EMPLOYMENT AGREEMENT

          AGREEMENT (the  "Agreement") by and between Amscan  Holdings,  Inc., a
Delaware   corporation   (the   "Company"),   and  Gerald  C.   Rittenberg  (the
"Executive"), dated as of the 19th day of June, 2003.

          WHEREAS,  the  Executive  serves the  Company  as its Chief  Executive
Officer  pursuant  to an  Employment  Agreement  dated as of August 10, 1997 and
amended as of June 15, 2001 (the "Prior Employment Agreement"); and

          WHEREAS, the Company and the Executive desire to set forth in this new
Employment  Agreement the terms and  conditions  under which the Executive  will
continue to be employed by the Company;

          NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

          1. Employment  Period.  (a) Initial Term. The Company shall employ the
Executive,  and the Executive  agrees to, and shall,  serve the Company,  on the
terms and conditions set forth in this Agreement,  for the period  commencing on
January 1, 2003 and ending on December 31, 2004 (the "Initial Term").

          (b) Extension of Initial Term. The Initial Term of this Agreement will
be  automatically  extended after  December 31, 2004 for  additional  successive
periods of one year each, each such extension to be effective  immediately after
the last day of the term then in effect,  with the first such  extension  period
beginning on January 1, 2005 (each such additional period, an "Additional Term")
(the Initial Term and any Additional Term thereof  pursuant to this Section 1(b)
being  hereinafter  referred to as the "Employment  Period"),  unless either the
Company  gives the  Executive or the  Executive  gives the Company not less than
twelve  months  written  notice prior to the end of the Initial Term or any such
Additional Term of such party's intention not to extend the Employment Period.

          2.  Position  and  Duties.  (a)  During  the  Employment  Period,  the
Executive shall be Chief  Executive  Officer of the Company with such duties and
responsibilities as are assigned to him by the Board of Directors of the Company
(the "Board")  consistent  with his position as Chief  Executive  Officer of the
Company,  including, as the Board may request,  without additional compensation,
to serve as an officer or director of certain  subsidiaries and other affiliated
entities of the Company.

          (b)  During  the  Employment  Period,  and  excluding  any  periods of
vacation and sick leave to which the Executive is entitled,  the Executive shall
devote his full attention and time during normal  business hours to the business
and affairs of the  Company and shall  perform  his  services  primarily  at the
Company's headquarters,  wherever the Board may from time to time designate them
to be, but in any case,  within a 100-mile  radius of  Elmsford,  New York,  and
shall use his reasonable best efforts to carry out the responsibilities assigned
to the  Executive  faithfully  and  efficiently.  It shall not be  considered  a
violation of the foregoing for the Executive to (i) serve on civic or charitable
boards or committees,  (ii) deliver  lectures,  fulfill speaking  engagements or
teach at educational institutions or (iii) manage personal investments,  so long
as such activities do not compete with and are not provided to or for any entity
that competes with


<PAGE>


or intends to compete with the Company or any of its subsidiaries and affiliates
and do not interfere with the performance of the Executive's responsibilities as
an employee of the Company in accordance with this Agreement.

          3.  Compensation.  (a) Base Salary.  During the Employment Period, the
Executive  shall  receive from the Company an annual base salary  ("Annual  Base
Salary")  of  $500,000,  payable in regular  intervals  in  accordance  with the
Company's  customary payroll  practices in effect during the Employment  Period;
provided  that such Annual Base Salary shall be increased by 5% (from the Annual
Base Salary  theretofore in effect) at the beginning of each Additional Term and
shall be payable in accordance with the preceding sentence.

          (b) Other  Compensation.  In addition to the Annual Base  Salary,  the
Executive  shall  be  eligible  for an  annual  bonus  for each  fiscal  year of
employment  hereunder (the  "Bonus").  Any Bonus shall be paid no later than the
75th day following  the end of the fiscal year to which such Bonus  corresponds.
The exact amount of the Bonus,  if any,  payable to the Executive  hereunder for
fiscal  year 2003  shall be  determined  in  accordance  with  Exhibit A hereto;
provided however that the  Compensation  Committee of the Board may, in its sole
discretion,  increase  the amount of the Bonus  above the amount  determined  in
accordance with Exhibit A hereto.  The basis for determining the Bonus hereunder
for any subsequent  fiscal year of employment  hereunder  shall be determined in
the same manner as the Bonus for 2003 as set forth in Exhibit A, except that the
EBITDA and Debt Paydown minimum,  target,  and maximum amounts for each relevant
year shall be as established  by the  Compensation  Committee of the Board,  not
later  than the 90th  day of the  relevant  year,  after  consultation  with the
Executive.  For any fiscal year during  which the  Executive  is employed by the
Company for less than the entire year,  any Bonus shall be payable on a pro rata
basis for the period during which the  Executive is employed  during such fiscal
year  (based on the  number of days in such  fiscal  year the  Executive  was so
employed  divided by 365), as  determined in good faith by the Board;  provided,
however,  that in no event will the  Executive  be  entitled  to a Bonus for any
fiscal year during which the  Executive's  employment is  terminated  during the
Employment  Period other than as provided in Section 5(c) of this Agreement,  if
applicable.

          (c) Other Benefits.  During the Employment  Period:  (i) the Executive
shall be entitled to participate in all incentive, savings and retirement plans,
practices,  policies and programs of the Company,  and shall be entitled to paid
vacation,  to the same  extent  and on the same  terms  and  conditions  as peer
executives;  and (ii) the Executive and/or the Executive's  family,  as the case
may be, shall be eligible for  participation  in, and shall receive all benefits
under, all welfare benefit plans,  practices,  policies and programs provided by
the Company (including,  to the extent provided,  without  limitation,  medical,
prescription, dental, disability, employee life insurance, group life insurance,
accidental  death and travel accident  insurance plans and programs) to the same
extent  and on the same  terms  and  conditions  as peer  executives;  provided,
however,  that  nothing  in this  Agreement  shall  impose  on the  Company  any
obligation to offer to the Executive  participation in any stock,  stock option,
restricted  stock,  bonus or other incentive award,  plan,  practice,  policy or
program  other than the awards  made  pursuant  to Section  3(b) and the Options
granted in accordance  with Section 3(e). The term "peer  executives"  means the
President  and Senior Vice  President  in charge of Sales and  Marketing  of the
Company,  if such  positions  exist,  and if such  positions  do not exist,  the
definition  of the term "peer  executives"  shall be  determined by the Board in
good faith.

                                      -2-
<PAGE>


          (d) Expenses.  During the Employment  Period,  the Executive  shall be
entitled to receive  reimbursement  for all reasonable travel and other expenses
incurred by the  Executive  in carrying  out the  Executive's  duties under this
Agreement, provided that the Executive complies with the policies, practices and
procedures  of the Company  for  submission  of expense  reports,  receipts,  or
similar documentation of such expenses.

          (e) Options.  Promptly following the execution of this Agreement,  the
Executive  shall be granted  options  (the  "Options")  to purchase 25 shares of
common  stock of the  Company,  at an  exercise  price of  $150,000  per  share,
pursuant to an option  agreement  substantially  in the form attached  hereto as
Exhibit B.

          4. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate  automatically  upon the Executive's death during the
Employment  Period.  The Company shall be entitled to terminate the  Executive's
employment  because of the Executive's  Disability during the Employment Period.
"Disability"  means that the Executive has been unable,  for a period of (i) 180
consecutive days or (ii) an aggregate of 210 days in a period of 365 consecutive
days,  to perform his duties  under this  Agreement,  as a result of physical or
mental  illness or injury.  A termination of the  Executive's  employment by the
Company for Disability shall be communicated to the Executive by written notice,
and shall be  effective  on the 30th day  after  receipt  of such  notice by the
Executive (the "Disability  Effective  Date"),  unless the Executive  returns to
full-time   performance  of  the  Executive's  duties  in  accordance  with  the
provisions  of Section 2 before  such 30th day.  In the event of a dispute as to
whether Executive has suffered a Disability,  the final  determination  shall be
made by a licensed  physician  selected by the Board of Directors of the Company
and acceptable to Executive in Executive's reasonable judgment.

          (b) Not Death or Disability. The Company may terminate the Executive's
employment at any time during the Employment  Period with or without Cause.  The
Executive may terminate his employment at any time during the Employment  Period
for any reason.

          (c) Date of Termination.  The "Date of Termination"  means the date of
the Executive's  death,  the Disability  Effective Date or the date on which the
termination of the Executive's  employment by the Company,  or by the Executive,
is effective, as the case may be.

          5.  Obligations of the Company Upon  Termination.  (a) By the Company,
Other Than for Death or  Disability.  If,  during  the  Employment  Period,  the
Company terminates the Executive's  employment other than due to the Executive's
death or Disability, the Company shall, except as provided in clause (ii) below,
pay the amounts  described in subparagraph  (i) below to the Executive in a lump
sum in cash within 30 days after the Date of Termination:

          (i)  The amounts to be paid in a lump sum as described above are:

               (A) The  Executive's  accrued but unpaid cash  compensation  (the
               "Accrued  Obligations"),  which  shall  equal  the sum of (1) any
               portion of the Executive's Annual Base Salary through the Date of
               Termination  that has not yet been  paid;  (2) any Bonus that the
               Executive  has earned for a prior full fiscal year that has ended
               prior to the Date of Termination but


                                      -3-
<PAGE>


               which has not yet been calculated and paid; (3) any  compensation
               previously  deferred by the Executive  (together with any accrued
               interest or earnings thereon) that has not yet been paid (subject
               to any applicable  provisions of any deferred  compensation  plan
               with  respect to the  payment  thereof);  and (4) any accrued but
               unpaid vacation pay; and

               (B)  Severance  pay equal to the Annual  Base  Salary;  provided,
               however,  that in connection  with a  termination  by the Company
               other than (1) for Cause or (2) due to the  Executive's  death or
               Disability,  such severance pay shall be equal to the Annual Base
               Salary  multiplied  by  the  number  of  years  constituting  the
               Post-Termination   Restriction  Period  (as  defined  in  Section
               8(a)(ii)).   (For  example,  if  the  Company,  pursuant  to  its
               Restriction  Election (as defined in Section 8(a)(ii)),  elects a
               two-year Post-Termination  Restriction Period, then severance pay
               will be equal to two times the Annual Base Salary.)

          (ii) Notwithstanding the foregoing,  if the Executive's  employment is
     terminated for Cause,  the Executive  shall not be entitled to the payments
     contemplated  by clause  (i)(B) of this Section 5(a) and the payment to the
     Executive  in  connection  therewith  shall be  limited  to  payment of the
     Accrued Obligations and the Company shall have no further obligations under
     this  Agreement.  For purposes of this  Agreement,  "Cause"  shall mean (1)
     conviction  of the  Executive  by a court of  competent  jurisdiction  of a
     felony  (excluding  felonies under the Motor Vehicle Code);  (2) any act of
     intentional  fraud in connection with his duties under this Agreement;  (3)
     any act of gross  negligence  or  wilful  misconduct  with  respect  to the
     Executive's  duties  under  this  Agreement;  and  (4)  any  act of  wilful
     disobedience  in violation of specific  reasonable  directions of the Board
     consistent with the Executive's duties.

          (b) Death or Disability.  If the Executive's  employment is terminated
by reason of the Executive's death or Disability  during the Employment  Period,
the  Company  shall  pay  the  Accrued  Obligations  to  the  Executive  or  the
Executive's estate or legal representative, as applicable, in a lump sum in cash
within 30 days of the Date of Termination  and the Company shall have no further
obligations under this Agreement.

          (c) Bonus. If (i) the Executive's  employment is terminated during the
Employment  Period (1) by the  Company  other than for Cause or (2) by reason of
the  Executive's  death or  Disability,  or (ii) the  Employment  Period  is not
renewed at the expiration  thereof (other than for Cause), the Company shall pay
to  the  Executive  or  the  Executive's  estate  or  legal  representative,  as
applicable,  an amount equal to the Bonus which the  Executive  would  otherwise
have been  entitled  to  receive  for the fiscal  year in which the  Executive's
employment is so  terminated or not renewed,  determined on a pro rata basis for
the period during which the Executive is employed during such fiscal year (based
on the number of days in such fiscal year the Executive was so employed  divided
by 365), as determined in good faith by the Board.  For purposes of this Section
5(c),  the Bonus shall be calculated in accordance  with Section 3(b) at the end
of the fiscal year to which such Bonus would  otherwise  have  corresponded  and
shall be paid to the  Executive no later than 75th day  following the end of the
fiscal year to which such Bonus corresponds.


                                      -4-
<PAGE>


          (d) By the Executive.  If the Executive terminates his employment with
the Company, the Company shall pay the Accrued Obligations to the Executive in a
lump sum in cash within 30 days of the Date of Termination and the Company shall
have no further obligations under this Agreement.

          (e)  Effect of  Employment  of  Executive  by  Certain  Stock or Asset
Purchasers. If all or substantially all of the stock or assets of the Company is
sold or otherwise  disposed of to a third party not affiliated with the Company,
and the Executive is not offered  employment on  substantially  similar terms by
the Company or one of its continuing affiliates  immediately  thereafter,  then,
for all purposes of this Agreement,  the Executive's  employment shall be deemed
to have been  terminated by the Company other than for Cause effective as of the
date of such sale or other  disposition;  provided,  however,  that the  Company
shall have no obligations to the Executive under this Section 5 if the Executive
is hired or offered  employment on substantially  similar terms by the purchaser
of the  stock or assets  of the  Company  or if the  Executive's  employment  is
continued by the Company.

          6. Full  Settlement.  The Company's  obligations  to make the payments
provided for in, and otherwise to perform its obligations  under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim,  right or action  that the  Company may have  against  the  Executive  or
others. In no event shall the Executive be obligated to seek other employment or
take any  other  action  by way of  mitigation  of the  amounts  payable  to the
Executive  under any of the  provisions of this Agreement and such amounts shall
not be reduced, regardless of whether the Executive obtains other employment.

          7. Confidential  Information.  The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential  information,
knowledge  or data  relating to the Company or any company  affiliated  with the
Company and its  respective  businesses  that the Executive  obtains  during the
Executive's  employment  by the  Company  (whether  before,  during or after the
Employment Term) and that is not public knowledge (other than as a result of the
Executive's  violation  of this  Section 7)  ("Confidential  Information").  The
Executive shall not communicate, divulge or disseminate Confidential Information
at any time during or after the Executive's employment with the Company,  except
with the prior written consent of the Company or as otherwise required by law.

          8.  Noncompetition;  Nonsolicitation.  (a) (i) During  the  Employment
Period and during the three-year period (subject to Section 8(a)(ii))  following
any  termination of the  Executive's  employment with the Company and any of its
affiliates,   including  due  to  expiration  of  the  Employment   Period  (the
"Restriction   Period"),   the  Executive   shall  not  directly  or  indirectly
participate in or permit his name directly or indirectly to be used by or become
associated  with  (including  as an advisor,  representative,  agent,  promoter,
independent contractor,  provider of personal services or otherwise) any person,
corporation,  partnership,  firm,  association or other  enterprise or entity (a
"person")  that is,  or  intends  to be,  engaged  in any  business  which is in
competition  with any business of the  Company,  or any of its  subsidiaries  or
controlled  affiliates  in  any  country  in  which  the  Company  or any of its
subsidiaries or controlled  affiliates  operate,  compete or are engaged in such
business or at such time intend so to operate, compete or become engaged in such
business  (a   "Competitor").   For  purposes  of  this   Agreement,   the  term
"participate"  includes any direct or indirect interest,  whether as an officer,
director,


                                      -5-
<PAGE>


employee, partner, sole proprietor, trustee, beneficiary, agent, representative,
independent contractor, consultant, advisor, provider of personal services,
creditor, or owner (other than by ownership of less than five percent of the
stock of a publicly-held corporation whose stock is traded on a national
securities exchange or in an over-the-counter market).

          (ii) In the event the  Employment  Period is terminated by the Company
other than (1) for Cause or (2) due to the Executive's death or Disability,  the
Company  shall  elect (a  "Restriction  Election"),  in its  sole  and  absolute
discretion  (subject  to the  provisions  of Section  5(a)(i)(B)),  to limit the
remainder of the Restriction  Period following such termination to a one, two or
three-year period (the "Post-Termination Restriction Period"). If no Restriction
Election  is made,  the  Company  shall be deemed to have  elected a  three-year
Post-Termination Restriction Period.

          (b)  During  the  portion  of the  Restriction  Period  following  any
termination  of the  Executive's  employment  with  the  Company  and any of its
affiliates,  the  Executive  shall not,  directly or  indirectly,  encourage  or
solicit,  or assist any other person or firm in encouraging  or soliciting,  any
person that during the  three-year  period  preceding  such  termination  of the
Executive's  employment  with  the  Company  is or  was  engaged  in a  business
relationship with the Company, any of its subsidiaries or controlled  affiliates
to terminate its  relationship  with the Company or any of its  subsidiaries  or
controlled affiliates or to engage in a business relationship with a Competitor.

          (c)  During  the  portion  of the  Restriction  Period  following  any
termination  of the  Executive's  employment  with  the  Company  and any of its
affiliates, the Executive will not, except with the prior written consent of the
Company,  directly or indirectly,  induce any employee of the Company, or any of
its  subsidiaries  or controlled  affiliates to terminate  employment  with such
entity, and will not, directly or indirectly,  either  individually or as owner,
agent,  employee,  consultant or otherwise,  employ,  offer  employment or cause
employment to be offered to any person  (including  employment as an independent
contractor)  who is or was  employed  by the  Company  or any of its  respective
subsidiaries or controlled affiliates unless such person shall have ceased to be
employed by such entity for a period of at least twelve months.  For purposes of
this Section 8(c), "employment" shall be deemed to include rendering services as
an independent contractor and "employees" shall be deemed to include independent
contractors.

          (d) Promptly  following the  Executive's  termination  of  employment,
including due to expiration of the Employment Period, the Executive shall return
to the Company all property of the Company and its respective  subsidiaries  and
affiliates,  and all copies thereof, in the Executive's  possession or under his
control, including, without limitation, all Confidential Information in whatever
media such Confidential Information is maintained.

          (e) The Executive  acknowledges and agrees that the Restriction Period
and the covenants and obligations of the Executive in Section 7 and this Section
8 with respect to non-competition,  nonsolicitation and confidentiality and with
respect to the  property  of the  Company and its  subsidiaries  and  controlled
affiliates, and the territories covered thereby, are fair and reasonable and the
result of negotiation.  The Executive  further  acknowledges and agrees that the
covenants and obligations of the Executive in Section 7 and this Section 8 with


                                      -6-
<PAGE>


respect to noncompetition, nonsolicitation and confidentiality and with respect
to the property of the Company and its subsidiaries and controlled affiliates,
and the territories covered thereby, relate to special, unique and extraordinary
matters and that a violation of any of the terms of such covenants and
obligations will cause the Company and its subsidiaries and affiliates
irreparable injury for which adequate remedies are not available at law.
Therefore, the Executive agrees that the Company shall be entitled to an
injunction, restraining order or such other equitable relief as a court of
competent jurisdiction may deem necessary or appropriate to restrain the
Executive from committing any violation of such covenants and obligations. These
injunctive remedies are cumulative and are in addition to any other rights and
remedies the Company may have at law or in equity. If, at the time of
enforcement of Section 7 and/or this Section 8, a court holds that any of the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope, and/or geographical
area legally permissible under such circumstances will be substituted for the
period, scope and/or area stated herein.

          9.  Successors.  (a) This  Agreement is personal to the  Executive and
shall not be  assignable by the  Executive.  This  Agreement  shall inure to the
benefit of and be enforceable by the Executive's legal representatives and heirs
and successors.

          (b) This  Agreement  shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

          10.  Miscellaneous.  (a) This  Agreement  shall be  governed  by,  and
construed  in  accordance  with,  the  laws of the  State of New  York,  without
reference to principles of conflict of laws.  The captions of this Agreement are
not part of the  provisions  hereof  and  shall  have no force or  effect.  This
Agreement may not be amended or modified except by a written agreement  executed
by  the  parties  hereto  or  their  respective  heirs,   successors  and  legal
representatives.

          (b) All notices and other communications under this Agreement shall be
in  writing  and  shall be  given  by hand  delivery  to the  other  party or by
overnight courier or by registered or certified mail, return receipt  requested,
postage  prepaid,  or by facsimile  (with  receipt  confirmation),  addressed as
follows:

          If to the Executive:

                   Gerald C. Rittenberg
                   18 Carey Drive
                   Bedford, NY  10506
                   Fax no.:

          If to the Company:

                   Amscan Holdings, Inc.
                   80 Grasslands Road
                   Elmsford, NY  10523
                   Attention:  Corporate Secretary
                   Fax no.: (914) 345-2056


                                      -7-
<PAGE>


or to such other address as either party furnishes to the other in writing in
accordance with this Section 10(b). Notices and communications shall be
effective when actually received by the addressee.

          (c)  The  invalidity  or  unenforceability  of any  provision  of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

          (d) Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and  foreign  taxes that are  required  to be  withheld  by  applicable  laws or
regulations.

          (e) Any  party's  failure to insist upon  strict  compliance  with any
provision of, or to assert any right under,  this Agreement  shall not be deemed
to be a waiver of such provision or right or of any other  provision of or right
under this Agreement.

          (f) The Executive acknowledges that this Agreement,  together with the
Exhibits  hereto  (and the other  agreements  referred  to herein and  therein),
supersedes  all other  agreements  and  understandings,  both  written and oral,
between the Executive and the Company with respect to the subject matter hereof,
including,  without  limitation,  the Prior  Employment  Agreement,  except that
Section 4 of the Prior  Employment  Agreement  shall  continue in full force and
effect and shall not be superseded and replaced by this Agreement.

          (g) This  Agreement  may be  executed in  counterparts,  each of which
shall be deemed to be an original,  but all of which shall  together  constitute
one and the same instrument.


                                      -8-
<PAGE>


          IN WITNESS  WHEREOF,  the Executive  has hereunto set the  Executive's
hand and, pursuant to the  authorization of its Board of Directors,  the Company
has caused this  Agreement  to be executed in its name on its behalf,  all as of
the day and year first above written.


                                          AMSCAN HOLDINGS, INC.



                                          By:    /s/JAMES M. HARRISON
                                              -----------------------------
                                              Name:
                                              Title:



                                              /s/ GERALD C. RITTENTERG
                                          ---------------------------------
                                          Gerald C. Rittenberg



                                      -9-
<PAGE>


                                    EXHIBIT A
                           DETERMINATION OF 2003 BONUS


          1. The minimum,  target and maximum amounts of the 2003 Bonus shall be
$450,000, $722,000 and $994,000, respectively.

          2. (a) Fifty  percent of the 2003 Bonus (the "EBITDA  Bonus") shall be
determined  based  upon the  Company's  EBITDA  for 2003 (as  defined  below) as
against the following targets,  with amounts between those shown interpolated on
a straight-line basis:



<TABLE>
<CAPTION>
                 Minimum                              Target                             Maximum
                 -------                              ------                             -------
<S>              <C>         <C>         <C>         <C>         <C>         <C>         <C>
EBITDA .......   $ 67,917    $ 71,309    $ 74,702    $ 78,094    $ 81,486    $ 84,879    $ 88,271
($mms)
% Target Bonus       62.3%       74.9%       87.4%      100.0%      112.6%      125.1%      137.7%

EBITDA Bonus     $225,000    $270,333    $315,667    $361,000    $406,333    $451,666    $497,000
</TABLE>

          (b) If the  minimum  EBITDA  shown above is not  achieved,  the EBITDA
Bonus shall be zero. In no event shall the EBITDA Bonus exceed $497,000.

          (c) The Company's EBITDA for 2003 shall mean its Consolidated Adjusted
EBITDA (as  defined in the  Second  Amended  and  Restated  Credit and  Guaranty
Agreement,  dated as of December  20, 2002,  by and among the  Company,  certain
subsidiaries  of the  Company,  the  Lenders  party  thereto  from time to time,
Goldman Sachs Credit  Partners L.P., as Sole Lead Arranger,  Sole Bookrunner and
Syndication Agent, General Electric Capital Corporation, as Administrative Agent
and as Collateral Agent, and Fleet National Bank, as Documentation  Agent, as it
may be amended from time to time (the "Credit Agreement")) for fiscal year 2003.

          3. (a) The  remaining  fifty  percent  of the 2003  Bonus  (the  "Debt
Reduction  Bonus") shall be determined  based upon the Company's  Debt Reduction
(as defined below) as against the following targets,  with amounts between those
shown interpolated on a straight-line basis:


<TABLE>
<CAPTION>
                 Minimum                              Target                             Maximum
                 -------                              ------                             -------
<S>              <C>         <C>         <C>         <C>         <C>         <C>         <C>
Debt Reduction   $ 22,945    $ 24,997    $ 27,050    $ 29,102    $ 31,154    $ 33,207    $ 35,259
($mms)
% Target Bonus       62.3%       74.9%       87.4%      100.0%      112.6%      125.1%      137.7%

Debt Reduction   $225,000    $270,333    $315,667    $361,000    $406,333    $451,666    $497,000
Bonus
</TABLE>

          (b) If the minimum Debt  Reduction  shown above is not  achieved,  the
Debt Reduction  Bonus shall be zero. In no event shall the Debt Reduction  Bonus
exceed $497,000.

                                      -10-
<PAGE>


          (c) The  Company's  Debt  Reduction  for 2003 shall mean the aggregate
decrease,  if any, of the Indebtedness  (as defined in the Credit  Agreement) of
the Company and its consolidated  subsidiaries as of the end of fiscal year 2003
from as of the end of fiscal  year  2002;  provided,  that for  purposes  of the
definition  of  "Indebtedness,"  short-term  account  and trade  payables of the
Company and its subsidiaries  ("Payables") shall be deemed to be an amount equal
to the product of (a) 57 and (b) the cost of sales for fiscal year 2003  divided
by 365  (the  "Payable  Amount");  provided  that  if  the  Board  of  Directors
determines  in its sole  discretion  that an increase or decrease of the Payable
Amount is warranted due to  circumstances  which have caused such Payables to be
significantly  above or below the product of the number of accounts payable days
and the  average  daily  cost  of  sales  for a  fiscal  year  which  they  have
historically represented,  then the Payable Amount shall be such other amount as
the Board of  Directors  so  determines.  For  purposes  of the  foregoing,  any
Payables or other  financial  measures for a particular  fiscal year shall be as
reflected  in the audited  financial  statements  of the Company for such fiscal
year; provided that cost of sales shall be determined on a basis consistent with
"cost of sales" as reflected in the audited financial  statements of the Company
for fiscal year 2002.



                                      -11-
<PAGE>


                                    EXHIBIT B

                             STOCK OPTION AGREEMENT

     STOCK  OPTION  AGREEMENT  ("Agreement")  dated as of June ___,  2003 by and
between Amscan  Holdings,  Inc., a Delaware  corporation  (the  "Company"),  and
Gerald C. Rittenberg (the "Employee").

     WHEREAS,  pursuant to the Amscan Holdings,  Inc. 1997 Stock Incentive Plan,
as amended (the  "Plan"),  the Committee (as defined in the Plan) has decided to
award stock options on the terms and conditions set forth is this Agreement.

     NOW, THEREFORE, in order to implement the foregoing and in consideration of
the mutual  representations,  warranties,  covenants  and  agreements  contained
herein, the parties hereto agree as follows:

1.   Definitions.
     -----------

     As used in this  Agreement,  the  following  terms shall have the  meanings
ascribed to them below.  Any  capitalized  term used in this  Agreement  and not
defined herein shall have the meaning ascribed to it in the Plan.

     "Acquisition" shall have the meaning set forth in Section 5.3.

     "Common Stock" shall mean the Common Stock,  par value $0.10 per share,  of
the Company,  subject to adjustment pursuant to the third paragraph of Section 3
of the Plan, under certain circumstances.

     "Exercise Price" shall have the meaning set forth in Section 2.2.

     "Grant Date" shall have the meaning set forth in Section 2.1.

     "Options" shall have the meaning set forth in Section 2.1.

     "Stockholders' Agreement" shall mean the Stockholders' Agreement,  dated as
of  December  19,  1997,  as  amended,  by and among  the  Company  and  certain
stockholders and employees of the Company that are signatories thereto.

     In addition,  certain  other terms used herein have  definitions  otherwise
ascribed to them herein.

2.   Grant and Terms of Options.
     --------------------------

     2.1. Grant of Options. The Company hereby grants to the Employee as of June
___, 2003 (the "Grant Date") 25  Nonqualified  Stock Options (the  "Options") to
purchase  one share of Common Stock per Option on the terms and  conditions  set
forth  below,  and in reliance  upon the  representations  and  covenants of the
Employee set forth below. Unless sooner exercised or


<PAGE>


forfeited  as provided  for in the Plan or this  Agreement,  the  Options  shall
expire on the third anniversary of the Grant Date.

     2.2.  Exercise  Price.  The  exercise  price of the Options is $150,000 per
share of Common Stock subject thereto (the "Exercise Price").

     2.3. Exercisability. The Options shall vest and become exercisable upon the
first to occur, during the Executive's Employment,  of the following events: (i)
an IPO; (ii) a Change of Control;  and (iii) the  expiration of two and one-half
years from the Grant Date.  Options  that have become  exercisable  shall remain
exercisable until they terminate as set forth in this Agreement or the Plan.

3.   Plan Shares.
     -----------

     3.1.  Transferability  of Plan Shares and Option. The Employee shall not be
permitted  to sell,  assign,  transfer,  pledge or  otherwise  encumber any Plan
Shares  or  Options,  except  as  provided  in the Plan or,  in the case of Plan
Shares, as provided in Sections 2.3, 2.4 and 2.5 of the Stockholders' Agreement.
Any transfer of Plan Shares otherwise permitted pursuant to this Agreement shall
remain  subject to the terms of the  Stockholders'  Agreement,  and shall not be
permitted other than in accordance with the terms thereof,  notwithstanding  any
provision of this Agreement that would otherwise permit such transfer.

4.   Employee's Representations, Warranties and Agreements.
     -----------------------------------------------------

     4.1. The Employee  hereby makes to the Company in connection with the grant
of the Options, and shall make to the Company in connection with the exercise of
any  Options   and  any   investment   in  any  Plan   Shares,   the   following
representations,  warranties and  agreements:

          4.1.1  Investment Intention;  No Resales.  The Employee represents and
warrants  that such  Employee  is  acquiring  the  Options  or Plan  Shares,  as
applicable,  for investment  purposes  only,  solely for his own account and not
with a view to, or for resale in  connection  with,  the  distribution  or other
disposition  thereof or with any present  intention of distributing or reselling
any Options or Plan Shares,  except for such  distributions  and dispositions as
are  both  explicitly  permitted  under  this  Agreement  and the  Stockholders'
Agreement and effected in compliance  with the Securities Act, and the rules and
regulations thereunder,  and all applicable state securities or "blue sky" laws.
The Employee agrees and  acknowledges  that such Employee will not,  directly or
indirectly,  offer,  transfer,  sell, assign,  pledge,  hypothecate or otherwise
dispose of any  Options or Plan  Shares,  or solicit  any offers to  purchase or
otherwise  acquire or take a pledge of any  Options or Plan  Shares,  other than
transfers,  sales,  assignments,  pledges,  hypothecations or other dispositions
explicitly  permitted by this  Agreement  and the  Stockholders'  Agreement  and
provided that (x) any such transfer, sale, assignment,  pledge, hypothecation or
other  disposition  is in  accordance  with the  terms  and  provisions  of this
Agreement  and the  Stockholders'  Agreement  and (y)  (i) the  transfer,  sale,
assignment,  pledge,  hypothecation  or  other  disposition  is  pursuant  to an
effective   registration  statement  under  the  Securities  Act  and  has  been
registered under all applicable state securities or "blue sky" laws, or (ii) the
Employee  shall have  furnished  the Company  with an opinion of counsel  (which
counsel  and the  form  and  substance  of which  opinion  shall  be  reasonably
satisfactory to the Company),


                                      -2-
<PAGE>


to the effect that no such registration is required because of the availability
of an exemption from registration under the Securities Act and the rules and
regulations in effect thereunder and under all applicable state securities or
"blue sky" laws.

          4.1.2 Stock  Unregistered.  The Employee  acknowledges  and represents
that  such  Employee  has  been  advised  that  (i) the  Options  have  not been
registered,  and the Plan Shares, upon issuance,  will not have been registered,
under the  Securities  Act;  (ii) the Plan Shares must be held for an indefinite
period  and  such  Employee  must  continue  to bear  the  economic  risk of the
investment in the Plan Shares  unless it is  subsequently  registered  under the
Securities Act or an exemption from such registration is available;  (iii) there
is no, and it is not  anticipated  that there will be any, public market for the
Options or the Plan Shares;  (iv) Rule 144 promulgated  under the Securities Act
("Rule 144") will not be available  with respect to the sales of any  securities
of the  Company,  and the  Company  has made no  covenant  to make such Rule 144
available; (v) if and when the Options or Plan Shares may be disposed of without
registration  in  reliance  on Rule 144,  such  disposition  can be made only in
limited  amounts in  accordance  with the terms and  conditions of such Rule 144
and, in any event,  any such  disposition  must be in accordance  with both this
Agreement and the Stockholders' Agreement; (vi) if the Rule 144 exemption is not
available,   public  offer  or  sale  without   registration  will  require  the
availability  of an exemption  under the  Securities  Act;  (vii) a  restrictive
legend or legends as provided for in the Stockholders' Agreement shall be placed
on the  certificates  representing  the Plan  Shares;  (viii) the  Stockholders'
Agreement restricts the sale or transfer of shares of any Options or Plan Shares
other than at  specified  times and under  specified  circumstances;  and (ix) a
notation shall be made in the appropriate records of the Company indicating that
the Options or Plan Shares are subject to  restrictions  on transfer and, if the
Company  should at some time in the future  engage the  services of a securities
transfer agent,  appropriate  stop-transfer  instructions  may be issued to such
transfer agent with respect to the Options or Plan Shares.

          4.1.3 Additional Investment  Representations.  The Employee represents
and  warrants  that (i) the  Employee's  financial  situation  is such  that the
Employee  can afford to bear the  economic  risk of holding  the Options or Plan
Shares, as applicable, for an indefinite period of time and suffer complete loss
of the Employee's investment in the Options or Plan Shares, as applicable;  (ii)
the Employee's  knowledge and experience in financial and business matters (and,
in  particular,  with  respect to the  Company)  are such that the  Employee  is
capable of evaluating the merits and risks of the  Employee's  investment in the
Options or Plan Shares, as applicable;  (iii) the Employee  understands that the
Options or Plan  Shares,  as  applicable,  are a  speculative  investment  which
involves a high  degree of risk of loss of the  Employee's  investment  therein,
that there are substantial restrictions on the transferability of the Options or
Plan Shares,  as  applicable,  and that on the date of this Agreement and for an
indefinite  period  following  such date there will be no public  market for the
Options or Plan Shares, as applicable,  and, accordingly, it may not be possible
to liquidate the Employee's  investment in the Company at all, including in case
of emergency;  (iv) the Employee and the Employee's  representatives,  including
the Employee's professional, tax and other advisors, have carefully reviewed the
financial  and  other   information  with  respect  to  the  Company,   and  its
subsidiaries  supplied  to  them  and the  Employee  understands  and has  taken
cognizance of (or has been advised by the Employee's  representatives as to) all
the risks related to an investment in the Options or Plan


                                      -3-
<PAGE>


Shares,  as applicable;  (v) in making the Employee's  decision to invest in the
Options or Plan Shares, as applicable,  hereunder,  the Employee has relied upon
independent  investigations  made by the Employee and, to the extent believed by
the Employee to be appropriate,  the Employee's  representatives,  including the
Employee's own professional,  tax and other advisors;  (vi) the Employee and the
Employee's  representatives have received and read this Agreement,  the Plan and
the  Stockholders'  Agreement and all other documents related to and executed or
to be executed  in  connection  with the  transactions  contemplated  hereby and
thereby,  and have been given the  opportunity to examine for a reasonable  time
prior to the date hereof all  documents  and to ask questions of, and to receive
answers from, the Company and their  respective  representatives  concerning the
terms and  conditions  of the  investment  in the  Options  or Plan  Shares,  as
applicable,  and to obtain any additional  information which the Company and its
subsidiaries  possess or can  acquire  without  unreasonable  effort or expense,
necessary  to verify the  accuracy  of the  information  supplied to it, and the
Employee  and  the  Employee's  representatives  have  received  all  additional
information  requested  by them,  and no  representations  have been made to the
Employee or such  representatives  concerning the Options or Plan Shares,  their
respective affiliates, their businesses or prospects or other matters; and (vii)
the  Employee  is an  officer  of the  Company  holding  the  position  of Chief
Executive  Officer as of the date hereof,  is familiar with the  operations  and
businesses  of the  Company,  has  access to all  material  financial  and other
information  available from the Company, and has significant business experience
in the party goods or similar  business and, in any such case,  expects to be an
officer of the Company.

     4.2.  Additional  Representations.  In  addition,  in  connection  with the
exercise of any  Options,  the Employee  shall make to the Company,  in writing,
such other  representations,  warranties and agreements in connection  with such
exercise  and  investment  in  shares  of Common  Stock as the  Committee  shall
reasonably request.

5.   Successors.
     ----------

    5.1.  This  Agreement  is personal to the  Employee  and,  without the prior
written  consent  of the  Company,  shall  not  be  assignable  by the  Employee
otherwise  than  (i) by  will or the  laws of  descent  and  distribution,  (ii)
pursuant to a  qualified  domestic  relations  order (as defined in the Code) or
(iii) pursuant to a gift to the Employee's  spouse,  children,  grandchildren or
other living descendants, whether directly or indirectly or by means of a trust,
partnership,  limited liability company or otherwise. This Agreement shall inure
to the benefit of and be enforceable by the Employee's legal representatives and
heirs.

     5.2. This  Agreement  shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

     5.3. The Company shall require any successor  (whether  direct or indirect,
by purchase,  merger,  consolidation or otherwise (an  "Acquisition")) to all or
substantially  all of the  business  and/or  assets of the Company  expressly to
assume and to agree to perform this Agreement in the same manner and to the same
extent  that the  Company  would  have been  required  to  perform it if no such
succession  had taken place (or by  substituting  for such  Options new options,
based upon the stock of such successor,  having an aggregate  spread between the
fair market value of the underlying  stock and the exercise  price thereof,  and
the same term, immediately after such


                                      -4-
<PAGE>


substitution,  equal to the spread on, and the term of, such Options immediately
before such substitution), and the Employee hereby agrees to such assumption (or
substitution); provided, however, that the Company or such successor may, at its
option, at the time of or promptly after such Acquisition,  terminate all of its
obligations  hereunder with respect to the Options and the underlying  shares by
paying to the Employee or the  Employee's  successors or assigns an amount equal
to the product of (i) the number of Options  and (ii) the Fair Market  Value per
share of the shares underlying such Options at the time of such Acquisition less
the  amount  of such  Options'  exercise  price  (but not in excess of such Fair
Market Value per share), in either case, in exchange for the Employee's Options.
As used in this Agreement,  the "Company" shall mean both the Company as defined
above and any such successor that assumes and agrees to perform this  Agreement,
by operation of law or otherwise.

6. Miscellaneous.

     6.1.  This  Agreement  shall be governed by and  construed  and enforced in
accordance  with  the laws of the  State  of New  York,  without  regard  to the
principles of conflicts of law thereof.  The captions of this  Agreement are not
part of the provisions hereof and shall have no force or effect.  This Agreement
may not be amended or  modified  except by a written  agreement  executed by the
parties hereto or their respective successors and legal representatives.

     6.2. All notices and other  communications under this Agreement shall be in
writing and shall be given by hand  delivery to the other party or by registered
or certified mail, return receipt  requested,  postage prepaid,  or by facsimile
(with receipt  confirmation),  addressed if to the  Employee,  at the address or
facsimile number set forth on the signature page hereto,  and if to the Company:
Amscan Holdings,  Inc., 80 Grasslands Road, Elmsford, New York 10523, Attention:
Secretary,  facsimile number 914-345-2056,  or to such other addresses as either
party  furnishes  to the other in writing in  accordance  with this Section 6.2.
Notices and  communications  shall be effective  when  actually  received by the
addressee.

     6.3. The invalidity or  unenforceability of any provision of this Agreement
shall not affect the validity or  enforceability  of any other provision of this
Agreement.

     6.4. No later than the date as of which an amount first becomes  includible
in the gross income of the Employee for federal income tax purposes with respect
to any Options, the Employee shall pay to the Company, or if appropriate, any of
its Affiliates, or make arrangements satisfactory to the Committee regarding the
payment of, any federal,  state,  local or foreign taxes of any kind required by
law to be withheld  with respect to such amount.  If approved by the  Committee,
withholding obligations may be settled with Common Stock, including Common Stock
that is part of the Award that gives rise to the  withholding  requirement.  The
obligations  of the Company under the Plan shall be  conditional on such payment
or  arrangements,  and the  Company  and its  Affiliates  shall,  to the  extent
permitted  by law,  have the right to deduct  any such  taxes  from any  payment
otherwise due to the Employee. The Committee may establish such procedures as it
deems appropriate, including making irrevocable elections, for the settlement of
withholding obligations with Common Stock.


                                      -5-
<PAGE>


     6.5.  The  Employee's  or the  Company's  failure  to  insist  upon  strict
compliance  with any provision of, or to assert any right under,  this Agreement
shall not be deemed  to be a waiver of such  provision  or right or of any other
provision of or right under this Agreement.

     6.6. The Options are granted  pursuant to the Plan,  which is  incorporated
herein by  reference,  and the  Options  shall,  except as  otherwise  expressly
provided  herein,  be  governed  by  the  terms  thereof.  The  Employee  hereby
acknowledges  receipt  of a copy of the Plan and  agrees  to be bound by all the
terms and  provisions  thereof.  The Employee and the Company each  acknowledges
that this Agreement (together with the Stockholders' Agreement, the Plan and the
other  agreements  referred  to  herein  and  therein)  constitutes  the  entire
agreement and supersedes all other agreements and  understandings,  both written
and oral,  among the  parties or either of them,  with  respect  to the  subject
matter hereof.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                       AMSCAN HOLDINGS, INC.


                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:


                                      EMPLOYEE:



                                      -----------------------------------------
                                          Name:
                                          Title:


                                          Facsimile Number:



                                      -6-