<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14(a)-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RUSS BERRIE AND COMPANY, INC.
- --------------------------------------------------------------------------------
(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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 12, 1999
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 The Sheraton Parsippany Hotel (formerly, the Sheraton Tara
Hotel), 199 Smith Road, Parsippany, New Jersey, at 2:00 P.M. on Wednesday, April
21, 1999.
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/ Russell Berrie
RUSSELL BERRIE
Chairman
<PAGE> 3
RUSS BERRIE AND COMPANY, INC.
111 BAUER DRIVE
OAKLAND, NEW JERSEY 07436
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 21, 1999
The Annual Meeting of Shareholders of Russ Berrie and Company, Inc. will be
held this year at The Sheraton Parsippany Hotel (formerly, the Sheraton Tara
Hotel), 199 Smith Road, Parsippany, New Jersey on Wednesday, April 21, 1999, 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 5, 1999 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 12, 1999
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 12, 1999
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 Wednesday, April 21, 1999, at 2:00 P.M., at The Sheraton Parsippany Hotel
(formerly, 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 5, 1999, 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 21,804,388 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,
1998 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 19, 1999.
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(1)........ 51 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. Mr. Benaroya
is also Managing Director of American Licensing Group,
L.P., which specializes in consumer goods' brand name
licensing.
Angelica Berrie(2)......... 44 1998 Director -- Product Development of the Company since
November 1991.
</TABLE>
1
<PAGE> 5
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION;
NAME AGE SINCE OTHER DIRECTORSHIPS
---- --- -------- ---------------------
<S> <C> <C> <C>
Russell Berrie(2).......... 66 1966 Chairman 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.............. 54 1996 Executive Vice President of the Company since July 1996;
Chief Financial Officer of the Company from March 1990 to
March 1998; Vice President -- Finance of the Company from
March 1990 to June 1996.
Ilan Kaufthal(3)........... 51 1995 Vice Chairman, since April 1997, of Schroder & Co., Inc.
(formerly known as Schroder, Wertheim & Co., Inc.), an
investment banking firm. Managing Director, from February
1987 to March 1997, of Schroder & Co., Inc. Mr. Kaufthal is
also a Director of United Retail Group, Inc., Cambrex
Corporation, a company which manufactures specialty
chemicals, ASI Solutions Incorporated, a company which
provides human resources outsourcing services, and
PROTEAM.com, a company which markets and sells sports and
sports-related products on the Internet and through
catalogs.
Charles Klatskin........... 64 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............... 69 1988(4) President and Chief Executive Officer of Pamsco, Inc., a
consulting company, since April 1991.
William A. Landman(1,3).... 46 1994 Principal, since 1987, and Chief Investment Officer, since
March 1998, of CMS Companies, an investment firm.
Sidney Slauson(1).......... 89 1978 Mr. Slauson was General Counsel to the Company from 1966
until 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.
Josh S. Weston............. 70 1999(5) Honorary Chairman, since April 1998, of Automatic Data
Processing, Inc. ("ADP"), a computerized transaction
processing, data communication and information services
company. Mr. Weston served as Chairman of the Board of ADP
from August 1996 to April 1998. Prior to August 1996, and
for more than five years prior thereto, he served as
Chairman of the Board and Chief Executive Officer of ADP.
Mr. Weston is also a Director of Public Service Enterprise
Group, an electric and gas utility company, Olsten
Corporation, a provider of home health care and temporary
staffing services, Vanstar, a computer services company,
and Shared Medical Systems Corporation, a provider of
health information services.
</TABLE>
- ---------------
(1) Member of Compensation Committee of the Board of Directors.
(2) Angelica Berrie is the spouse of Russell Berrie.
2
<PAGE> 6
(3) Member of Audit Committee of the Board of Directors.
(4) 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.
(5) Mr. Weston was elected to the Board of Directors on January 28, 1999.
------------------------------------------------------
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company held four meetings during 1998. The
Audit Committee of the Board of Directors, which held one meeting during 1998,
consists of Messrs. Ilan Kaufthal and William A. Landman. 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 1998, 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 1998, 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) except Messrs.
Kling and Landman.
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,
commencing January 1, 1989, directors who were not officers or other employees
of the Company became eligible to receive non-qualified stock options and stock
appreciation rights ("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 non-qualified stock
options under the Company's 1994 Stock Option Plan for Outside Directors (the
"1994 Directors Plan"). (See "1994 Directors Plan" below.) Commencing January 1,
1999, directors who were not officers or other employees of the Company became
eligible to receive non-qualified stock options under the Company's 1999 Stock
Option Plan for Outside Directors (the "1999 Directors Plan" and, together with
the 1989 Directors Plan and the 1994 Directors Plan, "All Directors Plans").
(See "1999 Directors Plan" below.)
ALL DIRECTORS PLANS
All Directors Plans are currently administered by a committee comprised of
two members of the Board of Directors who are not participants in any of such
plans: Russell Berrie and Paul Cargotch.
- ---------------
* Mr. A. Curts Cooke, former President and Chief Operating Officer of the
Company, retired on January 31, 1998. See "Employment Agreements and
Arrangements". Mr. Cooke, who has been engaged as a consultant to the Company
since his retirement from the Company, did not receive compensation (including
stock options) for serving as a Director during the year in which he was
engaged as a consultant to the Company. Mr. Cooke is not standing for
re-election to the Board of Directors of the Company but continues to be
engaged as a consultant.
3
<PAGE> 7
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 transferable to spouses, lineal descendants, certain
trusts and charitable organizations; otherwise, such options are not
transferable other than by will or under the laws of descent and distribution,
and are exercisable only by the grantee or a permitted transferee or by the
grantee's or permitted transferee'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, non-vested 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,
non-vested 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.
1989 DIRECTORS PLAN
A total of 150,000 shares of Common Stock were 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 1998.
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 securities and/or cash in 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 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 were reserved for the grant of
options under the 1994 Directors Plan. Grantees have been granted options to
purchase 3,000 shares of Common Stock in each year from 1994 through 1998. In
1998, options were granted to all eligible directors at an exercise price of
$26.25 per share. In 1998, Mr. Slauson exercised options, pursuant to the 1994
Directors Plan, for 3,000 shares of Common Stock at an exercise price of $13.625
per share.
1999 DIRECTORS PLAN
A total of 150,000 shares of Common Stock have been reserved for the grant
of options under the 1999 Directors Plan. Grantees will be granted options to
purchase 3,000 shares of Common Stock in each year from 1999 through 2003. In
1999, options were granted to all eligible directors at an exercise price of
$23.625 per share.
4
<PAGE> 8
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
CHIEF EXECUTIVE OFFICER
Mr. Russell Berrie, Chairman and Chief Executive Officer of the Company, is
party to an employment arrangement with the Company that provides for
compensation, in 1998, consisting of a base salary at an annual rate of $475,000
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 Compensation Committee (the "Committee") and Mr. Berrie discuss his
base compensation annually. For 1999, the Committee and Mr. Berrie concluded
that his base compensation should be increased by 2% to $485,000 plus the
Incentive Compensation.
The Committee has not conducted a 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 approximately 49.1% 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 one executive
officer, 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.
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 1998, executive officers received grants of stock
options under the Company's 1994 Stock Option and Restricted Stock Plan to
purchase stock having an aggregate fair market value (measured at the date of
grant) ranging from 32% to 40% of base compensation. One of the executive
officers named in the Summary Compensation Table received restricted stock
awards under the Company's Stock Option and Restricted Stock Plans 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.
Awards of cash bonuses to executive officers are based upon a bonus pool in
which approximately 75 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
5
<PAGE> 9
participants; otherwise, each participant receives the same percentage of the
bonus pool as such participant would have received had maximum bonuses been
paid. (See also "Summary Compensation Table".)
Additional awards of cash bonuses to executive officers (and certain other
eligible personnel) are also paid if the Company exceeds certain goals of
profitability from its core domestic business. Participants are eligible to
receive an award ranging from 2% to 10% of the recipient's base salary depending
upon the level of operating profit for the relevant period.
Mr. Berrie does not participate in the bonus pool or additional cash bonus
described above.
Russ Berrie and Company, Inc. Compensation Committee
Raphael Benaroya, William A. Landman and Sidney Slauson, 1998 Members
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1998, the Compensation Committee consisted of Messrs. Benaroya, Landman
and Slauson.
Russell Berrie, Chairman and Chief Executive Officer of the Company, serves
as a member of the Board of Directors of United Retail Group, Inc. Raphael
Benaroya, 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.
6
<PAGE> 10
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
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
RUSS BERRIE AND CO.,
INC. S&P 500 INDEX PEER GROUP
-------------------- ------------- ----------
<S> <C> <C> <C>
Dec 93 100.00 100.00 100.00
Dec 94 94.04 101.32 90.94
Dec 95 90.15 139.40 92.51
Dec 96 133.21 171.40 87.68
Dec 97 199.70 228.59 110.50
Dec 98 184.69 293.91 113.84
</TABLE>
Assumes $100 invested December 31, 1993, and reinvestment of all dividends.
Peer Group Companies are as follows: American Greetings (Class A), Cross
(A.T.) & Co. (Class A), Department 56 Inc. (Series A), Enesco Group Inc.
(formerly, Stanhome Inc.), First Years, Inc., Gibson Greetings 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.
7
<PAGE> 11
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 1, 1999, 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(8) OWNED(1) OWNED(1)(2) STOCK(1)(2)
------------------------- ---------- ------------ -------------
<S> <C> <C> <C>
Raphael Benaroya.......................................... 720 15,720 *
Angelica Berrie(3)........................................ 171,000 175,549 *
Russell Berrie(4)......................................... 10,770,528 10,775,077 49.1
Paul Cargotch(5).......................................... 1,859 10,923 *
Ricky Chan(5)............................................. 8,930 20,923 *
Chris Collins............................................. -0- 5,587 *
Ilan Kaufthal............................................. -0- 9,000 *
Charles Klatskin.......................................... 3,100 30,100 *
Joseph Kling.............................................. -0- 9,000 *
William A. Landman........................................ 65 12,065 *
Y.B. Lee(5)............................................... 2,552 13,128 *
Sidney Slauson............................................ 9,000 22,000 *
Josh S. Weston............................................ 300 300 *
Leslie Berrie, Russell Berrie and Myron Rosner, as
co-trustees
under The Leslie Berrie 1993 Trust(6)................... 126,541 126,541 *
All directors and officers as a group
(21 persons)(4)(5)(7)................................... 10,799,235 10,954,201 49.6
</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 6 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) 1,000 shares held by The Angelica 1992 Trust, and (b) 170,000
of the 219,356 shares held of record by The Russell Berrie 1995 Annuity
Trust, of which Mrs. Berrie is a co-trustee possessing shared voting power
and shared dispositive power with respect to such 170,000 shares (see note 4
below). Shares deemed to be beneficially owned also include 4,549 shares
subject to stock options.
(4) Includes (a) 1,867,931 shares held of record by Mr. Russell Berrie, (b)
8,203,542 shares held of record by The Russell Berrie 1991 Trust, of which
Mr. Berrie is the grantor possessing the unrestricted power to revoke the
trust, a co-trustee with Mr. Myron Rosner possessing shared voting power and
shared dispositive power with respect to the shares held by such trust and,
until his death, the sole beneficiary, (c) 401,364 shares held of record by
The Russell Berrie 1997 Annuity Trust, of which Mr. Berrie is the grantor
and a co-trustee with Mr. Rosner possessing shared voting power and shared
dispositive power with respect to the shares held by such trust, and (d) 150
shares held of record by Mr. Berrie as custodian for one of his daughters.
Also includes (a) 1,000 shares held by The Angelica 1992 Trust for the
benefit of Mr. Berrie's spouse, (b) 170,000 of the 219,356 shares held of
record by The Russell Berrie 1995 Annuity Trust, of which Mr. Berrie's
spouse is a co-trustee possessing shared voting power and shared dispositive
power with respect to such 170,000 shares, and (c) 126,541 shares held of
record by The
8
<PAGE> 12
Leslie Berrie 1993 Trust, of which Mr. Berrie is a co-trustee; all of which
Mr. Berrie disclaims beneficial ownership (see "Security Ownership of
Management" table above, note 3 above and note 6 below). Shares deemed to be
beneficially owned also include 4,549 shares subject to stock options held
by Mr. Berrie's spouse, of which Mr. Berrie disclaims beneficial ownership.
Does not include shares of Common Stock held beneficially and of record by
The Russell Berrie Foundation, a New Jersey Nonprofit Corporation (235,692
shares) of which Mr. Berrie is a co-trustee.
(5) Includes shares awarded under the Company's Stock Option and Restricted
Stock Plans which are not vested as of March 1, 1999, as follows: 1,859
shares for Mr. Cargotch; 4,134 shares for Mr. Chan; 1,532 shares for Mr.
Lee; and 7,525 shares for all directors and officers as a group.
(6) 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.
(7) Includes shares held by trusts included in the table.
(8) Does not include shares owned by Mr. Cooke, former President and Chief
Operating Officer of the Company, who retired as an employee of the Company
on January 31, 1998 and who has subsequently been engaged as a consultant to
the Company. Mr. Cooke is not standing for re-election to the Board of
Directors of the Company. (See note to "Director Compensation"; see also
"Employment Agreements and Arrangements".)
------------------------------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth as of March 1, 1999, 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)........................................... 10,775,077(2) 49.1
111 Bauer Drive
Oakland, New Jersey 07436
</TABLE>
- ---------------
(1) See note 4 under "Security Ownership of Management" table.
(2) Of Mr. Berrie's 10,775,077 shares, Mr. Myron Rosner, in his capacity as a
trustee, is deemed also to be the beneficial owner of 8,901,447 shares. Mr.
Rosner's trusteeships are as follows: (a) 8,203,542 shares held of record by
The Russell Berrie 1991 Trust, of which Mr. Rosner is a co-trustee with Mr.
Berrie possessing shared voting power and shared dispositive power with
respect to the shares held by such trust, subject to Mr. Berrie's
unrestricted power to revoke the trust, (b) 179,356 of the 219,356 shares
held of record by The Russell Berrie 1995 Annuity Trust, of which Mr. Rosner
is a co-trustee possessing shared voting power and shared dispositive power
with respect to 170,000 shares held by such trust and of which Mr. Rosner is
a trustee possessing sole voting power and sole dispositive power with
respect to 9,356 shares held by such trust, (c) 401,364 shares held of
record by The Russell Berrie 1997 Annuity Trust, of which Mr. Rosner is a
co-trustee with Mr. Berrie possessing shared voting power and shared
dispositive power with respect to the shares held by such trust, and (d)
126,541 shares held of record by The Leslie Berrie 1993 Trust, of which Mr.
Rosner is a co-trustee and of which Mr. Rosner disclaims beneficial
ownership. Mr. Rosner is also a trustee possessing sole voting power and
sole dispositive power with respect to the 242,782 shares held of record by
The Russell Berrie 1996 Annuity Trust. Mr. Rosner also owns (a) 4,837 shares
held of record by The Myron Rosner P.A. Pension Plan, of which Mr. Rosner
has
9
<PAGE> 13
sole voting power and sole dispositive power with respect to the shares, (b)
720 shares held by a Keogh plan, of which Mr. Rosner has sole voting power
and sole dispositive power with respect to the shares, and (c) 750 shares
held by Mr. Rosner as joint tenant with his spouse, of which Mr. Rosner has
shared voting power and shared dispositive power with respect to the shares.
In all capacities, Mr. Rosner is deemed to be the beneficial owner of
9,159,892 shares (approximately 41.7 percent of the outstanding Common Stock
of the Company). Mr. Rosner's ownership does not include shares of Common
Stock held beneficially and of record by The Russell Berrie Foundation, a
New Jersey Nonprofit Corporation (235,692 shares). Mr. Rosner is a
co-trustee of the Foundation. Mr. Rosner is a partner at Wilentz, Goldman &
Spitzer, P.A., 90 Woodbridge Center Drive, Woodbridge, New Jersey 07095.
------------------------------------------------------
EXECUTIVE COMPENSATION
The following table sets forth compensation for the years ended December
31, 1998, 1997 and 1996 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, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION
------------------------------- -------------------------------------
OTHER SECURITIES
ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
COMPEN- STOCK OPTIONS/ PAYOUTS COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SATION(2) AWARDS($)(3) SARS(SHARES) ($) SATION(4)
- --------------------------- ---- ------ ----- --------- ------------ ------------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Russell Berrie,............. 1998 $475,000 $415,095 $30,070 -0- -0- -0- $258,488
Chairman and Chief 1997 425,000 834,583 25,893 -0- -0- -0- 259,107
Executive Officer 1996 364,000 321,770 25,356 -0- -0- -0- 260,044
Ricky Chan,................. 1998 258,500 134,221 4,185 $68,933 3,151 -0- 54,418
Senior Vice President -- 1997 235,000 122,019 4,574 62,660 4,064 -0- 54,239
Product Development 1996 190,000 117,654 3,754 -0- 5,577 -0- 4,500
Paul Cargotch,.............. 1998 225,750 117,216 4,297 -0- 3,440 -0- 4,418
Executive Vice President 1997 215,000 111,635 4,862 57,332 3,718 -0- 4,239
1996 183,750 118,327 5,344 -0- 5,137 -0- 4,500
Y.B. Lee,................... 1998 177,100 88,550 -0- -0- 2,698 -0- 1,080
President -- Far East 1997 177,100 88,550 -0- 47,212 3,063 -0- 88
Operations 1996 146,125 70,000 -0- -0- 4,110 -0- 94
Chris Collins,.............. 1998 168,000 87,231 2,954 -0- 2,560 -0- 4,418
Vice President -- Sales 1997 140,000 49,359 2,361 -0- 3,027 -0- 4,239
1996 120,000 34,308 2,316 -0- 2,201 -0- 3,331
</TABLE>
- ---------------
(1) All salary and bonus payments are reported for the year in which they are
earned.
(2) 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 1998, 1997 and 1996,
(ii) Mr. Chan's personal use of a Company car (valued at $3,083 for each of
years 1998 and 1997 and $2,917 for 1996), (iii) Mr. Cargotch's personal use
of a Company car (valued at $3,166 for 1998 and $2,917 for each of years
1997 and 1996), and (iv) Mr. Collins' personal use of a Company car (valued
at $2,795 for 1998 and $1,950 for each of years 1997 and 1996).
(3) 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. 9,857 shares of restricted stock were held
10
<PAGE> 14
by 3 of the named executive officers at December 31, 1998, with an aggregate
value as of such date of $231,640 (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, 1998, the last day of the Company's last completed
fiscal year). At December 31, 1998, of the outstanding restricted shares,
the value of Mr. Cargotch's holdings was $58,257, Mr. Chan's was $125,396
and Mr. Lee's was $47,987. The number of shares of restricted stock awarded
in 1998, 1997 and 1996 to (i) Mr. Cargotch is 0, 3,099 and 0, respectively,
(ii) Mr. Chan is 2,626, 3,387 and 0, respectively, and (iii) Mr. Lee is 0,
2,552 and 0, respectively. 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 under the applicable plan. Dividends are
paid on all outstanding restricted stock.
(4) For all named executive officers except Mr. Lee, "All Other Compensation"
consists of the Company's contributions under the retirement plan/401(k)
Plan during 1996, 1997 and 1998. 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/40l(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. For
Mr. Lee, "All Other Compensation" consists of the Company's contributions
under a Korean national pension plan. For Mr. Berrie, "All Other
Compensation" also consists of $254,070 paid in 1998, $254,868 paid in 1997
and $255,544 paid in 1996 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 Mr. Chan, "All Other Compensation" also consists of $50,000
paid in each of years 1998 and 1997 for the premium on a life insurance
policy for Mr. Chan. See "Employment Agreements and Arrangements".
------------------------
40L(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 the amount permitted by the Code, i.e., $10,000 in each of 1998 and
1999) of their compensation, on a pretax basis, to the 401(k) Plan. Because the
401(k) Plan is a qualified defined contribution plan, if certain highly
compensated employees' contributions exceed the amount prescribed by the Code,
such contributions will be reduced or limited. In 1998, contributions of certain
highly compensated employees were limited to $8,835. Employees' contributions
are invested in one or more of seven funds (as selected by each participating
employee). The Company matches a portion (one-half of the first 6% contributed)
of the compensation deferred by each employee. The Company's matching
contribution is fully vested 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, Mrs. Angelica Berrie, who is a
Director and an employee of the Company. 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".)
11
<PAGE> 15
A. Curts Cooke, former President and Chief Operating Officer of the
Company, retired on January 31, 1998. From that time until January 31, 1999, and
pursuant to his agreement with the Company, Mr. Cooke was engaged as a
consultant to the Company at an annual compensation rate of $300,000. During
that same year, Mr. Cooke served as a Director of the Company but did not
receive compensation (including stock options) therefor. In January 1999, the
Company and Mr. Cooke agreed to continue the term of Mr. Cooke's consultancy.
The Company's agreement with Mr. Cooke was revised to provide, in relevant part,
that Mr. Cooke will (i) be engaged as a consultant to one of the Company's
wholly-owned subsidiaries, (ii) receive compensation at the rate of $5,000 per
month, and (iii) continue to receive insurance benefits during his consultancy.
Mr. Cooke is not standing for re-election to the Board of Directors of the
Company.
The Company has an agreement with Ricky Chan, Senior Vice
President -- Product Development of the Company, under which Mr. Chan will
receive the following retirement and life insurance benefits: (i) 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 beneficiary,
a lump sum death benefit by means of a life insurance arrangement, in the amount
of $1,000,000. The foregoing benefits would be in addition to other benefits to
which Mr. Chan is entitled as an employee of the Company.
The Company has an agreement with Paul Cargotch, Executive Vice President
of the Company, which provides that in the event of a change of control of the
Company, Mr. Cargotch will be entitled to be employed at his then current
compensation level for a period of 3 years.
1998 OPTION GRANTS
The following table sets forth the options granted to the named officers in
the Summary Compensation Table of the Company during the year ended December 31,
1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES ANNUAL RATES OF STOCK
UNDERLYING PERCENT OF TOTAL PRICE APPRECIATION FOR
OPTIONS OPTIONS GRANTED EXERCISE OR 10 YEAR OPTION TERM
GRANTED TO EMPLOYEES BASE PRICE EXPIRATION -----------------------
NAME (#)(1) IN FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ---------- ---------------- ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Russell Berrie.............. -0- -0- -0- -0- -0- -0-
Ricky Chan.................. 3,151 1.54 $26.25 1/2/08 $52,018 $131,824
Paul Cargotch............... 3,440 1.68 26.25 1/2/08 56,789 143,915
Y.B. Lee.................... 2,698 1.32 26.25 1/2/08 44,540 112,873
Chris Collins............... 2,560 1.25 26.25 1/2/08 42,261 107,099
</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.
12
<PAGE> 16
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND
YEAR-END OPTION/SAR VALUES
The following table sets forth option and SAR exercises during 1998 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, 1998
($23.50).
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
SHARES ACQUIRED VALUE AT FISCAL YEAR-END AT FISCAL YEAR-END($)
NAME ON EXERCISE(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- --------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Russell Berrie............ -0- -0- -0- -0-
Ricky Chan................ -0- -0- 8,842/3,151 $56,319/-0-
Paul Cargotch............. 7,972 $ 89,821 5,624/3,440 29,702/-0-
Y.B. Lee.................. 7,986 120,584 7,878/2,698 48,937/-0-
Chris Collins............. 2,106 25,967 3,027/2,560 15,135/-0-
</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 and Chief Executive Officer 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, 1998 was $7,943,000. The table below lists such
facilities, the current rentals and the lease expiration dates.
<TABLE>
<CAPTION>
ANNUAL LEASE
FACILITY(1) RENTAL(2) EXPIRATION(3)
----------- --------- -------------
<S> <C> <C>
Petaluma, California............................... $ 937,000 June 30, 2004
Oakland, New Jersey................................ 439,285 April 1, 2004
South Brunswick, New Jersey........................ 2,506,598 May 31, 2004
----------
Total.................................... $3,882,883
==========
</TABLE>
- ---------------
(1) The table set forth above does not include a facility located in Lakeland,
Florida, the lease for which expired on February 28, 1998. The Company paid
base rent for such facility during the first two months of 1998 in the
amount of $24,279 per month. This facility was sublet during those same two
months for rent of $16,426 per month.
(2) 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.
(3) Not including renewal options, if any.
------------------------------------------------------
13
<PAGE> 17
On February 5, 1998, Mr. Cooke, former President and 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, 1998, was $90,435. The proceeds of such borrowing were
used by Mr. Cooke 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 earlier of (i) termination of the officer's employment with the
Company, and (ii) his disposition of the shares giving rise to the indebtedness.
For a description of the employment and/or consulting arrangements between
the Company and each of Messrs. Cooke, Chan and Cargotch, see "Employment
Agreements and Arrangements".
The Company paid $138,591 during 1998 to Wilentz, Goldman & Spitzer, P.A.
("Wilentz"), a law firm which provides legal services to the Company. Mr.
Rosner, who is deemed to beneficially own more than five percent of the
Company's Common Stock, is a partner at Wilentz. See "Security Ownership of
Certain Beneficial Owners", footnote (2).
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, 1998, all filing requirements applicable to its officers,
directors and greater than ten percent shareholders were complied with on a
timely basis except that (i) Mr. Berrie filed late a report on Form 5 (with
respect to two transactions), and (ii) Mrs. Berrie filed late a report on Form 3
(with respect to one transaction).
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.
Until August 1997, Coopers & Lybrand L.L.P. served as the Company's
independent accountants. The Board of Directors, upon the recommendation of the
Audit Committee, selected Arthur Andersen LLP to be the Company's independent
accountants for the remainder of 1997, for 1998 and for 1999. It is expected
that only representatives of Arthur Andersen will be present at the meeting to
respond to appropriate questions and, if they so desire, to make a statement.
14
<PAGE> 18
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 holders of a majority of the
shares of Common Stock voting at the meeting (in person or by proxy) is required
for a particular 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.
SHAREHOLDER PROPOSALS
In order to be included in the proxy statement and form of proxy relating
to the 2000 Annual Meeting of Shareholders, proposals of shareholders intended
to be presented at such meeting must be received by the Company on or before
November 22, 1999. 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 12, 1999
15
<PAGE> 19
PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE. [X]
1. ELECTION OF DIRECTORS TO SERVE UNTIL THE 2000 ANNUAL MEETING OF
SHAREHOLDERS AND UNTIL THEIR SUCCESSORS SHALL HAVE BEEN ELECTED AND
QUALIFIED.
FOR NOMINEES LISTED WITHHOLD AUTHORITY
ON THE FRONT OF THIS CARD TO VOTE FOR ALL NOMINEES
(EXCEPT AS MARKED TO LISTED ON THE FRONT
THE CONTRARY BELOW. OF THIS CARD.
[ ] [ ]
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
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.
- --------------------------------------------------------------------------------
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.
Signature________________________________________________Date:__________________
Signature if held jointly________________________________Date:__________________
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.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 20
RUSS BERRIE AND COMPANY, INC.
111 Bauer Drive
Oakland, New Jersey 07436
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Russell Berrie and Paul Cargotch, and each of
them, 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 5, 1999, at the Annual Meeting of
Shareholders to be held on April 21, 1999 and any adjournment thereof.
Election of Directors. Nominees: (Change of Address/Comments)
Raphael Benaroya, Angelica Berrie,
Russell Berrie, Paul Cargotch,
Ilan Kaufthal, Charles Klatskin, ______________________________
Joseph Kling, William A. Landman, ______________________________
Sidney Slauson and Josh S. Weston ______________________________
______________________________
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 ALL PROPOSALS.
A VOTE FOR ALL PROPOSALS IS RECOMMENDED.
Your vote for the election of Directors and other proposals submitted to
Shareholders may be indicated on the reverse.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
