Document:

EX-10.1

 

EXHIBIT 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

     Executive Employment Agreement (this “Agreement”) dated as of February 7, 2006, between
R.G. Barry Corporation, an Ohio corporation (the “Company”), and Greg A. Tunney (the
"Executive”).

W I T N E S S E T H:

     WHEREAS, the Company desires to initially employ the Executive as Chief Operating
Officer and President of the Company and, by no later than August 7, 2006, to employ the
Executive as Chief Executive Officer and President of the Company;

     WHEREAS, the Company and the Executive desire to enter into this Agreement as to the terms of
his employment by the Company;

     NOW THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and
of other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

1. Position/Duties

     (a) During the Transition Employment Term (as defined in Section 2), the Executive shall serve
as the Chief Operating Officer and President of the Company, as set forth in Section 2. In such
capacities, the Executive shall report to the Chief Executive Officer. Immediately subsequent to
the Transition Employment Term, the Executive shall serve as the Chief Executive Officer and
President of the Company, as set forth in Section 2. Upon appointment as Chief Executive Officer,
the Executive shall no longer serve as Chief Operating Officer but shall continue in his position
as President. In his positions as Chief Executive Officer and President, the Executive shall
report exclusively to the Board of Directors of the Company (the “Board”). At the first regularly
scheduled meeting of the Board following the end of the Transition Employment Term, the Board (and
its Governance and Nominating Committee) will consider a proposal to increase the size of the Board
from nine (9) members to ten (10) members and to appoint the Executive to serve as a member of the
Board.

     (b) In each of his respective capacities the Executive shall have the duties, authorities and
responsibilities for such positions set forth in the Company’s Code of Regulations. In addition,
the Executive shall have the duties, authorities and responsibilities (to the extent not
inconsistent with the Company’s Code of Regulations) commensurate with the duties, authorities and
responsibilities of persons in similar capacities in similarly sized companies and such other
duties and responsibilities as the Chief Executive Officer or the Board, as applicable pursuant to
Section 1(a), shall designate that are consistent with the Executive’s positions under this
Agreement.

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     (c) During the Employment Term (as defined in Section 2), the Executive shall devote
substantially all of his business time (excluding periods of vacation and other approved leaves of
absence) to the performance of his duties with the Company, provided the foregoing shall not
prevent the Executive from (i) participating in charitable, civic, educational, professional,
community or industry affairs or, with prior written approval of the Board, serving on the boards
of directors or advisory boards of other companies, and (ii) managing his and his family’s personal
investments, so long as such activities do not materially interfere with the performance of his
duties hereunder or create a potential business conflict or the appearance thereof. If at any time
service on any board of directors or advisory board would, in the good faith judgment of the Board,
conflict with the Executive’s fiduciary duty to the Company or create any appearance thereof, the
Executive shall, as soon as reasonably practicable considering any fiduciary duty to the other
entity, resign from such other board of directors or advisory board after written notice of the
conflict is received from the Board. Service on the boards of directors or advisory boards
disclosed by the Executive to the Company on which he is serving as of the Effective Date (as
defined in Section 2) is hereby approved.

2. Employment Term

     The Executive’s initial term of employment under this Agreement (the “Transition Employment
Term”) shall begin on February 7, 2006 (the “Effective Date”) with respect to the Executive’s
position as Chief Operating Officer and President and shall end by no later than August 7, 2006,
unless such term is mutually extended by the parties in writing or sooner terminated as provided in
Section 5. With respect to the Executive’s position as Chief Executive Officer and President, the
Executive’s term of employment under this Agreement (the “CEO Employment Term”) shall begin by no
later than August 7, 2006 (the “CEO Effective Date") and end on the third (3rd)
anniversary of the CEO Effective Date, unless sooner terminated as provided in Section 5. The
Transition Employment Term and the CEO Employment Term shall be collectively referred to as the
"Employment Term” hereunder, unless expressly stated otherwise. Following the initial CEO
Employment Term, the Employment Term shall automatically renew for additional one-year periods
unless terminated pursuant to Section 5 or unless either party gives the other ninety (90)
days’ prior written notice of its intent not to renew.

3. Compensation and Related Matters

     (a) Annual Base Salary

     With respect to the Executive’s position of Chief Operating Officer and President, the Company
agrees to pay the Executive a base salary at an annual rate of not less than $400,000 before all
customary payroll deductions and withholdings. With respect to the Executive’s position of Chief
Executive Officer and President, the Company agrees to pay the Executive a base salary at an annual
rate of not less than $450,000 before all customary payroll deductions and withholdings. Base
salary shall be payable in accordance with the regular payroll practices of the Company, but not
less frequently than monthly. The base salary in effect for the Executive from time to time during
the Employment Term shall constitute “Base Salary” for purposes of this Agreement. The Executive’s
Base Salary shall be subject to annual review by the Board (or a committee thereof) and may be
increased, but not decreased, from time to time by the Board (or a committee thereof). No

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increase to Base Salary shall be used to offset or otherwise reduce any obligations of the
Company to the Executive hereunder or otherwise.

     (b) Signing Bonus

     Upon the Effective Date, the Executive shall be entitled to a signing bonus of $75,000,
the first half of which is payable one month after the Effective Date and the second half of
which is payable six months after the Effective Date.

     (c) Annual Performance Bonus

     During the Employment Term, the Executive shall be entitled to participate in the
Company’s 2005 R.G. Barry Management Bonus Plan, or any successor plan, pursuant to which the
Executive shall have the opportunity to earn an annual bonus measured against Company and
individual performance of between 25% (if the threshold performance level for such plan is
achieved) and 100% of Base Salary, with a target annual bonus of 50% of Base Salary.
Notwithstanding the foregoing, for 2006, the Executive’s bonus shall be no less than 25% of
Base Salary.

     (d) Equity Awards/Long Term Incentives

     (i) The Executive shall be granted on or as soon as possible after the Effective Date
a nonqualified stock option to purchase 100,000 common shares of the Company. The stock
option shall be granted under the Company’s 2005 Long-Term
Incentive Plan (the “Plan”) and
shall vest in equal installments on the first, second and third anniversaries of the grant
date. The option shall have an exercise price equal to the fair market value of the
Company’s common shares on the grant date, and a seven-year term. Subject to sections
12.03 and 12.04 of the Plan, the vested portion of the option shall remain exercisable for
twelve (12) months after the Executive ceases employment with the Company and each
subsidiary of the Company for any reason other than termination for Cause (as defined
below).

     (ii) Beginning January 1, 2007 and annually thereafter, the Executive shall be
entitled to participate in the Company’s Long-Term Incentive Plan (for so long as such
plan remains in effect for executives of the Company) in an amount determined annually by
the Board or a committee of the Board that is commensurate with his position, but in no
event shall such amount be less than that offered to any other executive of the Company.
Incentives shall be paid in the form of options, restricted stock units or cash, as
determined annually by the Board or a committee of the Board.

     (e) Other Awards

     During the Employment Term, the Executive shall be eligible to participate in any bonus
and other incentive compensation plans and programs available to the Company’s senior
executives at a level commensurate with his position, other than existing plans and programs
that have been terminated or frozen as to new participants as of the Effective Date.

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4. Employee Benefits

     (a) Benefit Plans

     Except for plans and programs that have been terminated or frozen as to new participants
as of the Effective Date, the Executive shall be entitled to participate in all benefit plans
of the Company that are available to the Company’s senior executives, including, but not
limited to, pension, thrift, profit sharing, 401(k), medical coverage, disability, education,
or other retirement or welfare benefits that the Company has adopted or may adopt, maintain or
contribute to for the benefit of its senior executives subject to satisfying the applicable
eligibility requirements and any other terms of any such plan. Such benefits, in the
aggregate, shall be no less favorable than the level of benefits provided to the Company’s
senior executives as of the Effective Date (without taking into account any terminated or
frozen plan); provided, however, that in the event there is a reduction of employee benefits
applicable to senior executives generally, nothing herein shall preclude the Company’s ability
to reduce the Executive’s benefits consistent with such reduction. Without limiting the
generality of the foregoing, during the Employment Term, the Company shall provide the
Executive with a variable life insurance policy providing a death benefit of at least $500,000.
The Company agrees to pay all costs and premiums associated with the policy during the
Employment Term and the Executive shall retain the discretion to allocate such premiums among
investment accounts offered under the policy. Any accrued cash value of the policy shall be
held solely in the name of the Executive and his named beneficiaries.

     (b) Vacations

     The Executive shall be entitled to annual paid vacation in accordance with the Company’s
policy applicable to senior executives, but in no event less than four (4) weeks per calendar
year (as prorated for partial years), which vacation may be taken at such times as the Executive
elects with due regard to the needs of the Company.

     (c) Perquisites

     The Company shall provide to the Executive all employee and executive perquisites which other
senior executives of the Company are generally entitled to receive, in accordance with Company
policy set by the Board from time to time, including country club and health club memberships
(initiation and dues). Notwithstanding the foregoing, the Company shall reimburse the Executive
for personal financial planning and tax services annually in an amount not to exceed $15,000 per
year, and the Company shall also provide Executive with an automobile allowance of $12,000 per
year. The Company shall have no right or claim to any automobile purchased by the Executive in
whole or in part with the automobile allowance. The Company further agrees to reimburse the
Executive for all reasonable professional fees incurred in connection with the preparation, review
and negotiation of this Agreement and related arrangements up to a maximum amount of $15,000.

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     (d) Business and Entertainment Expenses

     Upon presentation of appropriate documentation, the Executive shall be reimbursed in
accordance with the Company’s expense reimbursement policy for all reasonable and necessary
business and entertainment expenses incurred in connection with the performance of his duties
hereunder.

     (e) Relocation

     The Executive agrees to relocate to the Columbus, Ohio metropolitan area. The Executive shall
be entitled to relocation benefits in accordance with the Company’s relocation policy and such
additions thereto as mutually agreed to by the Executive and the Board (or a committee thereof).
Notwithstanding the foregoing, the Company shall reimburse the Executive for the costs of physical
packing and moving expenses for household goods and vehicles, temporary housing, house hunting
travel and customary closing costs on the sale of the Executive’s current residence and on the
purchase of a new residence in the Columbus, Ohio area. Until such time as the
Executive‘s immediate family relocates to the Columbus, Ohio area, Executive shall be
reimbursed for expenses incurred to visit family on weekends and holidays. The Company shall gross
up for tax purposes any income taxable to the Executive pursuant to the payment or benefits
provided under this Section 4(e) (other than for any gain on any sale of the Executive’s
residence), so that the economic benefit is the same to the Executive as if such payment or
benefits were provided on a non-taxable basis to the Executive. All amounts payable under this
Section 4(e) shall be subject to the Executive’s presentment to the Company of appropriate
documentation and otherwise in accordance with the terms of the Company’s relocation program (other
than reasonable costs that may exceed dollar limitations) applicable to senior executives.

5. Termination

     The Executive’s employment and the Employment Term shall terminate on the first of the
following to occur:

     (a) Disability

     Upon thirty (30) days‘ prior written notice by the Company to the Executive of
termination due to Disability, provided, however, that during such thirty (30) day period, the
Executive shall not have returned to the full-time performance of his duties and responsibilities
under this Agreement. For purposes of this Agreement, “Disability” shall mean a disability which
is determined to be total and permanent by a physician selected by the Company and reasonably
acceptable to the Executive or the Executive’s legal representative.

     (b) Death

     Automatically on the date of death of the Executive.

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     (c) Cause

     Upon written notice by the Company to the Executive of a termination for Cause.

          “Cause” shall mean any of the following:

     (i) gross negligence materially detrimental to the Company;

     (ii) conviction of, or a plea of guilty/nolo contendere to, a felony or a crime
involving dishonesty;

     (iii) willful and continued failure of the Executive to perform the duties or
responsibilities of the positions held by him and such failure continues for thirty (30)
days after the Executive’s receipt of written notice from the Company setting forth the
specifics of such failure, unless such failure is the result of ill health or physical or
mental disability; or

     (iv) intentional misconduct of the Executive which is materially and demonstrably
injurious to the Company.

     (d) Without Cause

     Upon written notice by the Company to the Executive of an involuntary termination without
Cause, other than for Disability or as a result of the Executive’s death.

     (e) Good Reason

     Upon written notice by the Executive to the Company that he intends to terminate his
employment hereunder for Good Reason and the failure of the Company, within ten (10) days of its
receipt of such written notice, to cure the condition cited by the Executive in such notice as
constituting Good Reason. For purposes of this Agreement, “Good Reason” means the occurrence of
any one of the following events unless the Executive specifically agrees in writing that such event
shall not be Good Reason:

     (i) (A) the assignment to the Executive of any duty or responsibility without the
Executive’s consent that is inconsistent in any material respect with the position
(including, without limitation, his status, office and titles), authority, duties or
responsibilities as contemplated in Section 1, or (B) any other action by the Company
without the Executive’s consent which results in a material diminution in such positions,
authority, duties or responsibilities, which in case of either (A) or (B) continues for ten
(10) days after written notice of such action from the Executive to the Company;

     (ii) any reduction, directly or indirectly, in the Executive’s Base Salary or any
material reduction in the extent of Executive’s participation in the plans referred to in
Section 3 or the extent of Executive’s entitlement to the employee benefits, expense
reimbursements, fringe benefits or perquisites referred to in Section 4 (other than plans
that are terminated or frozen as to new participants on the Effective Date or any

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     reduction that impacts all participants or that results pursuant to the terms of any such
benefit plan);

     (iii) the failure of the Company to assign this Agreement to a successor to the Company
or failure of a successor to the Company to explicitly assume and agree to be bound by this
Agreement in a writing delivered to the Executive;

     (iv) requiring the Executive to be principally based at any office or location
more than thirty (30) miles from the current corporate offices of the Company in
Columbus, Ohio;

     (v) any failure by the Company to appoint the Executive as Chief Executive
Officer of the Company on or before August 7, 2006; and

     (vi) any failure of the Executive to be appointed or elected as a member of the
Board at the first regularly scheduled meeting of the Board following commencement of
the CEO Employment Term and any failure of the Executive thereafter to be nominated
by the Board (or the appropriate Board committee) at each subsequent election of
directors at which the Executive is up for election.

     (vii) any other failure by the Company to comply with any term, condition or provision
of this Agreement which continues for ten (10) days after written notice of such failure
from the Executive to the Company.

     (f) Without Good Reason

     Upon thirty (30) days’ prior written notice by the Executive to the Company of the
Executive’s termination of employment without Good Reason (which the Company may, in its sole
discretion, make effective earlier than any notice date).

6. Consequences of Termination

     Subject to Section 7, the following amounts and benefits shall be due to the Executive upon
termination of employment during the Employment Term:

     (a) Disability

     If the Executive’s employment terminates by reason of Disability, the Company shall pay or
provide to the Executive (i) any unpaid Base Salary through the date of termination, any unpaid
signing bonus and any vacation accrued in accordance with Company policy; (ii) any unpaid bonus
earned with respect to any fiscal year ending on or preceding the date of termination; (iii)
reimbursement for any unreimbursed expenses incurred through the date of termination; (iv)
reimbursement for any unpaid relocation or related travel expenses (including the related
gross-up) in accordance with Sections 4(e) and 4(f); and (v) all other payments, benefits or
fringe benefits to which the Executive may be entitled under the terms of any applicable
compensation arrangement or benefit, equity or fringe benefit plan or program or grant or this
Agreement (collectively, the “Accrued Amounts”). In addition, the Executive shall

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receive a Pro Rata Bonus as defined in Section 6(d), payable at the time that annual bonuses
are next paid to other senior executives of the Company.

     (b) Death

     If the Executive’s employment terminates by reason of his death, the Executive’s estate (or
to the extent a beneficiary or beneficiaries has been designated, the named beneficiary(ies))
shall be entitled to any Accrued Amounts. In addition, the Executive’s beneficiary(ies) shall
receive a Pro Rata Bonus as defined in Section 6(d) below, payable at the time that annual bonuses
are next paid to other senior executives of the Company.

     (c) Termination for Cause or Without Good Reason

     If the Executive’s employment is terminated (i) by the Company for Cause, or (ii) by the
Executive without Good Reason, the Company shall pay to the Executive any Accrued Amounts.

     (d) Termination Without Cause or for Good Reason Prior to a Change in Control

     If the Executive’s employment is terminated by the Company (other than for Cause, Disability
or as a result of death) or by the Executive for Good Reason, and Section 8(b) is not applicable,
then:

     (i) The Company shall pay or provide the Executive with the Accrued Amounts.

     (ii) Any portion of the stock option granted to the Executive under Section 3(d) that
is unvested on the date of termination shall become fully vested and remain exercisable for
twelve (12) months following termination, subject to sections 12.03 and 12.04 of the Plan.

     (iii) Following such termination of employment, the Executive shall be entitled to
receive the following payments and benefits: (A) the Company shall continue to pay to
Executive his Base Salary at the rate in effect on the employment termination date for a
period of twelve (12) months following termination of employment in accordance with the
Company’s regular payroll policies, (B) subject to his co-payment of premiums, the
Executive shall be entitled to continue his participation for one (1) year following
termination of employment in all health and welfare plans in which the Executive (and
eligible dependents) is a participant at the time of such termination upon the same terms
and conditions (except for the requirements of the Executive’s continued employment) in
effect for active employees of the Company, and (C) the Company shall continue to pay the
premiums for the variable life insurance policy maintained by the Company for the Executive
for a period of one (1) year following termination of employment. The Executive shall also
receive an amount, payable at the time that annual bonuses are next paid to other senior
executives, equal to the greater of (x) the Executive’s target bonus opportunity in effect
at the time termination of employment occurred or (y) a pro-rata portion of the Executive’s
bonus for the performance year in which the Executive’s termination occurred (determined by
multiplying the amount the

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Executive would have received based upon actual performance had employment continued
through the end of the performance year by a fraction, the numerator of which is the number
of days during the performance year of termination that the Executive is employed by the
Company and the denominator of which is 365) (the “Pro Rata Bonus”). In the event that the
Executive obtains other employment that offers substantially similar or improved benefits,
as to any particular health or welfare plan, such continuation of coverage by the Company
for such similar or improved benefit under such plan under this Section (iii) shall
immediately cease, provided that in no event shall any COBRA (or COBRA-equivalent) benefits
cease but they shall become secondary to the extent permitted by law while such other
benefits are in effect. To the extent such coverage cannot be provided under the Company’s
health or welfare plans without jeopardizing the tax status of such plans, for underwriting
reasons (e.g., disability benefits) or because of the tax impact on the Executive, the
Company shall pay the Executive an amount equal to the value thereof; provided that the
“value” of benefits, if insured benefits, shall be the present value (based on the two
(2)-year U.S.Treasury rates as of the date of termination) of premiums expected for
coverage, and if not insurance benefits, shall be the present value of the expected net
cost (i.e., gross cost less any active employee premiums) to the Company to provide such
benefits. The continuation of health benefits under this subsection shall reduce and count
against the Executive’s rights under COBRA.

     (iv) Upon such termination of employment, the Company shall, at its sole expense as
incurred, provide the Executive with outplacement services, the scope and provider of
which shall be selected by the Executive in his sole discretion; provided, that the total
cost to the Company in providing such services shall not exceed $20,000.

7. Mitigation/Release

     The Executive shall not be required to mitigate the amount of any payment or benefit provided
for in Section 6 by seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for the Executive in Section 6 be reduced by any other 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, except as set forth in this Agreement. As a condition to receiving the
severance compensation provided for in Section 6, the Executive shall execute and deliver to the
Company a release of claims (other than claims arising under this Agreement) against the Company
in a form satisfactory to the Company so long as the Company executes and delivers to Executive a
comparable release of claims against the Executive.

8. Change in Control Benefits

     (a) Definition

     For purposes of this Agreement, “Change in Control” shall mean the first to occur of any of
the following events:

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     (i) any “person” (as defined in Section 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)), excluding for this purpose, (A) the Company or any
subsidiary of the Company, or (B) any employee benefit plan of the Company or any subsidiary
of the Company, or any person or entity organized, appointed or established by the Company
for or pursuant to the terms of any such plan which acquires beneficial ownership of voting
securities of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the Company’s then outstanding
voting securities; provided, however, that no Change in Control will be deemed to have
occurred as a result of a change in ownership percentage resulting solely from an acquisition
of securities by the Company; or

     (ii) persons who, as of the Effective Date, constitute the Board (the “Incumbent
Directors”) cease for any reason, including without limitation, as a result of a tender
offer, proxy contest, merger or similar transaction, to constitute at least a majority
thereof, provided that any person becoming a director of the Company subsequent to the
Effective Date shall be considered an Incumbent Director if such person’s election or
nomination for election was approved by a vote of at least fifty percent (50%) of the
Incumbent Directors; but provided further, that any such person whose initial assumption of
office is in connection with an actual or threatened election contest relating to the
election of members of the Board or other actual or threatened solicitation of proxies or
consents by or on behalf of a “person” (as defined in Section 13(d) and 14(d) of the Exchange
Act) other than the Board, including by reason of agreement intended to avoid or settle any
such actual or threatened contest or solicitation, shall not be considered an Incumbent
Director; or

     (iii) consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a “Business
Combination”), in each case, unless, following such Business Combination, all or
substantially all of the individuals and entities who were the beneficial owners of
outstanding voting securities of the Company immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of the combined
voting power of the then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the company resulting from such Business
Combination (including, without limitation, a company which, as a result of such transaction,
owns the Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the outstanding voting securities of the
Company; or

     (iv) approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

     (b) Effect

     If, within twelve (12) months after a Change in Control of the Company, the Executive’s
employment is terminated by the Company or a successor to the Company for any

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reason other than for Cause or Disability or due to the Executive’s death or if the
Executive terminates his employment for Good Reason, the Executive shall receive, within thirty
(30) days following his termination of employment, a lump sum cash payment equal to two (2) times
the sum of (i) his Base Salary at the rate in effect on the employment termination date plus (ii)
an amount equal to the Executive’s target bonus opportunity in effect at the time termination of
employment occurs. In addition, for a period of one (1) year following any such termination of
employment, the Executive shall be entitled to continue his participation in all health and
welfare plans in which the Executive (and eligible dependents) participated at the time of such
termination upon the same terms and conditions (except for the requirements of the Executive’s
continued employment) in effect for active employees of the Company, including any premium
co-payment requirements, and the Company shall continue to pay the premiums for the variable life
insurance policy maintained by the Company for the Executive. In the event that the Executive
obtains other employment that offers substantially similar or improved benefits, as to any
particular health or welfare plan, such continuation of coverage by the Company for such similar
or improved benefit under such plan under this subsection shall immediately cease, provided that
in no event shall any COBRA (or COBRA-equivalent) benefits or retiree benefits cease but they
shall become secondary to the extent permitted by law while such other benefits are in effect.
To the extent such coverage cannot be provided under the Company’s health or welfare plans
without jeopardizing the tax status of such plans, for underwriting reasons (e.g., disability
benefits) or because of the tax impact on the Executive, the Company shall pay the Executive an
amount equal to the value thereof; provided that the “value” of benefits, if insured benefits,
shall be the present value (based on the two (2)-year U.S. Treasury rates as of the date of
termination) of premiums expected for coverage, and if not insurance benefits, shall be the
present value of the expected net cost (i.e., gross cost less any active employee premiums) to
the Company to provide such benefits. The continuation of health benefits under this subsection
shall reduce and count against the Executive’s rights under COBRA. If the Executive’s employment
is terminated by the Company for Disability or Cause, if the Executive’s employment terminates
because of his death of if the Executive terminates his employment without Good Reason, and such
termination of employment occurs following a Change in Control, the effect of such termination
shall be governed by Section 6.

     (c) Excise Taxes

          Notwithstanding any other provision of this Agreement, if any payments or distributions in the
nature of compensation to be made to or for the benefit of the Executive, whether paid or payable
pursuant to this Agreement or otherwise (including the vesting of stock options and any other
events that result in a “payment in the nature of compensation” within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the “Code”)), are characterized as Excess
Parachute Payments within the meaning of Section 280G of the Code or any successor provision, then
the Company shall either (i) pay to the Executive an additional amount equal to the excise taxes
imposed by Section 4999 of the Code or any successor provision on the Executive’s Excess Parachute
Payments, if such procedure provides the Executive with an after-tax amount that is greater than
the after-tax amount produced under the following clause (ii) or (ii) reduce the amounts otherwise
payable to the Executive under this Agreement to the maximum amount that may be paid to the
Executive without any portion of any payment to the Executive under this or any other agreement
constituting an Excess Parachute Payment, if this procedure provides Executive with an after-tax
amount that is greater than the

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after-tax amount produced under clause (i) above. If clause (ii) applies, within ten (10) days of
the date of termination of employment, the Company shall notify the Executive of the amount of the
reduction. Within ten (10) days of receiving that information, the Executive may propose to the
Company how (and against which benefit or payment source) the reduction may be applied. If the
Company has not received such proposal from the Executive within such ten (10) day period, or if
the Company decides in its reasonable discretion not to reduce benefits in accordance with the
Executive’s proposal, the Company shall reduce the amounts paid to the Executive under this
Agreement proportionately. All after-tax amounts determined for purposes of this Section 8(c)
shall be made by a qualified tax advisor that is acceptable to the Executive, whose fees shall be
paid by the Company.

9. (a) Confidentiality

     The Executive acknowledges that the services which he will be providing to and for the Company
or its affiliates will give him access to, and the Executive hereby agrees to hold in a fiduciary
capacity for the benefit of the Company, any and all secret or confidential information, knowledge
or data relating to the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the Employment Term and which
shall not be in the public knowledge (other than by acts of the Executive or his representative in
violation of this Agreement). After the expiration or earlier termination of this Agreement and
the employment of the Executive hereunder, the Executive shall not, without prior written consent
or the Company, or unless required to do so by order of a court, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those designated by it. In no
event shall an asserted violation of the provisions of this Section 9(a) constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

     (b) Nonsolicitation

     During the Executive’s employment with the Company and for the one (1) year period thereafter,
the Executive agrees that he will not, directly or indirectly, individually or on behalf of any
other person, firm, corporation or other entity, knowingly solicit, aid or induce (i) any
managerial level employee of the Company or any of its subsidiaries or affiliates to leave such
employment in order to accept employment with, or render services to or with any other person,
firm, corporation or other entity unaffiliated with the Company or knowingly take any action to
materially assist or aid any other person, firm, corporation or other entity in identifying or
hiring any such employee (provided, that the foregoing shall not be violated by general advertising
not targeted at Company employees or by serving as a reference for an employee with regard to an
entity with which the Executive is not affiliated), or (ii) any customer of the Company or any of
its subsidiaries or affiliates to purchase goods or services then sold by the Company or any of its
subsidiaries or other affiliates from another person, firm, corporation or other entity or assist
or aid any other person or entity in identifying or soliciting any such customer.

     (c) Noncompetition

     During the Executive‘s employment hereunder and for the one (1) year period
thereafter, without the prior written consent of the Board, the Executive shall not, directly or
indirectly,

-16-

 

own, manage, operate, control, be employed by (whether as an employee, consultant,
independent contractor or otherwise, and whether or not for compensation) or render services to
any person, firm, corporation or other entity, in whatever form, that operates as a wholesaler of
one or more product lines that are directly competitive to one or more of the product lines of the
Company or any of its subsidiaries on the date of termination of employment. The geographic scope
of the restriction set forth in the immediately preceding sentence shall include the United States
and any other country in which the Company, including its subsidiaries, markets or sells such
competing product line or lines. This Section 9(c) shall not prevent the Executive from owning
not more than one percent (1%) of the total shares of all classes of stock outstanding of any
publicly held entity engaged in such business.

     (d) Equitable Relief and Other Remedies

     The parties acknowledge and agree that the other party’s remedies at law for a breach or
threatened breach of any of the provisions of this Section 9 would be inadequate and, in
recognition of this fact, the parties agree that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the other party, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which may then be
available.

     (e) Reformation

     If it is determined by a court of competent jurisdiction in any state that any restriction in
this Section 9 is excessive in duration or scope or is unreasonable or unenforceable under the
laws of that state, it is the intention of the parties that such restriction may be modified or
amended by the court to render it enforceable to the maximum extent permitted by the law of that
state.

     (f) Survival of Provisions

     The obligations contained in this Section 9 shall survive the termination or expiration of
the Executive’s employment under this Agreement with the Company and shall be fully enforceable
thereafter.

10. No Assignments

     (a) This Agreement is personal to each of the parties hereto. Except as provided in Section
10(b), no party may assign or delegate any rights or obligations hereunder without first
obtaining the written consent of the other party hereto.

     (b) The Company may assign this Agreement to any successor to all or substantially all of
the business and/or assets of the Company provided the Company shall require such successor to
expressly assume and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken place and shall
deliver a copy of such assignment to the Executive.

-17-

 

11. Notice

     For the purpose of this Agreement, notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of
delivery if delivered by hand, (b) on the date of transmission, if delivered by confirmed
facsimile, (c) on the first business day following the date of deposit if delivered by guaranteed
overnight delivery service, or (d) on the fourth business day following the date delivered or
mailed by United States registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

	 	 	 
	If to the Executive:

	 	At the address (or to the facsimile number) shown
on the records of the Company
	 
	 	 
	If to the Company:

	 	R.G. Barry Corporation
	 

	 	13405 Yarmouth Road N.W.
	 

	 	Pickerington, Ohio 43147

	 

	 	Fax No.: (614) 866-9787

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.

12. Section Headings; Inconsistency

     The section headings used in this Agreement are included solely for convenience and shall not
affect, or be used in connection with, the interpretation of this Agreement. In the event of any
inconsistency between the terms of this Agreement and any form, award, plan or policy of the
Company, the terms of this Agreement shall control; no provision in any policy, code, plan or
program related to a violation thereof being grounds for termination, or similar language, shall
result in a “cause” termination unless such violation is also Cause under this Agreement and the
provisions hereof are complied with, and the foregoing shall apply even if the Executive signs an
acknowledgment or otherwise agrees to the provisions of such policy, code, plan or program.

13. Severability

     The provisions of this Agreement shall be deemed severable, and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof.

14. Counterparts

     This Agreement may be executed in several counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and the same instrument. One or
more counterparts of this Agreement may be delivered by facsimile, with the intention that
delivery by such means shall have the same effect as delivery of an original counterpart
thereof.

-18-

 

15. Arbitration

     Any dispute or controversy arising under or in connection with this Agreement, other than
injunctive relief under Section 9(d) or damages for breach of Section 9, shall be settled
exclusively by arbitration, conducted before a single arbitrator in or around the Columbus, Ohio
area, administered by the American Arbitration Association (“AAA”) in accordance with its
Commercial Arbitration Rules then in effect. The single arbitrator shall be selected by the
mutual agreement of the Company and the Executive, unless the parties are unable to agree to an
arbitrator, in which case the arbitrator will be selected under the procedures of the AAA. The
arbitrator will have the authority to permit discovery and to follow the procedures that he or she
determines to be appropriate. The arbitrator will have no power to award consequential (including
lost profits), punitive or exemplary damages. The decision of the arbitrator will be final and
binding upon the parties hereto. Judgment may be entered on the arbitrator’s award in any court
having jurisdiction. Each party shall bear its own legal fees and costs and equally divide the
forum fees and cost of the arbitrator; provided, that if the Executive is a Prevailing Party (as
defined below), the Executive shall be entitled to recover all of his reasonable attorneys’ fees
and expenses incurred in connection with the dispute. A “Prevailing Party” is one who is
successful on any material substantive issue in the action and achieves either a judgment in such
party’s favor or some other affirmative recovery.

16. Indemnification

     The Company hereby agrees to indemnify the Executive and hold him harmless to the fullest
extent permitted by applicable law against and in respect to any and all actions, suits,
proceedings, claims, demands, judgments, costs, expenses (including reasonable attorneys’ fees),
losses and damages resulting from the Executive’s good faith performance of his duties and
obligations with the Company. This provision is in addition to any other rights of
indemnification the Executive may have.

17. Liability Insurance

     The Company shall cover the Executive under directors and officers liability insurance both
during and, while potential liability exists, after the term of this Agreement in the same amount
and to the same extent as the Company covers its other officers and directors.

18. Miscellaneous

     No provision of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in writing and signed by the Executive and such
officer or director as may be designated by the Board. 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. This
Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter
contained herein. No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and performance of this

-19-

 

Agreement shall be governed by the laws of the State of Ohio without regard to its conflicts
of law principles.

19. Code Section 409A

     It is intended that any amounts payable under this Agreement and the Company’s and the
Executive’s exercise of authority or discretion hereunder shall comply with the provisions of
Section 409A of the Code and the treasury regulations relating thereto so as not to subject the
Executive to the payment of interest and additional tax which may be imposed under
Section 409A. In furtherance of this interest, to the extent that any regulations or other
guidance issued under Section 409A of the Code after the date of this Agreement would result in
the Executive being subject to payment of interest and tax penalty under Section 409A, the parties
agree to amend this Agreement in order to bring this Agreement into compliance with Section 409A,
unless and to the extent that any such amendment could have a negative financial impact on the
Executive.

20. Full Settlement

     Except as set forth in this Agreement, the Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including, without limitation, set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the Executive or
others, except to the extent any amounts are due the Company or its subsidiaries or affiliates
pursuant to a judgment against the Executive.

21. Representations

     (a) The Company represents and warrants to the Executive that the execution of this Agreement
and the provision of all benefits and grants provided herein have been duly authorized by the
Company, including by action of the Board and, if required, the Compensation Committee of the
Board and, upon the execution and delivery of this Agreement by the Executive, this Agreement
shall be the valid and binding obligation of the Company, enforceable in accordance with its
terms, except to the extent enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally and by the effect of general
principles of equity (regardless of whether enforceability is considered in a proceeding in equity
or at law).

     (b) The Executive represents and warrants to the Company that he has the legal right to enter
into this Agreement and to perform all the obligations on his part to be performed hereunder in
accordance with its terms and that he is not a party to any agreement or understanding, written or
oral, which could prevent him from entering into this Agreement or performing all of his
obligations hereunder.

22. Withholding

     The Company may withhold from any and all amounts payable under this Agreement such federal,
state and local taxes as may be required to be withheld pursuant to any applicable law or
regulation.

-20-

 

23. Public Announcements

     The Company shall give the Executive a reasonable opportunity to review and comment on any
public announcement (including any filing with a governmental agency or stock exchange) relating
to this Agreement or the Executive’s employment by the Company.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.

	 	 	 	 	 	 	 
	 	 	R. G. BARRY CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Thomas M. Von Lehman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Thomas M. Von Lehman	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	CEO	 	 
	 

	 	 	 	 	 	 
	 
	 	/s/ Greg Alan Tunney	 	 
	 	 	 	 	 
	 	 	GREG A. TUNNEY	 	 

-21-EX-10.2

 

EXHIBIT 10.2

THIS FORM OF AWARD AGREEMENT IS PART OF A PROSPECTUS COVERING SECURITIES REGISTERED UNDER THE

SECURITIES ACT OF 1933

R. G. BARRY CORPORATION

2005 LONG-TERM INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

GRANTED TO GREG A. TUNNEY ON FEBRUARY 7, 2006

R. G. Barry Corporation (“Company”) and its shareholders believe that their business interests are
best served by extending to you an opportunity to earn additional compensation based on the growth
of the Company’s business. To this end, the Company and its shareholders adopted the R. G. Barry
Corporation 2005 Long-Term Incentive Plan (“Plan”) as a means through which you may share in the
Company’s success. If you satisfy the conditions described in this Agreement and the Plan, your
Award will mature into an opportunity to buy common shares of the Company.

This Award Agreement describes many features of your Award and the conditions you must meet before
you may receive the value associated with your Award. To ensure you fully understand these terms
and conditions, you should:

	 	•	 	Carefully read the Plan to ensure you understand how the Plan works;
	 
	 	•	 	Read this Award Agreement carefully to ensure you understand what you must do to earn
your Award; and
	 
	 	•	 	Contact Daniel Viren at (614) 729-7290 if you have any questions about your Award.

Also, no later than 10 days after the Grant Date specified in the attached description of your
Award, you must return a signed copy of the Award Agreement to:

	 	 	 
	 

	 	Daniel Viren
	 

	 	R. G. Barry Corporation
	 

	 	13405 Yarmouth Road, N.W.
	 

	 	Pickerington, Ohio 43147

If you do not do this, your Award will be revoked automatically as of the date it was granted and
you will not be entitled to receive any amount on account of the retroactively revoked Award.

Section 409A of the Internal Revenue Code (“Section 409A”) imposes substantial penalties on persons
who receive some forms of deferred compensation. Your Award has been designed to avoid these
penalties. However, because of the uncertainty that currently exists with respect to the effect of
Section 409A on executive compensation arrangements, it is possible that your Award and the Award
Agreement must be revised in the future. As a condition of accepting this Award, you must agree to
accept those revisions, without any further consideration, even if those revisions change the terms
of your Award and reduce its value or potential value.

-22-

 

Nature of Your Award

You have been granted Nonqualified Stock Options (“NQSOs”) which you may exercise to purchase
common shares of the Company but only if you satisfy the conditions described in this Award
Agreement and pay the Exercise Price specified below. Federal income tax rules apply to NQSOs.
These and other conditions affecting your NQSOs are described in this Award Agreement, the Plan and
the Plan’s prospectus, all of which you should read carefully before you exercise the NQSOs.

No later than February 17, 2006 you must return a signed copy of this Award Agreement to:

	 	 	 
	 

	 	Daniel Viren
	 

	 	R. G. Barry Corporation
	 

	 	13405 Yarmouth Road, N.W.
	 

	 	Pickerington, Ohio 43147

If you do not do this, your Award will be revoked automatically as of the Grant Date.

Grant Date: Your NQSOs were issued on February 7, 2006.

Number of NQSOs: You have been granted 100,000 NQSOs.

You may buy one common share of the Company for each NQSO granted but only if you meet the
conditions described in this Award Agreement and in the Plan.

When You May Exercise Your Award and When It Will Expire

Normal Vesting Date: You may not exercise your NQSOs until they vest. Your NQSOs will vest (and
may be exercised) if you are an employee of the Company or a subsidiary of the Company on the
following dates (see below for a discussion of what happens if your employment terminates before
these dates or what might happen to accelerate the date your NQSOs vest):

     33,333 NQSOs, any time on or after February 7, 2007;

     33,333 NQSOs, any time on or after February 7, 2008; and

     33,334 NQSOs, any time on or after February 7, 2009.

This does not mean that you must exercise your NQSOs on these dates; these are merely the first
dates that you may do so. However, your NQSOs will expire unless they are exercised before the
Expiration Date.

-23-

 

How Your NQSOs Might Vest (and Be Exercisable) Earlier Than The Normal Vesting Date: Regardless of
the normal vesting schedule just given, your NQSOs will fully vest (and may be exercised) if there
is a Business Combination (as defined in the Plan). If this happens, your NQSOs will be fully
exercisable as of the date of the Business Combination. In addition, while your Executive
Employment Agreement with the Company dated February 7, 2006 remains in effect (or if any other
agreement between you and the Company so provides), your NQSOs will become fully vested (and may be
exercised) if your employment with the Company is terminated by the Company (other than for Cause,
Disability or the result of death) or by you for Good Reason (as those capitalized terms are
defined in your Executive Employment Agreement or any other employment agreement between you and
the Company).

How Your NQSOs May be Forfeited. If you do not exercise your NQSOs before the Expiration Date
(as defined below), they will expire and may not be exercised at a later date. In addition,

	 	•	 	If your employment with the Company terminates prior to the Expiration Date for Cause
(as defined in your Executive Employment Agreement or in any other employment agreement
between you and the Company or, if neither the Executive Employment Agreement nor any other
employment agreement is then in effect, as such term is defined in the Plan), your NQSOs
will expire on the date of termination and may not be exercised following termination of
employment.
	 
	 	•	 	If your employment with the Company terminates for any reason other than Cause (as
defined above), the NQSOs that are vested as of the date of termination may be exercised
for a period ending on the earlier of (i) twelve (12) months following the date of
termination of employment or (ii) the Expiration Date. If your NQSOs are not exercised
before such date, they will expire and may not be exercised at a later date.

Exercising Your Award

There are specific procedures you must follow to exercise an NQSO; if you do not follow these
procedures, your attempted exercise will be disregarded.

When you buy a common share of the Company by exercising an NQSO, the option exercised is cancelled
and no more shares may be bought through the cancelled option.

Expiration Date: If your NQSOs do not expire earlier as described above, they will expire on (and
may not be exercised after) the close of business on February 6, 2013.

If you do not exercise your NQSOs before the Expiration Date, they will expire and may not be
exercised at a later date.

Exercise Price: You must pay $6.58 for each common share of the Company you buy when you exercise
an NQSO.

-24-

 

Minimum Number of NQSOs That You May Exercise: The smallest number of NQSOs that you may exercise
at any one time is 100 or, if fewer, the total number of your outstanding vested NQSOs.

Also, you may not exercise any NQSO to buy a fractional common share of the Company; the value of a
fractional share will be paid in cash.

Procedures for Exercising Your NQSOs: To exercise an NQSO, you must:

	 	•	 	Complete a copy of the Nonqualified Stock Option Exercise Form attached to this
Award Agreement (additional copies are available from Daniel Viren at (614) 729-7290 or
at the address given above); and
	 
	 	•	 	Pay the Exercise Price specified above (i.e., $6.58) for each share being purchased
by exercising an NQSO).

This must be done before your NQSOs expire (see section titled “When You May Exercise Your Award
and When It Will Expire” above).

You may pay the Exercise Price in one of three ways. These are:

	 	•	 	By check in the amount of the Exercise Price ($6.58) multiplied by the number of
NQSOs being exercised. This check must be made payable to “R. G. Barry Corporation.”
In this case, and as soon as administratively practicable, the Company will issue you a
number of shares equal to the number of NQSOs you are exercising.
	 
	 	•	 	Through a cashless exercise. In this case, upon exercise of the NQSOs you will
receive a reduced number of shares having a fair market value equal to the difference
between the fair market value of the shares subject to the NQSO being exercised and
their Exercise Price. If you elect this alternative, you will not have to spend any
cash to exercise your NQSOs but you will receive fewer shares than if you pay the
Exercise Price in cash.
	 
	 	•	 	Through an attestation process, which is available only if you have owned other
common shares of the Company for at least six months before the NQSOs are exercised.
In this case, you will surrender shares of the Company you have owned for at least six
months and the fair market value of these shares will be applied to pay the Exercise
Price. If you elect this alternative, you will not have to spend any cash to exercise
your NQSOs.

It is impossible now to calculate the effect of a cashless exercise or the attestation process on
the number of shares you will receive when your NQSOs are exercised. If you intend to use either
the cashless exercise or attestation process to exercise your NQSOs, you must contact Daniel Viren
when you complete the Nonqualified Stock Option Exercise Notice to be sure you understand the
effect of these forms of exercise.

-25-

 

Other Rules Affecting Your Award

Beneficiary Designation: You may name a Beneficiary or Beneficiaries to receive or to exercise any
vested NQSOs that are unpaid or unexercised when you die. This may be done only on the attached
Beneficiary Designation Form and by following the rules described in that form. This form need not
be completed now and is not required as a condition of receiving your Award. If you die without
completing a Beneficiary Designation Form or if you do not complete that form correctly, your
Beneficiary will be your surviving spouse or, if you do not have a surviving spouse, your estate.

Tax Withholding: The Company will withhold from other amounts owing to you, or require you to
remit to the Company, an amount sufficient to satisfy federal, state and local withholding tax
requirements resulting from your exercise of the NQSOs. If there are not other payments due to
you, the Company will defer the issuance of shares to you until the earlier of (i) thirty (30) days
after you deliver the Exercise Form or (ii) the date you remit the required amount. If you have
not remitted the required amount within thirty (30) days of the Company’s receipt of your Exercise
Form, the Company will permanently withhold from the shares otherwise issuable to you the minimum
amount required to be withheld to comply with applicable federal, state and local income, wage and
employment taxes and distribute the balance of the shares to you.

Transferring Your NQSOs: During your life your NQSOs may not be transferred to another person.
However, you may complete a Beneficiary Designation Form to name the person who may exercise your
NQSOs if you die before their Expiration Date. Also, the Committee may allow you to place your
NQSOs into a trust established for your benefit or for the benefit of your family. Contact Daniel
Viren at (614) 729-7290 or at the address given above if you are interested in doing this.

Governing Law: This Award Agreement will be construed in accordance with and governed by the laws
of the United States and of the State of Ohio (other than laws governing conflicts of laws).

Other Agreements: Also, your NQSOs will be subject to the terms of any other written agreements
between you and the Company including, without limitation, your Executive Employment Agreement.

Adjustments to NQSOs: Your Award will be adjusted, if appropriate, to reflect any change to the
Company’s capital structure (e.g., the number of your NQSOs and the Exercise Price will be adjusted
to reflect a stock split).

Other Rules: Your NQSOs also are subject to more rules described in the Plan and in the Plan’s
prospectus. You should read both these documents carefully to ensure you fully understand all the
terms and conditions of this Award. In the event of a conflict between this Award Agreement and
the Plan, the Plan will control.

-26-

 

Tax Treatment of Your Award

The federal income tax treatment of your NQSOs is discussed in the Plan’s prospectus.

*****

You may contact Daniel Viren at (614) 729-7290 or at the address given above if you have any
questions about your Award or this Award Agreement.

*****

-27-

 

Your Acknowledgment of Award Conditions

Note: You must sign and return a copy of this Award Agreement to Daniel Viren at the address given
below no later than February 17, 2006.

By signing below, I acknowledge and agree that:

	 	•	 	A copy of the Plan has been made available to me;
	 
	 	•	 	I understand and accept the conditions placed on my Awards by this Award Agreement
and the Plan and understand what I must do to earn and exercise my Award;
	 
	 	•	 	I will consent (on my own behalf and on behalf of my beneficiaries and without any
further consideration) to any change to my Award or this Award Agreement so I can avoid
paying penalties under Section 409A of the Internal Revenue Code, even if those changes
affect the conditions of my Award and reduce its value or potential value; and
	 
	 	•	 	If I do not return a signed copy of this Award Agreement to the address shown below
on or before February 17, 2006, my Award will be revoked automatically as of the date
it was granted and I will not be entitled to receive any amount on account of the
retroactively revoked Award.

Greg A. Tunney

	 	 	 	 	 
	 	 	 
	(signature)
	 	 	 	 
	 
	 	 	 	 
	Date signed:	 	 
	 

	 

	 	 

A signed copy of this form must be sent to the following address no later than February 17, 2006.

	 	 	 
	 

	 	Daniel Viren
	 

	 	R.G. Barry Corporation
	 

	 	13405 Yarmouth Road N.W.
	 

	 	Pickerington, Ohio 43147

After it is received, the Company will acknowledge receipt of your signed agreement.

-i-

 

 

Company’s Acknowledgment of Receipt

A signed copy of this Award Agreement was received on                                         .

Greg A. Tunney

                     Has complied with the conditions imposed on the grant and the Award and the Award
Agreement remains in effect; or

                     Has not complied with the conditions imposed on the grant and the Award and the Award
Agreement is retroactively revoked as of the Grant Date because

                                                                                                                                                                                     .

describe deficiency

	 	 	 	 	 
	R. G. Barry Corporation	 	 
	 
	 	 	 	 
	By:
	 	 

	 	 
	 
	 	 	 	 
	Date:
	 	 

	 	 

-ii-

 

 

R. G. BARRY CORPORATION

2005 LONG-TERM INCENTIVE PLAN

NONQUALIFIED STOCK OPTION EXERCISE NOTICE

AFFECTING NONQUALIFIED STOCK OPTIONS ISSUED TO

GREG A. TUNNEY ON FEBRUARY 7, 2006

Additional copies of this Nonqualified Stock Option Exercise Notice are available from Daniel Viren
at (614) 729-7290 or at the address given below.

Also, Dan can answer any questions you have about completing this notice and exercising your NQSOs.

By completing this form and returning it to Daniel Viren at the address given below, I elect to
exercise the NQSOs described below:

Affected Options: This exercise relates to the following NQSOs (fill in the blanks):

     Grant Date: February 7, 2006

     Number of NQSOs being exercised with this Notice:                     

Exercise Price: The Exercise Price due is $                                        

     Note: This amount must be the product of $6.58 multiplied by the number of NQSOs being
exercised.

Payment of Exercise Price: I have decided to pay the Exercise Price by (check one):

                          Personal check payable to “R. G. Barry Corporation.”

                          Through a cashless exercise.

                          Through the attestation process.

Note:

	 	•	 	If you select the cash method of exercise, you must include payment with this
notice.
	 
	 	•	 	If you select either the cashless or attestation form of paying the Exercise Price,
you should contact Daniel Viren at (614) 729-7290 or at the address given below to be
sure you understand how your choice of payment will affect the number of common shares
of the Company you will receive.

-i-

 

 

Your Acknowledgement of Effect of Exercise

By signing below, I acknowledge and agree that:

	 	•	 	I fully understand the effect (including the investment effect) of exercising my
NQSOs and buying common shares of the Company and understand that there is no guarantee
that the value of these shares will appreciate or will not depreciate;
	 
	 	•	 	This election will have no effect if it is not returned to Daniel Viren at the
address given below before the Expiration Date specified in the Award Agreement under
which these NQSOs were issued; and
	 
	 	•	 	The common shares of the Company I am buying by completing this form will be issued
to me as soon as administratively practicable.

Greg A. Tunney

	 	 	 	 	 
	 
	 	 	 	 
	 	 	 
	(signature)
	 	 	 	 
	 
	 	 	 	 
	Date signed:	 	 
	 

	 

	 	 

A signed copy of this Nonqualified Stock Option Exercise Notice must be sent to the following
address no later than the NQSO’s Expiration Date:

	 	 	 
	 

	 	Daniel Viren
	 

	 	R. G. Barry Corporation
	 

	 	13405 Yarmouth Road, N.W.
	 

	 	Pickering, Ohio 43147

*****

Acknowledgement of Receipt

     A signed copy of this Nonqualified Stock Option Exercise Notice was received on:
                                        .

Greg A. Tunney:

                    
Has effectively exercised the NQSOs described in this notice; or

                     Has not effectively exercised the NQSOs described in this notice because

                                                                                                                        

describe deficiency

	 	 	 	 	 
	R. G. Barry Corporation	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 

	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 

	 	 

Note: Keep a copy of this form as part of the Plan’s permanent records.

-ii-

 

 

R. G. BARRY CORPORATION

2005 LONG-TERM INCENTIVE PLAN

BENEFICIARY DESIGNATION FORM

RELATING TO STOCK OPTION AWARD ISSUED TO

GREG A. TUNNEY ON FEBRUARY 7, 2006

Instructions for Completing This Form

You may use this form [1] to name the person you want to receive any amount due after your death
under the terms of the Award described above or [2] to change the person who will receive these
benefits.

There are several things you should know before you complete this form.

First, if you do not elect another Beneficiary, any amount due to you under the Plan when you die
will be paid to your surviving spouse or, if you have no surviving spouse, to your estate.

Second, your election will not be effective (and will not be implemented) unless you sign this form
this form.

Third, your election will be effective only if and when this form is completed properly and
returned to the Company.

Fourth, all elections will remain in effect until they are changed (or until all death benefits are
paid).

Fifth, if you designate your spouse as your Beneficiary but are subsequently divorced from that
person (or your marriage is annulled), your Beneficiary designation will be revoked automatically.

Sixth, if you have any questions about this form or if you need additional copies of this form,
please contact Daniel Viren at (614) 729-7290 or at the address given below.

 3

 

 

Designation of Beneficiary

1.01 Primary Beneficiary:

	 	 	 	 	 
	 	 	I designate the following persons as my Primary Beneficiary or Beneficiaries to receive any
	 

	 	 	 	amount due after my death under the terms of the Award described above. This
	 

	 	 	 	benefit will be paid, in the proportion specified, to:

	 	 	 	 	 	 	 	 	 
	                    

	 	 	%	 	 	to
	 	                                                                                                                        
	 

	 	 	 	 	 	 	 	           (Name)                                                                       (Relationship)
	Address:                                                                                                                                            
	 
	 	 	 	 	 	 	 	 
	                    

	 	 	%	 	 	to
	 	                                                                                                                        
	 

	 	 	 	 	 	 	 	           (Name)                                                                       (Relationship)
	Address:                                                                                                                                            
	 
	 	 	 	 	 	 	 	 
	                    

	 	 	%	 	 	to
	 	                                                                                                                        
	 

	 	 	 	 	 	 	 	           (Name)                                                                       (Relationship)
	Address:                                                                                                                                            
	 
	 	 	 	 	 	 	 	 
	                    

	 	 	%	 	 	to
	 	                                                                                                                        
	 

	 	 	 	 	 	 	 	           (Name)                                                                       (Relationship)
	Address:                                                                                                                                            

1.02 Contingent Beneficiary

If one or more of my Primary Beneficiaries dies before I die, I direct that any amount due after my
death under the terms of the Award described above:

                     Be paid to my other named Primary Beneficiaries in proportion to the allocation given
above (ignoring the interest allocated to the deceased Primary Beneficiary); or

                     Be distributed among the following Contingent Beneficiaries.

	 	 	 	 	 	 	 	 	 
	                    

	 	 	%	 	 	to
	 	                                                                                                                        
	 

	 	 	 	 	 	 	 	           (Name)                                                                       (Relationship)
	Address:                                                                                                                                            
	 
	 	 	 	 	 	 	 	 
	                    

	 	 	%	 	 	to
	 	                                                                                                                        
	 

	 	 	 	 	 	 	 	           (Name)                                                                       (Relationship)
	Address:                                                                                                                                            
	 
	 	 	 	 	 	 	 	 
	                    

	 	 	%	 	 	to
	 	                                                                                                                        
	 

	 	 	 	 	 	 	 	           (Name)                                                                       (Relationship)
	Address:                                                                                                                                            

 

 

	 	 	 	 	 	 	 	 	 
	                    

	 	 	%	 	 	to
	 	                                                                                                                        
	 

	 	 	 	 	 	 	 	           (Name)                                                                       (Relationship)
	Address:                                                                                                                                            

Elections made on this form will be effective only after this form is received by the Company
and only if it is fully and properly completed and signed.

Name: Greg A. Tunney

Soc. Sec. No.:                                                                                                                  

Date of Birth:                                                                                                                   

Address:                                                                                                                            

                                                                                                                                          

	 	 	 	 	 
	Sign and return this form to Daniel Viren at the address given below	 	 
	 
	 	 	 	 
	 

Date

	 	 

Signature
	 	 

Return this signed form to Daniel Viren at the following address:

Daniel Viren

R. G. Barry Corporation

13405 Yarmouth Road, N.W.

Pickering, Ohio 43147

Received on:                                         

By:

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