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Exhibit 10.9  

 
  EMPLOYMENT AGREEMENT
  (Jan L. Murley)    

        This
EMPLOYMENT AGREEMENT (the "Agreement") is dated October    , 2003, by and between The Boyds Collection, Ltd., a Maryland corporation (the "Company) and Jan L.
Murley (the "Executive"). 

        WHEREAS,
the Company desires to employ Executive and to enter into an agreement embodying the terms of such employment; and 

        WHEREAS,
Executive desires to accept such employment and enter into such an agreement. 

        NOW,
THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows: 

        1.    Term of Employment.    Subject to the provisions of Section 8 of this Agreement, Executive shall be
employed by the Company for a period commencing on October    , 2003 (the "Commencement Date") and ending on the third anniversary of the Commencement Date (the "Employment Term"), on the
terms and subject to the conditions set forth in this Agreement; provided, that, commencing on the third anniversary of the date hereof and on each
anniversary thereafter (each an "Extension Date"), the Employment Term shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other
party hereto written notice at least 180 days prior to the next scheduled Extension Date that the Employment Term shall not be so extended, in which case the Employment Term shall end on such
next scheduled Extension Date. For purposes of this Agreement, the "Employment Term" shall include any such additional one-year periods of employment hereunder. 

        2.    Position.    

        a.     During
the Employment Term (so long as Executive remains employed hereunder), Executive shall serve as the Company's Chief Executive Officer, and, in such capacity, shall
be the most senior executive officer of the Company. In such position, Executive shall have such duties and authority as shall be determined from time to time by the Board of Directors of the Company
(the "Board"), which shall be consistent with the duties and authority of chief executive officers at public corporations of similar size and type. The Company shall also use its reasonable best
efforts to cause Executive, at all times during the Employment Term, to be appointed as a member of the Board. If so appointed, Executive shall serve on the Board without additional compensation. 

        b.     During
the Employment Term (so long as Executive remains employed hereunder), Executive will devote Executive's full business time and best efforts to the performance of
Executive's duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict with the rendition of such services either directly
or indirectly, without the prior written consent of the Board; provided, that, nothing herein shall preclude Executive, subject to the prior approval of
the Board, from continuing to serve as a member of the board of directors of The Clorox Company or from accepting appointment to any additional directorships or trusteeships, provided, in each case
and in the aggregate, that such activities do not interfere with the performance of Executive's duties hereunder or conflict with Section 9 of this Agreement. 

        3.    Base Salary.    During the Employment Term (so long as Executive remains employed hereunder), the Company shall
pay Executive a base salary (the "Base Salary") at the annual rate of $500,000, payable in regular installments in accordance with the Company's usual payment practices. The Base Salary shall be
reviewed annually by the Board, and Executive shall be entitled to such increases in Executive's Base Salary, if any, as may be determined from time to time in the sole discretion of the Board. 

        4.    Annual Bonus.    With respect to each full fiscal year of the Company (a "Fiscal Year") occurring during the
Employment Term, Executive shall be eligible to earn an annual bonus award (an 

 

"Annual
Bonus") of up to 200% of the Base Salary, with a target annual bonus of 100% of the Base Salary (the "Target Bonus"). Fifty percent (50%) of any such Annual Bonus shall be earned based on
budgetary goals to be achieved during the applicable Fiscal Year as agreed to by the Board and Executive, and 50% of any such Annual Bonus shall be earned based on Executive's achievement of certain
individual performance goals established by the Board. All performance goals shall be established as set forth herein no later than the last day of the first quarter of the Fiscal Year to which such
Annual Bonus relates. For Fiscal Year 2003, Executive shall receive a pro rata portion of Executive's Target Bonus based on the number of days Executive actually performs services hereunder during
Fiscal Year 2003. 

        5.    Equity Arrangements.    

        a.     Purchase
Equity. 

        (i)    On
December 1, 2003, Executive shall purchase from the Company 100,000 shares of common stock of the Company ("Common Stock") at a per share purchase price equal
to the closing trading price of one share of Common Stock on November 28, 2003 or, if no sale of shares of Common Stock shall have been reported on such date, then the immediately preceding
date on which sales of shares of Common Stock were so reported. Executive shall not be permitted to sell such shares while she is employed hereunder other than pursuant to that certain Sale
Participation Agreement, dated as of                        , 2003, by and between Executive and KKR 1996 Fund L.P. (the "Sale
Participation Agreement"), substantially in the form attached hereto as
Exhibit A, or with the express written consent of the Board. 

        (ii)   Executive
understands and agrees that the certificate (or certificates) representing such 100,000 shares of Common Stock shall bear a legend noted conspicuously on such
certificate in substantially the following form. "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE SALE PARTICIPATION AGREEMENT, DATED AS OF            , 2003, BY AND BETWEEN KKR
1996 FUND
L.P. AND JAN MURLEY AND THE EMPLOYMENT AGREEMENT, DATED AS OF OCTOBER    , 2003, BY AND BETWEEN THE BOYDS COLLECTION LTD. (THE "COMPANY") AND JAN MURLEY, COPIES OF WHICH ARE ON FILE
AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY AND WHICH, AMONG OTHER MATTERS, PLACE RESTRICTIONS ON THE SALE OF SUCH SHARES. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE,
AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH AGREEMENTS. IN ADDITION, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF ONLY PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED." 

        (iii)  On
or before March 15, 2004, the Company shall file with the Securities Exchange Commission a registration statement on Form S-8 registering
the re-sale by Executive of such 100,000 shares of Common Stock, which registration statement shall apply only to a re-sale occurring after Executive's employment hereunder is
terminated. 

        b.     Stock Options.    On the Commencement Date, the Company shall grant to Executive nonqualified stock options to
purchase an aggregate of 850,000 shares of Common Stock (the "Options"), pursuant to and in accordance with the terms of one or more of the following plans sponsored by the Company: 2001 Option Plan
for Key Employees of The Boyds Collection, Ltd., 2000 Option Plan for Key Employees of The Boyds Collection, Ltd., 1999 Option Plan for Key Employees of The Boyds
Collection, Ltd., and 1998 Option Plan for Key Employees of the Boyds 

2

 

Collection, Ltd.
and the related Non-Qualified Stock Option Agreements, substantially in the forms attached to this Agreement as Exhibit B, C, D and E to be entered into by
and between Executive and the Company (together, the "Option Documents"). The Options will have a per share exercise price equal to 100% of the Fair Market Value (as defined in the applicable Option
Documents) of Common Stock on the Commencement Date. 

        6.    Employee Benefits.    During the Employment Term (so long as Executive remains employed hereunder), Executive
shall be provided, in accordance with the terms of the Company's employee benefit plans as in effect from time to time, health insurance and short term and long term disability insurance, retirement
benefits and fringe benefits on the same basis as those benefits are generally made available to other senior executives of the Company. In addition, the Company shall provide Executive with life
insurance that provides a $4 million benefit upon Executive's accidental death and $2 million upon death otherwise typically covered by life insurance policies maintained by the Company
for its other senior executives (collectively with the benefits described in the prior sentence, the "Employee Benefits"). 

        7.    Business Expenses and Perquisites.    

        a.     Expenses.    During the Employment Term (so long as Executive remains employed hereunder), reasonable business
expenses incurred by Executive in the performance of Executive's duties hereunder shall be reimbursed by the Company in accordance with Company policies. 

        b.     Perquisites.    Executive shall be entitled to the following perquisites in connection with her employment
hereunder: 

        (i)    Automobile Expenses.    The Company shall pay reasonable automobile expenses incurred by Executive during the
Employment Term (so long as Executive remains employed hereunder) in connection with the performance of Executive's duties hereunder. 

        (ii)   Relocation Expenses.    The Company hereby acknowledges that, in connection with Executive's commencement of
employment hereunder, Executive shall be required to relocate her primary residence to a location more convenient to the performance of her duties hereunder, and that, in
connection with such relocation, Executive intends to offer for sale her current primary residence (the "Residence"). The Company hereby agrees to reimburse Executive for the following costs and
expenses in connection with the sale of the Residence: (A) the costs of the performance of two separate appraisals of the value and reasonable target sale price of the Residence (the average of
such two target sales prices (excluding any estimated closing costs associated with such sale) shall hereinafter be referred to as the "Target Sale Price"), with each such appraisal to be performed by
an independent, industry-qualified professional appraiser that is mutually acceptable to Executive and the Company, (B) with respect to the period commencing on the Commencement Date and ending
no later than the first anniversary of the Commencement Date (but in no event later than the date of the closing of the sale of the Residence), so long as Executive remains employed hereunder (the
"Reimbursement Period"), all costs incurred by Executive specifically related to Executive's maintaining her ownership of the Residence during such Reimbursement Period, including, without limitation,
any mortgage payment, insurance premium, utilities bill, property tax, and reasonable maintenance costs, but excluding any such costs payable during the Reimbursement Period but relating to
Executive's ownership of the Residence prior to the Commencement Date; and (C) so long as Executive remains employed hereunder at the time of the sale of the Residence, the excess, if any, of
the Target Sale Price over the actual sale price of the Residence. 

        In
addition to the foregoing, the Company shall reimburse Executive for reasonable travel, lodging and moving expenses incurred by Executive in connection with Executive's commencement
of 

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employment
hereunder, after receipt of documentation of such expenses from Executive in accordance with Company relocation policies. 

        8.    Termination.    

        a.     By the Company For Cause or By Executive's Resignation Without Good Reason.

        (i)    The
Employment Term and Executive's employment hereunder may be terminated by the Company for Cause (as defined below) or upon Executive's resignation without Good
Reason (as defined in Section 8(c) below) at any time. 

        (ii)   For
purposes of this Agreement, "Cause" shall mean (A) Executive's continued failure to substantially perform Executive's duties hereunder (other than as a
result of total or partial incapacity due to physical or mental illness), taken as a whole, for a period of 30 days following written notice by the Company to Executive of such failure
describing such failure, (B) dishonesty in the performance of Executive's duties hereunder, (C) an act or acts on Executive's part constituting (x) a (non-vehicular)
felony under the laws of the United States or any state thereof or (y) a (non-vehicular) misdemeanor involving moral turpitude, (D) Executive's willful malfeasance or willful
misconduct in connection with (i) Executive's duties hereunder or (ii) any
improper act or omission which is injurious (other than an injury which is insubstantial and insignificant, taking into account all of the circumstances) to the financial condition or business
reputation of the Company or any of its subsidiaries or affiliates, (E) Executive's intentional or material breach of the provisions of Section 9, 10 or 11 of this Agreement, or
(F) Executive's failure to purchase from the Company on December 1, 2003, 100,000 shares of Common Stock, as required by Section 5(a) of this Agreement. 

        (iii)  If
Executive's employment is terminated by the Company for Cause, or if Executive resigns without Good Reason after giving the Company 30 days advance written
notice of such resignation, Executive shall be entitled to receive: 

        (A)  the
Base Salary through the date of termination; 

        (B)  any
Annual Bonus earned but unpaid as of the date of termination for any previously completed Fiscal Year; 

        (C)  reimbursement
for any unreimbursed business and/or relocation expenses properly incurred by Executive in accordance with Company policy or as otherwise set forth in
Section 7(b)(ii) above prior to the date of Executive's termination; and 

        (D)  such
Employee Benefits (including but not limited to accrued vacation pay) or equity-related rights, if any, as to which Executive may be entitled under the employee
benefit plans of the Company or the Option Documents, respectively (the amounts described in clauses (A) through (D) hereof being referred to as the "Accrued Rights"). 

        Following
such termination of Executive's employment by the Company for Cause or resignation by Executive without Good Reason, except as set forth in this Section 8(a)(iii),
Executive shall have no further rights to any compensation or any other benefits under this Agreement. 

        b.     Death or Disability.

        (i)    The
Employment Term and Executive's employment hereunder shall terminate upon Executive's death or if Executive becomes physically or mentally incapacitated and is
therefore unable, for a period of six consecutive months or for an aggregate of nine months in any 24 consecutive month period, to perform Executive's duties (such incapacity is hereinafter referred
to as "Disability"). Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to Executive and the Company. If Executive and the 

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Company
cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The
determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement. 

        (ii)   Upon
termination of Executive's employment hereunder for either death or Disability, Executive or Executive's estate (as the case may be) shall be entitled to receive: 

        (A)  the
Accrued Rights; and 

        (B)  the
Target Bonus for such year pursuant to Section 4 hereof, payable when such Annual Bonus would have otherwise been payable had Executive's employment not
terminated. 

        Following
Executive's termination of employment due to death or Disability, except as set forth in this Section 8(b)(ii), Executive shall have no further rights to any
compensation or any other benefits under this Agreement. 

        c.     By the Company Without Cause or Resignation by Executive for Good Reason.

        (i)    The
Employment Term and Executive's employment hereunder may be terminated by the Company without Cause or by Executive for Good Reason at any time. 

        (ii)   For
purposes of this Agreement, "Good Reason" shall mean (A) the failure of the Company to pay or cause to be paid Executive's Base Salary or Annual Bonus (if
any) when due hereunder or (B) any substantial and sustained diminution in Executive's authority or responsibilities from those described in Section 2 hereof; provided, that, either of
the events described in clauses (A) and (B) of this Section 8(c)(ii) shall constitute Good Reason only if the Company shall have failed to cure such event
within 30 days after the Company's receipt of written notice by Executive describing the events which Executive alleges constitute Good Reason. 

        (iii)  Prior
to a Change of Control (as defined in Section 8(c)(v),below), if Executive's employment is terminated by the Company without Cause based on Executive's
performance of Executive's duties to the Company hereunder, as determined by the Board in its sole discretion (other than by reason of death or Disability) (a "Performance Termination"), Executive
shall be entitled to receive: 

        (A)  the
Accrued Rights; and 

        (B)  subject
to Executive's continued compliance with the provisions of Sections 9, 10 and 11, (1) continued payment of the Base Salary and (2) continuation of
medical, dental and life insurance benefits, in each case, subject to Section 9(b) hereof, for 24 months after the date of such termination; provided,
that, the aggregate amount described in this clause (B) shall be reduced by the present value of any other cash severance or termination benefits payable to Executive
under any other plans, programs or arrangements of the Company or its affiliates; and provided, further, that the medical and dental benefits shall
terminate upon Executive becoming eligible to receive comparable benefits from any other source, of which Executive is required to promptly notify the Company. 

        Following
a Performance Termination, except as set forth in this Section 8(c)(iii), Executive shall have no further rights to any compensation or any other benefits under this
Agreement. 

        (iv)  If
Executive's employment is terminated, (x) prior to a Change of Control, by the Company without Cause, other than by reason of a Performance Termination,
(y) after the occurrence of a Change of Control, by the Company without Cause for any reason (other than by 

5

 

reason
of death or Disability) or (z) by Executive for Good Reason at any time, Executive shall be entitled to receive: 

        (A)  the
Accrued Rights; and 

        (B)  subject
to Executive's continued compliance with the provisions of Sections 9, 10, and 11, and, except as otherwise limited by Section 9(b) hereof,
(1) continued payment of the Base Salary for 24 months after the date of such termination, (2) continuation of medical, dental and life insurance benefits for 24 months
after the date of such termination and (3) an amount equal to the sum of the Annual Bonus actually earned with respect to the prior two Fiscal Years of the Company (if Executive
has been employed hereunder more than one but less than two Fiscal Years, such payment shall be equal to two times Executive's Annual Bonus earned with respect to the previous Fiscal Year, and if
Executive has been employed hereunder less than one Fiscal Year, such payment shall be equal to two times Executive's Target Bonus for such Fiscal Year), payable in substantially equal monthly
installments during such 24-month period; provided, that, the aggregate amount described in this clause (B) shall be reduced by the
present value of any other cash severance or termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates; and  provided, further, that the
medical and dental benefits shall terminate upon Executive becoming eligible to receive comparable benefits from any other
source, of which Executive is required to promptly notify the Company. 

        Following
Executive's termination of employment, (x) prior to a Change of Control, by the Company without Cause, other than by reason of a Performance Termination,
(y) after the occurrence of a Change of Control, by the Company without Cause for any reason (other than by reason of death or Disability) or (z) by Executive for Good Reason at any
time, except as set forth in this Section 8(c)(iv), Executive shall have no further rights to any compensation or any other benefits under this Agreement. 

        (v)   For
purposes of this Agreement, "Change of Control" shall mean (A) a sale of all or substantially all of the assets of the Company to a person who is not an
affiliate of Kohlberg Kravis Roberts & Co. L.P. ("KKR"), (B) a sale by KKR or any of its affiliates (collectively, the "KKR Partnerships") resulting in more than 50% of the voting stock
of the Company being held by a person or group that does not include any of the KKR Partnerships or (C) the consummation of a merger or consolidation of the Company into another person that is
not an affiliate of KKR; if and only if any such event results in the inability of the KKR Partnerships to elect a majority of the Board or of the board of directors of the resulting entity. 

        d.     Expiration of Employment Term.

        (i)    Election Not to Extend the Employment Term.    In the event either party elects not to extend the Employment
Term pursuant to Section 1, unless Executive's employment is earlier terminated pursuant to paragraphs (a), (b) or (c) of this Section 8, Executive's termination of
employment hereunder (whether or not Executive continues as an employee of the Company thereafter) shall be deemed to occur on the close of business on the day immediately preceding the next scheduled
Extension Date. If the Company so elects not to extend the Employment Term, Executive shall be treated as having been terminated without Cause and Executive's rights and obligations shall be
determined in accordance with Section 8(c)(iii) or Section 8(c)(iv), as the Board shall determine. If Executive so elects not to extend the Employment Term, Executive shall be
entitled to the Accrued Rights. 

        Following
such termination of Executive's employment hereunder as a result of either party's election not to extend the Employment Term, except as set forth in this
Section 8(d)(i), Executive shall have no further rights to any compensation or any other benefits under this Agreement. 

6

 

        (ii)   Continued Employment Beyond the Expiration of the Employment Term.    Unless the parties otherwise agree in
writing, continuation of Executive's employment with the Company beyond the expiration of the Employment Term shall be deemed an employment-at-will and shall not be deemed to
extend any of the provisions of this Agreement and Executive's employment may thereafter be terminated at will by either Executive or the Company;  provided that the provisions of Sections 9, 10, 11, 12
and 13(h) of this Agreement shall survive any termination of this Agreement or Executive's
termination of employment hereunder. 

        e.     Notice of Termination.    Any purported termination of employment by the Company or by Executive (other than due
to Executive's death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 13(g) hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of employment under the provision so indicated. 

        f.      Board Resignation.    Upon termination of Executive's employment for any reason, Executive agrees to resign, as
of the date of such termination, from the Board and the Board of Directors of any of the Company's affiliates. 

        g.     Execution of Release of All Claims.    Upon good and valuable consideration, the receipt of which the Executive
hereby acknowledges, upon termination of Executive's employment for any reason in accordance with the terms hereof, Executive agrees to execute a release of all claims against the Company and its
shareholders, and any of their respective subsidiaries, affiliates, shareholders, partners, directors, officers, employees and agents (the "Protected Group"), substantially in the form attached hereto
as Exhibit F. Notwithstanding anything set forth in this Agreement to the contrary, upon termination of Executive's employment for any reason in accordance with the terms hereof, Executive
shall not receive any payments or benefits to which she may be entitled hereunder (other than those which by law cannot be subject to the execution of a release) (A) if Executive revokes such
release or (B) until eight days after the date Executives signs such release (or until such other date as applicable law may provide that Executive cannot revoke such release). 

        h.     Accrued Rights.    The Accrued Rights, other than those set forth in Section 8(a)(iii)(D) of this
Agreement, shall be paid to the Executive (or Executive's Estate) when such payments were otherwise due to Executive, but in no event later than thirty (30) days following the occurrence of the
termination event. 

        9.    Non-Competition.    

        a.     Executive
acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows: 

        (1)   During
the Employment Term and, subject to Section 9(b) of this Agreement, for a period of two years following the date Executive ceases to be employed by the
Company (the "Restricted Period"), Executive will not directly or indirectly, (i) engage in any business that competes with the business of the Company or any affiliate of the Company in the
Company's line of business (each, a "Company Entity"), including, without limitation, businesses which any Company Entity has specific plans to conduct within the next twelve (24) months and as
to which Executive is aware of such planning, (ii) enter the employ of, or render any services to, any person engaged in any business that competes with the business of any Company Entity,
(iii) acquire a financial interest in, or otherwise become actively involved with, any person engaged in any business that competes with the business of any Company Entity, directly or
indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant, or 

7

 

(iv) interfere
with business relationships (whether formed before or after the date of this Agreement) between any Company Entity and customers or suppliers of such Company Entity. 

        (2)   Notwithstanding
anything to the contrary in this Agreement, Executive may, directly or indirectly, own, solely as an investment, securities of any person engaged in the
business of any Company Entity which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a controlling
person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own 1% or more of any class of securities of such person. 

8

   
        (3)   During the Restricted Period, Executive will not, directly or indirectly, (i) solicit or encourage any employee of any Company Entity to leave the employment of
any Company Entity, or (ii) hire any such employee who was employed by a Company Entity as of the date of Executive's termination of employment with the Company or who left the employment of a
Company Entity within one year prior to or after the termination of Executive's employment with the Company. 

        (4)   During
the Restricted Period, Executive will not, directly or indirectly, solicit or encourage to cease to work with any Company Entity any consultant then under
contract with such Company Entity. 

        b.     Notwithstanding
any provision of this Agreement to the contrary, on or after the date that is 18 months after the date of Executive's termination of employment
hereunder, Executive shall be entitled to engage in any of the activities specifically prohibited under Section 9(a) of this Agreement and such activity shall not constitute a breach of this
Agreement, provided, that, Executive shall provide written notice to the Company not less than 30 days prior to her commencement of such
activities and such notice shall constitute a waiver by Executive of her rights to any further payment of all amounts and continuation of benefits due under Section 8(c)(iii)(B) or 8(c)(iv)(B)
hereof beyond the later of the date such activity commences or the date that is 18 months after the date of Executive's termination of employment hereunder. 

        c.     It
is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 9 to be reasonable, if a final
judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive,
the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine
or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so
as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein. 

        10.    Confidentiality.    Executive will not at any time (whether during or after Executive's employment with the
Company) disclose or use for Executive's own benefit or purposes or the benefit or purposes of any other person, firm, partnership, joint venture, association, corporation or other business
organization, entity or enterprise other than the Company and any of its subsidiaries or affiliates, any trade secrets, information, data, or other confidential information relating to customers,
development programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial data, manufacturing processes, financing methods, plans, or the business and affairs of
the Company generally, or of any subsidiary or affiliate of the Company, provided that the foregoing shall not apply to information which is not unique
to the Company or which is generally known to the industry or the public other than as a
result of Executive's breach of this covenant. Executive agrees that upon termination of Executive's employment with the Company for any reason, he will return to the Company immediately all
memoranda, books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to the business of the Company and its affiliates, except that he may
retain personal notes, notebooks and diaries that do not contain confidential information of the type described in the preceding sentence. Executive further agrees that he will not retain or use for
Executive's account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Company or its affiliates. 

        11.    Non-disparagement.

        a.     Executive
shall not at any time make any oral or written statement about the Company, its subsidiaries or its shareholders, regarding any of the foregoing's financial
status, business, compliance with laws, ethics, shareholders, partners, personnel, directors, officers, employees, 

9

 

consultants,
agents, services, business methods or otherwise, which is intended or reasonably likely to disparage any member of the Protected Group, or otherwise degrade any member of the Protected
Group's reputation in the business, industry or legal community in which any such member operates; provided,  that, Executive shall be permitted to make
such statements to the extent necessary to defend herself against (i) any statement made by the
Company in breach of its obligations under Section 11(b) of this Agreement, and (ii) any public statement, other than a statement made under Section 11(b) hereof, that is made by
any officer or director of the Company which is intended or reasonably likely to disparage Executive or otherwise degrade Executive's reputation in the business or industry in which Executive
operates, in each case, only if Executive reasonably believes that her statements made in such defense are true and accurate statements. 

        b.     The
Company shall not issue any press release or public statement about Executive which is intended or reasonably likely to disparage Executive, or otherwise degrade
Executive's reputation in the business or industry in which Executive operates; provided, that, the
Company shall be permitted to (i) make any statement that is required by applicable securities or other laws to be included in a filing or disclosure document, (ii) issue any press
release or public statement regarding the fact of a termination of Executive's employment and, (iii) defend itself against any statement made by Executive that is intended or reasonably likely
to disparage any member of the Protected Group or otherwise degrade any member of the Protected Group's reputation in the business, industry or legal community in which such member of the Protected
Group operates, only if the Company reasonably believes that the statements made in such defense are not false statements. 

        12.    Specific Performance.    Executive acknowledges and agrees that the Company's remedies at law for a breach or
threatened breach of any of the provisions of Section 9, 10 or 11 would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and
obtain
equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available. 

        13.    Miscellaneous.  

        a.     Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard
to conflicts of laws principles thereof. 

        b.     Entire Agreement/Amendments.    This Agreement contains the entire understanding of the parties with respect to
the employment of Executive by the Company, subject to the provisions of the Option Documents and the Sale Participation Agreement. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified or amended except by
written instrument signed by the parties hereto. 

        c.     No Waiver.    The failure of a party to insist upon strict adherence to any term of this Agreement on any
occasion shall not be considered a waiver of such party's rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. 

        d.     Severability.    In the event that any one or more of the provisions of this Agreement shall be or become
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. 

        e.     Assignment.    This Agreement shall not be assignable by Executive. This Agreement may be assigned by the
Company to its affiliates or to a person or entity that is a successor in interest 

10

 

to
substantially all of the business operations of the Company. Such assignment shall become effective when the Company notifies Executive of such assignment or at such later date as may be specified
in such notice. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such successor company; provided  that any assignee expressly assumes
the obligations, rights and privileges of this Agreement. 

        f.      Successors; Binding Agreement.    This Agreement shall inure to the benefit of and be binding upon personal or
legal representatives, executors, administrators, successors, heirs, distributes, devises and legatees. 

        g.     Notice.    For the purpose of this Agreement, notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered or mailed by overnight courier or United States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt. 

If
to the Company: 

c/o
Kohlberg Kravis Roberts & Co.

9 West 57th Street

Suite 4200

New York, NY 10019

Attention: Marc Lipschultz

With
a copy to: 

Simpson
Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Alvin Brown, Esq. 

If
to Executive: 

To
the most recent address of Executive set forth in the personnel records of the Company. 

With
a copy to: 

Neal,
Gerber & Eisenberg LLP

2 North LaSalle Street

Suite 2200

Chicago, Illinois 60602

Attention: Barry J. Shkolnik, Esq. 

        h.     Indemnification.    The Company agrees that if Executive is made a party to any action, suit or proceeding by
reason of the fact that Executive is or was a director, officer or employee of the Company, Executive shall be indemnified and held harmless by the Company to the fullest extent legally permitted or
authorized by the Company's certificate of incorporation or bylaws or, if greater, by the laws of the state of the Company's incorporation as of the date of the matter at issue, against all cost,
expense, liability and loss reasonably incurred or suffered by Executive. The Company agrees to continue and maintain a directors' and officers' liability insurance policy covering Executive that is
no less favorable than the policy covering other directors and senior officers of the Company. The provisions of this paragraph and the provisions of Sections 9, 10, 11 and 12 of this Agreement, shall
survive the termination of Executive's employment for any reason. 

        i.      Executive Representation.    Executive hereby represents to the Company that the execution and delivery of this
Agreement by Executive and the Company and the performance by Executive 

11

 

of
the Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or
otherwise bound. 

        j.      Jurisdiction; Right to Jury Trial.    Each party hereby consents to the jurisdiction of the federal and state
courts in the State of New York, irrevocably waives any objection it may now or hereafter have to laying of the venue of any suit, action or proceeding in connection with this Agreement in any such
court, and agrees that service upon it shall be sufficient if made by registered mail. EXECUTIVE HEREBY AGREES TO WAIVE HER RIGHT TO A JURY TRIAL OVER ANY DISPUTE ARISING UNDER
THIS AGREEMENT.

        k.     Withholding Taxes.    The Company may withhold from any amounts payable under this Agreement such Federal, state
and local taxes as may be required to be withheld pursuant to any applicable law or regulation. 

        l.      Counterparts.    This Agreement may be signed in counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument. 

12

 

        IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. 

	 	 	THE BOYDS COLLECTION, LTD.
	

 	
 	
By:	

 
	 	 	 	
 JAN L. MURLEY

Title: Chief Executive Office

13

  

 
 

Exhibit A    
    

 
 

SALE PARTICIPATION AGREEMENT    
    

As of [                        ], 2003 

	To:	The Person whose name

and address are set forth

on the signature page hereof	 	 

Dear
Sir or Madam: 

        You
have entered into certain agreements and arrangements between The Boyds Collection, Ltd., a Maryland corporation ("the Company"), and you relating to your ownership and/or
purchase of shares of the common stock, par value $.0001 per share of the Company (the "Common Stock"). KKR 1996 Fund L.P. (together with its affiliates, the "Investors") also has purchased shares of
Common Stock and hereby agree with you as follows, effective upon such purchase of Common Stock by you: 

        1.     In
the event that at any time the Investors (each, a "Selling Party" and collectively, the "Selling Parties"), propose to sell for cash or any other consideration any
shares of Common Stock owned by them, in any transaction other than a public offering or a sale to an affiliate of an Investor or a partner, executive or employee of KKR or an affiliate thereof who
agrees in writing to be bound by the provisions hereof (it being understood that if Common Stock owned by an Investor is pledged to a financial institution as collateral for a bona fide loan and such
Common Stock is transferred to such financial institution pursuant to the terms of the definitive agreements evidencing such loan and pledge, such transfer shall not constitute a Proposed Sale
hereunder), the Investors will notify you or your executors, administrators, testamentary trustees, legatees or beneficiaries (collectively, your "estate"), as the case may be, in writing (a "Notice")
of such proposed sale (a "Proposed Sale") and the material terms of the Proposed Sale as of the date of the Notice (the "Material Terms") promptly, and in any event not less than 15 days prior
to the consummation of the Proposed Sale and not more than 5 days after the execution of the definitive agreement relating to the Proposed Sale, if any (the "Sale Agreement"). If within
10 days of your or your estate's receipt of such Notice the Selling Party receives from you or your estate a written request (a "Request") to include Common Stock held by you or your estate, in
the Proposed Sale (which Request shall be irrevocable unless (a) there shall be a material adverse change in the Material Terms or (b) if otherwise mutually agreed to in writing by you
or your estate and the Selling Party), the Common Stock so held by you will be so included as provided herein; provided that only one Request, which shall be executed by you or your estate may be
delivered with respect to each Proposed Sale for all Common Stock held by you or your estate. Promptly after the consummation of the transactions contemplated thereby, the Selling Party will furnish
you or your estate with a copy of the Sale Agreement, if any. 

        2.     The
number of shares of Common Stock which you or your estate will be permitted to include in a Proposed Sale pursuant to a Request will be (i) the product of
(A) the number of shares of Common Stock then owned by you or your estate, as the case may be, plus all shares of Common Stock which you are then entitled to acquire under an unexercised option
to purchase shares of Common Stock, to the extent such option is then vested or would become vested as a result of the consummation of the Proposed Sale by the Investors and (B) the vesting
percentage set forth in the option agreement under the Company's option plan, multiplied by (ii) the quotient determined by dividing (1) the aggregate number of shares of Common Stock
proposed to be sold in the Proposed Sale by (2) the sum of (x) the aggregate number of shares of Common Stock owned by all parties who have rights pursuant to this Agreement and
(y) the aggregate number of shares of Common Stock held 

A-1

 

by
the Investors, including any affiliates of KKR. If one or more holders of shares of Common Stock who have been granted the same rights granted to you or your estate hereunder elect not to include
the maximum number of shares of Common Stock which such holders would have been permitted to include in a Proposed Sale (the "Eligible Shares"), the Investors, or such remaining holders of shares of
Common Stock, or any of them, may sell in the Proposed Sale a number of additional shares of Common Stock owned by any of them equal to their pro rata portion of the number of Eligible Shares not
included in the Proposed Sale, based on the relative number of shares of Common Stock then held by each such holder, and such additional shares of Common Stock which any such holder or holders propose
to sell shall not be included in any calculation made pursuant to the first sentence of this Paragraph 2 for the purpose of determining the number of shares of Common Stock which you or your
estate will be permitted to include in a Proposed Sale. The Investors may sell in the Proposed Sale additional shares of Common Stock owned by any of them equal to any remaining Eligible Shares which
will not be included in the Proposed Sale pursuant to the foregoing. 

        3.     If
the Investors (including KKR or its affiliates) receive an offer from a person who is not affiliated with KKR to purchase in a Proposed Sale (a) at least a
majority of the shares of Common Stock then outstanding or (b) all or substantially all of the shares of Common Stock owned by the Investors, and such offer is accepted by the Investors, then
each of you and/or your estate hereby agrees that, if requested by the Investors ("KKR Request"), you and your estate will sell in such Proposed Sale on the same terms and conditions (including,
without limitation, time of payment and form of consideration) as to be paid and given to the Investors, the number of shares of Common Stock equal to the number of shares of Common Stock owned by you
and/or your estate multiplied by (x) in the case of a Proposed Sale described in clause (a) above, the percentage of the then outstanding shares of Common Stock to which the Proposed
Sale is applicable or (y) in the case of a Proposed Sale described in clause (b) above, the percentage of the shares of Common Stock owned by the Investors to which the Proposed Sale is
applicable. 

        4.     (a)
Except as may otherwise be provided herein, shares of Common Stock subject to a Request will be included in a Proposed Sale pursuant hereto and in any agreements with
purchasers relating thereto on the same terms and subject to the same conditions applicable to the shares of Common Stock which the Selling Party proposes to sell in the Proposed Sale. Such terms and
conditions shall include, without limitation: the sales price; the payment of fees, commissions and expenses; the provision of, and representation and warranty as to, information requested by the
Selling Party; and the provision of requisite indemnifications; provided that any indemnification provided by you or your estate shall be pro rata in proportion with the number of shares of Common
Stock to be sold. 

        (b)   In
the event of a transaction (such as a merger or consolidation) involving the Company which results in a change of control transaction but is not a Proposed Sale (a
"Proposed Transaction"), you agree on behalf of yourself and your estate to bear your pro rata share of any fees, commissions, adjustments to purchase
price, expenses or indemnities borne by the Investors. 

        (c)   Your
pro rata share of any amount pursuant to Paragraphs 4(a) or (b) shall be based upon the number of shares of Common Stock owned by you and your estate plus
the number of shares of Common Stock you would have the right to acquire under unexercised options which are then vested or would become vested as a result of the Proposed Sale or Proposed
Transaction. 

        (d)   The
Investors shall be entitled to estimate the amount of fees, commissions, adjustments to purchase price, expenses or indemnities in connection with any Proposed Sale
or Proposed Transaction and to withhold such amounts from payments to be made to you and your estate at the time of closing of such Proposed Sale or Proposed Transaction;  provided that, (i) such
estimate shall not preclude The Investors from recovering additional amounts from you and your estate in respect of such
fees, commissions, adjustments to purchase price, expenses or indemnities and 

A-2

 

(ii) The
Investors shall reimburse you and your estate to the extent actual amounts are ultimately less than the estimated amounts. 

        5.     Upon
delivering a Request, you or your estate will, if requested by the Selling Party, execute and deliver a custody agreement and power of attorney in form and substance
satisfactory to the Selling Party with respect to the shares of Common Stock which are to be sold by you or your estate pursuant hereto (a "Custody Agreement and Power of Attorney"). The Custody
Agreement and Power of Attorney will provide, among other things, that you or your estate will deliver to and deposit in custody with the custodian and attorney-in-fact named
therein a certificate or certificates representing such shares of Common Stock (duly endorsed in blank by the registered owner or owners thereof) and irrevocably appoint said custodian and
attorney-in-fact as your or your estate's representative, agent and attorney-in-fact with full power and authority to act under the Custody Agreement
and Power of Attorney on your or your estate's behalf with respect to the matters specified therein. 

        6.     Your
or your estate's right pursuant hereto to participate in a Proposed Sale shall be contingent on your or your estate's strict compliance with each of the provisions
hereof and your or your estate's willingness to execute such documents in connection therewith as may be reasonably requested by the Selling Party. 

        7.     The
obligations of the Investors hereunder shall extend only to you or your estate and no one else, including any successors or assigns shall have any rights pursuant
hereto. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Common Stock, to any and all shares of capital stock which may be issued in respect of, in
exchange for, or substitution of the Common Stock, by reason of any stock dividend, split, reverse split, combination, recapitalization, liquidation, reclassification, merger, consolidation or
otherwise. 

        8.     (a)
Until such time as the Investors cease to own 20% or more of the voting equity securities of the Company, the Company will promptly notify you or your estate in
writing (a "Registration Notice") of any proposed registration (a "Proposed Registration") in connection with a public offering pursuant to an effective registration statement relating to the sale of
shares of Common Stock by the Investors (a "Qualified Public Offering"). If within 15 days of the receipt by you or your estate of such Notice, the Company receives from you or your estate a
written request (a "Request") to register shares of Common Stock held by you or your estate (which Request will be irrevocable unless otherwise mutually agreed to in writing by you or your estate and
the Company), shares of Common Stock will be so registered as provided in this Section 8(a); provided, however, that for each such registration
statement only one Request, which shall be executed by you or your estate may be submitted for all shares of Common Stock held by you or your estate. 

        (b)   The
maximum number of shares of Common Stock which will be registered pursuant to a Request will be the lowest of (i) (x) the product of (A) the number of
shares of Common Stock then held by you or your estate, as the case may be, plus all shares of Common Stock which you are then entitled to acquire under an unexercised option to purchase shares of
Common Stock, to the extent such option is then vested and (B) the vesting percentage set forth in the option agreement under the Company's option plan, multiplied by (ii) the quotient
determined by dividing (1) the aggregate number of shares of Common Stock requested by the Investors to be registered by (2) the sum of (x) the aggregate number of shares of
Common Stock owned by the Investors and (y) the aggregate number of shares of Common Stock held by other parties that have a right to request registration of their shares of Common Stock in
such offering and (ii) the maximum number of shares of Stock which the Investors and members of management can register in the Proposed Registration without adverse effect on the offering in
the view of the managing underwriters (reduced pro rata with all other members of management) as more fully described in subsection (c) of this Section 8. 

A-3

 

        (c)   If
a Proposed Registration involves an underwritten offering and the managing underwriter advises the Company or the Investors in writing that, in its opinion, the
number of shares of Common Stock requested to be included in the Proposed Registration exceeds the number which can be sold in such offering, so as to be likely to have an adverse effect on the price,
timing or distribution of the shares of Common Stock offered in such Qualified Public Offering as contemplated by the Investors, then will include in the Proposed Registration (i) first, 100%
of the shares of Common Stock the Company proposes to sell and (ii) second, to the extent of the number of shares of Common Stock requested to be included in such registration which, in the
opinion of such managing underwriter, can be sold without having the adverse effect referred to above, the number of shares of Common Stock which the holders of the Company's registrable securities
("Holders"), including, without limitation, the Investors,
you and your estate have requested to be included in the Proposed Registration, such amount to be allocated pro rata among all requesting Holders on the basis of the relative number of shares of
Common Stock then held by each such Holder (provided that any shares thereby allocated to any such Holder that exceed such Holder's request will be reallocated among the remaining requesting Holders
in like manner). 

        (d)   Upon
delivering a Request you or the representative of your estate will, if requested by the Company or the Investors, execute and deliver a custody agreement and power
of attorney in form and substance satisfactory to the Company or the Investors with respect to the shares of Common Stock to be registered pursuant to this Section 8 (a "Custody Agreement and
Power of Attorney"). The Custody Agreement and Power of Attorney will provide, among other things, that you will deliver to and deposit in custody with the custodian and
attorney-in-fact named therein a certificate or certificates representing such shares of Common Stock (duly endorsed in blank by the registered owner or owners thereof or
accompanied by duly executed stock powers in blank) and irrevocably appoint said custodian and attorney-in-fact as your agent and attorney-in-fact with
full power and authority to act under the Custody Agreement and Power of Attorney on your behalf with respect to the matters specified therein. 

        (e)   You
and your estate agree that you or your estate representative will execute such other agreements as the Company, the Investors or the underwriter may reasonably
request to further evidence the provisions of this Section 8, including a registration rights agreement in a form reasonably provided to you by the Company. 

        9.     This
Agreement shall terminate and be of no further force and effect on the earlier of the date that is 18 months after the date of your termination of employment,
or the date on which the Investors cease to own 20% or more of the Company's equity voting securities. 

        10.   All
notices and other communications provided for herein shall be in writing and shall be deemed to have been duly given when delivered to the party to whom it is
directed: 

        If
to the Investors to it at the following address: 

c/o
Kohlberg Kravis Roberts & Co.

9 West 57th Street

Suite 4200

New York, New York 10019

Attn: Scott M. Stuart 

with
a copy to: 

Simpson
Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn: Alan G. Schwartz, Esq. 

A-4

 

        If
to you, to you at the address first set forth above herein; If to your estate, at the address provided to such parties by such entity; or at such other address as any of the above
shall have specified by notice in writing delivered to the others by certified mail, overnight delivery or telecopy. 

        11.   The
laws of the State of New York shall govern the interpretation, validity and performance of the terms of this Agreement. No suit, action or proceeding with respect to
this Agreement may be brought in any court or before any similar authority other than in a court of competent jurisdiction in the State of New York, as the Selling Parties may elect in their sole
discretion, and you hereby submit to the non-exclusive jurisdiction of such courts for the purpose of such suit, proceeding or judgment. You hereby irrevocably waive any right which you
may have had to bring such an action in any other court, domestic or foreign, or before any similar domestic or foreign authority. You hereby irrevocably and unconditionally waive trial by jury in any
legal action or proceeding in relation to this Agreement and for any counterclaim therein. 

        12.   If
KKR transfers its interest in the Company to an affiliate of KKR, such affiliate shall assume the obligations hereunder as an Investor. 

        13.   Notwithstanding
any other provision of this Agreement, neither the officers or directors of KKR, nor any general partner, limited partner or member of any affiliate or
future general or limited partner or member of any affiliate of KKR, shall have any personal liability for performance of any obligation of such entity under this Agreement. 

        It
is the understanding of the undersigned that you are aware that no Proposed Sale presently is contemplated and that such a sale may never occur. 

A-5

 

        If
the foregoing accurately sets forth our agreement, please acknowledge your acceptance thereof in the space provided below for that purpose. 

	 	 	Very truly yours,
	

 	
 	
THE INVESTORS:
	

 	
 	

KKR 1996 FUND L.P.
	

 	
 	
By:	

KKR Associates 1996 L.P.,

its general partner
	

 	
 	

By:	

KKR 1996 GP LLC, its general partner
	

 	
 	

By:	

	

 	
 	

THE BOYDS COLLECTION, LTD. (only with

respect to obligations under Section 8

of the Agreement)
	

 	
 	

 By:

Title:

	

Accepted and agreed to:	
 	

 
	

By:	

	
 	

 
	

            [Address]	
 	

 

A-6

  

 
 

Exhibit F
  
    RELEASE    
    

        In exchange for a portion of the benefits described in the attached Employment Agreement dated October    , 2003 (the "Agreement"), to which I agree I
am not otherwise entitled, I hereby release The Boyds Collection Ltd. (the "Company"), its respective affiliates, subsidiaries, predecessors, successors, assigns, officers, directors,
employees, agents, stockholders, attorneys, and insurers, past, present and future (the "Released Parties") from any and all claims of any kind which I now have or may have against the Released
Parties, whether known or unknown to me, by reason of facts which have occurred on or prior to the date that I have signed this Release; provided, that such released claims shall not include any
claims to enforce your rights under, or with respect to, the Agreement. Notwithstanding the generality of the preceding sentence, such released claims include, without limitation, any and all claims
under federal, state or local laws pertaining to employment, including the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e  et seq., the Fair Labor Standards Act, as amended, 29 U.S.C. Section 201 et seq.,
the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101 et seq., the Reconstruction Era Civil Rights Act, as amended, 42
U.S.C. Section 1981 et seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701 et seq., the Family and
Medical Leave Act of 1992, 29 U.S.C. Section 2601 et seq., and any and all state or local laws regarding employment discrimination and/or
federal, state or local laws of any type or description regarding employment, including but not limited to any claims arising from or derivative of my employment with the Company, as well as any and
all claims under state contract or tort law or otherwise. 

        I
hereby represent that I have not filed any action, complaint, charge, grievance or arbitration against the Company or the Released Parties. 

        I
understand and agree that I must forever continue to keep confidential all proprietary or confidential information which I learned while employed by the Company, whether oral or
written and as defined in the Agreement ("Confidential Information") and shall not make use of any such Confidential Information on my own behalf or on behalf of any other person or entity; provided
however, that I may divulge such Confidential Information if I am required to do so by a court of law, by any governmental agency having supervisory authority over the business of the Company, or by
any administrative or legislative body with apparent jurisdiction to order me to divulge, disclose or make accessible such Confidential Information. 

        I
expressly understand and agree that the Company's obligations under this Release are in lieu of any and all other amounts to which I might be, am now or may become entitled to receive
from any of the Released Parties upon any claim whatsoever. 

        I
understand that I must not disclose the terms of this Release and the Agreement to anyone other than my immediate family, financial advisors (if any) and legal counsel, that I must
immediately inform my immediate family, financial advisors (if any) and legal counsel that they are prohibited from disclosing the terms of this Release and the Agreement. 

        It
is understood that I will not be in breach of the nondisclosure provisions of this Release if I am required to disclose information pursuant to a valid subpoena or court order,
provided that I notify the Company (to the attention of the General Counsel of the Legal Department) within one business day that I have received the subpoena or court order which may require me to
disclose information protected by this Release. Notwithstanding the foregoing, I may also disclose the terms of this Release to government taxing authorities. 

        I
agree that any violation or breach by me of my nondisclosure obligations, without limiting the Company's remedies, shall give rise on the part of the Company to a claim for relief to
recover from me, before a court of competent jurisdiction, any and all amounts previously paid to or on behalf of me 

F-1

 

by
the Company pursuant to the Agreement, but shall not release me from the performance of my obligations under this Release. 

        I
will not apply for or otherwise seek employment with the Released Parties. 

        I
have read this Release carefully, acknowledge that I have been given at least 21 days to consider all of its terms, and have been advised to consult with an attorney and any
other advisors of my choice prior to executing this Release, and I fully understand that by signing below I am voluntarily giving up any right which I may have to sue or bring any other claims against
the Released Parties, including any rights and claims under the Age Discrimination in Employment Act. I also understand that I have a period of 7 days after signing this Release within which to
revoke my agreement, and that neither the Company nor any other person is obligated to provide any benefits to me pursuant to the Agreement until 8 days have passed since my signing of this
Release without my signature having been revoked. I understand that any revocation of this Release must be received by the Senior Vice President or Executive Vice President of Human Resources within
the seven-day revocation period. Finally, I have not been forced or pressured in any manner whatsoever to sign this Release, and I agree to all of its terms voluntarily. I represent and
acknowledge that no representation, statement, promise, inducement, threat or suggestion has been made by any of the Released Parties or by any other
individual to influence me to sign this Release except such statements as are expressly set forth herein or in the Agreement. 

        This
Release is final and binding and may not be changed or modified. 

	

 DATE	
 	

 Jan Murley

F-2

 
 

AMENDMENT TO EMPLOYMENT AGREEMENT
  (Jan L. Murley)    

        THIS
AMENDMENT, dated as of the    day of March, 2004, by and between The Boyds Collection, Ltd., a Maryland corporation (the "Company") and Jan L. Murley (the
"Executive"). 

 
 

RECITALS    
    

        WHEREAS, the Company and the Executive entered into an Employment Agreement, dated as of October 21, 2003 (the "Employment Agreement"), pursuant to which
the Company agreed to employ the Executive, and the Executive agreed to become employed by the Company, pursuant to the terms and conditions of such Employment Agreement; and 

        WHEREAS,
the Company and the Executive desire to amend Section 5(a)(iii) of the Employment Agreement to change the date when the Company must file with the Securities
Exchange Commission a registration statement on Form S-8 registering the Executive's re-sale, after the Executive's employment is terminated, of 100,000 shares of common
stock of the Company that the Executive purchased from the Company pursuant to Section 5(a) of the Employment Agreement. 

        NOW,
THEREFORE, in consideration of the premises and mutual covenants herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows: 

        1.     Section 5(a)(iii) of
the Employment Agreement is hereby amended by deleting the date "March 15, 2004" and replacing it with "April 30, 2004". 

        2.     All
capitalized terms used herein that are not defined in this Amendment shall have the meaning given to such terms in the Employment Agreement. 

        3.     This
Amendment may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument. 

        4.     Except
as provided in this Amendment, all terms of the Employment Agreement shall remain in full force and effect. 

        5.     This
Amendment shall become effective as of the date first above written. 

 

        IN
WITNESS WHEREOF, the parties have duly executed this Amendment as of the day and year first set forth above. 

	 	 	THE BOYDS COLLECTION, LTD.
	

 	
 	

	 	 	By:    Joseph E. Macharsky

Title:  Chief Financial Officer
	

 	
 	

JAN L. MURLEY
	

 	
 	

2

QuickLinks

EMPLOYMENT AGREEMENT (Jan L. Murley)

Exhibit A

SALE PARTICIPATION AGREEMENT

Exhibit F RELEASE

AMENDMENT TO EMPLOYMENT AGREEMENT (Jan L. Murley)

RECITALS<Page>

                                                                  EXHIBIT 10.(g)

                              TAX SHARING AGREEMENT

THIS AGREEMENT is entered into by and between ING Life Insurance and Annuity
Company (formerly known as Aetna Life Insurance and Annuity Company) ("ILIAC")
and ING Insurance Company of America, Inc. (formerly known as Aetna Insurance
Company of America, Inc.) ("Subsidiary").

                                   WITNESSETH:

WHEREAS, ILIAC and the Subsidiary are members of an affiliated group, as that
term is defined in Section 1504 of the Internal Revenue Code of 1986, as amended
(the "Code"), which expects to file a consolidated federal income tax return for
each taxable year during which the Subsidiary are includible corporations
qualified to so file; and

WHEREAS, it is desirable for the Subsidiary and ILIAC to enter into this Tax
Sharing Agreement ("Agreement") to provide for the manner of computation of the
amounts and timing of payments with regard thereto by ILIAC to the Subsidiary
and by the Subsidiary to ILIAC, and various related matters;

NOW, THEREFORE, in consideration of the agreements contained herein and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

1.   AMOUNT OF PAYMENTS

     a.   GENERAL - For each taxable year during which the Subsidiary is
          included in a consolidated federal income tax return with ILIAC, the
          Subsidiary will pay to ILIAC an amount equal to the regular federal
          income tax liability (including any interest, penalties and other
          additions to tax) that the Subsidiary would pay on its taxable income
          if it were filing a separate, unconsolidated return, provided that (i)
          Tax Assets (as defined herein) will be treated in accordance with
          subsection (b) of this section, (ii) intercompany transactions will be
          treated in accordance with income tax regulations governing
          intercompany transactions in consolidated returns and subject to any
          election which may be made by ILIAC with regard thereto; (iii) the
          Subsidiary's payment will be increased to the extent that such
          Subsidiary generates Other Taxes, as determined in accordance with
          subsection (d) of this section; (iv) such computation will be made as
          though the highest rate of tax specified in subsection (b) of Section
          11 of the Code were the only rate set forth in that subsection, and
          (v) such computation shall reflect the positions, elections and
          accounting methods used by ILIAC in preparing the consolidated federal
          income tax return for ILIAC and its Subsidiary.

     b.   TAX ASSETS - "Tax Asset" shall mean any net operating loss, net
          capital loss, investment tax credit, foreign tax credit, charitable
          deduction, dividends received deduction or any other deduction, credit
          or tax attribute which could reduce taxes.

<Page>

          Except as provided in subsection (c) of this section, for each taxable
          year during which a Subsidiary is included in a consolidated federal
          income tax return with ILIAC, ILIAC will pay to the Subsidiary an
          amount equal to the tax benefit of the Subsidiary's Tax Assets
          generated in such year. The valuation of the tax benefit attributable
          to a Subsidiary's Tax Assets shall be made by ILIAC, and shall be
          determined without regard to whether such Tax Assets are actually
          utilized in the reduction of the consolidated federal income tax
          liability for any consolidated taxable year.

     c.   SEPARATE RETURN YEARS - To the extent any portion of a Tax Asset of
          the affiliated group is carried back to a pre-consolidation separate
          return year of the Subsidiary (whether by operation of law or at the
          discretion of ILIAC) the Subsidiary shall not be entitled to payment
          from ILIAC with respect thereto. This shall be the case whether or not
          that Subsidiary actually receives payment for the benefit of such Tax
          Asset from the Internal Revenue Service ("IRS") or from the parent of
          a former affiliated group.

     d.   OTHER TAXES - For any taxable year in which the affiliated group
          incurs taxes (other than the alternative minimum tax) such as ITC
          recapture, environmental tax, etc. ("Other Taxes"), such taxes, to the
          extent directly allocable to particular members of the affiliated
          group, will be paid by such members. To the extent such taxes are not
          directly allocable to particular members of the affiliated group, such
          taxes will be paid by ILIAC and/or the Subsidiary producing the
          attributes that give rise to such taxes, in the proportion that such
          attributes bear to the total amount of such attributes.

     e.   ALTERNATIVE MINIMUM TAX ("AMT") AND RELATED MINIMUM TAX CREDIT
          ("MTC")- For any taxable year in which the affiliated group incurs an
          AMT or utilizes a MTC, the Subsidiary producing the attributes that
          give rise to the AMT or MTC shall pay to, or receive from, ILIAC such
          AMT or MTC amount respectively. The calculation of the AMT or MTC
          shall be subject to a methodology determined by ILIAC in its sole
          discretion, provided, however, that any method adopted by ILIAC shall
          not be changed without prior notification to all affected Subsidiary.
          Any payments required under this subsection are in addition to
          payments required under the previous subsections.

     f.   Unless specifically approved in writing, all payments made pursuant to
          this Agreement by the Subsidiary shall be made by the Subsidiary, and
          not by any other company or business unit on behalf of the Subsidiary.

2.   INSTALLMENT PAYMENTS

     a.   DETERMINATION AND TIMING - During and following a taxable year in
          which the Subsidiary is included in a consolidated federal income tax
          return with ILIAC, it shall pay to ILIAC, or receive from ILIAC, as
          the case may be, installment payments of the amount determined
          pursuant to section 1 of this Agreement.

                                        2
<Page>

          Payments shall take place on the dates, on the bases of calculations,
          and in amounts that produce cumulative installments, as follows:

<Table>
<Caption>
DATE                           BASIS OF CALCULATION                          CUMULATIVE INSTALLMENT
----                           --------------------                          ----------------------
<S>                            <C>                                           <C>
April 15                       Prior year annual financial statement         25% of tax liability as determined in prior
                                                                             year financial statements results updated for
                                                                             known adjustments

June 15                        March 31 three month financial statement      50% of tax liability as determined by current
                                                                             financial statement annualized results

September 15                   June 30 six month financial statement         75% of tax liability as determined by current
                                                                             financial statement annualized results

December 15                    September 30 nine month financial             100% of tax liability as determined by
                               statement                                     current financial statement annualized results

March 15                       Year-end annual financial statement           100% of tax liability as determined by actual
                                                                             financial statements results for prior year
                                                                             updated for known adjustments

Not earlier than September     Final tax return                              100% of tax liability for prior year
15 of the following year
</Table>

          The due dates, basis of calculation and cumulative installments set
          forth above and made during a taxable year are intended to correspond
          to the applicable percentages as set forth in Section
          6655(e)(2)(B)(ii) of the Code. Should the Code be amended to alter
          such provisions, it is hereby agreed by the parties to this Agreement
          that the provisions will correspondingly change. ILIAC may revise the
          schedule of installment payments set forth in this paragraph, and may
          provide for annual rather than quarterly payments in cases where
          amounts due fall below a certain threshold, although any such change
          shall be prospective and shall not take effect prior to written notice
          to the Subsidiary.

     b.   ESTIMATED TAXES AND OTHER AMOUNTS - ILIAC shall pay required
          installments of federal estimated taxes pursuant to Code section 6655,
          and such other amounts with respect to taxes shown on the consolidated
          return for the taxable year pursuant to any other applicable provision
          of the Code ("tax payment"), to the IRS on behalf of itself and the
          Subsidiary. ILIAC shall have the sole right to determine

                                        3
<Page>

          the amount of each such tax payment with respect to the affiliated
          group's tax liability for the taxable year.

     c.   ADDITIONAL PAYMENTS BY SUBSIDIARY - Should the amount of any tax
          payment made by ILIAC under this section exceed the sum of installment
          payments made by it and the Subsidiary for any corresponding
          installment date pursuant to section 2 of this Agreement, ILIAC may,
          in its sole discretion, determine the Subsidiary's fair and reasonable
          share of that excess, and notify the Subsidiary thereof and such
          amount shall be paid over to ILIAC within 15 business days of the date
          of notification by ILIAC. Should ILIAC make any tax payment to the IRS
          on a date that does not correspond to the installment dates pursuant
          to section 2, the Subsidiary will pay over to ILIAC an amount which
          ILIAC may in its sole discretion, determine to be due from the
          Subsidiary.

     d.   PENALTY IN ADDITION TO TAX - If a penalty or an addition to tax for
          underpayment of estimated taxes is imposed on the affiliated group
          with respect to any required installment under section 6655 of the
          Code, ILIAC shall, in its sole discretion, determine the amount of the
          Subsidiary's share of such penalty or addition to tax, which amount
          shall be paid over to ILIAC within 15 business days of the date of
          notification by ILIAC.

3.   ADJUSTED RETURNS - If any adjustments are made to the income, gains,
     losses, deductions or credits of the affiliated group for a taxable year
     during which the Subsidiary is a member, whether by reason of the filing of
     an amended return, or a claim for refund with respect to such taxable year,
     or an audit with respect to such taxable year by the IRS, the amounts due
     under this Agreement for such taxable year shall be redetermined by taking
     into account such adjustments. If, as a result of such redetermination, any
     amounts due under this Agreement shall differ from the amounts previously
     paid, then, except as provided in section 6 hereof, payment of such
     difference shall be made by the Subsidiary to ILIAC or by ILIAC to the
     Subsidiary, as the case may be, (a) in the case of an adjustment resulting
     in a refund or credit, not later than thirty (30) days after the date on
     which such refund is received or credit is allowed with respect to such
     adjustment or (b) in the case of an adjustment resulting in the assertion
     of a deficiency, not later than thirty (30) days after the Subsidiary is
     notified of the deficiency. Any amounts due to or from a Subsidiary under
     this section shall be determined with respect to such refund or deficiency
     and any penalties, interest or other additions to tax which may be imposed.
     ILIAC shall indemnify the Subsidiary in the event the Internal Revenue
     Service levies upon such Subsidiary's assets for unpaid taxes in excess of
     the amount required to be paid by such Subsidiary in relation to a
     consolidated federal income tax return filed pursuant to this Agreement.

4.   PROCEDURAL MATTERS - ILIAC shall prepare and file the consolidated federal
     income tax return and any other returns, documents or statements required
     to be filed with the IRS with respect to the determination of the federal
     income tax liability of the affiliated group. In its sole discretion, ILIAC
     shall have the right with respect to any consolidated federal income tax
     returns which it has filed or will file, (a) to determine (i)

                                        4
<Page>

     the manner in which such returns, documents or statements shall be prepared
     and filed, including, without limitation, the manner in which any item of
     income, gain, loss, deduction or credit shall be reported, (ii) whether any
     extensions may be requested and (iii) the elections that will be made by
     the Subsidiary, (b) to contest, compromise or settle any adjustment or
     deficiency proposed, asserted or assessed as a result of any audit of such
     returns by the IRS, (c) to file, prosecute, compromise or settle any claim
     for refund and (d) to determine whether any refunds to which the affiliated
     group may be entitled shall be paid by way of refund or credited against
     the tax liability of the affiliated group. The Subsidiary hereby
     irrevocably appoints ILIAC as its agent and attorney-in-fact to take such
     action (including the execution of documents) as ILIAC may deem appropriate
     to effect the foregoing.

5.   ADDITIONAL MEMBERS - If future subsidiaries are acquired or created and
     they participate in the consolidated federal income tax filing, such
     subsidiary shall join in and be bound by this Agreement. This section will
     also apply to subsidiaries that are not eligible immediately to join the
     affiliated group, when they become eligible to join the affiliated group.

6.   COMPANIES LEAV ING ILIAC GROUP - Except as specifically treated to the
     contrary herein, the Subsidiary shall be treated as having withdrawn from
     this Agreement when the Subsidiary ceases to be a member of the affiliated
     group, or upon signing a letter of intent or a definitive agreement to sell
     the Subsidiary. Notwithstanding any provision to the contrary in section 2
     hereof, amounts payable to or receivable from ILIAC shall be recomputed
     with respect to the Subsidiary, including an estimate of the remaining
     taxes actually payable or receivable upon the filing of the consolidated
     tax return for the year of withdrawal, as of the last day the Subsidiary is
     a member of the affiliated group. Any amounts so computed as due to or from
     ILIAC to or from the Subsidiary shall be paid prior to its leaving the
     group, provided, however, that any deficiency or excess of taxes determined
     on the basis of the tax return filed for the year of withdrawal, and paid
     to or from ILIAC related to the tax liability of the Subsidiary for the
     portion of the year of withdrawal during which it had been a member of the
     affiliated group, shall be settled not later than November 15 of the year
     following the year of the date of withdrawal, in accordance with section 2
     of this Agreement.

     The extent to which ILIAC or the Subsidiary is entitled to any other
     payments as a result of adjustments, as provided in section 3 hereof,
     determined after the Subsidiary has left the affiliated group but affecting
     any taxable year during which this Agreement was in effect with respect to
     ILIAC and the Subsidiary, shall be provided for pursuant to a separate
     written agreement between ILIAC and the Subsidiary, or its new owner, or in
     the absence of such agreement, pursuant to the provision of section 3
     hereof. Tax benefits arising from the Tax Assets of the Subsidiary carried
     back to tax years during which the Subsidiary was a member of the
     affiliated group shall not be refunded to the Subsidiary, unless
     specifically provided for pursuant to a separate written agreement between
     ILIAC and the Subsidiary, or its new owner.

                                        5
<Page>

     In the case of any Tax Asset of a Subsidiary (i) that arose in a
     consolidated taxable year during which it was a member of the affiliated
     group, (ii) for which the Subsidiary was paid by ILIAC pursuant to Section
     1(b) of this Agreement, and (iii) which has not been utilized in the
     reduction of the consolidated federal income tax liability of the
     affiliated group for any consolidated taxable period ending on or before
     the date that the Subsidiary leaves the group, the Subsidiary shall repay
     to ILIAC prior to the time it leaves the group the amount of the tax
     benefit previously received with respect to the Tax Asset.

7.   BOOKS AND RECORDS - The books, accounts and records of ILIAC and the
     Subsidiary shall be maintained so as to provide clearly and accurately the
     information required for the operation of this Agreement. Notwithstanding
     termination of this Agreement, all materials including, but not limited to,
     returns, supporting schedules, workpapers, correspondence and other
     documents relating to the consolidated federal income tax return shall be
     made available to ILIAC and/or the Subsidiary during regular business
     hours. Records will be retained by ILIAC and by the Subsidiary, in a manner
     satisfactory to ILIAC, adequate to comply with any audit request by the IRS
     or appropriate State taxing authority, and, in any event to comply with any
     record retention agreement entered into by ILIAC or the Subsidiary with
     such taxing authority.

8.   EARNINGS AND PROFITS - The earnings and profits of ILIAC and the Subsidiary
     shall be determined during the period in which they are members of the
     affiliated group filing a consolidated tax return by allocating the
     consolidated tax liability in accordance with Income Tax Regulations
     Sections 1.1552-1(a)(2) and 1.1502-33(d)(3).

9.   ESCROW AGREEMENTS - The parties hereto agree that, to the extent required
     by applicable law, they shall enter into and file with appropriate
     jurisdictions any escrow agreements or similar contractual arrangements
     with respect to the taxes covered by this Agreement. The terms of such
     agreements shall, to the extent set forth therein, and with respect to the
     parties thereto, prevail over the terms of this Agreement.

10.  TERMINATION - This Agreement shall be terminated if ILIAC and the
     Subsidiary agree in writing to such termination or if the affiliated group
     fails to file a consolidated federal income tax return for any taxable
     year.

11.  ADMINISTRATION - This Agreement shall be administered by the Vice President
     of Taxes of ILIAC or, in his/her absence, by any other officer of ILIAC so
     designated by the Controller of ILIAC. Disputes between ILIAC and the
     Subsidiary shall be resolved by the Vice President of Taxes of ILIAC or
     other designated officer and the senior financial officer of each
     Subsidiary involved in the dispute.

12.  PERIOD COVERED - This Agreement shall be effective with respect to each
     party thereto upon signing by such party, and shall supersede all previous
     agreements between ILIAC and the Subsidiary with respect to the matters
     contained herein and such previous agreement shall thereupon terminate. The
     Agreement shall apply to the taxable year 2001, to all prior taxable years
     which are open to adjustments as provided in section 3 hereof (to the
     extent not subject to any separate tax sharing agreement) and to all

                                        6
<Page>

     subsequent periods unless and until amended or terminated, as provided in
     section 10 hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Tax Sharing Agreement.

ING Life Insurance                        By /s/ Paula Cludray-Engelke
and Annuity Company                          ----------------------------------
                                             Title:  Secretary

                                             ----------------------------------

ING Insurance Company of America, Inc.    By /s/ Paula Cludray-Engelke
                                             ----------------------------------
                                             Title: Secretary

                                             ----------------------------------

                                        7

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