SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Soliciting Material Pursuant to Subsection 240.14a-11(c)
or Subsection 240.14a-12
R. G. Barry Corporation
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box is any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
R. G. BARRY CORPORATION
13405 Yarmouth Road, N.W.
Pickerington, Ohio 43147
March 28, 1995
Dear Fellow Shareholders:
You are cordially invited to attend the 1995 Annual Meeting of Shareholders
(the "Annual Meeting") of R. G. Barry Corporation (the "Company"), which
will be held at 2:30 p.m., local time, on Wednesday, May 10, 1995, at the
Company's executive offices located at 13405 Yarmouth Road, N.W.,
Pickerington, Ohio 43147.
The formal Notice of Annual Meeting of Shareholders and Proxy Statement are
enclosed. This year you are being asked to elect three directors, to
approve an amendment to the Company's Articles of Incorporation to increase
the authorized number of common shares of the Company from 7,500,000 to
15,000,000 common shares and to ratify the selection of accountants.
Your Board of Directors believes that these proposals are in the best
interest of the Company and all its shareholders and recommends that you
vote "FOR" each proposal. The proposals and the reasons for our
recommendation are set forth in the accompanying Proxy Statement, which
you are asked to read at your earliest convenience.
Whether or not you plan to attend the Annual Meeting and regardless of the
number of common shares of the Company you own, it is important that your
common shares be represented and voted at the Annual Meeting. Accordingly,
after reading the enclosed Proxy Statement, please complete, sign and date
the enclosed proxy card and mail it promptly in the reply envelope provided
for your convenience.
Thank you for your continued support.
Very truly yours,
Gordon Zacks
Chairman of the Board, President
and Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
R. G. Barry Corporation
13405 Yarmouth Road, N.W.
Pickerington, Ohio 43147
Pickerington, Ohio
March 28, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of R. G. Barry Corporation (the "Company") will be held
at the executive offices of the Company at 13405 Yarmouth Road, N.W.,
Pickerington, Ohio 43147, on Wednesday, May 10, 1995, at 2:30 p.m., local
time, for the following purposes:
1. To elect three directors to serve for terms of three years each.
2. To consider and vote upon a proposal to adopt an amendment to Paragraph
I of Article FOURTH of the Company's Articles of Incorporation which
would increase the authorized number of common shares, $1.00 par value,
of the Company from 7,500,000 to 15,000,000 common shares.
3. To consider and vote upon a proposal to ratify the selection of KPMG
Peat Marwick LLP as independent public accountants for the Company for
1995.
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment or adjournments thereof.
Shareholders of record at the close of business on March 15, 1995, will
be entitled to receive notice of and to vote at the Annual Meeting and any
adjournment or adjournments thereof.
You are cordially invited to attend the Annual Meeting. The vote of
each shareholder is important, whatever the number of common shares held.
Whether or not you plan to attend the Annual Meeting, please sign, date and
return your proxy promptly in the enclosed envelope. Should you attend the
Annual Meeting, you may revoke your proxy and vote in person. Attendance
at the Annual Meeting will not, in and of itself, constitute revocation of
a proxy.
By Order of the Board of Directors,
Gordon Zacks
Chairman of the Board, President
and Chief Executive Officer
Notice of Annual Meeting of Shareholders
R. G. Barry Corporation
February, 1995
R. G. BARRY CORPORATION
13405 Yarmouth Road, N.W.
Pickerington, Ohio 43147
(614) 864-6400
PROXY STATEMENT
This Proxy Statement and the accompanying proxy are being
mailed to shareholders of R. G. Barry Corporation, an Ohio
corporation (the "Company"), on or about March 28, 1995, in connection
with the solicitation of proxies by the Board of Directors of the
Company for use at the Annual Meeting of Shareholders of the
Company (the "Annual Meeting") on Wednesday, May 10, 1995, or at
any adjournment or adjournments thereof. The Annual Meeting will
be held at 2:30 p.m., local time, at the Company's executive
offices at 13405 Yarmouth Road, N.W., Pickerington, Ohio. The
facility is located east of Columbus, Ohio, immediately south of
the intersection of Interstate 70 and State Route 256.
A proxy for use at the Annual Meeting accompanies this Proxy
Statement and is solicited by the Board of Directors of the
Company. A shareholder of the Company may use his proxy if he is
unable to attend the Annual Meeting in person or wishes to have
his common shares of the Company voted by proxy even if he does
attend the Annual Meeting. Without affecting any vote previously
taken, any shareholder executing a proxy may revoke it at any
time before it is voted by filing with the Secretary of the Company,
at the address of the Company set forth on the cover page of this
Proxy Statement, written notice of such revocation; by executing
a later-dated proxy which is received by the Company prior to the
Annual Meeting; or by attending the Annual Meeting and giving
notice of such revocation in person. Attendance at the Annual
Meeting will not, in and of itself, constitute revocation of a
proxy.
The Company will bear the costs of preparing and mailing
this Proxy Statement, the accompanying proxy and any other related
materials and all other costs incurred in connection with the
solicitation of proxies on behalf of the Board of Directors. The
Company has engaged D. F. King & Co., Inc. to assist in the
solicitation of proxies from shareholders at a fee of not more
than $4,000 plus reimbursement of reasonable out-of-pocket expenses.
In addition, proxies may be solicited, for no additional
compensation, by officers, directors or employees of the Company by
further mailing, by telephone or by personal contact. The Company will
also pay the standard charges and expenses of brokerage houses,
voting trustees, banks, associations and other custodians,
nominees and fiduciaries, who are record holders of common shares of the
Company not beneficially owned by them, for forwarding such
materials to and obtaining proxies from the beneficial owners of
such common shares.
The Annual Report to the Shareholders of the Company for the
fiscal year ended December 31, 1994 (the "1994 fiscal year") is
enclosed herewith.
VOTING AT ANNUAL MEETING
Only shareholders of the Company of record at the close of
business on March 15, 1995, are entitled to receive notice of and
to vote at the Annual Meeting and any adjournment or adjournments
thereof. At the close of business on March 15, 1995, __________
common shares were outstanding and entitled to vote. Each common
share of the Company entitles the holder thereof to one vote on
each matter to be submitted to shareholders at the Annual
Meeting. A quorum for the Annual Meeting is a majority of the outstanding
common shares.
Under the rules of the Securities and Exchange Commission
(the "SEC"), boxes are provided on the form of proxy for shareholders
to mark if they wish either to abstain on a proposal presented
for shareholder approval or to withhold authority to vote for one or
more nominees for election as a director of the Company. Common
shares as to which the authority to vote is withheld will be
counted for quorum purposes but will not be counted toward the
election of directors. Abstentions are counted as present for
quorum purposes; however, the effect of an abstention on the
proposals to adopt the proposed amendment to Paragraph I of the
Article FOURTH of the Company's Articles of Incorporation and to
ratify the selection of KPMG Peat Marwick LLP is the same as a
"no" vote.
The election of directors and the proposal to ratify the
selection of KPMG Peat Marwick LLP are considered "discretionary"
items upon which brokerage firms may vote in their discretion on
behalf of their clients if such clients have not furnished voting
instructions by the tenth day before the Annual Meeting.
However, the proposal to adopt the proposed amendment to Paragraph I of
Article FOURTH of the Company's Articles of Incorporation is
"non-discretionary," and brokers who have received no instructions
from their clients do not have discretion to vote on this item. Such
"broker non-votes" will not be considered as votes entitled to be
cast in determining the outcome of the proposal to adopt the
proposed amendment to Paragraph I of Article FOURTH of the
Company's Articles of Incorporation.
SHARE OWNERSHIP
The following table sets forth certain information with
respect to those persons known to the Company to be the
beneficial owners of more than five percent (5%) of the outstanding common
shares of the Company as of March 15, 1995 (unless otherwise
indicated):
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
Sole Voting
and Sole Sole Percent
Name and Address Investment Voting Investment of
of Beneficial Owner Power Only Power Only Total Class (1)
<S> <C> <C> <C> <C> <C>
Gordon Zacks 289,545(2) 325,273(3)(4) -- 614,818 ____%
140 N. Parkview Ave.
Columbus, OH 43209
Florence Zacks Melton 22,130 -- 268,276(3) 290,406 ____%
1000 Urlin Avenue
Columbus, OH 43212
Dimensional Fund 194,032(5) -- 130,132(5) 324,164(5) ____%(5)
Advisors Inc.
1299 Ocean Avenue
Suite 650
Santa Monica, CA 90401
</TABLE>
_________________________
(1) The percent of class is based upon the sum of __________
common shares outstanding on March 15, 1995 and the number
of common shares, if any, as to which the named person has the
right to acquire beneficial ownership upon the exercise of
stock options exercisable within 60 days of March 15, 1995.
(2) Includes 82,758 common shares deposited in the Zacks Voting
Trust (the "Voting Trust") by Mr. Zacks of which he is the
beneficial owner (see Note (3) below), 178,454 common shares
held of record by Mr. Zacks, and 28,333 common shares as to
which Mr. Zacks has the right to acquire beneficial
ownership upon the exercise of stock options exercisable within 60
days of March 15, 1995. Excludes 8,981 common shares held of
record and owned beneficially by the spouse of Mr. Zacks as
to which Mr. Zacks disclaims beneficial ownership.
(3) Gordon Zacks is the voting trustee of the Voting Trust and
exercises sole voting power as to the 351,034 common shares
deposited in the Voting Trust. The beneficial owners of
common shares deposited in the Voting Trust retain investment
power with respect to such common shares (subject to certain
limitations on the right to remove common shares from the
Voting Trust). As indicated in Note (2), Mr. Zacks is the
beneficial owner of 82,758 of the common shares deposited in
the Voting Trust. The number of common shares shown for Mr.
Zacks under the heading "Sole Voting Power Only" includes
268,276 common shares deposited in the Voting Trust by Mr.
Zacks' mother, Florence Zacks Melton, as Trustee under a
trust established by the will of Aaron Zacks, deceased.
The number of common shares shown for Mrs. Melton under the
heading "Sole Investment Power Only" includes these 268,276 common
shares.
Mr. Zacks is a remainder beneficiary of the trust created by
that will. The Voting Trust (which was originally adopted
as the "Zacks-Streim Voting Trust" on October 29, 1974) provides
that its term may extend as long as 21 years.
(4) Includes 56,997 common shares held for Mr. Zacks' account by
the trustee for the R. G. Barry Corporation Employee Stock
Ownership Plan. Mr. Zacks has voting power with respect to
these common shares.
(5) Based on information contained in filings with the SEC (the
latest of which is dated January 30, 1995), Dimensional Fund
Advisors Inc., a registered investment adviser ("Dimen-
sional"), is deemed to have beneficial ownership of 324,164
common shares as of December 31, 1994, all of which common
shares are held in portfolios of DFA Investment Dimensions
Group Inc., a registered open-end investment company (the
"Fund"), or in series of The DFA Investment Trust Company, a
Delaware business trust (the "Trust"), or the DFA Group Trust
and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional
serves as investment manager. Dimensional disclaims bene-
ficial ownership of all such common shares. Those filings
with the SEC also indicate that persons who are officers of
Dimensional also serve as officers of the Fund and the Trust.
In their capacities as officers of the Fund and the Trust,
these persons vote 116,266 of such common shares which are
owned by the Fund and 13,866 of such common shares which are
owned by the Trust.
The following table sets forth certain information with
respect to the Company's common shares beneficially owned by each
of the directors, including those persons nominated for re-
election as directors, of the Company, by each of the executive
officers of the Company named in the Summary Compensation Table
and by all executive officers and directors of the Company as a group
as of March 15, 1995:
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership(1)
Common Shares Which
Common Can Be Acquired Upon the
Shares Exercise of Options Percent
Presently Exercisable Within of
Name Held 60 Days Total Class(2)
<S> <C> <C> <C> <C>
Gordon Zacks(3) 586,485 (4) 28,333 614,818 ____%
Leopold Abraham II 2,660 0 2,660 (5)
Philip G. Barach 48,333 0 48,333 (5)
Richard L. Burrell(3) 28,860 14,665 43,525 (5)
Christian Galvis(3) 8,698 (6) 33,332 42,030 (5)
William Giovanello 400 0 400 (5)
Harvey M. Krueger 13,333 0 13,333 (5)
Charles E. Ostrander(3) 9,756 53,365 63,121 ____%
Edward M. Stan 22,844 (7) 0 22,844 (5)
Daniel D. Viren (3) 9,363 6,666 16,029 (5)
All directors and executive
officers as a group
(numbering 11) 732,972 140,360 873,332 ____%
</TABLE>
_________________________
(1) Unless otherwise indicated, the beneficial owner has sole
voting and investment power with respect to all of the common
shares reflected in the table.
(2) See Note (1) to preceding table.
(3) Executive officer of the Company named in the Summary
Compensation Table.
(4) See preceding table and Notes (2) through (4) thereto.
(5) Represents ownership of less than 1% of the outstanding common
shares of the Company.
(6) Excludes 344 common shares held of record and owned
beneficially by Mr. Galvis' spouse as to which he exercises
no voting or investment power and disclaims beneficial
ownership.
(7) Excludes 2,000 common shares held of record and owned
beneficially by Mr. Stan's spouse as to which he exercises no
voting or investment power and disclaims beneficial ownership.
ELECTION OF DIRECTORS
(Item 1 on Proxy)
In accordance with Article SIXTH of the Articles of
Incorporation of the Company, three directors are to be elected at the
Annual Meeting for terms of three years each and until their
respective successors are elected and qualified. It is the
intention of the persons named in the accompanying proxy to vote
the common shares represented by the proxies received pursuant to
this solicitation for the nominees named below who have been
designated by the Board of Directors, unless otherwise instructed
on the proxy. Under Ohio law and the Company's Regulations, the
three nominees receiving the greatest number of votes will be
elected as directors.
The following table gives certain information concerning
each nominee for re-election as a director of the Company. Unless
otherwise indicated, each person has held his principal
occupation for more than five years.
<TABLE>
<CAPTION>
Director of
Position(s) Held the Company Nominee
with the Company and Continuously for Term
Nominee Age Principal Occupation(s) Since Expiring In
<S> <C> <S> <C> <C>
Edward M. Stan 70 President, Edward M. Stan & 1971 1995
Associated Companies,
Columbus, Ohio, marketing
consultants; President, Kinetic
Ventures, Inc., Pickerington,
Ohio, management and sales of
real property, from 1990 to 1991.
Richard L. Burrell 62 Senior Vice President-Finance 1984 1995
since 1992, Treasurer and
Secretary since 1976, and Vice
President-Finance from 1976
to 1992, of the Company.
Philip G. Barach 64 Private Investor; Chairman 1991 1995
of the Board from 1968 to
1993, and Chief Executive Officer
and President from 1968 to 1990, of
U.S. Shoe Corporation, Cincinnati,
Ohio, shoe manufacturer. (1)
</TABLE>
__________________
(1) Mr. Barach is also a director of Union Central Life
Insurance Company, Bernard Chaus, Inc. and Glimcher Realty REIT.
While it is contemplated that all nominees will stand for
re-election, if one or more of the nominees at the time of the
Annual Meeting should be unavailable or unable to serve as a candidate
for re-election as a director of the Company, the proxies reserve
full discretion to vote the common shares represented by the proxies
for the re-election of the remaining nominees and for the election of
any substitute nominee or nominees designated by the Board of
Directors. The Board of Directors knows of no reason why any of
the above-mentioned persons will be unavailable or unable to
serve if re-elected to the Board.
The following table gives certain information concerning the
current directors whose terms will continue after the Annual
Meeting. Unless otherwise indicated, each person has held his
principal occupation for more than five years.
<TABLE>
Director of
Position(s) Held the Company
with the Company and Continuously Term
Name Age Principal Occupation(s) Since Expires In
<S> <C> <S> <C> <C>
Gordon Zacks 62 Chairman of the Board, 1959 1996
Chief Executive Officer
and, since 1992, President
of the Company.
Christian Galvis 53 Executive Vice President- 1992 1996
Operations since 1992, and
Vice President-Operations
from 1991 to 1992, of the
Company; Executive Vice
President-Manufacturing of
Work Wear Corporation,
Greensboro, North Carolina,
apparel manufacturers, from
1990 to 1991.
Charles E. Ostrander 46 Executive Vice President- 1992 1996
Sales & Marketing since 1992,
Vice President-Sales & Marketing
from 1990 to 1992, of the
Company.
Harvey M. Krueger 65 Senior Managing Director, 1980 1997
[Lehman Brothers, Inc.,]
New York, New York, invest-
ment bankers. (1)
William Giovanello 75 President of Retail 1985 1997
Requisites, Columbus, Ohio,
retail consultants.
Leopold Abraham II 67 Chairman and Chief Executive 1993 1997
Officer of Associated Merchan-
dising Corporation, a retail
merchandising and sourcing
company, from 1977 until his
retirement in 1993. (2)
</TABLE>
_________________________
(1) Mr. Krueger is also a director of Automatic Data Processing,
Inc., Club Med, Inc., IVAX Corporation and Chaus, Inc.
(2) Mr. Abraham is also a director of Liz Claiborne and Galey &
Lord, Inc. and a Trustee of the Smith Barney [Shearson] Income
Funds and the Smith Barney [Shearson] Equity Funds.
There are no family relationships among any of the directors,
nominees for re-election as directors and executive officers of the
Company.
The Board of Directors of the Company held a total of eight
meetings during the Company's 1994 fiscal year. Each incumbent
director attended 75% or more of the aggregate of the total number
of meetings held by the Board of Directors during the period he
served as a director and the total number of meetings held by all
committees of the Board of Directors on which he served during the
period he served.
The Company's Board of Directors has standing Audit and
Compensation Committees. There is no standing Nominating
Committee or committee performing similar functions.
The Audit Committee consists of Leopold Abraham II, Philip G.
Barach, William Giovanello, Harvey M. Krueger and Edward M. Stan.
The function of the Audit Committee is to review the adequacy of
the Company's system of internal controls, to investigate the
scope and adequacy of the work of the Company's independent public
accountants and to recommend to the Board of Directors a firm of
accountants to serve as the Company's independent public account-
ants. The Audit Committee met three times during the 1994 fiscal
year.
The Compensation Committee consists of Leopold Abraham II,
Philip G. Barach, William Giovanello and Harvey M. Krueger. The
function of the Compensation Committee is to review and supervise
the operation of the Company's compensation plans, to select
those eligible employees who may participate in each plan (where
selection is required), to prescribe the terms of any stock
options granted under the Company's stock option plans and its stock
purchase plan and to approve the compensation of the Company's
executive officers. The Compensation Committee met five times
during the 1994 fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Edward M. Stan, who retired as an executive officer and
employee of the Company on December 31, 1985, served as a member
of the Compensation Committee of the Company's Board of Directors
during the 1994 fiscal year until February 15, 1994.
REPORT OF
THE COMPENSATION COMMITTEE
OF
R. G. BARRY CORPORATION ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the
"Committee") is comprised entirely of non-employee directors.
Decisions on compensation of the Company's executive officers
generally are made by the Committee, although compensation levels
for executive officers other than the Chairman are recommended to
the Committee by the Chairman, who has substantially greater
knowledge of the contributions made by each such executive
officer.
Compensation Policies Toward Executive Officers
In determining the compensation of the Company's executive
officers, the Committee seeks to create a compensation program that
links compensation to the Company's operational results, rewards
above average corporate performance, recognizes individual
contribution and achievement and assists the Company in attracting and
retaining outstanding executive officers and other key employees.
Executive compensation is set at levels that the Committee, with
the advice of the Company's executive compensation consultants,
believes to be competitive with the compensation paid by other
companies that compete with the Company for executive officers
and other key employees having the experience and abilities that are
necessary to manage the Company's business. Comparative
compensation data is obtained from the Company's executive
compensation consultants and may or may not take into account the
compensation paid by all of the companies that are included in
the index for Media General Industry Group 57 - Textiles/Apparel
included in the performance graph on page __.
There are two primary components to the Company's executive
compensation program: annual cash compensation and long-term
incentive compensation. Annual cash compensation consists of
base salary and an annual incentive bonus program that is linked
directly to the Company's financial performance. The long-term
incentive compensation program primarily consists of stock
options.
1994 Cash Compensation
The base salaries of the Company's executive officers, other
than its Chairman, were increased by the Committee at a meeting
held in May, 1994. The increases were made retroactive to
January 1, 1994. Mr. Ostrander's annual base salary was
increased from $210,000 to $235,000; Mr. Galvis' annual base salary was
increased from $165,000 to $190,000; Mr. Burrell's annual base
salary was increased from $141,500 to $151,500; and Mr. Viren's
annual base salary was increased from $125,000 to $135.000.
These decisions were made based upon the recommendations of the
Company's Chairman. Mr. Zacks' recommendations regarding increases
in base salary for the Company's executive officers were based on three
primary considerations: (1) the criticality to the Company of
the executive officer's job function, (2) the individual's
performance in the position; and (3) the individual's potential to make
a strong contribution to the Company. Before making his recommendations,
the Company's Chairman consulted with an executive compensation consulting
firm and an executive recruiting firm to determine competitive compensation
levels in each of the Company's senior management positions. Base salaries
were targeted to be at the ____ percentile of comparable compensation. The
information provided by these firms was furnished to the Committee.
Since 1989, the Company has provided to its executive officers
and other members of management an annual incentive bonus program
(the "Incentive Program"). Annual bonus awards are based on the
extent to which the Company achieves or exceeds specified annual
planned profit goals. The Board of Directors meets at the
beginning of each year to establish the Company's target profit
goal (defined as profit before such items as taxes, payments under
the Incentive Program and charitable contributions) for the year.
The Committee then determines the amount of the target award
opportunity (the potential bonus) that is payable by the Company
under the Incentive Program for such year at specified levels of
attainment of the profit goal. For example, the Committee might
determine that an employee will receive 50% of his maximum award
opportunity if the Company achieves 100% of the profit goal and
75% of his maximum award opportunity if the Company achieves 120% of
the profit goal. The Committee's recommendation with respect to
bonuses payable under the Incentive Program at specified
threshold levels of profit are submitted to the full Board for final
approval.
Each participant in the Incentive Program is assigned a
target award opportunity (stated as a percentage of his base salary)
that can be achieved by such participant for the year. This
percentage is based upon the participant's position and responsibilities
and the area of the Company's operations in which the participant
serves, with a greater percentage being assigned to those
participants who make a larger impact on corporate profits. The
target award opportunities for the Company's executive officers
are set by the Committee; the target award opportunities for other
participants in the Incentive Program are assigned by senior
management. A participant is not entitled to receive a bonus
unless an acceptable year-end performance evaluation (as
determined under the Company's performance evaluation guidelines) has been
received from the person to whom such participant reports. Since
the Company did not meet the target profit goal established for
1994, none of the participants in the Incentive Program received
a bonus under that Program.
Mr. Zacks' 1994 Compensation
Mr. Zacks and the Company entered into a four-year Employment
Agreement (the "Employment Agreement") on July 1, 1994, under which
Mr. Zacks is entitled to receive a minimum annual salary of
$450,000 plus certain other benefits. The Employment Agreement
also provides that during the employment term, Mr. Zacks will be
entitled to participate in the Incentive Program at a maximum level
equal to 75% of his annual base salary, the specific level of
participation to be determined annually by the Committee. See
"COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS--Employment
Contracts and Termination of Employment and Change-in-Control
Arrangements" at page ___.
Mr. Zacks' base salary in 1994 of $450,000 reflected an
increase of $50,000 from his 1993 base salary. This increase
became effective July 1, 1994, the date of the Employment
Agreement. In authorizing the Employment Agreement, the
Committee determined, based upon advice from a nationally-recognized
executive compensation consulting firm, that the increased base
salary provided for in the Employment Agreement was [at the
median] of base salary levels of chief executive officers of comparable
companies. The comparative compensation data was compiled and
provided by the executive compensation consulting firm, and may
or may not have included the companies included in the Performance
Graph on page __. The base salary of Mr. Zacks is not intended
to be tied to the Company's performance from year to year. Because
the Employment Agreement requires that the Company pay to Mr.
Zacks a minimum annual base salary, the Committee will not have the
ability to reduce the base salary below such minimum to reflect
the Company's performance. Although the Committee will have the
ability to increase Mr. Zacks' base salary above the minimum
stated level to reflect corporate performance, no decision has been made
to do so nor has the Committee established any policy with
respect to the circumstances under which it would consider an increase in
Mr. Zacks' base salary.
Mr. Zacks received no bonus under the Company's Incentive
Program for 1994. Mr. Zacks' target award opportunity for 1994 had
been 75% of his base salary, which was established by the
Committee in May of 1994. The target profit goal of the Company for 1994,
established by the Committee and the Board in early 1994, was not
achieved and, as a result, no employee participating in the
Incentive Program, including Mr. Zacks, received his or her
target award opportunity. Depending on the profitability of the Company
for 1994, Mr. Zacks could have received under the Incentive
Program a bonus for 1994 of zero or a bonus as high as 75% of his base
salary. In other words, Mr. Zacks' 1994 bonus was tied directly
to the profitability of the Company in 1994.
Mr. Zacks' target award opportunity under the Incentive
Program for 1994 of 75% of his base salary was determined by the
Committee based upon advice of the Company's executive compensation
consulting firm regarding the range of performance-based compensation
that is provided to chief executive officers of comparable companies.
Stock-Based Compensation Plans
The Company's long-term compensation program consists primar-
ily of options granted under the Company's employee stock option
plans. Awards of options are designed to provide appropriate
incentive to employees to continue growth in shareholder value
and to assist in the hiring and retention of key employees. In 1994,
the Committee granted to 52 key employees, including the
executive officers named in the Summary Compensation Table, stock options
to purchase an aggregate of 293,446 common shares (adjusted for the
4-for-3 share split distributed on June 22, 1994 to shareholders
of record on June 1, 1994). These options consisted of both
incentive and nonqualified stock options. With the exception of
an incentive stock option granted to Mr. Zacks, all stock options
were granted with exercise prices equal to the market value of
the Company's common shares on the dates of grant. Mr. Zacks
received an incentive stock option to purchase 18,298 common shares with
an exercise price equal to 110% of the market value of the Company's
common shares on the date of grant. Mr. Zacks also received a
nonqualified stock option to purchase 41,701 common shares with
an exercise price equal to the market value on the date of grant.
If there is no appreciation in the market value of the Company's
common shares, the options are valueless. The Committee granted
the options based on its subjective determination of the relative
current and future contribution each prospective optionee has or
may make to the long-term welfare of the Company.
Additional Compensation Plans
At various times in the past, the Company has adopted
certain broad-based employee benefit plans in which the Company's
executive officers are permitted to participate on the same terms as
non-executive officer employees who meet applicable eligibility
criteria, subject to legal limitations on the amounts that may be
contributed or the benefits that may be payable under the plans.
Benefits under these plans are not tied to performance.
SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS
LEOPOLD ABRAHAM II PHILIP G. BARACH
WILLIAM GIOVANELLO HARVEY M. KRUEGER
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended
December 31, 1994, January 1, 1994 and January 2, 1993, cash
compensation paid by the Company, as well as certain other
compensation paid or earned for those years, to the Company's
Chief Executive Officer and the four other most highly compensated
executive officers of the Company in all capacities in which they
served.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
Restricted Securities
Name and Stock Underlying LTIP
Principal Fiscal Salary Bonus Other Annual Awards Options/ Payouts
Position Year ($) ($) Compensation($) ($) SARs(#)(1) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Gordon Zacks: 1994 $450,000 $0 $41,130(2)(4) $0(5) 59,999 $0
Chairman of 1993 $400,000 $103,200 $33,422(2)(3)(6) $0 33,333 $0
the Board, 1992 $400,000 $0 $30,777(2)(3)(7) $0 0 $0
Chief Executive
Officer and
President
Charles E. 1994 $235,000 $0 $10,162(2)(3) $0 33,332 $0
Ostrander: 1993 $210,000 $43,344 $ 4,922(2)(6) $0 16,666 $0
Executive 1992 $210,000 $49,056 $ 5,724(2)(7) $0 0 $0
Vice President-
Sales & Marketing
Christian 1994 $190,000 $0 $ 8,022(3) $0 33,333 $0
Galvis: 1993 $158,596 $30,960 $ 9,774(2)(6) $0 16,666 $0
Executive 1992 $150,000 $65,040 $11,106(2)(7) $0 0 $0
Vice President
- Operations
Richard L. 1994 $151,500 $0 $18,393(2)(3) $0 13,333 $7,200
Burrell: 1993 $141,512 $21,904 $14,026(2)(6) $0 13,333 $7,800
Senior Vice 1992 $141,500 $24,791 $16,214(2)(7) $0 0 $2,880
President-
Finance,
Treasurer
and Secretary
Daniel D. Viren: 1994 $135,000 $0 $11,124(2)(3) $0 13,333 $0
Senior Vice 1993 $120,731 $17,802 $10,915(2)(6) $0 13,333 $0
President - 1992 $113,731 $18,396 $11,166(2)(7) $0 0 $0
Administration
</TABLE>
___________________
(1) Reflects adjustments for 4-for-3 share split distributed on
June 22, 1994 to shareholders of record on June 1, 1994.
(2) "Other Annual Compensation" for (a) each of 1994, 1993 and
1992 includes premium payments in the amounts of $19,088,
$4,182 and $6,165 on behalf of Messrs. Zacks, Ostrander and
Galvis, respectively and (b) for 1994 and for each of 1993
and 1992, respectively, premium payments in the amounts of
$9,543 and $9,544 on behalf of Mr. Burrell and premium
payments in the amounts of $4,536 and $4,537 on behalf of
Mr. Viren, in each case to continue life insurance policies
which provide for a level of death benefits not available
under the Company's standard group life insurance program.
(3) "Other Annual Compensation" for 1994 also includes the amounts
of $14,027, $5,980, $1,857, $8,850 and $6,588 reflecting
either the amount of income deemed, under applicable federal
income tax regulations, to have been received, as a result of
each of their personal use of cars provided by the Company,
by, or the car allowance provided to, Messrs. Zacks,
Ostrander, Galvis, Burrell and Viren, respectively.
(4) "Other Annual Compensation" for Mr. Zacks includes:
(a) payments of $3,512, $4,432 and $3,998 made during 1994,
1993 and 1992, respectively, to cover Mr. Zacks' portion of
the insurance premiums on a life insurance policy in the face
amount of $1,310,000 on the life of Mr. Zacks; (b) payments
of $2,103, $2,183, and $1,969 made during 1994, 1993 and 1992,
respectively, to cover Mr. Zacks' estimated tax liability with
respect to such premium payments; and (c) a travel allowance
of $2,400 provided to Mr. Zacks in each of 1994, 1993 and 1992.
(5) As of the last day of the 1994 fiscal year, Mr. Zacks held
40,000 "restricted" common shares (as adjusted for the 4-for-3
share split distributed on June 22, 1994 to shareholders of
record on June 1, 1994). On March 1, 1995, restrictions
lapsed with respect to all of these "restricted" common
shares. See "EXECUTIVE COMPENSATION -- Employment Contracts
and Termination of Employment and Change-in-Control
Arrangements." On December 31, 1994, the market price of the
40,000 "restricted" common shares held by Mr. Zacks on that
date less the amount paid by Mr. Zacks for such common shares
was $445,000.
(6) "Other Annual Compensation" for 1993 includes the amounts of
$5,319, $740, $3,609, $4,482 and $6,378 reflecting the amount
of income deemed, under applicable federal income tax
regulations, to have been received by Messrs. Zacks,
Ostrander, Galvis, Burrell and Viren, respectively, as a
result of each of their personal use of cars provided by the
Company.
(7) "Other Annual Compensation" for 1992 includes the amounts of
$3,322, $1,542, $4,941, $6,670 and $6,629 reflecting the
amount of income deemed, under applicable federal income tax
regulations, to have been received by Messrs. Zacks,
Ostrander, Galvis, Burrell and Viren, respectively, as a
result of each of their personal use of cars provided by the
Company.
Grants of Options and Stock Appreciation Rights
The following table sets forth information concerning
individual grants of options made under the R. G. Barry Corporation
1988 Stock Option Plan (the "1988 Plan") and the R. G. Barry
Corporation 1994 Stock Option Plan (the "1994 Plan") during the
1994 fiscal year to each of the named executive officers. No stock
appreciation rights were granted during the 1994 fiscal year.
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual Rates of
Number of % of Total Options Stock Price Appreciation
Securities Underlying Granted to Employees Exercise Expiration for Option Term (2)
Name Options Granted (#)(1) in Fiscal Year Price ($/Sh)(1) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Gordon Zacks 18,298 (3) 6.2% $15.4687 5/12/99 $ 78,198 $172,825
41,701 (4) 14.2% $14.0625 5/12/04 $368,766 $934,611
Charles E. Ostrander 30,042 (5) 10.2% $14.0625 5/12/04 $265,664 $673,307
3,290 (6) 1.1% $14.0625 5/12/04 $ 29,094 $ 73,736
Christian Galvis 27,197 (5) 9.3% $14.0625 5/12/04 $240,506 $609,545
6,136 (6) 2.1% $14.0625 5/12/04 $ 54,261 $137,521
Richard L. Burrell 13,333 (5) 4.5% $14.0625 5/12/04 $117,905 $298,822
Daniel D. Viren 13,333 (5) 4.5% $14.0625 5/12/04 $117,905 $298,822
</TABLE>
__________________
(1) Reflects adjustments for 4-for-3 share split distributed on
June 22, 1994 to shareholders of record on June 1, 1994.
(2) The amounts reflected in this table represent certain assumed
rates of appreciation only. Actual realized values, if any,
on option exercises will be dependent on the actual
appreciation of the common shares of the Company over the term
of the options. These amounts have been rounded to the
nearest whole dollar.
(3) These options were granted under the 1988 Plan on May 13,
1994, and become exercisable as follows: 4,576 common shares
on each of the first and second anniversaries of the grant
date, 2,040 common shares on the third such anniversary and
7,106 common shares on the fourth such anniversary; provided,
however, that these options become fully exercisable in the
event of certain defined changes-in-control of the Company or
dispositions of its assets or upon the death, disability or
retirement of Mr. Zacks.
(4) These options were granted under the 1988 Plan on May 13,
1994, and become exercisable as follows: 10,424 common shares
on each of the first and second anniversaries of the grant
date, 12,960 common shares on the third such anniversary and
7,893 common shares on the fourth such anniversary; provided,
however, that these options become fully exercisable in the
event of certain defined changes-in-control of the Company or
dispositions of its assets or upon the death, disability or
retirement of Mr. Zacks.
(5) These options were granted under the 1994 Plan on May 13,
1994, and become exercisable as follows: (a) for
Mr. Ostrander, 5,844 common shares on each of the first,
second, third and fourth anniversaries of the grant date and
6,666 common shares on the fifth such anniversary; (b) for
Mr. Galvis, 4,421 common shares on each of the first and
second anniversaries of the grant date, 5,844 common shares
on each of the third and fourth such anniversaries and 6,667
common shares on the fifth such anniversary; and (c) for each
of Messrs. Burrell and Viren, 20% of the common shares on each
of the first, second, third, fourth and fifth anniversaries
of the grant date; provided, however, that each of these
options become fully exercisable in the event of certain
defined changes-in-control of the Company or dispositions of
its assets or upon the death, disability or retirement of the
executive officer.
(6) These options were granted under the 1994 Plan on May 13,
1994, and become exercisable as follows: (a) for
Mr. Ostrander, 822 common shares on each of the first and
fourth anniversaries of the grant date and 823 common shares
on each of the second and third such anniversaries; and
(b) for Mr. Galvis, 2,245 common shares on each of the first
and second anniversaries of the grant date and 823 common
shares on each of the third and fourth such anniversaries;
provided, however, that each of these options become fully
exercisable in the event of certain defined changes-in-
control of the Company or dispositions of its assets or upon
the death, disability or retirement of the executive officer.
Option and Stock Appreciation Right Exercises and Holdings
The following table sets forth certain information with respect
to options exercised during the 1994 fiscal year by each of the
named executive officers and unexercised stock options and stock
appreciation rights held as of the end of the 1994 fiscal year by
each of the named executive officers. No stock appreciation rights
were exercised during the 1994 fiscal year by such executive
officers.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<CAPTION>
Value Realized
Number of (Fair Market Number of Securities Value of Unexercised
Securities Value at Exercise Underlying Unexercised In-the-Money Options/
Underlying Options less Exercise Options/SARs at FY-End (#)(1) SARs at FY-End ($)(2)(3)
Name Exercised(#)(1) Price)($)(2) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Gordon Zacks 0 N/A 6,666(4) 86,666(4) $ 34,976 $139,919
Charles E. 13,300 $233,025 43,366(4)(5) 46,665(4)(6) $250,225 $ 77,081
Ostrander
Christian Galvis 0 N/A 23,333(4) 59,999(4)(6) $181,769 $185,411
Richard L. Burrell 24,000 $220,749 9,332(4)(5) 24,000(4)(6) $ 58,950 $ 61,668
Daniel D. Viren 21,332 $256,731 0 25,333(4)(6) $ 0 $ 70,749
</TABLE>
___________________________
(1) Reflects adjustments for 4-for-3 share split distribution on
June 22, 1994 to shareholders of record on June 1, 1994.
(2) Rounded to nearest whole dollar.
(3) "Value of Unexercised In-the-Money Options/SARs at FY-End" is
based upon the fair market value of the Company's common
shares on December 31, 1994 less the exercise price of
in-the-money options and stock appreciation rights at the end
of the 1994 fiscal year.
(4) Includes options granted under the 1988 Plan. The 1988 Plan
provides that outstanding options that are not fully
exercisable will become so in the event of certain defined
changes-in-control of the Company or dispositions of its
assets.
(5) Includes options granted under the R. G. Barry Corporation
1984 Incentive Stock Option Plan for Key Employees. This plan
provides that outstanding options that are not fully exercis-
able will become so in the event of certain defined changes-
in-control of the Company or dispositions of its assets. In
addition, options granted under this plan were granted in
tandem with limited stock appreciation rights. These limited
stock appreciation rights give the holders of the correspond-
ing options the right, in the event of certain defined
changes-in-control of the Company or dispositions of its
assets, to tender the unexercised options to the Company for
a cash payment equal to the product obtained by multiplying
the number of common shares covered by the unexercised options
times the difference between the option exercise price and the
greater of (i) the highest market price for the common shares
during the preceding 60 days and (ii) the highest price paid
for the common shares by the acquiror in the change-in-
control.
(6) Includes options granted under the 1994 Plan. The 1994 Plan
provides that outstanding options that are not fully
exercisable will become so in the event of certain defined
changes-in-control of the Company or dispositions of its assets.
Pension Plans
The Company's Salaried Employees' Pension Plan (the "Plan")
provides for the payment of monthly benefits at "normal retirement
date" (age 65) based upon 45% of a participant's "Final Average
Monthly Compensation" (subject to a limitation imposed by law on
the amount of annual compensation upon which benefits may be based)
less a designated percentage of the participant's primary Social
Security benefits. Benefits under the Plan are reduced by 1/30th
for each year of credited service less than 30 years. The
Company's Supplemental Retirement Plan (the "Supplemental Plan")
provides for the payment of additional monthly retirement
benefits based upon 2 1/2% of an eligible participant's "Final Average
Monthly Compensation" reduced by 2 1/12th% of his primary Social
Security benefits with the difference multiplied by his years of
credited service up to a maximum of 24 years, and the resulting
product then reduced by his monthly pension payable under the
Plan. The benefit to which any employee who was a participant in the
Supplemental Plan on December 31, 1988 is entitled will not be
less than 60% of such participant's "Final Average Monthly Compensa-
tion", reduced by (i) his monthly pension payable under the Plan
and (ii) a designated percentage of his primary Social Security
benefits.
The following table shows the estimated pension benefits
payable to a participant in the Plan and the Supplemental Plan (who
was a participant in the Supplemental Plan on December 31, 1988),
at "normal retirement age" of 65, based on compensation that is
covered by the Plan and the Supplemental Plan, years of service
with the Company and payment in the form of a lifetime annuity:
<TABLE>
PENSION PLANS TABLE
(Minimum Benefit for Persons Who Were Participants
in the Supplemental Plan on December 31, 1988)
<CAPTION>
Estimated Annual Pension Benefits
Final Average Based on Credited Years of Service Indicated
Annual
Compensation 10 15 20 25 30
<C> <C> <C> <C> <C> <C>
$125,000 $ 75,000 $ 75,000 $ 75,000 $75,000 $ 75,000
175,000 105,000 105,000 105,000 105,000 105,000
225,000 135,000 135,000 135,000 135,000 135,000
275,000 165,000 165,000 165,000 165,000 165,000
325,000 195,000 195,000 195,000 195,000 195,000
375,000 225,000 225,000 225,000 225,000 225,000
425,000 255,000 255,000 255,000 255,000 255,000
475,000 285,000 285,000 285,000 285,000 285,000
</TABLE>
Annual benefits are shown before deduction of 50% of primary
Social Security benefits.
The following table shows the estimated pension benefits
payable to a participant in the Plan and the Supplemental Plan (who
became a participant in the Supplemental Plan after December 31,
1988), at "normal retirement age" of 65, based on compensation that
is covered by the Plan and the Supplemental Plan, years of service
with the Company and payment in the form of a lifetime annuity:
<TABLE>
PENSION PLANS TABLE
<CAPTION>
Estimated Annual Pension Benefits
Final Average Based on Credited Years of Service Indicated
Annual
Compensation 10 15 20 25 30
<C> <C> <C> <C> <C> <C>
$125,000 $ 31,250 $ 46,875 $ 62,500 $75,000 $ 75,000
175,000 43,750 65,625 87,500 105,000 105,000
225,000 56,250 84,375 112,500 135,000 135,000
275,000 68,750 103,125 137,500 165,000 165,000
325,000 81,250 121,875 162,500 195,000 195,000
375,000 93,750 140,625 187,500 225,000 225,000
425,000 106,250 159,375 212,500 255,000 255,000
475,000 118,750 178,125 237,500 285,000 285,000
</TABLE>
Annual benefits are shown before deduction of 20.83% of
primary Social Security benefits after 10 years of service, 31.25%
after 15 years of service, 41.67% after 20 years of service, 50%
after 25 years of service, and 50% after 30 years of service.
A participant's "Final Average Monthly Compensation" for
purposes of the Company's pension plans is the average of the
participant's compensation (salary and commissions but excluding
cash bonuses and overtime pay) during the five consecutive calendar
years of the last twenty years in which such total compensation is
highest. The "Final Average Annual Compensation" as of the end of
the 1994 fiscal year was $383,905, $200,477, $169,928, $152,529 and
$115,256 for Messrs. Zacks, Ostrander, Galvis, Burrell and Viren,
respectively. Messrs. Zacks, Ostrander, Galvis, Burrell and Viren
have approximately 39, 8, 4, 28 and 6 years, respectively, of
credited service under the Plan and the Supplemental Plan. Messrs.
Zacks and Burrell were participants in the Supplemental Plan on
December 31, 1988, Mr. Ostrander became a participant in the
Supplemental Plan effective January 1, 1989, Mr. Viren became a
participant in the Supplemental Plan effective January 1, 1990 and
Mr. Galvis became a participant in the Supplemental Plan effective
January 1, 1992.
Directors' Compensation
Each director who is not an employee of the Company receives
$17,000 annually for services rendered to the Company as a director
except for Messrs. Giovanello and Krueger who receive $22,000
annually for serving as directors. In addition, each director who
is not an employee of the Company receives $1,000 for each meeting
of the Company's Board of Directors attended. Directors who are
also employees of the Company receive no separate compensation for
serving as directors.
Other Compensation
In 1952, Mrs. Florence Zacks Melton transferred to the Company
the exclusive right to manufacture all slippers created and
designed by her. Under the agreement, Mrs. Melton receives 1% of
the Company's gross receipts from sales of such products. The
agreement terminates five years after the death of Mrs. Melton.
During 1994, the Company accrued royalty payments (which were paid
in 1995) aggregating $90,294 pursuant to this agreement.
Mrs. Melton is the mother of Gordon Zacks.
Employment Contracts and Termination of Employment and Change-in-
Control Arrangements
Gordon Zacks, the Chairman of the Board, President and Chief
Executive Officer of the Company, and the Company entered into an
Employment Agreement, dated July 1, 1994 (the "Zacks Employment
Agreement"), which provides for the employment of Mr. Zacks by the
Company as its Chief Executive Officer for a term of four years,
automatically renewable for additional, consecutive one-year terms
unless the Company or Mr. Zacks gives notice to the other of non-
renewal. The Company is obligated to cause Mr. Zacks to be
nominated to membership on the Board of Directors. Mr. Zacks is
entitled to receive a minimum annual salary of $450,000, subject
to increases that from time to time may be granted by the Board of
Directors. In addition to his annual salary, Mr. Zacks is entitled
to participate in the Company's Incentive Program and to receive
certain health and life insurance coverages, pension and retirement
benefits and other benefits and perquisites.
If Mr. Zacks' employment is terminated by the Company without
"cause" (as defined in the Zacks Employment Agreement) or by
Mr. Zacks for "good reason" (as defined in the Zacks Employment
Agreement) prior to a "change of control" (as defined in the Zacks
Employment Agreement), he will be entitled to have his base salary
continued at the rate in effect immediately prior to the date of
termination until the last day of the employment term. In
addition, he and his spouse will receive for a period ending on
his 65th birthday or his earlier death, all life, medical and dental
insurance and other employee benefits to which he and his spouse
were entitled immediately prior to the date of termination and
compensation for lost benefits under the Company's retirement
plans resulting from the early termination of his employment. If
Mr. Zacks' employment is terminated by the Company without "cause"
or by Mr. Zacks for "good reason" within three years after a
"change of control", Mr. Zacks will be entitled to receive a
severance payment (subject to reduction if the payment would not
be deductible by the Company for federal income tax purposes) equal
to three times his base salary at the rate in effect at the date
of termination. In addition, he and his spouse will receive for
a period ending on his 70th birthday or his earlier death, all
life, medical and dental insurance benefits to which he and/or
his spouse was entitled immediately prior to the date of termination,
he will receive all of his perquisites for a period of three
years after the date of termination and he will receive compensation
for benefits under the Company's retirement plans that he would have
received if he had remained in the Company's employ for the
greater of an additional 36 months or the number of months remaining
in his employment term. A "change of control" is deemed to have occurred
if a third party acquires more than 25% of the total voting power
of the Company's outstanding voting securities or as a result of,
or in connection with, certain specified business combinations or
a contested election, the persons who were directors of the Company
immediately before the transaction cease to constitute a majority
of the Board of Directors of the Company or any successor to the
Company. The Zacks Employment Agreement also provides for the
continuation of Mr. Zacks' salary and benefits for a period of time
following a permanent and total disability.
Under an Agreement, dated July 30, 1984, as amended, between
the Company and Gordon Zacks (the "1984 Agreement"), the Company
issued to Mr. Zacks 300,000 "restricted" common shares (the
"Shares") (adjusted to 400,000 Shares as a result of the 4-for-3
share split distributed on June 22, 1994 to shareholders of record
on June 1, 1994). On March 1, 1995, restrictions lapsed with
respect to the remaining 40,000 Shares subject to restriction. The
Company was obligated to purchase (so long as such repurchase did
not violate any existing loan agreement and was permitted by law)
from Mr. Zacks, at his request, up to 50% of the Shares with
respect to which restrictions had lapsed. On March 1, 1995,
Mr. Zacks exercised his right to require the Company to purchase
20,000 of the Shares with respect to which the final restrictions
had lapsed at a price of $12.00 per share, the closing price of the
Company's common shares on March 1, 1995.
Under an Agreement dated September 27, 1989, as amended, the
Company agreed, upon the death of Mr. Zacks, to purchase from the
estate of Mr. Zacks, at the estate's election, up to $4 million
of the common shares of the Company held by Mr. Zacks at the time
of his death. The common shares would be purchased at their fair
market value at the time the estate of Gordon Zacks exercises its
put right. The estate's put right would expire after the second
anniversary of the death of Mr. Zacks. The Company agreed to fund
its potential obligation to purchase such common shares by
purchasing and maintaining during Mr. Zacks' lifetime one or more
policies of life insurance on the life of Mr. Zacks. In addition,
Mr. Zacks agreed that, for a period of 24 months following his
death, the Company will have a right of first refusal to purchase
any common shares of the Company owned by Mr. Zacks at his death
if his estate elects to sell such common shares. The Company would
have the right to purchase such common shares on the same terms and
conditions as the estate proposes to sell such common shares.
Christian Galvis, the Executive Vice President - Operations
of the Company, and the Company entered into an Employment
Agreement, dated July 1, 1994 (the "Galvis Employment Agreement"),
which provides for the employment of Mr. Galvis by the Company as
its Executive Vice President-Operations for a term of three years.
Mr. Galvis is entitled to receive a minimum annual salary of
$190,000, subject to increases that from time to time may be
granted by the Board of Directors. In addition to his annual
salary, Mr. Galvis is entitled to participate in the Company's
Incentive Program and to receive certain health and life insurance
coverages, pension and retirement benefits and other benefits and
perquisites. If Mr. Galvis' employment is terminated by the
Company without "cause" (as defined in the Galvis Employment
Agreement) or by Mr. Galvis for "good reason" (as defined in the
Galvis Employment Agreement), he will be entitled to receive a
severance payment equal to the total compensation (including bonus)
paid to or accrued for the benefit of Mr. Galvis by the Company for
services rendered during the 12-month period immediately preceding
the date of termination. The Galvis Employment Agreement also
provides for the continuation of Mr. Galvis' salary for a period
of time following a permanent and total disability.
Richard L. Burrell, the Senior Vice President - Finance,
Treasurer and Secretary of the Company, and Daniel D. Viren, the
Senior Vice President - Administration of the Company, each entered
into an Agreement, dated July 1, 1994 (the "Severance Agreement"),
which provides that if the named executive officer's employment is
terminated by the Company without "cause" (as defined in the
Severance Agreement) or by the named executive officer for "good
reason" (as defined in the Severance Agreement) within 36 months
following a "change in control" (as defined in the Severance
Agreement), he will be entitled to receive a severance payment
equal to the greater of (1) the total compensation (including
bonus) paid to or accrued for the benefit of the named executive
officer by the Company for services rendered during the calendar
year ending prior to the date on which the "change in control"
occurred or (2) the total compensation (including bonus) paid to
or accrued for the benefit of the named executive officer by the
Company for services rendered during the 12-month period
immediately preceding the date of termination of employment. Prior
to a "change in control", each Severance Agreement will terminate
immediately if the named executive officer's employment with the
Company is terminated for any reason. Each Severance Agreement
provides for a term of three years unless earlier terminated
pursuant to its terms.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly
percentage change in the Company's cumulative total shareholder
return on its common shares with an index for shares listed on the
American Stock Exchange and an index for Media General Industry
Group 57 - Textiles/Apparel ("Apparel Industry"), for the five-
year period ended December 31, 1994.
Performance graph omitted; represented by the following table:
<TABLE>
Comparison of Five-Year Cumulative
Total Return Among R. G. Barry Corporation,
AMEX Market Index and Apparel Industry
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
AMEX Market
Index $100 $84.8 $104.45 $105.88 $125.79 $111.12
Apparel
Industry $100 $89.1 $137.47 $159.51 $154.43 $141.96
R. G. Barry
Corporation $100 $31.4 $ 32.56 $ 68.61 $141.86 $137.98
</TABLE>
PROPOSED AMENDMENT OF ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED NUMBER
OF COMMON SHARES
(Item 2 on Proxy)
The Articles of Incorporation of the Company presently
authorize 12,500,000 shares, of which 7,500,000 are common shares,
$1.00 par value, 4,000,000 are Class A Preferred Shares, $1.00 par
value, and 1,000,000 are Class B Preferred Shares, $1.00 par value.
The Company's Board of Directors unanimously adopted a resolution
proposing and declaring it advisable that Paragraph I of Article
FOURTH of the Company's Articles of Incorporation be amended in
order to increase the authorized number of shares of the Company
to 20,000,000 shares, of which 15,000,000 will be common shares,
$1.00 par value ("Common Shares"), 4,000,000 will be Class A
Preferred Shares, $1.00 par value, and 1,000,000 will be Class B
Preferred Shares, $1.00 par value, and recommending to the
shareholders of the Company the approval of the proposed amendment.
Thus, the only class of shares which will be increased in
authorized number will be the Common Shares. Of the Company's
presently authorized 7,500,000 Common Shares, as of December 31,
1994, 5,542,581 were outstanding, an aggregate of 811,518 were
reserved for issuance under the Company's existing stock option
plans, 165,093 were reserved for issuance under the Company's
existing stock purchase plan, 266,667 were reserved for issuance
under the R. G. Barry Employee Stock Ownership Plan and 714,141
were available for issuance. In 1988, 500,000 shares of Class B
Preferred Shares were designated "Series I Junior Participating
Class B Preferred Shares" and were reserved for issuance pursuant
to a Rights Agreement, dated as of February 19, 1988 (the "Rights
Agreement"), between the Company and The Huntington National Bank,
as Rights Agent.
The Board of Directors believes that it is desirable and in
the best interests of the Company and its shareholders to increase
the number of Common Shares that the Company is authorized to issue
in order to ensure that the Company will have a sufficient number
of authorized Common Shares available in the future to provide it
with the desired flexibility to meet its business needs. If this
proposal is approved by the shareholders, the additional Common
Shares could be available for a variety of corporate purposes,
including, for example, the declaration and payment of share
dividends to the Company's shareholders; share splits; use in the
financing of expansion or future acquisitions; issuance pursuant
to the terms of employee benefit plans; and use in other possible
future transactions of a currently undetermined nature.
If the proposed amendment is adopted, the Company would be
permitted to issue the additional authorized Common Shares without
further shareholder approval, except to the extent otherwise
required by the Company's Articles of Incorporation, by law or by
any securities exchange on which the Common Shares may be listed
at the time (the Common Shares are currently listed on the American
Stock Exchange.) The authorization of additional Common Shares
will enable the Company, as the need may arise, to take timely
advantage of market conditions and the availability of favorable
opportunities without the delay and expense associated with the
holding of a special meeting of its shareholders. It is the belief
of the Board of Directors that the delay necessary for shareholder
approval of a specific issuance could be to the detriment of the
Company and its shareholders. The Board of Directors does not
intend to issue any Common Shares except on terms which the Board
deems to be in the best interests of the Company and its
shareholders. Existing shareholders of the Company will have no
pre-emptive rights to purchase any Common Shares issued in the
future. Depending on the terms thereof, the issuance of the Common
Shares may or may not have a dilutive effect on the Company's then-
existing shareholders. Other than the Common Shares which may be
acquired pursuant to the R. G. Barry Employee Stock Ownership Plan
and the Company's existing stock option plans and stock purchase
plan, the Company presently has no plans, agreements or
understandings to issue any of the newly authorized Common
Shares.
Although the Company has no such present intentions, the
proposed increase in the authorized and unissued Common Shares
might be considered as having the effect of discouraging an attempt
by another person or entity, through the acquisition of a
substantial number of Common Shares, to acquire control of the
Company with a view to imposing a merger, sale of all or any part
of its assets, or a similar transaction without prior approval of
the Company's Board of Directors, since the issuance of new Common
Shares, in a public or private sale, merger or similar transaction,
could be used to dilute the share ownership of a person or entity
seeking to obtain control of the Company. Furthermore, since
Article SIXTH of the Company's Articles of Incorporation requires
that the removal of a director be approved by the affirmative vote
of the holders of at least 80% of the votes entitled to be cast by
the holders of all of the outstanding voting shares of the Company,
the Board could (within the limits imposed by Ohio law) issue new
Common Shares to purchasers who, together with other shareholders
of the Company, might block such an 80% vote.
The Board has no present knowledge of any present or past
efforts to gain control of the Company and has not received any
indication from any party that such party is interested in
acquiring the Company. As of March 15, 1995, the Company's
executive officers and directors, together with participants in
the ESOP, held approximately ____% of the Company's voting power.
The Company's Articles of Incorporation and Regulations
contain other provisions which could potentially make a change of
control of the Company more difficult. These provisions include:
(a) the classification of the Board of Directors of the Company
into three classes of directors so that each director serves for
three years, with one class being elected each year; (b) the
elimination of cumulative voting in the election of directors;
(c) the requirement that holders of shares entitling them to
exercise not less than 80% of the voting power of the Company vote
in favor of the removal of a director from office; (d) the
requirement of the affirmative vote of at least 80% of the
outstanding voting shares of the Company, in addition to any
other vote required by law or the Company's Articles of Incorporation,
as a condition of certain major corporate transactions (e.g.,
merger or consolidation, sale or other disposition of all or
substantially all of the Company's assets, liquidation or
dissolution of the Company) with certain holders of stock
representing 10% or more of the voting power of the Company
unless a majority of the "disinterested" directors approve the
transaction or certain price criteria and procedural requirements are
satisfied; and (e) certain procedural requirements, including
provisions governing the time period for setting special
shareholder meetings, record dates and nominating directors, and
specifying who may call special shareholder meetings.
Under the Rights Agreement, each of the Company's shareholders
has one and one-third Rights for each outstanding common share held
and each newly-issued common share will have issued with it one and
one-third Rights. The Rights currently have no value, are
represented by the certificates evidencing the common shares and
trade only with such common shares. The Rights may only be
separated from the common shares and exercised upon the occurrence
of a person or group ("Acquiror") acquiring or obtaining benefi-
cial ownership of 25% or more of the then outstanding common shares
(a "Triggering Event") or the tenth business day after the
commencement or announcement of a tender or exchange offer that
would result in ownership of 30% or more of the outstanding common
shares. The Rights Agreement provides that, upon the Rights
becoming exercisable, shareholders would be entitled to purchase,
at the "Exercise Price", one tenth of one share of the Series I
Junior Participating Class B Preferred Shares (the "Preferred
Shares"). Such fractional share is intended to be the practical
equivalent of one common share. In the event of a Triggering
Event, the Rights will entitle each holder (except the Acquiror or
any affiliate or associate thereof, whose Rights become null and
void) to purchase Preferred Shares of the Company having a value
equal to twice the Exercise Price. In the event the Company is
acquired in a merger or other business combination or a significant
portion of its assets are sold, leased, exchanged, or otherwise
transferred to an Acquiror, shares of the Acquiror (or shares of
the surviving corporation in such acquisition, which could be the
Company) may be purchased. The Exercise Price and the number of
Preferred Shares or other securities or property issuable upon
exercise of a Right are subject to adjustment upon the occurrence
of certain events including, for example, a stock dividend or split
payable in the Company's common shares or Preferred Shares. The
number of Rights may also be adjusted upon the occurrence of
certain events including, for example, a reverse stock split. The
Rights expire on March 16, 1998, unless earlier redeemed by the
Company. The Rights may cause substantial dilution to a person or
group that attempts to acquire the Company and thus have an anti-
takeover effect.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF COMMON SHARES ENTITLING
THEM TO EXERCISE AT LEAST A MAJORITY OF THE VOTES ENTITLED TO BE
CAST IS REQUIRED TO ADOPT THE PROPOSED AMENDMENT TO PARAGRAPH I OF
ARTICLE FOURTH OF THE COMPANY'S ARTICLES OF INCORPORATION. If the
amendment is approved, it will become effective upon the filing of
a Certificate of Amendment to the Company's Articles of Incorporation
with the Ohio Secretary of State, which is expected to be accomplished
as promptly as practicable after such approval is obtained.
The Board of Directors of the Company unanimously recommends
that the shareholders vote FOR the proposed amendment to
Paragraph I of Article FOURTH of the Company's Articles of
Incorporation. Unless otherwise directed, the persons named in the
enclosed proxy will vote the Common Shares represented by all
proxies received prior to the Annual Meeting, and not properly
revoked, in favor of the proposed amendment to Paragraph I of
Article FOURTH.
RATIFICATION OF SELECTION OF ACCOUNTANTS
(Item 3 on Proxy)
The Board of Directors recommends the ratification of the
selection of KPMG Peat Marwick LLP as the independent public
accountants for the Company for 1995. That firm, together with its
predecessor Peat, Marwick, Mitchell & Co., have served as
independent public accountants for the Company since 1966 and are
serving as the Company's independent public accountants for the
current year.
Unless otherwise directed, the persons named in the enclosed
proxy will vote the common shares represented by all proxies
received prior to the Annual Meeting, and not revoked, in favor of
the proposal to ratify the selection of KPMG Peat Marwick as the
independent public accountants for the Company for 1995.
The Board of Directors expects that representatives of KPMG
Peat Marwick will be present at the Annual Meeting, will have the
opportunity to make a statement if they desire to do so and will
be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR
1996 ANNUAL MEETING
Any qualified shareholder who desires to present a proposal
for consideration at the 1996 Annual Meeting of Shareholders must
submit the proposal in writing to the Company. If the proposal is
received by the Company on or before November 28, 1995, and
otherwise meets the requirements of applicable state and federal
law, it will be included in the proxy statement and form of proxy
of the Company relating to its 1996 Annual Meeting of Share-
holders.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors
knows of no other business to be presented for action by the
shareholders at the 1995 Annual Meeting of Shareholders other than
as set forth in this Proxy Statement. However, if any other matter
is properly presented at the Annual Meeting, or at any adjournment
or adjournments thereof, it is intended that the persons named in
the enclosed proxy may vote the common shares represented by such
proxy on such matters in accordance with their best judgment in
light of the conditions then prevailing.
It is important that proxies be completed and returned
promptly; therefore, shareholders who do not expect to attend the
Annual Meeting in person are urged to fill in, sign and return the
enclosed proxy in the self-addressed envelope furnished herewith.
By Order of the Board of Directors,
Gordon Zacks,
Chairman of the Board, President
and Chief Executive Officer
March 28, 1995
R. G. BARRY CORPORATION
13405 Yarmouth Road, N.W.
Pickerington, Ohio 43147
(614) 864-6400
PROXY STATEMENT
(2/95)
R. G. BARRY CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 10, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder(s) of common shares of R. G. Barry Corporation
(the "Company") hereby constitutes and appoints Gordon Zacks and Richard L.
Burrell, or either of them, the Proxy or Proxies of the undersigned, with
full power of substitution, to attend the Annual Meeting of Shareholders
of the Company to be held on Wednesday, May 10, 1995, at the Company's
executive offices, 13405 Yarmouth Road, N.W., Pickerington, Ohio, at 2:30
P.M., local time, and any adjournment or adjournments thereof, and to vote
all of the common shares which the undersigned is entitled to vote at such
Annual Meeting or at any adjournment or adjournments thereof:
1. To elect three directors to serve for terms of three years each.
_____ FOR election as directors WITHHOLD AUTHORITY
of the Company of all of to vote for all of
the nominees listed below the nominees listed
(except as marked to the below.
contrary below.)*
Philip G. Barach Richard L. Burrell Edward M. Stan
*(INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list above.)
2. To approve the proposed amendment to Paragraph I of Article FOURTH of
the Company's Articles of Incorporation to increase the authorized
number of common shares, $1.00 par value, of the Company from 7,500,000
to 15,000,000 common shares.
FOR AGAINST ABSTAIN
3. To ratify the selection of KPMG Peat Marwick LLP as independent public
accountants for the Company for 1995.
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the Annual Meeting or any adjournment
or adjournments thereof.
(Continued, and to be executed and dated on the other side.)
(Continued from other side.)
WHERE A CHOICE IS INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED OR NOT VOTED AS SPECIFIED. IF NO
CHOICE IS INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES LISTED IN ITEM NO. 1 AS DIRECTORS
OF THE COMPANY AND FOR PROPOSAL NOS. 2 AND 3. IF ANY OTHER MATTERS ARE
PROPERLY BROUGHT BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT OR
ADJOURNMENTS THEREOF OR IF A NOMINEE FOR ELECTION AS A DIRECTOR NAMED
IN THE PROXY STATEMENT IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT
SERVE, THE COMMON SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE
DISCRETION OF THE PROXIES ON SUCH MATTERS OR FOR SUCH SUBSTITUTE NOMINEE(S)
AS THE DIRECTORS MAY RECOMMEND.
All proxies previously given or executed by the undersigned are hereby
revoked. The undersigned acknowledges receipt of the accompanying Notice
of Annual Meeting of Shareholders and Proxy Statement for the May 10, 1995
meeting and Annual Report to Shareholders for the fiscal year ended December
31, 1994.
Dated:____________, 1995 _________________________________
Signature of Shareholder(s)
__________________________________
Signature of Shareholder(s)
Please sign exactly as your name appears hereon.
When common shares are registered in two names, both
shareholders should sign. When signing as attorney,
executor, administrator, guardian or trustee, please
give full title as such. If shareholder is a corporation,
please sign in full corporate name by President or other
authorized officer. If shareholder is a partnership,
please sign in partnership name by authorized person.
(Please note any change of address on this proxy.)
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF R. G. BARRY CORPORATION.
PLEASE FILL IN, SIGN, DATE AND RETURN IT PROMPTLY
USING THE ENCLOSED ENVELOPE.
