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EXHIBIT 10
EXECUTIVE EMPLOYMENT CONTRACT
THIS
EXECUTIVE EMPLOYMENT CONTRACT (this "Agreement") is made on this
24th
day of February, 2005, by and between R. G.
BARRY CORPORATION, an Ohio
corporation having a principal place of
business located at 13405 Yarmouth Road,
N.W., Pickerington, Ohio 43147 (the
"Company"), and THOMAS M. VON LEHMAN, an
individual having an address of 223 Fourth
Avenue, Suite 1700, Pittsburgh,
Pennsylvania 15222 (the "Executive").
WITNESSETH:
WHEREAS,
the Executive has been employed by the Company since March 10,
2004 in the position of interim President
and interim Chief Executive Officer,
and the Company and the Executive are
currently parties to that certain
Executive Employment Contract dated March
10, 2004, as amended (the "Original
Employment Contract"), which expires on
March 9, 2005;
WHEREAS,
the Company desires by this Agreement to provide for the
continued employment of the Executive by
the Company as the President and Chief
Executive Officer of the Company ("the
Position") in accordance with the terms
and conditions hereof;
WHEREAS,
the Executive desires to continue his employment with the
Company
in the Position upon the terms and
conditions set forth herein;
WHEREAS,
except as otherwise expressly provided herein, the Company and
the Executive desire for this Agreement to
supersede the Original Employment
Contract in its entirety;
NOW,
THEREFORE, in consideration of the mutual covenants of the
parties
expressed in this Agreement, the parties
hereto make the following agreement,
intending to be legally bound hereby:
1.
EMPLOYMENT.
(a) Term.
The Company hereby agrees to continue the Executive in its
employ and Executive hereby agrees to
remain in the employ of the Company in
accordance with the terms and conditions
hereof, for the period commencing on
the date hereof and ending on March 31,
2006, unless sooner terminated as
hereinafter set forth (the "Term"). During
the Term, the Executive shall serve
as the President and Chief Executive
Officer of the Company. The Executive's
principal office shall be located in
Central Ohio. During the Term, the
Executive shall report to the Board of
Directors of the Company by reporting
directly to the specified Director(s) as
the point(s) of contact for the Board
of Directors. The initially specified
Directors are Edward Stan and Harvey
Weinberg.
(b)
Original Employment Contract Superseded. Upon the execution of
this
Agreement by the Company and the Executive,
this Agreement shall supersede the
Original Employment Contract in its
entirety and the Original Employment
Contract shall be of no further force or
effect except that the Executive shall
be entitled to receive the cash bonus
provided in Paragraph 3(d) of the Original
Employment Contract upon satisfaction of
the requirements set forth therein.
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2.
DUTIES AND
RESPONSIBILITIES OF THE POSITION.
(a) The
Executive will be primarily responsible for the operations of
the
Company including, but not limited to,
production, sourcing, planning,
distribution, marketing and sales. In
addition, the Executive shall oversee the
functional departments within the Company,
such as finance, communications,
information technology and other
administrative staff, and all such departments
shall report directly to the Executive.
(b) In
connection with the performance of his duties and
responsibilities,
the Executive shall have the authority and
the power to hire, reassign and fire
employees, professionals and consultants
and shall have the authority to
re-align the reporting relationships within
the Company, subject to prior Board
approval for actions affecting senior
executives. Board approval is required to:
(i) engage or make changes to the terms of
any engagement by the Company of The
Meridian Group or any other firm in which
the Executive has an interest or
affiliation; (ii) make any decision in
regard to the Company's independent
auditors; (iii) enter into any engagement
involving material expenditures; and
(iv) carry out programs or actions that
require specific Board approval under
applicable law or an established Board
policy as communicated to Executive.
(c)
Further, in connection with the performance of his duties and
responsibilities, the Executive shall have
the right to receive any and all
notices of, and to attend, any and all
meetings of the Board of Directors of the
Company and each of its committees, except
for certain matters for which the
Board or the committee may specifically ask
the Executive to excuse himself,
and, in addition thereto, to receive true
and correct copies of the minutes of
all such meetings.
(d) The
Executive agrees to devote reasonable attention and time during
normal business hours to the business and
affairs of the Company and, to the
extent necessary to discharge his duties
and responsibilities to the Company, to
use the Executive's reasonable best efforts
to perform faithfully and
efficiently such duties and
responsibilities. Notwithstanding the foregoing,
during the Term the Executive shall be
permitted, as he may determine in his
discretion, to spend up to 25% of his
working time on matters related to The
Meridian Group so long as such service to
The Meridian Group does not adversely
impair the ability of the Executive to
perform his duties under this Agreement
in any material respect.
3.
COMPENSATION. The terms of the Executive's total compensation
during
the Term shall be as follows:
(a) Base
Salary: The Executive shall be paid by the Company a base
salary
of THIRTY-SEVEN THOUSAND FIVE HUNDRED AND
NO/100 DOLLARS ($37,500.00) per month
(the "Base Salary") for the Term.
(b)
Options: In addition to the Base Salary, the Executive shall be
granted a non-qualified option for 100,000
of the Company's common shares at a
price per share equal to the closing price
per common share on the date the
option is granted (the "Option"). The
option shall be granted in 2005 at the
time that options are granted by the
Company to members of its management, but
in any event the option shall be granted no
later than March 15, 2005. The
Option shall vest in full on the earlier of
(1) December 31, 2005, if Executive
is employed by the Company on that day, (2)
the date on which the Company
terminates Executive's employment for any
reason other than for Cause (as
defined below), (3) the date on which
Executive terminates his employment for
Good Reason (as defined below), or (4) the
date of a Sale Transaction of the
Company (as defined in Paragraph 4 below).
Unless earlier terminated in
connection with a Sale Transaction or the
termination of employment, the Option,
if it becomes vested, shall be
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exercisable by the Executive, at his sole
discretion, for a period of three
years from the date of grant. The Option
will be granted pursuant to the
Company's 2002 Stock Incentive Plan and
shall be on the same general terms and
conditions and the same form of option
award agreement as options previously
granted to the Executive under such
plan.
(c)
Benefit Plans: The Executive shall be entitled to participate in
any
and all benefit plans made available to
other senior executive officers of the
Company (other than plans that have been
frozen or terminated).
(d) Cash
Bonus: For the 2005 fiscal year, the Executive shall be
entitled
to participate in the Company's Annual
Incentive Plan ("AIP"), as the same is
adopted by the Board of Directors at a
range of 20% to 80% of his annualized
Base Salary of FOUR HUNDRED AND FIFTY
THOUSAND AND NO/100 DOLLARS ($450,000),
with the level of 40% being the target if
the Annual Operating Plan is achieved.
If the Executive is employed by the Company
on December 31, 2005, and provided
that no bonus is paid or payable to the
Executive under the AIP as described in
the first sentence of this Paragraph 3(d),
the Executive shall nevertheless
receive a bonus payment of NINETY THOUSAND
AND NO/100 DOLLARS ($90,000.00). If
the Executive is terminated by the Company
without Cause or if he terminates his
employment for Good Reason prior to payment
of the 2005 bonus, if any, under the
AIP, the Executive shall be entitled to
receive the bonus payment that he would
have received pursuant to this Paragraph
3(d) had he remained an employee of the
Company through December 31, 2005.
4.
TRANSACTION SUCCESS FEE. In the event of a sale, merger,
consolidation
or any other business combination, in one
or a series of related transactions,
involving all or a substantial amount of
the business, securities or assets
(including related real estate assets) of
the Company or any recapitalization of
the Company or any spin-off, split-off or
other extraordinary dividend of cash,
securities or other assets to the equity
holders of the Company (a "Sale
Transaction") that is consummated during
the Transaction Period (as defined
below), the Company shall pay to Executive
a Sale Transaction Success Fee (as
defined below). Notwithstanding anything to
the contrary set forth herein, the
Executive shall not be entitled to receive
more than one Sale Transaction
Success Fee.
The
Transaction Period shall begin on the date of this Agreement and
end
on March 31, 2008 unless during the Term
Executive terminates his employment
with the Company other than for Good
Reason, or Executive is terminated for
Cause, in which event the Transition Period
shall end on September 10, 2006.
The Sale
Transaction Success Fee shall be one (1%) percent of the
aggregate amount of consideration ("Sale
Consideration") received or to be
received by the Company and/or its
shareholders (treating any shares issuable
upon exercise of options, warrants or other
rights of conversion as
outstanding), plus the amount of any debt
assumed, acquired, remaining
outstanding, retired or defeased or
preferred stock redeemed or remaining
outstanding in connection with the Sale
Transaction (the "Sale Transaction
Success Fee"). Such consideration may
include, but is not limited to, payments
in cash, stock, real and personal property,
warrants and options, fees, notes,
debentures or other debt assumption or
relief of any debt (including
guarantees), earn-outs, royalties, the
total amount of non-compete, employment,
consulting and lease agreements or
amendments thereto, and all other elements of
value exchanged, or to be exchanged, in
connection with the Sale Transaction.
The Sale
Transaction Success Fee shall be payable in cash at
consummation
of a Sale Transaction. For purposes of this
Agreement, a Sale Transaction shall
be deemed to have been consummated upon the
earliest of any of the following
events to occur: (a) the acquis
