To expand a bit on point #3 from Opus' first answer, I absolutely would NOT repay the full $10,000. I would repay $10,000 minus Social Security and Medicare tax (in most cases, minus $765, for a total repayment of $9,235, but that could possibly vary if your wages were very high).
Your former employer will be amending their payroll forms to be refunded that Social Security and Medicare tax. There is absolutely no reason why you should pay that to your employer AND that your employer be refunded that amount from the IRS.
