**Exhibit10.84**

 

**RUSSBERRIE AND COMPANY, INC.STOCK OPTION AGREEMENT**

 

**Date ofGrant:  May 1, 2003**

 

RussBerrie and Company, Inc., a New Jersey corporation (the “Company”), does herebygrant to Geff Lee (the “Optionee”), as of the date set forth above, a stockoption (the “Option”) to purchase an aggregate of 10,000 shares of its CommonStock (stated value $.10) (the “Stock”) at the price of $32.90 per share (the“Option Price”), upon the following terms and conditions.

 

# 1.                                       (a)                                  Subjectto Sections 2 and 4 below, this Option shall vest and become exercisableratably over five years (20% per year), commencing May 1, 2004.  In no event may a vested portion of theOption be exercised later than 10 years from the date of its vesting, however,the term of exercisability of a vested portion of the Option shall be subjectto the provisions of Section 2 below.

 

## (b)                                 TheCompensation Committee of the Board of Directors of the Company (the“Compensation Committee”) may at any time, in its sole discretion, limit thenumber of shares of Stock that the Optionee may purchase by the exercise ofthis Option on any particular date or in any year.

 

# 2.                                       [(a)                              Ifthe Optionee retires after reaching his Normal Retirement Date (as defined onthe date of his retirement under the Russ Berrie and Company, Inc. 401(k)Plan), any outstanding unexercised portion of this Option, whether or notvested and/or exercisable on the date he retires, shall be deemed fully vestedand exercisable and may be exercised for up to one (1) year after his retirementor the stated term of the Option, whichever period is shorter.]

 

## (b)                                 Ifthe Optionee becomes Disabled (as defined in the Employment Agreement dated asof May 1, 2003 between the Optionee and the Company), any outstandingunexercised portion of this Option, whether or not vested and/or exercisable onthe date he became Disabled (as determined by the Board of Directors of theCompany in good faith), shall be deemed fully vested and exercisable, and maybe exercised by the Optionee or his legal representative or permittedtransferee for up to one (1) year from the date he became Disabled, or thestated term of the Option, whichever period is shorter.

 

## (c)                                  Inthe event of the death of the Optionee while he is employed by the Company, [orwithin the one year period provided in paragraph 2(a),] any outstandingunexercised portion of this Option existing on the date such Optionee’semployment terminated, whether or not vested and/or exercisable on the date hisemployment is terminated, shall be deemed fully vested and exercisable, and maybe exercised by his estate or his legatee(s) for up to one (1) year after hisdeath or the stated term of the Option, whichever is shorter.

 

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## (d)                                 Subjectto the last sentence of this paragraph (d), if the Optionee’s employment withthe Company is terminated for any reason other than death, Disability [orretirement,] any outstanding unexercised portion of this Option (whether vestedor not) will be cancelled and deemed terminated as of the date of histermination; provided, however, that if the Optionee’s employment isterminated by the Company for reasons other than Cause (as defined in theEmployment Agreement dated as of May 1, 2003 between the Optionee and theCompany), any outstanding unexercised portion of this Option, only to theextent vested and exercisable on his date of termination, may be exercisedwithin thirty (30) days after his termination date or the stated term of theOption, whichever period is shorter.  Ifthe Optionee is also a Participant under the Company’s Change-in-ControlSeverance Plan (the “Severance Plan”), and the terms of this paragraph conflictwith the terms of the Severance Plan, such conflict shall be resolved inaccordance with the provisions of Section 6.7(b) of the Severance Plan.

 

# 3.                                       ThisOption shall be exercised by giving written notice of exercise to the Companyat 111 Bauer Drive, Oakland, NJ  07430(Attention: Chief Financial Officer) which shall specify the number of sharesof Stock to be purchased and which shall be accompanied by payment in full ofthe purchase price in cash.

 

# 4.                                       Thenumber of shares of Stock subject to this Option and the price to be paidtherefore, shall be subject to adjustment as follows:

 

## (a)                                  Inthe event of any change in the outstanding Stock by reason of a dissolution orliquidation of the Company, sale of all or substantially all of the assets ofthe Company, merger or consolidation of the Company with or into any otherentity if the Company is the surviving corporation, statutory share exchangeinvolving capital stock of the Company, reorganization, recapitalization,reclassification, stock dividend, extraordinary dividend, stock split, reversestock split, stock combination, rights offering, spin-off or other relevantchange, the Compensation Committee may adjust the Option Price or the number ofshares of Stock subject thereto, and any or all other matters deemedappropriate by the Compensation Committee, including, without limitation,accelerating the vesting and/or exercise period pertaining to such grant.

 

## (b)                                 Inthe event of the consummation of a reorganization, merger, share exchange orconsolidation if, in each case following such consummation, the outstandingshares of Stock are converted into cash, property or securities of any issuerother than the Company (a “Business Combination”), the Compensation Committee,in its sole discretion, may provide for (i) the substitution for such Option ofnew awards covering the stock of a successor corporation (or a parent orsubsidiary thereof), with appropriate adjustments as to the number and kind ofshares and exercise prices, (ii) the acceleration of the vesting and/orexercise period pertaining to the Option or (iii) (1) the cancellation of anyportion of this Option that is then exercisable and the payment to the holderthereof, in cash or stock, or any combination thereof, of the value of suchOption based upon the price per share of stock received or to be received byother stockholders of the Company in

 

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connection with the Business Combination, and (2) thecancellation of any portion of the Option that is not then exercisable.  In the event of any substitutioncontemplated by the foregoing clauses, the Option shall continue in the mannerand under the terms so provided.

 

## (c)                                  Notwithstandingthe foregoing, in the event that any decision of the Compensation Committeeconflicts with the provisions of the Severance Plan in a manner which adverselyaffects the rights of the Optionee, such conflict shall be resolved inaccordance with the provisions of Section 6.7(b) of the Severance Plan.

 

## (d)                                 If,by reason of a change in capitalization described above, Optionee shall beentitled to new, additional or different shares of stock or securities of theCompany or any other entity in respect of this Option, such new, additional ordifferent shares shall thereupon be subject to all of the conditions,restrictions and performance criteria, if any, which were applicable to theshares of Stock subject to the Option prior to such change in capitalization.

 

# 5.                                       ThisOption shall not be assignable or transferable except by will or by the laws ofdescent or distribution provided, however, that the Optionee maytransfer all or any portion of this Option to a member of his ImmediateFamily(1), a trust for the benefit of the Optionee or any member of hisImmediate Family, partnerships in which the Optionee or his Immediate Familymembers and/or trusts are the only partners, and/or any organization exemptunder Section 501(c) of the Internal Revenue Code of 1986, as amended (the“Code”).  This Option shall beexercisable only by the Optionee or his permitted assignee or transferee.

 

# 6.                                       Nothingcontained in this Agreement shall confer upon the Optionee any right withrespect to continuance of employment by the Company nor limit in any way theright of the Company to terminate or modify his employment at any time, with orwithout Cause.

 

# 7.                                       Ifthe Company is for any reason required to withhold any amount under the lawsand regulations of the United States, any jurisdiction thereof or localgovernment with respect to the transfer of Stock upon exercise of the Option(“Withholding Taxes”), the Optionee or other person receiving such Stock shallbe required to pay the Company the amount of any such Withholding Taxes.  The Company shall have the right to requirethe payment of any such Withholding Taxes before issuing any Stockhereunder.  In lieu of all or any partof a cash payment regarding such Withholding Taxes, the Company may permit a personto cover all or any part of the Withholding Taxes, through a reduction in thenumber of shares of Stock delivered to such person or a delivery or tender tothe

 

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# (1)                                  Forthe purposes of this Agreement, “Immediate Family” shall mean, whether natural,adopted or step (where applicable), the Optionee’s spouse, parents, children,siblings, mothers and fathers-in-law, sons and daughters-in-law, and anyone(other than employees) who shares such person’s home.

 

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Company of shares of Stock held by such person, ineach case valued in the same manner as used in computing the Withholding Taxesunder applicable laws.

 

# 8.                                       TheCompany shall not be required to issue or deliver a certificate for shares ofStock hereunder unless the issuance of such certificate complies with allapplicable legal requirements including, without limitation, compliance withthe provisions of applicable state securities laws, the Securities Act of 1933,as amended (the “Securities Act”), the Securities Exchange Act of 1934, asamended, and the requirements of the exchanges, if any, on which the Company’sshares of Common Stock may, at that time, be listed.

 

# 9.                                       Notwithstandinganything contained herein to the contrary, in the event that the disposition ofshares of Stock acquired hereunder is not covered by a then currentregistration statement under the Securities Act, and is not otherwise exemptfrom such registration, such shares shall be restricted against transfer to theextent required by the Securities Act and Rule 144 or other regulationsthereunder.  The certificates evidencingany of such shares shall be appropriately amended or have an appropriate legendplaced thereon to reflect their status as restricted securities as aforesaid.

 

# 10.                                 Tothe extent that federal laws of the United States do not otherwise control,this Agreement shall be governed by the laws of New Jersey, without givingeffect to principles of conflicts of laws, and shall be construed accordingly.

 

# 11.                                 Inthe event any provision of this Agreement shall be held illegal or invalid forany reason, the illegality or invalidity shall not affect the remaining partsof this Agreement, and this Agreement shall be construed and enforced as if theillegal or invalid provision had not been included.

 

# 12.                                 ThisAgreement shall be binding upon and inure to the benefit of the successors(including by way of merger), assigns and heirs of the respective parties.

 

# 13.                                 TheOptionee shall not be, nor have any of the rights or privileges of, astockholder of the Company in respect of any shares of Stock purchasable uponexercise of the Option granted hereunder unless and until certificatesrepresenting such shares shall have been issued by the Company.

 

# 14.                                 The Optionee acknowledges and agrees that aviolation of Section 5 of this Agreement will cause the Company irreparableinjury for which adequate remedy at law is not available.  Accordingly, the Optionee agrees that theCompany shall be entitled to an injunction, restraining order or otherequitable relief, without the posting of any bond, to prevent the breach ofsuch Section and to enforce the terms and provisions hereof in any court ofcompetent jurisdiction in the United States or any state thereof, in additionto any other remedy to which it may be entitled at law or equity.

 
|   | RUSS BERRIE AND COMPANY, INC. |
|--------|-------------------------------|
|   |                          |
|   |                          |
|   | BY:                           |  /s/ Angelica  Berrie |   |
|   |                          | Name: Angelica Berrie |

 

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|                                                              | Title: Chief  Executive Officer |
|-------------------------------------------------------------------|--------------------------------------|
|                                                              |                                 |
|                                                              |                                 |
| AGREED  TO AND ACCEPTED AS OF THE  DATE OF GRANT SET FORTH ABOVE: |                                 |
|                                                              |                                 |
|                                                              |                                 |
| /s/  Geff Lee                                           |                                 |
|                                                              |                                 |
| GEFF LEE                                                          |                                 |
|                                                              |                                 |
| Date:                                                             |  September  8, 2003             |   |
|                                                                   |                                      |  |  |  |

 

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