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...

EXHIBIT 10.2

THIS FORM OF AWARD AGREEMENT IS PART OF A PROSPECTUS COVERING SECURITIES REGISTERED UNDER THE
SECURITIES ACT OF 1933

X. X. XXXXX CORPORATION
2005 LONG-TERM INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT
GRANTED TO XXXX X. XXXXXX ON FEBRUARY 7, 2006

X. X. Xxxxx 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 X. X. Xxxxx 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 Xxxxxx Xxxxx at (000) 000-0000 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:

Xxxxxx Xxxxx

X. X. Xxxxx Corporation

00000 Xxxxxxxx Xxxx, X.X.

Xxxxxxxxxxxx, Xxxx 00000

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:

Xxxxxx Xxxxx

X. X. Xxxxx Corporation

00000 Xxxxxxxx Xxxx, X.X.

Xxxxxxxxxxxx, Xxxx 00000

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.

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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 Xxxxxx Xxxxx at (000) 000-0000 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 “X. X. Xxxxx 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 Xxxxxx Xxxxx 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 Xxxxxx Xxxxx at (000) 000-0000 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 Xxxxxx Xxxxx at (000) 000-0000 or at the address given above if you have any questions about your Award or this Award Agreement.

*****

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Your Acknowledgment of Award Conditions

Note: You must sign and return a copy of this Award Agreement to Xxxxxx Xxxxx 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.

Xxxx X. Xxxxxx

(signature)

Date signed:

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

Xxxxxx Xxxxx

X.X. Xxxxx Corporation

00000 Xxxxxxxx Xxxx X.X.

Xxxxxxxxxxxx, Xxxx 00000

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                                         .

Xxxx X. Xxxxxx

                     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

X. X. Xxxxx Corporation

By:

Date:

-ii-

X. X. XXXXX CORPORATION
2005 LONG-TERM INCENTIVE PLAN

NONQUALIFIED STOCK OPTION EXERCISE NOTICE

AFFECTING NONQUALIFIED STOCK OPTIONS ISSUED TO
XXXX X. XXXXXX ON FEBRUARY 7, 2006

Additional copies of this Nonqualified Stock Option Exercise Notice are available from Xxxxxx Xxxxx at (000) 000-0000 or at the address given below.

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

By completing this form and returning it to Xxxxxx Xxxxx 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 “X. X. Xxxxx 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 Xxxxxx Xxxxx at (000) 000-0000 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 Xxxxxx Xxxxx 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.

Xxxx X. Xxxxxx

(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:

Xxxxxx Xxxxx

X. X. Xxxxx Corporation

00000 Xxxxxxxx Xxxx, X.X.

Xxxxxxxxx, Xxxx 00000

*****

Acknowledgement of Receipt

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

Xxxx X. Xxxxxx:

                     Has effectively exercised the NQSOs described in this notice; or

                     Has not effectively exercised the NQSOs described in this notice because

describe deficiency

X. X. Xxxxx Corporation

By:

Date:

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

-ii-

X. X. XXXXX CORPORATION
2005 LONG-TERM INCENTIVE PLAN
BENEFICIARY DESIGNATION FORM

RELATING TO STOCK OPTION AWARD ISSUED TO
XXXX X. XXXXXX 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 Xxxxxx Xxxxx at (000) 000-0000 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: Xxxx X. Xxxxxx

Soc. Sec. No.:                                                                                                                  

Date of Birth:                                                                                                                   

Address:                                                                                                                            

Sign and return this form to Xxxxxx Xxxxx at the address given below
Date		Signature

Return this signed form to Xxxxxx Xxxxx at the following address:

Xxxxxx Xxxxx
X. X. Xxxxx Corporation
00000 Xxxxxxxx Xxxx, X.X.
Xxxxxxxxx, Xxxx 00000

Received on:                                         

By: