GALOOB TOYS, INC.
                      OFFICERS' DEFERRED COMPENSATION PLAN




1.       Participants. Any officer ("Officer") of Galoob Toys, Inc. (the
         "Corporation") who has been designated as eligible to participate in
         this Plan by the Compensation Committee of the Board of Directors of
         the Corporation may elect to become a participant ("Participant") by
         filing a written notice ("Notice") with the Corporation, in the form as
         prescribed by the Compensation Committee.

2.       Deferred Compensation. Any Participant may elect, in accordance with
         Section 5 of this Plan, to defer annually the receipt of a portion of
         the bonus otherwise payable to him by the Corporation in any calendar
         year, which portion shall be designated by the Officer but shall not
         exceed an amount of such Officer's bonus as determined annually by the
         Compensation Committee. Any compensation deferred pursuant to this
         Section shall be credited to a deferred compensation account
         ("Account") maintained in the name of the Participant, which Account
         shall be credited annually on the date of payment of the Corporation's
         bonus in accordance with the Corporation's normal practices the total
         amount of compensation deferred pursuant to this Plan.

         The Corporation shall furnish each Participant with an annual statement
         of his or her Account, reflecting the crediting of interest or other
         earnings on investment of amounts in the Account on the date received
         through the date of final distribution of the Account pursuant to
         Section 4 of the Plan. The amount of compensation that a Participant
         elects to defer under this Section will remain in effect only for the
         calendar year of the election; subsequent deferrals will be made only
         pursuant to the filing of another election in accordance with Section 5
         of the Plan.

3.       Investment of Deferred Amounts.

         a)       If a Participant so designates in the Notice, all or a portion
                  of the amount credited to his Account (as specified by the
                  Participant) will first be used to pay the premiums on a
                  policy of insurance purchased by the Corporation on the life
                  of the Participant ("Policy"), until all such premiums are
                  fully paid pursuant to the terms of the Policy. The Policy
                  shall be owned by and payable to the Corporation and the
                  Participant shall have no control over or incidence of
                  ownership with respect to the Policy.

         b)       If the Participant so designates in the Notice, all or a
                  portion of the amount credited to this Account (as specified
                  by the Participant) shall be invested in shares of registered
                  investment companies as selected from time to time by the
                  Compensation Committee and as described in the Notice.
                  Earnings and losses on said investment shall be calculated by
                  the Corporation on an annual basis.


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                  All amounts credited to an Account and not invested in
                  accordance with paragraphs a) or b) of this Section 3 shall be
                  credited with interest at a rate equal to the Corporation's
                  cost of funds as calculated periodically by the Corporation.

4.       Distribution

         a)       Upon termination of the services of the Officer with the
                  Corporation for any reason other than death, the Participant 
                  will be entitled to receive:

                  1)       the Policy on his or her life, if any, or any amount
                           equal to the cash surrender value of the Policy on
                           the date on which the Participant's employment
                           terminates, as determined by the Corporation in its
                           discretion; and

                  2)       all amounts (other than the Policy) credited to the
                           Participant's Account as of the date of termination
                           of employment. Said amounts shall be payable in a
                           lump sum or in installments over a designated period
                           of years, pursuant to the provisions of paragraph (e)
                           of this Section.

         b)       Upon termination of a Participant's employment by reason of
                  death, the Participant's designated beneficiary or
                  beneficiaries will be entitled to receive:

                  1)       the proceeds of the Policy on the life of the
                           Participant; and

                  2)       all other amounts credited to the Account of the
                           Participant as of the date of death. Said amounts
                           shall be payable in a lump sum or in installments
                           over a designated period of years, pursuant to the
                           provisions of paragraph (e) of this Section.

         c)       Upon the death of the Participant prior to complete
                  distribution to him of the entire balance of his Account (and
                  after the date of termination of his or her employment) the
                  balance of the Account on the date of death, including the
                  proceeds of the Policy on the life of the Participant if the
                  Participant's death occurs prior to distribution of the Policy
                  to the Officer pursuant to paragraph (a) of this Section,
                  shall be payable to the Participant's designated beneficiary
                  or beneficiaries pursuant to paragraph (e) of this Section.

         d)       If the Participant demonstrates a financial hardship to the
                  satisfaction of the Compensation Committee, the Participant,
                  at the discretion of the Compensation Committee, may receive
                  an amount in cash from his Account necessary to meet the
                  financial hardship within the calendar quarter next following
                  the demonstration of the financial hardship. A payment on
                  account of financial hardship will only be approved by the
                  Compensation Committee if the payment is necessary in light of
                  immediate unanticipated financial needs of the Participant. A


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                  payment on account of financial hardship cannot exceed the
                  amount required to meet the immediate financial need created
                  by the hardship and cannot be reasonably available from other
                  resources of the Participant. The determination of the
                  existence of financial hardship is entirely in the discretion
                  of the Compensation Committee.

         e)       The Corporation shall direct distribution of the amounts
                  credited to a Participant's Account, including earnings
                  pursuant to Section 3, to a Participant or his or her
                  beneficiary or beneficiaries pursuant to the preceding
                  paragraphs of this Section in a lump sum or installments over
                  such period of years as elected by the Officer. Distributions
                  shall be made or commence on the first day of the month next
                  following:

                  1)       the date upon which the Participant's employment with
                           the Corporation terminates in the event of a
                           distribution pursuant to paragraphs a) or b) of this
                           Section; or

                  2)       the date of the Participant's death in the event of a
                           distribution pursuant to paragraph c) of this
                           Section. Subsequent installments, if any, shall be
                           made on the annual anniversary dates of the date of
                           the first installment. Each such installment, if any,
                           shall include interest credited to the balance of the
                           Account pursuant to Section 3.

5.       Election to Defer Compensation. The Notice by which a Participant
         elects to defer compensation as provided in this Agreement shall be in
         writing, signed by the Participant, and delivered to the Corporation at
         such date as stipulated by the Compensation Committee on an annual
         basis, but in no event later than the date on which the Officer becomes
         entitled to a bonus under the Corporation's plan of compensation. Such
         election shall be effective only for the calendar year in which the
         election is made, and separate elections will be required for each
         subsequent year. Any deferral election made by the Participant shall be
         irrevocable with respect to the compensation covered by such election.

6.       Participant's Rights Unsecured. The right of the Participant or his or
         her designated beneficiary or beneficiaries to receive a distribution
         hereunder shall be an unsecured claim against the general assets of the
         Corporation, and neither the Participant nor any designated beneficiary
         shall have any rights in or against any amount credited to his Account
         or any other specific assets of the Corporation. All amounts credited
         to an Account shall constitute general assets of the Corporation and
         may be disposed of by the Corporation at such time and for such
         purposes as it may deem appropriate. An Account may not be encumbered
         or assigned by a Participant or any beneficiary.

7.       Amendments to the Plan. The Board may amend the Plan at any time,
         without the consent of the Participants or their beneficiaries,
         provided, however, that no amendment shall divest any Participant or
         beneficiary of the credits to his Account, or of any rights to which he


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         would have been entitled if the Plan had been terminated immediately
         prior to the effective date of such amendment.

8.       Termination of the Plan. The Board may terminate the Plan at any time.
         Upon termination of the Plan, distribution of the credits to a
         Participant's Account shall be made in the manner and at the time
         heretofore prescribed; provided that no additional credits shall be
         made to the Account of a Participant following termination of the Plan
         other than earnings credited thereon pursuant to Section 3.

9.       Expenses. Costs of administration of the Plan will be paid by the
         Corporation.

10.      Notices. Any notice or election required or permitted to be given
         hereunder shall be in writing and shall be deemed to be filed:

         a)       on the date it is personally delivered to the Secretary of the
                  Corporation; or

         b)       three business days after it is sent by registered or
                  certified mail, addressed to such Secretary in care of Galoob
                  Toys, Inc.





Attachment - Election Form


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                                GALOOB TOYS, INC.
                  ELECTION TO PARTICIPATE IN OFFICERS' DEFERRED
                COMPENSATION PLAN AND DESIGNATION OF BENEFICIARY



Pursuant to the Galoob Toys, Inc. Officers' Deferred Compensation Plan (the
"Plan"), I hereby elect to defer, as provided in the Plan, the receipt of _____
% of any bonus payable to me in connection with the performance of services for
the year ended December 31, 19__. In accordance with Section 3 of the Plan,
amounts deferred shall be invested in the following manner:

                  _____%   Life Insurance Policy Premiums

                  _____%   (insert name of mutual fund #1)

                  _____%   (insert name of mutual fund #2)

                  _____%   Fixed Income (Corporation cost of funds)
                   100 %


Pursuant to Section 4, I hereby elect to receive distributions under the Plan in
the following manner:

        _____       Lump sum

        _____       Installments over a period of _____ years (not to exceed 10)


I hereby designate ________________________________________________________ as
my beneficiary to receive all amounts held for me under the Plan which have not
been paid to me at the date of my death.



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Signature

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Print Name

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Date