Exhibit 10.4





Exhibit 10.4




CHANGE IN CONTROL AGREEMENT




BETWEEN




R. G. BARRY CORPORATION




AND




Greg Ackard




THIS CHANGE IN CONTROL AGREEMENT (this “Agreement”) is made to be effective as of
January 7, 2011 by and between Greg Ackard (the “Executive”) and R. G. Barry Corporation,
an Ohio corporation (the “Corporation”).



BACKGROUND




In order to induce the Executive to remain in the employ of the Corporation, the Corporation
wishes to provide the Executive with certain severance benefits in the event his employment with
the Corporation terminates subsequent to a Change in Control of the Corporation (as defined below)
under the circumstances described herein.




NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:



1. DEFINITIONS. For purposes of this Agreement, the following terms shall have the
following meanings unless otherwise expressly provided in this Agreement:



(i) Affiliate. An “Affiliate,” when used in reference to the Corporation,
means any entity controlling, controlled by or under common control with the Corporation or their
respective successors or assigns.



(ii) Change in Control. A “Change in Control” shall be deemed to have
occurred if (A) any “person” (as that term is used in §13(d) and §14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), including any “group” as such term is used in Section
13(d)(3) of the Exchange Act (an “Acquiring Person”)), shall hereafter acquire (or disclose
the previous acquisition of) beneficial ownership (as that term is defined in Section 13(d) of the
Exchange Act and the rules thereunder) of shares of the outstanding stock of any class or classes
of the Corporation which results in such person or group possessing more than 50.1% of the total
voting power of the Corporation’s outstanding voting securities ordinarily having the right to vote
for the election of directors of the Corporation (a “Control Acquisition”); or (B) as the
result of, or in connection with, any tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any combination of the foregoing transactions
(a “Transaction”), the persons who were directors of the Corporation immediately
before the completion of the Transaction shall cease to constitute a majority of the Board of
Directors of the Corporation or any successor to the Corporation.


 


 









 





(iii) Disability. The Executive’s employment shall be deemed to have been terminated
for “Disability” if, as a result of the Executive’s incapacity due to physical or mental
illness, the Executive shall have been absent from his or her duties with the Corporation on a
full-time basis for the entire period of four consecutive months, and within 30 days after written
notice of termination is given (which may occur before or after the end of such four-month period)
the Executive shall not have returned to the full-time performance of his or her duties.



(iv) Effective Period. The “Effective Period” means the 24-month period
following any Change in Control (even if such 24-month period shall extend beyond the term of this
Agreement or any extension hereof).



(v) Termination for Cause. The Corporation shall have “Cause” to terminate
the Executive’s employment hereunder upon (A) the willful and continued refusal by the Executive to
substantially perform his or her duties with the Corporation (other than any such refusal resulting
from his or her incapacity due to a Disability), (B) failure of the Executive to comply with any
applicable law or regulation affecting the Corporation’s business, (C) the commission by the
Executive of an act of fraud upon or an act evidencing bad faith or dishonesty toward the
Corporation, (D) conviction of the Executive of any felony or misdemeanor involving moral
turpitude, (E) the misappropriation by the Executive of any funds, property, or rights of the
Corporation, or (F) the Executive’s breach of any of the provisions of this Agreement.



(vi) Termination For Good Reason. “Good Reason” shall mean, unless the
Executive shall have consented in writing thereto, termination by the Executive of his employment
because of any of the following:



(A) a reduction in the Executive’s title, duties, responsibilities or status, as compared to
such title, duties, responsibilities or status immediately prior to the Change in Control or as the
same may be increased after the Change in Control;



(B) the assignment to the Executive of duties inconsistent with the Executive’s office on the
date of the Change in Control or as the same may be increased after the Change in Control;



(C) a reduction by the Corporation in the Executive’s base salary as in effect immediately
prior to the Change in Control or as the same may be increased after the Change in Control or a
reduction by the Corporation after a Change in Control in the Executive’s total compensation
(including bonus) so that the Executive’s total cash compensation in a given calendar year is less
than 90% of the Executive’s total compensation for the prior calendar year;


 


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(D) a requirement that the Executive relocate anywhere not mutually acceptable to the
Executive and the Corporation or the imposition on the Executive of business travel obligations
substantially greater than his or her business travel obligations during the year prior to the
Change in Control;



(E) the relocation of the Corporation’s principal executive offices to a location outside the
greater Columbus, Ohio area;



(F) the failure by the Corporation to continue in effect any material fringe benefit or
compensation plan, retirement plan, life insurance plan, health and accident plan or disability
plan in which the Executive is participating at the time of a Change in Control (or plans providing
the Executive with substantially similar benefits), the taking of any action by the Corporation
which would adversely affect the Executive’s participation in or materially reduce his or her
benefits under any of such plans or deprive the Executive of any material fringe benefit enjoyed by
him or her at the time of the Change in Control, or the failure by the Corporation to provide the
Executive with the number of paid vacation days to which he or she is then entitled on the basis of
years of service with the Corporation in accordance with the normal vacation policy in effect
immediately prior to the Change in Control; or




(G) any breach of this Agreement on the part of the Corporation.



(vii) Notice of Termination. A “Notice of Termination” shall mean a notice
which shall set forth in reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive’s employment.



(viii) Date of Termination. “Date of Termination” shall mean the date on
which the Executive’s employment terminates. For purposes of this Agreement, with regard to the
Executive’s employment, the term “termination” or any form thereof (whether or not capitalized)
shall mean a “separation from service” with the Corporation and all persons with whom the
Corporation would be considered a single employer under Sections 414(b) and (c) of the Internal
Revenue Code of 1986, as amended (the “Code”), within the meaning of Section 409A of the Code and
Treasury Regulation §1.409A-1(h).



2. TERM. Unless sooner terminated as herein provided, the term of this Agreement
shall commence on the date hereof and shall continue through January 7, 2014 (the “Termination
Date”). It is understood that no amounts or benefits shall be payable under this Agreement unless
(i) there shall have been a Change in Control during the term of this Agreement and (ii) the
Executive’s employment is terminated at any time during the Effective Period as provided in Section
5 hereof. It is further understood that the Executive shall be deemed an “employee at will” of the
Corporation and that the Corporation may terminate the Executive’s employment at any time before or
after a Change in Control, subject to the Corporation providing, if required to do so in accordance
with the terms hereof, the severance payments and benefits hereinafter specified, which payments
and benefits shall only be available
if a Change in Control has occurred prior to such termination. Prior to a Change in Control,
this Agreement shall terminate immediately if the Executive’s employment with the Corporation is
terminated for any reason.


 


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3. SERVICES DURING CERTAIN EVENTS. In the event any person (as that term is used in
Section 1(i) above) commences a tender or exchange offer, distributes proxy materials to the
Corporation’s shareholders or takes other steps to effect a Change in Control, the Executive agrees
he will not voluntarily terminate his employment with the Corporation other than by reason of his
retirement at normal retirement age, and will continue to serve as a full-time employee of the
Corporation until such efforts to effect a Change in Control are abandoned or terminated or until a
Change in Control has occurred.



4. TERMINATION FOLLOWING A CHANGE IN CONTROL. Any termination of the Executive’s
employment by the Corporation for Cause, Disability or otherwise or by the Executive for Good
Reason, which, in any case, occurs at any time during the Effective Period, shall be communicated
by written Notice of Termination to the other party.




5. COMPENSATION UPON TERMINATION FOLLOWING A CHANGE IN CONTROL.



(i) For Cause. If, at any time during the Effective Period, the Executive’s
employment shall be terminated for Cause, the Corporation shall pay to the Executive, not later
than 30 days following the Date of Termination, his or her full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given and the Corporation
shall not have any further obligations to the Executive under this Agreement.



(ii) Death or Disability. If, at any time during the Effective Period, the
Executive’s employment is terminated by reason of the Executive’s death or Disability, the
Corporation shall pay to the Executive or his or her legal representative, not later than 30 days
following the Date of Termination, his or her full base salary through the Date of Termination, and
the Corporation shall have no further obligation to the Executive or his or her legal
representative under this Agreement after the Date of Termination.



(iii) For Good Reason or Without Cause. If the Executive’s employment is terminated
at any time during the Effective Period by either: (a) the Corporation for any reason other than
for Cause, Disability or death, or (b) by the Executive for Good Reason, the Corporation shall pay
to the Executive, not later than 30 days following the Date of Termination:




(A) The Executive’s full base salary through the Date of Termination;



(B) In lieu of any further payments of salary to the Executive after the Date of Termination,
notwithstanding any dispute between the Executive and the Corporation as to the payment to the
Executive of any other amounts under this Agreement or
otherwise, a lump sum cash severance payment (the “Severance Payment”) equal to the
sum of (a) the Executive’s base salary at the rate in effect on the Termination Date or, if
greater, the Executive’s base salary in effect on the date of the Change in Control and (b) an
amount equal to the Executive’s target bonus opportunity in effect at the Termination Date or, if
greater, the Executive’s target bonus opportunity in effect on the date of the Change in Control.


 


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In addition to the payments provided for in (A) and (B) above, if the Executive’s employment
is terminated at any time during the Effective Period by either: (a) the Corporation for any reason
other than for Cause, Disability or death, or (b) by the Executive for Good Reason, and provided
that the Executive timely elects to continue benefits under COBRA, the Corporation shall make
available to the Executive and the Executive’s spouse and other dependents (who otherwise qualify
for coverage under the Corporation’s programs), for a period of twelve (12) months following such
termination of employment, at the same cost such benefits are provided to active full-time
employees of the Corporation or any Affiliate of the Corporation (including co-pays, coinsurance
and deductibles), all medical, prescription drug, dental and vision benefits provided to such
full-time employees.



Notwithstanding any provision contained herein, if, on the Date of Termination, the Executive
is a “specified employee” within the meaning of Section 409A of the Code and the Treasury
Regulations promulgated thereunder and as determined under the Corporation’s policy for determining
specified employees, the Severance Payment and any other amount or benefit under this Agreement
that is subject to Section 409A of the Code shall not be paid or provided (or commence to be paid
or provided) until the first business day of the seventh month following the Date of Termination
(or, if earlier, the Executive’s death). The payment made following this postponement period shall
include the cumulative amount of any amounts that could not be paid during such period.



(iv) The Executive’s right to receive payments under this Section 5 shall not decrease the
amount of, or otherwise adversely affect, any other benefits payable to the Executive under any
plan, agreement or arrangement relating to employee benefits provided by the Corporation.



(v) The Executive shall not be required to mitigate the amount of any payment provided for in
this Section 5 by seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Section 5 be reduced by any compensation earned by the Executive as
the result of employment by another employer or by reason of the Executive’s receipt of or right to
receive any retirement or other benefits after the date of termination of employment or otherwise.



(vi) If the payments provided under this Agreement, when combined with payments and benefits
under all other plans and programs maintained by the Corporation or an Affiliate, constitute
“parachute payments” within the meaning of Section 280G of the Code, the Corporation or its
successor will reduce the Executive’s payments and benefits under this Agreement and/or the other
plans and programs maintained by the Corporation so that the
Executive’s total payments and benefits under this Agreement and all other plans and programs
will be $1.00 less than the amount that would be considered a “parachute payment” but only to the
extent that such reduction provides the Executive with a greater after-tax economic value, taking
into account all federal, state and local taxes, including any additional tax imposed under Section
4999 of the Code, than payment without such reduction. Any reduction pursuant to this Section
5(vi) shall be made, after consultation with the Executive, in the manner that minimizes the
economic loss to the Executive as a result of such reduction and shall be made consistent with the
requirements of Section 409A of the Code.


 


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6. NON-COMPETITION; CONFIDENTIALITY



(i) Period. While the Executive is an employee of the Corporation and for a period of
one (1) year following the termination of the Executive’s employment for any reason, whether such
termination of employment occurs either before or after a Change in Control and whether such
termination is by the Corporation or the Executive and whether with or without Cause, the Executive
shall not, as a shareholder, member, employee, officer, director, partner, consultant or otherwise,
engage directly or indirectly in any business or enterprise which is in Competition with the
Corporation (as defined below).



(ii) Competition with the Corporation. For purposes of this Agreement, (A) the words
“Competition with the Corporation” shall mean any competition with the Corporation or any business
engaged in by the Corporation, and (B) a business or enterprise shall be deemed to be in
Competition with the Corporation if it is engaged in any business activity which is the same or
comparable to any business activity of the Corporation from time to time during the Executive’s
employment with the Corporation in any geographic area of the United States in which the
Corporation conducts or has conducted such business. Notwithstanding the foregoing, nothing herein
contained shall prevent the Executive from purchasing and holding for investment less than 5% of
the shares of any corporation the shares of which are regularly traded either on a national
securities exchange or in the over-the-counter market.



(iii) Interpretation of Covenant. The Executive agrees and acknowledges that the
covenant not to compete set forth in this Section 6 is being granted to the Corporation as an
inducement to it to enter into this Agreement with the Executive, and that the Corporation would
not be willing to enter into this Agreement unless the Executive agrees to such covenant not to
compete. The parties agree that the time period and geographic area of such covenant not to
compete are reasonable. In the event that any court determines that the time period or the
geographic area, or both of them, are unreasonable and that such covenant is to that extent
unenforceable, the parties hereto agree that the covenant shall remain in full force and effect for
the greatest time period and in the greatest geographic area that would not render it
unenforceable. The parties intend that this covenant shall be deemed to be a series of separate
covenants, one for each and every county of each and every state of the United States of America
where the covenant not to compete is intended to be effective.



(iv) Prohibition on Disclosure or Use. The Executive shall at all times keep and
maintain the confidentiality of all Confidential Information (as defined below), and the Executive
shall not, at any time, either during or subsequent to his or her employment with the Corporation,
either directly or indirectly, use any Confidential Information for the Executive’s own benefit or
divulge, disclose or communicate any Confidential Information to any person or entity in any manner
whatsoever, other than (A) to employees or agents of the Corporation having a need to know such
Confidential Information and only to the extent necessary to perform their responsibilities on
behalf of the Corporation and (B) in the performance of the Executive’s employment duties to the
Corporation.


 


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(v) Definition of Confidential Information. “Confidential Information” shall mean any
and all information (excluding information in the public domain) related to the business of the
Corporation, including without limitation all processes; inventions; trade secrets; computer
programs; engineering or technical data, drawings, or designs; manufacturing techniques;
information concerning pricing and pricing policies; marketing techniques; plans and forecasts; new
product information; information concerning suppliers; methods and manner of operations; and
information relating to the identity and location of all past, present and prospective customers.



(vi) Non-Solicitation. The Executive agrees that during the period of the Executive’s
employment by the Corporation and for a period of two years after the date of termination of such
employment for any reason, the Executive will not, either directly or through others, solicit,
induce, recruit, or encourage any employee of the Corporation to leave the employment of the
Corporation or hire or employee any such employee. The Executive agrees and acknowledges that
covenant set forth in this Section 6(vi) is being granted to the Corporation as an inducement to
it to enter into this Agreement with the Executive, and that the Corporation would not be willing
to enter into this Agreement unless the Executive agrees to such covenant. This Section 6(vi)
shall apply whether the Executive is terminated prior to or after a Change in Control, by the
Corporation with or without Cause or by the Executive for any reason.



(vii) Equitable Relief. The Executive’s obligations contained in this Section 6 are
of special and unique character which gives them a peculiar value to the Corporation, and the
Corporation cannot be reasonably or adequately compensated in damages in an action at law in the
event the Executive breaches such obligations. The Executive therefore expressly agrees that, in
addition to any other rights or remedies which Corporation may possess, the Corporation shall be
entitled to injunctive and other equitable relief in the form of preliminary and permanent
injunctions without bond or other security in the event of any actual or threatened breach of said
obligations by the Executive. The provisions of this Section 6 shall survive any termination of
this Agreement.



(viii) Definition of Corporation. For purposes of this Section 6, all references to
the Corporation shall include the Corporation and any Affiliate of the Corporation, or their
respective successors or assigns.


 


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7. SUCCESSORS; BINDING AGREEMENT.



(i) The Corporation will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or assets of
the Corporation and its subsidiaries to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Corporation would be required to perform it if no
succession had taken place. Failure of the Corporation to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and the Executive shall be
entitled to termination for Good Reason and shall receive the payments and benefits described in
Section 5(iii) of this Agreement. As used in this Agreement, “Corporation” shall mean the
Corporation as defined above and any successor to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section 7 or which otherwise becomes bound
by all the terms and provisions of this Agreement by operation of law. Nothing contained in this
Section 7 shall be construed to modify or affect the definition of a “Change in Control” contained
in Section 1 hereof.



(ii) This Agreement shall inure to the benefit of and be enforceable by (A) the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees, and (B) the Corporation and its successors and assigns.



8. ARBITRATION. Any dispute or controversy arising out of or relating to this
Agreement, or any breach thereof, shall be settled by arbitration in accordance with the rules of
the American Arbitration Association. The award of the arbitrator shall be final, conclusive and
nonappealable and judgment upon such award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator shall be an arbitrator qualified to serve in
accordance with the rules of the American Arbitration Association and one who is approved by both
the Corporation and the Executive. In the absence of such approval, each party shall designate a
person qualified to serve as an arbitrator in accordance with the rules of the American Arbitration
Association and the two persons so designated shall select the arbitrator from among those persons
qualified to serve in accordance with the rules of the American Arbitration Association. The
arbitration shall be held in Columbus, Ohio or such other place as may be agreed upon at the time
by the parties to the arbitration.



9. NOTICES. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given (i)
on the third day after being mailed by United States registered mail, return receipt requested,
postage prepaid, or (ii) on the following day if sent by a nationally registered overnight courier
service, addressed in the case of the Executive, to




Greg Ackard



(address on record in the Corporation)



and in the case of the Corporation, to the principal executive offices of the Corporation, provided
that all notices to the Corporation shall be directed to the attention of the Corporation’s Chief
Executive Officer with copies to the Secretary of the Corporation and to its Board of Directors, or
to such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.


 


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10. MISCELLANEOUS. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing signed by the
Executive and a duly authorized officer of the Corporation. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement
or representation, oral or otherwise, express or implied, with respect to the subject matter hereof
has been made by either party which is not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed by the laws (but
not the law of conflicts of laws) of the State of Ohio.



11. VALIDITY. The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.



12. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding of the
parties hereto with respect to the subject matter hereof and supersedes all prior negotiations,
discussions, writings, and agreements between them, including, without limitation, any change in
control agreement previously in effect between the Executive and the Corporation.



13. SECTION 409A OF THE CODE. It is intended that this Agreement comply with Section
409A of the Code and the Treasury Regulations promulgated thereunder (and any subsequent notices or
guidance issued by the Internal Revenue Service), and this Agreement will be interpreted,
administered and operated accordingly. Nothing herein shall be construed as an entitlement to or
guarantee of any particular tax treatment to the Executive.


 


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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the
date and year first above written.



	 	 	 	 	 
	 

	 	R. G. BARRY CORPORATION	 	 
	 
	 	 	 	 
	 

	 	/s/ Greg Tunney	 	 
	 

	 	 

By: Greg Tunney
	 	 
	 

	 	Title: President, CEO	 	 
	 
	 	 	 	 
	 

	 	/s/ Greg Ackard	 	 
	 

	 	 

Signature
	 	 
	 

	 	Greg Ackard	 	 







 


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