8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): September 26, 2005

Russ Berrie and Company, Inc.

(Exact Name of Registrant as Specified in Charter)

New Jersey	1-8681	22-1815337
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
111 Bauer Drive, Oakland, New Jersey 07436
(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (201) 337-9000

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1 - Registrant’s Business and Operations

Item 1.01  Entry into a Material Definitive Agreement.

On September 26, 2005 (the “Effective Date”), as a result of the retirement of Arnold S. Bloom, Russ Berrie and Company, Inc. (the “Company”) entered into an employment agreement (the “Agreement”) with Marc S. Goldfarb, with respect to his employment as Vice President, General Counsel and Secretary of the Company.  In accordance with the terms of the Agreement, Mr. Goldfarb will be entitled to an annual base salary of $260,000.  Mr. Goldfarb will also be entitled to participate in the Company’s Incentive Compensation Program (“IC Program”), with an Applicable Percentage (as defined in the IC Program) for 2005 of 40% and an IC Factor (as defined in the IC Program) of $104,000, pro-rated based on the Effective Date (for total potential incentive compensation under the IC Program of approximately $39,000 for 2005 and $156,000 for 2006, assuming no change in Applicable Percentage or base salary).  In addition, after 3 months of continuous employment, Mr. Goldfarb will be granted 40,000 stock options pursuant to the Company’s 2004 Stock Option, Restricted and Non-Restricted Stock Plan.  Future option grants will be at the discretion of the Compensation Committee of the Board of Directors of the Company.

Mr. Goldfarb is also entitled to participate generally in all retirement, savings, welfare and other employee benefit plans and arrangements provided to other executive officers of the Company, including the Company’s Severance Policy for Domestic Vice Presidents (and above), and will receive a monthly car allowance.  Mr. Goldfarb is a participant in the Company’s Change of Control Severance Plan.

On September 28, 2005, as a result of the retirement of Arnold S. Bloom as the Company’s Vice President, General Counsel and Secretary, and in recognition of his many years of service with the Company, the Company entered into a severance agreement (the “Severance Agreement”) with Mr. Bloom, effective September 26, 2005.  Pursuant to the Severance Agreement, Mr. Bloom shall serve as a Company Vice President from September 26, 2005 until December 31, 2005 at his current salary and benefit level, at which time his employment with the Company shall terminate.  Beginning in January, 2006, for a period of twelve months, the Company will (i) pay Mr. Bloom severance at his current base salary level and (ii) continue Mr. Bloom’s coverage (at the Company’s expense) under the Company’s employee benefit plans.  In addition, beginning in January, 2006, over the course of 2006, the Company will pay Mr. Bloom additional severance in the aggregate amount of $67,990.

In addition, on September 28, 2005, the Company entered into a consulting agreement (the “Consulting Agreement”) with Mr. Bloom, effective January 1, 2006, pursuant to which Mr. Bloom will serve as a consultant to the Company at least one day a week over the nine-month period commencing January 1, 2006, for a minimum aggregate consultancy fee of $35,880.  In addition, to the extent additional services are requested by the Company in its discretion, Mr. Bloom will serve as a consultant at a daily rate of $920 for any additional days he is engaged.

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Section 8 — Other Events

Item 8.01  Other Events

On September 28, 2005, the Company issued a press release announcing the retirement of Mr. Bloom and the engagement of Mr. Goldfarb as Vice President, General Counsel and Secretary of the Company.

Section 9 — Financial Statements and Exhibits

Item 9.01  Financial Statements and Exhibits

(c)  Exhibits

The following exhibits are filed with this report:

Exhibit 10.95          Employment Agreement dated September 26, 2005, between Russ Berrie and Company, Inc. and Marc S. Goldfarb.

Exhibit 10.96          Severance Agreement dated September 28, 2005, between Russ Berrie and Company, Inc. and Arnold S. Bloom.

Exhibit 10.97          Consulting Agreement dated September 28, 2005, between Russ Berrie and Company, Inc. and Arnold S. Bloom

Exhibit 99.1            Press Release, dated September 28, 2005, announcing the retirement of Mr. Bloom and the engagement of Mr. Goldfarb as Vice President, General Counsel and Secretary of the Company.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: September 29, 2005	RUSS BERRIE AND COMPANY, INC.
	By:	/s/ John D. Wille
		John D. Wille
		Vice President and Chief Financial Officer

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Exhibit Index

Exhibit 10.95          Employment Agreement dated September 26, 2005, between Russ Berrie and Company, Inc. and Marc S. Goldfarb.

Exhibit 10.96          Severance Agreement dated September 28, 2005, between Russ Berrie and Company, Inc. and Arnold S. Bloom.

Exhibit 10.97          Consulting Agreement dated September 28, 2005, between Russ Berrie and Company, Inc. and Arnold S. Bloom

Exhibit 99.1            Press Release, dated September 28, 2005, announcing the retirement of Mr. Bloom and the engagement of Mr. Goldfarb as Vice President, General Counsel and Secretary of the Company.

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EX-10.95

Exhibit No. 10.95

Russ Berrie and Company, Inc.

111 Bauer Drive, Oakland, NJ 07436

(201) 337-9000  (800) 631-8465

September 28, 2005

Marc S. Goldfarb, Esq.

29 Sinclair Terrace

Short Hills, NJ  07078

Dear Marc:

I am pleased to offer you the position of Vice President, General Counsel and Corporate Secretary of Russ Berrie and Company, Inc. (the “Company”) effective September 26, 2005.  This position is one of corporate officer of the Company.

Your employment with the Company will include the following:

1.COMPENSATION.  Your base salary will be at an annual rate of $260,000.  For 2005, you shall be eligible to participate in the Company’s 2005 Incentive Compensation (“IC”) program (pro-rated for your date of hire).  Your 2005 IC Factor (as defined in the IC program), together with the 2005 goals and objectives, are set forth on Exhibit A attached hereto and incorporated herein.  Payment of the IC (or portion thereof) is predicated upon meeting both objective and subjective performance standards established for the applicable year, as set forth on Exhibit A.  In order to receive the IC payment (or any portion thereof), you must be actively employed by the Company at the time of the payment.  In order to be eligible to participate in the IC program, you must execute and deliver to the Company the IC document which has been provided to you. 

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

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

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

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

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

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

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

a.Healthcare Flexible Spending Account. 

b.Dependent Care Flexible Spending Account. 

c.Supplemental Disability and Accident Insurance Plans. 

4.STOCK OPTIONS.  After 3 months of continuous employment, you will be granted 40,000 stock options. These options will be granted under and pursuant to the Company’s 2004 Stock Option, Restricted and Non-Restricted Stock Plan (the “Stock Plan”).  In accordance with the Stock Plan, these options will vest ratably over a period of 5 years. Such options will be Non-Qualified Stock Options.  Possible future grants of stock options shall be at the sole discretion of the Compensation Committee of the Board of Directors of the Company. 

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

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

7.VACATION.  The Company’s vacation policy provides that after 6 months of employment, you will be eligible for one week paid vacation.  The Company’s vacation policy further provides that thereafter, during the following calendar year, you will be eligible for two weeks paid vacation.  However, you will be eligible for vacation above and beyond the aforementioned policy.  Upon your date of hire, you will be eligible for two weeks paid vacation.  Beginning with calendar year 2006, you will be eligible for three weeks paid vacation per year.

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

9.CAR ALLOWANCE  You will receive an allowance of $1,100 per month to cover the cost of an automobile, automobile insurance, automobile maintenance and repair, gasoline and any and all other costs and expenses relating to such automobile. 

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

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policy for Domestic Vice Presidents (and above), a copy of which is attached hereto as Exhibit B.

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

The Company reserves the right to change or modify these programs.  In addition, employment with the Company is considered “at will” and does not represent a specific guarantee.

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

		Very truly yours,
		/s/ Anthony Cappiello
		Anthony Cappiello
		EVP and CAO
cc: A. Gatto
E. Goldenberg
ACCEPTED AND AGREED:
/s/ Marc S. Goldfarb
Marc S. Goldfarb
Date:	September 28, 2005

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EXHIBIT A

MARC GOLDFARB’S INCENTIVE COMPENSATION PROGRAM

(effective September 26, 2005)

IC Factor:  40% of Base Salary, pro-rated based upon date of hire (40% of 2005 Base Salary of $260,000 is $104,000, to be pro-rated based upon date of hire of September 26, 2005)

2005 CORPORATE OBJECTIVES:

See “Corporate” Business Unit’s IC Target set forth on	Value: 50%* of IC Factor
Exhibit “A” to Russ Berrie and Company, Inc. Incentive	($52,000)
Compensation (“IC”) Program
(excluding material acquisitions)

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

2005 INDIVIDUAL OBJECTIVES:

	Value:  30% of IC Factor
	($31,200)
To Be Determined

2005 INDIVIDUAL INITIATIVES:

	Value:  20% of IC Factor
	($20,800)
1.  Other initiatives as may be mutually determined by EVP and CAO and associate throughout course of the year.

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EXHIBIT B

SEVERANCE POLICY FOR DOMESTIC VICE PRESIDENTS (AND ABOVE)

OF RUSS BERRIE AND COMPANY, INC.,  Effective February 11, 2003

The Company’s severance policy is amended for domestic Vice Presidents (and above; collectively referred to herein as “VPs”) and is effective February 11, 2003, as follows:

Domestic VPs, if terminated by the Company without cause and not in connection with a change in control of the Company (namely, more than 6 months prior to or more than 2 years after such Change in Control), are eligible, based on tenure with the Company, for the following severance payment:

•VPs with less than 1 year of service with the Company would receive 4 months of severance pay

•VPs with at least 1 year of service but less than 2 years of service with the Company would receive 6 months of severance pay

•VPs with at least 2 years of service but less than 6 years of service with the Company would receive 8 months of severance pay

•VPs with at least 6 years of service but less than 10 years of service with the Company would receive 10 months of severance pay

•VPs with 10 or more years of service with the Company would receive 12 months (i.e., one year) of severance pay 

The severance is to be paid at the salary rate (base pay not including bonus(es) 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).  During the severance period, the terminated VP is also entitled to remain on the Company’s (1) health and dental insurance plan (making the same payroll contribution as he/she made, on the date of termination, as an active employee), and (2) all other insurance plans for which he/she was eligible on the date of termination.  In addition, for a period of 60 days, the terminated VP is entitled to use of the Company automobile (or payment of an automobile allowance) or reimbursement of certain automobile expenses, as the case may be, in accordance with the nature and type of automobile perk that the VP had in effect on the date of termination.  If the terminated VP obtains gainful employment during his/her severance period, then the severance payments will be terminated effective on the date that he/she begins new employment.

“Change-in-control” and “cause” shall have the meanings assigned thereto in the Company’s Change in Control Severance Plan. 

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

This amended severance policy supercedes any other agreement between the Company and a VP that provides for lesser benefits with respect to the type of termination covered hereby in effect on the effective date of this amendment or thereafter.

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EX-10.96

Exhibit No. 10.96

Russ Berrie and Company, Inc.

111 Bauer Drive, Oakland, NJ 07436

(201) 337-9000  (800) 631-8465

September 28, 2005

Mr. Arnold S. Bloom

8 Suzanne Lane

Chappaqua, NY 10514

Dear Arnold:

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

1.Title; Termination of Employment; Final Paycheck.  Effective September 26 through December 31, 2005, you shall hold the title of, and serve as, a Company Vice President.  Your employment with the Company will terminate effective December 31, 2005.  You will be paid your final paycheck in the usual manner.  That final paycheck will include your regular pay through December 31, 2005.

2.Severance Payments.  The Company will pay you severance for a period of 12 months pursuant to the Company’s Severance Policy for Domestic Vice Presidents (and Above).  Severance payments will begin with the first pay period of 2006.  Severance will be paid at your current salary rate (base pay not including bonuses, commissions or the like.  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).  Notwithstanding the terms of the Company’s Severance Policy for Domestic Vice Presidents (and Above), 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 hereinafter described).  In order to receive the severance payments under the Company’s Severance Policy for Domestic Vice Presidents (and Above), you must sign and deliver to the Company its form of Release Agreement (a copy of which is attached hereto).

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3.Other Payments.  In addition to the severance payments described in paragraph 2 above, the Company will also pay to you additional severance in the amount of Two Thousand Six Hundred Fifteen Dollars ($2,615.00) per regular pay period for a period of 26 pay periods, beginning with the first pay period in 2006.  In order to receive these additional severance payments, you must sign and deliver to the Company its form of Release Agreement (referenced in paragraph 2 above).

4.Benefit Continuation.  Pursuant to the Company’s Severance Policy for Domestic Vice Presidents (and Above), you are entitled to remain on the Company’s family medical and family dental insurance plans for a period of 12 months after termination of employment.  This means that you will be covered under these insurance coverages from January 1 through December 31, 2006.  The premiums for this coverage during that 12 month period are paid entirely by the Company.  In other words, the Company will pay your premiums 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 above-referenced Release Agreement).  As a condition to receiving the 12 months of benefit continuation coverage, you must sign and deliver to the Company the Company’s form of Release Agreement (referenced in paragraph 2 above).

5.Other Benefits.  Pursuant to the Company’s Severance Policy for Domestic Vice Presidents (and Above), during the 12 month severance period, you are entitled to remain on all of the Company’s other insurance plans for which you were eligible on the date of termination of your employment.

6.COBRA.  After the expiration of the benefit continuation coverage described in paragraph 4 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).  This right to continue your benefits under COBRA would currently allow you to continue your benefits (at your expense) for a period of 18 months commencing January 1, 2007.

7.2005 Vacation.  You will be paid for all 2005 accrued and unused vacation time (including carry-over time).  Our records indicate that you currently have 17 accrued and unused vacation (and carry-over) days.  You will be paid for these days (less the vacation days, if any, that you use between now and December 31, 2005).  This vacation pay will be included in your final paycheck (described in paragraph 1 above).

8.Automobile Allowance.  Pursuant to the Company’s Severance Policy for Domestic Vice Presidents (and Above), you are entitled to payment of your automobile allowance for a period of 60 days following termination of

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employment.  You will receive payment of that allowance for the first 60 days of 2006.

9.401(k) Plan.  Enclosed please find a letter explaining the various alternatives regarding the monies you have in your 401(k) account.

10.Executive Deferred Compensation Plan.  Our records indicate that you have monies in the Executive Deferred Compensation Plan.  Enclosed please find an informational sheet relating to your options with respect to these monies.

11.Company Property.  On or prior to your date of termination of employment, you are required to return all Company property and documents.

12.Unemployment Benefits.  You may be entitled to file for unemployment compensation providing that you meet your State’s criteria.  The Company agrees not to contest your application for unemployment benefits.

The above-described severance arrangement supercedes all other severance, termination and all other provisions contained in any 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 stock option agreements between the Company and you and the Company’s Change-in-Control Agreement).

Arnold, I wish you the best in your future endeavors.

Very truly yours,

/s/ Anthony Cappiello

Anthony Cappiello

EVP and CAO

cc:  A. Gatto

       E. Goldenberg

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EX-10.97

Exhibit No. 10.97

Russ Berrie and Company, Inc.

111 Bauer Drive, Oakland, NJ 07436

(201) 337-9000  (800) 631-8465

September 28, 2005

Mr. Arnold S. Bloom

8 Suzanne Lane

Chappaqua, NY  10514

Dear Arnold:

This is to confirm your engagement, on a consultant basis, by Russ Berrie and Company, Inc. (“RUSS”) beginning on January 1, 2006.  You are being engaged as an independent contractor (not as an employee of RUSS).  In your consulting role, you shall report to me and to Marc Goldfarb, RUSS’ Vice President and General Counsel.  The work that you undertake in your consulting capacity shall be at my or Marc’s direction.

You will be compensated for the above-listed services at the rate of $920 per day.  You will be reimbursed for any out-or-pocket expenses incurred by you in performing the consulting services requested (other than your travel to and from RUSS’ Oakland, NJ corporate headquarters.  You will not be required to work for a portion of a day unless you otherwise agree.  You must submit an invoice each month setting forth the dates on which you worked together with a brief description of your work.  You will be paid on a monthly basis, upon submission, and our review of, such invoice.  Payment will be made to you within thirty (30) days of the submission of your invoice.  You will be solely responsible for the payment of taxes and any other obligations with respect to your consulting services and the compensation received.

You are engaged for a period of at least thirty-nine (39) consulting days over a nine (9) month period commencing on January 1, 2006.  You will be engaged at least one (1) day per week during the first 39 weeks of 2006.  Based on business necessity, you may be requested to consult for additional days but the Company shall not be required to engage your consulting services for more than one day per week for each of the first 39 weeks of 2006.

		Very truly yours,
		/s/ Anthony Cappiello
		Anthony Cappiello
		EVP and CAO
ACCEPTED AND AGREED:
Arnold S. Bloom
/s/ Arnold S. Bloom
Signature
Date:	September 28, 2005

EX-99.1

Exhibit 99.1

AT THE COMPANY:	AT FINANCIAL RELATIONS BOARD
John Wille – Vice President & CFO	John McNamara
201-337-9000	212-445-8432

FOR IMMEDIATE RELEASE

RUSS BERRIE AND COMPANY, INC. ANNOUNCES APPOINTMENT OF A NEW VICE PRESIDENT AND GENERAL COUNSEL AND RETIREMENT OF PRIOR VICE PRESIDENT AND GENERAL COUNSEL

Oakland, N.J. — September 28, 2005 - RUSS BERRIE AND COMPANY, INC. (NYSE: RUS) today announced that Marc S. Goldfarb joined the Company on September 26, 2005 as Vice President, General Counsel and Corporate Secretary.  Mr. Goldfarb, age 41, served as Vice President, General Counsel and Corporate Secretary at Journal Register Company (NYSE:JRC) from January 2003 to September 2005.  Prior thereto, from 1998 to 2002, Mr. Goldfarb served as Managing Director and General Counsel of The Vertical Group and, from 1988 -1998, Mr. Goldfarb was an attorney in private practice in New York, NY.

Mr. Andy Gatto, President and CEO, commented, “We are delighted to have someone of Marc’s caliber and experience join the RUSS executive management team.  His background as both an accomplished business manager and as general counsel of a NYSE company will make him an important addition to our Company.”

Mr. Goldfarb succeeds Arnold Bloom, who had served as the Company’s Vice President, General Counsel and Corporate Secretary since 1988.  Mr. Bloom has announced his retirement from the Company.  Mr. Bloom has agreed to remain with the Company, as Vice President, until December 31, 2005 in order to assist the Company in the transition of this position.

Mr. Andy Gatto commented, “Arnold has been a very important leader at our Company for close to two decades.  He has made enormous contributions to our Company and has provided invaluable and distinguished guidance and counsel.  We thank him for his service and wish him and his family all the best as he begins his retirement.”

Note: This press release contains certain forward-looking statements. Additional written and oral forward-looking statements may be made by the Company from time to time in Securities and Exchange Commission (SEC) filings and otherwise. The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-looking statements. These statements may be identified by the use of forward-looking words or phrases including, but not limited to, “anticipate”, “believe”, “expect”, “intend”, “may”, “planned”, “potential”, “should”, “will” or “would”. The Company cautions readers that results predicted by forward-looking statements, including, without limitation, those relating to the Company’s future business prospects, revenues, working capital, liquidity, capital needs, interest costs and income are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Specific risks and uncertainties include, but are not limited to, the Company’s

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ability to continue to manufacture its products in the Far East, the seasonality of revenues, the actions of competitors, ability to increase production capacity, price competition, the effects of government regulation, results of any enforcement action by the People’s Republic of China (“PRC”) authorities with respect to the Company’s PRC operations, the resolution of various legal matters, possible delays in the introduction of new products, customer acceptance of products, changes in foreign currency exchange rates, issues related to the Company’s computer systems, the ability to obtain debt financing to fund acquisitions, the current and future outlook of the global retail market, the ability to integrate new business ventures, the ability to meet covenants in Financing Agreement and other factors.

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