Exhibit
10.87


 





Russ
Berrie and Company, Inc.


111 Bauer Drive, Oakland, NJ
07436


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


 


September 28,
2004


 


Mr. John T.
Toolan


31 Van
Holten Road


Basking
Ridge, NJ  07920


 


Dear Jack:


 


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.  The next payroll period
ends on October 6, 2004.  Your final
paycheck will include your regular pay through September 29, 2004.  It will also include the beginning of your
severance pay which severance pay begins on September 30, 2004.  Therefore, your next paycheck will include
your regular pay through September 29 and the beginning of your severance
pay (which begins on September 30).


 


2.              Severance Payments.  The Company will pay you severance for a
period of 8 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).


 


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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 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 16.5 vacation days.  You will also be paid for 4 additional,
supplemental vacation weeks.  You will be
paid for all of these vacation days. 
Your vacation pay will be included in your next regular 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.              Stock Options and
Restricted Stock.  Our records indicate
that you currently have no stock options, either vested or unvested.  Our records indicate that you have 9,036
shares of restricted stock (of which 5,928 are vested and 3,108 are not
vested).   Under the terms of the Company’s
1999 and 2004 stock option and restricted stock plans, pursuant to which your
restricted shares were issued, any non-vested restricted stock is immediately
forfeited upon termination of employment (in the case of the restricted shares
issued under the Company’s 1999 Stock Option and Restricted Stock Plan) or are
forfeited if the participant does not remain in the continuous employ of the
Company for 5 years from the date of grant (in the case of the restricted
shares issued under the Company’s 2004 Stock Option, Restricted and Non-Restricted
Stock Plan).  Therefore, the 5,928 shares
of non-vested restricted stock are forfeited upon termination of your
employment.     With regard to the 3,108
vested shares, 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.  


 


8.              Company Automobile.  For a
period of 6 months following your termination date, you are entitled to use
of the Company automobile and reimbursement of


 


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certain automobile expenses as you had been
entitled to as an active employee of the Company.


 


9.              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.


 


10.       Company Property.  Other than the Company automobile referenced
under paragraph 7 above, 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).


 


11.       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 (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 between the Company and you, the performance share option
agreements between the Company and you and the restricted stock agreements
between the Company and you).


 


Jack, 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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