<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
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 if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:________________________________________________
(2) Form, Schedule or Registration Statement No.:__________________________
(3) Filing Party:__________________________________________________________
(4) Date Filed:____________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
[LOGO]
R. G. BARRY CORPORATION
13405 YARMOUTH ROAD, N.W.
PICKERINGTON, OHIO 43147
March 26, 1996
DEAR FELLOW SHAREHOLDERS:
You are cordially invited to attend the 1996 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 Thursday, May 16, 1996, 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 and to approve
the R. G. Barry Corporation Stock Option Plan for Non-Employee Directors.
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,
/s/ Gordon Zacks
Gordon Zacks
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 3
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
R. G. BARRY CORPORATION
13405 YARMOUTH ROAD, N.W.
PICKERINGTON, OHIO 43147
(614) 864-6400
Pickerington, Ohio
March 26, 1996
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 Thursday, May 16, 1996, 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 approve the R. G. Barry
Corporation Stock Option Plan for Non-Employee Directors.
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment(s) thereof.
Shareholders of record at the close of business on March 18, 1996, will be
entitled to receive notice of, and to vote at, the Annual Meeting and any
adjournment(s) 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,
/s/ Gordon Zacks
Gordon Zacks,
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 4
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 26, 1996, 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 Thursday, May 16, 1996, or at any
adjournment(s) 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 30, 1995 (the "1995 fiscal year") is enclosed herewith.
VOTING AT ANNUAL MEETING
Only shareholders of the Company of record at the close of business on
March 18, 1996, are entitled to receive notice of, and to vote at, the Annual
Meeting and any adjournment(s) thereof. At the close of business on March 18,
1996, 7,411,883 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.
Common shares represented by signed proxies that are returned to the
Company will be counted toward the quorum in all matters even though they are
marked as "Abstain," "Against" or "Withhold Authority" on one or more or all
matters or they are not marked at all. The effect of an abstention on each of
the matters to be voted upon at the Annual Meeting is the same as a "no" vote.
Under the applicable rules of the New York Stock Exchange, the election of
directors and the proposal to approve the R. G. Barry Corporation Stock Option
Plan for Non-Employee Directors are considered
<PAGE> 5
"discretionary" items upon which broker/dealers, who hold their clients' common
shares in street name, may vote in their discretion on behalf of their clients
if such clients have not furnished voting instructions within the required time
frame before the Annual Meeting. Accordingly, there should be no "broker
non-votes" with respect to the matters to be voted upon at the Annual Meeting.
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 18,
1996 (unless otherwise indicated):
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-------------------------------------------------------
SOLE VOTING
AND SOLE PERCENT
NAME AND ADDRESS INVESTMENT SOLE VOTING INVESTMENT OF
OF BENEFICIAL OWNER POWER POWER ONLY POWER ONLY TOTAL CLASS(1)
- ------------------------------ ----------- ------------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
Gordon Zacks 378,214(2) 433,696(3)(4) -- 811,910 10.9%
140 N. Parkview Ave.
Columbus, OH 43209
Florence Zacks Melton 29,506 -- 357,701(3) 387,207 5.2%
1000 Urlin Avenue
Columbus, OH 43212
Dimensional Fund 258,707(5) -- 163,776(5) 422,483(5) 5.7%
Advisors Inc.
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
<FN>
- ---------------
(1) The percent of class is based upon the sum of 7,411,883 common shares
outstanding on March 18, 1996, 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 options exercisable within 60 days of March 18, 1996.
(2) Includes 110,344 common shares deposited in the Zacks-Streim Voting Trust,
as amended (the "Voting Trust") by Mr. Zacks of which he is the beneficial
owner (see Note (3) below), 201,205 common shares held of record by Mr.
Zacks, and 66,665 common shares as to which Mr. Zacks has the right to
acquire beneficial ownership upon the exercise of options exercisable within
60 days of March 18, 1996. Excludes 11,974 common shares held of record and
owned beneficially by the spouse of Mr. Zacks as to which Mr. Zacks has no
voting or investment power and disclaims beneficial ownership.
(3) Gordon Zacks is the voting trustee of the Voting Trust and exercises sole
voting power as to the 468,045 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 110,344 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
357,701 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 357,701 common
shares. Mr. Zacks is a remainder beneficiary of the trust created by that
will. The Voting Trust will continue in existence until October 29, 2005,
unless extended or terminated in accordance with its terms.
(4) Includes 75,995 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 February 7, 1996), Dimensional Fund Advisors Inc., a registered
investment adviser ("Dimensional"), is deemed to have
</TABLE>
2
<PAGE> 6
beneficial ownership of 422,483 common shares as of December 31, 1995, 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 beneficial
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 18,488 common shares which are owned by the
Fund and 145,288 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 current executive officers and directors of the Company as a group as
of March 18, 1996:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(1)
--------------------------------------------
COMMON SHARES WHICH
COMMON CAN BE ACQUIRED UPON
SHARES EXERCISE OF OPTIONS PERCENT
PRESENTLY EXERCISABLE WITHIN OF
NAME HELD 60 DAYS TOTAL CLASS(2)
- ---------------------------------------- --------- -------------------- --------- --------
<S> <C> <C> <C> <C>
Gordon Zacks (3)........................ 745,245(4) 66,665 811,910 10.9%
Leopold Abraham II...................... 5,333 0 5,333 (5)
Philip G. Barach........................ 24,577 0 24,577 (5)
Richard L. Burrell (3).................. 38,478 44,442 82,920 1.1%
Christian Galvis (3).................... 11,597(6) 66,665 78,262 1.0%
William Giovanello...................... 533 0 533 (5)
Harvey M. Krueger....................... 17,777 0 17,777 (5)
Charles E. Ostrander (3)................ 13,907(7) 82,187 96,094 1.3%
Edward M. Stan.......................... 32,146(8) 0 32,146 (5)
Daniel D. Viren (3)..................... 0 16,001 16,001 (5)
All current directors and executive
officers as a group (numbering 11).... 892,579 283,959 1,176,538 15.3%
<FN>
- ---------------
(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 458 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) Includes 1,284 common shares held by Mr. Ostrander as custodian for his
daughter.
(8) Excludes 2,310 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.
</TABLE>
To the Company's knowledge, based solely on a review of the copies of the
reports furnished to the Company and written representations that no other
reports were required during the 1995 fiscal year, all filing requirements
applicable to officers, directors and beneficial owners of more than 10% of the
outstanding common shares of the Company under Section 16(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), were complied with;
except that Mr. Abraham, a director of the Company, filed late
3
<PAGE> 7
two reports, each covering one transaction and Mr. Ostrander, an executive
officer and director of the Company, filed late one report covering two
transactions.
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 NOMINEE
POSITION(S) HELD THE COMPANY FOR TERM
WITH THE COMPANY AND CONTINUOUSLY EXPIRING
NOMINEE AGE PRINCIPAL OCCUPATION(S) SINCE IN
- ------------------------ --- ------------------------------------------- ----------- ----------
<S> <C> <C> <C> <C>
Gordon Zacks............ 63 Chairman of the Board, Chief Executive 1959 1999
Officer and, since 1992, President of the
Company.
Christian Galvis........ 54 Executive Vice President--Operations since 1992 1999
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.... 47 Executive Vice President--Sales & Marketing 1992 1999
since 1992, Vice President--Sales &
Marketing from 1990 to 1992, of the
Company.
</TABLE>
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(s) 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.
4
<PAGE> 8
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>
<CAPTION>
DIRECTOR OF
POSITION(S) HELD THE COMPANY
WITH THE COMPANY AND CONTINUOUSLY TERM
NAME AGE PRINCIPAL OCCUPATION(S) SINCE EXPIRES IN
- ---------------------- --- ---------------------------------------- ----------- ----------
<S> <C> <C> <C> <C>
Harvey M. Krueger..... 66 Senior Managing Director, Lehman 1980 1997
Brothers, Inc., New York, New York,
investment bankers.(1)
William Giovanello.... 76 President of Retail Requisites, 1985 1997
Columbus, Ohio, retail consultants.
Leopold Abraham II.... 68 Chairman and Chief Executive Officer of 1993 1997
Associated Merchandising Corporation,
a retail merchandising and sourcing
company, from 1977 until his
retirement in 1993.(2)
Edward M. Stan........ 71 President, Edward M. Stan & Associated 1971 1998
Companies, Columbus, Ohio, marketing
consultants; President, Kinetic
Ventures, Inc., Pickerington, Ohio,
management and sales of real property,
from 1990 to 1991.
Richard L. Burrell.... 63 Senior Vice President--Finance since 1984 1998
1992, Treasurer and Secretary since
1976, and Vice President--Finance from
1976 to 1992, of the Company.
Philip G. Barach...... 65 Private Investor; Chairman of the Board 1991 1998
from 1968 to 1993, and Chief Executive
Officer and President from 1968 to
1990, of U.S. Shoe Corporation,
Cincinnati, Ohio, shoe
manufacturer.(3)
<FN>
- ---------------
(1) Mr. Krueger is also a director of Automatic Data Processing, Inc., IVAX
Corporation, Chaus, Inc. and Electric Fuels Corporation and serves on the
Club Mediterranee International Advisory Board.
(2) Mr. Abraham is also a director of Liz Claiborne, Galey & Lord, Inc., Signet
Group, plc and a Trustee of the Smith Barney Shearson Income Funds and the
Smith Barney Shearson Equity Funds.
(3) Mr. Barach is also a director of Union Central Life Insurance Company,
Chaus, Inc. and Glimcher Realty REIT.
</TABLE>
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 five meetings during
the Company's 1995 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
5
<PAGE> 9
Company's independent auditors and to recommend to the Board of Directors a firm
to serve as the Company's independent auditors. The Audit Committee met four
times during the 1995 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 associates who may participate in
each plan (where selection is required), to prescribe the terms of any options
granted under the Company's stock option plans (where permitted) and its stock
purchase plan and to approve the compensation of the Company's executive
officers. The Compensation Committee met three times during the 1995 fiscal
year.
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 the executive officers.
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
associates. 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 associates having the experience
and abilities that are necessary to manage the Company's business.
BASE SALARIES
The base salaries of the Company's executive officers and subsequent
adjustments to such base salaries are determined relative to the following
factors: (1) the criticality to the Company of the executive officer's job
function; (2) the individual's performance in his or her position; (3) the
individual's potential to make a significant contribution to the Company in the
future; and (4) a comparison of industry pay practices. The Committee believes
that all of these factors are important and the relevance of each factor varies
from individual to individual. The Committee has not assigned any specific
weight to any of these factors in the evaluation of an executive officer's base
salary.
An executive officer's individual performance is measured against goals and
objectives that have been previously discussed with the executive officer.
Consideration is given to the individual's contribution to the management team
and the individual's overall value and contribution to the Company. The
Committee relies on the Company's Chairman and Chief Executive Officer to make
recommendations to the Committee regarding the appropriate base salaries of the
executive officers other than the Chairman. Before making his base salary
recommendations to the Committee, the Company's Chairman obtains survey
information from one or more executive compensation consulting firms to
determine competitive compensation levels in each of the Company's senior
management positions. The Company has generally sought to establish base
salaries for its key management positions that fall within the 75th to 90th
percentiles of the competitive market. This comparative data, which includes
compensation information compiled from small to medium-sized consumer product
companies, may not include the compensation paid by all of the companies that
are included in the Apparel Industry index which is used for comparative
purposes in the shareholder return graph (see "PERFORMANCE GRAPH"). The
Committee believes that it is critically important for the Company to
6
<PAGE> 10
remain competitive in its management salaries in order to attract and retain the
small group of senior managers who are key to the Company's success.
ANNUAL INCENTIVE BONUS PROGRAM
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 during the first quarter 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. 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 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 1995, none of the participants in the Incentive
Program received a bonus under the Program for 1995.
MR. ZACKS' 1995 COMPENSATION
Mr. Zacks and the Company entered into a four-year Employment Agreement
(the "Employment Agreement") in 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. Mr. Zacks received a base salary of
$450,000 in 1995.
The Committee can increase Mr. Zacks' base salary above the minimum level
established by the Employment Agreement to reflect corporate performance. The
Committee will evaluate Mr. Zacks' base salary on an annual basis and will
determine whether an increase is warranted based on the Committee's
consideration of a number of subjective and objective criteria, including the
Company's financial results, positive changes in the Company's competitive
position, the success of the Company's strategic planning, achievements in the
areas of customer satisfaction and product innovation and overall leadership.
The Committee feels that all of these factors are significant and, therefore, no
specific weight has been assigned to these factors in the evaluation of Mr.
Zacks' base salary. Because the Employment Agreement requires that the Company
pay to Mr. Zacks a minimum annual base salary, the Committee does not have the
ability to reduce the base salary below such minimum to reflect the Company's
performance. However, the minimum base salary in the Employment Agreement was
established by the Committee based upon advice from a nationally recognized
executive compensation consulting firm that the base salary provided for in the
Employment Agreement was consistent with base salaries paid to executive
officers of comparable companies. This comparative data was compiled and
provided by the Company's executive compensation consulting firm and may or may
not have included the companies included in the Performance Graph.
Mr. Zacks' target award opportunity for 1995 was 75% of his base salary,
which was established by the Committee in February of 1995. The target profit
goal of the Company for 1995, established by the Committee and the Board in
early 1995, 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
7
<PAGE> 11
profitability of the Company for 1995, Mr. Zacks could have received under the
Incentive Program a bonus for 1995 of zero or a bonus as high as 75% of his base
salary. In other words, Mr. Zacks' potential 1995 bonus was tied directly to the
profitability of the Company in 1995.
Mr. Zacks' target award opportunity under the Incentive Program for 1995 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 primarily of options
granted under the Company's associates stock option plans. Awards of options are
designed to provide appropriate incentive to associates to continue growth in
shareholder value and to assist in the hiring and retention of key associates.
All stock options are granted with exercise prices at least equal to the market
value of the Company's common shares on the dates of grant. If there is no
appreciation in the market value of the Company's common shares, the options are
valueless. The Committee grants options based on its subjective determination of
the relative current and future contribution that each prospective optionee has
or may make to the long-term welfare of the Company. No options were granted in
1995 to the executive officers named in the Summary Compensation Table. In 1995,
incentive stock options were granted to 26 key associates for the purchase of an
aggregate of 59,895 common shares at an average price of $10.76 per share and
non-qualified stock options for an aggregate of 6,162 common shares were granted
to two key associates at an average price of $10.61 per share.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Internal Revenue Code Section 162(m) no longer permits the Company to
deduct certain non-performance-based compensation in excess of $1,000,000 per
taxable year paid to the Chief Executive Officer and the other four most highly
compensated executives required to be named in the Proxy Statement ("Covered
Employees"). The Company may continue to deduct compensation paid to its Covered
Employees in excess of $1,000,000 if the payment of such compensation qualifies
for an exception, including an exception for certain performance-based
compensation.
The Committee believes that Section 162(m) should not cause the Company to
be denied a deduction for 1995 compensation paid to the Covered Employees. The
Committee will continue to work to structure components of its executive
compensation package to achieve maximum deductibility under Section 162(m) while
at the same time considering the goals of its executive compensation philosophy.
ADDITIONAL COMPENSATION PLANS
At various times in the past, the Company has adopted certain broad-based
associate benefit plans in which the Company's executive officers are permitted
to participate on the same terms as non-executive officer associates who meet
applicable eligibility criteria, subject to legal limitations on the amounts
that may be contributed or the benefits that may be payable under the plans.
Benefits under these plans are not tied to performance.
8
<PAGE> 12
SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS
Leopold Abraham II Philip G. Barach
William Giovanello, Chairman Harvey M. Krueger
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the last three fiscal years, cash
compensation paid by the Company, as well as certain other compensation paid or
earned for those years, to the Company's Chief Executive Officer and the four
other most highly compensated executive officers of the Company in all
capacities in which they served.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------
AWARDS
---------- PAYOUTS
ANNUAL COMPENSATION SECURITIES ----------
--------------------------------------- UNDERLYING LTIP
NAME AND FISCAL SALARY OTHER ANNUAL OPTIONS/ PAYOUTS ALL OTHER
PRINCIPAL POSITION YEAR ($) BONUS($) COMPENSATION($) SARS(#)(1) ($) COMPENSATION
- -------------------------------- ------ -------- -------- ----------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gordon Zacks: 1995 $450,000 $ 0 $41,953(2)(3)(4) 0 $ 0 $1,456(5)
Chairman of the Board, 1994 $450,000 $ 0 $41,130(2)(4)(6) 79,999 $ 0 $ 0
Chief Executive Officer 1993 $400,000 $103,200 $33,422(2)(4)(7) 44,444 $ 0 $ 0
and President
Charles E. Ostrander: 1995 $235,000 $ 0 $13,782(2)(3) 0 $ 11,620 $ 0
Executive Vice President-- 1994 $235,000 $ 0 $10,162(2)(6) 44,443 $ 0 $ 0
Sales & Marketing 1993 $210,000 $ 43,344 $ 4,922(2)(7) 22,222 $ 0 $ 0
Christian Galvis: 1995 $190,000 $ 0 $10,427(2)(3) 0 $ 0 $ 613(5)
Executive Vice President-- 1994 $190,000 $ 0 $ 8,022(2)(6) 44,444 $ 0 $ 0
Operations 1993 $158,596 $ 30,960 $ 9,774(2)(7) 22,222 $ 0 $ 0
Richard L. Burrell: 1995 $151,500 $ 0 $19,143(2)(3) 0 $ 8,300 $ 507(5)
Senior Vice President-- 1994 $151,500 $ 0 $18,393(2)(6) 17,777 $ 7,200 $ 0
Finance, Treasurer and 1993 $141,512 $ 21,904 $14,026(2)(7) 17,777 $ 7,800 $ 0
Secretary
Daniel D. Viren: 1995 $141,539 $ 0 $12,321(2)(3) 0 $ 0 $ 469(5)
Senior Vice President-- 1994 $135,000 $ 0 $11,124(2)(6) 17,777 $ 0 $ 0
Administration 1993 $120,731 $ 17,802 $10,915(2)(7) 14,223 $ 0 $ 0
<FN>
- ---------------
(1) Reflects adjustments for 4-for-3 share split on September 1, 1995, and for
4-for-3 share split on June 1, 1994.
(2) "Other Annual Compensation" for (a) each of 1995, 1994 and 1993 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 each of 1995
and 1994 and for 1993, respectively, includes 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 1995 also includes the amounts of $13,972,
$9,600, $4,262, $9,600 and $7,785 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 $4,061,
$3,512 and $4,432 made during 1995, 1994 and 1993, 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
$2,432,
</TABLE>
9
<PAGE> 13
$2,103 and $2,183 made during 1995, 1994 and 1993, 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 1995,
1994 and 1993.
(5) Includes contributions (rounded to the nearest whole dollar) to the R. G.
Barry Corporation Deferred Compensation Plan (the "Deferred Compensation
Plan") on behalf of the named executive officers to match 1995 deferred
contributions (included under "Salary") made by them under the Deferred
Compensation Plan and interest deemed to have been earned with respect to
each executive officer's account under the Deferred Compensation Plan.
(6) "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.
(7) "Other Annual Compensation" for 1993 includes the amounts of $5,319, $740,
$3,609, $4,482 and $6,378 reflecting the amount of income deemed, under
applicable federal income tax regulations, to have been received by Messrs.
Zacks, Ostrander, Galvis, Burrell and Viren, respectively, as a result of
each of their personal use of cars provided by the Company.
GRANTS OF OPTIONS AND STOCK APPRECIATION RIGHTS
No options or stock appreciation rights were granted to the named executive
officers during the 1995 fiscal year.
OPTION AND STOCK APPRECIATION RIGHT EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to
unexercised options and stock appreciation rights held as of the end of the 1995
fiscal year by each of the named executive officers. No options or stock
appreciation rights were exercised during the 1995 fiscal year by such executive
officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SECURITIES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/
UNDERLYING OPTIONS/SARS AT FY-END(#)(1) SARS AT FY-END($)(2)(3)
OPTIONS VALUE --------------------------------- ----------------------------
NAME EXERCISED(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------ ----------- --------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gordon Zacks........... 0 N/A 37,776(4) 86,667(4) $ 432,690 $895,688
Charles E. Ostrander... 0 N/A 70,003(4)(5)(6) 48,889(4)(6) $1,026,311 $524,932
Christian Galvis....... 0 N/A 53,331(4)(6) 57,779(4)(6) $ 830,602 $678,277
Richard L. Burrell..... 0 N/A 19,554(4)(6) 24,888(4)(6) $ 284,691 $292,584
Daniel D. Viren........ 0 N/A 8,889(4)(6) 24,889(4)(6) $ 115,842 $292,599
<FN>
- ---------------
(1) Reflects adjustments for 4-for-3 share split on September 1, 1995, and for
4-for-3 share split 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 30, 1995
($19.50) less the exercise price of in-the-money options and stock
appreciation rights at the end of the 1995 fiscal year.
(4) Includes options granted under the R. G. Barry Corporation 1988 Stock Option
Plan (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 exercisable will become so in
</TABLE>
10
<PAGE> 14
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 corresponding 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 acquirer in the
change-in-control.
(6) Includes options granted under the R. G. Barry Corporation 1994 Stock Option
Plan (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 1/12% 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 associate
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
Compensation", 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:
PENSION PLANS TABLE
(MINIMUM BENEFIT FOR PERSONS WHO WERE PARTICIPANTS
IN THE SUPPLEMENTAL PLAN ON DECEMBER 31, 1988)
<TABLE>
<CAPTION>
FINAL ESTIMATED ANNUAL PENSION BENEFITS
AVERAGE BASED ON CREDITED YEARS OF SERVICE INDICATED
ANNUAL ------------------------------------------------------------
COMPENSATION 10 15 20 25 30
- ------------ -------- -------- -------- -------- --------
<S> <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
525,000 315,000 315,000 315,000 315,000 315,000
575,000 345,000 345,000 345,000 345,000 345,000
</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
11
<PAGE> 15
"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:
PENSION PLANS TABLE
<TABLE>
<CAPTION>
FINAL ESTIMATED ANNUAL PENSION BENEFITS
AVERAGE BASED ON CREDITED YEARS OF SERVICE INDICATED
ANNUAL ------------------------------------------------------------
COMPENSATION 10 15 20 25 30
- ------------ -------- -------- -------- -------- --------
<S> <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
525,000 131,250 196,875 262,500 315,000 315,000
575,000 143,750 215,625 287,500 345,000 345,000
</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 1995 fiscal year was $399,128, $222,153, $169,422, $149,073 and $123,164
for Messrs. Zacks, Ostrander, Galvis, Burrell and Viren, respectively. Messrs.
Zacks, Ostrander, Galvis, Burrell and Viren have approximately 40, 9, 5, 29 and
7 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 associate of the Company receives $12,000
annually for services rendered to the Company as a director except for Messrs.
Giovanello and Krueger who receive $17,000 annually for serving as directors. In
addition, each director who is not an associate of the Company receives $1,000
for each regular meeting and $500 for each telephonic meeting of the Company's
Board of Directors attended. All members of a committee of the Board, other than
the chairman of such committee, receive a fee of $500 for each attended meeting
that occurs on the same day as a Board meeting. All members of a committee of
the Board, including the chairman of such committee, receive (a) a fee of $1,000
for attending a committee meeting that does not occur on the same day as a Board
meeting and (b) a fee of $500 for participating in a telephonic meeting of the
committee. Directors who are also associates 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 1995, the Company accrued royalty payments (which were paid
in 1996) aggregating $95,253 pursuant to this agreement. Mrs. Melton is the
mother of Gordon Zacks.
12
<PAGE> 16
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 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
13
<PAGE> 17
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.
14
<PAGE> 18
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 New York Stock Exchange, 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 29, 1995. The Company's common shares were listed on the American
Stock Exchange from 1969 to July 6, 1995, on which date the Company's common
shares became listed on the New York Stock Exchange.
COMPARE 5 YEAR TOTAL CUMULATIVE RETURN
AMONG R. G. BARRY CORPORATION, NYSE AND
AMEX MARKET INDICES AND APPAREL INDUSTRY
<TABLE>
<CAPTION>
MEASUREMENT PERIOD NYSE MARKET APPAREL AMEX MARKET RGBARRY
(FISCAL YEAR COVERED) INDEX INDUSTRY INDEX CORPORATION
<S> <C> <C> <C> <C>
1990 $100.00 $100.00 $100.00 $ 100.00
1991 129.41 154.29 123.17 103.70
1992 135.50 179.03 124.86 218.51
1993 153.85 173.33 148.34 451.84
1994 150.86 159.34 131.04 439.49
1995 195.61 202.05 168.90 1027.13
</TABLE>
PROPOSAL TO APPROVE R. G. BARRY CORPORATION
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(ITEM 2 ON PROXY)
The Board of Directors of the Company has adopted and recommends that the
shareholders approve the R. G. Barry Corporation Stock Option Plan for
Non-Employee Directors (the "Directors Plan"), a copy of which is attached to
this Proxy Statement as Exhibit A. The following summary of certain provisions
of the Directors Plan is qualified in its entirety by reference to said Exhibit
A.
The principal purpose of the Directors Plan is to benefit the Company
through offering to the Company's Non-Employee Directors (those directors who
are not full-time associates of the Company or of any subsidiary of the Company)
a favorable opportunity to increase their ownership interest in the Company,
thereby providing them with a greater stake in the growth and prosperity of the
Company, enabling them to represent the viewpoint of other shareholders of the
Company more effectively and encouraging them to continue serving as directors
of the Company.
The Directors Plan will be administered by the Board of Directors. The
Board will interpret the Directors Plan and make all determinations necessary
for the administration of the Directors Plan. The Board will, however, have no
discretion to determine who will be eligible for the grant of options under the
Directors Plan,
15
<PAGE> 19
to set the number of options granted to any Non-Employee Director, to set the
number of common shares subject to options granted to any Non-Employee Director,
or to set the date and circumstances of grants of options, the term of such
options, the period within which such options may be exercised or the exercise
price of such options.
An aggregate of 50,000 common shares of the Company are available to be
purchased under the Directors Plan. The Directors Plan provides that each
Non-Employee Director will be automatically granted an option to purchase a
total of 5,000 common shares of the Company effective on the date on which the
shareholders of the Company approve the Directors Plan (the "Effective Date").
If the Directors Plan is not approved by the shareholders of the Company within
12 months of the date on which the Directors Plan was approved by the Board of
Directors, December 14, 1995, the Directors Plan will terminate without any
options having been granted thereunder. The Directors Plan also provides that
each Non-Employee Director who is newly elected or appointed to the Company's
Board of Directors after the Effective Date will be automatically granted an
option to purchase 5,000 common shares of the Company, effective on the third
business day following the date on which he is appointed or elected to the Board
of Directors. No person may be granted more than one such option pursuant to the
Directors Plan. No options have been granted under the Directors Plan as of the
date of this Proxy Statement. There are currently five Non-Employee Directors of
the Company who will each automatically be granted an option to purchase 5,000
common shares if the Directors Plan is approved by the shareholders at the
Annual Meeting.
In the event that common shares of the Company are increased through the
payment of a share dividend or the declaration of a share split or are changed
into or exchanged for a different kind of stock or other securities of the
Company or of another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares or
otherwise), an adjustment will be made in the number and kind of shares or other
securities subject to unexercised options and available for new options under
the Directors Plan. In addition, outstanding options will also be appropriately
amended as to price and other terms as may be necessary to reflect the foregoing
events.
No option may be granted under the Directors Plan subsequent to May 16,
2001, although options granted prior to that date will continue in effect after
that date until their date of expiration. In the event an option expires or is
terminated or cancelled unexercised as to any common shares, such released
common shares may again be optioned. Common shares subject to options may be
made available from unissued or reacquired common shares of the Company. Nothing
contained in the Directors Plan or any option granted pursuant thereto will in
itself confer upon any optionee any right to continue serving as a director of
the Company or interfere in any way with the removal of such director pursuant
to the articles of incorporation or regulations of the Company or applicable
law.
The price at which common shares may be purchased pursuant to an option is
the fair market value of the common shares on the date as of which the option is
granted, which will be equal to the last reported sales price of a common share
of the Company as shown on the national stock exchange on which the common
shares are traded (the Company's common shares are currently traded on the New
York Stock Exchange) on such date or, if there are no reported sales on such
date, then the last reported sales price of the Company's common shares on the
next preceding day on which a sale was transacted. On March 18, 1996, the last
reported sales price of the Company's common shares on the New York Stock
Exchange was $16 7/8 per share. Optionees must pay the full purchase price for
common shares being purchased in cash or by check payable to the Company within
ten business days after exercise or by delivery of common shares already owned
at the time of the exercise of the option. Each option will be for a term of ten
years from the date of grant and will become exercisable with respect to all of
the common shares subject to the option six months after the date of grant.
Options granted under the Directors Plan are not transferable by the
optionees otherwise than by will or the laws of descent and distribution. Such
options may be exercised only while an optionee is a director of the Company and
will expire immediately when an optionee ceases to be a director, except that
upon termination of director status by reason of death or permanent disability,
the optionee (or, if the optionee is not living, the
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<PAGE> 20
optionee's heirs, legatees or legal representatives) may exercise the option in
full at any time during its term prior to twelve months after the date of death
or permanent disability.
The Company understands that under existing federal income tax law, (i) no
income will be recognized by the optionee at the time of grant, (ii) upon
exercise of an option, the optionee will be required to treat as ordinary income
the difference on the date of exercise between the option price and the fair
market value of the common shares purchased, and the Company will be entitled to
a deduction equal to such amount, and (iii) assuming the common shares received
upon the exercise of an option constitute capital assets in the optionee's
hands, any gain or loss upon disposition of the common shares will be treated as
capital gain or loss, which will be long-term if the common shares have been
held longer than one year.
In the case of the exercise of an option using previously acquired common
shares, the Company understands that (i) with respect to the evenly exchanged
common shares (i.e., the new common shares received which are equal in number to
the old common shares surrendered), no gain or loss will be recognized by the
optionee at the time of exercise, the Company will not be entitled to a
deduction, and the basis and holding period of the equal number of new common
shares received in the exchange will be the same as the basis and holding period
of the surrendered common shares, and (iii) with respect to the additional
common shares received upon exercise, the optionee will be required to recognize
as ordinary income in the year of exercise an amount equal to the fair market
value on the date of exercise of the additional common shares received, less any
cash paid upon exercise, and the Company will be entitled to a deduction in a
corresponding amount. The basis of the additional common shares received will be
equal to their fair market value on the date of exercise and the holding period
for such common shares will begin on the date of exercise.
The Board of Directors may amend or discontinue the Directors Plan at any
time, provided that, if required to qualify the Directors Plan under Rule 16b-3
under the Exchange Act ("Rule 16b-3"), no amendment may be made more than once
every six months except to comply with changes in the Internal Revenue Code of
1986, as amended, and the Employee Retirement Income Security Act, and provided,
further, that if required to qualify the Directors Plan under Rule 16b-3, no
amendment that would materially increase the number of common shares that may be
issued under the Directors Plan, materially modify the requirements as to
eligibility for participation in the Directors Plan or otherwise materially
increase the benefits accruing to participants may be made without the approval
of the Company's shareholders. Notwithstanding the foregoing, no amendment or
discontinuance of the Directors Plan may, without the consent of the optionee,
change or impair any option previously granted thereunder.
The Board of Directors recommends a vote FOR this proposal. Unless
otherwise instructed, the common shares represented by each properly executed
proxy, which is returned in a timely manner and not revoked, will be voted for
approval of the Directors Plan. The affirmative vote of the holders of a
majority of the outstanding common shares of the Company, present in person or
by proxy, is necessary to approve the Directors Plan.
INDEPENDENT AUDITORS
The Board of Directors of the Company has not selected a firm to serve as
independent auditors for the Company for the 1996 fiscal year. As part of the
ongoing review of the auditing and tax services required by the Company, the
Audit Committee of the Board of Directors of the Company is in the process of
conducting a review and evaluation of the qualifications and capabilities of
several firms, including its current firm, to provide such services. Such review
has not been completed as of the date of this Proxy Statement. After completing
its review of each firm's qualifications and capabilities, the Audit Committee
will make its recommendation to the Board of Directors as to the appointment of
independent auditors for the Company for the 1996 fiscal year. The Board of
Directors will then make a final decision as to the appointment of independent
auditors.
KPMG Peat Marwick LLP is the firm which served as independent auditors for
the Company for the 1995 fiscal year. It is expected that representatives of
KPMG Peat Marwick LLP will be present at the
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<PAGE> 21
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
1997 ANNUAL MEETING
Any qualified shareholder who desires to present a proposal for
consideration at the 1997 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 26, 1996, 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 1997 Annual Meeting of
Shareholders.
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 1996 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(s) 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,
/s/ Gordon Zacks
Gordon Zacks,
Chairman of the Board, President
and Chief Executive Officer
March 26, 1996
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<PAGE> 22
EXHIBIT A
R. G. BARRY CORPORATION STOCK OPTION
PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE AND ELIGIBILITY. The purpose of this R. G. Barry Corporation
Stock Option Plan for Non-Employee Directors (the "Directors Plan") is to
enhance the value of the shareholders' investment in R. G. Barry Corporation
(the "Company") by encouraging those directors of the Company who are not
full-time employees of the Company or any of its subsidiaries (collectively, the
"Outside Directors" and individually, an "Outside Director") to acquire or
increase and retain a financial interest in the Company and thereby encouraging
the Outside Directors to remain as directors of the Company and to put further
maximum efforts for the success of the Company.
It is intended that stock options ("Nonqualified Stock Options"), other
than incentive stock options ("ISOs") (as defined by Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code")), may be granted to Outside
Directors under the Directors Plan.
2. ADMINISTRATION OF THE DIRECTORS PLAN.
(a) General. The Directors Plan shall be administered by the Board of
Directors of the Company (the "Board").
(b) Authority of the Board. The Board shall have full power and authority
in its discretion, subject to and not inconsistent with the express provisions
of this Directors Plan, to administer the Directors Plan and to exercise all the
power and authority specifically granted to it under the Directors Plan or
necessary or advisable, in the sole and absolute discretion of the Board, in the
administration of the Directors Plan including, without limitation, the
authority to: interpret and construe any provision of the Directors Plan or any
option granted hereunder; make all required or appropriate determinations under
the Directors Plan or any option granted hereunder; adopt, amend and rescind
such rules and regulations relating to the Directors Plan as the Board shall
determine in its discretion subject to the express provisions of the Directors
Plan; and make all other determinations deemed by it necessary or advisable for
the administration of the Directors Plan. Notwithstanding the preceding
sentence, the Board shall have no discretion to determine who will be eligible
for the grant of options under the Directors Plan, to set the number of options
granted to any Outside Director, to set the number of shares subject to options
granted to any Outside Director, or to set the date and circumstances of grants
of options, the term of such options, the period within which such options may
be exercised or the exercise price of such options.
(c) Interpretation. The interpretation and construction of any provision
of the Directors Plan or any option granted hereunder and all determinations by
the Board in each case shall be final, binding and conclusive with respect to
all interested parties, unless otherwise determined by the Board. No member of
the Board shall be personally liable for any action, failure to act,
determination, interpretation or construction made in good faith with respect to
the Directors Plan or any option or transaction thereunder.
(d) No Other Rights. Nothing contained in the Directors Plan, nor any
option granted pursuant to the Directors Plan, shall confer upon any Outside
Director covered by the Directors Plan any right to continue as a director of
the Company nor limit in any way the right of the Company to terminate his
status as a director at any time.
3. The Stock. The common shares available for issuance pursuant to the
grant of options under the Directors Plan shall consist of a maximum of 50,000
common shares, par value $1.00 per share (the "Common Stock"), of the Company,
subject to adjustment as provided in Section 6 hereof. All shares acquired upon
the exercise of options will be, in whole or in part, either Common Stock
purchased by the Company in the open market and held in the treasury of the
Company or authorized and unissued shares of Common Stock of the Company. Should
an option (or a portion thereof) expire for any reason without being exercised,
the shares subject to the portion of such option not so exercised shall be
available for subsequent grants under the Directors Plan.
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4. EFFECTIVE DATE AND TERMINATION OF PLAN. The Directors Plan was adopted
by the affirmative vote of the Board of Directors of the Company on December 14,
1995; provided, however, that, if the Directors Plan is not approved by the
shareholders of the Company within twelve months following such date of
adoption, the Directors Plan shall be deemed null and void and shall be of no
effect. The Directors Plan shall terminate upon the earlier of (i) the fifth
anniversary of the date on which this Directors Plan is approved by the
shareholders of the Company; or (ii) the date on which all shares available for
issuance under the Directors Plan have been issued pursuant to the exercise of
options granted hereunder; or (iii) the determination of the Board that the
Directors Plan shall terminate; or (iv) December 14, 1996, if the Directors Plan
has not been approved by the shareholders prior to such date. No options may be
granted under the Directors Plan after the termination date, provided that the
options granted and outstanding on such date shall continue to have force and
effect in accordance with the provisions of the instruments evidencing such
options. The date on which this Directors Plan is approved by the shareholders
of the Company is herein referred to as the "Effective Date."
5. GRANT, TERMS AND CONDITIONS OF OPTIONS.
(a) Grant of Options. Each person who is an Outside Director on the
Effective Date shall be granted an option to purchase 5,000 shares of Common
Stock effective on the Effective Date. Any individual who is a newly elected or
appointed Outside Director after the Effective Date shall be granted an option
to purchase 5,000 shares of Common Stock (subject to adjustment pursuant to
Section 6 hereof) effective on the third business day following the date of his
appointment or election to the Board.
(b) When Exercisable. An option shall vest and become nonforfeitable when,
and only if, the Outside Director who has received the option continues to serve
as a director of the Company for a period of six months following the date on
which the option was granted. An option shall thereafter be fully vested and
exercisable for the total number of shares subject to the option.
(c) Price. The option exercise price per share of each option shall be
equal to the fair market value of a share of Common Stock on the date of grant
(as defined by subsection (i) hereof), provided that, the option exercise price
shall be subject to adjustment only as provided in Section 6 hereof.
(d) Term of Options. Options shall be effective on and shall be of a term
of ten (10) years from the date of grant. Each such option shall be subject to
earlier termination as provided in subsection (f) hereof.
(e) Notice of Exercise and Payment. To the extent that it is exercisable,
an option shall be exercised by oral or written notice to the Company, stating
the number of shares with respect to which the option is being exercised and the
intended manner of payment. The date of the notice shall be the exercise date.
Any oral notice of exercise shall be confirmed in writing in all cases to the
Company no later than concurrently with payment for the shares as required
herein. Payment for the shares purchased shall be made in full to the Company
within ten (10) business days after the exercise date in cash or check payable
to the order of the Company in an amount equal to the option price for the
shares being purchased, in whole shares of Common Stock of the Company owned by
the optionee having a fair market value on the exercise date (as defined by
subsection (i) hereof) equal to the option price for the shares being purchased,
or a combination of Common Stock and cash or check payable to the order of the
Company, equal in the aggregate to the option price for the shares being
purchased. Payments of Common Stock shall be made by delivery of stock
certificates properly endorsed for transfer in negotiable form. The person or
persons exercising the option on behalf of an optionee shall be required to
furnish to the Company appropriate documentation that such person or persons
have the full legal right and power to exercise the option on behalf of and for
the optionee.
(f) Termination of Service.
(i) Except as otherwise provided herein, an optionee's option is
exercisable only by the optionee, is exercisable only while the optionee is
a director of the Company and then only if the option has become
exercisable by its terms and shall expire on the date the optionee ceases
to be a director of the Company.
(ii) In the event of the death of the optionee while a director of the
Company, any unexercised option of such optionee granted under the
Directors Plan (whether or not then exercisable by its terms)
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shall become immediately exercisable by his estate for a period ending on
the earlier of the fixed expiration date of such option or twelve months
after the date of death, after which period such option shall expire. For
purposes hereof, the estate of an optionee shall be defined to include the
legal representatives thereof or any person who has acquired the right to
exercise an option by reason of the death of the optionee.
(iii) In the case of any option granted under this Directors Plan, in
the event the optionee ceases to be a director of the Company by reason of
a permanent disability (as defined below), any such unexercised option of
such optionee (whether or not then exercisable by its terms) shall become
exercisable for a period ending on the earlier of the fixed expiration date
of such option or twelve months from the date the optionee ceases to be a
director after which period such option shall expire. For purposes hereof,
"permanent disability" shall be deemed to be the inability of the optionee
to perform the duties of a director of the Company because of a physical or
mental disability as evidenced by the opinion of a Company-approved doctor
of medicine.
(g) Transferability of Options. Any option granted hereunder shall be
transferable only by will or the laws of descent and distribution and shall be
exercisable during the lifetime of the optionee only by the optionee or by his
guardian or legal representative.
(h) Tax Withholding. Any option granted hereunder shall provide for
appropriate arrangements for the satisfaction by the Company and the optionee of
all federal, state, local or other income, excise or employment taxes or tax
withholding requirements applicable to the exercise of the option or the later
disposition of the shares of Common Stock or other property thereby acquired and
all such additional taxes or amounts as determined by the Board in its
discretion. "Appropriate arrangements" shall not include the right to withhold
Common Stock upon exercise of an option to satisfy withholding obligations.
(i) Fair Market Value. The "fair market value" of a share of Common Stock
on any relevant date for purposes of any provision of the Directors Plan shall
be the last reported sales price of a share of Common Stock as shown on the
national stock exchange on which the Company's Common Stock is then traded or,
if there are no reported sales on such date, then the last reported sales price
on the next preceding day on which such a sale was transacted.
(j) Option Agreement. Each option granted under the Directors Plan shall
be evidenced by an option agreement (an "Agreement") duly executed on behalf of
the Company and by the Outside Director to whom such option is granted and dated
as of the applicable date of grant. Each Agreement shall be signed on behalf of
the Company by an officer or officers delegated such authority by the Board.
Each Agreement shall comply with and be subject to the terms and conditions of
the Directors Plan. Any Agreement may contain such other terms, provisions and
conditions not inconsistent with the Directors Plan or Rule 16b-3 under Section
16 of the Securities Exchange Act of 1934, as amended ("Section 16b-3"), as may
be determined by the Board.
6. ADJUSTMENT AND CHANGES IN THE COMMON STOCK.
(a) Adjustments. In the event that the outstanding shares of Common Stock
of the Company shall be changed into or exchanged for a different kind of shares
of stock or other securities of the Company or of another corporation (whether
by reason of merger, consolidation, recapitalization, reclassification,
split-up, combination of shares or otherwise) or if the number of such shares of
Common Stock shall be increased through the payment of a stock dividend or the
declaration of a stock split, then there shall be substituted for or added to
each share of Common Stock of the Company theretofore appropriated or thereafter
subject or which may become subject to an option under the Directors Plan, the
number and kind of shares of stock or other securities into which each
outstanding share of Common Stock of the Company shall be so changed, or for
which each such share shall be exchanged, or to which each such share shall be
entitled, as the case may be. Outstanding options shall also be appropriately
amended as to price and other terms as may be necessary to reflect the foregoing
events. Fractional shares resulting from any adjustment in options pursuant to
this Section 6 shall be rounded to the nearest whole number of shares.
(b) Notice of Adjustment. Notice of any adjustment shall be given by the
Company to each holder of an option which shall have been so adjusted, provided
that such adjustment (whether or not such notice is
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given) shall be effective and binding for all purposes of the Directors Plan and
any instrument issued thereunder.
(c) Other Provisions. The grant of options under the Directors Plan shall
in no way affect the right of the Company to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
7. REGULATORY REQUIREMENTS.
(a) Registration of Shares. No option granted pursuant to the Directors
Plan shall be exercisable in whole or in part if at any time the Board shall
determine in its discretion that the registration or qualification of the shares
of Common Stock subject to such option on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the granting
of such option or the issue of shares thereunder, unless such registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board. Any option issued under the
Directors Plan in a transaction that is subject to Chapter 1707 of the Ohio
Revised Code shall not be exercisable except for shares of Common Stock which at
the time of exercise are exempt, are the subject of an exempt transaction or are
registered, under said Chapter 1707.
(b) Transfer of Shares. If shares of Common Stock subject to an option are
sold and transferred upon the exercise of thereof to a person who (at time of
such exercise or thereafter) controls, is controlled by or is under common
control with the Company, or are sold and transferred in reliance upon
exemptions under the Securities Act of 1933, as amended (the "Act"), or the
securities laws of any state, then upon such sale and transfer:
(i) Such shares shall not be transferable by the holder thereof, and
neither the Company nor its transfer agent or registrar, if any, shall be
required to register or otherwise to give effect to any transfer thereof
and may prevent any such transfer, unless the Company shall have received
an opinion from its counsel to the effect that any such transfer would not
violate the Act or the applicable laws of any state; and
(ii) The Company shall cause each stock certificate evidencing such
shares to bear a legend reflecting applicable restrictions on the transfer
thereof and may use the following or any appropriate legend for that
purpose:
SHARES EVIDENCED BY THIS CERTIFICATE ARE OWNED BY A PERSON WHO MAY BE
DEEMED AN AFFILIATE OF THE COMPANY WITHIN THE MEANING OF RULE 144
PROMULGATED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
SOLD, TRANSFERRED OR DISTRIBUTED EXCEPT PURSUANT TO (1) AN EFFECTIVE
REGISTRATION STATEMENT REGISTERING THE SHARES UNDER THE ACT OR (2) UNTIL
THE COMPANY HAS RECEIVED AN OPINION FROM ITS COUNSEL TO THE EFFECT THAT
SUCH TRANSFER DOES NOT VIOLATE THE ACT OR THE APPLICABLE LAWS OF ANY STATE.
(c) No Obligation. Nothing contained in the Directors Plan or elsewhere
shall be construed to require the Company to take any action whatsoever to make
exercisable any option granted under the Directors Plan or to make transferable
any shares of Common Stock issued upon the exercise of any such option.
8. AMENDMENT OF THE DIRECTORS PLAN. The Board may amend, terminate or
suspend the Directors Plan at any time, in its sole and absolute discretion;
provided, however, that if required to qualify the Directors Plan under Rule
16b-3, no amendment shall be made more than once every six months other than to
comport with changes in the Internal Revenue Code of 1986, as amended, or the
rules and regulations promulgated thereunder or the Employment Retirement Income
Security Act; and provided, further, that if required to qualify the Directors
Plan under Rule 16b-3, no amendment that would (a) materially increase the
number of shares of Common Stock that may be issued under the Directors Plan,
(b) materially modify the requirements as to eligibility for participation in
the Directors Plan, or (c) otherwise materially increase the
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benefits accruing to participants under the Directors Plan, shall be made
without the approval of the Company's shareholders.
9. SHAREHOLDER RIGHTS. An optionee shall have none of the rights of a
shareholder of the Company with respect to any shares subject to any option
granted hereunder until such individual shall have exercised the option and been
issued shares therefor.
10. SEVERABILITY. If any provision of the Directors Plan shall cause the
Directors Plan to violate any provision of any applicable law, rule or
government regulation or to be considered null and void, such provision shall be
severed from the Directors Plan and shall be null and void or shall be deemed
null and void ab initio, as shall be appropriate or necessary, and the Directors
Plan shall continue in full force and effect as if such provision were not part
of the Directors Plan.
11. USE OF PROCEEDS. The proceeds received by the Company from the sale of
shares pursuant to the options granted under the Directors Plans shall be used
for general corporate purposes.
12. EXPENSES. The expenses of the Directors Plan shall be borne by the
Company.
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R. G. BARRY CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 16, 1996
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 Thursday, May 16, 1996, at the Company's executive offices, 13405
Yarmouth Road, N.W., Pickerington, Ohio, at 2:30 P.M., local time, and any
adjournment(s) thereof, and to vote all of the common shares which the
undersigned is entitled to vote at such Annual Meeting or at any adjournment(s)
thereof:
1. To elect three directors to serve for terms of three years each.
/ / FOR election as directors of the Company of all of the nominees listed
below (except as marked to the contrary below).*
/ / WITHHOLD AUTHORITY to vote for all of the nominees
listed below.
Christian Galvis Charles E. Ostrander Gordon Zacks
*(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 R. G. Barry Corporation Stock Option Plan for Non-Employee
Directors.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the Annual Meeting or any adjournment(s)
thereof.
(Continued, and to be executed and dated on the reverse 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 NO. 2. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE ANNUAL
MEETING OR ANY ADJOURNMENT(S) 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
16, 1996 meeting and Annual Report to
Shareholders for the fiscal year ended
December 30, 1995.
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.
Dated , 1996
--------------------------------
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.)
