RC2
      CORPORATION


STOCK
      APPRECIATION RIGHTGRANT AGREEMENT








THIS
      STOCK APPRECIATION RIGHT GRANT AGREEMENT dated as of _____________, 200__ (the
      "Grant Date"), is between __________________ ("Grantee") and RC2 CORPORATION,
      a
      Delaware corporation (the "Company").





RECITALS





A.  The
      Company adopted the RC2 Corporation 2005 Stock Incentive Plan (the "Plan"),
      which was approved by its Board of Directors (the "Board") and
      stockholders.





B.  The
      Board has designated Grantee as a participant in the Plan.





C.  Pursuant
      to the Plan, Grantee and the Company desire to enter into this Agreement setting
      forth the terms and conditions of the following stock appreciation right granted
      to Grantee under the Plan.





AGREEMENTS





Grantee
      and the Company agree as follows:





1.  Grant
      of Stock Appreciation
      Right.  The Company grants to Grantee a stock appreciation
      right (hereinafter referred to as the "Stock Appreciation Right") with respect
      to a total of _____ shares (the "Shares") of the Company's common stock,
      par value $0.01 per share (the "Common Stock "), on the terms and conditions
      set
      forth below and in the Plan.





2.  Exercise
      Price.  The exercise price of this Stock Appreciation Right
      shall be $______ per share, which is equal to or greater than the Fair Market
      Value of the Stock on the Grant Date.





3.  Period
      of
      Exercise.  Except as provided under the Plan, unless the Stock
      Appreciation Right is terminated, Grantee may exercise this Stock Appreciation
      Right for up to, but not in excess of, the percent of shares of Stock subject
      to
      the Stock Appreciation Right during the periods specified below:





Percentage
                of Sharesof
                Common Stock
            
            On
                or After


Grantee's
      right to exercise the Stock Appreciation Right expires ten years from the Grant
      Date.





4.  Definitions.  Unless
      provided to the contrary in this Agreement, the definitions contained in the
      Plan and any amendments to the Plan shall apply to this Agreement.





5.  Change
      in Capital
      Structure.  The number of Shares covered by and the exercise
      price of this Stock Appreciation Right will be adjusted in the event of a stock
      dividend, stock split, reverse stock split, recapitalization, reorganization,
      merger, consolidation, acquisition or other change in the capital structure
      of
      the Company as determined by the Board in accordance with the Plan.












6.  Nontransferability
      of Stock
      Appreciation Right.  This Stock Appreciation Right shall not be
      transferable other than by will or the laws of descent or distribution and
      shall
      be exercisable, during Grantee's lifetime, only by Grantee.





7.  Exercise
      of Stock
      Appreciation Right.  Each exercise of this Stock Appreciation
      Right shall be in writing (substantially in the form of Exhibit A hereto),
      signed by the Grantee, and received by the Company in its principal
      office.  The Grantee may exercise this Stock Appreciation Right with
      respect to less than the total number of Shares covered hereby; provided that
      no
      partial exercise of this Stock Appreciation Right may be with respect to any
      fractional Share.  Upon exercise of this Stock Appreciation Right, the
      Grantee shall receive from the Company certificate(s) issued in the Grantee's
      name (or, if requested by the Grantee, such shares shall be issued to the
      Grantee by electronic transfer to the Grantee's broker) for the number of whole
      shares of Stock equal to the amount determined by dividing (a) the product
      of (i) the difference between the Fair Market Value on the Date of Exercise
      over the exercise price of this Stock Appreciation Right, times (ii) the
      number of Shares with respect to which this Stock Appreciation Right is
      exercised, by (b) the Fair Market Value on the Date of Exercise, rounding
      any fractional share to the nearest whole share.  If delivery is by mail,
      such delivery shall be deemed effected when deposited in the United States
      mail,
      addressed to Grantee.





8.  Nontransferability
      of Stock
      Appreciation Right.  This Stock Appreciation Right shall not be
      transferable other than by will or the laws of descent and distribution and
      shall be exercisable, during the Grantee's lifetime, only by the
      Grantee.





9.  Addresses.  All
      notices or statements required to be given to either party hereto shall be
      in
      writing and shall be personally delivered or sent, in the case of the Company,
      to its principal business office and, in the case of Grantee, to Grantee's
      address as is shown on the records of the Company or to such address as Grantee
      designates in writing.  Notice of any change of address shall be sent
      to the other party by registered or certified mail.  It shall be
      conclusively presumed that any notice or statement properly addressed and mailed
      bearing the required postage stamps has been delivered to the party to which
      it
      is addressed.





10.  Restrictions
      Imposed by
      Law.  Notwithstanding any other provision of this Agreement,
      Grantee agrees that Grantee shall not exercise this Stock Appreciation Right
      and
      that the Company will not be obligated to deliver any shares of Common Stock
      or
      make any cash payment if counsel to the Company determines that such exercise,
      delivery or payment would violate any law or regulation of any governmental
      authority or any agreement between the Company and any national securities
      exchange upon which the Common Stock is listed.  The Company shall in
      no event be obligated to take any affirmative action in order to cause the
      exercise of this Stock Appreciation Right to comply with any law or regulation
      of any governmental authority.





11.  Service
      Provider
      Relationship.  Nothing in this Agreement or in the Plan shall
      limit the right of the Company or any parent or subsidiary of the Company to
      terminate Grantee's employment or other form of service relationship or
      otherwise impose any obligation to employ and/or retain Grantee as a service
      provider.





12.  Governing
      Law.  This Agreement shall be construed, administered and
      governed in all respects under and by the laws of the State of
      Delaware.





13.  Provisions
      Consistent with
      Plan.  This Agreement is intended to be construed to be
      consistent with, and is subject to, all applicable provisions of the Plan,
      which
      is incorporated herein by reference.  In the event of a conflict
      between the provisions of this Agreement and the Plan, the provisions of the
      Plan shall prevail.








_______________________________________


[Name
      of
      Grantee]




RC2
      CORPORATION




BY____________________________________











EXHIBIT
      A





Stock
      Appreciation Right Exercise








1.  I
      exercise my Stock Appreciation Right with respect to the number of shares of
      RC2
      Corporation (the “Company”) common stock shown below pursuant to the Company’s
      2005 Stock Incentive Plan.





Grant
                Agreement
            Stock
                Appreciation Right
                ExercisedDate____________________
            Number____________________
              Per
                Share
              Exercise
                Price_________________





2.  In
      connection with this Stock Appreciation Right exercise, I represent the
      following:





(a)  All
      conditions under the above-referenced Grant Agreement have been met with respect
      to the Stock Appreciation Right exercised.





(b)  I
      have had access to and have reviewed all current publicly available reports
      filed by the Company with the Securities and Exchange Commission and have based
      my purchase on that information and not on any other oral or written information
      supplied by the Company.





3.  I
      understand that before I receive my certificate for the shares referenced above,
      the Company requires me to remit to it an amount in cash sufficient to satisfy
      any outstanding amounts due the Company and to satisfy any federal, state or
      local withholding tax requirements.








Date____________________
            Name_______________________________
              (Please
                print name)Signature______________________________







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