<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
RUSS BERRIE AND COMPANY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
RUSS BERRIE AND COMPANY, INC.
111 BAUER DRIVE
OAKLAND, NEW JERSEY 07436
March 14, 1997
Dear Shareholder:
It is my pleasure, on behalf of your Board of Directors, to extend to you a
cordial invitation to attend our Annual Meeting of Shareholders which will be
held this year at a new location at the Sheraton Tara Hotel, 199 Smith Road,
Parsippany, New Jersey, at 2:00 P.M. on Thursday, April 24, 1997.
At the meeting, shareholders will be asked to elect 10 directors and to
transact such other business as may properly come before the meeting.
I look forward to greeting you at the meeting. Whether or not you expect to
attend, I urge you to sign and return your proxy card immediately.
Sincerely,
/s/ Russel Berrie
RUSSELL BERRIE
Chairman of the Board
<PAGE> 3
RUSS BERRIE AND COMPANY, INC.
111 BAUER DRIVE
OAKLAND, NEW JERSEY 07436
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, APRIL 24, 1997
The Annual Meeting of Shareholders of Russ Berrie and Company, Inc. will be
held this year at a new location at the Sheraton Tara Hotel, 199 Smith Road,
Parsippany, New Jersey, on Thursday, April 24, 1997, at 2:00 P.M., for the
following purposes:
1. To elect 10 directors to serve until the next Annual Meeting of
Shareholders and until their successors shall have been elected and qualified;
and
2. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on March 7, 1997, are
entitled to notice of and to vote at such meeting.
BY ORDER OF THE
BOARD OF DIRECTORS,
/s/ Arnold S. Bloom
ARNOLD S. BLOOM
Secretary
Oakland, New Jersey
March 14, 1997
Please complete, date, sign and promptly return your proxy card in the enclosed
envelope.
<PAGE> 4
RUSS BERRIE AND COMPANY, INC.
111 BAUER DRIVE
OAKLAND, NEW JERSEY 07436
PROXY STATEMENT
DATED MARCH 14, 1997
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Russ Berrie and Company, Inc. (the "Company") of
proxies for use at the Annual Meeting of Shareholders of the Company to be held
on Thursday, April 24, 1997, at 2:00 P.M., at the Sheraton Tara Hotel, 199 Smith
Road, Parsippany, New Jersey, and at any adjournments thereof.
Shareholders of record at the close of business on March 7, 1997, will be
entitled to one vote for each share they then held on all matters to come before
the meeting. There were outstanding on that date 22,187,329 shares of common
stock of the Company, stated value $.10 per share ("Common Stock"). The Company
has no other class of stock outstanding. The holders of a majority of the shares
of Common Stock entitled to vote at the meeting will constitute a quorum.
An executed proxy may be revoked at any time by written notification to the
Secretary of the Company if such notice is actually received by the Secretary
before such proxy is exercised, or by attending and voting at the meeting in
person. Proxies in the accompanying form which are properly executed by
shareholders, duly returned to the Company and not revoked will be voted in the
manner specified. If no specification is indicated, the proxy will be voted as
indicated below. The cost of solicitation will be borne by the Company.
The Annual Report of the Company for the fiscal year ended December 31,
1996 accompanies this Proxy Statement, but is not part of the proxy soliciting
materials.
This Proxy Statement and the form of proxy will be mailed to shareholders
on or about March 25, 1997.
ELECTION OF DIRECTORS
Ten directors are to be elected to hold office until the next Annual
Meeting of Shareholders and until their respective successors are elected and
qualified. The election of directors requires the affirmative vote of the
holders of a plurality of the shares of Common Stock voting at the meeting. It
is intended that proxies in the accompanying form which do not withhold the
authority to vote for any or all of the nominees will be voted for the election
as directors of the persons named below. Should any nominee become unable or
unwilling to serve as a director, the proxies will be voted in favor of the
remainder of those named and may be voted for substitute nominees who would be
nominated by the Board of Directors in place of those who are not candidates. At
this time, the Board of Directors knows of no reason why any nominee might not
be a candidate at the meeting. The information concerning the nominees has been
furnished by them to the Company.
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION;
NAME AGE SINCE OTHER DIRECTORSHIPS
- ------------------------------ --- -------- -----------------------------------------------
<S> <C> <C> <C>
Raphael Benaroya.............. 49 1993 Chairman of the Board, President and Chief
Executive Officer, since 1988, of United Retail
Group, Inc., which operates a chain of retail
specialty stores.
</TABLE>
1
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION;
NAME AGE SINCE OTHER DIRECTORSHIPS
- ------------------------------ --- -------- -----------------------------------------------
<S> <C> <C> <C>
Russell Berrie................ 64 1966 Chairman of the Board and Chief Executive
Officer of the Company since its incorporation
in 1966. Mr. Berrie is the founder of the
Company. Mr. Berrie is also a Director of
United Retail Group, Inc.
Paul Cargotch................. 52 1996* Executive Vice President and Chief Financial
Officer of the Company since July 1996; Vice
President -- Finance and Chief Financial
Officer of the Company from March 1990 to June
1996.
A. Curts Cooke................ 60 1982** President and Chief Operating Officer of the
Company since March 1990.
Ilan Kaufthal................. 49 1995 Managing Director, since February 1987, of
Schroder Wertheim & Co. Incorporated, an
investment banking firm. Mr. Kaufthal is also a
Director of United Retail Group, Inc., Cambrex
Corporation, a company which manufactures
specialty chemicals, and Rexene Corporation, a
company which manufactures petrochemicals and
plastic film.
Charles Klatskin.............. 62 1983 Chairman of the Board and President of Charles
Klatskin Company Inc., a commercial real estate
brokerage and development firm, since its
incorporation in 1966.
Joseph Kling.................. 67 1988***.... President of Pamsco, Inc., a consulting
company, since April 1991. Mr. Kling is also a
Director of Lancit Media Productions, Ltd.
which produces children's television
programming.
William A. Landman............ 44 1994 Principal and Director of Acquisitions of CMS
Companies, an investment firm, since 1987. Mr.
Landman is also a Director of Comtrex Systems
Corporation, which manufactures cash registers.
Sidney Slauson................ 87 1978 Mr. Slauson was general counsel to the Company
from 1966 through 1990. From 1990 until June
30, 1995, Mr. Slauson was of counsel to Rosner
and Feltman, a law firm which provided legal
services to the Company. Mr. Slauson is
currently retired.
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION;
NAME AGE SINCE OTHER DIRECTORSHIPS
- ------------------------------ --- -------- -----------------------------------------------
<S> <C> <C> <C>
Bernard H. Tenenbaum.......... 42 1989 Vice President -- Corporate Development of the
Company since January 14, 1993. From September
1988 until joining the Company as an officer,
Mr. Tenenbaum was a founding Director of the
George Rothman Institute of Entrepreneurial
Studies, Fairleigh Dickinson University. Mr.
Tenenbaum is also a Director of WPI Group which
manufactures component parts for electronic and
computer systems.
</TABLE>
- ---------------
* Mr. Cargotch was elected to the Board of Directors in July 1996.
** For further information regarding Mr. Cooke's employment with the Company,
see "Employment Agreements and Arrangements".
*** Mr. Kling did not stand for re-election to the Board of Directors of the
Company in April 1995, but was re-elected as a Director in October 1995.
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held four meetings during 1996. The
Audit Committee of the Board of Directors, which held two meetings during 1996,
consisted of Messrs. Ilan Kaufthal and Charles Klatskin. Effective April 24,
1997, Mr. William A. Landman will replace Mr. Klatskin as a member of the Audit
Committee. The Audit Committee is responsible for ensuring maintenance of an
adequate system of internal financial controls, causing the books of account and
annual financial statements of the Company to be audited by certified public
accountants, discussing with the certified public accountants the results of
their audit, and recommending to the Board of Directors the appointment of
certified public accountants. The Compensation Committee, which held one meeting
during 1996, consists of Messrs. Benaroya, Landman and Slauson. The Compensation
Committee reviews and recommends to the Board of Directors remuneration
arrangements for senior management of the Company and various Company
compensation plans. The report of the Compensation Committee is set forth in
this Proxy Statement. There is no standing nominating committee. All of the
directors attended, in 1996, at least 75% of the aggregate number of meetings of
the Board of Directors and the Audit Committee and Compensation Committee (if
they were members of those Committees).
DIRECTOR COMPENSATION
Directors who are full-time employees of the Company receive no additional
compensation for services as a director. Each director who is not an employee of
the Company receives $8,000 per year plus $1,000 for each Board meeting and
$1,000 for each Audit or Compensation Committee meeting attended. In addition,
until December 31, 1988, the Russ Berrie and Company, Inc. Stock Option Plan for
Outside Directors (the "1984 Directors Plan") provided for the granting of
nonqualified stock options (and was amended to include stock appreciation rights
("SARs")) to members of the Board of Directors who were not officers or other
employees of the Company and who did not own Common Stock as of the effective
date of the plan. (See "1984 Directors Plan" below.) Commencing January 1, 1989,
directors who were not officers or other employees of the Company became
eligible to receive nonqualified stock options and related SARs, if granted,
under the Company's 1989 Stock Option Plan for Outside Directors (the "1989
Directors Plan"). (See "1989 Directors Plan" below.) Commencing January 1, 1994,
directors who were not officers or other employees of the Company became
eligible to receive nonqualified stock options under the Company's 1994 Stock
Option
3
<PAGE> 7
Plan for Outside Directors (the "1994 Directors Plan" and, together with the
1984 Directors Plan and the 1989 Directors Plan, "All Directors Plans"). (See
"1994 Directors Plan" below.)
ALL DIRECTORS PLANS
All Directors Plans are administered by a committee comprised of three
members of the Board of Directors who are not participants in any of such plans:
Russell Berrie, Paul Cargotch and A. Curts Cooke.
Options granted under All Directors Plans vest and become exercisable one
year after the date of grant and remain exercisable for ten years from the date
of grant. Options are not transferable other than by will or under the laws of
descent and distribution, and are exercisable only by the grantee or by the
grantee's legal representative(s) after death or disability. If the grantee
ceases to be a member of the Board of Directors for reasons other than death or
disability, nonvested options expire immediately and vested options are only
exercisable for 30 days thereafter, or the remaining option term, if shorter. In
the event of the grantee's death or disability, nonvested options shall vest and
all outstanding options may be exercised within 12 months after the death or
disability or the remaining option term, if shorter.
Options granted under All Directors Plans are issued on each January 1 at
an exercise price equal to the closing market price of the Common Stock on the
New York Stock Exchange on the first trading day of each such year.
1984 DIRECTORS PLAN
A total of 75,000 shares of Common Stock had been reserved for the grant of
options and related SARs, if any, under the 1984 Directors Plan. Each eligible
director received options to purchase 3,000 shares of Common Stock in each year
from 1984 through 1988. In addition, each eligible director was granted SARs
relating to the options granted under the 1984 Directors Plan in January 1988.
An amendment to the 1984 Directors Plan in 1988 gave the committee the
discretion to grant SARs relating to options granted under the plan. (See
penultimate paragraph of "1989 Directors Plan" below for an explanation of
SARs.) The grant of SARs was subject to the same terms and conditions as the
related options and are exercisable only to the same extent as the related
options. Exercise prices of options and SARs granted pursuant to the 1984
Directors Plan were based upon the closing market price of the Common Stock on
the New York Stock Exchange on the first trading day of each year.
The 1984 Directors Plan terminated on December 31, 1988, although options
and SARs previously granted may be exercised beyond that date. No options
granted under the 1989 Directors Plan were exercised in 1996.
1989 DIRECTORS PLAN
A total of 150,000 shares of Common Stock have been reserved for the grant
of options and related SARs, if any, under the 1989 Directors Plan. Grantees
have been granted options to purchase 3,000 shares of Common Stock in each year
from 1989 through 1993. No options granted under the 1989 Directors Plan were
exercised in 1996.
Until December 31, 1991, the committee administering the 1989 Directors
Plan had the discretion to grant SARs subject to related options, which are
exercisable only to the same extent and subject to the same terms and conditions
as the related options. In general, a grantee who exercises an SAR will be
entitled to an amount equal to the excess of the closing market price of the
Common Stock on the New York Stock Exchange on the date of exercise over the
exercise price of the related option, multiplied by the number of shares as to
which the SAR is exercised. Exercise of all or any part of an SAR will reduce on
a share-for-share
4
<PAGE> 8
basis the number of shares subject to a grantee's related option. Payment due
upon exercise of an SAR shall be made (i) in cash, (ii) in Common Stock, or
(iii) partly in cash and partly in Common Stock, all as determined by the
committee in its discretion.
This plan terminated on December 31, 1993, although options and SARs
previously granted may be exercised beyond that date.
1994 DIRECTORS PLAN
A total of 150,000 shares of Common Stock have been reserved for the grant
of options under the 1994 Directors Plan. Grantees are granted options to
purchase 3,000 shares of Common Stock in each year from 1994 through 1998. In
1996 and 1997, options were granted to all eligible directors at an exercise
price of $13.625 per share and $18.50 per share, respectively.
No options granted under the 1994 Directors Plan were exercised in 1996.
5
<PAGE> 9
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
CHIEF EXECUTIVE OFFICER
Mr. Russell Berrie, Chairman and Chief Executive Officer of the Company,
was party to an employment arrangement with the Company that provided for
compensation, in 1996, consisting of a base salary at an annual rate of $364,000
and a bonus equal to 1% of the Company's net income after taxes ("Incentive
Compensation"). Mr. Berrie does not participate in any of the Company's stock
option or restricted stock plans. The bonus arrangement has been in effect since
July 1, 1983, prior to the Company's initial public offering.
The Committee and Mr. Berrie discuss his base compensation annually. For
1997, the Committee and Mr. Berrie concluded that his base compensation should
be increased by 17% to $425,000 plus the Incentive Compensation.
The Committee has not conducted a formal study of chief executive officer
compensation at companies comparable to the Company. The Committee believes that
basing a substantial portion of Mr. Berrie's compensation on a fixed percentage
of the Company's net income after taxes provides an appropriate linkage between
his compensation and the Company's performance. The Committee also notes that,
although Mr. Berrie does not participate in any of the Company's stock option or
restricted stock plans, he is the beneficial owner of more than 50% of the
outstanding Common Stock.
OTHER EXECUTIVE OFFICERS
The Committee determines the compensation of executive officers, other than
the chief executive officer, in consultation with Mr. Berrie. Generally, the
compensation received by these individuals consists of the following principal
components: base salary, cash bonuses, stock options and, for three executive
officers, restricted stock awards under the Company's 1994 Stock Option and
Restricted Stock Plan (including predecessor plans, the "Stock Option and
Restricted Stock Plans"). The Committee, after discussion with Mr. Berrie, has
followed a policy of determining increases in base compensation based
principally upon the Company's and the individual executive officer's
performance. In 1996, three executive officers, Mr. Paul Cargotch, who was
promoted to Executive Vice President in July 1996, Mr. Eric Lohwasser, who was
promoted to Vice President -- Finance in July 1996 and Mr. Y.B. Lee, who was
promoted to Senior Vice President -- Far East in August 1996 and to President of
Far East Operations in October 1996, received increases in their respective base
compensations as a result of their respective promotions.
The Committee views stock options and restricted stock awards as serving
two functions: compensation to executive officers and providing executive
officers with an equity stake in the Company that aligns their interests with
shareholders. In January 1996, executive officers received grants of stock
options under the Stock Option and Restricted Stock Plans to purchase stock
having an aggregate fair market value (measured at the date of grant) ranging
from 32% to 40% of base compensation. Two of the executive officers named in the
Summary Compensation Table and one other executive officer, who left the employ
of the Company in July 1996, received restricted stock awards under the
Company's 1994 Stock Option and Restricted Stock Plan relating to shares having
a fair market value (measured at the date of grant) equal to 33.3% of 80% of
base compensation. Although the amount of these awards does not vary on the
basis of the recipients' other holdings of the Company's stock, it may vary on
the basis of the Company's performance or other factors deemed relevant by the
Compensation Committee. The ultimate value to the recipient of such awards
depends upon the market price of the Company's common stock.
6
<PAGE> 10
Awards of cash bonuses to executive officers are based upon a bonus pool in
which approximately 63 of the Company's personnel participate and are paid if
the Company exceeds certain operating profit levels from its core domestic
business. Participants are eligible to receive a maximum award ranging from 50%
(in the case of certain executive officers) to 4% of the recipient's base
salary. Participants receive the maximum bonus for which they are eligible if
the amount of the bonus pool is sufficient to pay the maximum bonus to all
participants; otherwise, the bonus payable will be calculated so that each
participant receives the same percentage of the maximum bonus for which he or
she was eligible and the total bonuses paid equal the amount of the bonus pool.
For 1996, full cash bonuses were paid to eligible personnel. (See also "Summary
Compensation Table".)
Additional awards of cash bonuses to executive officers and other eligible
personnel are also paid if the Company exceeds certain levels above budgeted
operating profits. Participants are eligible to receive an award ranging from 4%
to 10% of the recipient's base salary depending upon the extent to which
operating profit exceeded budgeted operating profit for the relevant year. For
1996, cash bonuses equal to 10% of the recipient's base salary were paid to
eligible personnel.
Mr. Berrie does not participate in the bonus pool or additional cash bonus
described above.
LIMITATIONS ON DEDUCTIBILITY
The Committee has reviewed the Company's compensation policies in light of
amendments to the Internal Revenue Code enacted during 1993 that generally limit
deductions for compensation paid to certain executive officers to $1,000,000 per
annum (certain performance based compensation is not subject to that limit). At
present levels of compensation, these amendments do not limit the deductions to
which the Company is entitled and the Committee has therefore concluded that no
changes in the Company's compensation policies as a result of these amendments
are appropriate at this time.
Russ Berrie and Company, Inc. Compensation Committee
Raphael Benaroya, William A. Landman and Sidney Slauson, 1996 Members
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1996, the Compensation Committee consisted of Messrs. Benaroya, Landman
and Slauson.
Russell Berrie, the Chairman of the Board and Chief Executive Officer of
the Company, serves as a member of the Board of Directors of United Retail
Group, Inc., Raphael Benaroya, the Chairman of the Board, President and Chief
Executive Officer of United Retail Group, Inc., serves on the Compensation
Committee of the Board of Directors of the Company.
7
<PAGE> 11
RUSS BERRIE AND COMPANY, INC.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
RUSS BERRIE AND COMPANY, INC., THE S & P 500 INDEX
AND PEER GROUP COMPANIES
<TABLE>
<S> <C> <C> <C>
DEC-91 100 100 100
DEC-92 144.71 107.62 115.2
DEC-93 125.99 118.46 138.55
DEC-94 118.48 120.03 111.35
DEC-95 113.58 165.13 119.38
DEC-96 167.84 203.05 137.77
</TABLE>
Assumes $100 invested December 31, 1991 and reinvestment of all dividends.
Peer Group Companies are as follows: American Greetings (Class A), Cross
(A.T.) & Co. (Class A), Galoob (Lewis) Toys Inc., Gibson Greetings Inc., Hasbro
Inc., First Years, Inc. (formerly, Kiddie Products Inc.), Ohio Art Co. and
Tandycrafts Inc. Peer Group Companies were selected on the basis of similarity
of their products or distribution channels to those of the Company.
8
<PAGE> 12
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 1, 1997, the shares of Common
Stock beneficially owned by each director of the Company, by certain executive
officers of the Company and by all directors and officers of the Company as a
group.
<TABLE>
<CAPTION>
TOTAL SHARES APPROXIMATE
SHARES OF OF COMMON PERCENTAGE OF
COMMON STOCK OUTSTANDING
NAME OF DIRECTOR, OFFICER STOCK BENEFICIALLY COMMON
OR IDENTITY OF GROUP OWNED(1) OWNED(1)(2) STOCK(1)(2)
- ---------------------------------------------------------- ---------- ------------ -------------
<S> <C> <C> <C>
Raphael Benaroya.......................................... 720 9,720 *
Russell Berrie(3)......................................... 11,350,637 11,353,694 51.2
Paul Cargotch(4).......................................... 3,099 12,977 *
Ricky Chan(4)............................................. 3,387 13,877 *
A. Curts Cooke(4)......................................... 23,064 48,730 *
Ilan Kaufthal............................................. -0- 3,000 *
Charles Klatskin.......................................... 3,100 30,100 *
Joseph Kling.............................................. -0- 3,000 *
William A. Landman........................................ 65 6,065 *
Sidney Slauson............................................ 11,250 23,250 *
Bernard H. Tenenbaum(4)................................... 9,238 16,863 *
Leslie Berrie, Russell Berrie and Myron Rosner, as
co-trustees under The Leslie Berrie 1993 Trust(5)....... 126,541 126,541 *
All directors and officers as a group (16
persons)(3)(4)(6)....................................... 11,533,803 11,701,954 52.3
</TABLE>
- ---------------
*Less than 1%
(1) Each individual has the sole power to vote and dispose of the shares of
Common Stock, except as provided in notes 3, 4 and 5 below; and, in the case
of restricted shares granted under Russ Berrie and Company, Inc. Stock
Option and Restricted Stock Plans, subject to the provisions of such plans.
(2) Includes the number of shares subject to stock options granted by the
Company which are exercisable within 60 days.
(3) Includes (a) 9,703,542 shares held of record by The Russell Berrie 1991
Trust, of which Mr. Russell Berrie is the grantor and a trustee possessing
sole voting and dispositive power (other than to Mr. Berrie) as to the
shares held by such trust, (b) 595,188 shares held of record by The Russell
Berrie 1995 Annuity Trust, of which Mr. Berrie is the grantor and a trustee
possessing sole voting and dispositive power (other than to Mr. Berrie) as
to the shares held by such trust, (c) 1,000,000 shares held of record by The
Russell Berrie 1996 Annuity Trust, of which Mr. Berrie is the grantor and a
trustee possessing sole voting and dispositive power (other than to Mr.
Berrie) as to the shares held by such trust, (d) 150 shares held of record
by Mr. Berrie as custodian for one of his daughters, (e) 1,000 shares held
by The Angelica 1992 Trust for the benefit of Mr. Berrie's spouse and of
which Mr. Berrie disclaims beneficial ownership, and (f) 3,057 options held
by Mr. Berrie's spouse and of which options and underlying shares Mr. Berrie
disclaims beneficial ownership. Does not include shares of Common Stock held
beneficially and of record by The Russell Berrie Foundation (280,150
shares). Mr. Berrie is a trustee of the Foundation. Also does not include
shares of Common Stock held beneficially and of record by The Leslie Berrie
1993 Trust of which Mr. Berrie disclaims beneficial ownership.
9
<PAGE> 13
(4) Includes shares awarded under the Company's Stock Option and Restricted
Stock Plans which are not vested as of March 1, 1997, as follows: 3,099
shares for Mr. Cargotch; 3,387 shares for Mr. Chan; 9,694 shares for Mr.
Cooke; 7,277 shares for Mr. Tenenbaum; and 26,009 shares for all directors
and officers as a group.
(5) Leslie Berrie, Russell Berrie and Myron Rosner are co-trustees, each having
the power to vote and dispose of these shares. Messrs. Berrie and Rosner
disclaim beneficial ownership of these shares.
(6) Includes shares held by trusts included in the table.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of March 1, 1997, with respect to each
person who is known to the Company to be the beneficial owner of more than five
percent of the outstanding shares of Common Stock: (i) the name and address of
such owner, (ii) the number of shares beneficially owned, and (iii) the
percentage of the total number of shares of Common Stock outstanding so owned.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- --------------------------------------------------------------------- ------------------ --------
<S> <C> <C>
Russell Berrie (1)................................................... 11,353,694 51.2
111 Bauer Drive
Oakland, New Jersey 07436
John Hancock Mutual Life Insurance Company (2)....................... 1,578,432 7.1
John Hancock Place
P.O. Box 111
Boston, Massachusetts 02117
</TABLE>
- ---------------
(1) Includes (a) 9,703,542 shares held of record by The Russell Berrie 1991
Trust, of which Mr. Russell Berrie is the grantor and a trustee possessing
sole voting and dispositive power (other than to Mr. Berrie) as to the
shares held by such trust, (b) 595,188 shares held of record by The Russell
Berrie 1995 Annuity Trust, of which Mr. Berrie is the grantor and a trustee
possessing sole voting and dispositive power (other than to Mr. Berrie) as
to the shares held by such trust, (c) 1,000,000 shares held of record by The
Russell Berrie 1996 Annuity Trust, of which Mr. Berrie is the grantor and a
trustee possessing sole voting and dispositive power (other than to Mr.
Berrie) as to the shares held by such trust, (d) 150 shares held of record
by Mr. Berrie as custodian for one of his daughters, (e) 1,000 shares held
by The Angelica 1992 Trust for the benefit of Mr. Berrie's spouse and of
which Mr. Berrie disclaims beneficial ownership, and (f) 3,057 options held
by Mr. Berrie's spouse and of which options and underlying shares Mr. Berrie
disclaims beneficial ownership. Does not include shares of Common Stock held
beneficially and of record by The Russell Berrie Foundation (280,150
shares). Mr. Berrie is a trustee of the Foundation. Also does not include
shares of Common Stock held beneficially and of record by The Leslie Berrie
1993 Trust of which Mr. Berrie disclaims beneficial ownership. (See
"Security Ownership of Management".)
(2) Consists of shares owned by 2 indirect, wholly-owned subsidiaries of John
Hancock Mutual Life Insurance Company: NM Capital Management, Inc. and John
Hancock Advisers, Inc. Based on information provided by John Hancock Mutual
Life Insurance Company as of January 21, 1997.
10
<PAGE> 14
EXECUTIVE COMPENSATION
The following table sets forth compensation for the years ended December
31, 1996, 1995 and 1994 paid to or accrued for the benefit of the Chief
Executive Officer and the other four most highly compensated executive officers
of the Company as of December 31, 1996:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------
ANNUAL OTHER SECURITIES ALL
COMPENSATION(1) ANNUAL RESTRICTED UNDERLYING OTHER
------------------- COMPEN- STOCK OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SATION AWARDS($)(2) SARS(SHARES) SATION(3)
- ---------------------------------- ---- -------- -------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Russell Berrie,................... 1996 $364,000 $321,770 $25,356 -0- -0- $260,044
Chairman of the Board and 1995 350,000 170,400 25,392 -0- -0- 260,610
Chief Executive Officer 1994 350,000 58,270 27,489 -0- -0- 260,396
A. Curts Cooke,................... 1996 300,006 185,773 11,399 $ 79,992 7,046 4,500
President and Chief 1995 292,507 121,458 10,430 77,990 6,807 4,500
Operating Officer 1994 263,520 5,068 10,102 -0- 4,428 3,806
Ricky Chan,....................... 1996 190,000 117,654 3,754 -0- 5,577 4,500
Senior Vice President -- 1995 165,011 49,376 3,701 -0- 2,818 4,500
Product Development 1994 134,784 2,592 3,642 -0- 2,265 3,806
Paul Cargotch,.................... 1996 183,750 118,327 5,344 -0- 5,137 4,500
Executive Vice President and 1995 167,500 69,551 4,876 -0- 4,872 4,500
Chief Financial Officer 1994 150,000 2,885 5,102 -0- 4,033 3,806
Bernard H. Tenenbaum,............. 1996 175,000 108,365 4,236 46,666 4,110 4,500
Vice President -- 1995 164,500 68,305 3,194 43,863 3,828 4,500
Corporate Development 1994 150,000 2,885 3,121 -0- 2,521 3,806
</TABLE>
- ---------------
(1) While the aggregate of "Other Annual Compensation" received by the named
executive officers is lower than the lesser of $50,000 or 10 percent of
total annual salary and bonus for each named executive officer, the
perquisites and other personal benefits included within the "Other Annual
Compensation" which individually exceed 25% of the total perquisites and
other personal benefits for each named executive officer include (i) Mr.
Berrie's travel allowance ($20,800) for each of years 1996, 1995 and 1994,
(ii) Mr. Cooke's personal use of a Company car (valued at $3,083 for each of
years 1996, 1995 and 1994), and the premium ($4,319) paid by the Company for
each of years 1996, 1995 and 1994 on Mr. Cooke's behalf for long term
disability insurance, (iii) Mr. Chan's personal use of a Company car (valued
at $2,917 for each of years 1996, 1995 and 1994), (iv) Mr. Cargotch's
personal use of a Company car (valued at $2,917 in 1996, $2,960 in 1995 and
$2,917 in 1994), and (v) Mr. Tenenbaum's personal use of a Company car
(valued at $2,917 in 1996, $2,960 in 1995 and $2,917 in 1994). All salary
and bonus payments are reported for the year in which they are earned.
(2) Value is calculated by multiplying the number of shares awarded by the
closing price of the Common Stock on the New York Stock Exchange on the date
of grant. 21,652 shares of restricted stock were held by the named executive
officers at December 31, 1996 with an aggregate value as of such date of
$389,736 (calculated by multiplying the number of shares held by the closing
price of the Common Stock on the New York Stock Exchange on December 31,
1996, the last day of the Company's last completed fiscal year). At December
31, 1996, the value of Mr. Cooke's holdings was $282,150 and Mr. Tenenbaum's
was $107,586. The number of shares of restricted stock awarded in 1996 and
1995 to (i) Mr. Cooke is 5,871 and 5,672, respectively, and (ii) Mr.
Tenenbaum is 3,425 and 3,190, respectively. No shares of restricted stock
were awarded in 1994. Restricted stock awards vest over five years at 20
percent per year provided the recipient remains in the employ of the Company
or as otherwise provided
11
<PAGE> 15
under the applicable plan. (For further information regarding Mr. Cooke's
restricted stock, see "Employment Agreements and Arrangements"). Dividends are
paid on all outstanding restricted stock.
(3) For Mr. Berrie, consists of $255,544 paid in 1996, $256,110 paid in 1995 and
$256,590 paid in 1994 for split dollar life insurance policies on the joint
lives of Mr. Berrie and his spouse. The split dollar life insurance policies
have been assigned to the Company to secure repayment of the premiums. For
all named executive officers, consists of retirement plan contributions and
reallocation of forfeitures under the retirement plan during 1994 and
contributions under the retirement plan/401(k) Plan during 1995 and 1996.
Does not include investment gains or losses under the retirement plan/401(k)
Plan. (See "401(k) Plan"). Since the Company contributions to the retirement
plan/401(k) Plan are not fixed, and because it is impossible to calculate
future income, it is not currently possible to calculate an individual
participant's retirement benefits.
------------------------
401(k) PLAN
In February 1995, the Company amended its existing retirement plan (a
defined contribution plan) to convert such retirement plan to a plan based on
employees' pretax salary deferrals with Company matching contributions pursuant
to Section 401(k) of the Internal Revenue Code of 1986, as amended (the "401(k)
Plan"). Participating employees may elect to contribute from 1% to 15% (but not
in excess of $9,500 in 1997) of their compensation, on a pretax basis, to the
401(k) Plan. Employees' contributions are invested in one or more of six funds
(as selected by each participating employee). The Company matches a portion of
the compensation deferred by each employee. The Company's matching contribution
fully vests after four years of employment at the rate of 25% per year of
employment. Under certain circumstances, the 401(k) Plan permits participants to
make withdrawals or receive loans from the 401(k) Plan prior to retirement age.
EMPLOYMENT AGREEMENTS AND ARRANGEMENTS
Pursuant to Mr. Berrie's compensation arrangement with the Company, the
Company pays the cost of certain split dollar life insurance policies insuring
the joint lives of Mr. Berrie and his spouse. The policies have been assigned to
the Company to secure repayment of the premiums. (See also "Compensation
Committee Report -- Chief Executive Officer", "Summary Compensation Table" and
"Certain Transactions").
A. Curts Cooke has announced his retirement as President and Chief
Operating Officer of the Company effective June 30, 1997. The Company has an
agreement with Mr. Cooke which provides, in relevant part, that Mr. Cooke will
(i) be employed by the Company as President and Chief Operating Officer until
June 30, 1997 and, from July 1, 1997 until June 30, 1998, will be engaged as a
consultant to the Company, (ii) receive compensation at a rate of $300,000 per
year until June 30, 1998, (iii) be proposed, until June 30, 1998, by the
Company, for election to the Board of Directors of the Company, (iv) be
entitled, on June 30, 1997, to consider that date as his normal retirement date
under the Stock Option and Restricted Stock Plans (which effectively allows Mr.
Cooke to exercise all of his outstanding options for up to one year or the
stated period of the option (whichever is shorter)) and all restrictions on Mr.
Cooke's restricted stock will lapse, and (v) receive insurance benefits until
June 30, 1998. Under the agreement, Mr. Cooke will not receive compensation as a
Director of the Company during the year in which he is engaged as a consultant
to the Company and will be subject to certain confidentiality and
non-competition restrictions.
The Company has agreed in principle to an agreement with Ricky Chan, Senior
Vice President-Product Development of the Company, under which Mr. Chan, would
receive the following retirement and life insurance benefits: (1) if Mr. Chan is
employed by the Company and reaches the age of 59, he would receive retirement
compensation in the amount of $2,750,000 payable to Mr. Chan (or his designated
beneficiary) at the rate of $250,000 per year for a period of 11 years, or (ii)
if Mr. Chan dies prior to the age of 59 and is employed by the Company at the
time of such death, the Company would pay, to Mr. Chan's designated
12
<PAGE> 16
beneficiary, a lump sum death benefit by means of a life insurance arrangement,
in the amount of $1,000,000. The foregoing benefits would be in addition to
other benefits to which Mr. Chan is entitled as an employee of the Company.
The Company has an agreement with Bernard H. Tenenbaum, Vice
President -- Corporate Development of the Company, providing for a base salary
of at least $150,000 per annum, a discretionary bonus, the annual grant of stock
options and restricted stock under the Company's Stock Option and Restricted
Stock Plans then in effect which grants are commensurate with his status and
level of employment, and participation in employee benefit plans. Mr. Tenenbaum
is receiving an annual base salary of $182,000 in 1997. In addition, the
agreement provides that in the event of a change of control of the Company, Mr.
Tenenbaum will be entitled to receive his salary, bonus and benefits for a
period of 3 years. The agreement may be terminated with or without cause and
shall terminate on death or disability. If Mr. Tenenbaum is terminated without
cause, he is entitled to receive his accrued bonus, if any, to the date of his
termination in an amount equal to 50% of his base salary to the date of
termination and, for a period of 12 months following such termination, his base
salary and the continuation of employee benefit plans. If Mr. Tenenbaum is
terminated due to death, disability or for cause, he is not entitled to receive
any salary or other payments or benefits after the date of his death, disability
or termination for cause. Furthermore, the agreement provides that Mr.
Tenenbaum's office for the performance of his services shall be in the greater
New York metropolitan area.
1996 OPTION GRANTS
The following table sets forth the options granted to the named officers in
the Summary Compensation Table of the Company during the year ended December 31,
1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED ANNUAL
SECURITIES RATES OF STOCK PRICE
UNDERLYING PERCENT OF TOTAL APPRECIATION FOR 10
OPTIONS OPTIONS GRANTED EXERCISE OR YEAR OPTION TERM
GRANTED TO EMPLOYEES BASE PRICE EXPIRATION -----------------------
NAME (#)(1) IN FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- --------------------------- ---------- ---------------- ----------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Russell Berrie............. -0- -0- -0- -0- -0- -0-
A. Curts Cooke............. 7,046 2.69 $13.625 1/2/06 $ 60,375 $ 153,002
Ricky Chan................. 5,577 2.13 13.625 1/2/06 47,787 121,103
Paul Cargotch.............. 5,137 1.96 13.625 1/2/06 44,017 111,548
Bernard H. Tenenbaum....... 4,110 1.57 13.625 1/2/06 35,217 89,247
</TABLE>
- ---------------
(1) All options granted vest and become exercisable one year from the date of
grant. In any 12 month period, an option holder may exercise no more than
the number of options received in the most recent grant plus one-third of
the option holder's remaining exercisable options.
13
<PAGE> 17
AGGREGATED OPTION/SAR EXERCISES IN 1996 AND
YEAR-END OPTION/SAR VALUES
The following table sets forth option and SAR exercises during 1996 and
year-end option and SAR values for the named officers in the Summary
Compensation Table of the Company based upon the closing price of the Common
Stock of the Company on the New York Stock Exchange on December 31, 1996
($18.00).
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES ACQUIRED VALUE AT FISCAL YEAR-END AT FISCAL YEAR-END($)
NAME ON EXERCISE(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------------------- --------------- --------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Russell Berrie............ -0- -0- -0- -0-
A. Curts Cooke............ -0- -0- 20,636/7,046 $57,153/30,826
Ricky Chan................ -0- -0- 8,186/5,577 25,074/24,399
Paul Cargotch............. -0- -0- 17,051/5,137 45,531/22,474
Bernard H. Tenenbaum...... -0- -0- 12,349/4,110 41,637/17,981
</TABLE>
(1) Value is calculated by determining the difference between the price of the
Common Stock underlying the options or SARs on the New York Stock Exchange
at the time of exercise and the exercise or base price of the options or
SARs.
CERTAIN TRANSACTIONS
Several warehouse, office and distribution facilities are leased to the
Company by Russell Berrie, Chairman of the Board of the Company, or trusts for
the benefit of members of his immediate family or by a partnership in which he
and Murray Berrie, his brother, are both general partners. The Company believes
that the terms of those leases are no less favorable to the Company than could
have been obtained from an unaffiliated third party. The Company is also a
guarantor under mortgage loan payments on the facilities in South Brunswick and
Oakland, New Jersey. The aggregate amount outstanding on the loans as of
December 31, 1996 was $8,180,000. The table below lists such facilities, the
current rentals and the lease expiration dates.
<TABLE>
<CAPTION>
ANNUAL LEASE
FACILITY RENTAL(1) EXPIRATION(2)
--------------------------------------------------- ---------- -----------------
<S> <C> <C>
Petaluma, California............................... $ 845,000 June 30, 2004
Lakeland, Florida(3)............................... 291,353 February 28, 1998
Oakland, New Jersey................................ 399,350 April 1, 2004
South Brunswick, New Jersey........................ 2,506,598 May 31, 1999
----------
Total.................................... $4,042,301
==========
</TABLE>
- ---------------
(1) Reflects base rental obligations. Does not include payments for real estate
taxes and certain other items applicable to the premises. Base rentals are
subject to periodic increases during the remainder of the term of certain of
the leases.
(2) Not including renewal options, if any.
(3) This facility was closed in March 1990 in connection with a restructuring
undertaken by the Company and is currently subleased.
------------------------
14
<PAGE> 18
As of March 1, 1997, Mr. Cooke, President, Chief Operating Officer and a
Director, had repaid in full all amounts outstanding under a loan previously
made to him by the Company. The highest outstanding balance of such loan since
January 1, 1996 was $39,833. As of March 1, 1997, Mr. Tenenbaum, Vice
President -- Corporate Development and a Director, was indebted to the Company
in the aggregate amount of $8,811 which is also the highest outstanding balance
of the loan since January 1, 1996. The proceeds of these borrowings were used by
Messrs. Cooke and Tenenbaum to pay for certain tax obligations resulting from
the lapse of restrictions on shares of Common Stock awarded under the Company's
Stock Option and Restricted Stock Plans. The Company lends to various officers
who receive restricted shares of Common Stock under the Stock Option and
Restricted Stock Plans amounts equal to Federal tax obligations incurred by such
officers resulting from the lapse of restrictions on such shares. Under this
arrangement, the indebtedness from the officer is represented by an agreement or
promissory note providing for loans for a five-year period bearing interest at
the Applicable Federal Rate as determined by the Internal Revenue Service. The
principal amounts of and accrued interest on these loans are required to be paid
upon the termination of the officer's employment with the Company or his
disposition of the shares giving rise to the indebtedness.
For a description of the employment arrangements between the Company and
each of Messrs. Cooke and Chan, see "Employment Agreements and Arrangements".
The Company leases a warehouse and office facility located in Dayton, New
Jersey from a partnership in which Charles Klatskin, a Director of the Company,
is a general partner. This facility was closed in July 1989, in connection with
a restructuring undertaken by the Company. From July 1991 through December 1994,
the Company occupied some office and warehouse space in this building
(approximately 31.3% of the building). From January 1995 until January 1996, the
Company occupied only a portion of the office space in this building
(approximately 10% of the building). After January 1996, and in connection with
the sale of the business of the Company's subsidiary, Papel/Freelance, Inc., the
portion of the Dayton, New Jersey property, previously occupied by that
subsidiary (approximately 10% of such property), was sublet. Currently, the
Company occupies approximately 31% of the Dayton, New Jersey property as
warehouse space. The lease for this facility expires on October 31, 1997 (not
including renewal options) and provides for annual base rental payments (not
including payments for real estate taxes and certain other items) of $996,369.
Mr. Klatskin and certain of his affiliated companies have been engaged as a real
estate broker to assist with selling or arranging subleases for certain
properties which the Company currently owns or leases and is not fully
utilizing, including the facilities in Dayton, New Jersey and Lakeland, Florida.
During 1996, Mr. Klatskin and companies affiliated with Mr. Klatskin received
from the Company, directly or indirectly, $32,685 for performing such
activities. Mr. Klatskin and his affiliated companies continue to act in a real
estate brokerage capacity for certain real estate properties of the Company, and
the Company believes that the terms of the leases and the arrangements with Mr.
Klatskin and his affiliated companies to arrange sales and subleases of certain
of the Company's facilities are no less favorable to the Company than could have
been obtained from an unaffiliated third party.
The Company has an agreement with Schroder Wertheim & Co. Incorporated
("Schroders") pursuant to which, among other things, the Company retained
Schroders as its exclusive financial advisor in connection with the possible
sale of the Company's wholly-owned toy subsidiaries, Cap Toys, Inc. and OddzOn
Products, Inc. (together, the "Toy Companies"). The agreement provides, in
relevant part, that Schroders will be paid a fee, at the closing of the sale,
equal to 1% of the sum of the (i) amount received by the Company for such sale,
(ii) any indebtedness of the Toy Companies to the Company which is assumed by
the purchaser, and (iii) any extraordinary dividends and/or cash distributions
paid by the Toy Companies to the Company which exceed the Toy Companies' net
income since September 26, 1996. Ilan Kaufthal, a Director of the Company, is a
Managing Director of Schroders. The Company has entered into a letter of intent
with Hasbro, Inc. relating to the sale of the Toy Companies for $166,000,000
subject to adjustment.
15
<PAGE> 19
SECTION 16 COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. Officers, directors and greater than ten
percent shareholders are required to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the fiscal year
ended December 31, 1996, all filing requirements applicable to its officers,
directors and greater than ten percent shareholders were complied with on a
timely basis.
OTHER MATTERS
The Board of Directors knows of no business to be presented at the meeting
other than that set forth in the accompanying Notice of Annual Meeting of
Shareholders. However, if other matters properly come before the meeting, the
holders of the proxies intend to vote the proxies in accordance with their best
judgment on such matters.
The Board of Directors, upon the recommendation of the Audit Committee, has
selected Coopers & Lybrand to be the Company's independent accountants for 1997.
It is expected that representatives of Coopers & Lybrand will be present at the
meeting to respond to appropriate questions and, if they so desire, to make a
statement.
VOTING PROCEDURES
Election of Directors: Directors are elected by a plurality of the votes
cast at the annual meeting. Only shares that are voted in favor of a particular
nominee will be counted toward such nominee's achievement of a plurality. Shares
present at the meeting that are not voted for a particular nominee or shares
present by proxy where the shareholder properly withheld authority to vote for
such nominee (including broker non-votes) will not be counted toward such
nominee's achievement of a plurality.
Other Matters: The affirmative vote of the majority of shares present in
person or represented by proxy at the annual meeting for a particular matter is
required for the matter to be deemed an act of the shareholders. Shares electing
to abstain are considered present at the meeting for the particular matter, but
since they are not affirmative votes for the matter, abstentions have the same
effect as votes against the matter. In the event of broker non-votes, shares are
not considered present at the meeting for the particular matter as to which the
broker withheld authority. Broker non-votes are not counted in respect of the
matter, but have the practical effect of reducing the number of affirmative
votes required to achieve a majority for such matter by reducing the total
number of shares from which the majority is calculated.
16
<PAGE> 20
SHAREHOLDER PROPOSALS
In order to be included in the proxy statement and form of proxy relating
to the 1998 Annual Meeting of Shareholders, proposals of shareholders intended
to be presented at such meeting must be received by the Company on or before
November 25, 1997. Any such proposals should be submitted in writing to:
Secretary, Russ Berrie and Company, Inc., 111 Bauer Drive, Oakland, New Jersey
07436.
By Order of the Board of Directors
ARNOLD S. BLOOM
Secretary
Oakland, New Jersey
March 14, 1997
17
<PAGE> 21
RUSS BERRIE AND COMPANY, INC.
111 BAUER DRIVE
P OAKLAND, NEW JERSEY 07436
R
O THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X
Y The undersigned hereby appoints Russell Berrie, Paul Cargotch and A.
Curts Cooke, and each of them severally, as proxies of the undersigned,
each with the power to appoint his substitute, and hereby authorizes them
to represent and to vote as designated below all the shares of Common
Stock of Russ Berrie and Company, Inc. held of record by the undersigned
on March 7, 1997, at the Annual Meeting of Shareholders to be held on
April 24, 1997 and any adjournment thereof.
Election of Directors. Nominees:
Raphael Benaroya, Russell Berrie, Paul Cargotch, A. Curts Cooke,
Iian Kaufthal, Charles Klatskin, Joseph King, William A. Landman,
Sidney Slauson and Bernard H. Tenenbaum
(Change of Address/Comments)
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1.
A VOTE FOR PROPOSAL 1 IS RECOMMENDED.
Your vote for the election of Directors may be indicated in the reverse.
- -------------
SEE REVERSE
SIDE
- -------------
<PAGE> 22
/ X / PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
- --------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS TO SERVE UNTIL THE 1998 ANNUAL MEETING OF SHAREHOLDERS
AND UNTIL THEIR SUCCESSORS SHALL HAVE BEEN ELECTED AND QUALIFIED.
FOR nominees listed on the WITHHOLD AUTHORITY to
front of this card (except as vote for all nominees listed on
marked to the contrary below). the front of this card.
/ / / /
INSTRUCTION: To withhold authority to vote for any individual nominee, check
the box marked "FOR" above and write that nominee's name on the line provided.
- -----------------------------------------------------
2. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come
before the meeting.
- --------------------------------------------------------------------------------
Please sign exactly as name appears on the other side. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please sign your name and indicate full
title as such. If a corporation, an authorized officer should sign his/her
name and indicate his/her title. If a partnership, please sign in partnership
name by authorized person.
Date:
- -------------------------------------------- --------------------------
Signature
Date:
- -------------------------------------------- --------------------------
Signature if held jointly
