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                          RUSS BERRIE AND COMPANY, INC.
                        CHANGE IN CONTROL SEVERANCE PLAN



                  The purpose of this Change in Control Severance Plan (the
  "Plan") is to enable Russ Berrie and Company, Inc., a New Jersey corporation
  (the "Company"), to offer a form of income protection to "Participants" (as
  defined in Section 7.5 below) in the event their employment with the Company
  terminates under certain circumstances due to a "Change in Control" (as
  defined in Section 7.2 below).

                               ARTICLE I: BENEFITS

                  1.1 ELIGIBILITY FOR BENEFITS; BENEFITS; PAYMENT; AND RIGHTS OF
PARTICIPANTS.

                  (a) If a Participant's employment with the Company is
  terminated by the Company without "Cause" (as defined in Section 7.1 below) or
  by the Participant for "Good Reason" (as defined in Section 7.4 below) (each,
  a "Qualifying Termination") during the period commencing six months prior to
  and ending two years after a Change in Control, such Participant shall be paid
  the applicable "Severance Benefit" (as defined below) and shall receive the
  additional benefits described in this Article I. The term "Severance Benefit"
  shall mean:

                         (i)     if the Qualifying Termination occurs during the
                                 six-month period preceding or the one-year
                                 period following the Change in Control, an
                                 amount equal to 150% of the Participant's
                                 "Current Total Annual Compensation" (as defined
                                 in Section 7.3 below); and

                         (ii)    if the Qualifying Termination occurs during the
                                 second year after the Change in Control, an
                                 amount equal to 75% of the Participant's
                                 Current Total Annual Compensation.

                 (b) Any Participant entitled to a Severance Benefit (in
  accordance with Section 1.1 (a) above) shall receive his Severance Benefit in
  the form of a lump-sum payment within 30 business days after his employment
  with the Company terminates or the Change in Control occurs, whichever is
  later, or at such earlier time as required by applicable law.

                  1.2 ADDITIONAL BENEFITS. A Participant entitled to receive a
Severance Benefit shall also receive the following additional benefits:

                 (a) The Company shall cause options to purchase Company stock
 ("Stock Options") held by a Participant that are not fully vested and
 exercisable on the date of the Qualifying Termination to:

                        (i)   if the Qualifying Termination occurs during the
                              six months preceding or the first year following
                              the Change in Control,

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                              become fully vested and exercisable as of the date
                              of such Qualifying Termination (or, if later, as
                              of the date on which the Change in Control
                              occurred); and

                        (ii)  if the Qualifying Termination occurs during the
                              second year following the Change in Control,
                              become fully vested and exercisable as of the date
                              of such Qualifying Termination as to those Stock
                              Options that would otherwise have vested within
                              one year after the Qualifying Termination.

                (b) The Company shall cause unvested restricted shares of
Company stock (the "Restricted Shares") held by a Participant on the date of the
Qualifying Termination to:

                         (i)  if the Qualifying Termination occurs during the
                              six months preceding or the first year following
                              the Change in Control, become fully vested as of
                              the date of such Qualifying Termination (or, if
                              later, as of the date on which the Change in
                              Control occurred) as to those Restricted Shares
                              for which the vesting restrictions would otherwise
                              have lapsed within one year after the Qualifying
                              Termination; and



                        (ii)  if the Qualifying Termination occurs during the
                              second year after the Change in Control, become
                              fully vested as of the date of such Qualifying
                              Termination as to those Restricted Shares for
                              which the vesting restrictions otherwise would
                              have lapsed within six months after the Qualifying
                              Termination.

                  (c) The Company shall for a period of 18 months (in the case
of a Qualifying Termination to which Section 1.1(a)(i) applies) or one year (in
the case of a Qualifying Termination to which Section 1.1(a)(ii) applies)
following the Qualifying Termination continue to provide to the Participant (i)
use of an automobile or payment of an automobile allowance in an amount
sufficient to compensate the Participant to substantially the same extent as if
the Company continued to provide the automobile and (ii) medical and other
insurance benefits, in each case to the extent and on substantially the same
basis as provided immediately prior to the Qualifying Termination (disregarding
any reduction described in clause (B) of the definition of Good Reason).

                1.3 REDUCTION OF PAYMENTS. If a Participant's receipt of any
payment and/or non-monetary benefit under this Plan (including, without
limitation, the accelerated vesting of Stock Options and/or Restricted Shares)
(collectively, the "Plan Payments") would cause him or her to become subject to
the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986,
as amended (the "Code"), the Company shall reduce his or her Plan Payments to
the extent necessary to avoid the application of such excise tax if (i) the
required reduction does not exceed 10% of the aggregate amount of the Plan
Payments and (ii) as a result of such reduction, the net benefits to the
Participant of the Plan Payments as so reduced (after payment of applicable
income taxes) exceeds the net benefit to the Participant of the Plan Payments



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<PAGE>



without such reduction (after payment of applicable income taxes and excise
taxes). If a reduction in Plan Payments to a Participant in the amount permitted
by clause (i) is insufficient to avoid the application of such excise tax, then
the provisions of "Exhibit A," attached hereto and incorporated herein, shall
apply to that Participant.

                1.4 RIGHTS OF PARTICIPANTS. Nothing contained herein shall be
held or construed to create any liability or obligation on the Company to retain
any Participant in its service or in a corporate officer position. All
Participants shall remain subject to discharge or discipline to the same extent
as if the Plan did not exist.

                               ARTICLE II: FUNDING

                2.1 FUNDING. The Plan shall be funded out of the general assets
of the Company as and when benefits are payable under the Plan. All Participants
shall be solely general creditors of the Company.

                     ARTICLE III: ADMINISTRATION OF THE PLAN

                3.1 PLAN ADMINISTRATOR. The general administration of the Plan
shall be placed with the Compensation Committee of the Board of Directors of the
Company (the "Board") or an administrative committee appointed by the Board (the
"Committee").

                3.2 REIMBURSEMENT OF EXPENSES OF COMMITTEE. The Company shall
pay or reimburse the members of the Committee for all reasonable expenses
incurred in connection with their duties hereunder.

                3.3 ACTION BY THE PLAN COMMITTEE. Decisions of the Committee
shall be made by a majority of its members attending a meeting at which a quorum
is present (which meeting may be held telephonically), or by written action in
accordance with applicable law. No member of the Committee may act with respect
to a matter which involves only that member.

                3.4 DELEGATION OF AUTHORITY. The Committee may delegate any and
all of its powers and responsibilities hereunder to other persons by formal
resolution filed with and accepted by the Board. Any such delegation shall not
be effective until it is accepted by the Board and the persons designated and
may be rescinded at any time by written notice from the Committee to the person
to whom the delegation is made.

                3.5 RETENTION OF PROFESSIONAL ASSISTANCE. The Committee may
employ such legal counsel, accountants and other persons as may be required in
carrying out its work in connection with the Plan, and the Company shall pay the
fees and expenses of such persons.


                3.6 ACCOUNTS AND RECORDS. The Committee shall maintain such
accounts and records regarding the fiscal and other transactions of the Plan,
and such other data as may be required to carry out its functions under the Plan
and to comply with all applicable laws.


                                        3



<PAGE>



                3.7 COMPLIANCE WITH APPLICABLE LAW. The Company shall be deemed
the administrator of the Plan for the purposes of any applicable law and shall
be responsible for the preparation and filing of any required returns, reports,
statements or other filings with appropriate governmental agencies. The Company
shall also be responsible for the preparation and delivery of information to
persons entitled to such information under any applicable law.

                3.8 REIMBURSEMENT OF EXPENSES. If any contest or dispute shall
arise under this Plan involving termination of a Participant's employment with
the Company or involving the failure or refusal of the Company to perform fully
in accordance with the terms hereof and the Participant prevails on the merits
in such contest or dispute, the Company shall, promptly after the date a court
issues a final order from which no appeal can be taken, or with respect to which
the time period to appeal has expired, reimburse such Participant for all
reasonable legal fees and expenses, if any, paid by the Participant in
connection with such contest or dispute (together with interest in an amount
equal to the J.P. Morgan Chase Bank prime rate from time to time in effect, such
interest to begin to accrue on the dates Participant actually paid such fees and
expenses through the date of payment thereof).

                              ARTICLE IV: AMENDMENT

                4.1 AMENDMENT. The Company reserves the right to amend, in whole
or in part, any or all of the provisions of this Plan by action of the Board at
any time; PROVIDED, THAT, no such amendment may reduce the benefits and payments
due to any Participant hereunder in the event of a Qualifying Termination.

                              ARTICLE V: SUCCESSORS

                5.1 SUCCESSORS. The Company shall require any successor or
assignee, whether direct or indirect, by purchase or otherwise (and whether or
not by operation of law), to all or substantially all the business or assets of
the Company, expressly and unconditionally to assume and agree to perform the
Company's obligations under this Plan, in the same manner and to the same extent
that the Company would be required to perform if no such succession or
assignment had taken place, PROVIDED, THAT, no such assumption and agreement
shall be required from a successor or assignee that becomes obligated for the
Company's obligations hereunder through a merger, consolidation or otherwise by
operation of law. In such event, the term "Company," as used in this Plan, shall
mean the Company, as applicable, as hereinbefore defined and any successor or
assignee to the business or assets which by reason hereof becomes bound by the
terms and provisions of this Plan. Any payment or benefit to which a Participant
has become entitled under this Plan which remains unpaid at the time of such
Participant's death shall be paid to the estate of such Participant when it
becomes due.




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                            ARTICLE VI: MISCELLANEOUS

               6.1 NO DUTY TO MITIGATE/SET-OFF. No Participant entitled to
receive a Severance Benefit shall be required to seek other employment or to
attempt in any way to reduce any amounts payable to him pursuant to this Plan.
The Severance Benefit payable hereunder shall not be reduced by any compensation
earned by the Participant as a result of employment by another employer or
otherwise. Subject to Section 6.5, the Company's obligations to pay the
Severance Benefits and to perform its obligations hereunder shall not be
affected by any circumstances including without limitation, any set off,
counterclaim, recoupment, defense or other right which the Company may have
against the Participant.

               6.2 HEADINGS. The headings of the Plan are inserted for
convenience of reference only and shall have no effect upon the meaning of the
provisions hereof.

               6.3 USE OF WORDS. Whenever used in this instrument, a
masculine pronoun shall be deemed to include the masculine and feminine gender,
and a singular word shall be deemed to include the singular or plural, in all
cases where the context so requires.

               6.4 CONTROLLING LAW. The construction and administration of
the Plan shall be governed by the laws of the State of New York (without
reference to rules relating to conflicts of law).

               6.5 WITHHOLDING. The Company shall have the right to make such
provisions as it deems necessary or appropriate to satisfy any obligations it
reasonably believes it may have to withhold federal, state or local income or
other taxes incurred by reason of payments pursuant to this Plan.

               6.6 SEVERABILITY. Should any provision of the Plan be deemed or
held to be unlawful or invalid for any reason, such fact shall not adversely
affect the other provisions of the Plan unless such determination shall render
impossible or impracticable the functioning of the Plan, and in such case, an
appropriate provision or provisions shall be adopted so that the Plan may
continue to function properly.

               6.7 RIGHTS UNDER OTHER PLANS, POLICIES, PRACTICES AND
AGREEMENTS.

               (a) Other than as expressly provided herein, the Plan does not
supersede any other plans, policies, and/or practices of the Company.

               (b) The Plan supersedes any other change in control severance
plans, policies and/or practices of the Company as to the Participants;
PROVIDED, THAT, the Plan shall not supersede any individual executed agreement
or arrangement between a single Participant and the Company in effect on January
1, 2003 or thereafter, which agreement specifically addresses payments or
benefits made or provided upon termination of employment or in connection with a
Change in Control (an "Additional Agreement"). If a Participant is due benefits
or payments under both an Additional Agreement and the Plan and/or where the
Plan and the Applicable Additional Agreement have inconsistent or conflicting
terms and conditions, the Participant shall


                                        5



<PAGE>



receive the greater of the benefits and payments, and the more favorable terms
and conditions to him, under the Additional Agreement and the Plan, determined
on an item-by-item basis.


                            ARTICLE VII: DEFINITIONS.

                7.1 "CAUSE" shall mean: (A) refusal or repeated failure by a
Participant to perform his or her duties as an employee of the Company; (B)
gross negligence or willful misconduct by a Participant in connection with such
Participant's employment by the Company; (C) misappropriation or fraud with
regard to the Company or its assets; or (D) conviction of, or the pleading of
guilty or NOLO CONTENDERE to, a felony or, to the extent involving the assets or
business of the Company, a misdemeanor or other criminal offense; which, in the
case of clause (A) is not fully remedied (to the extent reasonably possible to
be remedied) within 15 days after the Company gives the Participant notice
thereof.

                7.2 "CHANGE IN CONTROL" shall mean the occurrence of any of the
following: (A) any "person" (as defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) or group (as defined in
Rule 13d-5 under the Exchange Act), excluding any Permitted Holder or any
Permitted Group (or the members thereof) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of securities of the Company
representing 35% (or such greater percentage as may then represent the
percentage of total combined voting power held by all Permitted Holders) or more
of the total combined voting power of the Company's then outstanding securities,
other than by reason of receiving a distribution from any person referred to in
clause (vi), (vii), (viii), (ix), (x) or (xi) of the definition of Permitted
Holder; (B) as a result of any proxy solicitation made otherwise than by or on
behalf of (x) the Board, (y) one or more Permitted Holders, or (z) any Permitted
Group (or the members thereof), Continuing Directors to cease to be a majority
of the Board (a "Continuing Director" is any member of the Board who (a) was a
member of the Board on January 1, 2003, (b) first became a member of the Board
as a result of or following his election or nomination for election by the Board
at a time that Continuing Directors form a majority of the Board) or (c) first
became a member of the Board as a result of or following his election or
nomination for election by the Board with the approval of a majority of
Continuing Directors in office at the time of such appointment or nomination;
(C) the merger, consolidation or other business combination of the Company (a
"Transaction"), other than a Transaction immediately following which (x) the
stockholders of the Company immediately prior to the Transaction continue to be
the beneficial owners of securities of the resulting entity representing more
than a majority of the voting power in the resulting entity, in substantially
the same proportions as their ownership of Company voting securities immediately
prior to the Transaction or (y) Permitted Holders are the beneficial owners of
securities of the resulting entity representing more than a majority of the
voting power in such equity; (D) the sale of all or substantially all of the
Company's assets, other than a sale immediately following which (x) the
stockholders of the Company immediately prior to the sale are the beneficial
owners of securities of the purchasing entity representing more than a majority
of the voting power in the purchasing entity, in substantially the same
proportions as their ownership of Company voting securities immediately prior to
the Transaction or (y) Permitted Holders are the beneficial owners of securities
of the purchasing entity representing more than a majority of the voting power
in such equity; or (E) the approval by the shareholders of a plan of liquidation
or dissolution of the Company.



                                        6






<PAGE>



               7.3 "CURRENT TOTAL ANNUAL COMPENSATION" shall be the sum of the
following amounts: (A) the greater of a Participant's highest rate of annual
salary during the calendar year in which his employment terminates or such
Participant's highest rate of annual salary during the calendar year immediately
prior to the year of such termination; (B) the greater of a Participant's annual
bonus compensation (prior to any bonus deferral election) earned in respect of
each of the two most recent calendar years immediately preceding the calendar
year in which the Participant's employment terminated; and (C) the amount of the
Company's contribution to the Participant's 401(k) account for the last full
year prior to such termination.

               7.4 "GOOD REASON" shall mean the occurrence of any of the
following events after a Change in Control without the Participant's express
written consent: (A) material diminution in the importance of a Participant's
position, status or authority as of the date immediately prior to the Change in
Control; (B) a material reduction in a Participant's aggregate compensation or
benefits; (C) a failure of any successor or assign (whether direct or indirect,
by purchase, merger, consolidation or otherwise) of the Company to assume in
writing (or by operation of law in a merger) the obligations of the Company
hereunder as required by Section 5.1; or (D) the Company's requiring the
Participant to relocate the Participant's office outside of the metropolitan
area in which it is located immediately prior to the Change in Control (for this
purpose, the Northern New Jersey suburbs shall constitute the "metropolitan
area" for Participants whose office is located in Oakland; New Jersey or
elsewhere in the Northern New Jersey suburbs). A termination for Good Reason
shall mean a termination by a Participant effected by written notice given by
the Participant to the Company within 30 days after the occurrence of the Good
Reason event, unless the Company shall, within 15 days after receiving such
notice, take such action as is necessary to fully remedy such Good Reason event
and give the Participant written notice thereof, in which case the Good Reason
event shall be deemed to have not occurred.

               7.5 "PARTICIPANT" shall mean such individuals as may from time to
time be designated as such by the Board or a duly authorized committee thereof.

               7.6 "PERMITTED GROUP" means a group, as defined in Rule 13d-5
under the Exchange Act, in which the Permitted Holders that are members of such
group have beneficial ownership of voting securities of the Company having a
majority of the voting power of all voting securities of the Company that are
beneficially owned by members of the group.

               7.7 "PERMITTED HOLDER" shall mean (i) the Company; (ii) any
subsidiary of the Company; (iii) any employee benefit plan sponsored or
maintained by the Company; (iv) Angelica Berrie; (v) any lineal descendent of
Russell Berrie; (vi) the Estate of Russell Berrie; (vii) The Russell Berrie 2001
Annuity Trust; (viii) The Russell Berrie 1999 Charitable Remainder Trust; (ix)
The Russell Berrie 2002A Trust; (x) The Russell Berrie Foundation, a New Jersey
Nonprofit Corporation; (xi) any trust created pursuant to the terms of the
instruments governing or creating any of the persons referred to in clause (vi),
(vii), (viii), (ix) and (x); and (xii) any fiduciary of any of the persons
referred to in clause (vi), (vii), (viii), (ix), (x) and (xi) acting in his or
her capacity as such.



                                        7






<PAGE>



                  7.8 "YEAR" shall mean the period from any day in a calendar
year to the same day in the immediately succeeding calendar year.






                                        8






<PAGE>



                                    Exhibit A

                   GROSS-UP. This Exhibit A shall apply to a Participant only as
   provided by the last sentence of Section 1.3 of the Plan; "Affected
   Participant" shall mean any Participant to which this Exhibit A so applies.


                  (a) For purposes of this Exhibit A, the following terms shall
have the following meanings:

                   "Payment" shall mean any payment or distribution (or
                   acceleration of benefits) by the Company to or for the
                   benefit of the Affected Participant (whether paid or payable
                   or distributed or distributable (or accelerated) pursuant to
                   the terms of this Plan or otherwise, but determined without
                   regard to any additional payments required under this Exhibit
                   A). In addition, "Payment" shall also include the amount of
                   income deemed to be received by the Affected Participant as a
                   result of the acceleration of the exercisability of any of
                   the Affected Participant's options to purchase stock of the
                   Company, the acceleration of the lapse of restrictions on
                   restricted stock of the Company held by the Affected
                   Participant or the acceleration of payment from any deferral
                   plan.

                   "Excise Tax" shall mean the excise tax imposed by Section
                   4999 of the Code, or any interest or penalties incurred by
                   the Affected Participant with respect to such excise tax.

                   "Income Tax" shall mean all taxes other than the Excise Tax
                   (including any interest or penalties imposed with respect to
                   such taxes) including, without limitation, any income and
                   employment taxes imposed by any United States federal
                   (including (i) FICA and Medicare taxes, and (ii) the tax
                   resulting from the loss of any federal deductions or
                   exemptions which would have been available to the Affected
                   Participant but for receipt of the Payment), state or local
                   government.

                   (b) In the event it shall be determined in accordance with
   this Exhibit A that a Payment is subject to an Excise Tax, then the Affected
   Participant shall be entitled to receive an additional payment (a "Gross-Up
   Payment") in an amount such that after payment by the Affected Participant of
   Income Tax and Excise Tax imposed upon the Gross-Up Payment, the Affected
   Participant retains an amount of the Gross-Up Payment equal to the Excise Tax
   imposed upon the Payment.

                   (c) All determinations required to be made under this Exhibit
   A, including whether and when a Gross-Up Payment is required and the amount
   of such Gross-Up Payment and the assumptions to be utilized in arriving at
   such determination, shall be made by the public accounting firm that is
   retained by the Company as of the date immediately prior to a Change in
   Control or, if such accounting firm fails to agree to perform the functions
   contemplated by this Exhibit A, an accounting firm of national reputation
   designated by the Company (in either case, the "Accounting Firm"), which
   shall provide detailed supporting calculations both to the






<PAGE>



Company and to the Affected Participant within 20 business days of the receipt
of notice from the Affected Participant that there has been a Plan Payment, or
such earlier time as is requested by the Company (collectively, the
"Determination"). All fees and expenses of the Accounting Firm with respect to
the matters contemplated by this Exhibit A shall be borne by the Company. Any
Gross-Up Payment, as determined pursuant to this Exhibit A, shall be paid by the
Company to the Affected Participant within ten days of the Determination. If the
Accounting Firm determines that no Excise Tax is payable, the Affected
Participant may request the Accounting Firm to furnish the Affected Participant
with a written opinion that there is a reasonable basis for that determination.
The Determination by the Accounting Firm shall be binding upon the Company and
the Affected Participant, except as provided in paragraph (d) below. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the Determination, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made ("Underpayment"), consistent with
the calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to paragraph (d) below and the Affected
Participant is thereafter required to make payment of any Excise Tax or Income
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Affected Participant.

               (d) The Affected Participant shall notify the Company in writing
of any claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of the Gross-Up Payment or the Underpayment. Such
notification shall be given as soon as practicable but no later than five
business days after the Affected Participant is informed in writing of such
claim and shall include copies of all communications received from the Internal
Revenue Service and apprize the Company of the nature of such claim and the date
on which such claim is requested to be paid. The Affected Participant shall not
pay such claim prior to the expiration of the 30-day period following the date
on which such notice is given to the Company. If the Company notifies the
Affected Participant in writing prior to the expiration of such period that it
desires to contest such claim, the Affected Participant shall not pay such claim
unless directed to do so by the Company and:

                       (i) give the Company any information reasonably requested
               by the Company relating to such claim and provide the Company
               with copies of all communications received from the Internal
               Revenue Service or other taxing authority with respect to such
               claim, or served on it in any related litigation, upon receipt,

                       (ii) take such action in connection with contesting such
               claim as the Company shall from time to time direct, including,
               without limitation, accepting legal representation with respect
               to such claim by an attorney reasonably selected by the Company,

                       (iii) cooperate with the Company in good faith in order
               effectively to contest such claim, and



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<PAGE>



                      (iv) permit the Company to control any proceeding relating
              to such claim;

PROVIDED, HOWEVER, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Affected Participant
harmless, on an after-tax basis, for any Excise Tax or Income Tax imposed as a
result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this paragraph (d), the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect to such claim and
may, at its sole option, either direct the Affected Participant to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
the Affected Participant shall prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; PROVIDED FURTHER, that if
the Company directs the Affected Participant to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to the Affected
Participant on an interest-free basis and shall indemnify and hold the Affected
Participant harmless, on an after-tax basis, from any Excise Tax or Income Tax
imposed with respect to such advance or with respect to any imputed income with
respect to such advance. Furthermore, the Company's control of the contest shall
be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder or an Underpayment and the Affected Participant shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority, PROVIDED that such action by the
Affected Participant does not affect the Company's ability to settle or contest
issues with respect to which a Gross-Up Payment would be payable or an
Underpayment.

                (e) If, after the receipt by the Affected Participant of an
amount advanced by the Company pursuant to paragraph (d) above, the Affected
Participant receives any refund with respect to such claim, the Affected
Participant shall promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after payment of taxes
applicable thereto). If, after the receipt by the Affected Participant of an
amount advanced by the Company pursuant to paragraph (d) above, the proceedings
contemplated by paragraph (d) above, result in a final determination not subject
to further review or appeal to the effect that the Affected Participant is not
be entitled to any refund with respect to such claims then such advance shall be
forgiven and shall not be required to be repaid.


                                       11