Document:

EMPLOYMENT AGREEMENT

           THIS AGREEMENT is made as of the 6th day of June, 2000 by and between
  Donnkenny Apparel, Inc., a Delaware corporation (the "Company") and Beverly
  Eichel of 95 Fairway Drive, Commack, New York 11725 (the "Executive").

                                 WITNESSETH THAT

  WHEREAS, the Executive is currently employed by the Company pursuant to a
  written employment agreement between the Executive and the Company dated as of
  the 28th day of September, 1998; and

  WHEREAS, the Company wishes to provide for the continued employment by the
  Company of the Executive, and the Executive wishes to continue to serve as an
  employee of the Company, in the capacities and on the terms and conditions set
  forth in this Agreement;

  NOW THEREFORE, it is hereby agreed as follows:

  1. EMPLOYMENT PERIOD. The Company shall employ the Executive, and the
  Executive shall serve as an employee of the Company, on the terms and
  conditions set forth in this Agreement. The term of this Agreement shall
  commence on the date hereof and, unless earlier terminated in accordance with
  Section 5 hereof, shall continue to December 31, 2002 (herein as the
  "Employment Period"): it being recognized that Executive has been continuously
  employed by the Company since November 2, 1998.

  2. POSITION AND DUTIES. (a) During the Employment Period, the Executive shall
  continue to serve as Executive Vice President and Chief Financial Officer of
  the Company with such duties and responsibilities as are customarily assigned
  to such positions, and such other executive duties and responsibilities not
  inconsistent therewith as may from time to time be assigned to her by the
  Board of Directors of the Company (the "Board").

           (b) During the Employment Period, the Executive shall report to
  the Chief Executive Officer.

           (c) During the Employment Period, the Executive shall devote her full
  business time and attention to the business and affairs of the Company and
  shall perform, faithfully and diligently her duties and responsibilities
  hereunder.

  3. COMPENSATION. (a) BASE SALARY. During the Employment Period, the Executive
  shall receive an annual base salary of $325,000. The annual base salary shall
  be payable in accordance with the Company's regular payroll practice for its
  senior executives, as in effect from time to time.

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           (b) PERFORMANCE BONUS. During the Employment Period, the Executive
  shall be eligible to receive a discretionary annual bonus ("Performance
  Bonus") in an amount, if any, to be determined on an annual basis by the
  Board, taking into account the performance of Executive and the Company during
  the year in respect of which the Performance Bonus is payable.

           (c) REIMBURSEMENT OF EXPENSES AND ADMINISTRATIVE SUPPORT. The Company
  shall pay or reimburse the Executive, upon the presentation of appropriate
  documentation, for all reasonable travel (including automobile parking) and
  other expenses incurred by the Executive in performing her obligations under
  this Agreement. The Company further agrees to furnish the Executive with a car
  allowance of $650 per month plus reimbursement for reasonable insurance and
  maintenance costs.

           (d) VACATION. Executive shall be entitled to four (4) weeks paid
  vacation in each calendar year.

           (f) LIFE INSURANCE. During the Employment Period, the Company shall
  provide term life insurance, for the benefit of the Executive, in the face
  policy amount of One Million ($1,000,000) Dollars with the Employee
  designating the beneficiaries of such policy. During the Employment Period the
  Company shall pay the premiums for such life insurance policy.

           (g) DEDUCTIONS. All payments made under this Agreement shall be
  subject to such deductions as from time to time may be required to be made
  pursuant to any law, rule, regulation or order.

           (h) CHANGE IN CONTROL. For purposes of this Agreement, a "Change in
  Control" of the Company shall be deemed to have occurred upon any of the
  following events:
                    (A) A person or entity or group of persons or entities,
           acting in concert, shall become the direct or indirect beneficial
           owner (within the meaning of Rule 13d-3 of the Securities Exchange
           Act of 1934, as amended), of securities of the Company or Donnkenny
           representing more than fifty percent (5O%) of the combined voting
           power of the issued and outstanding common stock of the Company or
           Donnkenny;

                    (B) The majority of the Board, or of the board of directors
           of Donnkenny, is no longer comprised of the incumbent directors who
           constitute such board on the date of this Agreement and other
           individual (s) who became a director subsequent to the date of this
           Agreement whose initial election or nomination for election as a
           director, as the case may be, was approved by at least a majority of
           the directors who comprised the incumbent directors on such board as
           of the date of this Agreement;

                    (C) The Board shall approve a sale of all or substantially
           all of the assets of the Company, or the board of directors of
           Donnkenny shall approve a sale of all or substantially all

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           of the assets of Donnkenny; or any merger, consolidation, or like
           business combination or reorganization of the Company, or of
           Donnkenny, the consummation of which would result in the occurrence
           of any event described in clause (A) or (B) above, and such
           transaction shall have been consummated.

                    (D) Notwithstanding the foregoing provisions, a Change of
           Control shall not be deemed to have occurred if one or more of the
           events described in paragraphs A, B or C above is occasioned by a
           transaction involving a group including the current Chief Executive
           Officer of the Company.

  4. PARTICIPATION IN BENEFIT PLANS. The Executive shall be entitled to
  participate, during the term of this Agreement, in the Company's benefit
  programs, including but not limited to qualified or non-qualified pension
  plans, supplemental pension plans, group hospitalization, health, dental care,
  death benefit, post-retirement welfare plans, or other present or future group
  employee benefit plans or programs of the Company for which key executives are
  or shall become eligible (collectively, the "Benefit Plans"), on the same
  terms as other key executives of the Company.

  5. 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 not
  less than (x) 120 consecutive business days, or (y) 180 days within any 12
  month period, to perform the Executive's 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 before the Disability Effective Date.

           (b) BY THE COMPANY. The Company may terminate the Executive's
  employment during the Employment Period for Cause or without Cause. "Cause"
  means (x) the conviction of the Executive for the commission of (A) any
  felony, or (B) a misdemeanor involving moral turpitude, or (y) willful
  misconduct by the Executive that results in demonstrable and material damage
  to the business or reputation of the Company, or (z) commission of fraud or
  embezzlement or any act of dishonesty relating to Executive's employment
  resulting or intending to result in direct or indirect personal gain or
  enrichment to Executive at the expense of the Company. No act or failure to
  act on the part of the Executive shall be considered "willful unless it is
  done, or omitted to be done, by the Executive in bad faith or without
  reasonable belief that the Executive's action or omission was in the best
  interests of the Company. Any act or failure to act that is based upon
  authority given pursuant to the Chief Executive Officer of the Company, a
  resolution duly adopted by the Board, or the advice of counsel for the
  Company, shall be conclusively presumed to be done, or omitted to be done, by
  the Executive in good faith and in the best interests of the Company.

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           (c) BY THE EXECUTIVE FOR GOOD REASON. The Executive may terminate her
  employment during the Employment Period for Good Reason. "Good Reason" means
  (A) defacto or de jure material diminution of the Executive's title, or her
  position and responsibilities as Chief Financial Officer. Executive
  acknowledges that the Company's MIS and Human Resources departments may not
  report to the Company's Chief Financial Officer; (B) location or relocation of
  the main office of the company other than within a 50 mile radius of New York,
  New York; (C) location of the Executive other than at the Company's New York
  office or other location permitted by (B) above, and (d) breach by the Company
  of any of its material I obligations hereunder that is not cured within twenty
  (20) days after written notice thereof is given by the Executive to the
  Company.

           (d) DATE OF TERMINATION. "Date of Termination" means the date of the
Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause is effective, or the date on which the Executive gives the Company notice
of a termination of employment for Good Reason or otherwise, as the case may be.

  6. OBLIGATIONS OF THE COMPANY UPON TERMINATION.

           (a) DEATH. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, the Company shall continue
to pay to the Executive's designated beneficiaries (or, if there is no such
beneficiary, to the Executive's estate or legal representative), the annual base
salary provided for in Section 3(a) as in effect on the Date of Termination
through the end of the month in which the Executive's death occurs plus prorated
bonus, if any, due.

           (b) DISABILITY. If the Executive's employment is terminated by reason
  of the Executive's Disability during the Employment Period, the Company shall
  li continue to pay to the Executive the annual base salary provided for in
  Section 3(a) until the earlier of: (x) the date on which the Executive
  begins receiving payments pursuant to any long-term disability insurance
  policy or (y) the Disability Effective Date plus prorated bonus, if any,
  due.

           (c) AFTER A CHANGE IN CONTROL. If, during the Employment Period and
upon or after the occurrence of a Change in Control, the Executive's employment
is terminated by the Company other than by the Company for Cause, death or
Disability, the Company shall pay to the Executive a lump sum amount of two (2)
times the Executive's base salary in effect on the Date of Termination. If,
during the Employment Period and upon or after the occurrence of a Change in
Control, the Executive's employment is terminated by Executive, provided a
notice of termination is given by the Executive to the Company within ninety
(90) days from the effective date of a Change in Control, the Company shall pay
to the Executive a lump sum amount of one and one-half (1 1/2) times the
Executive's base salary in effect on the Date of Termination. The

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lump sum payment provided for in this subparagraph (c) shall be payable on the
Date of Termination.

           (d) BY THE COMPANY FOR CAUSE; BY THE EXECUTIVE. If the Executive's
  employment is terminated by the Company for Cause during the Employment
  Period, or if the Executive voluntarily terminates employment during the
  Employment Period (other than for Good Reason), the Company shall pay to the
  Executive in a lump sum in cash within 30 days of the Date of Termination any
  portion of the Executive's annual base salary through the Date of Termination
  that has not yet been paid, and the Company shall have no further obligations
  under this Agreement.

           (e) BY THE EXECUTIVE FOR GOOD REASON. If the Executive's employment
  is terminated by the Executive for Good Reason, the Company shall continue to
  pay to the Executive the annual base salary provided for in Section 3 (a)
  through the Employment Period and any Performance Bonus due to Executive.

           (f) SURVIVAL. The Respective obligations of the Company and the
  Executive under Sections 7, 8, 9 and 10 shall survive any termination of
  Executive's employment; provided, however, that the Executive's obligations
  under Section 9 (Non-Solicitation) shall terminate and shall not survive in
  the event (i) the Executive's employment is terminated by the Company other
  than for Cause; (ii) the Executive's employment is terminated for any or no
  reason following a Change in Control or (iii) the Executive's employment is
  terminated by the Executive for Good Reason.

  7. INVENTIONS. Any and all inventions, innovations or improvements
  ("inventions") made, developed or created by the Executive (whether at the
  request or suggestion of the Company (which, as used in this Section 7, shall
  be deemed to include the Company and each of its subsidiaries) or otherwise,
  whether alone or in conjunction with others, and whether during regular hours
  of work or otherwise) during the period of her employment with the Company
  which may be directly or indirectly useful in, or relate to, the business of
  the Company, shall be promptly and fully disclosed by the Executive to the
  Board and shall be the Company's exclusive property as against the Executive,
  and the Executive shall promptly deliver to an appropriate representative of
  the Company as designated by the Board all papers, drawings, models, data and
  other material relating to any inventions made, developed or created by her as
  aforesaid. The Executive shall, at the request of the Company and without any
  payment therefore, execute any documents necessary or advisable in the opinion
  of the Company's counsel to direct issuance of patents or copyrights to the
  Company with respect to such inventions as are to be the Company's exclusive
  property as against the Executive or to vest in the Company title to such
  inventions as against the Executive. The expense of securing any such patent
  or copyright shall be borne by the Company.

  B. CONFIDENTIAL INFORMATION. The Executive shall hold all secret or
  confidential information, knowledge or data relating to the Company or any of
  its affiliated companies and

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<PAGE>

  their respective businesses that the Executive obtains during the Executive's
  employment by the Company or any of its affiliated companies and that is not
  public knowledge (other than as a result of the Executive's violation of this
  Section 8)("Confidential Information") in strict confidence. 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 or
  regulation or by legal process. If the Executive is requested pursuant to, or
  required by, applicable law or regulation or by legal process to disclose any
  Confidential Information, the Executive will provide the Company, as promptly
  as the circumstances reasonably permit, with notice of such request or
  requirement and, unless a protective order or other appropriate relief is
  previously obtained, the Confidential Information, subject to such request,
  may be disclosed pursuant to and in accordance with the terms of such request
  or requirement, provided that the Executive shall use her best efforts to
  limit any such disclosure to the precise terms of such request or requirement.

  9. NON-SOLICITATION. The Executive agrees that she will not, during the term
  of this Agreement and until the expiration of twelve (12) months from the date
  of termination other employment with the Company, solicit or entice to
  endeavor to solicit or entice away from the Company any person who was an
  officer or employee, either for her own account or for any individual, firm or
  corporation.

  10. INDEMNIFICATION. (a) The Company shall indemnify the
  Executive to the fullest extent permitted by Delaware law in effect as of the
  date hereof against all costs, expenses, liabilities and losses (including,
  without limitation, attorneys' fees, judgments, fines, penalties, ERISA excise
  taxes, penalties and amounts paid in settlement) reasonably incurred by the
  Executive in connection with a Proceeding. For the purposes of this Section
  10, a "Proceeding" shall mean any action, suit or proceeding, whether civil,
  criminal, administrative or investigative, in which the Executive is made, or
  is threatened to be made, a party to, or a witness in, such action, suit or
  proceeding by reason of the fact that she is or was an officer, director or
  employee of the Company or is or was serving as an officer, director, member,
  employee, trustee or agent of any other entity at the request of the Company,
  whether or not the basis of such Proceeding arises out of or in connection
  with the Executive's alleged action or omission in an official capacity.

            (b) The Company shall advance to the Executive all reasonable costs
  and expenses incurred by her in connection with a Proceeding within 20 days
  after receipt by the Company of a written request for such advance. Such
  request shall include an itemized list of the costs and expenses and an
  undertaking by the Executive to repay the amount of such advance if it shall
  ultimately be determined that she is not entitled to be indemnified against
  such costs and expenses as authorized by Delaware law. Upon a request under
  subsection (b), the Executive shall be deemed to have met the standard of
  conduct required for such indemnification unless the contrary shall be
  established by a court of competent jurisdiction.

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           (c) The Executive shall not be entitled to indemnification under this
  Section 10 unless she meets the standard of conduct specified in the Delaware
  General Corporation Law. Any indemnification under subsection (a) (unless
  ordered by a court) shall be made by the Company only as authorized in the
  specific case upon a determination that indemnification of the Executive is
  proper in the circumstances because she has met the applicable standard of
  conduct set forth in the Delaware Corporation Law. Such determination shall be
  made in accordance with Delaware law.

11. SUCCESSORS; BENEFICIARIES. (a) This Agreement is personal to the executive
and, without the prior written consent of the Company, shall not be assignable
by the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives . (b) This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns.

           (c) The Company shall require any successor (whether direct or
  indirect, by purchase, merger, consolidation or otherwise) to all or
  substantially all of the business and/or assets of the Company expressly to
  assume and 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 plane. As used in this Agreement, "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.

           (d) The Executive shall be entitled, to the extent permitted under
  any applicable law, to select and change the beneficiary or beneficiaries to
  receive any compensation or benefit payable hereunder following the
  Executive's death by giving the Company written notice thereof. In the event
  of the Executive's death or a judicial determination of her incompetence,
  reference in this Agreement to the Executive shall be deemed, where
  appropriate, to refer to her beneficiary, estate or other legal
  representative.

  12. MISCELLANEOUS. (a) Except for the applicability of Delaware law provided
  for in paragraph 10 above, 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 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 registered or certified mail, return receipt requested, postage prepaid,
  addressed as follows:

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           If to the Executive:

           Beverly Eichel
           95 Fairway View Drive
           Commack, New York 11725

           If to the Company:

           Donnkenny Apparel, Inc.
           1411 Broadway
           New York, New York 10018
           Attention: President

  or such other address as either party furnishes to the other in writing in
  accordance with this paragraph (b) of Section 12. 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. If any provision of this Agreement shall be held
  invalid or unenforceable in part, the remaining portion of such provision,
  together with all other provisions of this Agreement, shall remain valid and
  enforceable and continue in full force and effect to the fullest extent
  consistent with law.

           (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) The Executive's or the Company's failure to insist upon strict
  compliance with any provisions 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) This Agreement may be executed in several counterparts, each of
  which shall be deemed an original, and said counterparts shall constitute but
  one and the same instrument.

            (g) The Executive and the Company acknowledge that this Agreement
  supersedes any other agreement between them concerning the subject matter
  hereof including the Employment Agreement between the parties dated as of the
  28th day of September, 1998, and certain letter agreements dated November 30,
  1999 and dated as of January 1, 2000.

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          IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization of the Board, 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.

                                           /s/Beverly Eichel
                                           ------------------------------------
                                           Beverly Eichel

                                           Donnkenny Apparel, Inc.

                                           By:  /s/Daniel H. Levy
                                               -----------------------------
                                               Daniel H. Levy
                                        9EMPLOYMENT 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.

<PAGE>

          (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

<PAGE>

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.

<PAGE>

          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

<PAGE>

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.

<PAGE>

          (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:

<PAGE>

         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.

<PAGE>

         (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

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