Exhibit 10.20
 
EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of April 26, 2004, by
and between RC2 Brands, Inc., a Delaware corporation (the "Company"), and
Gregory J. Kilrea (the "Employee"). RC2 Brands, Inc. is a wholly owned
subsidiary of RC2 Corporation, a Delaware corporation (the "Parent Company").

RECITAL

The Company desires to employ the Employee and the Employee is willing to make
his/her services available to the Company on the terms and conditions set forth
below. Certain capitalized terms used herein are defined in Section 10 below.

AGREEMENTS
 
In consideration of the promises and the mutual agreements which follow, the
parties agree as follows:

1.    Employment. The Company hereby employs the Employee and the Employee
hereby accepts employment with the Company on the terms and subject to the
conditions set forth in this Agreement.

2.    Term. This Agreement is effective as of the date referred to above. The
Agreement is not intended to create a promise or contract of employment for a
specific term. Employee's employment shall be at will, and it expressly
understood that either the Company or Employee may terminate the employment
relationship at any time for any reason. It is also expressly understood that
during the course of Employee's employment, the job title, duties,
responsibilities and all other terms and conditions of his/her employment may be
modified at any time for any reason and that such modification shall not alter
his/her obligations under this Agreement.

3.    Duties. The Employee shall serve as the Senior Vice President of Planning
and Corporate Development of the Company and will, under the direction of the
Parent Company's Chief Executive Officer and President ("Top Management"),
faithfully and to the best of his/her ability, perform the duties of such
position. The Employee shall also perform such additional duties and
responsibilities which may from time to time be reasonably assigned or delegated
by Top Management. The Employee agrees to devote his/her entire business time,
effort skill and attention to the proper discharge of such duties while employed
by the Company.

4.    Compensation. The Employee shall receive a base salary of $160,000 per
year, payable in regular and equal monthly installments (the "Base Salary"). The
Employee's Base Salary shall be reviewed annually by Top Management of the
Company to determine appropriate increases, if any, in such Base Salary.

5.    Fringe Benefits.

(a)     Vacation. The Employee shall be entitled to four weeks of paid vacation
annually, under the terms of the Company's stated vacation policy. The Employee
and the Company shall mutually determine the time and intervals of such
vacation.

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(b)    Medical, Health, Dental, Disability and Life Coverage. The Employee shall
be eligible to participate in any medical, health, dental, disability and life
insurance policy in effect for management of the Company on a basis consistent
with his/her position and level of compensation and contribution within the
Company as determined solely by Top Management, as long as such coverages can be
obtained by the Company at a cost that is consistent with rest of the management
group.

(c)    Incentive Bonus and Stock Ownership Plans. The Employee shall be entitled
to participate in any incentive bonus or other incentive compensation plan
developed generally for the management of the Company on a basis consistent with
his/her position and level of compensation and contribution within the Company,
as determined solely by Top Management. The Employee shall also be entitled to
participate in any incentive stock option plan or other stock ownership plan
developed generally for the management of the Company on a basis consistent with
his/her position and level of compensation and contribution within the Company,
as determined solely by Top Management.

(d)    Automobile. The Company agrees to reimburse the Employee up to $600 per
month, as such amount may be increased from time to time consistent with the
Company's reimbursement policy for management of the Company to cover Employee's
expenses in connection with his/her leasing or owning an automobile.
Additionally, the Company will pay for the gas used for business purposes. All
maintenance and insurance expense for the automobile is the responsibility of
the Employee.

(e)    Reimbursement for Reasonable Business Expenses. The Company shall pay or
reimburse the Employee for reasonable expenses incurred by him/her in connection
with the performance of his/her duties pursuant to this Agreement including, but
not limited to, travel expenses, expenses in connection with seminars,
professional conventions or similar professional functions and other reasonable
business expenses.

(f)    Key Man Insurance. The parties agree that the Company has the option to
purchase one or more key man life insurance policies upon the life of the
Employee. The Company shall own and shall have the absolute right to name the
beneficiary or beneficiaries of said policy. The Employee agrees to cooperate
fully with the Company in securing said policy, including, but not limited to,
submitting himself to any physical examination which may be required at such
reasonable times and places as Company shall specify.

6.    Termination.

(a)    Termination of the Employment Period. The employment period (the
"Employment Period") shall continue until the earliest of (i) the Employee's
death or Disability, (ii) the Employee resigns or (iii) the Top Management
determines that termination of Employee's employment is in the best interests of
the Company (the date of the earliest of these events shall be referred to
herein as the "Termination Date").

(b)     Definitions.

(i)    For purposes of this Agreement, "Disability" shall mean a physical or
mental sickness or any injury which renders the Employee incapable of performing
the services required of him/her as an employee of the Company and which does or
may be expected to continue for more than six (6) months during any 12-month
period. In the event Employee shall be able to perform his/her usual and
customary duties on behalf of the Company following a period of disability, and
does so perform such duties, or such other duties as are prescribed by the Board
of Directors or the President of the Company, for a period of three continuous
months, any subsequent period of disability shall be

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regarded as a new period of disability for purposes of this Agreement. The
Company and the Employee shall determine the existence of a Disability and the
date upon which it occurred. In the event of a dispute regarding whether or when
a Disability occurred, the matter shall be referred to a medical doctor selected
by the Company and the Employee. In the event of their failure to agree upon
such a medical doctor, the Company and the Employee shall each select a medical
doctor who together shall select a third medical doctor who shall make the
determination. Such determination shall be conclusive and binding upon the
parties hereto.

(ii)    For purposes of this Agreement, "Cause" shall be deemed to exist if the
Employee shall have (1) violated the terms of sections 7 or 8 of this Agreement;
(2) failed to substantially perform his/her duties to the reasonable
satisfaction of Top Management; (3) committed a felony or a crime involving
moral turpitude; (4) engaged in serious misconduct which is demonstrably
injurious to the Company, or the Parent Company or any of its Subsidiaries; (5)
engaged in fraud or dishonesty with respect to the Company, or the Parent
Company or any of its Subsidiaries or made a material misrepresentation to the
stockholders or directors of the Company or the Parent Company; or (6) committed
acts of negligence in the performance of his/her duties which are substantially
injurious to the Company, or the Parent Company or any of its subsidiaries.

(c)    Termination for Disability or Death. In the event of termination for
Disability or death, payments of the Employee's Base Salary shall be made to the
Employee, for a period of three (3) months after the Termination Date in
accordance with the normal payroll practices of the Company. During this period,
the Company shall also reimburse the Employee or Employee's estate for amounts
paid, if any, to continue medical, dental and health coverage pursuant to the
provisions of the Consolidated Omnibus Budget Reconciliation Act and will pay to
the Employee or Employee's estate the fringe benefits pursuant to section 5
which have accrued prior to the Termination Date. Incentive bonus, in any, for
the year of termination will be prorated based on the Termination Date and paid
in accordance with the annual bonus payment schedule.

(d)    Termination by the Company without Cause. If (i) the Employee is
terminated by the Company for any reason other than for Cause, Disability or
death, (ii) if the Employee is terminated by the Company for what the Company
believes is Cause or Disability, and it is ultimately determined that the
Employee was terminated without Cause or Disability, the Employee shall be
entitled to receive, as severance, his/her Base Salary for a period of three (3)
months following the Termination Date; provided, however, that if such
termination occurs at any time within one year after the occurrence of, or in
contemplation of, a Change of Control then Employee shall be entitled to receive
his/her Base Salary for a period of one year following the Termination Date.
Such payment of Base Salary shall be made in accordance with the normal payroll
practices of the Company, net of applicable taxes, tax withholdings and employee
portions of medical and dental insurance premiums, if any. During this period,
the Company shall also continue to pay the Company portion of premiums, if any,
to continue medical and dental coverage pursuant to the provisions of the
existing plan or of the Consolidated Omnibus Budget Reconciliation Act. During
this period, the Company will also continue Employee's life insurance and
disability coverage, to the extent permitted under applicable policies, and will
pay to the Employee the fringe benefits pursuant to section 5 which have accrued
prior to the Termination Date. Incentive bonus, in any, for the year of
termination will be prorated based on the Termination Date and paid in
accordance with the annual bonus payment schedule. Notwithstanding the forgoing,
the Company shall not be obligated to make any of the payments or provide the
other benefits called for by this section 6(d) unless (i) Employee signs a
waiver and release of all claims against the Company, the Parent Company and its
subsidiaries in a form acceptable to the Company, and (ii) Employee is not in
breach of this Agreement, including sections 7 and 8.

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(e)    Termination by the Company for Cause or by Resignation by the Employee.
If the Employee's employment is terminated by the Company with Cause or as a
result of the Employee's resignation, the Employee shall not be entitled to
receive any future Base Salary, fringe benefits or incentive bonus payments or
any other payments or benefits for periods after the Termination Date. Bonuses
will not be prorated based on the Termination Date; Bonuses will be paid only if
the employee is employed at the time of the annual bonus payments.

(f)    Effect of Termination. The termination of the Employment Period pursuant
to section 6 shall not affect the Employee's obligations as described in
sections 7 and 8.

7.    Noncompetition and Nonsolicitation. The Employee acknowledges and agrees
that the contacts and relationships of the Company and its Subsidiaries with its
customers, suppliers, licensors and other business relations are, and have been,
established and maintained at great expense and provide the Company and its
Subsidiaries with a substantial competitive advantage in conducting their
business. The Employee acknowledges and agrees that by virtue of the Employee's
employment with the Company, the Employee will have unique and extensive
exposure to and personal contact with the Company's customers and licensors, and
that he will be able to establish a unique relationship with those Persons that
will enable him/her, both during and after employment, to unfairly compete with
the Company and its Subsidiaries. Furthermore, the parties agree that the terms
and conditions of the following restrictive covenants are reasonable and
necessary for the protection of the business, trade secrets and Confidential
Information (as defined in section 8 below) of the Company and its Subsidiaries
and to prevent great damage or loss to the Company and its Subsidiaries as a
result of action taken by the Employee. The Employee acknowledges and agrees
that the noncompete restrictions and nondisclosure of Confidential Information
restrictions contained in this Agreement are reasonable and the consideration
provided for herein is sufficient to fully and adequately compensate the
Employee for agreeing to such restrictions. The Employee acknowledges that he
could continue to actively pursue his/her career and earn sufficient
compensation in the same or similar business without breaching any of the
restrictions contained in this Agreement. The Employee acknowledges that one
business of the Company and its Subsidiaries is the design, production
(including, without limitation, the obtaining of the licenses necessary
therefor), marketing and sale of collectibles, toys, apparel, souvenirs and
trading cards.

(a)    Noncompetition. The Employee hereby covenants and agrees that during the
Employment Period he/she shall not, directly or indirectly, either individually
or as an employee, principal, agent, partner, shareholder, owner, trustee,
beneficiary, co-venturer, distributor, consultant, representative or in any
other capacity, participate in, become associated with, provide assistance to,
engage in or have a financial or other interest in any business, activity or
enterprise which is competitive with the Company or any of its Subsidiaries or
any successor or assign of the Company or any of its Subsidiaries. The ownership
of less than a one percent interest in a corporation whose shares are traded in
a recognized stock exchange or traded in the over-the-counter market, even
though that corporation may be a competitor of the Company, shall not be deemed
financial participation in a competitor. The term "indirectly" as used in this
section and section 8 below is intended to include any acts authorized or
directed by or on behalf of the Employee or any Affiliate of the Employee.

(b)    Nonsolicitation. The Employee hereby covenants and agrees that during the
Employment Period and for a period of 18 months thereafter (the "Noncompete
Period"), he/she shall not, directly or indirectly, either individually or as an
employee, agent, partner, shareholder, owner, trustee, beneficiary, co-venturer,
distributor, consultant or in any other capacity;

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(i)    canvass, solicit or accept from any Person who is a customer or licensor
of the Company or any of its Subsidiaries (any such Person is hereinafter
referred to individually as a "Customer," and collectively as the "Customers")
any business which in competition with the business of the Company or any of its
Subsidiaries or the successors or assigns of the Company or any of its
Subsidiaries, including, without limitation, the canvassing, soliciting or
accepting of business from any Person which is or was a Customer of the Company
within two years preceding the date hereof or with the Company or any of its
Subsidiaries during the Noncompete Period;

(ii)    advise, request, induce or attempt to induce any of the Customers,
suppliers, or other business contacts of the Company or any of its Subsidiaries
who currently have or have had business relationships with the Company within
two years preceding the date hereof or with the Company or any of its
Subsidiaries during the Noncompete Period, to withdraw, curtail or cancel any of
its business or relations with the Company or any of its Subsidiaries;

(iii)    induce or attempt to induce any employee, sales representative,
consultant or other agent of the Company or any of its Subsidiaries to terminate
her relationship or breach any agreement with the Company or any of its
Subsidiaries; or

(iv)    hire any person who was an employee, sales representative, consultant or
other agent of the Company or any of its Subsidiaries at any time during the
Noncompete Period.

If the final judgment of a court of competent jurisdiction declares that any
term or provision of this section is invalid or unenforceable, the parties agree
that the court making the determination of invalidity or unenforceability shall
have the power to reduce the scope, duration, or area of the term or provision,
to delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified.

8.    Confidential Information. The Employee acknowledges and agrees that the
customers, business connections, customer lists, procedures, operations,
techniques, and other aspects of and information about the business of the
Company and its Subsidiaries (the "Confidential Information") are established at
great expense and protected as confidential information and provide the Company
and its Subsidiaries with a substantial competitive advantage in conducting
their business. The Employee further acknowledges and agrees that by virtue of
her past employment with the Company, and by virtue of her employment with the
Company, she has had access to and will have access to, and has been entrusted
with and will be entrusted with, Confidential Information, and that the Company
would suffer great loss and injury if the Employee would disclose this
information or use in a manner not specifically authorized by the Company.
Therefore, the Employee agrees that during the Employment Period and for five
(5) years thereafter, she will not, directly or indirectly, either individually
or as an employee, agent, partner, shareholder, owner, trustee, beneficiary,
co-venturer, distributor, consultant or in any other capacity, use or disclose,
or cause to be used or disclosed, any Confidential Information, unless and to
the extent that any such information become generally known to and available for
use by the public other than as a result of the Employee's acts or omissions.
The Employee shall deliver to the Company at the termination of the Employment
Period, or at any other time the

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Company may request, all memoranda, notes, plans, records, reports, computer
tapes, printouts and software and other documents and data (and copies thereof
relating to the Confidential Information, Work Product (as defined below) or the
business of the Company or any Subsidiary which he may then possess or have
under her control. The Employee acknowledges and agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by the Employee while employed by the
Company and its Subsidiaries ("Work Product") belong to the Company or such
Subsidiary, as the case may be.

9.    Common Law of Torts and Trade Secrets. The parties agree that nothing in
this Agreement shall be construed to limit or negate the common law of torts or
trade secrets where it provides the Company and its Subsidiaries with broader
protection than that provided herein.

10.    Definitions.

"Affiliate" means with respect to any Person, any other Person controlling,
controlled by or under common control with such Person and any partner of a
Person which is a partnership.

"Change of Control" means:

(a)    The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i)
the then outstanding shares of common stock of Parent Company (the "Outstanding
Common Stock") or (ii) the combined voting power of the then outstanding voting
securities of Parent Company entitled to vote generally in the election of
directors (the "Outstanding Voting Securities"); provided, however, that the
following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from Parent Company, (ii) any acquisition by Parent
Company, (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Parent Company or any corporation controlled by
Parent Company or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of
this definition; or

(b)    Individuals who, as of the date hereof, constitute the Board of Directors
of Parent Company (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors of Parent Company; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by Parent Company's stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall. be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors of Parent Company; or

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(c)    Approval by the stockholders of Parent Company of a reorganization,
merger or consolidation (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns Parent through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Common Stock
and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding
any employee benefit plan (or related trust) of Parent or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board of Directors of Parent Company,
providing for such Business Combination; or

(d)    Approval by the stockholders of Parent Company of (i) a complete
liquidation or dissolution of Parent Company or (ii) the sale or other
disposition of all or substantially all of the assets of Parent Company, other
than to a corporation, with respect to which following such sale or other
disposition, [a] more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, [b] less than 20% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by any Person (excluding any employee benefit plan (or related
trust) of Parent Company or such corporation), except to the extent that such
Person owned 20% or more of the Outstanding Common Stock or Outstanding Voting
Securities prior to the sale or disposition, and [c] at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board of Directors of Parent Company, providing for such sale or
other disposition of assets of Parent Company or were elected, appointed or
nominated by the Board of Directors of Parent Company.

"Person" means any individual, partnership, corporation, limited liability
company, association, joint stock company, trust, joint venture, unincorporated
organization and any governmental entity or any department, agency or political
subdivision thereof.

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"Subsidiary " means, with respect to any Person, any corporation, partnership,
association or other business entity of which (i) if a corporation, a majority
of the total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a partnership, association or other business
entity, a majority of the partnership or other similar ownership interest
thereof is at the time owned or controlled, directly or indirectly, by any
Person or one or more Subsidiaries of that Person or a combination thereof. For
purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control any managing
director or general partner of such partnership, association or other business
entity.

11.    Specific Performance. The Employee acknowledges and agrees that
irreparable injury to the Company may result in the event the Employee breaches
any covenant or agreement contained in sections 7 and 8 and that the remedy at
law for the breach of any such covenant will be inadequate. Therefore, if the
Employee engages in any act in violation of the provisions of sections 7 and 8,
the Employee agrees that the Company shall be entitled, in addition to such
other remedies and damages as may be available to it by law or under this
Agreement, to injunctive relief to enforce the provisions of sections 7 and 8.

12.    Waiver. The failure of either party to insist in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or a relinquishment of any right granted hereunder
or of the future performance of any such term, covenant or condition.

13.    Notices. Any notice to be given hereunder shall be deemed sufficient if
addressed in writing, and delivered by registered or certified mail or delivered
personally, in the case of the Company, to its principal business office, and in
the case of the Employee, to her address appearing on the records of the
Company, or to such other address as she may designate in writing to the
Company.

14.    Severability. In the event that any provision shall be held to be invalid
or unenforceable for any reason whatsoever, it is agreed such invalidity or
unenforceability shall not affect any other provision of this Agreement and the
remaining covenants, restrictions and provisions hereof shall remain in full
force and effect and any court of competent jurisdiction may so modify the
objectionable provision as to make it valid, reasonable and enforceable.
Furthermore, the parties specifically acknowledge the above covenant not to
compete and covenant not to disclose confidential information are separate and
independent agreements.

15.    Complete Agreement. Except as other-wise expressly set forth herein, this
document embodies the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.

16.    Amendment. This Agreement may only be amended by an agreement in writing
signed by each of the parties hereto.

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17.    Governing Law; Arbitration. This Agreement shall be governed by and
construed exclusively in accordance with the laws of the State of Illinois,
regardless of choice of law requirements. The parties hereby consent to the
jurisdiction of the state courts located in DuPage County of the State of
Illinois and of any federal court in the venue of the Northern District of
Illinois for the purpose of any suit, action or proceeding arising out of or
related to this Agreement, and expressly waive any and all objections they may
have as to venue in any of such courts. Any controversy or claim arising out of
or relating to this Agreement, other than a claim that would entitle the
Employee or the Company to injunctive relief, shall be settled by expedited
arbitration (i.e., 15 day presentation of evidence; 15 day decision by
arbitrator) in accordance with the rules of the American Arbitration Association
in such place as the Company's headquarters are then located.

18.    Benefit. This Agreement shall be binding upon and inure to the benefit of
and shall be enforceable by and against the Company, its successors and assigns
and the Employee, her heirs, beneficiaries and legal representatives. It is
agreed that the rights and obligations of the Employee may not be delegated or
assigned.

IN WITNESS HEREOF, the parties hereto have executed this Employment Agreement on
the day and year first above written.

RC2 BRANDS, INC.

By:  /s/ Curtis W. Stoelting                         
Its:  Chief Executive Officer

/s/ Gregory J. Kilrea                                       
Gregory J. Kilrea
 
 
 
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