THE MIDDLETON DOLL COMPANY

FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT

        THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made and
entered into by and between The Middleton Doll Company, a Wisconsin corporation
(the “Company”), and the person whose signature is set forth on the signature
page hereof (the “Participant”) effective as of ___________________.

RECITALS

        WHEREAS, the Company has adopted The Middleton Doll Company 2003 Stock
Option Plan (the “Plan”), which provides for the grant of options to officers
and other key employees of the Company and its subsidiaries, each as designated
by an appropriate committee of the Company’s Board of Directors, as provided in
the Plan (the “Committee”), to participate in the Plan;

        WHEREAS, the Participant is an officer or other key employee that the
Committee has designated to participate in the Plan; and

        WHEREAS, the Company wishes to grant to the Participant an option to
purchase the Company’s common stock, par value 6 2/3 cents per share (the
“Common Stock”), on the terms and conditions specified herein to provide a means
for the Participant to participate in the future growth of the Company and to
increase the Participant’s incentive and personal interest in the continued
success and growth of the Company.

AGREEMENT

        NOW, THEREFORE, the parties agree as follows (any capitalized terms used
herein but not defined herein shall have the respective meanings given in the
Plan):

        1.    Option.

            a.    Grant. Subject to the terms and conditions of this Agreement
and the Plan, the Company hereby grants to the Participant a Non-Qualified Stock
Option to purchase all or any part of the shares of Common Stock set forth on
the signature page hereof (the “Shares”), at the exercise price set forth on the
signature page hereof (collectively, the “Option”).

            b.    Term. The term of the Option shall expire at 11:59 p.m.,
Wisconsin time, on the date immediately preceding the tenth anniversary of the
date of grant of the Option.

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            c.    Vesting. _____________ percent (___%) of the Option shall vest
on each of the first _____ (__) anniversaries of the grant date.

        2.    Exercise. The Option may not be exercised prior to the date it is
vested or after the term of the Option has expired. The Participant may, subject
to the limitations of this Agreement and the Plan, exercise all or any portion
of the Option that has vested pursuant to Section 1 hereof by providing written
notice of exercise to the Company specifying the number of Shares with respect
to which the Option is being exercised, which shall be accompanied by payment of
the exercise price for such Shares. The exercise price shall be paid as provided
in the Plan. No portion of the Option may be exercised after it has expired
pursuant to Section 1 hereof.

        3.    Termination of Employment.

            a.     If the employment of the Participant terminates by reason of
death or disability, any unvested portion of the Option shall vest in full upon
the Participant’s death, and the Participant’s Beneficiary (as hereinafter
defined) may exercise the Option for a period of one year after the date of
death or date of disability and not thereafter; provided, however, that no
Option or portion thereof shall be exercisable after it has expired pursuant to
Section 1 hereof. For purposes of this Agreement, the term “disability” shall
mean a total and permanent disability as determined by the Committee in its sole
discretion.

            b.     If the employment of the Participant terminates for any
reason other than death or disability, the Participant (or his or her legal
representative) may exercise any portion of the Option that has vested pursuant
to Section 1 hereof for a period of three months after the date of such
termination of employment and not thereafter; provided, however, that no Option
or portion thereof shall be exercisable after it has expired pursuant to Section
1 hereof.

            4.    Change of Control. In the event of any sale of assets, merger,
consolidation, combination or other corporate reorganization, restructuring or
change of control of the Company (“Change of Control”), the Board of Directors
in its discretion may take one or more of the following actions: (a) provide for
the acceleration of any time period relating to the exercise of the Option;
(b) provide for the purchase of the Option for an amount of cash or other
property that could have been received upon the exercise of the Option had the
Option been currently exercisable or payable; (c) adjust the terms of the Option
in the manner determined by the Board of Directors to reflect the Change of
Control; (d) cause the Option to be assumed, or new right substituted for the
Option, by another entity; or (e) make such other provision as the Board of
Directors may consider equitable and in the best interests of the Company.

        5.    Withholding. The Company may withhold the amount of any tax
attributable to any Shares deliverable under the Plan after giving the
Participant notice as far in advance as practicable, and the Company may defer
making delivery if any such tax may be pending unless and until indemnified to
its satisfaction. The Committee may, in its sole discretion and subject to such
rules as it may adopt, permit the Participant to pay all or a portion of the
federal, state and local withholding taxes arising in connection with the
exercise of the Option by electing to (a) have the Company withhold shares of
Common Stock, (b) tender back shares of Common Stock received in connection with
such benefit, or (c) deliver other previously owned shares of Common Stock, in
each case such stock having a then Fair Market Value (as defined in the Plan)
equal to the amount to be withheld; provided, however, that the amount to be
withheld shall not exceed the Participant’s estimated minimum federal, state and
local tax obligations associated with the transaction. The election must be made
on or before the date as of which the amount of tax to be withheld is determined
and otherwise as required by the Committee. The Fair Market Value of fractional
shares of Common Stock remaining after payment of the withholding taxes shall be
paid to the Participant in cash.

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        6.    Non-Transferability. The Participant shall have no rights to sell,
assign, transfer, pledge, assign or otherwise alienate the Option under this
Agreement, except by will or by the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code (as defined in
the Plan) or Title I of ERISA, or the rules thereunder, and any such attempted
sale, assignment, transfer, pledge or other conveyance shall be null and void.
The Option shall be exercisable during the Participant’s lifetime only by the
Participant (or his or her legal representative).

        7.    Beneficiary. The person whose name appears on the signature page
hereof after the caption “Beneficiary” or any successor designated by the
Participant in accordance herewith (the person who is Participant’s Beneficiary
at the time of his or her death is referred to as the “Beneficiary”) shall be
entitled to exercise the Option, to the extent it is exercisable, after the
death of the Participant. The Participant may from time to time revoke or change
his or her Beneficiary designation without the consent of any prior Beneficiary
by filing a new designation with the Board of Directors. The last such
designation received by the Board of Directors shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be
effective unless received by the Board of Directors prior to the Participant’s
death, and in no event shall any designation be effective as of a date prior to
such receipt. If no Beneficiary designation is in effect at the time of the
Participant’s death, or if no designated Beneficiary survives the Participant or
if such designation conflicts with law, the Participant’s estate shall be
entitled to exercise the Option, to the extent it is exercisable after the death
of the Participant. If the Committee is in doubt as to the right of any person
to exercise the Option, then the Company may refuse to recognize such exercise,
without liability for any interest or dividends on the underlying Shares, until
the Board of Directors determines the person entitled to exercise the Option, or
the Company may apply to any court of appropriate jurisdiction and such
application shall be a complete discharge of the liability of the Company
therefor.

        8.    Securities Law Restrictions. The Participant acknowledges that he
or she is acquiring the Option and the Shares purchasable pursuant to the Option
for investment purposes only and not with a view to resale or other distribution
thereof to the public in violation of the Securities Act of 1933, as amended
(the “Act”). The Participant agrees and acknowledges with respect to any Shares
that have not been registered under the Act, that (i) Participant will not sell
or otherwise dispose of such Shares except pursuant to an effective registration
statement under the Act and any applicable state securities laws, or in a
transaction which in the opinion of counsel for the Company, is exempt from such
registration, and (ii) a legend will be placed on the certificates for the
Shares to such effect. As further conditions to the issuance of the Shares, the
Participant agrees for himself or herself, and his or her heirs, legatees and
legal representatives, prior to such issuance to execute and deliver to the
Company such investment representations and warranties, and to take such other
actions, as counsel for the Company determines may be necessary or appropriate
for compliance with the Act and any applicable securities laws.

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        Unless otherwise determined by the Board of Directors, the Participant
agrees that any certificate representing shares of Common Stock acquired upon
exercise of the Option shall bear the following legend:

  “The shares of Common Stock represented by this certificate are restricted
securities as that term is defined under Rule 144 promulgated under the
Securities Act of 1933, as amended (the “Act”). These shares may not be sold,
transferred or disposed of unless they are registered under the Act, or sold in
a transaction that is exempt from registration under the Act and any applicable
state securities laws. Any sale, assignment, exchange, gift, transfer or other
disposition of the Common Stock represented by this certificate is subject to
the terms and conditions of a Non-Qualified Stock Option Agreement, dated and
effective as of __________________ and The Middleton Doll Company 2003 Stock
Option Plan.”

        9.    Limited Interest.

            a.     The grant of the Option shall not be construed as giving the
Participant any interest other than as provided in this Agreement.

            b.     The Participant shall not have any voting or dividend rights
or other rights as a shareholder with respect to the Shares before the date of
transfer to the Participant of a certificate or certificates for such shares and
recording of the Participant’s name on the Company’s shareholder ledger as the
holder of record of such shares.

            c.     Nothing in this Agreement shall interfere with or limit in
any way the right of the Company or any subsidiary to terminate the
Participant’s employment at any time nor confer upon the Participant any right
to continue in the employ of the Company or any subsidiary.

            d.     The grant of the Option shall not affect in any way the right
or power of the Company to make or authorize any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company’s capital
structure or its business, or any merger, consolidation or business combination
of the Company, or any issuance or modification of any term, condition, or
covenant of any bond, debenture, debt, preferred stock or other instrument ahead
of or affecting the Shares or the rights of the holders thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business or any other Company act or proceeding, whether
of a similar character or otherwise.

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        10.    Incorporation by Reference. The terms of the Plan to the extent
not stated herein are expressly incorporated herein by reference and in the
event of any conflict between this Agreement and the Plan, the Plan shall
govern.

        11.    Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Wisconsin, without reference to
conflict of law principles thereof.

        12.    Amendment. This Agreement may not be amended, modified,
terminated or otherwise altered except by the written consent of the parties
hereto.

        13.    Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

        14.    Severability. If any provision of this Agreement, the Option or
the Plan (a) is or becomes or is deemed to be invalid, illegal or unenforceable
in any jurisdiction, or as to the Participant or the Option, or (b) would
disqualify this Agreement, the Option or the Plan under any law deemed
applicable by the Committee, then such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be so construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of this Agreement, the Option or the Plan, then such provision shall be
stricken as to such jurisdiction, the Participant or the Option, and the
remainder of this Agreement, the Option and the Plan shall remain in full force
and effect.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

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        IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer and the Participant has hereunto affixed
his or her hand, dated and effective as of the date first set forth above.

THE MIDDLETON DOLL COMPANY (“Company”)

  By:_________________________________
  Its:_________________________________

  (“Participant”)

  ___________________________________
  Name:______________________________

Date of Agreement:  ________________ Grant Date:  ________________

Exercise Price Per Share: ______________ Option Expiration Date: _____________

No. of Shares: ______________
Beneficiary: ____________________________ Address of Beneficiary:
___________________________________ ___________________________________
Beneficiary Tax Identification No.: ______________________________________

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