AMENDED AND RESTATED
2005 LONG-TERM INCENTIVE PLAN
1.00 PURPOSE AND EFFECTIVE
DATE
1.01
PURPOSE. This Plan is
intended to foster and promote the Company’s long-term
financial success; to reward performance and to increase
shareholder value by providing Participants appropriate incentives
and rewards; to enable the Company to attract and retain the
services of outstanding individuals upon whose judgment, interest
and dedication the successful conduct of the Company’s
business is largely dependent; to encourage Participants’
ownership interest in the Company; and to align the interests of
management and directors with that of the shareholders.
1.02
EFFECTIVE DATE. This Plan
originally became effective on the Effective Date. This Plan is
hereby amended and restated effective as of October 28, 2008
to incorporate certain changes required by Code Section 409A
and to reflect other administrative changes.
When used in
this Plan, the following terms will have the meanings given to them
in this section unless another meaning is expressly provided
elsewhere in this document or clearly required by the context. When
applying these definitions and any other word, term or phrase used
in this document, the form of any term, word or phrase will include
any and all of its other forms.
ACT. The Securities Exchange Act of 1934, as
amended.
AWARD. Any Incentive Stock Option, Nonqualified Stock
Option, Restricted Stock, Restricted Stock Unit, Stock Appreciation
Right, share of Stock, Stock Unit and Cash Award. Grants of
Restricted Stock, Restricted Stock Units, Stock Units and Cash
Awards may, as determined by the Committee in its sole discretion,
constitute Performance-Based Awards, as described in
Section 11.00.
AWARD
AGREEMENT. The written or
electronic agreement between the Company and each Participant that
describes the terms and conditions of each Award and the manner in
which it will be settled if earned. If there is any conflict
between the terms of this Plan and the terms of the Award
Agreement, the terms of the Plan will prevail.
BENEFICIARY. The individual a Participant designates to
receive (or to exercise) any Plan benefits (or rights) that are
unpaid (or unexercised) when he or she dies. A Beneficiary may be
designated only by following the procedures described in
Section 15.02; neither the Company nor the Committee is
required or permitted to infer a Beneficiary from any other
source.
BOARD. The Company’s board of
directors.
BUSINESS
COMBINATION. A
transaction of the type described in Section 13.01.
BUSINESS
CRITERIA. One or more of
the criteria listed in Section 11.02.
CASH
AWARD. Any Award that is
granted to a Participant under Section 10.00 and which the
Award Agreement specifies will be paid in cash.
CAUSE. For purposes of this Plan and unless otherwise
specified in the Award Agreement, with respect to any Participant
who is an Employee:
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[1] Any act of fraud, intentional misrepresentation,
embezzlement, misappropriation or conversion of any Company or
Subsidiary asset or business opportunity;
[2] Conviction of, or entering into a plea of nolo
contendere to, a felony;
[3] Intentional, repeated or continuing violation of
any of the Company’s policies or procedures that occurs or
continues after notice to the Participant that he or she has
violated a Company policy or procedure; or
[4] Any breach of a written covenant or agreement
with the Company or any Subsidiary, including the terms of this
Plan.
CODE. The Internal Revenue Code of 1986, as amended
from time to time, and any applicable rulings or regulations issued
under the Code.
[1] In
the case of Awards to Directors, the entire Board; or
[2] In
the case of all other Awards, the Board’s compensation
committee which also is a “compensation committee”
within the meaning of Treas. Reg. Section 1.162-27(c)(4). The
Committee will be comprised of at least three individuals
[A] each of whom must be [I] an outside director, as
defined in Treas. Reg. Section 1.162-27(e)(3)(i) and
[II] a “non-employee director” within the
meaning of Rule 16b-3 under the Act and [B] none of
whom may receive remuneration from the Company or any Subsidiary in
any capacity other than as a director, except as permitted under
Treas. Reg. Section 1.162-27(e)(3).
COMPANY. R. G. Barry Corporation, a corporation organized
under the laws of Ohio, and all successors to it.
DIRECTOR. Each member of the Board or of the board of
directors of any Subsidiary who is not an Employee. For purposes of
applying this definition, a Director’s status will be
determined as of the Grant Date applicable to each
Award.
DISABILITY. Unless the Committee specifies otherwise in the
Award Agreement:
[1] With respect to any Award subject to Code
Section 409A, the Participant is [A] unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months; or [B] by reason of any
readily determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months
under an accident and health plan covering employees of the
Participant’s employer; or
[2] With respect to any other Award, as defined in
Code Section 22(e)(3).
DIVIDEND
EQUIVALENT RIGHT. A right
to receive the amount of any dividend paid on a share of Stock
underlying a Stock Unit, as provided in
Section 9.03.
EFFECTIVE
DATE. The date this Plan
was originally approved by the Board.
EMPLOYEE. Any individual who is a common law employee of
the Company or of any Subsidiary. A worker who is classified as
other than a common law employee but who is subsequently
reclassified as a common law employee of the Company or any
Subsidiary for any reason and on any basis will be treated as a
common law employee only from the date that reclassification occurs
and will not retroactively be reclassified as an Employee for any
purpose of this Plan.
EXERCISE
PRICE. The price, if any,
at which a Participant may exercise an Award.
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FAIR MARKET
VALUE. The value of one
share of Stock on any relevant date, determined as
follows:
[1] If
the shares are traded on an exchange (including the NASDAQ National
Market System), the reported “closing price” on the
relevant date if it is a trading day; otherwise on the next trading
day.
[2] If
the shares are traded over-the-counter with no reported closing
price, the mean between the lowest bid and the highest asked prices
on that quotation system on the relevant date if it is a trading
day; otherwise on the next trading day; or
[3] If
neither subsection [1] nor [2] of this definition applies, the fair
market value as determined by the Committee in good faith and
consistent with any applicable provisions under the Code; provided,
however, that, with respect to Nonqualified Stock Options and Stock
Appreciation Rights, fair market value shall be determined by the
reasonable application of a reasonable valuation method taking into
account all information material to the value of the Company within
the meaning of Code Section 409A.
FREESTANDING
SAR. A Stock Appreciation
Right that is not associated with an Option and is granted under
Section 7.00.
GRANT
DATE. The later of
[1] the date the Committee establishes the terms of an Award
or [2] the date specified in the Award Agreement.
INCENTIVE
STOCK OPTION. Any Option
granted under Section 5.00 that, on the Grant Date, meets the
conditions imposed under Code Section 422(b) and is not
subsequently modified in a manner inconsistent with Code
Section 422.
NONQUALIFIED
STOCK OPTION. Any Option
granted under Section 5.00 that is not an Incentive Stock
Option.
OPTION. The right granted under Section 5.00 to
purchase a share of Stock at a stated price for a specified period
of time. An Option may be either [1] an Incentive Stock
Option or [2] a Nonqualified Stock Option.
PARTICIPANT. Any Employee or Director to whom the Committee
grants an Award. Designation of a Participant in any year will not
require the Committee to designate that person to receive an Award
in any other year or, once designated, to receive the same type or
amount of Award granted to the Participant in any other year. The
Committee will consider the factors it deems pertinent to selecting
Participants and in determining the type and amount of their
respective Awards.
PERFORMANCE-BASED AWARD. An Award granted subject to
Section 11.00.
PERFORMANCE
PERIOD. The period over
which the Committee will determine if a Participant has met
conditions imposed on a Performance-Based Award.
PLAN. The R. G. Barry Corporation Amended and Restated
2005 Long-Term Incentive Plan, as amended from time to
time.
PLAN
YEAR. The Company’s
fiscal year.
PRIOR
PLANS. The R. G. Barry
Corporation 1997 Stock Incentive Plan and the R. G. Barry
Corporation 2002 Stock Incentive Plan.
RESTRICTED
STOCK. An Award granted
under Section 6.01.
RESTRICTED
STOCK UNIT. An Award
granted under Section 6.02.
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RESTRICTION
PERIOD. The period over
which the Committee will determine if a Participant has met
conditions placed on Restricted Stock or Restricted Stock
Units.
[1] In
the case of an Employee, Termination of Service after meeting the
definition of normal or early retirement under the Company’s
tax-qualified defined benefit retirement plan (or if the Company
does not maintain a tax-qualified defined benefit retirement plan
the normal or early retirement definition included in the
tax-qualified retirement plan that the Company most recently
maintained and which included a definition of normal and early
retirement), whether or not the Employee is then accruing (or ever
has accrued) a benefit under any plan; and
[2] In
the case of a Director, the Director’s Termination of Service
on the Board for any reason other than Disability or death after
completing one full term as a Board member.
STOCK. Common shares of the Company.
STOCK
APPRECIATION RIGHT (OR “SAR”). An Award granted under Section 7.00 that is
either a Tandem SAR or a Freestanding SAR.
STOCK
UNIT. An Award granted
under Section 9.00.
SUBSIDIARY. Any corporation, partnership or other form of
unincorporated entity of which the Company owns, directly or
indirectly, 50 percent or more of the total combined voting
power of all classes of stock, if the entity is a corporation; or
of the capital or profits interest, if the entity is a partnership
or another form of unincorporated entity.
TANDEM
SAR. An SAR that is
associated with an Option and which expires when that Option
expires or is exercised, as described in
Section 7.00.
TERMINATION
OF SERVICE (OR REFERENCES TO A PARTICIPANT’S SERVICE BEING
TERMINATED).
[1] With respect to the exercise or settlement of
any Award subject to Code Section 409A, a “separation
from service” with the Company and all Subsidiaries within
the meaning of Treas. Reg. Section 1.409A-1(h).
[2] Under all other circumstances, as applicable,
[a] termination of the employee-employer relationship
between a Participant and the Company and all Subsidiaries for any
reason, [b] with respect to an Employee of a Subsidiary, a
severance or diminution of the ownership relationship between the
Company and that entity after which that entity is no longer a
Subsidiary and after which that person is not an Employee of the
Company or any entity that then is a Subsidiary, or [c]
cessation of a Director’s service on the Board for any
reason. However, with respect to any such Award that is not an
Incentive Stock Option and unless the Committee specifies otherwise
either in the Award Agreement or subsequently, a Termination of
Service will not have occurred solely because an Employee becomes a
consultant to the Company or any Subsidiary but only if that
consultant is providing bona fide services to the Company or any
Subsidiary. Also, with respect to any such Award (including an
Incentive Stock Option), a Termination of Service will not have
occurred while the Employee is absent from active employment for a
period of not more than three months (or, if longer, the period
during which reemployment rights are protected by law, contract or
written agreement, including the Award Agreement, between the
Participant and the Company) due to illness, military service or
other leave of absence approved by the Committee.
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[1] The Committee is granted all powers appropriate
and necessary to administer the Plan. Consistent with the
Plan’s purpose, the Committee may adopt, amend and rescind
rules and regulations relating to the Plan, to the extent
appropriate to protect the interest of the Company and its
shareholders, and has complete discretion to make all other
decisions necessary or advisable for the administration and
interpretation of the Plan. Any action by the Committee will be
final, binding and conclusive for all purposes and upon all
Participants.
[2] The Committee (or the Board, as appropriate)
also may amend the Plan and all Award Agreements without any
additional consideration to affected Participants to the extent
necessary to avoid penalties arising under Code Section 409A,
even if those amendments reduce, restrict or eliminate rights
granted under the Plan or any Award Agreement (or both) before
those amendments.
3.02
DELEGATION OF DUTIES. In
its sole discretion, the Committee may delegate to any individual
or entity (including Employees) that it deems appropriate any of
its duties other than those described in Section 3.03[1] and
[2].
[1] Consistent with the terms of the Plan, the
Committee will:
[a] Decide which Employees and Directors may become
Participants;
[b] Decide which Participants will be granted
Awards;
[c] Identify the type of Awards to be granted to
each Participant;
[d] Specify the terms and conditions imposed on any
Awards granted;
[e] Develop the procedures through which an Award
may be exercised;
[f] Specify the circumstances under which the
Company may cancel an Award or reacquire any Award or shares of
Stock acquired through the Plan;
[g] Impose any other terms and conditions the
Committee believes are appropriate and necessary to implement the
purpose of this Plan; and
[h] Discharge the duties described in
Section 11.00 with respect to Performance-Based
Awards.
[2] The Committee may establish different terms and
conditions:
[a] For each type of Award;
[b] For Participants receiving the same type of
Award; and
[c] For the same Participant for each Award the
Participant receives, whether or not those Awards are granted at
different times.
[3] The Committee (or its delegate) will prepare and
deliver an Award Agreement to each affected Participant with
respect to each Award. The Award Agreement will
describe:
[a] The type of Award and when and how it may be
exercised or settled;
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[b] The effect of exercising an Award;
[c] Any Exercise Price associated with the
Award;
[d] Any conditions that must be met before the Award
may be exercised or settled;
[e] Any performance objectives imposed on
Performance-Based Awards as described in
Section 11.00;
[f] When and how Options and SARs may be exercised;
and
[g] Any other applicable terms and conditions
affecting the Award.
[4] No
Award subject to Code Section 409A will be granted under this
Plan to any person who is performing services only for an entity
that is not an affiliate of the Company within the meaning of Code
Section 414(b) or (c).
3.04
CONDITIONS OF PARTICIPATION. By accepting an Award, each Participant
agrees:
[1] To
be bound by the terms of the Award Agreement and the Plan and to
comply with other conditions imposed by the Committee;
and
[2] That the Committee (or the Board, as
appropriate) may amend the Plan and the Award Agreements without
any additional consideration to the extent necessary to avoid
penalties arising under Code Section 409A, even if those
amendments reduce, restrict or eliminate rights granted under the
Plan or any Award Agreement (or both) before those
amendments.
4.00 STOCK SUBJECT TO
PLAN
[1] Subject to Section 4.03, the number of
shares of Stock that may be issued under the Plan is the sum
of:
[b] The number of shares of Stock that were
authorized to be awarded under the Prior Plans but were not awarded
under the Prior Plans; plus
[c] The number of shares of Stock that were awarded
under the Prior Plans but which are subsequently forfeited under
the terms of the Prior Plans.
The terms of
the Prior Plans will continue to apply to all awards issued under
the Prior Plans while those awards are outstanding under the Prior
Plans. However, the terms of this Plan will apply to Awards issued
with respect to all shares of Stock described in Section
4.01[1][a], [b] and [c].
[2] The shares of Stock to be delivered under the
Plan may consist, in whole or in part, of treasury Stock or
authorized but unissued Stock not reserved for any other
purpose.
4.02
UNFULFILLED AWARDS. Any
Stock subject to an Award that, for any reason, is forfeited,
cancelled, terminated, relinquished, exchanged or otherwise settled
without the issuance of Stock or without payment of cash equal to
the difference between the Award’s Fair Market Value and its
Exercise Price may again be granted under the Plan and, in the
discretion of the Committee, may be subject to a subsequent
Award.
4.03
ADJUSTMENT IN CAPITALIZATION. If, after the Effective Date, there is a Stock
dividend or Stock split, recapitalization (including payment of an
extraordinary dividend), merger, consolidation, combination,
spin-
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off,
distribution of assets to shareholders, exchange of shares, or
other similar corporate change affecting Stock, the Committee will
appropriately adjust the number of Awards that may or will be
granted to Participants in any Plan Year, the aggregate number of
shares of Stock available for Awards under Section 4.01 or
subject to outstanding Awards (as well as any share-based limits
imposed under this Plan) the respective Exercise Prices and/or
limitations applicable to outstanding or subsequently granted
Awards and any other affected factor, limit or term applying to
Awards. Any decision of the Committee under this section will be
final and binding on all Participants and Beneficiaries.
Notwithstanding the foregoing, an adjustment pursuant to this
Section 4.03 shall be made only to the extent such adjustment
complies, to the extent applicable, with Code
Section 409A.
4.04
LIMITATIONS ON NUMBER OF SHARES ISSUABLE TO A
PARTICIPANT. The
aggregate number of shares of Stock with respect to which Awards
may be granted under this Plan to any Participant in any calendar
year will not exceed 200,000 (adjusted as provided in
Section 4.03), including Awards that are cancelled or deemed
to have been cancelled under Treas. Reg.
Section 1.162-27(e)(2)(vi)(B) during the Plan Year
granted.
[1] At
any time during the term of this Plan, the Committee may grant
[a] Incentive Stock Options to Employees who are employed by
the Company or any Subsidiary that is a “subsidiary
corporation” as defined under Code Section 424(f) and
[b] Nonqualified Stock Options to any Employee.
[2] The Committee may grant Nonqualified Stock
Options to each Director at any time, subject to any terms and
conditions imposed by the Committee on the Grant Date.
5.02 OPTION
PRICE. Except as provided
in Section 5.04[2] and subject to later adjustment of the
Exercise Price as provided in this Plan, each Option will bear an
Exercise Price that is not less than the Fair Market Value of a
share of Stock on the date it is granted.
5.03
EXERCISE OF OPTIONS. Options awarded to a Participant under
Section 5.01 may be exercised at the times and subject to the
restrictions and conditions (including a vesting schedule) that the
Committee specifies in the Award Agreement and to the terms and
conditions of the Plan. However:
[1] An
Option may not be exercised for a fraction of a share (instead,
fractional shares will be settled in cash);
[2] The Committee may prohibit a Participant from
exercising Options for fewer than the minimum number of shares
specified by the Committee in the Award Agreement but only if this
prohibition does not prevent a Participant from acquiring the full
number of shares of Stock for which Options are then exercisable;
and
[3] Unless the Committee specifies otherwise in the
Award Agreement, no Option may be exercised more than 10 years
after its Grant Date.
5.04
INCENTIVE STOCK OPTIONS. Notwithstanding anything in the Plan to the
contrary:
[1] The aggregate Fair Market Value of the Stock
(determined as of the Grant Date) with respect to which Incentive
Stock Options are exercisable for the first time by any Participant
during any calendar year (under all plans of the Company and all
Subsidiaries) will not exceed $100,000 [or the amount specified in
Code Section 422(d)], determined under rules issued under Code
Section 422;
[2] Each Incentive Stock Option granted to a
Participant who owns [as defined in Code Section 424(d)]
shares possessing more than 10 percent of the total combined
voting power of all classes of shares of the Company or any
Subsidiary, determined under rules issued under Code
Section 422, will bear an Exercise Price that is at least
110 percent of the Fair Market Value of a share of Stock on
the Grant Date;
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[3] No
Incentive Stock Option may be exercised more than 10 years
after it is granted; provided, however, that if the Participant
owns [as defined in Code Section 424(d)] shares possessing
more than 10 percent of the total combined voting power of all
classes of shares of the Company or any Subsidiary, determined
under rules issued under Code Section 422, no Incentive Stock
Option granted to such Participant may be exercised more than five
years after it is granted; and
[4] The maximum number of shares of Stock that may
be granted through Incentive Stock Options during the term of this
Plan will not be greater than 500,000.
5.05 PAYMENT
FOR OPTIONS. The
Committee will develop procedures through which a Participant may
pay an Option’s Exercise Price, including a cashless exercise
or tendering shares of Stock the Participant already has owned for
at least six months, either by actual delivery of the previously
owned shares of Stock or by attestation, valued at their Fair
Market Value on the exercise date, as partial or full payment of
the Exercise Price.
5.06
RESTRICTIONS ON TRANSFERABILITY. The Committee may impose restrictions on any
shares of Stock acquired through the exercise of an Option,
including restrictions related to applicable federal securities
laws, the requirements of any national securities exchange or
system on which Stock is then listed or traded, or any applicable
blue sky or state securities laws.
5.07
RESTRICTIONS ON RELOAD/REPRICING. Regardless of any other provision of this
Plan:
[1] Neither the Company nor the Committee may
“reprice” (as defined under rules issued by the
exchange on which the Stock then is traded or, if the Stock is not
then traded on an exchange, as defined under rules issued by the
New York Stock Exchange) any Award without the prior approval of
the shareholders; and
[2] No
Participant will be entitled to (and no Committee discretion may be
exercised to extend to any Participant) an automatic grant of
additional Awards solely in connection with any exercise or
settlement of an Award or otherwise.
6.00 RESTRICTED STOCK AND
RESTRICTED STOCK UNITS
6.01
RESTRICTED STOCK. Subject
to the terms of this Plan, the Committee may grant Restricted Stock
to Participants at any time during the term of this Plan subject to
the terms and conditions that the Committee specifies in the Award
Agreement and to the terms and conditions of the Plan.
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