EMPLOYMENT AGREEMENT

          Employment agreement dated as of June 1, 2000 between Russ Berrie and
Company, Inc., a New Jersey corporation (the "Company"), and Benjamin J. Sottile
(the "Executive").

          The Company and the Executive wish to provide for the terms of the
Executive's employment as Vice Chairman of the Company.

          It is therefore agreed as follows:

          1. Term. The employment of the Executive under this agreement shall
commence as of June 1, 2000 and shall continue through January 2, 2003, subject
to termination as provided in Section 5.

          2. Duties. The Executive shall be employed as Vice Chairman of the
Company, reporting only to the Board of Directors (the "Board") and the Chairman
of the Board of the Company. He shall have such authority and responsibility,
and shall serve in such capacities with the Company's subsidiaries and
affiliates, consistent with that status as may from time to time be assigned to
him by the Board or the Chairman of the Board. He shall serve as a member of the
Board if elected. The Executive shall devote substantially all of his business
time, effort and energies to the business of the Company, subject, however, that
the Executive may continue as per our past practices, observance of the Sabbath,
Holy Days and enjoy personal time consistent with past practices and his and the
Chairman's understanding of those issues.

          3. Compensation and Benefits.

          (a) Base Salary. During his employment under this agreement (or his
deemed employment pursuant to section 6(b)), the Company shall pay the Executive
a base salary at the annual rate of $300,000, payable in substantially equal
semi-monthly installments.

          (b) Expense Reimbursement. The Company shall reimburse the Executive
for the ordinary and necessary business expenses incurred by him in the
performance of his duties as an employee of the Company in accordance with the
Company's usual policies.


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          (c) Executive Bonus Plan (EIP). The Executive shall be eligible to
receive a bonus of up to $150,000 with respect to each of 2001 and 2002, as
determined by the Board in its discretion, based on achievement of operating
income targets to be established by the Board on a basis consistent with the
Company's EIP bonus program and payable within 120 days after the end of the
applicable calendar year.

          (d) Other Benefit Plans, Fringe Benefits and Vacations. During his
employment under this agreement, the Executive shall be entitled to participate
in all employee benefit plans maintained by the Company from time to time
subject to eligibility requirements of such plans, and to all fringe benefits
and vacations, and as noted in Section 2, for which his status and level of
employment qualify him in accordance with the Company's usual policies and
arrangements.

          4. Stock Option and Restricted Stock.

          (a) Stock option and Restricted Stock Plan. The Company shall cause to
be granted to the Executive under the Russ Berrie and Company, Inc. 1999 Stock
Option and Restricted Stock Plan ("SORSP") for each Plan Year, commencing with
2001, that includes at least one day of the Executive's employment under this
agreement Options pursuant to section 5 of SORSP in amounts such that the shares
of Stock subject to Options so granted have an aggregate fair market value on
the Date of Grant equal to $60,000 (in the case of 2001) or $120,000 (in the
case of 2002 and 2003). Each Option shall vest as to 50% of the shares subject
thereto six months after the date of grant (or January 2, 2003, if earlier) and
as to all shares subject thereto on January 2, 2003, subject to the terms of
SORSP. Capitalized terms used in this section 4 that are not defined in this
agreement have the respective meanings given to them in SORSP.

          (b) Restricted Stock. Concurrently with the execution and delivery of
this agreement, the Company is issuing to the Executive 10,000 Shares. These
Shares shall be forfeited to the Company without the payment of consideration if
the Executive's employment under this agreement terminates for any reason (other
than termination by the Company, in accordance with Sections 5(c) or by the
Executive in accordance with Section 5(d)) prior to January 2, 2003 and the
Executive may not sell, assign, transfer, pledge, hypothecate or otherwise
encumber any of these Shares prior to January 2, 2003. Prior to forfeiture and
subject to the restrictions set forth in this paragraph, the Executive shall
have all rights of a shareholder with respect to these Shares, including the
right to receive all dividends paid thereon. However, these Shares shall cease
to be subject to forfeiture or the foregoing restrictions on transfer upon a
change of control or termination of the Executive's employment under this
agreement by the Company in accordance with Section 5(c). For purposes of this
section 4(b), a "change of control" occurs if any person, entity or group
(within the meaning of section 13(d)(3) of the Securities Exchange Act of 1934),
other than a Continuing Holder, has beneficial ownership (as defined in Rule


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13d-3 under the Securities Exchange Act of 1934) of more than 50% of the
outstanding common stock of the Company. "Continuing Holder" means (i) Russell
Berrie, (ii) the estate of Russell Berrie or any executor, administrator,
trustee or other fiduciary appointed by Russell Berrie inter vivos or under the
will of Russell Berrie or with respect to his estate acting in his capacity as
such, (iii) any person or entity receiving shares of common stock of the Company
(or any interest therein) by inter vivos gift from Russell Berrie or under the
will of Russell Berrie or from him in intestacy, (iv) any employee stock
ownership plan or other employee benefit plan established by the Company, (v)
any person or entity having beneficial ownership of any shares of common stock
of the Company owned by a person or entity referred to in clause (i), (ii),
(iii) or (iv), but only with respect to those shares, or (vi) a group including
any person or entity referred to in clause (i), (ii), (iii), (iv) or (v).

          (c) Supplemental Options. If the Company's operating profit for 2001
is at least 115% but less than 125% of its operating profit for 2000, the
Company shall cause to be granted to the Executive under SORSP Options to
purchase 25,000 Shares as of the first business day of 2001. If the Company's
operating profit for 2001 is at least 125% but less than 135% of its operating
profit for 2000, the Company shall cause to be granted to the Executive under
SORSP Options to purchase 50,000 Shares as of the first business day of 2001. If
the Company's operating profit for 2001 is at least 135% of its operating profit
for 2000, the Company shall cause to be granted to the Executive under SORSP
Options to purchase 75,000 Shares as of the first business day of 2001. If the
Company's operating profit for 2002 is at least 115% but less than 125% of its
operating profit for 2001, the Company shall cause to be granted to the
Executive under SORSP Options to purchase 25,000 Shares as of the first business
day of 2002. If the Company's operating profit for 2002 is at least 125% but
less than 135% of its operating profit for 2001, the Company shall cause to be
granted to the Executive under SORSP Options to purchase 50,000 Shares as of the
first business day of 2002. If the Company's operating profit for 2002 is at
least 135% of its operating profit for 2001, the Company shall cause to be
granted to the Executive under SORSP Options to purchase 75,000 Shares as of the
first business day of 2002. Options granted pursuant to this paragraph shall
vest as to all the Shares subject thereto on the earlier of one year from the
date of grant or January 2, 2003. For purposes of this Section 4(c), operating
profit shall be determined in a manner consistent with its determination for
purposes of the Company's bonus programs.

          (d) Not a Public Company. No Options shall be issued at a time that
the Shares are not listed on a national securities exchange or registered under
Section 12 of the Securities Exchange Act of 1934.


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          5. Termination.

          (a) Death and Disability. The Executive's employment under this
agreement shall terminate upon his death. The Company may terminate the
Executive's employment under this agreement if the Board determines in good
faith that he is physically or mentally incapacitated and has been unable for
(x) a period of 180 consecutive days or (y) for more than 180 days (whether or
not consecutive) in any period of 365 consecutive days to perform his duties
under this agreement. In order to assist the Board in making that determination,
the Executive shall, as reasonably requested by the Board, (i) make himself
available for medical examinations by one or more physicians chosen by the
Board, and (ii) grant the Board and any such physicians access to all relevant
medical information concerning him, arrange to furnish copies of medical records
to them and use his best efforts to cause his own physicians to be available to
discuss his health with them.

          (b) Termination by the Company for Cause. The Company may terminate
the Executive's employment under this agreement for Cause. "Cause" shall mean
(i) the Executive's willful failure to perform his duties under this agreement
in any material respect, (ii) the Executive's failure to comply with any lawful
written directions from the Board or the Chairman of the Board in connection
with the performance of his duties hereunder, (iii) malfeasance or gross
negligence in the performance of the Executive's duties under this agreement,
(iv) the Executive's commission of a felony under the laws of the United States
or any state thereof (whether or not in connection with his employment), or (v)
breach of the provisions of section 7(a) or 7(b). The Executive's employment
shall be conclusively presumed to be subject to termination for Cause pursuant
to clause (iv) of the preceding sentence if he is indicted for or convicted of
commission of a felony described therein.

          (c) Termination by the Company Without Cause. The Company may
terminate the Executive's employment under this agreement at any time by notice
to the Executive in circumstances other than those contemplated by section 5(a)
or (b).

          (d) Termination by the Executive for Good Reason. The Executive may
terminate his employment under this agreement for Good Reason by notice to the
Company. "Good Reason" shall mean (i) any substantial reduction of the
Executive's authority or status inconsistent with section 2 that is not
rescinded within 30 days after the Executive notifies the Company in writing
that he objects thereto, (ii) the Company's requiring the Executive to maintain
his principal office or conduct his principal activities anywhere other than at


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the Company's executive offices within 100 miles of the location of those
offices in Oakland, New Jersey, on the date of this agreement, or (iii) the
Company's failure to pay to the Executive the compensation to which he is
entitled under this agreement (other than by reason of (i) a mistake that is
cured promptly after the Executive notifies the Company thereof or (ii) a
determination with respect to such compensation made by the Company in good
faith).

          6. Consequences of Termination.

          (a) Death, Disability, Cause or Absence of Good Reason. If the
Executive's employment under this agreement is terminated (i) pursuant to
section 5(a) or 5(b), or (ii) by the Executive other than pursuant to section
5(d), the Executive shall not thereafter be entitled to receive any salary or
other payments or benefits under this agreement, other than the payment pursuant
to section 3(a) of salary earned through the date of termination, the
reimbursement pursuant to section 3(b) of expenses incurred through the date of
termination, and the payment pursuant to section 3(c) of the bonuses earned with
respect to salary earned for the preceding year not already paid.

          (b) Other Terminations. If the Executive's employment under this
agreement is terminated (i) by the company pursuant to section 5(c), or (ii) by
the Executive pursuant to section 5(d), the Executive shall be entitled to
receive his salary pursuant to section 3(a) as if his employment under this
agreement had continued until January 2, 2003.

          7. Certain Restrictions.

          (a) Confidentiality. The Executive acknowledges that he has acquired
and will acquire confidential information respecting the business of the
Company, its subsidiaries and affiliates. Accordingly, the Executive shall not
disclose, at any time (during his employment under this agreement or
thereafter), any such confidential information, other than in the performance of
his duties under this agreement.


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          (b) Competitive Activity. During his employment under this agreement,
any period during which he is entitled to receive payments pursuant to section
6(b) and for one year after the end of such employment or period, whichever is
later regardless of the time, manner or reason for such termination, the
Executive shall not, without the prior written consent of the Board, (i)
directly or indirectly, knowingly engage or be interested in (as owner, partner,
shareholder, employee, director, officer, agent, consultant or otherwise), with
or without compensation, any business which is in competition with or similar to
any line of business conducted by the Company, any successor to the Company's
business, or any of their affiliates or subsidiaries, or (ii) employ or retain
(or participate in or arrange the employment or retention of) any person who was
employed or retained by the Company, any successor to the Company's business or
any of their affiliates or subsidiaries within the six-month period preceding
such employment or retention. Nothing in this section 7(b) shall prohibit the
Executive from acquiring or holding not more than one percent of any class of
publicly traded securities of any business.

          (c) Remedy for Breach and Modification. The Executive acknowledges
that the provisions of this section 7 are reasonable and necessary for the
protection of the Company and that the Company will be irrevocably damaged if
these provisions are not specifically enforced. Accordingly, the Executive
agrees that, in addition to any other relief or remedies available to the
Company, the Company shall be entitled to seek and obtain an appropriate
injunction or other equitable remedy for the purposes of restraining the
Executive from any actual or threatened breach of or otherwise enforcing these
provisions and no bond or security will be required in connection therewith. If
any provision of this section 7 is deemed invalid or unenforceable, such
provision shall be deemed modified and limited to the extent necessary to make
it valid and enforceable. In addition to and not in lieu of any other remedy
that the Company may have under this section 7(c) or otherwise, in the event of
any breach of any provision of this section 7 during the period during which the
Executive is entitled to receive payments pursuant to section 6(b), such period
shall terminate as of the date of such breach, the Executive shall not
thereafter be entitled to receive any salary or other payments or benefits under
this agreement, any unexercised options and stock appreciation rights granted
pursuant to SORSP or section 4(a) or 4(c) shall terminate.

          8. Miscellaneous.

          (a) Notices. Any notice or other communication made or given in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by registered mail, return receipt
requested, to a party at his or its address set forth below or at such other
address as a party may specify by notice to the other:


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         To the Executive:

         Benjamin J. Sottile
         24 South Park Drive
         Tenafly, New Jersey 07670

         To the Company:

         Russ Berrie and Company, Inc.
         111 Bauer Drive
         Oakland, New Jersey 07436
         Attention: Chairman of the Board

          (b) Entire Agreement; Amendment. This agreement supersedes all prior
agreements between the parties with respect to its subject matter, is intended
(with the documents referred to herein) as a complete and exclusive statement of
the terms of the agreement between the parties with respect thereto and cannot
be changed, except in a writing signed by the parties.

          (c) Waiver. The failure of a party to insist upon strict adherence to
any term of this agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this agreement. Any waiver must be in writing.

          (d) Assignment. Except as otherwise provided in this paragraph, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, representatives, successors and assigns. This
Agreement shall not be assignable by the Executive, and shall be assignable by
the Company only to any corporation or other entity resulting from the
reorganization, merger or consolidation of the Company with any other
corporation or entity or any corporation or entity to or with which the
Company's business or substantially all of its business or assets may be sold,
exchanged or transferred, and it must be so assigned by the Company to, and
accepted as binding upon it by, such other corporation or entity in connection
with any such reorganization, merger, consolidation, sale, exchange or transfer.

          (e) Counterparts. This agreement may be executed in two or more
counterparts, each of which shall be considered an original, but all of which
together shall constitute the same instrument.


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         (f) Captions. The captions in this agreement are for convenience of
reference only and shall not be given any effect in the interpretation of this
agreement.

          (g) Conflict. The Executive represents that his relationship with the
Company and his execution of and compliance with the terms of this Agreement
will not conflict with, violate the terms of or constitute a breach of any
agreement or understanding to which the Executive is a party or to which he may
otherwise be bound.

          (h) Governing Law. This agreement and (unless otherwise provided) all
amendments hereof and waivers and consents hereunder shall be governed by the
internal law of the State of New Jersey, without regard to the conflicts of law
principles thereof.

                                      RUSS BERRIE AND COMPANY, INC.


                                      By         /s/ Russell Berrie
                                        --------------------------------------

                                                 /s/ Benjamin J. Sottile
                                        ---------------------------------------
                                                     Benjamin J. Sottile