Exhibit
10.84


 


RUSS
BERRIE AND COMPANY, INC.

STOCK OPTION AGREEMENT


 


Date of
Grant:  May 1, 2003


 


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


 


1.                                       (a)                                  Subject
to Sections 2 and 4 below, this Option shall vest and become exercisable
ratably over five years (20% per year), commencing May 1, 2004.  In no event may a vested portion of the
Option 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 subject
to the provisions of Section 2 below.


 


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


 


2.                                       [(a)                              If
the Optionee retires after reaching his Normal Retirement Date (as defined on
the date of his retirement under the Russ Berrie and Company, Inc. 401(k)
Plan), any outstanding unexercised portion of this Option, whether or not
vested and/or exercisable on the date he retires, shall be deemed fully vested
and exercisable and may be exercised for up to one (1) year after his retirement
or the stated term of the Option, whichever period is shorter.]


 


(b)                                 If
the Optionee becomes Disabled (as defined in the Employment Agreement dated as
of May 1, 2003 between the Optionee and the Company), any outstanding
unexercised portion of this Option, whether or not vested and/or exercisable on
the date he became Disabled (as determined by the Board of Directors of the
Company in good faith), shall be deemed fully vested and exercisable, and may
be exercised by the Optionee or his legal representative or permitted
transferee for up to one (1) year from the date he became Disabled, or the
stated term of the Option, whichever period is shorter.


 


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


 

















 


(d)                                 Subject
to the last sentence of this paragraph (d), if the Optionee’s employment with
the Company is terminated for any reason other than death, Disability [or
retirement,] any outstanding unexercised portion of this Option (whether vested
or not) will be cancelled and deemed terminated as of the date of his
termination; provided, however, that if the Optionee’s employment is
terminated by the Company for reasons other than Cause (as defined in the
Employment Agreement dated as of May 1, 2003 between the Optionee and the
Company), any outstanding unexercised portion of this Option, only to the
extent vested and exercisable on his date of termination, may be exercised
within thirty (30) days after his termination date or the stated term of the
Option, whichever period is shorter.  If
the Optionee is also a Participant under the Company’s Change-in-Control
Severance Plan (the “Severance Plan”), and the terms of this paragraph conflict
with the terms of the Severance Plan, such conflict shall be resolved in
accordance with the provisions of Section 6.7(b) of the Severance Plan.


 


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


 


4.                                       The
number of shares of Stock subject to this Option and the price to be paid
therefore, shall be subject to adjustment as follows:


 


(a)                                  In
the event of any change in the outstanding Stock by reason of a dissolution or
liquidation of the Company, sale of all or substantially all of the assets of
the Company, merger or consolidation of the Company with or into any other
entity if the Company is the surviving corporation, statutory share exchange
involving capital stock of the Company, reorganization, recapitalization,
reclassification, stock dividend, extraordinary dividend, stock split, reverse
stock split, stock combination, rights offering, spin-off or other relevant
change, the Compensation Committee may adjust the Option Price or the number of
shares of Stock subject thereto, and any or all other matters deemed
appropriate by the Compensation Committee, including, without limitation,
accelerating the vesting and/or exercise period pertaining to such grant.


 


(b)                                 In
the event of the consummation of a reorganization, merger, share exchange or
consolidation if, in each case following such consummation, the outstanding
shares of Stock are converted into cash, property or securities of any issuer
other than the Company (a “Business Combination”), the Compensation Committee,
in its sole discretion, may provide for (i) the substitution for such Option of
new awards covering the stock of a successor corporation (or a parent or
subsidiary thereof), with appropriate adjustments as to the number and kind of
shares and exercise prices, (ii) the acceleration of the vesting and/or
exercise period pertaining to the Option or (iii) (1) the cancellation of any
portion of this Option that is then exercisable and the payment to the holder
thereof, in cash or stock, or any combination thereof, of the value of such
Option based upon the price per share of stock received or to be received by
other stockholders of the Company in


 


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


 


(c)                                  Notwithstanding
the foregoing, in the event that any decision of the Compensation Committee
conflicts with the provisions of the Severance Plan in a manner which adversely
affects the rights of the Optionee, such conflict shall be resolved in
accordance 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 be
entitled to new, additional or different shares of stock or securities of the
Company or any other entity in respect of this Option, such new, additional or
different shares shall thereupon be subject to all of the conditions,
restrictions and performance criteria, if any, which were applicable to the
shares of Stock subject to the Option prior to such change in capitalization.


 


5.                                       This
Option shall not be assignable or transferable except by will or by the laws of
descent or distribution provided, however, that the Optionee may
transfer all or any portion of this Option to a member of his Immediate
Family(1), a trust for the benefit of the Optionee or any member of his
Immediate Family, partnerships in which the Optionee or his Immediate Family
members and/or trusts are the only partners, and/or any organization exempt
under Section 501(c) of the Internal Revenue Code of 1986, as amended (the
“Code”).  This Option shall be
exercisable only by the Optionee or his permitted assignee or transferee.


 


6.                                       Nothing
contained in this Agreement shall confer upon the Optionee any right with
respect to continuance of employment by the Company nor limit in any way the
right of the Company to terminate or modify his employment at any time, with or
without Cause.


 


7.                                       If
the Company is for any reason required to withhold any amount under the laws
and regulations of the United States, any jurisdiction thereof or local
government with respect to the transfer of Stock upon exercise of the Option
(“Withholding Taxes”), the Optionee or other person receiving such Stock shall
be required to pay the Company the amount of any such Withholding Taxes.  The Company shall have the right to require
the payment of any such Withholding Taxes before issuing any Stock
hereunder.  In lieu of all or any part
of a cash payment regarding such Withholding Taxes, the Company may permit a person
to cover all or any part of the Withholding Taxes, through a reduction in the
number of shares of Stock delivered to such person or a delivery or tender to
the


 












(1)                                  For
the 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, in
each case valued in the same manner as used in computing the Withholding Taxes
under applicable laws.


 


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


 


9.                                       Notwithstanding
anything contained herein to the contrary, in the event that the disposition of
shares of Stock acquired hereunder is not covered by a then current
registration statement under the Securities Act, and is not otherwise exempt
from such registration, such shares shall be restricted against transfer to the
extent required by the Securities Act and Rule 144 or other regulations
thereunder.  The certificates evidencing
any of such shares shall be appropriately amended or have an appropriate legend
placed thereon to reflect their status as restricted securities as aforesaid.


 


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


 


11.                                 In
the event any provision of this Agreement shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts
of this Agreement, and this Agreement shall be construed and enforced as if the
illegal or invalid provision had not been included.


 


12.                                 This
Agreement 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.                                 The
Optionee shall not be, nor have any of the rights or privileges of, a
stockholder of the Company in respect of any shares of Stock purchasable upon
exercise of the Option granted hereunder unless and until certificates
representing such shares shall have been issued by the Company.


 


14.                                 The Optionee acknowledges and agrees that a
violation of Section 5 of this Agreement will cause the Company irreparable
injury for which adequate remedy at law is not available.  Accordingly, the Optionee agrees that the
Company shall be entitled to an injunction, restraining order or other
equitable relief, without the posting of any bond, to prevent the breach of
such Section and to enforce the terms and provisions hereof in any court of
competent jurisdiction in the United States or any state thereof, in addition
to 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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