EMPLOYMENT AGREEMENT

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Exhibit 10.9

EMPLOYMENT AGREEMENT
(Jan L. Murley)

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

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

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

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

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

        2.     Position.     

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

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

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

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

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

        5.     Equity Arrangements.     

        a.     Purchase Equity.

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

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

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

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

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

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

        7.     Business Expenses and Perquisites.     

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

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

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

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

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

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

        8.     Termination.     

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

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

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

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

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

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

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

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

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

        b.      Death or Disability.

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

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

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

        (A)  the Accrued Rights; and

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

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

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

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

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

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

        (A)  the Accrued Rights; and

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

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

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

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

        (A)  the Accrued Rights; and

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

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

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

        d.      Expiration of Employment Term.

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

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

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

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

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

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

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

        9.     Non-Competition.     

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

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

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

        (2)   Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly, own, solely as an investment, securities of any perso