Exhibit 10.41
February 17, 2010
Mr. Richard F. Schaub, Jr.
(Address)

Dear Rick:
I am pleased to offer you the following position with Sassy, Inc. (“Sassy”), a
wholly-owned subsidiary of Kid Brands, Inc. (the “Company”, and together with
each subsidiary of the Company, the “Employer Group”). Your employment with
Sassy will include the following:
1. RESPONSIBILITIES. Effective February 17, 2010, you will serve as President of
Sassy. Your responsibilities may also include other activities on behalf of the
Employer Group, to be determined in consultation with the CEO and Board of
Directors of the Company and you. You shall devote substantially all of your
business time, effort and energies to the business of Sassy; provided, however,
that notwithstanding the foregoing, you may serve on the board of directors of a
reasonable number of trade associations and/or charitable organizations, as long
as such activities do not individually or in the aggregate interfere with the
proper performance of your duties and responsibilities hereunder in any material
respect.
2. BASE COMPENSATION. Your base salary, effective upon the commencement of your
employment, will be at an annual rate of $275,000 and will be payable bi-weekly
in accordance with Sassy’s normal payroll practices. Your base salary shall at
no time be lowered below $275,000 without your consent.
3. INCENTIVE COMPENSATION. You shall be eligible to participate in the Company’s
Incentive Compensation (“IC”) program. For 2010, your IC Factor (as defined in
the IC program), shall be 50%, with the opportunity to earn as much as 75% of
your earned base salary. Payment of the IC bonus (or portion thereof) is
predicated upon meeting both objective and subjective performance standards
established for the applicable year, which will be established annually by the
Compensation Committee of the Board of Directors of the Company, in consultation
with the CEO of the Company and you. The objective portion of the 2010 IC
program is likely to be based largely on achievement of Sassy’s 2010 budgeted
EBITDA. In order to receive the IC bonus (or any portion thereof), you must be
actively employed by the Employer Group at the time of the payment (typically
following receipt of audited results for the relevant fiscal year).

 

 

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4. STOCK OPTIONS. As of the close of business on the fifth (5th) business day
following the commencement of your employment, you shall be granted the
following equity awards: (i) 30,000 stock appreciation rights (SARs) at fair
market value on the date of grant; and (ii) 10,000 restricted stock units
(RSUs), with each such equity award becoming exercisable ratably over a
five-year period. Each such award shall terminate ten years from the date of
grant. You will also be considered for additional grants of equity at a level
commensurate with your position, although all possible future grants of equity
awards shall be at the sole discretion of the Compensation Committee of the
Board of Directors of the Company. In addition, to the extent that, subsequent
to the date hereof: (A) a Business Combination (as defined in the Company’s
current Equity Incentive Plan (the “Plan”)) is consummated; and (B) in
connection with such Business Combination, your equity awards are not treated in
accordance with either clause (i) or clause (ii) of Section 14.2 of the Plan;
and (C) the Compensation Committee exercises its discretion to accelerate or
otherwise modify the equity award of any officer of any subsidiary of the
Company other than the current President of Kids Line (not including any officer
of the Company’s Corporate group or any member of the Company’s Board of
Directors), your equity award will be treated no less favorably than those of
such other officer; provided, that this sentence shall not be applicable to any
such acceleration or modification that is in connection with the consummation of
a Business Combination involving solely a subsidiary or business unit of the
Company (and the officers thereof) other than Sassy.
5. BENEFITS. (a) You shall be eligible to participate in all Sassy’s 401(k),
life insurance, hospitalization, major medical and other employee benefit plans,
and their successor and/or replacement plans that are generally provided to all
other officers of Sassy (to the extent that they continue to be offered to
eligible employees). You shall also be eligible for any new or enhanced employee
benefit plans generally provided to all other officers of Sassy that are
approved by the Compensation Committee of the Company in the future. In
addition, Sassy agrees that it will reimburse you, upon receipt of required
documentation, for any COBRA premiums that you pay for the 90 day period during
which you are not eligible for Sassy medical benefits.
(b) Sassy further agrees to reimburse you for reasonable temporary housing and
coach class transportation expenses associated with your required business
travel to Kentwood, Michigan for a period of up to fifteen (15) months, as
required. In addition, in the event that Sassy requests that you relocate the
principal executive office to any location within the United States east of the
Mississippi River, you agree to accept such relocation and, in connection
therewith, Sassy agrees to reimburse you for any documented out-of-pocket
relocation expenses directly related to a move requested by Sassy in an
aggregate amount not to exceed $45,000, together with a reasonable number of
pre-approved trips for you and your spouse for the purpose of facilitating any
such move; provided, that in the event such relocation allowance is deemed to be
taxable income to you, Sassy will reimburse you an additional amount equal to
the income taxes actually paid and directly related to the inclusion of such
relocation allowance in your ordinary income.

 

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6.VACATION. You will be eligible for three weeks paid vacation per year in
accordance with Sassy’s policies in effect from time to time. You will also
continue to be entitled to the paid holidays and other paid leave set forth in
Sassy’s policies in effect from time to time.
7. EXPENSES. In addition, during the term hereof, you shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by you in
accordance with the policies, practices and procedures of Sassy in effect
generally with respect to officers of Sassy, which shall include the requirement
that you submit paid receipts or other documentation acceptable to Sassy and as
required by the Internal Revenue Service to qualify as ordinary and necessary
business expenses under the Internal Revenue Code of 1986, as amended. All
business travel expenses reimbursable pursuant to paragraph 5(b) or otherwise
shall be either pre-approved by the CEO of the Company or shall be consistent
with a pre-approved travel plan.
8. SEVERANCE. In the event that you are terminated from Sassy for reason other
than cause or other than your own voluntary resignation, you will be eligible to
receive severance in accordance with the Company’s severance policy for Domestic
Vice Presidents (and above), a copy of which is attached hereto as Exhibit A
(the “VP Policy”). References in the VP Policy to (i) “Company” shall be read as
references to “Sassy”, (ii) “the New York metropolitan area” shall be read as
references to the area within the United States east of the Mississippi River
until your initial relocation on behalf of Sassy, and shall thereafter be read
as references to the area located within an approximate one hour driving
distance from your principal place of employment immediately following such
initial relocation, and (iii) “the Change-in-Control Severance Plan” shall be
disregarded, as such plan has been terminated. “Cause” shall be defined as
(A) refusal or repeated failure by you to perform your duties as an employee of
Sassy, which is not fully remedied (to the extent reasonably possible to be
remedied) within 15 days after Sassy gives you notice thereof; (B) gross
negligence or willful misconduct by you in connection with your employment by
Sassy; (C) misappropriation or fraud with regard to Sassy, the Employer Group 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 Sassy or the
Employer Group, a misdemeanor or other criminal offense. By way of supplement to
the VP Policy, in the event Sassy breaches the last sentence of paragraph 2
hereof, you shall be entitled to terminate your employment for “good reason”, in
which event such termination shall be deemed to be a termination without cause
for purposes of the VP Policy.
9. TERM. Employment with Sassy is “at will” and nothing contained herein shall
be construed to represent a specific term or guarantee of continuing employment,
nor limit in any way the right of Sassy to terminate or modify your employment,
with or without Cause; provided, that the provisions of paragraph 8 above shall
survive any termination of employment.

 

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10. CONFIDENTIALITY. You shall, during and after your employment by Sassy and
except in connection with performing services on behalf of (or for the benefit
of) Sassy or any member of the Employer Group, keep secret and retain in the
strictest confidence all confidential, proprietary and non-public matters,
tangible or intangible, of or related to Sassy or the Employer Group, and their
respective stockholders, subsidiaries, affiliates, successors, assigns,
officers, directors, attorneys, fiduciaries, representatives, employees,
licensees and agents including, without limitation, trade secrets, business
strategies and operations, customer lists, supplier lists, customer and supplier
information, manufacturers, financial information, personnel information, legal
advice and counsel obtained from counsel, information regarding litigation,
actual, pending or threatened, research and development, identities and habits
of employees and agents and business relationships, and shall not disclose them
to any person, entity or any federal, state or local agency or authority, except
as may be required by law. Notwithstanding the foregoing, nothing in this
Agreement or elsewhere shall prohibit you from making any statement or
disclosure: (i) to the extent required by law; (ii) to the extent required by
subpoena or other legal process (upon receipt of which you shall immediately
give Sassy and the Company written notice thereof in order to afford the same an
opportunity to contest such disclosure); (iii) with Sassy’s or the Employer
Group’s prior written consent; or (iv) in confidence to an attorney for the
purpose of obtaining legal advice. Upon termination of your employment with
Sassy, you shall return to Sassy or another member of the Employer Group, as the
case may be, all confidential, proprietary and non-public materials, and any
other property of Sassy or the Employer Group, in your possession.
11. NON-COMPETE; NONSOLICITATION. You agree that during your employment by Sassy
and for a period thereafter during which you receive any severance payments
hereunder (the “Post-Employment Period”), you shall not, directly or indirectly,
engage or be interested in (as owner, partner, stockholder, employee, director,
officer, agent, fiduciary, consultant or otherwise), with or without
compensation, any business whose products or activities compete in whole or in
part with the products or activities of any member of the Employer Group
anywhere within the United States or in any other jurisdiction in which any
member of the Employer Group offers products for sale, provided, however, that
you may purchase or otherwise acquire up to (but not more than) two percent of
any class of securities of any enterprise (but without otherwise participating
in the activities of such enterprise) if such securities are listed on any
national or regional securities exchange or have been registered under Section
12(g) of the Securities Exchange Act of 1934; and provided, further, in the
event that you obtain “gainful employment” as provided in the VP Policy and your
severance terminates as a result thereof, the restriction set forth in this
sentence shall no longer be applicable. You also agree that for a period of one
year following the termination of your employment, you shall not, directly or
indirectly, solicit the employment or retention of (or attempt, directly or
indirectly, to solicit the employment or retention of or participate in or
arrange the solicitation of the employment or retention of), or accept if
offered with or without solicitation the services of, any person who is to your
knowledge then employed or retained by any member of the Employer Group. You
acknowledge and agree that the scope described in this paragraph 11 is necessary
and reasonable in order to protect the Employer Group in the conduct of its
business.

 

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12. NONDISPARAGEMENT. You shall, after your employment with Sassy has
terminated, refrain from any action that could reasonably be expected to harm
the reputation or goodwill of Sassy or any member of the Employer Group and any
shareholder holding more than 5% of any such member’s voting securities,
including, without limitation, making derogatory comments about the character or
ability of any directors, officers, employees, shareholders, agents or
representatives of any member of the Employer Group. Each member of the Employer
Group shall, after your employment with Sassy has terminated, refrain from any
action that could reasonably be expected to harm your reputation, including,
without limitation, making derogatory comments about your character or ability.
13. INVENTIONS. You recognize and agree that all inventions, conceptions,
patents, copyrights, copyright designs, trade secrets, trademarks, processes,
discoveries, improvements, enhancements, software, source code, catalogues,
prints, business applications and other developments or improvements and all
other intellectual property and proprietary rights and any derivative work based
thereon (the “Inventions”) made, conceived or completed by you, alone or with
others, during the term of your employment, whether or not during working hours,
that are within the scope of Sassy or the Employer Group’s business operations
or that relate to any of Sassy or the Employer Group’s work or projects are the
sole and exclusive property of Sassy or the Employer Group. You further agree
that: (i) you will promptly disclose all Inventions (which pursuant to this
paragraph 13 are the sole and exclusive property of Sassy) to Sassy and hereby
assign to Sassy all present and future rights you have or may have in those
Inventions, including without limitation those relating to patent, copyright,
trademark or trade secrets; and (ii) all Inventions eligible under the copyright
laws are “work made for hire.” At the request of Sassy and at Sassy’s sole cost
and expense, you will do all things deemed by Sassy to be reasonably necessary
to perfect title to the Inventions in Sassy or another member of the Employer
Group and to assist in obtaining for Sassy or such other member of the Employer
Group such patents, copyrights or other protection as may be provided under law
and desired by Sassy, including but not limited to executing and signing any and
all relevant applications, assignments or other instruments. Notwithstanding the
foregoing, Sassy hereby notifies you that the provisions of this paragraph 13
shall not apply to any Inventions for which no equipment, supplies, facility or
trade secret information of Sassy or the Employer Group was used and which were
developed entirely on your own time, unless (a) the Invention relates (I) to the
business of Sassy or the Employer Group, or (II) to actual or demonstrably
anticipated research or development of Sassy or the Employer Group, or (b) the
Invention results from any work performed by you for Sassy or the Employer
Group.
14. REMEDY FOR BREACH AND MODIFICATION. You acknowledge that the provisions of
this Agreement are reasonable and necessary for the protection of Sassy and the
Employer Group and that Sassy and the Employer Group may be irreparably damaged
if these provisions are not specifically enforced. Accordingly, you agree that,
in addition to any other relief or remedies available to Sassy or the Employer
Group, Sassy or the Employer Group shall be entitled to seek appropriate
temporary, preliminary and permanent injunctive or other equitable relief for
the purposes of restraining you from any actual or threatened breach of or
otherwise enforcing these provisions and no bond or security will be required in
connection therewith. In addition, notwithstanding any provision in this
Agreement to the contrary, if you breach any of the provisions of paragraphs 10,
11, 12 or 13 of this Agreement at any time and such breach is either (x) willful
and not inconsequential or (y) in a material respect and not cured promptly
after notice from Sassy or the Employer Group, you shall not thereafter be
entitled to any payments or benefits under this Agreement or any severance
program.
15. SEVERABILITY. If any provision of this Agreement is deemed invalid or
unenforceable, such provision shall be deemed modified and limited to the extent
necessary to make it valid and enforceable.

 

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16. CONFLICTS. The execution and delivery of this Agreement by you does not
conflict with, or result in a breach of or constitute a default under, any
agreement or contract, whether oral or written, to which you are a party or by
which you may be bound. In addition, you have informed Sassy of, and provided
Sassy with copies of, any non-competition, confidentiality, work-for-hire or
similar agreements to which you are subject or bound.
17. ARBITRATION. Any claim or dispute arising out of or relating to this
Agreement, or the breach, termination or validity of this Agreement, or your
employment with Sassy or the termination thereof (a “Dispute”) shall be
submitted for de novo review in arbitration in accordance with the procedures
set forth in this paragraph 17. A party that wishes to initiate the arbitration
of a Dispute (the “Initiating Party”) shall give notice of its demand for
arbitration to the other party; that notice must include a description of the
Dispute in reasonable detail and a specific description of the relief sought by
the Initiating Party, including a proposed form of award by the arbitrator.
Within fifteen (15) business days after that notice is given, the other party or
parties (each, a “Responding Party”) shall give notice to the Initiating Party
including a statement as to whether it wishes to submit to the arbitration a
Dispute that varies from, or is in addition to, the Dispute described in the
Initiating Party’s notice and a specific description of the relief sought by the
Responding Party, including a proposed form of award by the arbitrator. If a
Responding Party’s notice describes a Dispute that varies from, or is in
addition to, the Dispute described in the Initiating Party’s notice, the
Initiating Party may, by notice to the Responding Party within ten (10) business
days after the Responding Party’s notice is given, modify the description of its
requested relief, including the proposed form of award by the arbitrator, to
take account of the Dispute as described in the Responding Party’s notice. The
arbitration shall be conducted in Newark, New Jersey before a single arbitrator
in accordance with the rules of the American Arbitration Association. Each party
shall bear its own fees and expenses of arbitration hereunder, including the
fees and expenses of its lawyers, representatives, and witnesses, and shall
share equally with the other party all other costs of the arbitration, including
the fees and expenses of the arbitrators. The arbitrator shall have the
authority to award attorneys fees and costs to a party if the arbitrator
determines that the positions asserted by the party against whom such attorneys
fees and costs are awarded, lacked a reasonable basis.
With the exception of paragraph 1 and the last sentence of paragraph 2 hereof,
Sassy reserves the right to change or modify these programs. Subject to
paragraph 8 above, employment with Sassy is considered “at-will” and does not
represent a specific guarantee.

 

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Rick, I want to welcome you to the Company and wish you much success in your new
position.
Very truly yours,
/s/ Bruce G. Crain
Bruce G. Crain
President and CEO
Kid Brands, Inc.
ACCEPTED AND AGREED:
/s/ Richard F. Schaub, Jr.
Date: February 17, 2010

 

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