of the amendment.
(c) No amendment shall decrease the accrued benefit of any Member within the
meaning of Code Section 411(d)(6), except as may be permitted under Code
Section 411(d)(6).
(d) No amendment shall change the rights, duties or responsibilities of the
Trustee under the Plan without its written consent.
Subject to the foregoing limitations, any amendment which, in the judgment of
the Committee is necessary or advisable, may be made retroactively, provided
that such retroactive amendment does not deprive a Member, surviving Spouse or
Beneficiary, without his consent, of a right to receive benefits under the Plan
which have already vested and matured, except as such modification or amendment
shall be necessary in order to comply with any laws or regulations of the United
States or of any state to qualify this as a tax exempt Plan and Trust, or
otherwise.
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8.3 DISTRIBUTION ON TERMINATION
(a) Upon any termination (full or partial), all unallocated amounts shall be
allocated in accordance with the provisions hereof. Upon termination of
the Plan, the Employer with the consent of the Sponsor, by written notice
to the Trustee, may direct either--
(1) continuation of the Trust and the distribution of benefits at such
time and in such manner as though the Plan had not been terminated,
or
(2) subject to Section 8.3(b), complete distribution of the assets in
the Trust Fund to the Members and their surviving Spouses or
Beneficiaries, in one lump-sum cash payment, or in the form of a
deferred annuity payable at Normal Retirement Date, as soon as the
Committee deems it in the best interest of the Members and their
surviving Spouses or Beneficiaries (no later than three years after
such termination).
(b) Upon the termination of the Plan, that portion of any assets then held in
the Trust Fund which remain after payment of all expenses of
administration or liquidation shall be allocated for the purpose of paying
benefits under the Plan in the order of precedence and in the amounts
indicated for plans covered under Section 4044 of ERISA, according to the
principles set forth in said Section 4044. Following the termination of
the Plan, benefit distributions to Members and their surviving Spouses or
Beneficiaries shall be made through the continuation of the Plan and Trust
Fund, as such benefits become due and payable under the Plan; provided,
however, that if the assets of the Trust Fund are sufficient to provide
the Members' current accrued benefits, the Committee shall direct the
Trustee to liquidate the Trust Fund and make benefit distributions to
Members and their surviving Spouses or Beneficiaries. In such case such
distributions shall be made in accordance with applicable amendments to
the Plan relating to the termination of the Plan. In any case where there
are assets in the Trust Fund remaining after the satisfaction of all
accrued benefit liabilities to Members and their surviving Spouses or
Beneficiaries following the termination of the Plan, such assets shall
revert to and be distributed to the Employers.
(c) Notwithstanding any of the above provisions of this Section 8.3,
distributions to married Members shall be subject to the provisions of
Section 4.8.
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8.4 EFFECT OF CONTINGENCIES AFFECTING THE EMPLOYER
In the event an Employer terminates its connection with the Plan, or in the
event an Employer is dissolved or liquidated, or in the event judicial
proceedings of any kind result in the involuntary dissolution of an Employer,
the Plan shall be terminated as respects such Employer. The merger,
consolidation, or reorganization of an Employer, or the sale by it of all or
substantially all of its assets, shall not terminate the Plan if there is
delivery to such Employer by the successor to such Employer or by the purchaser
of all or substantially all of its assets, a written instrument requesting that
it be substituted for the Employer and agreeing to perform all the provisions
which such Employer is required to perform, a copy of which shall be delivered
to the Trustee. Upon receipt of said instrument, with the approval of the
Sponsor, the successor, or the purchaser shall be substituted for such Employer
herein, and such Employer shall be relieved and released from any obligations of
any kind, character, or description herein or in any Trust Agreement imposed
upon it.
8.5 TEMPORARY RESTRICTIONS ON BENEFITS FOR MEMBERS OF EACH EMPLOYER
Notwithstanding any other provisions in the Plan to the contrary, the temporary
restrictions on benefits contained in this Section 8.5 shall apply on any date
prior to January 1, 1994. Thereafter, the restrictions in Section 8.6 shall
apply. The benefits provided under the Plan for Members (including subsequently
retired Members) of the Plan who are among the 25 most highly compensated
Employees of all Employers as of the Effective Date, or as of any later date as
of which any amendment of the Plan shall increase the retirement benefits
hereunder for such Members (each of which dates shall hereinafter be referred to
as a "Restricted Date"), and whose anticipated annual benefits exceed $1,500,
shall be subject to the following restrictions:
(a) If, on any date prior to ten years after any Restricted Date, the Plan is
terminated as respects an Employer, the benefits payable to any Member in
this group from Employer contributions shall not exceed the benefit which
can be provided from the greater of the following:
(1) the Employer contributions (or funds attributable thereto) which
would have been applied to provide benefits for the Member under the
Plan as in effect on the day before such applicable Restricted Date
had it continued in effect unchanged to such date of termination of
the Plan;
(2) $20,000;
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(3) the sum of--
(A) the Employer contributions (or funds attributable thereto) which
would have been applied to provide benefits for the Member under
the Plan as in effect on the day before such applicable
Restricted Date if it had been terminated on the day before such
applicable Restricted Date; and
(B) an amount computed by multiplying (i) 20 percent of the Member's
average annual earnings, or (ii) $10,000, whichever is the
lesser, by the number of years elapsing between the applicable
Restricted Date and such date of termination of the Plan; or
(4) the present value of the benefit guaranteed for such Employees
under Section 4022 of ERISA.
(b) If any Member in this group leaves the employ of the Employer when the
full current costs have not been met, the funds or benefits from Employer
contributions which any Member in such group may receive (including any
funds or benefits from Employer contributions he has already received)
shall not, at any time prior to ten years after an applicable Restricted
Date, exceed the funds or benefits from Employer contributions which he
could receive in accordance with Section 8.5(a) above if the Plan were
terminated at the time he receives such funds or benefits; provided,
however, that neither this Section 8.5(b) nor Section 8.5(a) shall
restrict the current payment of the full monthly retirement benefits
called for by the Plan for any Member in such group while the Plan is in
full effect and its full current costs have been met.
8.6 RESTRICTIONS ON BENEFITS AND DISTRIBUTIONS TO CERTAIN MEMBERS
(a) RESTRICTION OF BENEFITS. Notwithstanding any other provisions in the Plan
to the contrary, in the event of the termination of the Plan, the benefit
of any Highly Compensated Employee (and any Highly Compensated Former
Employee) is limited to a benefit that is nondiscriminatory under Code
Section 401(a)(4). For purposes of this Section 8.6, the term "Highly
Compensated Former Employee" shall mean any Member who has terminated
employment as an Employee in a prior Plan Year and who was a Highly
Compensated Employee either when he terminated employment as an Employee
or any Plan Year ending on or after his fifty-fifth birthday.
(b) RESTRICTIONS ON DISTRIBUTIONS. Notwithstanding any other provisions in the
Plan to the contrary, the restrictions on distributions contained in this
Section 8.6(b) shall be effective for Plan Years beginning on or after
January 1, 1994. The annual benefits provided under the Plan for
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participating Highly Compensated Employees and Highly Compensated Former
Employees who are among the 25 most highly paid Employees of the Employer
are restricted to an amount equal to the annual payments that would be
made on behalf of the Participant under a single life annuity that is the
Actuarial Equivalent of the sum of such Participant's accrued benefit and
other benefits under the Plan. In any one year, the total number of
Members whose benefits are subject to the restriction under this Section
8.6(b) shall be limited to the group of the 25 Highly Compensated
Employees and Highly Compensated Former Employees who received the
greatest compensation. The restrictions of this Section 8.6(b) shall not
apply, however, if--
(1) after payment to such Member of all benefits under the Plan, the
value of Plan assets equals or exceeds 110 percent of the value of
the current liabilities (defined in Code Section 412(l)(7)) of the
Plan, or
(2) the value of the benefits payable to such Member is less than 1
percent of the value of the current liabilities (as defined in Code
Section 412(l)(7)) of the Plan.
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ARTICLE IX. PARTICIPATION IN AND WITHDRAWAL FROM THE PLAN BY AN EMPLOYER
9.1 PARTICIPATION IN THE PLAN
Any Affiliate of the Sponsor which desires to become an Employer under the Plan
may elect, with the consent of the Board of Directors of the Sponsor, to become
a party to the Plan and Trust Fund by adopting the Plan for the benefit of its
Eligible Employees, effective as of the date specified in such adoption--
(a) By filing with the Sponsor a certified copy of a resolution of its board
of directors (or equivalent governing authority) to that effect, and such
other instruments as the Sponsor may require; and
(b) By the Sponsor's filing with the Committee and the Trustee a copy of such
resolution, together with a certified copy of resolutions of the Board of
Directors of the Sponsor approving such adoption.
The adoption resolution, supplement or instrument may contain such specific
changes and variations in Plan or Trust Agreement terms and provisions
applicable to such adopting Employer and its Eligible Employees as may be
acceptable to such Employer, the Sponsor and the Trustee. However, the sole,
exclusive right to make any amendment of whatever kind or extent to the Plan or
Trust Agreement is reserved by the Sponsor, subject to its right of delegation
under Section 8.1(a). It shall not be necessary for the adopting Employer to
sign or execute the original or then amended Plan and Trust Agreement documents.
The effective date of the Plan for any such adopting Employer shall be that
stated in the adoption resolution or instrument, and from and after such
effective date, such adopting Employer shall assume all the rights, obligations,
and liabilities of an Employer under the Plan and Trust Agreement.
The administrative powers and control of the Sponsor, as provided in the Plan
and Trust Agreement, including the sole right of appointment and removal of the
members of the Committee, the Trustee, and their successors, shall not be
diminished by reason of the participation of any such adopting Employer in the
Plan and Trust Agreement.
9.2 WITHDRAWAL FROM THE PLAN
Any Employer other than the Sponsor, by actions of its board of directors or
other governing body, may elect to withdraw from the Plan and Trust Agreement by
giving 90 days' advance written notice of its election to the Board of Directors
of the Sponsor, unless the Board of Directors of the Sponsor waives such advance
notice or agrees to a shorter advance notice
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period. Such Employer's election to withdraw from the Plan and Trust Agreement
shall be subject to the consent of the Board of Directors of the Sponsor.
Distributions following such withdrawal may be implemented through continuation
of the Trust Fund, or transfer to another trust fund exempt from tax under Code
Section 501, or to a group annuity contract qualified under Code Section 403,
or, subject to Section 8.3, distributions may be made as immediate distributions
in accordance with the directions of the Committee; provided, however, that no
such action shall direct any part of the Trust Fund relating to the Members of
such Employer to any purpose other than the exclusive benefit of the Members of
such Employer, or the surviving Spouses or Beneficiaries of such Members, prior
to the satisfaction of all benefit liabilities under the Plan with respect to
the Members of such Employer.
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ARTICLE X. MISCELLANEOUS
10.1 NONALIENATION
Except as provided herein, no benefit payable at any time under the Plan shall
be subject in any manner to alienation, sale, transfer, assignment, pledge,
attachment, garnishment, or encumbrance of any kind. Any attempt to alienate,
sell, transfer, assign, pledge, or otherwise encumber any such benefit, whether
presently or hereafter payable, shall be void. No benefit nor the Trust Fund
shall in any manner be liable for or subject to the debts or liabilities of any
Member, surviving Spouse or Beneficiary entitled to any benefit, except as may
be provided in a "qualified domestic relations order" under Code Section 414(p).
The Committee shall establish procedures to determine whether domestic relations
orders are "qualified domestic relations orders" and to administer distributions
under such qualified domestic relations orders.
10.2 INCOMPETENCY
Every person receiving or claiming benefits under the Plan shall be conclusively
presumed to be mentally competent until the date on which the Committee receives
a written notice, in a form and manner acceptable to it, that such person is
incompetent, for whom a guardian or other person legally vested with the care of
his estate has been appointed; provided, however, that if the Committee shall
find that any person to whom a benefit is payable under the Plan is unable to
care for his affairs because of any disability or infirmity, any payment due
(unless a prior claim therefor shall have been made by a duly appointed legal
representative of his estate) may be paid to the spouse, a child, a parent, or a
brother or sister, or to any person deemed by the Committee to have incurred
expense for such person otherwise entitled to payment. Any such payment so made
shall be a complete discharge of any liability therefor under the Plan. In the
event a guardian of the estate of any person receiving or claiming benefits
under the Plan shall be appointed by a court of competent jurisdiction, benefit
payments may be made to such guardian provided that proper proof of appointment
and continuing qualification is furnished in a form and manner acceptable to the
Committee. Any such payment so made shall be a complete discharge of any
liability therefor under the Plan.
10.3 MERGER, CONSOLIDATION, OR TRANSFER
In the case of any merger or consolidation of the Plan with, or in the case of
any transfer of assets or liabilities of the Plan to or from, any other plan,
each Member in the Plan shall (if the Plan then terminated) receive a
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benefit immediately after the merger, consolidation, or transfer which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).
10.4 LITIGATION
In order to protect the Trust Fund against depletion as a result of litigation,
in the event that any Member or other person may bring any legal or equitable
action arising under the Plan against the Trustee or an Employer or the
Committee, or in the event that an Employer or the Trustee or the Committee may
find it necessary to bring any legal or equitable action arising under the Plan
against any Member or any person claiming any interest by or through such
Member, the Committee shall have the right to join the Trustee as a party
defendant or party plaintiff in any such action, and all expenses of defending
or bringing such action shall be paid by the Trustee from the Trust Fund, to the
extent permitted by ERISA.
10.5 EFFECT OF MISTAKE
In the event of a mistake or misstatement as to the eligibility or Compensation
or participation of a Member, or the amount of benefit payments made or to be
made to or with respect to a Member, the Committee shall, if possible, cause an
adjustment to be made so as to correct such mistake and provide for the correct
amount of benefit payments with respect to such Member.
10.6 NO ENLARGEMENT OF EMPLOYEE RIGHTS
Nothing contained in the Plan shall be deemed to give any Employee the right to
be retained in the service of an Employer or Affiliate or to interfere with the
right of an Employer or Affiliate to discipline, discharge or retire any
Employee at any time.
10.7 NO GUARANTEE
Neither the Committee, the Sponsor, the Employers, nor the Trustee in any way
guarantees the Trust Fund from loss or depreciation nor the payment of any money
which may be or become due to any person from the Trust Fund. Nothing herein
contained shall be deemed to give any Member, surviving Spouse or Beneficiary an
interest in any specific part of the Trust Fund or any other interest except the
right to receive benefits out of the Trust Fund in accordance with the
provisions of the Plan.
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<PAGE> 63
10.8 INTERNAL REVENUE SERVICE APPROVAL
It is the intention of the Sponsor to obtain a ruling or rulings by the District
Director of the Internal Revenue Service that--
(a) The Plan, as in effect from time to time, with respect to the Employer,
meets the requirements of Code Section 401(a); and
(b) Any and all contributions made by the Employer under the Plan are
deductible for income tax purposes under Code Section 404(a) or any other
applicable provisions of the Code.
10.9 EXCLUSIVE BENEFIT; NONREVERSION
The Trust Fund shall be used and applied only in accordance with the provisions
of the Plan and Trust Agreement to provide the benefits provided under the Plan,
and the Employers shall not have any right, title or interest in the assets of
the Trust Fund, and no part of the corpus or income of the Trust Fund shall be
used for or diverted to purposes other than for the exclusive benefit of
Members, surviving Spouses and Beneficiaries and for the payment of the
reasonable expenses of administering the Plan and Trust Fund, except that--
(a) Upon termination of the Plan with respect to any Employer and the
allocation and distribution of the Trust Fund as provided herein, any
funds remaining in the Trust Fund with respect to the Employer because of
an erroneous actuarial computation after the satisfaction of all fixed and
contingent benefit liabilities under the Plan with respect to that
Employer shall revert to such Employer.
(b) If contributions under the Plan are made to the Trust Fund by an Employer
by a mistake of fact, then such contributions shall be returned to such
Employer within one year after the payment of such contributions; and if
any part or all of the contributions are disallowed as a deduction under
Code Section 404, then to the extent such contributions are disallowed as
a deduction they shall be returned to such Employer within one year after
the disallowance. All contributions are conditioned upon the deductibility
of the contributions under Code Section 404 as provided in Section 7.2 of
the Plan.
(c) In the case of a contribution which would otherwise be an excess
contribution (as defined in Code Section 4979(c)), a correcting
distribution with respect to such contribution from the Plan to the
Employer shall be made to the extent permitted in the Code to avoid
payment of an excise tax on excess contributions under Code Section
4979(c).
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<PAGE> 64
(d) If the Internal Revenue Service determines that the Plan does not
initially meet the requirements of Code Section 401 with respect to an
Employer, the Plan shall be null and void from the effective date of the
Plan applicable to such Employer, and any contributions shall be returned
to the Employer within one year following the determination that the Plan
does not initially meet such requirements, unless the Sponsor elects to
make the changes to the Plan necessary to receive a determination from the
Internal Revenue Service that the requirements of Code Section 401 are
met.
10.10 APPLICABLE LAW
The Plan and all rights hereunder shall be governed by and construed in
accordance with the laws of the State of Ohio to the extent such laws have not
been preempted by applicable Federal law.
10.11 SEVERABILITY
If a provision of the Plan shall be held illegal or invalid, the illegality or
invalidity shall not affect the remaining parts of the Plan and the Plan shall
be construed and enforced as if the illegal or invalid provision had not been
included in the Plan.
10.12 EFFECTIVE DATES FOR CERTAIN PROVISIONS
(a) As a result of changes made by the Tax Reform Act of 1986, certain changes
to the Code relating to qualified plans and trusts have become effective
as to the Plan for its Plan Year beginning January 1, 1987. Since such
effective date precedes the effective date of this amended and restated
Plan, it is the intent that certain provisions in the Plan be
retroactively applied to January 1, 1987. Accordingly, any and all
amendments reflected in the Plan as amended and restated effective as of
January 1, 1989 which relate to such changes as are required by the Tax
Reform Act of 1986 and other applicable changes to the Code, and which
would be required to be made under the Plan effective as of January 1,
1987, shall be deemed to be amendments to the Plan which are effective as
of January 1, 1987. Such amendments shall include, without limitation, the
provisions in Sections 2.1(i), 4.11, and Article XI. All such amendments
shall be administratively applied under the provisions of the Plan as if
the content thereof had been included in a separate amendment to the Plan.
(b) In Plan Years beginning after December 31, 1987, only with respect to
Employees who have at least one Hour of Service after December 31, 1987,
all Employees otherwise eligible to participate under the Plan
58
<PAGE> 65
shall be eligible to so participate regardless of age and benefit accruals
shall not be eliminated or reduced because of a Participant's attainment
of any age; provided, however, that the Plan shall continue to impose
(without regard to age) a limitation on the maximum number of years of
Benefit Service which are taken into account under Section 4.1 for
purposes of determining benefits under the Plan. No year of service
(including years of service before January 1, 1988) may be disregarded
because of age in determining an Employee's eligibility and vesting under
the Plan when such Employee has been credited with at least one Hour of
Service after December 31, 1987. Any Employee who was previously excluded
from the Plan prior to January 1, 1988, due to his age shall become a
Participant on January 1, 1988, if he then satisfies the requirements to
become a Participant, or on such later date when he satisfies the
requirements to become a Participant. The provisions of this Section
10.12(b) shall apply to the Plan as in effect prior to January 1, 1989,
and shall be effective as of January 1, 1988.
(c) The Sponsor hereby confirms that the Plan has been administered in
accordance with all of the requirements of Alternative IID as issued by
the Internal Revenue Service in Notice 88-131, which is incorporated
herein by reference. Notwithstanding any Plan provisions to the contrary,
a Member who is a Highly Compensated Employee described in Section
2.1(t)(1) or (2) shall not receive a distribution after December 31, 1988,
of a benefit that exceeds the benefit that the Member had accrued as of
December 31, 1988, until such time as the accrued benefit for that Member
under the Plan as amended for the Tax Reform Act of 1986 exceeds that
Member's Code Section 411(d)(6) protected benefits as of any given date on
or before December 31, 1988. Notwithstanding any Plan provisions to the
contrary, any Member other than a Member described in the immediately
preceding sentence shall be entitled to the greater of his benefit accrued
on any given date on or before December 31, 1989, under the provisions of
the Plan in effect on December 31, 1988 or under the Plan as amended.
Effective September 1, 1993, the Sponsor has determined that the Plan
benefit formula satisfies the nondiscrimination requirements and has
adjusted the accrued benefit of any Member who is a Highly Compensated
Employee described in Section 2.1(t)(1) or (2) to include any benefit
accruals after December 31, 1988.
(d) The Effective Date of the Plan is generally January 1, 1989. Any special
effective dates regarding the changes effective after January 1, 1989 are
59
<PAGE> 66
provided in the relevant sections of the Plan. Such amendments shall
include, without limitation, the provisions in Sections 2.1(k), 3.11,
4.1(b), 4.13, 8.6, and 10.12(c).
60
<PAGE> 67
ARTICLE XI. TOP-HEAVY PROVISIONS
11.1 APPLICATION OF TOP-HEAVY PROVISIONS
(a) SINGLE PLAN DETERMINATION. Except as provided in Section 11.1(b)(2), if as
of a Determination Date, the sum of the amount of the Code Section 416
Benefit of Key Employees and the surviving Spouses and Beneficiaries of
deceased Key Employees exceeds 60 percent of the amount of the Code
Section 416 Benefits of all Members and their surviving Spouses or
Beneficiaries (excluding former Key Employees), the Plan is top-heavy and
the provisions of this Article XI shall become applicable.
(b) AGGREGATION GROUP DETERMINATION.
(1) If as of a Determination Date the Plan is part of an Aggregation
Group which is top-heavy, the provisions of this Article XI shall
become applicable. Top-heaviness for the purpose of this Section
11.1(b)(1) shall be determined with respect to the Aggregation Group
in the same manner as described in Section 11.1(a).
(2) If the Plan is top-heavy under Section 11.1(a), but the Aggregation
Group is not top-heavy, the Plan shall not be top-heavy and this
Article XI shall not be applicable.
(3) In determining whether the Plan, or any other plan included in a
required aggregation group (within the meaning of Code Section
416(g)) is top-heavy, the accrued benefit of any Employee (other
than a Key Employee) shall be determined under (A) the accrual
method which is used for accrual purposes under all such plans, or
(B) if there is no such method, as if such benefit accrued not more
rapidly than the slowest rate permitted under Code Section
411(b)(1)(C).
(c) COMMITTEE. The Committee shall have responsibility to make all
calculations to determine whether the Plan is top-heavy.
11.2 DEFINITIONS
(a) "AGGREGATION GROUP" means the Plan and all other plans maintained by the
Employers and Affiliates which cover a Key Employee and any other plan
which enables a plan covering a Key Employee to meet the requirements of
Code Section 401(a)(4) or 410. In addition, at the election of the
Committee, the Aggregation Group may be expanded to include any other
qualified plan maintained by an Employer or Affiliate if such expanded
Aggregation Group meets the requirements of Code Sections 401(a)(4) and
410.
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<PAGE> 68
(b) "DETERMINATION DATE" means the last day of the Plan Year immediately
preceding the Plan Year for which top-heaviness is to be determined or,
in the case of the first Plan Year of a new plan, the last day of such
Plan Year.
(c) "KEY EMPLOYEE" means a Member who for the Plan Year containing the
Determination Date or any of the four preceding Plan Years is--
(1) An officer of an Employer or Affiliate who has annual Compensation
greater than 50 percent of the amount in effect under Code Section
415(b)(1)(A) for such Plan Year; provided, however, that no more
than the lesser of--
(A) 50 Employees, or
(B) the greater of (i) three Employees or (ii) 10 percent of all
Employees,
shall be treated as officers, and such officers shall be those
with the highest annual Compensation in the five-year period;
(2) One of the 10 Employees having annual Compensation from all Employers
and Affiliates for such Plan Year greater than the dollar limit
specified in Code Section 415(c)(1)(A) and owning both more than a
one-half of 1 percent interest and the largest interests in an
Employer or Affiliate;
(3) A 5 percent owner of an Employer or Affiliate; or
(4) A 1 percent owner of an Employer or Affiliate having annual
Compensation of more than $150,000.
For purposes of this Section 11.2(c), "Compensation" shall mean
compensation as defined in Section 2.1(k)(2), plus amounts that would
otherwise be excluded from the Participant's compensation thereunder by
reason of the application of Code Sections 125, 402(e)(3), 402(h)(1)(B),
and amounts that would otherwise be excluded by reason of the application
of Code Section 403(b) pursuant to a salary reduction agreement;
provided, however, that Compensation for purposes of this Section 11.2(c)
shall not exceed the maximum annual compensation limit as provided for in
Code Section 401(a)(17), as such amount may be adjusted or changed from
year to year in accordance with the adjustment provisions or changes to
Code Section 401(a)(17). Ownership shall be determined in accordance with
Code Section 416(i)(1)(B) and (C). For purposes of Section 11.2(c)(2), if
two Employees have the same ownership interest in an Employer or
Affiliate, the Employee having the greater annual Compensation from the
Employers and Affiliates shall be treated as having a larger interest.
62
<PAGE> 69
(d) "SECTION 416 BENEFIT" means the sum of--
(1) The amount credited as of a Determination Date to a Member's,
surviving Spouse's or Beneficiary's account under any qualified
defined contribution plan which is part of an Aggregation Group
(including amounts to be credited as of the Determination Date but
which have not yet been contributed);
(2) The present value of the accrued benefit credited as of a
Determination Date to a Member, surviving Spouse or Beneficiary
under the Plan and any other qualified defined benefit plan which is
part of an Aggregation Group; and
(3) The amount of distributions to the Member, surviving Spouse or
Beneficiary during the five-year period ending on the Determination
Date other than a distribution which is a tax-free rollover
contribution (or similar transfer) that is not initiated by the
Member or that is contributed to a plan which is maintained by an
Employer or Affiliate;
reduced by--
(4) The amount of rollover contributions (or similar transfers) and
earnings thereon credited as of a Determination Date under a plan
forming part of an Aggregation Group which is attributable to a
rollover contribution (or similar transfer) accepted after December
31, 1983, initiated by the Member and derived from a plan not
maintained by an Employer or Affiliate.
The account or accrued benefit of a Member who was a Key Employee and who
subsequently meets none of the conditions of Section 11.2(c) for the Plan Year
containing the Determination Date is not a Section 416 Benefit and shall be
excluded from all computations under this Article XI. Furthermore, if a Member
has not performed any service for an Employer or Affiliate during the five-year
period ending on the Determination Date, any accrued benefit of such Member (and
any account for such Member) shall not be taken into account in computing
top-heaviness under this Article XI. The present value of the accrued benefits
shall be determined as of the most recent valuation date used for the purposes
of Code Section 412 which is within the 12-month period ending on the
Determination Date. The accrued benefit of a current Member shall be determined
as if the Member terminated service as of such valuation date. For purposes of
this Article XI, the actuarial assumptions used for determining an Actuarial
Equivalent benefit shall be used to compute the present value of the accrued
benefits.
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<PAGE> 70
11.3 VESTING REQUIREMENTS
Notwithstanding the vesting formula in Section 4.5(a), if the Plan is determined
to be top-heavy with respect to a Plan Year under the provisions of Section
11.1, then a Member's interest in his accrued benefit shall vest by substituting
"three years of Vesting Service" for "five years of Vesting Service" in
determining a Member's Vested Retirement Age under the Plan.
The vesting provisions described in this Section 11.3 shall not apply to a
Member who does not have an Hour of Service after the Plan becomes top-heavy. If
in a subsequent Plan Year the Plan is no longer top-heavy, the vesting
provisions that were in effect prior to the time the Plan became top-heavy shall
be reinstated; provided, however, that the vesting provisions of this Section
11.3 shall continue to apply in the case of a Member who has at least three
years of Vesting Service at the time of such reinstatement.
11.4 MINIMUM BENEFIT
(a) MINIMUM ACCRUAL FORMULA. If the Plan is determined to be top-heavy under
the provisions of Section 11.1 with respect to a Plan Year, the accrued
benefit, when expressed as an Annual Retirement Benefit (as defined
below), of a Member who is not a Key Employee shall not be less than the
difference between (1) and (2) where--
(1) is the product of--
(A) the number of years of Top-Heavy Service (as defined below); and
(B) 2 percent of the Member's average Compensation during the period
of the five consecutive years of Top- Heavy Service during which
the Member had the greatest aggregate Compensation;
but such product shall not exceed 20 percent of the average
Compensation; and
(2) is the amount of the Annual Retirement Benefit that would be provided
by the Member's account balance attributable to Employer
contributions under a defined contribution plan which is included in
an Aggregation Group.
(b) DEFINITIONS.
(1) ANNUAL RETIREMENT BENEFIT means a benefit payable annually in the
form of a Single Life Annuity and which commences at age 65. If the
benefit is payable in another form or commences at another time, the
amount described in Section 11.4(a) shall be
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<PAGE> 71
adjusted on an Actuarial Equivalent basis. Preretirement death
benefits shall not cause a reduction in the amount of the benefit.
(2) A YEAR OF TOP-HEAVY SERVICE shall be credited for each year of
Benefit Service which is credited with respect to a Plan Year in
which the Plan is top-heavy.
11.5 LIMIT ON ANNUAL ADDITIONS; COMBINED PLAN LIMIT
(a) GENERAL. If the Plan is determined to be top-heavy under Section 11.1,
Section 4.11(g) shall be applied by substituting "1.0" for "1.25" in
applying the provisions of Code Section 415(e)(2) and (e)(3).
(b) EXCEPTION. Section 11.5(a) above shall not be applicable if--
(1) Section 11.4 is applied by substituting "3 percent" for "2 percent";
(2) Section 11.4 is applied by increasing (but not by more than 10
percentage points) "20 percent" by 1 percentage point for each year
for which the Plan was taken into account under this Section 11.5;
and
(3) the Plan would not be top-heavy if "90 percent" is substituted for
"60 percent" in Section 11.1.
(c) TRANSITION RULE. If, but for this Section 11.5, Section 11.5(a) would
begin to apply with respect to the Plan, the application of Section
11.5(a) shall be suspended with respect to a Member so long as there
are--
(1) no Employer contributions or forfeitures allocated to such Member;
and
(2) no accruals under a qualified defined benefit plan for such Member.
* * * * * * * * * *
65
<PAGE> 72
IN WITNESS WHEREOF, R. G. Barry Corporation has caused this document to be
executed by its duly authorized officers effective as of the 1st day of January,
1989, unless otherwise stated herein.
R. G. Barry Corporation
By:____________________________________
Vice-President of Human Resources
By:____________________________________
Senior Vice-President of
Finance and Treasurer
By:____________________________________
Vice-President of Finance
and Assistant Treasurer
66
<PAGE> 1
Exhibit 10(e)
Employment Agreement, dated July 1, 1994 between
R. G. Barry Corporation and Gordon Zacks
<PAGE> 2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made this
1st day of July, 1994, by and between R. G. Barry Corporation, an
Ohio corporation (the "Company"), and Gordon Zacks ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to continue Executive in its employ and
Executive desires to remain in the employ of the Company, holding the office of
Chairman of the Board and Chief Executive Officer of the Company, for an
extended period in accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and of their mutual
covenants expressed in this Agreement, the parties hereto make the following
agreement, intending to be legally bound hereby:
1. Term. The Company hereby agrees to continue Execu tive in its
employ, and Executive hereby agrees to remain in the employ of the Company, in
accordance with the terms and condi tions hereof, for the period commencing on
July 1, 1994 (the "Commencement Date"), and ending on the fourth anniversary of
the Commencement Date (the "Original Term"), unless sooner terminated as
hereinafter set forth; provided, however, that the term of this Agreement shall
automatically be extended for additional, consecutive one-year terms (each, an
"Extended Term") unless at least 60 days prior to the expiration of the Original
Term or an Extended Term, the Company or Executive shall give notice to the
other that it/he does not wish to extend the term of this Agreement. The
Original Term of Executive's employment under this Agreement, together with any
Extended Terms, is hereinafter sometimes referred to as the "Employment Term."
In the event Executive shall continue his full-time employment with the Company
after the expiration of the Employment Term without a written extension of this
Agreement, such continued employment shall be subject to the terms and
conditions of this Agreement.
2. Position and Duties. (a) During the Employment Term, (i) Executive
shall serve as the Chief Executive Officer of the Company, reporting only to the
Company's Board of Directors (the "Board of Directors" or the "Board") and his
authority, duties and responsibilities shall be at least commensurate in all
material respects with those held, exercised and assigned on the Commencement
Date and (ii) Executive's principal office shall be located in Central Ohio,
although he shall be allowed to travel
<PAGE> 3
extensively for the Company as he may determine, particularly to New York City.
(b) Excluding periods of vacation and sick leave to which
Executive is entitled, Executive agrees to devote reasonable attention and time
during normal business hours to the business and affairs of the Company and, to
the extent necessary to discharge the responsibilities assigned to Executive
here under, to use Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. Executive may (i) serve on corporate, civic,
charitable or political boards or committees, (ii) fulfill speaking engagements
and (iii) manage personal investments, so long as such activities do not
interfere in any material respect with the performance of Executive's
responsibilities hereunder. It is expressly understood and agreed that, to the
extent any such activities shall have been conducted by Executive prior to the
Commencement Date, the continued conduct of such activities or the conduct of
activities similar in nature and scope thereto subsequent to the Commence ment
Date shall not, for the purposes of this Agreement, be deemed to interfere in
any material respect with the performance of Executive's responsibilities
hereunder.
3. Compensation and Other Benefits. The terms of Executive's
compensation during the Employment Term shall be as follows:
(a) BASE SALARY. Commencing July 1, 1994, Executive shall receive
a minimum annual salary of $450,000 (the "Base Salary"), to be paid in equal
installments in accordance with the Company's normal pay schedule for salaried
employees; said Base Salary may be increased at any time and from time to time
by the Company, and the Company shall cause its Board of Directors or an
appropriate committee thereof to review annually the performance of Executive
and the results of operations and financial condition of the Company, together
with prevailing economic conditions and other relevant factors, to determine
whether or not any increase above said minimum annual salary is appropriate; and
the highest rate of salary (on an annualized basis) paid to Executive by the
Company during the Employment Term (excluding any bonus) shall be deemed to be
the Base Salary for purposes of this Agreement. As an inducement to Executive to
enter into this Agreement with the Company, the Company shall pay to Executive
on July 1, 1994 the amount of $25,000 which shall be in addition to the Base
Salary payable to Executive under this Subsection 3(a) and the STIPS bonus
provided by Subsection 3(b)(vi).
<PAGE> 4
(b) BENEFITS. During the Employment Term:
(i) The Company, at its sole expense, shall provide and
maintain a policy of insurance on Executive's life from an insurance company
that is acceptable to Executive providing for a death benefit of $1,000,000
(less the amount of any life insurance provided under any group life insurance
program), payable to one or more beneficiaries designated by Executive (or to
the beneficiaries designated by Executive's assignee, if any, of such policy)
or, if Executive (or his assignee, if any) fails to so designate a beneficiary,
to Executive's estate; provided, however, that at Executive's option, the
Company shall, in lieu of providing the aforesaid life insurance, pay to
Executive for each 12-month period during the Employment Term a cash payment of
$18,000;
(ii) In addition to the insurance described in subsection
(i) above, the Company, at its expense, shall provide and maintain a
split-dollar life insurance policy on Executive's life from an insurance company
acceptable to Executive providing for a death benefit payable to Executive's
beneficiaries or estate (or to the beneficiaries designated by Executive's
assignee, if any, of his interest under this subsection (ii)), in an amount that
is not less than the amount of coverage provided by the split-dollar policy on
Executive's life in effect on the Commencement Date; the Company shall be
obligated to pay the Company's portion of the premiums on such split-dollar
policy and shall pay to or at the direction of Executive a cash bonus in an
amount equal to Executive's (or his assignee's) portion of such insurance
premiums (i.e., the term cost of the life insurance protection under the policy)
plus the amount of Executive's personal income tax liability resulting from the
payment of such cash bonus;
(iii) Executive shall be entitled to receive paid vacation
time during each consecutive twelve (12) month period during the Employment Term
in accordance with the vacation policy of the Company for its senior officers in
effect on the Commencement Date;
(iv) Executive shall be entitled to receive such
perquisites, fringe benefits and reimbursement of expenses historically provided
by the Company to its Chairman and Chief Executive Officer, including, without
limitation, the exclusive use of a new luxury automobile and reimbursement of
his initiation fees, dues and assessments at a country club of his choosing;
(v) Executive shall be entitled to partici pate in the
Company's Salaried Employees' Pension Plan (the
<PAGE> 5
"Pension Plan"), Supplemental Retirement Plan (the "Supplemental Plan") and
Employee Stock Ownership Plan, as any or all of the same may be amended from
time to time, or any substitute or successor plans;
(vi) During the Employment Term, Executive shall be entitled
to participate in the Company's Short-Term Incentive Plan (STIPS), as the same
may be amended from time to time, or any substitute or successor plan, at a
maximum annual level equal to 75% of his Base Salary; the bonus payable to
Executive under the STIPS for the first fiscal year of the Company ending during
the Employment Term shall be based upon the Base Salary of Executive at the rate
in effect on July 1, 1994;
(vii) Executive shall be entitled to receive all other
employee benefits, including, without limitation, medical, dental, group life
(to the extent the coverage is superior to that provided for in subsection
3(b)(i) above) and accidental death insurance benefits as are or in the future
may be provided by the Company to its key employees; and
(viii) The Board of Directors of the Company will consider
annually whether additional benefits should be provided to Executive, including,
without limitation, the grant of additional shares of restricted stock of the
Company or the implementation of other stock-based incentive plans.
4. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company and for which
Executive may qualify, nor shall anything herein limit or otherwise affect such
rights as Executive may have under any stock option or other agreements with the
Company. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan or program of the Company at or subsequent to
the Date of Termination (as defined in Section 5 hereof) shall be payable in
accordance with such plan or program.
5. Termination. (a) DEATH OR DISABILITY. Executive's employment shall
terminate automatically upon Executive's death. The Company may terminate
Executive's employment under this Agreement, after having established
Executive's Disability (pursuant to the definition of "Disability" set forth
below), by giving to Executive written notice of its intention to terminate
Executive's employment hereunder. In such a case, Executive's employment
hereunder shall terminate effective on the 30th day after receipt of such notice
(the "Disability Effective Date"), provided that within such 30-day period,
Executive shall not have returned to full-time performance of his duties. For
purposes of
<PAGE> 6
this Agreement, "Disability" means a disability which, after the expiration of
more than 6 months after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and reasonably
acceptable to Executive or Executive's legal representative.
(b) CAUSE. The Company may terminate Executive's employment for
"Cause." For purposes of this Agreement, termina tion of employment for the
following reasons shall constitute "Cause": (i) dishonest and/or immoral conduct
of Executive materially detrimental to the Company, (ii) conviction of a felony,
(iii) willful and continued failure of Executive to perform the duties of his
offices with the Company unless such failure is the result of ill health or
physical or mental dis ability or (iv) willful and gross misconduct of Executive
materially and demonstrably injurious to the Company.
(c) GOOD REASON. Executive's employment may be terminated by
Executive for Good Reason. For purposes of this Agreement, "Good Reason" means:
(i) (A) The assignment to Executive of any duties
inconsistent in any respect with Executive's position (including, without
limitation, his status, office and title), authority, duties or responsibilities
as contemplated by Section 2 of this Agreement or (B) any other action by the
Company which results in a material diminution in such position, authority,
duties or responsibilities, other than an insubstantial and inadvertent action
which is remedied by the Company promptly after receipt of notice thereof given
by Executive;
(ii) Any reduction in Executive's Base Salary or any
material reduction in the extent of Executive's participation in the plans
referred to in Section 3 hereof or the extent of Executive's entitlement to the
employee benefits, expenses, fringe benefits or prerequisites referred to in
Section 3; or
(iii) The assignment of Executive without his consent to a
Company office located beyond a radius of 50 miles from the Company's principal
office on the Commencement Date; or
(iv) Any other failure by the Company to comply with any
provision of this Agreement, other than an insubstantial and inadvertent failure
which is remedied by the Company promptly after receipt of notice thereof given
by Executive.
<PAGE> 7
For purposes of this subsection 5(c) any good faith determination of
"Good Reason" made by Executive shall be conclusive. In addition, for purposes
of this Agreement, a reduction of the kind described in clause (ii) of this
subsection 5(c) shall be deemed to be an "Impermissible Reduction."
(d) NOTICE OF TERMINATION. Any termination of Executive's
employment hereunder by the Company or by Executive shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section
15 of this Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination pro vision
in this Agreement relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date.
(e) DATE OF TERMINATION. The term "Date of Termination," as used
in this Agreement, means the date of receipt of the Notice of Termination or any
later date specified therein (which date shall be not more than 15 days after
the giving of such notice), as the case may be. If Executive's employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies Executive of such
termination.
(f) RETIREMENT. Unless Executive elects to continue employment
beyond his normal retirement date under the Company's retirement plans ("Normal
Retirement Date"), Executive's employment under this Agreement shall terminate
on the first day of the month of or next following Executive's Normal Retirement
Date.
6. Compensation Upon Termination of Employment or During Disability.
(a) DEATH. If Executive's employment shall be terminated by reason of his death,
the Company shall promptly make all payments to which Executive's spouse,
beneficiaries or estate may be entitled to receive pursuant to any pension or
employee benefit plan, or life insurance policy maintained by the Company. If
the policy of life insurance described in subsection 3(b)(ii) above is not in
force at the time of Executive's death for any reason, the Company shall
continue to pay Executive's full Base Salary at the rate in effect on the date
of his death on a monthly basis for a period of 60 months following Executive's
date of death to such person or persons as he shall have designated to the
Company or, if no such person shall have been designated, to his estate.
<PAGE> 8
(b) DISABILITY. During any period during the Employment Term that
Executive fails to perform his duties hereunder as a result of incapacity due to
ill health or physical or mental disability ("Disability Period"), Executive
shall continue to receive the Base Salary for such period until his employment
is terminated for Disability pursuant to Section 5(a), provided that payments of
Base Salary shall be reduced by the sum of amounts, if any, payable to Executive
at or prior to the time of any such Base Salary payment under disability benefit
plans of the Company and which were not previously applied to reduce any payment
of Base Salary. If Executive's employment is terminated by reason of Executive's
Disability, Executive shall continue to receive after the Disability Effective
Date his full Base Salary at the rate then in effect under this Agreement (less
any sums payable to Executive under any disability benefit plan maintained by
the Company) until Executive reaches the age of 70. Such payments shall not be
offset by Social Security payments, if any. In addition, after any such
termination of employment for Disability, Executive (or, if applicable, his
spouse, benefici aries or estate) shall receive all amounts to which any of them
may be entitled under any pension, deferred compensation plan or employee
benefit plan maintained by the Company or under any other agreement (said
amounts to be paid in accordance with the terms of any such plan or agreement).
(c) WITH CAUSE OR WITHOUT A GOOD REASON. If Executive's
employment shall be terminated by the Company during the Employment Term for
Cause or by Executive without Good Reason, the Company shall pay to Executive
his Base Salary through the Date of Termination at the rate then in effect, and
the Company shall have no further obligation to Executive under this Agreement;
provided, that the Company shall not be relieved of its obligation to make any
payments to which Executive (or, if applicable, his spouse, beneficiaries or
estate) are entitled under any pension, deferred compensation or employee
benefit plan or plans of the Company or under any other agreement (which
payments shall be made in accordance with the terms of any such plan or
agreement). In addition, Executive shall immediately forfeit any Restricted
Shares whose transfer restrictions have not previously lapsed.
(d) WITHOUT CAUSE OR FOR GOOD REASON AFTER A CHANGE OF CONTROL.
If, during the Employment Term and within three (3) years of the date of any
Change of Control (as defined in Section 9 of this Agreement), the Company shall
terminate Executive's employment other than for Cause or Disability, or the
employment of Executive shall be terminated by Executive for Good Reason:
<PAGE> 9
(i) The Company shall pay to Executive in a lump sum in cash
within 10 days after the Date of Termination (or such later date as may be
required by Section 8 hereof) the aggregate of the following amounts:
(A) If not theretofore paid, Executive's Base Salary
through the Date of Termination at the rate in effect on the Date of
Termination;
(B) Three times Executive's annual Base Salary at the
rate in effect at the Date of Termination; and
(C) In the case of compensation previously deferred by
Executive, all amounts of such compensation previously deferred and not yet paid
by the Company, together with all interest accrued thereon;
(ii) The Company shall, promptly upon submission by
Executive of supporting documentation, pay or reimburse to Executive all costs
and expenses paid or incurred by Executive which would have been payable under
subsection 3(b) hereof if Executive's employment had not been terminated;
(iii) For a period ending on Executive's 70th birthday, or
until his earlier death, the Company, at its cost, shall maintain in full force
and effect, for the continued benefit of Executive and Executive's spouse, all
life, medical and dental insurance to which Executive and/or his spouse was
entitled immediately prior to the Date of Termination less any such benefits
provided to them by Medicare or similar governmentfunded health insurance;
provided that, in the event the participation by Executive or his spouse in any
Company employee benefit program is not possible under the terms of such
program, the Company, at its cost, shall arrange to provide Executive and his
spouse with benefits substantially similar to those which they were entitled to
receive under any such program immediately prior to the Date of Termination
(less any such benefits provided to them by Medicare or similar
government-funded health insurance).
(iv) In addition to the benefits to which Executive is
entitled under any retirement plan or plans of the Company in which he
participates, or any successor plan or plans in effect on the Date of
Termination, the Company shall pay Executive in one lump sum in cash, at
Executive's Normal Retirement Date (or earlier or later retirement age should
Executive so elect pursuant to such plan or plans), an amount (the "Additional
Pension Payment") equal to the actuarial equivalent of the retirement pension to
which Executive would have been entitled under the terms of such retirement plan
or
<PAGE> 10
plans had he accumulated an additional period of continuous service with the
Company after the Date of Termination equal to the greater of (A) 36 months or
(B) the number of months between the Date of Termination and the end of the
Employment Term, at his Base Salary at the rate in effect on the Date of
Termination reduced by the single sum actuarial equivalent of any amounts to
which Executive is then actually entitled pursuant to the provisions of any such
retirement plan or plans; provided that, at the option of Executive, instead of
payment of the Additional Pension Payment at Executive's Normal Retirement Date
or such other retirement date, such amount, discounted to reflect its then
present value, shall be paid to the Executive at the same time as the payment
provided for under subsection (i) above; and further provided that, for purposes
of this subsection (iv), the actuarial equivalents shall be determined, and all
other calculations shall be made, using the same methods and assumptions
utilized under any such retirement plan or plans;
(v) All of Executive's executive perquisites immediately
prior to the Date of Termination shall be continued for three years after the
Date of Termination;
(vi) After the Date of Termination, Executive shall have no
obligation to seek other employment, but shall have the right to be otherwise
employed, and any compensation of any type whatsoever received by Executive in
connection with such employment shall not be offset by the Company against any
of the obligations of the Company under this Section 6(d).
(e) WITHOUT CAUSE OR FOR GOOD REASON PRIOR TO A CHANGE OF
CONTROL. If, during the Employment Term, the employ ment of Executive shall be
terminated by the Company for any reason other than for Cause or Disability, or
the employment of Executive shall be terminated by Executive for Good Reason,
and Section 6(d) of this Agreement shall not be applicable:
(i) The Company shall pay to Executive in a lump sum in
cash within 10 days after the Date of Termination the aggregate of the following
amounts:
(A) If not theretofore paid, Executive's Base Salary
through the Date of Termination at the rate in effect on the Date of
Termination;
(B) In the case of compensation previously deferred by
Executive, all amounts of such compensation previously deferred and not yet paid
by the Company together with all interest accrued thereon;
<PAGE> 11
(ii) Until the last day of the Employment Term, the Company
shall continue to pay Executive his Base Salary on a monthly basis at the rate
in effect immediately prior to the Date of Termination;
(iii) The Company shall, promptly upon submission by
Executive of supporting documentation, pay or reimburse to Executive all costs
and expenses paid or incurred by Executive which would have been payable under
subsection 3(b) hereof if Executive's employment had not terminated;
(iv) For a period ending on Executive's 65th birthday, or
until his earlier death, the Company, at its cost, shall maintain in full force
and effect, for the continued benefit of Executive and Executive's spouse, all
life, medical and dental insurance benefits to which Executive and his spouse
were entitled immediately prior to the Date of Termination; provided that, in
the event the participation by Executive or his spouse in any Company employee
benefit program is not possible under the terms of such program, the Company, at
its cost, shall arrange to provide Executive and his spouse with benefits
substantially similar to those which they were entitled to receive under any
such program immediately prior to the Date of Termination.
(v) In addition to the benefits to which Executive is
entitled under any retirement plan or plans of the Company in which he
participates or any successor plan or plans in effect on the Date of
Termination, the Company shall pay Executive in one lump sum in cash, at
Executive's Normal Retirement Date (or such earlier or later retirement age
should Executive so elect pursuant to such plan or plans), an amount (the
"Additional Pension Payment") equal to the actuarial equivalent of the
retirement pension to which Executive would have been entitled under the terms
of such retirement plan or plans had he accumulated an additional period of
continuous service after the Date of Termination equal to the number of months
between the Date of Termination and the end of the Employment Term at his Base
Salary at the rate in effect on the Date of Termination reduced by the single
sum actuarial equiva lent of any amounts to which Executive is then actually
entitled pursuant to the provisions of any such retirement plans; provided that,
at the option of Executive, instead of payment of the Additional Pension Payment
at Executive's Normal Retirement Date or such other retirement date, such
amount, discounted to reflect its then present value, shall be paid to Executive
within 30 days from the Date of Termination; and further provided that, for
purposes of this subsection (v), the actuarial equivalents shall be determined,
and all other calculations shall be made, using
<PAGE> 12
the same methods and assumptions utilized under any such retirement plans;
(vi) After the Date of Termination, Executive shall have no
obligation to seek other employment, but shall have the right to be otherwise
employed, and any compensation of any type whatsoever received by Executive in
connection with such employment shall not be offset by the Company against any
of the obligations of the Company under this Section 6(e).
(f) Anything in this Section 6 to the contrary notwithstanding,
for purposes of calculating any amount payable to or for the benefit of the
Executive and/or his family pursuant to Section 6, the effect of any
Impermissible Reduction in amounts payable pursuant to Section 5 shall be
disregarded.
7. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement. The Company agrees
to pay, to the full extent permitted by law, all legal fees and expenses which
Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Company or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof, plus interest, compounded quarterly, on the total unpaid
amount determined to be payable under this Agreement, such interest to be
calculated at a rate equal to 2% in excess of the prime commercial lending rate
announced by The Huntington National Bank, Columbus, Ohio, in effect from time
to time during the period of such nonpayment.
8. Certain Reduction of Payments by the Company. Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Company to or for the benefit of
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise) (a "Payment") would be non deductible
by the Company for federal income tax purposes because of Section 280G of the
Internal Revenue Code (the "Code"), then the aggregate present value of amounts
payable or distributable to or for the benefit of Executive pursuant to this
Agreement (such payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced
<PAGE> 13
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be nondeductible by the
Company because of Section 280G of the Code. Anything to the contrary
notwithstanding, if the Reduced Amount is zero and it is determined further that
any Payment which is not an Agreement Payment would nevertheless be
nondeductible by the Company for federal income tax purposes because of Section
280G of the Code, then the aggregate present value of payments which are not
Agreement Payments shall also be reduced (but not below zero) to an amount
expressed in present value which maximizes the aggregate present value of
payments without causing any payment to be nondeductible by the Company because
of Section 280G of the Code. For purposes of this Section 8, present value shall
be determined in accordance with Section 280G(d) of the Code.
All determinations required to be made under this Section 8 shall be
made by KPMG Peat, Marwick unless otherwise agreed by the parties (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and Executive within 15 business days of the Date of Termination of
employment of Executive or such earlier time as is requested by the Company. Any
such determination by the Accounting Firm shall be binding upon the Company and
Executive. Executive shall determine which and how much of the Agreement
Payments (or, at the election of Executive, other Payments) shall be eliminated
or reduced consistent with the requirements of this Section 8, provided that, if
Executive does not make such determination within 10 business days of the
receipt of the calculations made by the Accounting Firm, the Company shall elect
which and how much of the Agreement Payments shall be eliminated or reduced
consistent with the requirements of this Section 8 and shall notify Executive
promptly of such election.
Within five business days thereafter, the Company shall pay to or
distribute to or for the benefit of Executive such amounts as are then due to
Executive under this Agreement and shall promptly pay to or distribute for the
benefit of Executive in the future such amounts as become due to Executive under
this Agreement.
As a result of the uncertainty in the application of Section 280G of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments will have been made by the
Company which should not have been made ("Overpayment") or that additional
Agreement Payments which will have not been made by the Company could have been
made ("Underpayment"), in each case, consistent with the calculations required
to be made hereunder. In the event that the Accounting
<PAGE> 14
Firm determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to Executive which Executive shall repay to
the Company together with interest at the applicable federal rate provided for
in Section 7872(f) (2) of the Code; provided, however, that no amount shall be
payable by Executive to the Company (or if paid by Executive to the Company
shall be returned to Executive) if and to the extent such payment would not
reduce the amount which is subject to taxation under Section 4999 of the Code.
In the event that the Accounting Firm determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the Company to or for
the benefit of Executive together with interest at the applicable federal rate
provided for in Section 7872(f)(2) of the Code.
9. Change of Control. (a) For purposes of this Agreement, a "Change of
Control" shall be deemed to have occurred if: (i) any individual (other than
Executive), firm, corporation, partnership, joint venture or other entity or any
group (as the term "group" is defined in Section 13(d)(3) of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules thereunder on the
Commencement Date), other than any such entity or group in respect of which
Executive is a participant, shall hereafter acquire (or disclose the previous
acquisition of) beneficial ownership (as that term is defined in Section 13(d)
of the Exchange Act and the rules thereunder on the Commencement Date) of shares
of the outstanding stock of any class or classes of the Company which results in
such person, firm, corporation, partnership, joint venture, other entity or
group possessing more than 25% of the total voting power of the Company's
outstanding voting securities ordinarily having the right to vote for the
election of directors of the Company; or (ii) as the result of, or in connection
with, any tender or exchange offer, merger or other business combination, sale
of assets or contested election of directors, or any combination of the
foregoing transactions ("Transaction"), the persons who were directors of the
Company immediately before the Transaction shall cease to constitute a majority
of the Board of Directors of the Company or any successor to the Company.
(b) A Change of Control shall also be deemed to have occurred for
purposes of this Agreement if the Board of Directors of the Company shall at any
time declare that one or more events have occurred or are likely to occur which,
in their sole determination, create or pose the threat of a Change of Control
and which, for that reason, make it desirable and in the best interests of the
Company to invoke those provisions of this Agreement which become effective on
or after the occurrence of a Change of Control; provided, however, that no
Director of the Company who is a party to this Agreement or an agreement with
the
<PAGE> 15
Company similar to this Agreement shall participate in considering or voting
upon any such resolution.
10. Nomination to Board. During the term of Executive's employment
with the Company, the Company shall cause Executive to be nominated to
membership on the Board of Directors of the Company in all applicable proxy
solicitations made to shareholders.
11. Confidential Information. Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by Executive
during Executive's employment by the Company or any of its affiliated companies
and which shall not be public knowledge (other than by acts by Executive or his
representatives in violation of this Agreement). After termination of
Executive's employment with the Company, Executive shall not, without the prior
written consent of the Company, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
In no event shall an asserted violation of the provisions of this Section 11
constitute a basis for deferring or withholding any amounts otherwise payable to
Executive under this Agreement.
12. Agreement Not to Compete. Executive agrees that during the
Employment Term and for a period of five (5) years thereafter he will not,
without the consent of the Company's Board of Directors, serve on the board of
directors of any corporation or other entity that is in competition with the
Company, nor allow the use of his name with respect to any such corporation or
entity, nor serve as an officer, employee, consultant, representative or
otherwise or have a substantial investment in any such corporation or entity. In
no event shall any asserted violation of the provisions of this Section 12
constitute a basis for deferring or withholding any amounts otherwise payable to
Executive under this Agreement.
13. Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be submitted to arbitration by
the American Arbitration Association in Columbus, Ohio, and the determination of
the American Arbitration Association shall be final and absolute. The
arbitration and the arbitrator shall be governed by the duly promulgated
Commercial Arbitration Rules of the American Arbitration Association and the
pertinent provisions of the laws of the State of Ohio relating to arbitration.
Any judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. Compensation and benefits provided
<PAGE> 16
hereunder shall continue while any proceeding entered into pursuant to this
section is in progress. Arbitration and legal fees regarding disputes or
controversies arising under this Agreement shall be borne by the Company.
14. Successors; Binding Agreement. (a) The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or sub stantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no
succession had taken place. Failure of the Company to obtain such agreement
prior to the effective ness of any such succession shall be a breach of this
Agreement and shall entitle Executive to compensation and benefits and other
rights in the same amount and on the same terms as he would be entitled
hereunder if he had terminated his employment for Good Reason immediately after
a Change of Control, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the Company as
defined above and any successor to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Paragraph 14 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal repre sentatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive should die while any amounts would still be payable to him hereunder
if he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to his devisee,
legatee or other designee or, if there be no such designee, to his estate.
15. Notices. All notices, requests, demands, and other communications
required or permitted under this Agreement shall be deemed to have been given if
delivered by hand to the address of the recipient or mailed by first-class
certified mail return receipt requested, to the party at the following
addresses:
If to Executive: Gordon Zacks
140 North Parkview
Bexley, Ohio 43209
<PAGE> 17
If to the Company: R. G. Barry Corporation
13405 Yarmouth Rd., N. W.
Pickerington, Ohio 43147
Attention: Corporate Secretary
Either party to this Agreement may, by notice given in accordance with this
paragraph, designate a new address for notices, requests, demands and other
communications to such party.
16. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives. The
provisions of the Employment Agreement between the Company and Executive dated
June 30, 1989 applicable to the Restricted Shares issued to Executive in 1984
and 1985, including the restrictions on transfer and the forfeiture and lapsing
provisions contained therein, shall continue to apply during the term of this
Agreement until such restrictions have lapsed in accordance with such provisions
or the Restricted Shares are forfeited in accordance with such provisions.
(b) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(c) The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(d) This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
<PAGE> 18
IN WITNESS WHEREOF, this Agreement has been duly executed on behalf of
the Company by an officer duly authorized in the premises and by Executive on
the date first above written.
EXECUTIVE: COMPANY:
R. G. BARRY CORPORATION
/s/ Gordon Zacks By: /s/ C. E. Ostrander
------------------------ --------------------------------
Gordon Zacks Title: /s/ Exec. V.P. Sales/Mktg
-----------------------------
<PAGE> 1
Exhibit 10(n)
Executive Employment Agreement, dated
July 1, 1994, between R. G. Barry Corporation
and Christian Galvis
<PAGE> 2
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT is entered into this 1st day of
July, 1994 between R.G. Barry Corporation, an Ohio corporation (the "Company"),
and Christian Galvis (the "Executive") under the following circumstances:
A. Executive is presently employed by the Company in an executive
capacity;
B. The Company desires by this Agreement to provide for the continued
employment of Executive by the Company; and
C. Executive desires to continue his employment with the Company upon the
terms and conditions stated herein.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL
COVENANTS CONTAINED HEREIN, THE COMPANY AND EXECUTIVE AGREE AS FOLLOWS:
Section 1. Employment. The Company hereby agrees to continue to
employ Executive, and Executive hereby agrees to continue in the employ of the
Company, on the terms and conditions set forth herein.
Section 2. Term of Employment. The term of employment of Executive by
the Company under this Agreement shall commence on the date of this Agreement
(the "Agreement Date") and end on the date which is the third anniversary date
of the Agreement Date (the "Term of Employment").
Section 3. Position and Duties.
(a) Position. During the Term of Employment, the Company shall employ
Executive as, and Executive shall serve as, the Executive Vice President,
Operations, of the Company with his duties, authority and responsibilities to be
of the same character as those being performed and exercised by him at the time
of entering into this Agreement or in such other capacity or capacities of at
least equal standing and dignity connected with the business of the Company as
the Company shall from time to time determine, provided that any change of
capacity shall be subject to Executive's reasonable approval.
(b) Duties. Executive shall devote his full-time efforts to the
business and affairs of the Company and shall
<PAGE> 3
perform his duties faithfully, diligently, and to the best of his ability and in
conformity with the policies of the Company and under and subject to such
reasonable directions and instructions as the Board of Directors or the Chief
Executive Officer of the Company may issue from time to time.
Section 4. Compensation and Related Matters.
(a) Salary. The Company shall pay Executive a salary of not less than
$190,000 per year payable in approximately equal installments in accordance with
the Company's normal pay schedule. In the event the Company shall at any time or
times after the Agreement Date increase Executive's salary, then Executive's
salary under this Agreement for any period after any such increase shall be not
less than the last amount to which the Company increased the salary of Executive
(such salary including increases granted after the Agreement Date is hereinafter
re ferred to as "Basic Salary"). Compensation of Executive by Basic Salary
payments shall not be deemed exclusive and shall not prevent Executive from
participating in any other compensation or benefit plan of the Company. The
Basic Salary payments hereunder shall not in any way limit or reduce any other
obligation of the Company hereunder, and no other compensation, benefit or
payment hereunder shall in any way limit or reduce the obligation of the Company
to pay Executive's Basic Salary hereunder.
(b) Expenses. During the Term of Employment, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in performing services hereunder, including all reasonable expenses of
travel and living expenses while away from home on business or at the request of
and in the service of the Company, provided that such expenses are incurred and
accounted for in accordance with the policies and procedures established by the
Company.
(c) Other Benefits. During the term of Employment:
(1) The Company, at its expense, shall provide and maintain a
policy of insurance on Executive's life providing for a death benefit payable to
Executive's beneficiaries or estate in an amount that is not less than the
amount of coverage provided by the life insurance policy on Executive's life
maintained by the Company for Executive's benefit on the date of this Agreement.
(2) Executive shall be entitled to receive such perquisites and
fringe benefits historically provided by the Company to its senior executives,
including, without limitation, the exclusive use of an automobile;
<PAGE> 4
(3) Executive shall be entitled to participate in the Company's
Salaried Employees' Pension Plan (the "Pension Plan"), Supplemental Retirement
Plan (the "Supplemental Plan") and Employee Stock Ownership Plan, as any or all
of the same may be amended from time to time, or any substitute or successor
plans;
(4) Executive shall be entitled to participate in the Company's
Short-Term Incentive Plan (STIPS), as the same may be amended from time to time,
or any substitute or successor plan, at a maximum annual level equal to 60% of
his Basic Salary; and
(5) Executive shall be entitled to receive all other employee
benefits, including, without limitation, medical, dental, group life and
accidental death insurance benefits as are or in the future may be provided by
the Company to its key employees.
Section 5. Termination.
(a) Termination of Employment Other Than by Executive. Executive's
employment hereunder may be terminated without any breach of this Agreement only
under the following circumstances:
(1) Death. Executive's employment hereunder shall
terminate upon his death.
(2) Disability. If, as a result of Executive's incapacity
due to physical or mental illness, Executive shall have been absent
from his duties hereunder on a full-time basis for the entire period
of four consecutive months, and within thirty days after written
notice of termination is given (which may occur before or after the
end of such four month period) shall not have returned to the
performance of his duties hereunder on a full-time basis, the Company
may terminate Executive's employment hereunder for Disability.
(3) Cause. The Company may terminate Executive's employment
hereunder for Cause. For purposes of this Agreement, the Company shall
have "Cause" to terminate Executive's employment hereunder only upon:
(i) The willful and continued refusal by the Executive
to perform his duties with the
<PAGE> 5
Company (other than any such refusal resulting from his incapacity due
to physical or mental illness), after a demand for substantial
performance is delivered to the Executive by the Company which
specifically identifies the manner in which it is believed that the
Executive has refused substantially to perform his duties;
(ii) Failure of Executive to comply with any applicable
law or regulation affecting the Company's business;
(iii) The commission by Executive of an act of fraud
upon or an act evidencing bad faith or dishonesty toward the Company;
(iv) Conviction of Executive of any felony or
misdemeanor involving moral turpitude;
(v) The misappropriation by Executive of any funds,
property, or rights of the Company; or
(vi) Executive's breach of any of the provisions of
this Agreement.
(b) Termination of Employment by Executive. Executive may terminate
his employment hereunder for Good Reason. As used herein "Good Reason" means any
of the following:
(1) The assignment to Executive, without his express
consent, of any duties materially inconsistent with his position,
duties, responsibilities and status with the Company on the Agreement
Date, or a change in Executive's responsibilities, as in effect on the
Agreement Date, which materially diminishes Executive's
responsibilities with the Company when considered as a whole;
provided, however, that the foregoing shall not constitute Good Reason
if done in con nection with the termination of Executive's employment
because of Disability or for Cause.
(2) A reduction by the Company in Executive's Basic Salary.
<PAGE> 6
(3) Failure by the Company to comply with the provisions of
Section 4(c).
(4) The Company's requiring Executive to be based anywhere
other than the location where Executive is based on the Agreement
Date, if the same requires Executive to relocate his principal
residence; or, in the event Executive consents to being based anywhere
other than such location, the failure by the Company to pay (or
reimburse Executive for) all rea sonable moving expenses incurred by
Executive relating to a change of Executive's principal residence in
connection with such relocation.
(5) The failure of the Company to obtain the assumption of
this agreement by any successor as provided in Section 9.
(c) Notice of Termination. Any termination of Executive's employment
by the Company or by Executive other than termination pursuant to Section
5(a)(1) shall be communicated by written Notice of Termination to the other
party. For purposes of this Agreement, a Notice of Termination shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under the
provision so indicated.
(d) Date of Termination. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 5(a)(2), thirty days
after Notice of Termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis during such
thirty (30) day period), or (iii) if Executive's employment is terminated for
any other reason, the date on which the Notice of Termination is given.
Section 6. Compensation Upon Termination or During Disability.
(a) Disability. During any period that Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness
("Disability Period"), Executive shall continue to receive his Basic Salary at
the rate then in effect for such period until his employment is terminated
<PAGE> 7
pursuant to Section 5(a)(2), provided that payments of Basic Salary so made to
Executive shall be reduced by the sum of the amounts, if any, payable to
Executive at or prior to the time of any such salary payment under disability
benefit plans of the Company and which were not previously applied to reduce any
payment of Basic Salary.
(b) Death. If Executive's employment is terminated by his death, the
Company shall pay to Executive's estate his full Basic Salary through the Date
of Termination at the rate in effect on the date of death and shall thereafter
have no further obligations to Executive under this Agreement.
(c) Termination for Cause. If Executive's employment shall be
terminated for Cause, the Company shall pay Executive his full Basic Salary
through the Date of Termination at the rate in effect at the time Notice of
Termination is given and the Company shall have no further obligations to
Executive under this Agreement.
(d) Termination For Good Reason or Without Cause. In the event
Executive terminates his employment with the Company for Good Reason or the
Company terminates Executive's Employment for any reason other than for Cause or
Disability, in either case at any time prior to the expiration of the Term of
Employment, Executive shall be entitled to the following payments and benefits:
(1) The Company shall pay to the Executive, not later than 30
days following the Date of Termination, the Executive's accrued but unpaid Basic
Salary through the Date of Termination plus compensation for current and
carried-over unused vacation and compensation days in accordance with the
applicable personnel policy.
(2) In lieu of any further payments of salary or bonus to the
Executive after the Date of Termination, the Company shall pay to the Executive,
not later than ten (10) days following the Date of Termination, a lump sum cash
severance payment (the "Severance Payment") equal to the total compensation
(including bonus) paid to or accrued for the benefit of the Executive by the
Company for services rendered during the twelve-month period immediately
preceding the Date of Termination.
(e) After payment of the sums described in subpara graphs (d)(1) and
(d)(2) above, the Company shall have no further obligations to Executive under
this Agreement; provided that the Executive's right to receive payments under
this Agreement shall not decrease the amount of, or otherwise adversely affect,
any other benefits payable to the Executive under any other plan,
<PAGE> 8
agreement or arrangement relating to employee benefits provided by the Company.
(f) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 6 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for him in this Section
6 be reduced by any compensation earned by the Executive as the result of
employment by another employer or by reason of the Executive's receipt of or
right to receive any retirement or other benefits after the date of termination
of employment or otherwise.
Section 7. Non-Competition; Confidentiality
(a) Period. During Executive's employment with the Company and for a
period of two years following any termination of Executive's employment with the
Company (other than following a Change of Control (as defined below)), Executive
shall not, as a shareholder, employee, officer, director, partner, consultant or
otherwise, engage directly or indirectly in any business or enterprise which is
in Competition with the Company.
(b) Competition with the Company. For purposes of this Agreement, (i)
the words "Competition with the Company" shall be deemed to include competition
with the Company or any entity controlling, controlled by or under common
control with the Company (an "Affiliate"), or their respective successors or
assigns, or the business of any of them, and (ii) a business or enterprise shall
be deemed to be in Competition with the Company if it is engaged in any business
activity which is the same or comparable to any business activity of the Company
or any Affiliate from time to time during the Term of Employment in any
geographic area of the United States in which the Company or any Affiliate
conducted such business. Notwithstanding the foregoing, nothing herein contained
shall prevent Executive from purchasing and holding for investment less than 5%
of the shares of any corporation the shares of which are regularly traded either
on a national securities exchange or in the over-the-counter market.
(c) Interpretation of Covenant. The parties hereto agree that the
duration and area for which the covenant not to compete set forth in this
Section 7 is to be effective are reasonable. In the event that any court
determines that the time period or the area, or both of them, are unreasonable
and that such covenant is to that extent unenforceable, the parties hereto agree
that the covenant shall remain in full force and effect for the greatest time
period and in the greatest area that would not render it unenforceable. The
parties intend that this covenant shall be deemed to be a series of separate
covenants,
<PAGE> 9
one for each and ever county of each and every state of the United States of
America where the covenant not to compete is intended to be effective. The
provisions of this Section 7 shall survive any termination of this Agreement.
(d) Prohibition on Disclosure or Use. Executive shall at all times
keep and maintain Confidential Information (as defined below) confidential, and
Executive shall not, at any time, either during or subsequent to the Term of
Employment, either directly or indirectly, use any Confidential Information for
Executive's own benefit or divulge, disclose, or communicate any Confidential
Information to any person or entity in any manner whatsoever other than
employees or agents of the Company having a need to know such Confidential
Information, and only to the extent necessary to perform their responsibilities
on behalf of the Company and other than in the performance of Executive's duties
hereunder.
(e) Definition of Confidential Information. "Confidential Information"
shall mean any and all information (excluding information in the public domain)
related to the business of the Company or any Affiliate, including without
limitation all processes; inventions; trade secrets; computer programs;
engineering or technical data, drawings, or designs; manufacturing techniques;
information concerning pricing and pricing policies; marketing techniques; plans
and forecasts; new product information; information concerning suppliers;
methods and manner of operations; and information relating to the identity and
location of all past, present, and prospective customers.
(f) Equitable Relief. Executive's obligations contained in this
Section 7 are of special and unique character which gives them a peculiar value
to the Company, and the Company cannot be reasonably or adequately compensated
in damages in an action at law in the event Executive breaches such obligations.
Executive therefore expressly agrees that, in addition to any other rights or
remedies which Company may possess, the Company shall be entitled to injunctive
and other equitable relief in the form of preliminary and permanent injunctions
without bond or other security in the event of any actual or threatened breach
of said obligations by Executive.
(g) Definition of Change of Control. A "Change of Control" shall be
deemed to have occurred if (i) any "person" (as that term is used in 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") on
the date hereof), including any "group" as such term is used in Section 13(d)(3)
of the Exchange Act on the date hereof (an "Acquiring Person"), shall hereafter
acquire (or disclose the previous acquisition of)
<PAGE> 10
beneficial ownership (as that term is defined in Section 13(d) of the Exchange
Act and the rules thereunder on the date hereof) of shares of the outstanding
stock of any class or classes of the Company which results in such person or
group possessing more than 25% of the total voting power of the Company's
outstanding voting securities ordinarily having the right to vote for the
election of directors of the Company; or (ii) as the result of, or in connection
with, any tender or exchange offer, merger or other business combination, sale
of assets or contested election, or any combination of the foregoing
transactions ("Transaction"), the persons who were directors of the Company
immediately before the Transaction shall cease to constitute a majority of the
Board of Directors of the Company or any successor to the Company. Anything
contained in this paragraph (g) to the contrary notwithstanding, a "Change of
Control" shall not be deemed to have occurred if the Acquiring Person is Gordon
Zacks or any entity or group in which he is an investor or participant.
Section 8. Waiver. The failure of either party to insist, in any one
or more instances, upon the performance of any of the terms, covenants or
conditions of this Agreement by the other party hereto, shall not be construed
as a waiver or as a relinquishment of any right granted hereunder to the party
failing to insist on such performance, or as a waiver of the future performance
of any such term, covenant or condition, but the obligations hereunder of both
parties hereto shall remain unimpaired and shall continue in full force and
effect.
Section 9. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company and its
subsidiaries to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle the Executive to compensation in the same
amount and on the same terms as he would be entitled hereunder if he terminated
his employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Company" shall mean
the Company as defined above and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this Section
9 or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
<PAGE> 11
(b) This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal repre sentatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amounts would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to his devisee, legatee or
other designee or, if there by no such designee, to his estate.
Section 10. Arbitration. Any dispute or controversy arising out of or
relating to this Agreement, or any breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association. The award of the arbitrator shall be final, conclusive, and
nonappealable and judgment upon such award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The arbitrator shall be an
arbitrator qualified to serve in accordance with the rules of the American
Arbitration Association and one who is approved by both the Company and the
Executive. In the absence of such approval, each party shall designate a person
qualified to serve as an arbitrator in accordance with the rules of the American
Arbitration Association and the two persons so desig nated shall select the
arbitrator from among those persons qualified to serve in accordance with the
rules of the American Arbitration Association. The arbitration shall be held in
Columbus, Ohio or such other place as may be agreed upon at the time by the
parties to the arbitration.
Section 11. Notices. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed in
the case of the Executive, to
Christian Galvis
-----------------------------
-----------------------------
and in the case of the Company, to the principal executive offices of the
Company, provided that all notices to the Company shall be directed to the
attention of the Company's Chief Executive Officer with copies to the Secretary
of the Corporation and to its Board of Directors, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
<PAGE> 12
Section 12. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and a duly authorized officer of
the Company. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws (but not the law of conflicts of laws) of the State of Ohio.
Section 13. Validity. The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year above written.
R.G. BARRY CORPORATION
By: /s/ Gordon Zacks
------------------------------
Title: Chairman-CEO
---------------------------
/s/ Christian Galvis
----------------------------------
Christian Galvis
<PAGE> 1
Exhibit 10(o)
Agreement, dated July 1, 1994, between
R. G. Barry Corporation and Richard L. Burrell
<PAGE> 2
AGREEMENT
THIS AGREEMENT is made this 1st day of July, 1994 by and between
RICHARD L. BURRELL (the "Executive") and R.G. Barry Corporation, an Ohio
corporation (the "Corporation").
BACKGROUND
In order to induce the Executive to remain in the employ of the
Corporation, the Corporation wishes to provide the Executive with certain
severance benefits in the event his employment with the Corporation terminates
subsequent to a change in control of the Corporation under the circumstances
described herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings unless other wise expressly provided in this
Agreement:
(i) Change in Control. A "Change in Control" shall be deemed to
have occurred if (A) any "person" (as that term is used in 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") on the date
hereof), including any "group" as such term is used in Section 13(d)(3) of the
Exchange Act on the date hereof (an "Acquiring Person"), shall hereafter acquire
(or disclose the previous acquisition of) beneficial ownership (as that term is
defined in Section 13(d) of the Exchange Act and the rules thereunder on the
date hereof) of shares of the outstanding stock of any class or classes of the
Corporation which results in such person or group possessing more than 25% of
the total voting power of the Corporation's outstand ing voting securities
ordinarily having the right to vote for the election of directors of the
Corporation; or (B) as the result of, or in connection with, any tender or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions
("Transaction"), the persons who were directors of the Corpora tion immediately
before the Transaction shall cease to constitute a majority of the Board of
Directors of the Corporation or any successor to the Corporation. Anything
contained in this paragraph (i) to the contrary notwithstanding, a "Change in
Control" shall not be deemed to have occurred if the Acquiring Person is Gordon
Zacks or any entity or group in which he is an investor or participant.
<PAGE> 3
(ii) Disability. The Executive's employment shall be deemed to
have been terminated for "Disability" if, as a result of his incapacity due to
physical or mental illness, he shall have been absent from his duties with the
Corporation on a full-time basis for the entire period of four consecutive
months, and within 30 days after written notice of termination is given (which
may occur before or after the end of such four-month period) he shall not have
returned to the full-time performance of his duties.
(iii) Effective Period. The "Effective Period" means the 36-month
period following any Change in Control (even if such 36-month period shall
extend beyond the term of this Agreement or any extension thereof).
(iv) Termination for Cause. The Corporation shall have "Cause" to
terminate the Executive's employment hereunder upon (A) the willful and
continued refusal by the Executive substantially to perform his duties with the
Corpora tion (other than any such refusal resulting from his incapacity due to
physical or mental illness), after a demand for substan tial performance is
delivered to the Executive by the Corporation which specifically identifies the
manner in which it is believed that the Executive has refused substantially to
perform his duties, (B) failure of Executive to comply with any applicable law
or regulation affecting the Corporation's business, (C) the commission by
Executive of an act of fraud upon or an act evidencing bad faith or dishonesty
toward the Corporation, (D) conviction of Executive of any felony or misdemeanor
involving moral turpitude, (E) the misappropriation by Executive of any funds,
property, or rights of the Corporation, or (F) Executive's breach of any of the
provisions of this Agreement.
(v) Termination For Good Reason. "Good Reason" shall mean,
unless the Executive shall have consented in writing thereto, termination by the
Executive of his employment because of any of the following:
(A) a reduction in the Executive's title, duties,
responsibilities or status, as compared to such title, duties, responsibilities
or status immediately prior to the Change in Control or as the same may be
increased after the Change in Control;
(B) the assignment to the Executive of duties inconsistent
with the Executive's office on the date of the Change in Control or as the same
may be increased after the Change in Control;
<PAGE> 4
(C) a reduction by the Corporation in the Executive's base
salary as in effect immediately prior to the Change in Control or as the same
may be increased after the Change in Control or a reduction by the Corporation
after a Change in Control in the Executive's total compensation (includ ing
bonus) so that the Executive's total cash compensation in a given calendar year
is less than 90% of Executive's total compensation for the prior calendar year;
(D) a requirement that the Executive relocate anywhere not
mutually acceptable to the Executive and the Corporation or the imposition on
the Executive of business travel obligations substantially greater than his
business travel obligations during the year prior to the Change in Control;
(E) the relocation of the Corporation's principal executive
offices to a location outside the greater Columbus, Ohio area;
(F) the failure by the Corporation to continue in effect any
material fringe benefit or compensation plan, retirement plan, life insurance
plan, health and accident plan or disability plan in which the Executive is
participating at the time of a Change in Control (or plans providing the
Executive with substantially similar benefits), the taking of any action by the
Corporation which would adversely affect the Executive's participation in or
materially reduce his benefits under any of such plans or deprive him of any
material fringe benefit enjoyed by him at the time of the Change in Control, or
the failure by the Corporation to provide him with the number of paid vacation
days to which he is then entitled on the basis of years of service with the
Corporation in accordance with the normal vacation policy in effect immediately
prior to the Change in Control; or
(G) any breach of this Agreement on the part of the
Corporation.
(vi) Notice of Termination. A "Notice of Termination" shall mean
a notice which shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment.
(vii) Date of Termination. "Date of Termination" shall mean (A)
if this Agreement is terminated for Disability, 30 days after a Notice of
Termination is given (provided that the Executive shall not have returned to the
performance of his duties on a full-time basis during such 30-day period), (B)
if the Executive's employment is terminated for Cause, the date specified in the
Notice of Termination, (C) if the Executive's
<PAGE> 5
employment is terminated by death, the date of death, and (D) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given, or, if the Corporation terminates the Executive's
employment without giving a Notice of Termination, the date on which such
termination is effective.
2. TERM. Unless sooner terminated as herein provided, the term of this
Agreement shall commence on the date hereof and shall continue until July 1,
1997 (the "Termination Date"). It is understood that no amounts or benefits
shall be payable under this Agreement unless (i) there shall have been a Change
in Control during the term of this Agreement and (ii) the Executive's employment
is terminated at any time during the Effective Period as provided in Section 5
hereof. It is further understood that the Corporation may terminate the
Executive's employment at any time before or after a Change in Control, subject
to the Corporation providing, if required to do so in accordance with the terms
hereof, the severance payments and benefits hereinafter specified, which
payments and benefits shall only be available if a Change in Control has
occurred prior to such termination. Prior to a Change in Control, this Agreement
shall terminate immediately if Executive's employment with the Corporation is
terminated for any reason.
3. SERVICES DURING CERTAIN EVENTS. In the event any person (as that
term is used in Section 1(i) above) commences a tender or exchange offer,
distributes proxy materials to the Corporation's shareholders or takes other
steps to effect a Change in Control, the Executive agrees he will not
voluntarily terminate his employment with the Corporation other than by reason
of his retirement at normal retirement age, and will continue to serve as a
full-time employee of the Corporation until such efforts to effect a Change in
Control are abandoned or terminated or until a Change in Control has occurred.
4. TERMINATION FOLLOWING A CHANGE IN CONTROL. Any termination of
Executive's employment by the Corporation for Cause, Disability or otherwise or
by the Executive for Good Reason, which, in any case, occurs at any time during
the Effective Period, shall be communicated by written Notice of Termination to
the other party.
5. COMPENSATION UPON TERMINATION FOLLOWING A CHANGE IN CONTROL.
(i) For Cause. If, at any time during the Effective Period, the
Executive's employment shall be terminated for Cause, the Corporation shall pay
the Executive his full base salary through the Date of Termination at the rate
in effect at
<PAGE> 6
the time Notice of Termination is given and the Corporation shall not have any
further obligations to the Executive under this Agreement.
(ii) Death or Disability. If, at any time during the Effective
Period, the Executive's employment is terminated by reason of the Executive's
death or Disability, the Corporation shall pay to the Executive or his legal
representative his full base salary through the Date of Termination, and the
Corporation shall have no further obligation to the Executive or his legal
representative under this Agreement after the Date of Termination.
(iii) For Good Reason or Without Cause. If the Executive's
employment is terminated by the Corporation for any reason other than for Cause,
Disability, or death, or by the Executive for Good Reason, in either case at any
time during the Effective Period, then:
(A) The Corporation shall pay to the Executive, not later
than 30 days following the Date of Termination, the Executive's accrued but
unpaid base salary through the Date of Termination plus compensation for current
and carried-over unused vacation and compensation days in accordance with the
applicable personnel policy.
(B) In lieu of any further payments of salary to the
Executive after the Date of Termination, the Corporation shall pay to the
Executive, not later than thirty (30) days following the Date of Termination and
notwithstanding any dispute between the Executive and the Corporation as to the
payment to the Executive of any other amounts under this Agreement or otherwise,
a lump sum cash severance payment (the "Severance Payment") equal to the greater
of (i) the total compensation (including bonus) paid to or accrued for the
benefit of the Executive by the Corporation for services rendered during the
calendar year ending prior to the date on which a Change in Control of the
Corporation occurred or (ii) the total compensa tion (including bonus) paid to
or accrued for the benefit of the Executive by the Corporation for services
rendered during the twelve-month period immediately preceding the Date of
Termination.
(iv) The Executive's right to receive payments under this
Agreement shall not decrease the amount of, or otherwise adversely affect, any
other benefits payable to the Executive under any plan, agreement or arrangement
relating to employee benefits provided by the Corporation.
<PAGE> 7
(v) The Executive shall not be required to mitigate the amount of
any payment provided for in this section 5 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 5 be reduced by any compensation earned by the Executive as the result
of employment by another employer or by reason of the Executive's receipt of or
right to receive any retirement or other benefits after the date of termination
of employment or otherwise.
6. Non-Competition; Confidentiality
(i) Period. For a period of two years following the termination
of Executive's employment with the Corporation (other than following a Change of
Control), Executive shall not, as a shareholder, employee, officer, director,
partner, consultant or otherwise, engage directly or indirectly in any business
or enterprise which is in Competition with the Corporation.
(ii) Competition with the Corporation. For purposes of this
Agreement, (A) the words "Competition with the Corporation" shall be deemed to
include competition with the Corporation or any entity controlling, controlled
by or under common control with the Corporation (an "Affiliate"), or their
respective successors or assigns, or the business of any of them, and (B) a
business or enterprise shall be deemed to be in Competition with the Corporation
if it is engaged in any business activity which is the same or comparable to any
business activity of the Corporation or any Affiliate from time to time during
the Executive's employment with the Corporation in any geographic area of the
United States in which the Corporation or any Affiliate conducted such business.
Notwithstanding the fore going, nothing herein contained shall prevent Executive
from purchasing and holding for investment less than 5% of the shares of any
corporation the shares of which are regularly traded either on a national
securities exchange or in the over-the-counter market.
(iii) Interpretation of Covenant. The parties hereto agree that
the duration and area for which the covenant not to compete set forth in this
Section 6 is to be effective are reasonable. In the event that any court
determines that the time period or the area, or both of them, are unreasonable
and that such covenant is to that extent unenforceable, the parties hereto agree
that the covenant shall remain in full force and effect for the greatest time
period and in the greatest area that would not render it unenforceable. The
parties intend that this covenant shall be deemed to be a series of separate
covenants, one for each and ever county of each and every state of the United
States of America where the covenant not to compete is intended to be
<PAGE> 8
effective. The provisions of this Section 6 shall survive any termination of
this Agreement.
(iv) Prohibition on Disclosure or Use. Executive shall at all
times keep and maintain Confidential Information (as defined below)
confidential, and Executive shall not, at any time, either during or subsequent
to his employment with the Corporation, either directly or indirectly, use any
Confidential Information for Executive's own benefit or divulge, disclose, or
communicate any Confidential Information to any person or entity in any manner
whatsoever other than employees or agents of the Company having a need to know
such Confidential Information, and only to the extent necessary to perform their
responsibilities on behalf of the Company and other than in the performance of
Executive's employment duties to the Corporation.
(v) Definition of Confidential Information. "Confidential
Information" shall mean any and all information (excluding information in the
public domain) related to the business of the Corporation or any Affiliate,
including without limitation all processes; inventions; trade secrets; computer
programs; engineering or technical data, drawings, or designs; manufacturing
techniques; information concerning pricing and pricing policies; marketing
techniques; plans and forecasts; new product information; information concerning
suppliers; methods and manner of operations; and information relating to the
identity and location of all past, present, and prospective customers.
(vi) Equitable Relief. Executive's obligations contained in this
Section 6 are of special and unique character which gives them a peculiar value
to the Corporation, and the Corporation cannot be reasonably or adequately
compensated in damages in an action at law in the event Executive breaches such
obligations. Executive therefore expressly agrees that, in addition to any other
rights or remedies which Corporation may possess, the Corporation shall be
entitled to injunctive and other equitable relief in the form of preliminary and
permanent injunctions without bond or other security in the event of any actual
or threatened breach of said obligations by Executive.
7. SUCCESSORS; BINDING AGREEMENT.
(i) The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation and its
subsidiaries to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no succession had taken place. Failure of the
<PAGE> 9
Corporation to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation in the same amount and on the same terms as he would be entitled
hereunder if he terminated his employment for Good Reason during the Effective
Period, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Corporation" shall mean the Corporation
as defined above and any successor to its business and/or assets as aforesaid
which executes and delivers the agreement provided for in this Section 7 or
which otherwise becomes bound by all the terms and provisions of this Agreement
by operation of law. Nothing contained in this Section 7 shall be construed to
modify or affect the definition of a "Change in Control" contained in Section 1
hereof.
(ii) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal repre sentatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
8. ARBITRATION. Any dispute or controversy arising out of or relating
to this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association. The award of
the arbitrator shall be final, conclusive and nonappealable and judgment upon
such award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator shall be an arbitrator qualified to serve
in accordance with the rules of the American Arbitration Association and one who
is approved by both the Corporation and the Executive. In the absence of such
approval, each party shall designate a person qualified to serve as an
arbitrator in accordance with the rules of the American Arbitration Association
and the two persons so designated shall select the arbitrator from among those
persons qualified to serve in accordance with the rules of the American
Arbitration Association. The arbitration shall be held in Columbus, Ohio or such
other place as may be agreed upon at the time by the parties to the arbitration.
9. NOTICES. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed in the
case of the Executive, to
<PAGE> 10
Richard L. Burrell
---------------------------
---------------------------
and in the case of the Corporation, to the principal executive offices of the
Corporation, provided that all notices to the Corporation shall be directed to
the attention of the Corpora tion's Chief Executive Officer with copies to the
Secretary of the Corporation and to its Board of Directors, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
10. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and a duly authorized officer of the
Corporation. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws (but not the law of conflicts of laws) of the State of Ohio.
11. VALIDITY. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
R.G. BARRY CORPORATION
By: /s/ Gordon Zacks
-------------------------------
Title: CEO/Chairman
----------------------------
/s/ Richard L. Burrell
-----------------------------------
Richard L. Burrell
<PAGE> 1
Exhibit 10(p)
Agreement, dated July 1, 1994 between
R. G. Barry Corporation and Daniel D. Viren
<PAGE> 2
AGREEMENT
THIS AGREEMENT is made this 1st day of July, 1994 by and between
DANIEL D. VIREN (the "Executive") and R.G. Barry Corporation, an Ohio
corporation (the "Corporation").
BACKGROUND
In order to induce the Executive to remain in the employ of the
Corporation, the Corporation wishes to provide the Executive with certain
severance benefits in the event his employment with the Corporation terminates
subsequent to a change in control of the Corporation under the circumstances
described herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings unless other wise expressly provided in this
Agreement:
(i) Change in Control. A "Change in Control" shall be deemed to
have occurred if (A) any "person" (as that term is used in 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") on the date
hereof), including any "group" as such term is used in Section 13(d)(3) of the
Exchange Act on the date hereof (an "Acquiring Person"), shall hereafter acquire
(or disclose the previous acquisition of) beneficial ownership (as that term is
defined in Section 13(d) of the Exchange Act and the rules thereunder on the
date hereof) of shares of the outstanding stock of any class or classes of the
Corporation which results in such person or group possessing more than 25% of
the total voting power of the Corporation's outstand ing voting securities
ordinarily having the right to vote for the election of directors of the
Corporation; or (B) as the result of, or in connection with, any tender or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions
("Transaction"), the persons who were directors of the Corpora tion immediately
before the Transaction shall cease to constitute a majority of the Board of
Directors of the Corporation or any successor to the Corporation. Anything
contained in this paragraph (i) to the contrary notwithstanding, a "Change in
Control" shall not be deemed to have occurred if the Acquiring Person is Gordon
Zacks or any entity or group in which he is an investor or participant.
<PAGE> 3
(ii) Disability. The Executive's employment shall be deemed to
have been terminated for "Disability" if, as a result of his incapacity due to
physical or mental illness, he shall have been absent from his duties with the
Corporation on a full-time basis for the entire period of four consecutive
months, and within 30 days after written notice of termination is given (which
may occur before or after the end of such four-month period) he shall not have
returned to the full-time performance of his duties.
(iii) Effective Period. The "Effective Period" means the 36-month
period following any Change in Control (even if such 36-month period shall
extend beyond the term of this Agreement or any extension thereof).
(iv) Termination for Cause. The Corporation shall have "Cause" to
terminate the Executive's employment hereunder upon (A) the willful and
continued refusal by the Executive substantially to perform his duties with the
Corpora tion (other than any such refusal resulting from his incapacity due to
physical or mental illness), after a demand for substan tial performance is
delivered to the Executive by the Corporation which specifically identifies the
manner in which it is believed that the Executive has refused substantially to
perform his duties, (B) failure of Executive to comply with any applicable law
or regulation affecting the Corporation's business, (C) the commission by
Executive of an act of fraud upon or an act evidencing bad faith or dishonesty
toward the Corporation, (D) conviction of Executive of any felony or misdemeanor
involving moral turpitude, (E) the misappropriation by Executive of any funds,
property, or rights of the Corporation, or (F) Executive's breach of any of the
provisions of this Agreement.
(v) Termination For Good Reason. "Good Reason" shall mean,
unless the Executive shall have consented in writing thereto, termination by the
Executive of his employment because of any of the following:
(A) a reduction in the Executive's title, duties,
responsibilities or status, as compared to such title, duties, responsibilities
or status immediately prior to the Change in Control or as the same may be
increased after the Change in Control;
(B) the assignment to the Executive of duties inconsistent
with the Executive's office on the date of the Change in Control or as the same
may be increased after the Change in Control;
<PAGE> 4
(C) a reduction by the Corporation in the Executive's base
salary as in effect immediately prior to the Change in Control or as the same
may be increased after the Change in Control or a reduction by the Corporation
after a Change in Control in the Executive's total compensation (includ ing
bonus) so that the Executive's total cash compensation in a given calendar year
is less than 90% of Executive's total compen sation for the prior calendar year;
(D) a requirement that the Executive relocate anywhere not
mutually acceptable to the Executive and the Corporation or the imposition on
the Executive of business travel obligations substantially greater than his
business travel obligations during the year prior to the Change in Control;
(E) the relocation of the Corporation's principal executive
offices to a location outside the greater Columbus, Ohio area;
(F) the failure by the Corporation to continue in effect any
material fringe benefit or compensation plan, retirement plan, life insurance
plan, health and accident plan or disability plan in which the Executive is
participating at the time of a Change in Control (or plans providing the
Executive with substantially similar benefits), the taking of any action by the
Corporation which would adversely affect the Executive's participation in or
materially reduce his benefits under any of such plans or deprive him of any
material fringe benefit enjoyed by him at the time of the Change in Control, or
the failure by the Corporation to provide him with the number of paid vacation
days to which he is then entitled on the basis of years of service with the
Corporation in accordance with the normal vacation policy in effect immediately
prior to the Change in Control; or
(G) any breach of this Agreement on the part of the
Corporation.
(vi) Notice of Termination. A "Notice of Termination" shall mean
a notice which shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment.
(vii) Date of Termination. "Date of Termination" shall mean (A)
if this Agreement is terminated for Disability, 30 days after a Notice of
Termination is given (provided that the Executive shall not have returned to the
performance of his duties on a full-time basis during such 30-day period), (B)
if the Executive's employment is terminated for Cause, the date specified in the
Notice of Termination, (C) if the Executive's
<PAGE> 5
employment is terminated by death, the date of death, and (D) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given, or, if the Corporation terminates the Executive's
employment without giving a Notice of Termination, the date on which such
termination is effective.
2. TERM. Unless sooner terminated as herein provided, the term of this
Agreement shall commence on the date hereof and shall continue until July 1,
1997 (the "Termination Date"). It is understood that no amounts or benefits
shall be payable under this Agreement unless (i) there shall have been a Change
in Control during the term of this Agreement and (ii) the Executive's employment
is terminated at any time during the Effective Period as provided in Section 5
hereof. It is further understood that the Corporation may terminate the
Executive's employment at any time before or after a Change in Control, subject
to the Corporation providing, if required to do so in accordance with the terms
hereof, the severance payments and benefits hereinafter specified, which
payments and benefits shall only be available if a Change in Control has
occurred prior to such termination. Prior to a Change in Control, this Agreement
shall terminate immediately if Executive's employment with the Corporation is
terminated for any reason.
3. SERVICES DURING CERTAIN EVENTS. In the event any person (as that
term is used in Section 1(i) above) commences a tender or exchange offer,
distributes proxy materials to the Corporation's shareholders or takes other
steps to effect a Change in Control, the Executive agrees he will not
voluntarily terminate his employment with the Corporation other than by reason
of his retirement at normal retirement age, and will continue to serve as a
full-time employee of the Corporation until such efforts to effect a Change in
Control are abandoned or terminated or until a Change in Control has occurred.
4. TERMINATION FOLLOWING A CHANGE IN CONTROL. Any termination of
Executive's employment by the Corporation for Cause, Disability or otherwise or
by the Executive for Good Reason, which, in any case, occurs at any time during
the Effective Period, shall be communicated by written Notice of Termination to
the other party.
5. COMPENSATION UPON TERMINATION FOLLOWING A CHANGE IN CONTROL.
(i) For Cause. If, at any time during the Effective Period, the
Executive's employment shall be terminated for Cause, the Corporation shall pay
the Executive his full base salary through the Date of Termination at the rate
in effect at
<PAGE> 6
the time Notice of Termination is given and the Corporation shall not have any
further obligations to the Executive under this Agreement.
(ii) Death or Disability. If, at any time during the Effective
Period, the Executive's employment is terminated by reason of the Executive's
death or Disability, the Corporation shall pay to the Executive or his legal
representative his full base salary through the Date of Termination, and the
Corporation shall have no further obligation to the Executive or his legal
representative under this Agreement after the Date of Termination.
(iii) For Good Reason or Without Cause. If the Executive's
employment is terminated by the Corporation for any reason other than for Cause,
Disability, or death, or by the Executive for Good Reason, in either case at any
time during the Effective Period, then:
(A) The Corporation shall pay to the Execu tive, not later
than 30 days following the Date of Termination, the Executive's accrued but
unpaid base salary through the Date of Termination plus compensation for current
and carried-over unused vacation and compensation days in accordance with the
applicable personnel policy.
(B) In lieu of any further payments of salary to the
Executive after the Date of Termination, the Corporation shall pay to the
Executive, not later than thirty (30) days following the Date of Termination and
notwithstanding any dispute between the Executive and the Corporation as to the
payment to the Executive of any other amounts under this Agree ment or
otherwise, a lump sum cash severance payment (the "Severance Payment") equal to
the greater of (i) the total compensation (including bonus) paid to or accrued
for the benefit of the Executive by the Corporation for services rendered during
the calendar year ending prior to the date on which a Change in Control of the
Corporation occurred or (ii) the total compensa tion (including bonus) paid to
or accrued for the benefit of the Executive by the Corporation for services
rendered during the twelve-month period immediately preceding the Date of
Termination.
(iv) The Executive's right to receive payments under this
Agreement shall not decrease the amount of, or otherwise adversely affect, any
other benefits payable to the Executive under any plan, agreement or arrangement
relating to employee benefits provided by the Corporation.
<PAGE> 7
(v) The Executive shall not be required to mitigate the amount of
any payment provided for in this section 5 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 5 be reduced by any compensation earned by the Executive as the result
of employment by another employer or by reason of the Executive's receipt of or
right to receive any retirement or other benefits after the date of termination
of employment or otherwise.
6. Non-Competition; Confidentiality
(i) Period. For a period of two years following the termination
of Executive's employment with the Corporation (other than following a Change in
Control), Executive shall not, as a shareholder, employee, officer, director,
partner, consultant or otherwise, engage directly or indirectly in any business
or enterprise which is in Competition with the Corporation.
(ii) Competition with the Corporation. For purposes of this
Agreement, (A) the words "Competition with the Corporation" shall be deemed to
include competition with the Corporation or any entity controlling, controlled
by or under common control with the Corporation (an "Affiliate"), or their
respective successors or assigns, or the business of any of them, and (B) a
business or enterprise shall be deemed to be in Competition with the Corporation
if it is engaged in any business activity which is the same or comparable to any
business activity of the Corporation or any Affiliate from time to time during
Executive's employment with the Corporation in any geographic area of the United
States in which the Corporation or any Affiliate conducted such business.
Notwithstanding the fore going, nothing herein contained shall prevent Executive
from purchasing and holding for investment less than 5% of the shares of any
corporation the shares of which are regularly traded either on a national
securities exchange or in the over-the-counter market.
(iii) Interpretation of Covenant. The parties hereto agree that
the duration and area for which the covenant not to compete set forth in this
Section 6 is to be effective are reasonable. In the event that any court
determines that the time period or the area, or both of them, are unreasonable
and that such covenant is to that extent unenforceable, the parties hereto agree
that the covenant shall remain in full force and effect for the greatest time
period and in the greatest area that would not render it unenforceable. The
parties intend that this covenant shall be deemed to be a series of separate
covenants, one for each and ever county of each and every state of the United
States of America where the covenant not to compete is
<PAGE> 8
intended to be effective. The provisions of this Section 6 shall survive any
termination of this Agreement.
(iv) Prohibition on Disclosure or Use. Executive shall at all
times keep and maintain Confidential Information (as defined below)
confidential, and Executive shall not, at any time, either during or subsequent
to his employment with the Corporation, either directly or indirectly, use any
Confidential Information for Executive's own benefit or divulge, disclose, or
communicate any Confidential Information to any person or entity in any manner
whatsoever other than employees or agents of the Company having a need to know
such Confidential Information, and only to the extent necessary to perform their
responsibilities on behalf of the Company and other than in the performance of
Executive's employment duties to the Corporation.
(v) Definition of Confidential Information. "Confidential
Information" shall mean any and all information (excluding information in the
public domain) related to the business of the Corporation or any Affiliate,
including without limitation all processes; inventions; trade secrets; computer
programs; engineering or technical data, drawings, or designs; manufacturing
techniques; information concerning pricing and pricing policies; marketing
techniques; plans and forecasts; new product information; information concerning
suppliers; methods and manner of operations; and information relating to the
identity and location of all past, present, and prospective customers.
(vi) Equitable Relief. Executive's obligations contained in this
Section 6 are of special and unique character which gives them a peculiar value
to the Corporation, and the Corporation cannot be reasonably or adequately
compensated in damages in an action at law in the event Executive breaches such
obligations. Executive therefore expressly agrees that, in addition to any other
rights or remedies which Corporation may possess, the Corporation shall be
entitled to injunctive and other equitable relief in the form of preliminary and
permanent injunctions without bond or other security in the event of any actual
or threatened breach of said obligations by Executive.
7. SUCCESSORS; BINDING AGREEMENT.
(i) The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation and its
subsidiaries to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
it if no succession had taken place. Failure of the
<PAGE> 9
Corporation to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation in the same amount and on the same terms as he would be entitled
hereunder if he terminated his employment for Good Reason during the Effective
Period, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Corporation" shall mean the Corporation
as defined above and any successor to its business and/or assets as aforesaid
which executes and delivers the agreement provided for in this Section 7 or
which otherwise becomes bound by all the terms and provi sions of this Agreement
by operation of law. Nothing contained in this Section 7 shall be construed to
modify or affect the definition of a "Change in Control" contained in Section 1
hereof.
(ii) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal represen tatives, executors,
administrators, successors, heirs, distribu tees, devisees and legatees.
8. ARBITRATION. Any dispute or controversy arising out of or relating
to this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association. The award of
the arbitra tor shall be final, conclusive and nonappealable and judgment upon
such award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator shall be an arbitrator qualified to serve
in accordance with the rules of the American Arbitration Association and one who
is approved by both the Corporation and the Executive. In the absence of such
approval, each party shall designate a person qualified to serve as an
arbitrator in accordance with the rules of the American Arbitration Association
and the two persons so designated shall select the arbitrator from among those
persons qualified to serve in accordance with the rules of the American
Arbitration Association. The arbitration shall be held in Columbus, Ohio or such
other place as may be agreed upon at the time by the parties to the arbitration.
9. NOTICES. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed in the
case of the Executive, to
<PAGE> 10
Daniel D. Viren
------------------------
------------------------
and in the case of the Corporation, to the principal executive offices of the
Corporation, provided that all notices to the Corporation shall be directed to
the attention of the Corpora tion's Chief Executive Officer with copies to the
Secretary of the Corporation and to its Board of Directors, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
10. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modifi cation or discharge is agreed to
in writing signed by the Executive and a duly authorized officer of the
Corporation. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws (but not the law of conflicts of laws) of the State of Ohio.
11. VALIDITY. The invalidity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
R.G. BARRY CORPORATION
By: /s/ Gordon Zacks
------------------------
Title: CEO/Chairman
---------------------
/s/ Daniel D. Viren
----------------------------
Daniel D. Viren
<PAGE> 1
Exhibit 10(q)
Agreement, dated July 1, 1994, between
R. G. Barry Corporation and Harry Miller
<PAGE> 2
AGREEMENT
THIS AGREEMENT is made this 1st day of July, 1994 by and between HARRY
MILLER (the "Executive") and R.G. Barry Corporation, an Ohio corporation (the
"Corporation").
BACKGROUND
In order to induce the Executive to remain in the employ of the
Corporation, the Corporation wishes to provide the Executive with certain
severance benefits in the event his employment with the Corporation terminates
subsequent to a change in control of the Corporation under the circumstances
described herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings unless other wise expressly provided in this
Agreement:
(i) Change in Control. A "Change in Control" shall be deemed to
have occurred if (A) any "person" (as that term is used in 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") on the date
hereof), including any "group" as such term is used in Section 13(d)(3) of the
Exchange Act on the date hereof (an "Acquiring Person"), shall hereafter acquire
(or disclose the previous acquisition of) beneficial ownership (as that term is
defined in Section 13(d) of the Exchange Act and the rules thereunder on the
date hereof) of shares of the outstanding stock of any class or classes of the
Corporation which results in such person or group possessing more than 25% of
the total voting power of the Corporation's outstand ing voting securities
ordinarily having the right to vote for the election of directors of the
Corporation; or (B) as the result of, or in connection with, any tender or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions
("Transaction"), the persons who were directors of the Corpora tion immediately
before the Transaction shall cease to constitute a majority of the Board of
Directors of the Corporation or any successor to the Corporation. Anything
contained in this paragraph (i) to the contrary notwithstanding, a "Change in
Control" shall not be deemed to have occurred if the Acquiring Person is Gordon
Zacks or any entity or group in which he is an investor or participant.
<PAGE> 3
(ii) Disability. The Executive's employment shall be deemed to
have been terminated for "Disability" if, as a result of his incapacity due to
physical or mental illness, he shall have been absent from his duties with the
Corporation on a full-time basis for the entire period of four consecutive
months, and within 30 days after written notice of termination is given (which
may occur before or after the end of such four-month period) he shall not have
returned to the full-time performance of his duties.
(iii) Effective Period. The "Effective Period" means the 36-month
period following any Change in Control (even if such 36-month period shall
extend beyond the term of this Agreement or any extension thereof).
(iv) Termination for Cause. The Corporation shall have "Cause" to
terminate the Executive's employment hereunder upon (A) the willful and
continued refusal by the Executive substantially to perform his duties with the
Corporation (other than any such refusal resulting from his incapacity due to
physical or mental illness), after a demand for substantial performance is
delivered to the Executive by the Corporation which specifically identifies the
manner in which it is believed that the Executive has refused substantially to
perform his duties, (B) failure of Executive to comply with any applicable law
or regulation affecting the Corporation's business, (C) the commission by
Executive of an act of fraud upon or an act evidencing bad faith or dishonesty
toward the Corporation, (D) conviction of Executive of any felony or misdemeanor
involving moral turpitude, (E) the misappropriation by Executive of any funds,
property, or rights of the Corporation, or (F) Executive's breach of any of the
provisions of this Agreement.
(v) Termination For Good Reason. "Good Reason" shall mean,
unless the Executive shall have consented in writing thereto, termination by the
Executive of his employment because of any of the following:
(A) a reduction in the Executive's title, duties,
responsibilities or status, as compared to such title, duties, responsibilities
or status immediately prior to the Change in Control or as the same may be
increased after the Change in Control;
(B) the assignment to the Executive of duties inconsistent
with the Executive's office on the date of the Change in Control or as the same
may be increased after the Change in Control;
<PAGE> 4
(C) a reduction by the Corporation in the Executive's base
salary as in effect immediately prior to the Change in Control or as the same
may be increased after the Change in Control or a reduction by the Corporation
after a Change in Control in the Executive's total compensation (including
bonus) so that the Executive's total cash compensation in a given calendar year
is less than 90% of Executive's total compensation for the prior calendar year;
(D) a requirement that the Executive relocate anywhere not
mutually acceptable to the Executive and the Corporation or the imposition on
the Executive of business travel obligations substantially greater than his
business travel obligations during the year prior to the Change in Control;
(E) the relocation of the Corporation's principal executive
offices to a location outside the greater Columbus, Ohio area;
(F) the failure by the Corporation to continue in effect any
material fringe benefit or compensation plan, retirement plan, life insurance
plan, health and accident plan or disability plan in which the Executive is
participating at the time of a Change in Control (or plans providing the
Executive with substantially similar benefits), the taking of any action by the
Corporation which would adversely affect the Executive's participation in or
materially reduce his benefits under any of such plans or deprive him of any
material fringe benefit enjoyed by him at the time of the Change in Control, or
the failure by the Corporation to provide him with the number of paid vacation
days to which he is then entitled on the basis of years of service with the
Corporation in accordance with the normal vacation policy in effect immediately
prior to the Change in Control; or
(G) any breach of this Agreement on the part of the
Corporation.
(vi) Notice of Termination. A "Notice of Termination" shall mean
a notice which shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment.
(vii) Date of Termination. "Date of Termination" shall mean (A)
if this Agreement is terminated for Disability, 30 days after a Notice of
Termination is given (provided that the Executive shall not have returned to the
performance of his duties on a full-time basis during such 30-day period), (B)
if the Executive's employment is terminated for Cause, the date specified in the
Notice of Termination, (C) if the Executive's
<PAGE> 5
employment is terminated by death, the date of death, and (D) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given, or, if the Corporation terminates the Executive's
employment without giving a Notice of Termination, the date on which such
termination is effective.
2. TERM. Unless sooner terminated as herein provided, the term of this
Agreement shall commence on the date hereof and shall continue until July 1,
1997 (the "Termination Date"). It is understood that no amounts or benefits
shall be payable under this Agreement unless (i) there shall have been a Change
in Control during the term of this Agreement and (ii) the Executive's employment
is terminated at any time during the Effective Period as provided in Section 5
hereof. It is further understood that the Corporation may terminate the
Executive's employment at any time before or after a Change in Control, subject
to the Corporation providing, if required to do so in accordance with the terms
hereof, the severance payments and benefits hereinafter specified, which
payments and benefits shall only be available if a Change in Control has
occurred prior to such termination. Prior to a Change in Control, this Agreement
shall terminate immediately if Executive's employment with the Corporation is
terminated for any reason.
3. SERVICES DURING CERTAIN EVENTS. In the event any person (as that
term is used in Section 1(i) above) commences a tender or exchange offer,
distributes proxy materials to the Corporation's shareholders or takes other
steps to effect a Change in Control, the Executive agrees he will not
voluntarily terminate his employment with the Corporation other than by reason
of his retirement at normal retirement age, and will continue to serve as a
full-time employee of the Corporation until such efforts to effect a Change in
Control are abandoned or terminated or until a Change in Control has occurred.
4. TERMINATION FOLLOWING A CHANGE IN CONTROL. Any termination of
Executive's employment by the Corporation for Cause, Disability or otherwise or
by the Executive for Good Reason, which, in any case, occurs at any time during
the Effective Period, shall be communicated by written Notice of Termination to
the other party.
5. COMPENSATION UPON TERMINATION FOLLOWING A CHANGE IN CONTROL.
(i) For Cause. If, at any time during the Effective Period, the
Executive's employment shall be terminated for Cause, the Corporation shall pay
the Executive his full base salary through the Date of Termination at the rate
in effect at
<PAGE> 6
the time Notice of Termination is given and the Corporation shall not have any
further obligations to the Executive under this Agreement.
(ii) Death or Disability. If, at any time during the Effective
Period, the Executive's employment is terminated by reason of the Executive's
death or Disability, the Corporation shall pay to the Executive or his legal
representative his full base salary through the Date of Termination, and the
Corporation shall have no further obligation to the Executive or his legal
representative under this Agreement after the Date of Termination.
(iii) For Good Reason or Without Cause. If the Executive's
employment is terminated by the Corporation for any reason other than for Cause,
Disability, or death, or by the Executive for Good Reason, in either case at any
time during the Effective Period, then:
(A) The Corporation shall pay to the Executive, not later
than 30 days following the Date of Termination, the Executive's accrued but
unpaid base salary through the Date of Termination plus compensation for current
and carried-over unused vacation and compensation days in accordance with the
applicable personnel policy.
(B) In lieu of any further payments of salary to the
Executive after the Date of Termination, the Corporation shall pay to the
Executive, not later than thirty (30) days following the Date of Termination and
notwithstanding any dispute between the Executive and the Corporation as to the
payment to the Executive of any other amounts under this Agreement or otherwise,
a lump sum cash severance payment (the "Severance Payment") equal to the greater
of (i) the total compensation (including bonus) paid to or accrued for the
benefit of the Executive by the Corporation for services rendered during the
calendar year ending prior to the date on which a Change in Control of the
Corporation occurred or (ii) the total compensa tion (including bonus) paid to
or accrued for the benefit of the Executive by the Corporation for services
rendered during the twelve-month period immediately preceding the Date of
Termination.
(iv) The Executive's right to receive payments under this
Agreement shall not decrease the amount of, or otherwise adversely affect, any
other benefits payable to the Executive under any plan, agreement or arrangement
relating to employee benefits provided by the Corporation.
<PAGE> 7
(v) The Executive shall not be required to mitigate the amount of
any payment provided for in this section 5 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 5 be reduced by any compensation earned by the Executive as the result
of employment by another employer or by reason of the Executive's receipt of or
right to receive any retirement or other benefits after the date of termination
of employment or otherwise.
6. Non-Competition; Confidentiality
(i) Period. For a period of two years following the termination
of Executive's employment with the Corporation (other than following a Change in
Control), Executive shall not, as a shareholder, employee, officer, director,
partner, consultant or otherwise, engage directly or indirectly in any business
or enterprise which is in Competition with the Corporation.
(ii) Competition with the Corporation. For purposes of this
Agreement, (a) the words "Competition with the Corporation" shall be deemed to
include competition with the Corporation or any entity controlling, controlled
by or under common control with the Corporation (an "Affiliate"), or their
respective successors or assigns, or the business of any of them, and (b) a
business or enterprise shall be deemed to be in Competition with the Corporation
if it is engaged in any business activity which is the same or comparable to any
business activity of the Corporation or any Affiliate from time to time during
Executive's employment with the Corporation in any geographic area of the United
States in which the Corporation or any Affiliate conducted such business.
Notwithstanding the foregoing, nothing herein contained shall prevent Executive
from purchasing and holding for investment less than 5% of the shares of any
corporation the shares of which are regularly traded either on a national
securities exchange or in the over-the-counter market.
(iii) Interpretation of Covenant. The parties hereto agree that the
duration and area for which the covenant not to compete set forth in this
Section 6 is to be effective are reasonable. In the event that any court
determines that the time period or the area, or both of them, are unreasonable
and that such covenant is to that extent unenforceable, the parties hereto agree
that the covenant shall remain in full force and effect for the greatest time
period and in the greatest area that would not render it unenforceable. The
parties intend that this covenant shall be deemed to be a series of separate
covenants, one for each and ever county of each and every state of the United
States
<PAGE> 8
of America where the covenant not to compete is intended to be effective.
(iv) Prohibition on Disclosure or Use. Executive shall at all
times keep and maintain Confidential Information (as defined below)
confidential, and Executive shall not, at any time, either during or subsequent
to his employment with the Corporation, either directly or indirectly, use any
Confidential Information for Executive's own benefit or divulge, disclose, or
communicate any Confidential Information to any person or entity in any manner
whatsoever other than employees or agents of the Corporation having a need to
know such Confidential Information, and only to the extent necessary to perform
their responsibilities on behalf of the Corporation and other than in the
performance of Executive's employment duties to the Corporation.
(v) Definition of Confidential Information. "Confidential
Information" shall mean any and all information (excluding information in the
public domain) related to the business of the Corporation or any Affiliate,
including without limitation all processes; inventions; trade secrets; computer
programs; engineering or technical data, drawings, or designs; manufacturing
techniques; information concerning pricing and pricing policies; marketing
techniques; plans and forecasts; new product information; information concerning
suppliers; methods and manner of operations; and information relating to the
identity and location of all past, present, and prospective customers.
(iv) Equitable Relief. Executive's obligations contained in this
Section 6 are of special and unique character which gives them a peculiar value
to the Corporation, and the Corporation cannot be reasonably or adequately
compensated in damages in an action at law in the event Executive breaches such
obligations. Executive therefore expressly agrees that, in addition to any other
rights or remedies which Corporation may possess, the Corporation shall be
entitled to injunctive and other equitable relief in the form of preliminary and
permanent injunctions without bond or other security in the event of any actual
or threatened breach of said obligations by Executive. The provisions of this
Section 6 shall survive any termination of this Agreement.
7. SUCCESSORS; BINDING AGREEMENT.
(i) The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation and its
subsidiaries to expressly
<PAGE> 9
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no succession had
taken place. Failure of the Corporation to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation in the same amount and on the same
terms as he would be entitled hereunder if he terminated his employment for Good
Reason during the Effective Period, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Corporation" shall
mean the Corporation as defined above and any successor to its business and/or
assets as aforesaid which executes and delivers the agreement provided for in
this Section 7 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law. Nothing contained in this Section 7 shall
be construed to modify or affect the definition of a "Change in Control"
contained in Section 1 hereof.
(ii) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal repre sentatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
8. ARBITRATION. Any dispute or controversy arising out of or relating
to this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association. The award of
the arbitrator shall be final, conclusive and nonappealable and judgment upon
such award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitrator shall be an arbitrator qualified to serve
in accordance with the rules of the American Arbitration Association and one who
is approved by both the Corporation and the Executive. In the absence of such
approval, each party shall designate a person qualified to serve as an
arbitrator in accordance with the rules of the American Arbitration Association
and the two persons so designated shall select the arbitrator from among those
persons qualified to serve in accordance with the rules of the American
Arbitration Association. The arbitration shall be held in Columbus, Ohio or such
other place as may be agreed upon at the time by the parties to the arbitration.
9. NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed in the
case of the Executive, to
<PAGE> 10
Harry Miller
-----------------------
-----------------------
and in the case of the Corporation, to the principal executive offices of the
Corporation, provided that all notices to the Corporation shall be directed to
the attention of the Corporation's Chief Executive Officer with copies to the
Secretary of the Corporation and to its Board of Directors, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.
10. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and a duly authorized officer of the
Corporation. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws (but not the law of conflicts of laws) of the State of Ohio.
11. VALIDITY. The invalidity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
R.G. BARRY CORPORATION
By: /s/ Gordon Zacks
------------------------------
Title: CEO/Chairman
---------------------------
/s/ Harry Miller
----------------------------------
Harry Miller
<PAGE> 1
Exhibit 21
Subsidiaries of R. G. Barry Corporation
<PAGE> 2
SUBSIDIARIES OF R. G. BARRY CORPORATION
<TABLE>
<CAPTION>
State or Other Jurisdiction
of Incorporation or
Name Organization
--------------------------------- ---------------------------
<S> <C>
R. G. Barry International, Inc. Ohio
Barry De Mexico, S.A., DE C.V. Mexico
R. G. B., Inc. Ohio
Barry De Acuna, S.A., DE C.V. Mexico
Barry Juarez, S.A., DE C.V. Mexico
Barry De Zacatecas, S.A., DE C.V. Mexico
Vesture Corporation North Carolina
</TABLE>
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
R. G. Barry Corporation:
We consent to incorporation by reference in Registration Statement Nos.
2-63741, 2-92577, 2-92578, 33-3586, 33-23567, 33-23568, 33-28343, 33-38495,
33-46904, 33-67594, 33-67596, 33-7640, 33-81820 and 33-83252 on Forms S-8 and
S-3 of R. G. Barry Corporation of our reports dated February 14, 1995, relating
to the consolidated balance sheets of R. G. Barry Corporation and subsidiaries
as of December 31, 1994 and January 1, 1994, and the related consolidated
statements of earnings, shareholders' equity and cash flows and related
financial statement schedules for each of the fiscal years in the three-year
period ended December 31, 1994, which reports appear in the 1994 annual report
on Form 10-K of R. G. Barry Corporation.
Our report refers to the Company adopting Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes during fiscal 1993.
KPMG Peat Marwick LLP
Columbus, Ohio
March 29, 1995
<PAGE> 1
Exhibit 24
Powers of Attorney
<PAGE> 2
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of R. G. Barry Corporation, an Ohio corporation (the "Company"), which
is about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Exchange Act of 1934, as amended, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, hereby
constitutes and appoints Richard L. Burrell and Michael S. Krasnoff as his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign both the Annual Report on Form 10-K and any and all
amendments and documents related thereto, and to file the same, and any and all
exhibits, financial statements and schedules relating thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and grants unto each of said attorneys-in-fact and agents, and substitute or
substitutes, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all things that each of said attorneys-in-fact and agents, or any
of them or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
21st day of March, 1995.
/s/ Gordon Zacks
---------------------
Gordon Zacks
<PAGE> 3
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of R. G. Barry Corporation, an Ohio corporation (the "Company"), which
is about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Exchange Act of 1934, as amended, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, hereby
constitutes and appoints Richard L. Burrell and Michael S. Krasnoff as his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign both the Annual Report on Form 10-K and any and all
amendments and documents related thereto, and to file the same, and any and all
exhibits, financial statements and schedules relating thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and grants unto each of said attorneys-in-fact and agents, and substitute or
substitutes, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all things that each of said attorneys-in-fact and agents, or any
of them or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
21st day of March, 1995.
/s/ Richard L. Burrell
---------------------------
Richard L. Burrell
<PAGE> 4
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of R. G. Barry Corporation, an Ohio corporation (the "Company"), which
is about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Exchange Act of 1934, as amended, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, hereby
constitutes and appoints Richard L. Burrell and Michael S. Krasnoff as his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign both the Annual Report on Form 10-K and any and all
amendments and documents related thereto, and to file the same, and any and all
exhibits, financial statements and schedules relating thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and grants unto each of said attorneys-in-fact and agents, and substitute or
substitutes, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all things that each of said attorneys-in-fact and agents, or any
of them or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
22nd day of March, 1995.
/s/ Christian Galvis
--------------------------
Christian Galvis
<PAGE> 5
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of R. G. Barry Corporation, an Ohio corporation (the "Company"), which
is about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Exchange Act of 1934, as amended, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, hereby
constitutes and appoints Richard L. Burrell and Michael S. Krasnoff as his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign both the Annual Report on Form 10-K and any and all
amendments and documents related thereto, and to file the same, and any and all
exhibits, financial statements and schedules relating thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and grants unto each of said attorneys-in-fact and agents, and substitute or
substitutes, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all things that each of said attorneys-in-fact and agents, or any
of them or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
22nd day of March, 1995.
/s/ Leopold Abraham II
----------------------------
Leopold Abraham II
<PAGE> 6
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of R. G. Barry Corporation, an Ohio corporation (the "Company"), which
is about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Exchange Act of 1934, as amended, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, hereby
constitutes and appoints Richard L. Burrell and Michael S. Krasnoff as his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign both the Annual Report on Form 10-K and any and all
amendments and documents related thereto, and to file the same, and any and all
exhibits, financial statements and schedules relating thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and grants unto each of said attorneys-in-fact and agents, and substitute or
substitutes, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all things that each of said attorneys-in-fact and agents, or any
of them or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
22nd day of March, 1995.
/s/ Philip G. Barach
----------------------------
Philip G. Barach
<PAGE> 7
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of R. G. Barry Corporation, an Ohio corporation (the "Company"), which
is about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Exchange Act of 1934, as amended, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, hereby
constitutes and appoints Richard L. Burrell and Michael S. Krasnoff as his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign both the Annual Report on Form 10-K and any and all
amendments and documents related thereto, and to file the same, and any and all
exhibits, financial statements and schedules relating thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and grants unto each of said attorneys-in-fact and agents, and substitute or
substitutes, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all things that each of said attorneys-in-fact and agents, or any
of them or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
22nd day of March, 1995.
/s/ William Giovanello
-------------------------------
William Giovanello
<PAGE> 8
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of R. G. Barry Corporation, an Ohio corporation (the "Company"), which
is about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Exchange Act of 1934, as amended, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, hereby
constitutes and appoints Richard L. Burrell and Michael S. Krasnoff as his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign both the Annual Report on Form 10-K and any and all
amendments and documents related thereto, and to file the same, and any and all
exhibits, financial statements and schedules relating thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and grants unto each of said attorneys-in-fact and agents, and substitute or
substitutes, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all things that each of said attorneys-in-fact and agents, or any
of them or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
22nd day of March, 1995.
/s/ Harvey M. Krueger
--------------------------
Harvey M. Krueger
<PAGE> 9
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of R. G. Barry Corporation, an Ohio corporation (the "Company"), which
is about to file with the Securities and Exchange Commission, Washington, D.C.,
under the provisions of the Securities Exchange Act of 1934, as amended, the
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, hereby
constitutes and appoints Richard L. Burrell and Michael S. Krasnoff as his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign both the Annual Report on Form 10-K and any and all
amendments and documents related thereto, and to file the same, and any and all
exhibits, financial statements and schedules relating thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and grants unto each of said attorneys-in-fact and agents, and substitute or
substitutes, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, and hereby ratifies
and confirms all things that each of said attorneys-in-fact and agents, or any
of them or his or their substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
21st day of March, 1995.
/s/ Edward M. Stan
---------------------------
Edward M. Stan
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 2,360
<SECURITIES> 0
<RECEIVABLES> 25,072
<ALLOWANCES> 4,100
<INVENTORY> 26,062
<CURRENT-ASSETS> 56,399
<PP&E> 35,663
<DEPRECIATION> 21,878
<TOTAL-ASSETS> 76,961
<CURRENT-LIABILITIES> 17,332
<BONDS> 16,445
<COMMON> 5,543
0
0
<OTHER-SE> 35,511
<TOTAL-LIABILITY-AND-EQUITY> 76,961
<SALES> 116,720
<TOTAL-REVENUES> 116,720
<CGS> 69,975
<TOTAL-COSTS> 69,975
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,853
<INCOME-PRETAX> 6,002
<INCOME-TAX> 2,191
<INCOME-CONTINUING> 3,811
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,811
<EPS-PRIMARY> .72
<EPS-DILUTED> .72
</TABLE>
