Exhibit 10.65

 

 

                                                                                                               
December 11, 2001

 

Mr. Tom Bowles

22 Westwood Drive

Carmel, NY 10512

 

Dear Tom:

 

                I am pleased to offer you the position of Chief Operating
Officer of Russ Berrie and Company, Inc. effective January 2, 2002.

 

                Your employment with the Company will include the following:

 

1.     COMPENSATION.  Your base salary will be at an annual rate of $250,000. 
The Company has an annual bonus program.  For the year 2002, you will be
eligible for the Vice President/Management Incentive Program (“VP/MIP”) bonus
program (generally paid in February of the following year).  For the year 2002,
the VP/MIP bonus is equal to 20% of your base salary.  The bonus program is
predicated on meeting the Company’s minimum operating profit for the applicable
year (2002).  Beginning with the year 2003, you will be eligible for the
Executive Incentive Program (“EIP”) bonus program (also generally paid in
February of the following year).  The EIP is equal to 50% of your base salary. 
Generally, the full 50% bonus vests over a period of three years.  However, this
three-year vesting period can be waived and, in your case, will be.  Again, the
bonus program is predicated on meeting the Company’s minimum operating profit
for the applicable year.  The Company also has an annual performance bonus
program.  You will also be eligible to participate in that program beginning
with the year 2002.  Payment of this additional bonus is predicated on the
Company exceeding budgeted operating profit by at least 10% during the relevant
12-month period.   In order to receive the aforementioned bonus payments, you
must be actively employed by the Company at the time of the payment(s).

 

2.     GROUP HEALTH AND DISABILITY.  After 90 days of continuous employment, you
will be eligible to participate in:

 

a.     Our contributory Group Health Plan.

 

 

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b.     Our non-contributory Life Insurance Plan in the amount one times your
base salary.

c.     Our non-contributory Long Term Disability.

 

3.     DENTAL.  After twelve months of employment, you will be eligible to
participate in our contributory Dental Insurance Plan.

 

4.     STOCK OPTIONS.  Stock options are granted to eligible employees at the
beginning of each calendar year.  You will be eligible to participate in the
Company’s Stock Option Plan based on its current provisions.  You will receive
stock options equal to 40% of your base salary. Under the provisions of the
stock option plan, you must have 18 months of service prior to the first grant. 
However, this can be waived and, in your case, would be.  You will receive your
first grant at the beginning of 2002.

 

5.     STOCK OPTIONS BASED ON OPERATING PROFIT.  In addition to the stock
options set forth above, you will be eligible to receive 10,000 stock options
(“Performance Options”) for each year in which the Company’s domestic operating
profit exceeds the prior year’s domestic operating profit by at least 15%.  You
will be eligible to receive such Performance Options beginning January 1, 2003
if the Company’s 2002 domestic operating profit exceeds 2001 domestic operating
profit by at least 15%.  Performance Options will vest and be exercisable one
year after the date of grant and remain exercisable for a period of 10 years
from the date of grant (subject to earlier termination under certain
circumstances set forth under the performance option agreement) and will be
subject to the terms and provisions of a performance option agreement, in form
and substance satisfactory to the Company setting forth substantially all of the
terms and provisions of grants made under the Company’s 1999 Stock Option and
Restricted Stock Plan (the “Plan”) or the then-current successor option plan to
the Plan adopted by the Company.  In order to receive Performance Options, you
must be an active employee of the Company on the date of the grant.

 

6.     RESTRICTED STOCK.  Beginning with the year 2003 and for a total of 5
consecutive years (i.e., 2003, 2004, 2005, 2006 and 2007), you will also be
eligible to receive $100,000 worth of restricted stock of the Company per year
for each of these 5 years.  During the first year following the date of the
grant of such restricted stock, the shares of such restricted stock remain
wholly restricted.  After the first year and for the following 3 years, such
restricted stock shall vest, one-third each year until fully vested.  By way of
example, the $100,000 worth of restricted stock that is granted on the first
business day of January 2003 would remain wholly restricted throughout 2003.  On
January 1, 2004, one-third of such shares would vest.  On January 1, 2005,
another

 

 

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one-third of such shares would vest and on January 1, 2006, the remaining
one-third of such shares would vest so that on January 1, 2006 all shares that
had been granted on January 1, 2003 would be fully vested.  The restricted stock
award described above shall be granted pursuant to the Plan.  In order to
receive these restricted stock awards, you must be an active employee of the
Company on the date of the award.

 

7.     401(k).  After six months of employment, you will be eligible to
participate in the Company’s 401(k) plan based on its current provisions.  The
Company’s contribution to your 401(k) account fully vests over a period of four
years of employment.

 

8.     VACATION.  Beginning January 2002, you will be eligible for three weeks
vacation per year.

 

9.     HOLIDAY/SICK. You will be eligible for paid holidays and sick time in
accordance with Company policy.

 

10.   COMPANY CAR.  You will receive an allowance of up to $28,000 to purchase
an automobile in the Company’s name.  This allowance is paid every three years
toward an automobile.  Certain expenses, such as gasoline, maintenance/repairs
and insurance, will be provided by the Company.

 

11.   SEVERANCE.  In the event that you are terminated from the Company for
reason other than cause or other than your own voluntary resignation, you will
receive 6 months’ severance pay at the rate that you are being paid on your
termination date.  This severance will be paid to you over a 6 month period on
the Company’s normal pay schedule.  During this period, you will also be
entitled to remain on the Company’s heath and dental insurance plan (making the
same payroll contribution as when you were an active employee).  If you obtain
gainful employment during this 6 month severance period (with employment being
defined as full-time salaried work), your severance payments will be terminated,
effective the date that you start your new employment.

 

The Company reserves the right to change or modify these programs.  In addition,
employment with the Company is considered “at-will” and does not represent a
specific guarantee.

 

 

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Tom, I want to welcome you to Russ Berrie and Company, Inc. and wish you much
success in your new position.

 

 

 

Very truly yours,

 

 

 

 

 

/s/ Russ Berrie

 

 

Russ Berrie

 

 

Chairman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCEPTED AND AGREED:

 

 

 

 

 

             /s/ Tom Bowles

 

 

Tom Bowles

 

 

 

 

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