Document:

Exhibit
10.86

 

RUSS
BERRIE AND COMPANY, INC.

RESTRICTED STOCK AGREEMENT

 

Date of
Grant:             
    , 200  

 

Russ Berrie and Company, Inc., a New Jersey
corporation (the “Company”), does hereby grant to                          
(the “Participant”), as of the date set forth above, pursuant to the 2004 Russ
Berrie and Company, Inc. Stock Option, Restricted and Non-Restricted Stock Plan
(the “Plan”), a copy of which is appended hereto and incorporated herein by
reference,            shares
of its Common Stock (stated value $.10) (the “Restricted Stock”), upon the
following terms and conditions. 
Capitalized terms used but undefined herein shall have the meanings
ascribed to them in the Plan.  This is
the Restricted Stock Agreement referred to in Section 6.9 of the Plan.

 

1.                                       The Restricted Stock shall be registered in the
name of the Participant and held by the Company until the restrictions on such
Restricted Stock lapse and such Restricted Stock is no longer subject to
forfeiture in accordance with the terms hereof. 
As the restrictions on the Restricted Stock lapse (unless such stock is
earlier forfeited in accordance with the terms hereof), the Company shall
deliver to the Participant certificates representing such stock, free and clear
of all restrictions other than those arising under federal and/or state
securities laws.

 

2.                                       (a)                                  Subject to the last sentence of this paragraph (a)
and the provisions of Sections 3 and 7 hereof, the Restricted Stock shall vest
ratably over five years (20% per year) from the Date of Grant, and upon
vesting, shall not be subject to any further restrictions hereunder.  Notwithstanding the foregoing, however, if a
Participant is also a participant under the Severance Plan, and the terms of
this Agreement conflict with the terms of the Severance Plan, such conflict
shall be resolved in accordance with Section 6.7(b) of the Severance Plan.

 

(b)                                 Except as provided in Section 3 hereof, and
subject to the provisions of Section 7 hereof in the event of a Business
Combination, any non-vested Restricted Stock (after giving effect to any
applicable provisions of the Severance Plan) shall be immediately forfeited and
all rights of a Participant to such forfeited Restricted Stock shall terminate
without payment of consideration by the Company upon termination of the
Participant’s employment with the Company for any reason (including the
consummation of a Business Combination, whether or not the Participant is
employed by the surviving entity, but excluding an authorized leave of
absence).

 

3.                                      (a)                                   In the event that the employment of a Participant
is terminated prior to the lapse of all or part of the restrictions on the
Restricted Stock, and such termination is by reason of his or her death,
Disability or retirement after reaching his or her normal retirement date (as
set forth at the time of his or her retirement under the Russ Berrie and
Company, Inc. 401k Plan), all restrictions on the Restricted Stock shall lapse
on the date of Participant’s death, Disability or retirement.

 

 

(b)                                 The
Committee may at any time, in its sole discretion, accelerate the time at which
any or all restrictions will lapse or remove any or all of such restrictions
with respect to the Restricted Stock.

 

4.                                       None of the Restricted Stock may be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or
disposed of during the period in which the restrictions on such Restricted
Stock are in effect.

 

5.                                       Subject to the restrictions set forth in this
Agreement, the Participant shall have all of the rights of a shareholder with
respect to the Restricted Stock, including the right to receive all dividends
thereon.

 

6.                                       [An appropriate legend shall be placed on the
stock certificate representing the Restricted Stock with respect to the
restrictions imposed thereon.]

 

7.                                       The award of Restricted Stock hereunder shall be
subject to adjustment as follows:

 

(a)                                  In
the event of any change in the outstanding Common Stock by reason of a
dissolution or liquidation of the Company, sale of all or substantially all of
the assets of the Company, merger or consolidation of the Company with or into
any other corporation if the Company is the surviving corporation, statutory
share exchange involving capital stock of the Company, reorganization,
recapitalization, reclassification, stock dividend, extraordinary dividend,
stock split, reverse stock split, stock combination, rights offering, spin-off
or other relevant change, the Committee may adjust the aggregate number of
shares of Common Stock available for awards of Restricted Stock under the Plan
and any or all other matters deemed appropriate by the Committee, including,
without limitation, accelerating the vesting period pertaining to any award of
Restricted Stock under the Plan.

 

(b)                                 In
connection with a Business Combination, the Committee, in its sole discretion,
may provide for (i) the continuation of the Plan and/or the assumption of the
awards granted thereunder by a successor corporation (or a parent or subsidiary
thereof), (ii) the substitution for such awards of new awards covering the
stock of a successor corporation (or a parent or subsidiary thereof), with
appropriate adjustments as to the number and kind of shares, or (iii) upon 10
days’ advance notice from the Committee to the Participant, the acceleration of
the vesting period pertaining to the Restricted Stock.  In the event of any continuation, assumption
or substitution contemplated by the foregoing clauses, the award of Restricted
Stock shall continue in the manner and under the terms so provided.

 

(c)                                  Notwithstanding
the foregoing, in the event that any decision of the Committee thereunder
conflicts with the provisions of the Severance Plan in a manner which adversely
affects the rights of any participant thereunder (including the Participant),
such conflict shall be resolved in accordance with the provisions of Section 6.7(b)
of the Severance Plan.

 

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(d)                                 If,
by reason of a change in capitalization described above, Participant shall be
entitled to new, additional or different shares of stock or securities of the
Company or any other corporation in respect of his or her Restricted Stock, in
the event that the Plan continues, such new, additional or different shares
shall thereupon be subject to all of the conditions, restrictions and
performance criteria which were applicable to the Restricted Stock prior to
such change in capitalization.

 

8.                                       Subject to the limitations set forth in the Plan,
the Committee is vested with absolute discretion and authority to interpret the
Plan and make all determinations necessary or advisable for the administration
thereof.  Any determination of the
Committee in the administration of the Plan, as described therein, shall be
final, conclusive and binding upon the Participant and any person claiming
under or through the Participant, including, without limitation, as to any
adjustments pursuant to Section 7 hereof.

 

9.                                       Nothing contained in the Plan or this Agreement
shall confer upon the Participant any right with respect to continuance of
employment by any Participating Company nor limit in any way the right of any
Participating Company to terminate or modify his or her employment at any time,
with or without Cause.

 

10.                                 If a Participating Company is for any reason
required to withhold any amount under the laws and regulations of the United
States, any jurisdiction thereof or local government with respect to the
issuance of Restricted Stock hereunder, or the lapse of restrictions with
respect thereto (“Withholding Taxes”), the Participant or other person
receiving such stock shall be required to pay such Participating Company the
amount of any such Withholding Taxes. 
The applicable Participating Company shall have the right to require the
payment of any such Withholding Taxes before issuing any Restricted Stock
hereunder or removing the restrictions with respect thereto.  In lieu of all or any part of a cash payment
regarding such Withholding Taxes, the Committee may permit a person to cover
all or any part of the Withholding Taxes, through a reduction in the number of
shares of stock delivered to such person or a delivery or tender to the Company
of shares of Common Stock held by such person, in each case valued in the same
manner as used in computing the Withholding Taxes under applicable laws.

 

11.                                 The Company shall not be required to issue or
deliver a certificate for shares of Restricted Stock hereunder unless the
issuance of such certificate complies with all applicable legal requirements
including, without limitation, compliance with the provisions of applicable
state securities laws, the Securities Act of 1933, as amended (the “Securities
Act”), the Securities Exchange Act of 1934, as amended, and the requirements of
the exchanges, if any, on which the Company’s shares of Common Stock may, at
that time, be listed.

 

12.                                 Notwithstanding anything contained in the Plan or
herein to the contrary, in the event that the disposition of shares of
Restricted Stock acquired pursuant to the Plan is not covered by a then current
registration statement under the Securities Act, and is not otherwise exempt
from such registration, such shares shall be restricted against transfer to the
extent required by the Securities Act and Rule 144 or other regulations
thereunder.  The

 

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certificates
evidencing any of such shares shall be appropriately amended or have an
appropriate legend placed thereon to reflect their status as restricted
securities as aforesaid.

 

13.                                 To the extent that federal laws of the United States
do not otherwise control, this Agreement shall be governed by the laws of New
Jersey, without giving effect to principles of conflicts of laws, and shall be
construed accordingly.

 

14.                                 In the event any provision of this Agreement shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of this Agreement, and this Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included.

 

15.                                 This Agreement shall be binding upon and inure to
the benefit of the successors (including by way of merger), assigns and heirs
of the respective parties.

 

16.                                 The Participant
acknowledges and agrees that a violation of Section 4 of this Agreement
will cause the Company irreparable injury for which adequate remedy at law is
not available.  Accordingly, the
Participant agrees that the Company shall be entitled to an injunction,
restraining order or other equitable relief, without the posting of any bond,
to prevent the breach of such Section and to enforce the terms and
provisions hereof in any court of competent jurisdiction in the United States
or any state thereof, in addition to any other remedy to which it may be
entitled at law or equity.

 

	
   

  	
  RUSS BERRIE AND
  COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED TO AND ACCEPTED AS OF THE

  DATE OF GRANT SET FORTH ABOVE:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURE-PARTICIPANT

  	
   

  
					

 

4Exhibit
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).

 

1

 

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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