exv10w41






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).


 


 









 





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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