Vice President of Sales Employment Agreement

August 24, 2004





Ms. Lynn Moran

28558 N 95 th Place

Scottsdale, AZ 58262-3601



Dear Lynn:



I am pleased to offer you the position of Executive Vice President of Sales of Russ Berrie and Company, Inc. (the "Company") effective September 27, 2004. This position is one of corporate officer of the Company and is included in the Company92s executive committee.





Your employment with the Company will include the following:





1. COMPENSATION . Your base salary will be at an annual rate of $325,000. Your 2005 bonus program, and eligibility therefor, is set forth on Exhibit A attached hereto and incorporated herein. Payment of the bonus (or portion thereof) is predicated upon meeting both objective and subjective performance standards established for the applicable year. The bonus is generally paid in February of the year following the applicable year. In order to receive the bonus payment (or any portion thereof), you must be actively employed by the Company at the time of the bonus payment. For each of the years 2005 and 2006, $65,000 of your bonus is guaranteed to be paid. Furthermore, during each of years 2005 and 2006, the $65,000 guaranteed portion of your bonus will be paid in 4 equal installments as soon as reasonably practicable after the end of each of the Company92s fiscal quarters.



2. GROUP HEALTH AND DISABILITY . After 90 days of continuous employment, you will be eligible to participate in:





a. The Company92s contributory Group Health Plan.

b. The Company92s non-contributory Life Insurance Plan in the amount equal to the lesser of (i) one times your base salary, or (ii) $200,000, in accordance with the terms of the Plan.

c. The Company92s n ...