**Exhibit – 10.111**

 

June 4, 2008

 

Mr. Bruce G. Crain

President and ChiefExecutive Officer

Russ Berrie and Company, Inc.

111 Bauer Drive

Oakland, New Jersey  07346

 

Dear Bruce:

 

Thefollowing is a description of your incentive compensation opportunity with respectto 2008, in accordance with your Employment Agreement with Russ Berrie andCompany, Inc. (the “Company”).  Thedetermination of your achievement of performance goals shall be made after theend of 2008 in the Compensation Committee’s discretion.

 

TheCompensation Committee has determined that 50% of your 2008 incentivecompensation opportunity shall be based on the achievement of consolidatedfinancial goals by the Company and 50% shall be based on your achievement ofpersonal goals.

 

*Financial Goals*

* *

TheCompensation Committee has set corporate consolidated EBITDA targets for 2008as the financial goals.  EBITDA isdefined for this purpose as consolidated net income before net interestexpense, provision for income taxes, depreciation, amortization and othernon-cash, special or non-recurring charges. With respect to consolidated EBITDA, your targets consist of thefollowing:  (i) a specified minimumlevel of achievement (the “Minimum Crain Target”) required to earn an amountequal to 7.5% of your annual base salary, (ii) a specified level ofachievement (the “Crain Target”) in excess of the Minimum Crain Target requiredto earn an amount equal to 37.5% of your annual base salary, and (ii) aspecified level of achievement in excess of the Crain Target (the “MaximumCrain Target”) required to earn an amount equal to 65% of your annual basesalary.  Amounts earned for achievementof results between (i) the Minimum Crain Target and the Crain Target, and (ii) theCrain Target and the Maximum Crain Target will be determined by a straight-lineinterpolation. No amounts will be paid for achievement of results in excess ofthe Maximum Crain Target. No amounts will be paid for achievement of resultsbelow the Minimum Crain Target.  Indetermining whether any of the Crain Targets were achieved for the year, the CompensationCommittee may exercise its judgment whether to reflect or exclude the impact ofchanges in accounting principles and extraordinary, unusual or infrequentlyoccurring events reported in the Company’s public filings that it believes werenot driven by the current performance or that otherwise had a distortingpositive or negative impact on Company performance.  The EBITDA Targets are set forth on Exhibit Aattached hereto.

 

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* *

*Personal Goals*

* *

With respect to yourpersonal goals, three different categories (each with a target and a maximumlevel of achievement) have been established as follows:  (i) structural/integration goals, whichwill entitle you to receive 18.75% of your annual base salary at the targetlevel and 32.50% of your annual base salary at the maximum level ofachievement; (ii) organizational goals, which will entitle you to receive9.375% of your annual base salary at the target level and 16.25% of your annualbase salary at the maximum level of achievement, and (iii) strategicgoals, which will entitle you to receive 9.375% of your annual base salary atthe target level and 16.25% of your annual base salary at the maximum level ofachievement.  The Committee willdetermine in its sole discretion your level of achievement of each of thesepersonal goals during 2008, if any.  Theparticular payout level awarded, if any, in each case will depend on theassessment of the Committee as to the degree of achievement attained, and willaccount for the difficulty and complexity of the particular goal.  No bonus will be payable for a particularcategory if the Committee determines that the target level of achievement forthat category has not been achieved, and no amounts will be payable in excessof the maximum incentive compensation opportunity for that category.  Failure to achieve the Minimum Crain Targetor any category of the three personal goals targets will not, however, precludeincentive compensation from being paid if targets for other categories areachieved.  The particular deliverableswith respect to each of the three personal goal categories are set forth on Exhibit A.

 

Potentialamounts payable to you with respect to your incentive compensation program for2008 are as follows:

 

| ** **             | ** ** | **Target** | ** ** | **Maximum** | ** ** |
|------------------------|------------|------------|------------|-------------|------------|
| ** **             | ** ** | ** ** | ** ** | ** **  | ** ** |
| EBITDA                 |       | $          | 206,250    | *           | $          | 357,500 |   |
|                   |       |       |       |        |       |
| Structural/Integration |       | $          | 103,125    |        | $          | 178,750 |   |
|                   |       |       |       |        |       |
| Organizational         |       | $          | 51,562.50  |        | $          | 89,375 |   |
|                   |       |       |       |        |       |
| Strategic              |       | $          | 51,562.50  |        | $          | 89,375 |   |

 

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*              Achievement of the Minimum Crain Target would entitleyou to a payment of $41,250.

 

Pleasesign and return the enclosed copy of this letter acknowledging your agreementtherewith.  We look forward to workingclosely with you during 2008 in order that these goals may be achieved for theenhancement of shareholder value.

 
|   | Sincerely,                 |
|--------|----------------------------|
|   |                       |
|   | /s/ Frederick J.  Horowitz |
|   | Chair                      |
|   | Compensation  Committee    |

 

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| ACKNOWLEDGED AND AGREED          |   |
|----------------------------------|--------|
| this 4 day of  June , 2008. |   |
|                             |   |
|                             |   |
| /s/ Bruce Crain                  |   |
| Bruce G. Crain                   |   |

 

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