Exhibit
10.94


 





Russ Berrie and Company, Inc.


111 Bauer Drive, Oakland, NJ 07436


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


 


July 27, 2005


 


Via email:
acappiel@wwusa.com


 


Mr. Anthony Cappiello


1623 Rustic Court


Neptune, NJ 07753


 


Dear Tony:


 


I am pleased to offer you
the position of Executive Vice President (EVP) and Chief Administrative Officer
(CAO) of Russ Berrie and Company, Inc. (the “Company”) effective August 1,
2005.   This position is one of corporate
officer of the Company and is included in the CEO’s Senior Staff.


 


Your employment with the
Company will include the following:


 


1.               COMPENSATION.  Your base salary will be at an annual rate of
$325,000.  Your 2005 Incentive
Compensation (“IC”) program (pro-rated for your date of hire), and eligibility
therefor, is set forth on Exhibit A attached hereto and incorporated
herein.  Payment of the IC (or portion
thereof) is predicated upon meeting both objective and subjective performance
standards established for the applicable year, as set forth on Exhibit A.  Notwithstanding the foregoing, for each of
the years 2005 and 2006, $65,000 of your bonus is guaranteed to be paid.  During each of years 2005 and 2006, the
$65,000 guaranteed portion of your bonus will be paid in 4 equal installments
as soon as reasonably practicable after the end of each of the Company’s fiscal
quarters.  For the year 2005, the $65,000
will be pro-rated based upon your date of hire. 
In order to receive the IC payment (or any portion thereof), you must be
actively employed by the Company at the time of the payment.  In order to be eligible to participate in the
IC program, you must execute and deliver to the Company the IC document which
has been provided to you.


 


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


 


a.               The Company’s
contributory Group Health Plan and Group Dental Plan.


b.              The Company’s
non-contributory Life Insurance Plan. This is provided at no cost to you.


 


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c.               The Company’s
non-contributory Business Travel Insurance Plan.  This is provided at no cost to you.


d.              The Company’s
non-contributory Accidental Death and Dismemberment Plan.  This is provided at no cost to you.


e.               The Company’s
non-contributory Long Term Disability Plan. 
This is provided at no cost to you.


 


3.               VOLUNTARY
BENEFITS:  After 90 days of
continuous employment, you will be eligible to participate in:


 


a.               Healthcare Flexible
Spending Account.


b.              Dependent Care
Flexible Spending Account.


c.               Supplemental Disability
and Accident Insurance Plans.


 


4.               STOCK OPTIONS.  After 3 months of continuous employment, you
will be granted 50,000 stock options. These options will be granted under and
pursuant to the Company’s 2004 Stock Option, Restricted and Non-Restricted
Stock Plan (the “Stock Plan”).  In
accordance with the Stock Plan, these options will vest ratably over a period
of 5 years. Such options will be Non-Qualified Stock Options.  Possible future grants of stock options shall
be at the sole discretion of the Compensation Committee of the Board of
Directors of the Company.


 


5.               401(k) PLAN.  After 6 months of continuous employment, you
will be eligible to participate in the Company’s 401(k) plan based on its
current provisions.  Under the current
plan terms, the Company matches a portion of your contribution to your 401(k)
account.  The Company’s contribution
vests over a period of 4 years of employment.


 


6.               EXECUTIVE
DEFERRED COMPENSATION PLAN.  Within
30 days of your date of hire, you will be eligible to participate in the
Company’s Executive Deferred Compensation Plan.


 


7.               VACATION.  The Company’s vacation policy provides that
after 6 months of employment, you will be eligible for one week paid
vacation.  The Company’s vacation policy
further provides that thereafter, during the following calendar year, you will
be eligible for two weeks paid vacation. 
However, you will be eligible for vacation above and beyond the
aforementioned policy.  Beginning
immediately upon your date of hire, you will be eligible for three weeks paid
vacation per year.


 


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


 


9.               CAR ALLOWANCE  You will receive an allowance of $1,100 per
month to cover the cost of an automobile, automobile insurance, automobile 


 


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maintenance and repair,
gasoline and any and all other costs and expenses relating to such
automobile.  


 


10.         SEVERANCE.  In the event that you are terminated from the
Company for reason other than cause, other than your own voluntary resignation
or other than a Change in Control in the Company, you will be eligible to
receive severance in accordance with
the following schedule:


 


•                  during the first 8 months following
termination, you will be eligible to receive severance pay at the rate of 100%
of your annual base salary


•                  during the 9th and 10th
months following termination, you will be eligible to receive severance pay at
the rate of 75% of your annual base salary


•                  during the 11th and 12th
months following termination, you will be eligible to receive severance pay at
the rate of 50% of your annual base salary


 


The severance pay will be paid at the salary rate (base pay not
including IC, bonus(es),  commissions or
the like) 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).  During the severance period, you are entitled
to (i) remain on the Company’s health and dental insurance plan (making the
same payroll contribution as you made on the date of termination as an active
employee), (ii) remain on all other Company insurance plans for which you were
eligible on the date of termination, and (iii) receive the car allowance, in
the usual course, in effect on the termination date.


 


If you obtain gainful employment during the severance period, then the
severance payments (and aforementioned benefits) will be terminated effective
on the date that you begin new employment.


 


As a condition to
receiving the aforementioned severance payments and benefits, you must sign and
deliver to the Company the Company’s form of General Release of Claims,
Non-Compete, Non-Hire and Non-Disparagement Agreement.


 


11.         CHANGE IN CONTROL SEVERANCE
PLAN.  Effective your date of hire, you
will receive the protections of the Company’s Change in Control Severance Plan.


 


12.         RELOCATION.  Pursuant to the Company’s policy, the
movement of your household good will be paid as a direct expense of the Company
to the applicable vendor.  Three
estimates are required.  In addition, the
Company will reimburse you for documented expenses up to $27,500 relating to
your relocation.


 


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The
Company reserves the right to change or modify these programs.  Notwithstanding the foregoing, (i) the
position title specified above will not be changed to a title that would be
subordinate to the title specified above, (ii) the base salary specified in
paragraph 1 above will not be reduced, (iii) the guaranteed portion of the IC
described in paragraph 1 above will not be reduced during the years for which
it is guaranteed so long as you are actively employed by the Company, (iv) the
initial grant of stock options specified in paragraph 4 above will not be
reduced when initially granted after 3 months of continuous employment, (v) the
vacation specified in paragraph 7 above will not be reduced, (vi) the severance
program specified in paragraph 10 will not be reduced, and (vii) the car
allowance specified in paragraph 9 above will not be reduced.  In addition, employment with the Company is
considered “at-will” and does not represent a specific guarantee; provided,
however, that if the Company modifies the benefit programs described in
paragraphs 2, 3, 5, 6 and 8 above and paragraph 1 as it relates to the
non-guaranteed portion of the IC, you shall be entitled to participate in those
modified programs to the same extent that all other employees at your level,
class or the like are eligible to participate.


 


Tony,
I want to welcome you to the Company and wish you much success in your new
position.


 


	
   

  	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Andrew R. Gatto

  
	
   

  	
   

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  cc: 

  	
  J. Weston, R. Benaroya,
  I. Kaufthal, A. Berrie

  	
   

  
	
   

  	
  W. Landman, J. Kling

  	
   

  
	
   

  	
  E. Goldenberg

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND
  AGREED:

  
	
   

  
	
   

  
	
  /s/ Anthony
  Cappiello 

  	
   

  
	
  Anthony
  Cappiello

  
	
   

  
	
  Date: 

  	
  July 27, 2005

  	
   

  
					



 


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EXHIBIT A


 


TONY CAPIELLO’S INCENTIVE COMPENSATION PROGRAM 


(effective August 1, 2005)


 


IC Factor:  50% of Base Salary,
pro-rated based upon date of hire (50% of 2005 Base Salary of $325,000 is
$162,500, to be pro-rated based upon date of hire) – subject to “guarantee” set
forth in Employment Agreement dated July 27, 2005


 


2005 CORPORATE OBJECTIVES:


 


	
  See “Corporate”
  Business Unit’s IC Target set forth on Exhibit “A” to Russ Berrie and
  Company, Inc. Incentive Compensation (“IC”) Program 

  (excluding material acquisitions)

  	
   

  	
  Value: 50%*
  of IC Factor

  ($81,250)

  



 










*Value could be up to
100% of the IC Factor if the Maximum Target is reached.


 


2005 INDIVIDUAL OBJECTIVES:


 


	
   

  	
   

  	
  Value:  30% of IC Factor

  ($48,750)

  
	
  To
  Be Determined

  	
   

  	
   

  



 


2005 INDIVIDUAL INITIATIVES:


 


	
   

  	
   

  	
  Value:  20% of IC Factor
 ($32,500)

  



 


1.               Other initiatives
as may be mutually determined by CEO and associate throughout course of the
year.


 


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