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                            LEWIS GALOOB TOYS, INC.
                 1995 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN


                 1.      Purpose.  The 1995 Non-Employee Directors' Stock
Option Plan (the "Plan") of Lewis Galoob Toys, Inc., a Delaware corporation
(the "Corporation"), is designed to aid the Corporation and its subsidiaries in
retaining and attracting non-employee directors of exceptional ability by
enabling such non-employee directors to purchase a proprietary interest in the
Corporation, thereby stimulating in such individuals an increased desire to
contribute to the continued growth and success of the Corporation and its
subsidiaries.

                 2.      Amount and Source of Stock.  The total number of
shares of the Corporation's Common Stock (the "Shares") which may be the
subject of options granted pursuant to the Plan shall be limited so that the
total number of Shares issued upon the exercise of options granted pursuant to
the Plan shall not exceed 160,000, subject to adjustment as provided in
paragraph 11.  None of the options to be granted under the Plan are intended to
be "Incentive Stock Options" as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), and the regulations (whether proposed,
temporary or final) promulgated thereunder.  Such Shares may be reserved or
made available from the Corporation's authorized and unissued Shares or from
Shares reacquired and held in the Corporation's treasury.  In the event that
any option granted hereunder shall terminate prior to its exercise in full for
any reason, then the Shares subject to such option shall be added to the Shares
otherwise available for issuance pursuant to the exercise of options under the
Plan.

                 3.      Administration of the Plan.  The Plan shall be
administered by a committee (the "Committee") of the Board of Directors of the
Corporation (the "Board") comprised of three or more members of the Board,
selected by the Board, all of which members shall be "disinterested persons" as
that term is defined in Rule 16b-3(d)(3) (or any successor provision)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").  The Committee is hereinafter sometimes referred to as the
"Administrative Body."  The Administrative Body shall have full authority to
interpret the Plan, to establish and amend rules and regulations relating to it
and to make all other determinations necessary or advisable for the
administration of the Plan.

                 4.      Eligibility/ Non-Discretionary Grants.  All
non-employee directors of the Corporation then serving on the Board of
Directors of the Corporation shall be eligible for, and shall receive, an
option exercisable to purchase 2,000 Shares on July 1, 1995 and on January 1 of
each year thereafter.  The date on which an option is granted hereunder to a
specified individual shall constitute the date of grant of such option (the
"Date of Grant").





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                 5.      Option Price.  The initial exercise price of the
Shares purchasable under any option granted pursuant to the Plan shall be 100%
of the fair market value of the Shares subject to such option on the Date of
Grant.  For purposes of the Plan, the "fair market value per share" of the
Shares on a given date shall be: (i) if the Shares are listed on a registered
securities exchange or quoted on the National Market System, the closing price
per share of the Shares on such date (or, if there was no trading reported on
such date, on the next preceding day on which there was trading reported); (ii)
if the Shares are not listed on a registered securities exchange and not quoted
on the National Market System, but the bid and asked prices per share for the
Shares are provided by Nasdaq, the National Quotation Bureau Incorporated or
any similar organization, the average of the closing bid and asked price per
share of the Shares on such date (or, if there was no trading in the Shares on
such date, on the next preceding day on which there was trading) as provided by
such organization; and (iii) if the Shares are not traded on a registered
securities exchange and not quoted on the National Market System and the bid
and asked price per share of the Shares are not provided by Nasdaq, the
National Quotation Bureau Incorporated or any similar organization, solely as
determined by the Administrative Body in good faith.

                 6.      Vesting and Term of Option.

                         (a)      Subject to subparagraph 12(b) hereof, options
granted to a participant hereunder shall vest immediately upon grant.

                         (b)      Options granted hereunder shall be 
exercisable for a period of ten (10) years from the Date of Grant.

                         (c)      The grant of options by the Administrative
Body shall be effective as of the Date of Grant; provided, however, that no
option granted hereunder shall be exercisable unless and until this Plan has
been approved by the Corporation's stockholders and unless and until the holder
has entered into an individual option agreement with the Corporation that shall
set forth the terms and conditions of such option.  Each such agreement shall
expressly incorporate by reference the provisions of this Plan (a copy of which
shall be made available for inspection by the optionee during normal business
hours at the principal office of the Corporation), and shall state that in the
event of any inconsistency between the provisions hereof and the provisions of
such agreement, the provisions of this Plan shall govern.

                 7.      Exercise of Options.  An option shall be exercised
when written notice of such exercise, signed by the person entitled to exercise
the option, has been delivered or transmitted by registered or certified mail
to the Secretary of the Corporation at its then principal office.  Such notice
shall specify the number of Shares for which the option is being exercised and
shall be accompanied by (i) such documentation, if any, as may be required by
the Corporation as provided in subparagraph 12(b), and (ii) payment of the
aggregate option price.  Subject to paragraph 8 hereof, such payment shall be
in the form of (i) cash or a





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certified check (unless such certification is waived by the Corporation)
payable to the order of the Corporation in the amount of the aggregate option
price, (ii) certificates duly endorsed for transfer (with all transfer taxes
paid or provided for) evidencing a number of Shares of which the aggregate fair
market value on the date of exercise is equal to the aggregate option exercise
price of the Shares being purchased, or (iii) a combination of these methods of
payment.  Delivery of such notice shall constitute an irrevocable election to
purchase the Shares specified in such notice, and the date on which the
Corporation receives the last of such notice, documentation and the aggregate
option exercise price for all of the shares covered by the notice shall,
subject to the provisions of paragraphs 8 and 12 hereof, be the date as of
which the Shares so purchased shall be deemed to have been issued.  Subject to
paragraph 8 hereof, the person entitled to exercise the option shall not have
the right or status as a holder of the Shares to which such exercise relates
prior to receipt by the Corporation of the payment, notice and documentation
expressly referred to in this paragraph 7.  Notwithstanding the foregoing, a
holder whose transactions in Common Stock are subject to Section 16(b) of the
Exchange Act may tender Shares in payment of all or any portion of the option
price only if the following additional conditions are met: (i) the tender is
made at least six months after the Date of Grant and (ii) either (x) the
election to tender is irrevocably made at least six months in advance of the
tender of Shares or (y) the tender of Shares takes place during the period
beginning on the third business day following the date of release of the
Corporation's quarterly or annual financial results and ending on the twelfth
business day following such date.

                 8.      Loans.  Anything in paragraph 7 to the contrary
notwithstanding, the making of a loan by the Corporation to an optionee for the
purpose of fully or partially exercising an option granted hereunder shall be
permissible, and the application of the proceeds of any such loan to such
exercise shall not be construed to contravene the requirement that payment of
the aggregate option price be made upon exercise of an option.  Stockholder
approval of this Plan constitutes approval of all such loans which the
Administrative Body may in its sole discretion hereafter determine to make for
the express purpose of permitting the exercise of an option granted hereunder.

                 9.      Exercise and Cancellation of Options After
Termination, Disability or Death.  Except as set forth below, if a holder shall
voluntarily or involuntarily cease to serve as a director of the Corporation,
the option of such holder shall terminate upon the first day that the holder is
no longer such a director (the "Termination Date"), regardless of the
expiration date specified in such option.  If the termination of such service
is due to disability (as defined by the Administrative Body in its sole
discretion), the holder (or his duly appointed guardian or conservator) shall
have the privilege of exercising any option that he could have exercised on the
Termination Date; provided, however, that such exercise must be accomplished
within the term of such option and within one (1) year of the Termination Date.
If the termination of such service is due to the death of the holder, the duly
appointed executor or administrator of his estate shall have the privilege at
any time of exercising any option that the holder could have exercised on the
Termination Date; provided, however, that such





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exercise must be accomplished within the term of such option and within one (1)
year of the Termination Date.

                 Nothing contained herein or in any option agreement shall be
construed to confer on any option holder any right to continue as a director of
the Corporation or derogate from any right of the Corporation to remove such
option holder as a director of the Corporation, with or without cause.

                 10.     Non-transferability of Options.  No option granted
under the Plan shall be sold, pledged, assigned or transferred in any manner
except to the extent that options may be exercised by an executor or
administrator as provided in paragraph 9 hereof.  An option may be exercised,
during the lifetime of the holder thereof, only by such holder or his duly
appointed guardian or conservator in the event of his disability.

                 11.     Adjustments Upon Certain Events.

                         (a)      If the outstanding Shares are subdivided,
consolidated, increased, decreased, changed into, or exchanged for a different
number or kind of shares or other securities of the Corporation through
reorganization, merger, recapitalization, reclassification, capital adjustment
or similar transaction, or if the Corporation shall issue additional Shares as
a dividend or pursuant to a stock split, then the number and kind of Shares
available for issuance pursuant to the exercise of options to be granted under
this Plan and all Shares subject to the unexercised portion of any option
theretofore granted and the exercise price of such options shall be adjusted on
a pro rata basis to prevent the inequitable enlargement or dilution of any
rights hereunder; provided, however, that any such adjustment in outstanding
options under the Plan shall be made without change in the aggregate exercise
price applicable to the unexercised portion of any such outstanding option.
Distributions to the Corporation's stockholders consisting of property other
than Shares of the Corporation or its successor and distributions to
stockholders of rights to subscribe for Shares shall not result in the
adjustment of the Shares purchasable under outstanding options or the exercise
price of outstanding options.  Adjustments under this paragraph shall be made
by the Administrative Body, whose determination thereof shall be conclusive and
binding.  Any fractional Share resulting from adjustments pursuant to this
paragraph shall be eliminated from any then outstanding option.  Nothing
contained herein or in any option agreement shall be construed to affect in any
way the right or power of the Corporation to make or become a party to any
adjustments, reclassifications, reorganizations or changes in its capital or
business structure or to merge, consolidate, dissolve, liquidate or otherwise
transfer all or any part of its business or assets.

                         (b)      In the event of the dissolution or
liquidation of the Corporation or in the event of a change in control of the
Corporation, the holder of any option theretofore granted under this Plan shall
have the right immediately prior to the record date for the determination of
stockholders entitled to participate in such change in control, dissolution or
liquidation, to exercise his option, in whole or in part, without regard to any
installment





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provision that may have been made part of the terms and conditions of such
option.  In any such event, the Corporation will mail or cause to be mailed to
each holder of an option hereunder a notice specifying the date that is to be
fixed as of which all holders of record of the Shares shall be entitled to
exchange their Shares for securities, cash or other property issuable or
deliverable pursuant to such merger, consolidation, dissolution or liquidation.
Such notice shall be mailed at least ten (10) days prior to the date therein
specified.  For purposes of this paragraph, a "change in control" of the
Corporation shall be deemed to occur as of the date on which a person or entity
or group of persons or entities, acting in concert, shall, in a transaction in
which the Corporation is not a party, become the direct or indirect beneficial
owner (within the meaning of Rule 13d-3 of the Exchange Act, as amended from
time to time) of securities of the Corporation representing fifty-one percent
(51%) or more of the combined voting power of the issued and outstanding voting
securities of the Corporation.

                 12.     General Restrictions.

                         (a)      No option granted hereunder shall be
exercisable if the Corporation shall at any time determine that (i) the listing
upon any securities exchange, registration or qualification under any state or
federal law of any Shares otherwise deliverable upon such exercise, or (ii) the
consent or approval of any regulatory body or the satisfaction of withholding
tax or other withholding liabilities, is necessary or appropriate in connection
with such exercise.  In any of the events referred to in clause (i) or clause
(ii) above, the exercisability of such options shall be suspended and shall not
be effective unless and until such withholding, listing, registration,
qualification or approval shall have been effected or obtained free of any
conditions not acceptable to the Corporation in its sole discretion,
notwithstanding any termination of any option or any portion of any option
during the period when exercisability has been suspended.

                         (b)      The Administrative Body may require, as a
condition to the right to exercise an option, that the Corporation receive from
the option holder, at the time of any such exercise, representations,
warranties and agreements to the effect that the Shares are being purchased by
the option holder for investment only and without any present intention to sell
or otherwise distribute such Shares and that the option holder will not dispose
of such Shares in transactions which, in the opinion of counsel to the
Corporation, would violate the registration provisions of the Securities Act of
1933, as then amended, and the rules and regulations thereunder.  The
certificates issued to evidence such Shares shall bear appropriate legends
summarizing such restrictions on the disposition thereof.

                 13.     Exchange of Options.  The Administrative Body shall
have the right to grant options hereunder that are granted subject to the
condition that the grantee shall agree with the Corporation to terminate all or
a portion of another option or options previously granted under the Plan.  The
Shares that had been issuable pursuant to the exercise of the option terminated
in the exchange of options shall, upon such termination, again become available
for issuance pursuant to the exercise of options under the Plan.





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                 14.     Provision of Information to Optionees.  The
Corporation shall furnish annually to each optionee while his or her option
remains in effect and not fully exercised, copies of all annual and quarterly
reports filed by the Corporation with the Securities and Exchange Commission
during such period, or, if no such reports are required to be so filed, copies
of all annual and other periodic reports provided by the Corporation to its
stockholders generally.

                 15.     Amendment.   The Board shall have full authority to
amend the Plan; provided, however, that any amendment that (i) increases the
total number of Shares that may be subject to stock options granted (in the
aggregate or to any director) under the Plan, (ii) expands the class of
individuals eligible to receive options under the Plan, (iii) increases the
period during which options may be granted or the permissible term of options
under the Plan or (iv) decreases the minimum exercise price of such options
shall only be adopted by the Board subject to stockholder approval.  No
amendment to the Plan shall, without the consent of the holder of an existing
option, materially and adversely affect his rights under any option.

                 16.     Termination.  Unless the Plan shall theretofore have
been terminated as provided hereinafter and in Section 17 hereof, the Plan
shall terminate on January 20, 2005, and no options under the Plan shall
thereafter be granted; provided, however, that the Board may at any time, in
its sole discretion, terminate the Plan prior to the foregoing date.  No
termination of the Plan by the Board shall, without the consent of the holder
of an existing option, materially and adversely affect his rights under such
option.

                 17.     Stockholder Approval.  The Plan shall be submitted to
the stockholders of the Corporation not later than at the 1995 Annual Meeting
of the Corporation's stockholders.  Any options granted hereunder prior to such
stockholder approval shall not be exercisable unless and until such approval is
obtained.  If such approval is not obtained by such date, the Plan and any
options granted hereunder shall terminate.





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