Exhibit
10.88


 





Russ
Berrie and Company, Inc.


111 Bauer Drive, Oakland, NJ
07436


(201) 337-9000   (800) 631-8465


 


December 30,
2004


 


Mr. Ricky
Chan


45 Great
Hills Terrace


Short
Hills, NJ  07078


 


Dear Ricky:


 


This letter serves to confirm the severance
arrangement between Russ Berrie and Company, Inc. (the “Company”) and you.  In
recognition and appreciation of your service and contribution to the Company,
the severance package consists of the following:


 


1.              Final Paycheck.  You will be paid your final paycheck in the
usual manner.  Your last day of work will
be December 30, 2004 and you will be paid through December 31, 2004


 


2.              Severance Payments.  The Company will pay you severance for a
period of 12 months pursuant to the Company’s Severance Policy for Domestic
Vice Presidents (and Above).  Severance
will be paid at the salary rate (base pay not including bonuses or commissions)
in effect on the termination date.  The
severance will be paid over the course of the severance period in accordance
with the Company’s normal pay schedule (not in a lump sum).  The severance pay will continue even if you
secure other employment during the severance
payment period (but subject to the terms of the Release Agreement referenced
below).  As a condition to receiving the
severance package, you must sign and deliver to the Company the Company’s
form of Release Agreement (a copy of which is attached hereto).


 


3.              Benefit Continuation.  If
you presently have medical (or medical and dental) coverage, are
entitled to remain on the Company’s medical and dental insurance plans for a
period of 12 months.  This coverage is
paid entirely by the Company.  In other
words, the Company will pay your premium for the medical and dental coverage in
which you were enrolled on the date of your termination of employment.  The
benefit continuation will continue even if you secure other employment during
the period of benefit continuation (but subject to the terms of the Release
Agreement).  Our records indicate
that you are currently enrolled in family medical and family dental
coverage.  As a condition to receiving the new benefit continuation coverage, you
must sign and deliver to the Company the Company’s form of Release Agreement
(as stated above in paragraph 2 above).


 


4.              COBRA.  After the expiration of the benefit
continuation coverage described in paragraph 3 above, you will be entitled to
continue your benefits, at your


 


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expense, pursuant to the provisions of COBRA.   You will receive more information (including
the cost) about COBRA directly from the Company’s COBRA administrator (PayFlex
Systems USA, Inc).


 


5.              2004 Vacation.  You will be paid for all 2004 accrued and
unused vacation time (and carry-over vacation time).  You will also be paid for 2004 vacation time
that has not yet accrued but will accrue by the end of this year. Our records
indicate that you have (and will accrue) a total of 15 vacation days.  Your vacation pay will be included in your final
paycheck and the amount paid for vacation days is listed on your pay stub.


 


6.              401(k) Plan.  If you are a participant in the Company’s
401(k) Plan, you will receive a letter explaining the various alternatives
regarding the monies you have in your account. 
Our records indicate that you participate in the 401(k) Plan.


 


7.              Executive Deferred Compensation Plan.  Our records indicate that you have monies in
the Executive Deferred Compensation Plan. 
The options you have with regard to monies in that plan depend upon,
among other things, the options you previously elected.  Information regarding these options will be
sent to you under separate cover.


 


8.              Stock Options and
Restricted Stock.  Our records
indicate that you currently have no stock options, either vested or
unvested.  Our records further indicate
that you currently have 6,023 shares of restricted stock, none of which are vested
(you previously sold all of your vested shares).   Under the terms of the Company’s 1999 stock
option and restricted stock plan, pursuant to which your restricted shares were
issued, any non-vested restricted stock is immediately forfeited upon
termination of employment.  Please be
reminded that as a former officer of the Company, you possess material
information about the Company and its securities.  Please also be reminded that federal and
state securities laws prohibit the purchase or sale of securities while in
possession of material, non-public information. 
As you know, the Company has imposed a “blackout”, which is currently in
effect, upon all of its officers, among others, due to the existence of
material, non-public information.   Until
the date of your termination of employment, you were an as an executive officer
of the Company and were subject to the Company’s “blackout” periods.  As a former executive officer of the Company
who is in possession of material, non-public information, you remain subject to
the requirements of federal and state securities laws described above.  


 


9.              Company Automobile.    For a period of 12 months following your
termination date, you are entitled to receive a monthly car allowance of
$1,100.  This allowance will be included
in severance paychecks.


 


10.       Severance Bonus.   In appreciation of your many years of
dedicated service and in recognition of the significant role you played in the
Company, the Company


 


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will pay you an
additional $55,000 as a severance bonus. 
This bonus will be paid to you in your final paycheck.


 


11.       Life and Accident Insurance Coverage.  Prior to your termination date, the Company
paid for life and accident insurance for you. 
Enclosed please find a letter explaining your options (and the cost)
with respect to converting this coverage to personal policies.


 


12.       Life Insurance Policy.  The Company shall provide your designated
beneficiary with a life insurance benefit in the amount of One Million Dollars
($1,000,000) if you die before age 80.  


 


13.       Company Property.   On
your date of termination you are required to return all Company property and
documents (including, without limitation, your Company cell phone(s) and
Company laptop computer).


 


14.       Unemployment Benefits.  You may be entitled to file for unemployment
compensation providing that you meet your State’s criteria.  You should file for benefits immediately.


 


This severance arrangement supercedes all
other severance, termination and all other provisions contained in any other
Company policies relating thereto (including, without limitation, the Company’s
Severance Policy for Domestic Vice Presidents (and above)) and in any
agreements between the Company and you (including, without limitation, the
employment agreement between the Company and you, the stock option agreements and
restricted stock agreements between the Company and you, and the supplemental
benefits agreement between the Company and you ).


 


Ricky, I wish you all the best in your future
endeavors.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  /s/ Andrew R. Gatto

  	
   

  
	
   

  	
  Andrew R. Gatto

  
	
   

  	
  President and Chief Executive Officer

  



 


cc:  E. Goldenberg


 


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