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EXHIBIT 10.2
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EXECUTIVE EMPLOYMENT CONTRACT
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THIS EXECUTIVE EMPLOYMENT CONTRACT (this "Agreement") is made on
this
10th day of March, 2004, 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:
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WHEREAS, the Company has offered and the Executive has accepted
employment with the Company under the terms
and conditions set forth herein.
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) The
Company will employ the Executive, and the Executive
agrees to serve, as the interim Chief
Executive Officer and interim President of
the Company (the "Position"), in accordance
with the terms and conditions of
this Agreement, for a period of six (6)
months (the "Initial Term"), commencing
on the date of this Agreement (the
"Commencement Date"), and ending on September
9, 2004, unless sooner terminated as
hereinafter set forth. The Initial Term may
be extended for three (3) month intervals
(each an "Extension") upon the mutual
agreement of the Company and the Executive,
such agreement shall be in writing
and signed by both parties (the Initial
Term as such term may be extended by an
Extension is sometimes hereinafter referred
to as the "Term"). The Position and
the offices related thereto shall be
located in the Pickerington, Ohio office of
the Company. During the Term of this
Agreement, 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) It is
hereby acknowledged and agreed by the Company that this
Agreement and the employment of the
Executive hereunder shall not affect the
Company's decision whether to continue to
retain the services of The Meridian
Group in the restructuring efforts of the
Company. The Company hereby further
acknowledges that the President of The
Meridian Group is Margaret M. Good and
that she is the wife of the Executive. As
such, any and all invoices produced by
The Meridian Group for payment by the
Company shall be reviewed and approved by
the Chief Financial Officer of the Company,
without any input or approval from
the Executive.
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(c) It is
hereby further agreed by the Company that the prior
Chief Executive Officer, Mr. Gordon Zacks,
shall: (i) set up his principal
office outside of the headquarters building
of the Company; (ii) remain involved
in the affairs of the Company solely in his
capacity as a member of the Board of
Directors of the Company and as Chairman of
the Board and on those special
matters at the direction of the Executive;
and (iii) visit the Company's
locations only on official Board of
Directors matters or upon the specific
request of the Executive.
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.
(b) In
addition to the primary duties of the Position, 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. The Executive
shall also oversee all restructuring and
refinancing-related efforts or sale of
the Company; such efforts shall be subject,
however, to the approval of the
Board of Directors.
(c) In
connection with the performance of the duties and
responsibilities of the Position, 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) make changes to the terms of the
Company's engagement of The Meridian Group;
(ii) change 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 the rules of the New York
Stock Exchange, applicable law or an
established Board policy as communicated to
Executive.
(d) Further,
in connection with the performance of the duties and
responsibilities of the Position, 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.
(e) 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 the
duties and responsibilities of the
Position, to use the Executive's reasonable
best efforts to perform faithfully
and efficiently such duties and
responsibilities.
3.
COMPENSATION. The terms of the Executive's total compensation
during the Term shall be as follows:
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(a) Base Salary: The Executive shall be paid by the Company a
base salary of
FIFTY THOUSAND AND NO/100 ($50,000.00) DOLLARS per month
(the "Base Salary") for the Initial Term and the first Extension,
which
shall be subject to adjustment by the Board of Directors and
Executive
at the time of the second and any subsequent Extensions.
(b) Options: In addition to the Base Salary, the Executive
shall be granted on the Commencement Date a non-qualified option
for
100,000 shares of the Company's common stock at a price per share
equal
to the closing price per share of the Company's common stock on
the
Commencement Date (the "Initial Stock Option") and on September
10,
2004, if the parties have agreed to a first Extension, a
non-qualified
option for 50,000 shares of the Company's common stock at a price
per
share equal to the closing price per share of the Company's
common
stock on such grant date (the "Second Stock Option"). The Initial
Stock
Option shall vest in full on the earlier of (1) the last day of
the
Initial Term 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 (v) the date of a Sale of the Company (as defined below). The
Second
Stock Option, if granted, shall vest in full on the earlier of the
(1)
the last day of the first Extension if Executive is employed by
the
Company on that day, (2) the date during such first Extension on
which
Executive is terminated by the Company for any reason other than
for
Cause (as defined below), (3) the date during such first Extension
on
which Executive terminates his employment for Good Reason (as
defined
below), or (v) the date of a Sale of the Company (as defined
below).
Unless earlier terminated in connection with a Sale, the Initial
Stock
Option and the Second Stock Option, if they become vested, shall
be
exercisable by the Executive, at his sole discretion, for a period
of
two years from the date of grant. For purposes of this Section 3(b)
a
"Sale" of the Company shall refer to a merger, consolidation or
similar
transaction or a sale of all or substantially all of the assets of
the
Company.
Executive understands that the Initial Stock Option will be
comprised of two stock options: one stock option for 50,000 shares
will
be granted pursuant to the Company's 2002 Stock Incentive Plan, and
a
second stock option for 50,000 shares (the "Special Option") will
be
granted pursuant to a separate stock option agreement and not
pursuant
to a shareholder-approved stock option plan. The stock option
for
50,000 shares to be granted on the first day of the first
Subsequent
Term will be granted pursuant to the 2002 Stock Incentive Plan.
Executive understands that neither the Special Option nor the
shares
issuable upon exercise of the Special Option will be registered
under
the Securities Act of 1933 in reliance upon an exemption from
registration which may impose trading restrictions on the
option
shares. Executive also understand that the New York Stock
Exchange
requires the Company to issue a press release announcing the grant
of a
non-shareholder approved stock option as an inducement to
employment.
(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
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than plans that have been frozen or terminated and are no
longer
available to new executive officers).
(d) Cash Bonus: The Board will fix an EBITDA target for the
Company for fiscal year 2004 (the "EBITDA Target") at the March
meeting
of the Board of Directors. If the Company achieves the EBITDA
Target,
and Executive has served in the Position for the entire Initial
Term,
the Company
shall pay Executive a cash bonus in the amount of One
Hundred Thousand Dollars ($100,000). Such payment shall be made as
soon
as reasonably practicable after the appropriate EBITDA calculations
can
be made. If the Company achieves the EBITDA Target and Executive
has
served in the Position for the Initial Term and a first Extension,
he
shall be paid a cash bonus of $200,000 (but not in addition to
the
$100,000 amount provided above), said $200,000 amount to be paid
as
soon as reasonably practicable after the appropriate EBITDA
calculations are made. If Executive is terminated without Cause or
he
leaves for Good Reason during the Initial Term or the first
Extension,
he shall be paid a bonus as described above as if he had completed
the
term in which his employment terminated. If prior to the end of
the
fiscal year 2004 the Company is party to a Sale, Executive shall
be
paid a cash bonus in lieu of those described above in the amount
of
$100,000 payable upon the consummation of the Sale. The amounts
paid to
Executive pursuant to this paragraph shall be made without
deduction or
withholding unless the Company is required to make such deduction
or
withholding under applicable tax laws.
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 (each, a "Sale Transaction")
that is consummated during the
Transaction Period (as defined below), the
Company shall pay to Executive a
Transaction Success Fee (as defined
below).
The Transaction Period shall begin on the Commencement Date and end
on
the earlier of (1) any date during the
Initial Term or any Extension on which
Executiv
