Document:

EX-10.1

Exhibit 10.1

AMENDMENT NO. 1 TO SHORTFALL AGREEMENT

     AMENDMENT No. 1 (this “Amendment”) dated as of December 18, 2008 to the Shortfall Agreement
dated as of November 25, 2008 by and between Maiden Lane III LLC, a Delaware limited liability
company (“ML III”), and AIG Financial Products Corp., a Delaware corporation (“AIG-FP”) (the
“Shortfall Agreement”).

RECITALS

     WHEREAS, the parties hereto desire to amend the Shortfall Agreement as set forth herein to
provide for the addition of certain derivative transactions to such agreement and to provide for
additional payments between ML III and AIG-FP;

     NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree as follows:

     Section 1. Definitions. Unless otherwise specifically defined herein, each term used herein
that is defined in the Shortfall Agreement has the meaning assigned to such term therein. Each
reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each
reference to “this Agreement” and each other similar reference contained in the Shortfall Agreement
shall, after this Amendment becomes effective, refer to the Shortfall Agreement as amended hereby.

     Section 2. Adjustment Date. The parties agree that December 18, 2008 shall be the
Adjustment Date under the Shortfall Agreement.

     Section 3. Amendment of Shortfall Agreement. Effective as of the date hereof, the Shortfall
Agreement is hereby amended as follows:

     (a) The first recital shall be replaced by the following text:

     “WHEREAS as of October 31, 2008, AIG-FP was party to the derivative
transactions listed on Schedule A (the “Derivative Transactions”), with an aggregate
notional value of $62,129,719,487;”

     (b) Schedule A to the Shortfall Agreement shall be replaced in full with Schedule A
hereto.

     (c) The following text shall be inserted immediately after Section 2(c):

     (d) On the Adjustment Date (i) if the aggregate of deemed increases in Posted
Collateral exceeds the aggregate of deemed reductions in Posted Collateral pursuant
to Section 2(c) of the applicable Termination Agreements, ML III shall pay or cause
to be paid, in immediately available funds, to AIG-FP the amount of such excess and
(ii) if the aggregate of deemed reductions in Posted Collateral exceeds the
aggregate of deemed increases in Posted Collateral pursuant to Section 2(c) of the
applicable Termination Agreements, AIG-FP shall pay, in immediately available funds,
to ML III the amount of such excess for credit to the Collateral Account.

 

 

     Section 4. Counterparts. This Amendment may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. Delivery of an executed signature page of this Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart hereof.

     Section 5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

     Section 6. Effectiveness. This Amendment shall become effective on the date when each party
hereto shall have received from each of the other parties hereto a counterpart hereof signed by
such party or facsimile or other written confirmation that such party has signed a counterpart
hereof.

     Section 7.
Captions. The captions and section headings appearing herein are included solely
for convenience of reference and are not intended to affect the interpretation of any provision of
this Amendment.

[Remainder of page intentionally left blank.]

 

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed on its
behalf by its officers thereunto duly authorized on the day and year first above written.

	 	 	 	 	 
	 	 	MAIDEN LANE III LLC
	 
	 	 	 	 
	 	 	By: FEDERAL RESERVE BANK OF NEW

YORK, as its sole Managing Member
	 
	 	 	 	 
	 

	 	By:	 	/s/ Helen
Mucciolo 
	 

	 	 	 	 
	 

	 	 	 	Name: Helen
Mucciolo
	 

	 	 	 	Title: Senior Vice President
	 
	 	 	 	 
	 	 	AIG FINANCIAL PRODUCTS CORP.
	 
	 	 	 	 
	 

	 	By:	 	/s/ William N. Dooley
	 

	 	 	 	 
	 

	 	 	 	Name: William N. Dooley
	 

	 	 	 	Title: Chief Executive Officer

 

 

Schedule A

to

Shortfall Agreement

List of Derivative TransactionsEX-10.1

Exhibit 10.1

R.G. BARRY CORPORATION

AMENDED AND RESTATED
2005 SUPPLEMENTAL RETIREMENT PLAN

          R.G. Barry Corporation (the “Sponsor”) adopted a deferred compensation plan effective January
1, 1978 (the “Prior Plan”) in order to provide supplemental retirement benefits to certain officers
and other management or highly compensated employees of the Sponsor and its Affiliates. The Prior
Plan was subsequently amended and restated, effective as of January 1, 1989, and again, effective
as of January 1, 1997. Effective March 31, 2004 (the “Freeze Date”), the Prior Plan was frozen.
Effective as of January 1, 2005, a new plan, the 2005 Supplemental Retirement Plan (the “Plan”),
was created for the benefit of certain participants in the Prior Plan in lieu of any benefits under
the Prior Plan. The Sponsor amends and restates the Plan as set forth herein to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

ARTICLE I
DEFINITIONS

Except as expressly provided in this Plan, each capitalized definition or term used in this
document shall have the same meaning as that definition or term used in the Base Plan.

1.01 ACCRUED RETIREMENT PENSION

     “Accrued Retirement Pension” shall mean the pension to which the Participant would have been
entitled under the Plan at his Normal Retirement Date had he remained in the full-time employ of
the Sponsor until his Normal Retirement Date and using in the calculation his current Final Average
Compensation, multiplied by a fraction, the numerator of which is his Salaried Benefit Service up
to the date of determination and the denominator of which is the Salaried Benefit Service he would
have had if he had remained in the employ of the Sponsor accruing Salaried Benefit Service at the
maximum annual rate until his Normal Retirement Date. In determining the Accrued Retirement Pension
of a Participant who has not attained his Normal Retirement Date, the amount of his Primary Social
Security Benefit shall be estimated based on the provisions of the Social Security Act in effect on
the first day of the Plan Year during which such determination is made, assuming that his
Compensation will continue at its most recent rate. For purposes of this Section 1.01, the term
“Salaried Benefit Service” does not include service during the period beginning on the Freeze Date
and ending on December 31, 2004.

1.02 ACTUARIAL EQUIVALENT

     “Actuarial Equivalent” shall have the same meaning as such term has in the Base Plan, using
the same actuarial assumptions and reduction factors as are used in the Base Plan for the relevant
calculation under this Plan. By way of example, for purposes of Section 4.02 of this Plan, if a
Participant commences his Early Retirement Benefit prior to attainment of his Normal Retirement
Age, such monthly benefit shall be reduced by using the reduction factors utilized under the Base
Plan for the reduction of early retirement payments.

 

 

1.03 BASE PLAN

     “Base Plan” shall mean the R.G. Barry Corporation Associates’ Retirement Plan.

1.04 COMPENSATION

     “Compensation” shall have the same meaning as used in the Base Plan except that (a) amounts
deferred under the R.G. Barry Corporation Deferred Compensation Plan shall be included as
“Compensation” for purposes of this Plan; and (b) “Compensation” shall not be limited by the
provisions of Section 401(a)(17) of the Code.

1.05 PARTICIPANT

     “Participant” shall mean an individual who is eligible to participate in the Plan pursuant to
Section 2.01.

1.06 PLAN

     “Plan” shall mean this R.G. Barry Corporation Amended and Restated 2005 Supplemental
Retirement Plan, including any amendments made hereto. The Plan Year for this Plan shall be the
calendar year. This amended and restated Plan shall be effective as of November 20, 2008 (the
“Effective Date”).

1.07 TERMINATION

     “Termination” or any form thereof shall mean a “separation from service” within the meaning of
Treasury Regulation §1.409A-1(h) by a Participant with the Sponsor and all persons with whom the
Sponsor would be considered a single employer under Sections 414(b) and (c) of the Code.

ARTICLE II

PARTICIPATION

2.01 ELIGIBILITY

     An individual who (a) was a participant in the Prior Plan prior to the Freeze Date and (b) is
an officer or other management or Highly Compensated Employee of the Sponsor who is designated by
the Board of Directors of the Sponsor as being a participant in the Plan shall be eligible to
participate in the Plan. The selection of individuals eligible to participate in the Plan shall be
within the sole and absolute discretion of the Board of Directors of the Sponsor.

     As a condition to participating in this Plan, each Participant must relinquish any rights to
payments under the Prior Plan.

2

 

ARTICLE III

ELIGIBILITY FOR BENEFITS

3.01 NORMAL RETIREMENT

     Each Participant who Terminates on the date he attains his Normal Retirement Age shall be
entitled to receive a Normal Retirement Benefit as provided in Section 4.01.

3.02 EARLY RETIREMENT

     Each Participant who Terminates before he is eligible for a Normal Retirement Benefit under
Section 3.01, but on or after the date he attains his Early Retirement Age shall be entitled to
receive an Early Retirement Benefit as provided in Section 4.02.

3.03 LATE RETIREMENT

     Each Participant who continues as an employee of the Sponsor beyond the date he is eligible
for a Normal Retirement Benefit under Section 3.01 and has completed at least five years of Vesting
Service shall be entitled to receive a Late Retirement Benefit as provided in Section 4.03. For
purposes of this Section 3.03, the term “Vesting Service” does not include service during the
period beginning on the Freeze Date and ending on December 31, 2004.

3.04 DEFERRED VESTED RETIREMENT

     A Participant who Terminates prior to completing five years of Vesting Service shall be
entitled to no benefits under the Plan. A Participant who Terminates after completing five years of
Vesting Service shall be eligible to receive the benefit provided in Section 4.01 upon attainment
of the Normal Retirement Age or the benefit provided in Section 4.02 after attainment of the Early
Retirement Age, in accordance with Section 3.05.

3.05 TIME AND FORM OF PAYMENT

          A Participant who is entitled to a benefit under the Plan shall be entitled to begin to
receive the Participant’s Plan benefit, if any, in the form of a single life annuity within 90 days
following the Participant’s Termination.

          Notwithstanding the foregoing, each Participant who is participating in this Plan on the
Effective Date and who has not yet begun to receive payment of benefits under this Plan as of the
Effective Date shall be entitled to receive the Participant’s Plan benefit, if any, in the form and
on the date selected by the Participant in a written election form delivered to the Sponsor prior
to December 31, 2008, which date shall not be earlier than January 1, 2009. If no date is selected
by a Participant on or before December 31, 2008, or if a Participant selects a date prior to
January 1, 2009, the benefit shall be payable as set forth above. Notwithstanding the foregoing,
if a Participant’s benefit under this Plan would otherwise have been paid or begun to be paid prior
to January 1, 2009, pursuant to the terms in effective immediately prior to the Effective

3

 

Date, the Participant’s benefit shall be paid pursuant to the terms of the Plan in effect
immediately prior to the Effective Date, but modified to the extent necessary for good faith
compliance with the requirements of Section 409A of the Code. Nothing in the foregoing shall be
construed as causing a Participant’s benefit that would not otherwise be payable in calendar year
2008 to be paid in calendar year 2008.

          Notwithstanding anything in this Plan to the contrary, if a Participant is a “specified
employee” (within the meaning of Section 409A of the Code and as determined under the Sponsor’s
policy for determining specified employees), on the Participant’s Termination and the Participant
is entitled to a payment and/or a benefit under this Plan that is required to be delayed pursuant
to Section 409A(a)(2)(B)(i) of the Code, then such payment shall not be paid (or begin to be paid)
until the first business day of the seventh month following the date of the Participant’s
Termination (or, if earlier, the date of the Participant’s death).

ARTICLE IV

BENEFITS

4.00 BENEFITS UNDER PRIOR PLAN

               No benefits shall be payable under the Prior Plan to any Participant in this Plan.

4.01 NORMAL RETIREMENT BENEFIT

   (a) Except as provided in Section 4.01(b),

(1) Each Participant shall upon Termination at his Normal Retirement Age (determined as of
the Freeze Date) be entitled to a pension, payable monthly for his life, in the amount of
(i) minus (ii) minus (iii), where (i), (ii) and (iii) have the following meanings:

(i) 2-1/2% of his Final Average Compensation determined on the Freeze Date, minus
2-1/12% of his Primary Social Security Benefit determined on his Normal Retirement Date,
the difference multiplied by his Salaried Benefit Service determined on the Freeze Date
up to a maximum of 24 years;

(ii) the monthly pension payable on a life only basis under the Base Plan; and

(iii) the monthly benefit payable on a life only basis under the R.G. Barry Corporation
Restoration Plan.

(2) Notwithstanding any provision contained herein, each Participant shall upon Termination
at his Normal Retirement Age be entitled to a pension, payable monthly for his life, in an
amount equal to the greater of (i) the benefit described in paragraph (a) of this
Section 4.01 and (ii) 60% of his Final Average Compensation determined on the Freeze Date
reduced by (A) the monthly pension payable on a life only basis under the Base Plan; and
(B) 50% of his Primary Social Security Benefit determined at his Normal Retirement Age.

4

 

	(b)	 	(1) Each Participant shall upon Termination at his Normal Retirement Age be entitled to
a pension, payable monthly for his life, equal to the greater of the amount produced under
Section 4.01(a) or the amount of (i) minus (ii) minus (iii) minus (iv), where (i), (ii),
(iii), and (iv) have the following meanings:

(i) 2-1/2% of his Final Average Compensation determined on his Normal Retirement Date,
minus 2-1/12% of his Primary Social Security Benefit determined on his Normal Retirement
Date, the difference multiplied by his Salaried Benefit Service determined on his Normal
Retirement Date up to a maximum of 24 years;

(ii) the monthly pension payable on a life only basis under the Base Plan determined on
the Freeze Date;

(iii) the monthly benefit payable on a life only basis under the R.G. Barry Corporation
Restoration Plan; and

(iv) the monthly benefit that would be payable under an annuity for the life of the
Participant only and which is the Actuarial Equivalent of the account balance of the 3%
non-elective employer contributions under the R.G. Barry Corporation 401(k) Savings Plan
determined on his Normal Retirement Date. Only for purposes of this Section 4.01
(b)(1)(iv), Actuarial Equivalent shall be determined using the interest rate and
mortality table used to determine single sum benefits under the Base Plan.

For purposes of making benefit calculations under this Section 4.01(b), the term “Salaried
Benefit Service” does not include service during the period beginning on the Freeze Date and
ending on December 31, 2004.

(2) Notwithstanding any provision contained herein, each Participant shall upon Termination
at his Normal Retirement Age be entitled to a pension, payable monthly for his life, in an
amount equal to the greater of (i) the benefit described in paragraph (b)(1) of this
Section 4.01 and (ii) 60% of his Final Average Compensation determined on his Normal
Retirement Age reduced by (A) the monthly pension payable on a life only basis under the
Base Plan; and (B) 50% of his Primary Social Security Benefit determined at his Normal
Retirement Age.

(c) For purposes of making benefit calculations under Sections 4.01(a)(2) and 4.01(b)(2),
“Compensation” shall have the meaning contained in Section 1.04 except that “Compensation” shall
include cash bonuses.

(d) Notwithstanding the foregoing, the benefit payable to a Participant pursuant to this Section
4.01 shall be paid at the time and in the form described in Section 3.05.

5

 

4.02 EARLY RETIREMENT BENEFIT

     The monthly pension benefit payable to a Participant who is eligible for an Early Retirement
Benefit under Section 3.02 shall be an amount equal to the Actuarial Equivalent of his Accrued
Retirement Pension as of the date of his early retirement.

4.03 LATE RETIREMENT BENEFIT

     The monthly pension benefit payable to a Participant who is eligible for a Late Retirement
Benefit under Section 3.03 shall be an amount determined in the same manner as set forth in Section
4.01 as of his Normal Retirement Age, actuarially increased to reflect the later starting date
thereof.

4.04 DEATH BENEFITS

(a) In the event that a Participant dies after benefit payments under this Plan have
commenced, death benefits shall be payable in accordance with Section 3.00.

(b) Notwithstanding the foregoing: (1) in the event of a Participant’s death prior to
January 1, 2009, the benefit described in this Plan shall be paid (i) pursuant to the terms
of the Plan in effect immediately prior to the Effective Date, but (ii) modified to the
extent necessary for good faith compliance with the requirements of Section 409A of the
Code. Nothing in the foregoing shall be construed as causing a Participant’s benefit that
would not otherwise be payable in calendar year 2008 to be paid in calendar year 2008; and
(2) in the event of a Participant’s death on or after January 1, 2009, the benefit described
in this Plan shall be payable to the Participant’s surviving spouse and, if no surviving
spouse exists, to the Participant’s estate in the form as provided in Section 3.00 and
commencing within 60 days of the Participant’s death.

4.05 OFFSETS TO BENEFITS

     Notwithstanding any provision of the Plan to the contrary, the Sponsor may, if the Committee
in its sole and absolute discretion shall determine, offset any amounts to be paid to a Participant
or Beneficiary under the Plan at the time the amounts are otherwise distributable against any
amounts which such Participant or Beneficiary may owe to the Sponsor or an Affiliate.

4.06 WITHHOLDING AND DEDUCTIONS

     All payments made by the Sponsor under the Plan to any Participant or Beneficiary
shall be subject to applicable withholding and to such other deductions as shall at the
time of such payment be required. A Participant’s portion of any employment, wage and
other taxes imposed under any applicable law or regulations on any Plan benefit before that
Plan benefit is distributed will be withheld from the Participant’s other compensation or,
if no other compensation is then payable to the Participant, the Participant shall remit to
the Sponsor an amount sufficient to satisfy such liability.

6

 

ARTICLE V

MISCELLANEOUS

5.01 ADMINISTRATION

     The Plan shall be administered by the Committee which shall have the sole and exclusive
authority to interpret the Plan, and decide any disputes which may arise with respect to
Participants’ rights under the terms of the Plan. Claims for benefits under the Plan shall be
subject to the claims and appeal procedures contained in the Base Plan. The Committee shall be
empowered to obtain legal, accounting, and actuarial assistance in order to facilitate its
administration of the Plan and shall be entitled to rely on any reports, opinions, or certificates
provided by such professionals. All fees, salaries, or expenses incurred by the Committee in
connection with administering the Plan shall be paid by the Sponsor. The Committee shall have
absolute discretion in carrying out its duties and responsibilities under this Section 5.01.

5.02 INDEMNITY

     The Sponsor shall indemnify the Committee (which, for purposes of this Section 5.02, includes
any employee of the Sponsor or an Affiliate to whom the Committee has delegated administrative
duties) against any and all claims, losses, damages, and expenses, including counsel fees, incurred
by the Committee and any liability, including any amounts paid in settlement with the Sponsor’s
approval, arising from the Committee’s action or failure to act, except when the same is determined
to be attributable to the gross negligence or willful misconduct of the Committee or any such
employee. The right of indemnity described in the preceding sentence shall be conditioned upon:

(a) the timely receipt of notice by the Sponsor of any claim asserted against the Committee,
which notice, in the event of a lawsuit shall be given within ten (10) days after receipt by
the Committee of the complaint; and

(b) the receipt by the Sponsor of an offer from the Committee of an opportunity to
participate in the settlement or defense of such claim.

5.03 ACTION BY COMMITTEE

     A majority of the Committee shall constitute a quorum and any action by a majority vote of the
Committee at a meeting, or, upon unanimous consent, in writing without a meeting, shall constitute
the action of the Committee.

5.04 NON-ALIENATION

     No benefit payable at any time under the Plan shall be subject to the debts or liabilities of
a Participant or Beneficiary; nor shall any such benefit be subject to the claims of creditors or
others, nor to any action in bankruptcy or other legal process, prior to actual payment to the
Participant or Beneficiary. Any attempt to alienate, sell, transfer, assign, pledge or otherwise

7

 

encumber any such benefit, whether presently or thereafter payable, shall be void. No benefit under
the Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge,
attachment, garnishment or encumbrance of any kind.

5.05 UNSECURED AND UNFUNDED OBLIGATION

     There shall be no contributions required or permitted to be made by any Participant in the
Plan. All payments of benefits shall be made directly from the general assets of the Sponsor, and
the right of a Participant or Beneficiary to any payment of such benefits shall be solely that of
an unsecured general creditor of the Sponsor. No assets of the Sponsor shall be set aside,
earmarked, placed in trust or escrow or represented as being specifically set aside to provide for
Plan benefits. Notwithstanding any provision of this Section 5.05, the Sponsor may, in its
discretion, establish a trust to pay all or a portion of the benefits payable under this Plan,
provided that the assets of such trust shall remain, at all time, the assets of the Sponsor subject
to the claims of its creditors.

5.06 AMENDMENT AND TERMINATION

     The Sponsor reserves the right at any time and from time to time to terminate or amend this
Plan, in any respect, by action of its Board of Directors; provided, however, that no such
termination or amendment shall deprive a Participant of any benefits accrued under this Plan prior
to such termination or amendment.

5.07 MISCONDUCT

     If the Committee determines that any Participant has engaged in an act of dishonesty or
malicious destruction which results in a financial loss to the Sponsor or to an Affiliate or if he
is convicted of a felony arising out of his employment by the Sponsor or an Affiliate, all rights
such Participant has hereunder shall be forfeited. If a Participant shall, during the period of his
employment with the Sponsor or an Affiliate, or while he is receiving benefits hereunder, engage
directly or indirectly in competition with the Sponsor or an Affiliate or in an occupation
detrimental to the interests of the Sponsor or an Affiliate, and if such activity continues after
30 days’ notice by the Committee to such Participant, the Participant shall be entitled to no
further benefits under this Plan.

5.08 NO GUARANTEE OF PLAN PERMANENCY

     This Plan does not contain any guarantees or provisions for continued employment with the
Sponsor nor is it guaranteed by the Sponsor to be a permanent plan.

5.09 PAYMENT TO INCOMPETENT ETC.

     If any person entitled to receive any benefits hereunder is, in the judgment of the Committee,
legally, physically or mentally incapable of personally receiving any distribution, the Committee
may make distribution or may instruct a trustee or insurance company to make

8

 

distribution to such other person, persons or institutions as, in the judgment of the Committee,
are then maintaining or who have custody of such distributee.

5.10 GENDER

     Any reference in the Plan made in the masculine pronoun shall apply to both men and women.

5.11 GOVERNING LAW

     This Plan shall be construed in accordance with and governed by the laws of the State of Ohio,
unless such laws are otherwise preempted by federal law.

5.12 SECTION 409A OF THE CODE

     It is intended that this Plan comply with Section 409A of the Code and the Treasury
Regulations promulgated thereunder, and this Plan will be interpreted, administered and
operated accordingly. Nothing herein shall be construed as an entitlement to or guarantee
of any particular tax treatment to a Participant, and none of the Sponsor, any Affiliate,
the Board of Directors of the Sponsor or the Committee shall have any liability with
respect to any failure to comply with the requirements of Section 409A of the Code. The
Sponsor may accelerate the time or schedule of a payment to a Participant to pay an amount
the Participant includes in income as a result of the Plan failing to meet the requirements
of Section 409A of the Code and the Treasury Regulations promulgated thereunder. Such
distribution may not exceed the amount required to be included in income as a result of the
failure to comply with the requirements of Section 409A of the Code and the Treasury
Regulations promulgated thereunder.

IN WITNESS
WHEREOF, R.G. BARRY CORPORATION, has caused this Plan to be executed
this 23 day of
December, 2008.

	 	 	 	 	 
	 

	 	R.G. BARRY CORPORATION	 	 
	 
	 	 	 	 
	 

	 	/s/ Greg A. Tunney

By: Greg A. Tunney
	 	 
	 
	 	 	 	 
	 

	 	Title: President and Chief Executive
Officer	 	 

9

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