EMPLOYMENT
      AGREEMENT








THIS
      EMPLOYMENT AGREEMENT is made as of
      November5,
      2008, by and between RC2 CORPORATION,
      a Delaware corporation (the "Company"), and JODY L. TAYLOR (the
      "Employee").  Certain capitalized terms used herein are defined in
      Section 10 below.





RECITALS





A.The
      Company and the Employee desire to
      terminate any and all prior agreements, whether oral or written, between the
      parties and between the Employee and the Company relating to the Employee's
      employment.





B.The
      Company desires to employ the
      Employee and the Employee is willing to make her services available to the
      Company on the terms and conditions set forth below.





AGREEMENTS





In
      consideration of the premises 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.  The
      term of the Employee's
      employment hereunder shall commence on the date hereof and shall continue until
      terminated as provided in Section 6 below.





3.Duties.  The
      Employee shall serve as
      the Director of Risk Management of the Company and will, under the direction
      of
      the Company's Chief Executive Officer and Chief Financial Officer, faithfully
      and to the best of 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 the Chief Executive Officer or Chief Financial Officer of the
      Company.  The Employee agrees to devote her entire business time,
      effort, skill and attention to the proper discharge of such duties while
      employed by the Company.





4.Compensation.  Effective
      November5,
      2008, the Employee shall receive a
      base salary of $75,000 per year, payableundertheregularpay
      practices of the Company(the "Base
      Salary").







1


Fringe
      Benefits




(a)Vacation.The
      Employee shall
      beentitled to four weeks
      of
      paidvacation
      annually.  The Employee and the Company shall mutually determine the
      time and intervals of such vacation.





(b)Medical,
      Health, Dental, Disability and Life Coverage.  The Employee shall be
      eligible to participate in any medical, health, dental, disability and
      lifeinsurance policy in
      effect for full-timeemployees of the Company.Additionally,
      during the
      Employee’s employment the Company will continue to pay the premiums for the
      Employee’s life insurance policy and disability insurance currently in effect at
      November 5, 2008, which were previously provided for her under section 5 (g)
      of
      the Employment Agreement dated April 1, 2008.





(c)Incentive
      Bonus Plan.The
      Employee shall be
      entitled to participate in any incentive bonus plan or other incentive
      compensation plan developed generally for the Company, on a basis consistent
      with her position and level of compensation with the
      Company.





(d)Reimbursement
      for Reasonable Business Expenses.  The Company shall pay
      or
      reimburse the Employee for reasonable expenses incurred by her in connection
      with the performance of 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.





6.Termination.





(a)Termination
      of the Employment Period.  The Employment Period
      shall
      continue until the earlier of:  (i) the Employee's death,
      (ii) the Employee resigns for any reason or (iii) the Board of
      Directors or Chief Executive Officer determines that termination of Employee's
      employment is in the best interests of the Company (the "Employment
      Period").  The last day of the Employment Period shall be referred to
      herein as the "Termination Date."





(b)Termination
      of Employment.  In the event of termination
      of Employee's employment for any reason, the Company shall pay $157,500
      (the "Severance Payment") to Employee
      within three days of the Termination Date.  In addition, for a period
      of three years after the Termination Date, the Company shall reimburse the
      Employee for amounts paid, if any, to continue medical, dental and health
      coverage pursuant to the provisions of the Consolidated Omnibus Budget
      Reconciliation Act,andcontinue
      Employee's then
      existing life insurance and disability coverage, to the extent limited
      below.In
      the event of termination as a result
      of the death of Employee, Employee's designated beneficiary or her estate shall
      be entitled to receive the Severance Payment together with the proceeds
      of any life insurance payable to Employee's designated beneficiary.


2




The
      Company's obligation to provide life
      insurance and disability coverage for a three-year period after the Termination
      Date as provided in this Section 6(b) shall be limited such that the
      Company shall not be obligated to pay greater than $20,000 for such premiums
      or
      coverage during any fiscal year.  In the event that the premiums for
      such policies or coverage would exceed this limitation, the Company shall
      consult with Employee to determine the allocation of such amount to the premiums
      for each type of policy to obtain such insurance as may be available for an
      aggregate of $20,000 per fiscal year.





(c)Intentionally
      not
      used.





(d)Effect
      of
      Termination.  The
      termination of the Employment Period pursuant to Section 6(a) shall not
      affect the Employee's obligations as described in Sections 7 and
      8.





(e)Acceleration
      of Option Vesting.  Upon termination of
      employment of Employee for any reason, all options to purchase stock of the
      Company held by the Employee shall immediately vest and become exercisable
      by
      the Employee in accordance with their remaining terms (subject to the period
      of
      exercise set forth in Section 6(f)).  The Company agrees to take
      any and all actions necessary or appropriate to effectuate the acceleration
      of
      these options and to permit the Employee to exercise the options in accordance
      with their terms from and after this accelerated vesting
      date.





(f)Exercise
      of
      Options Following Termination of Employment.  If the Employee's
      employment is terminated for any reason, the Employee (or her designated
      beneficiary or her estate in the event of the termination of the Employee's
      employment due to death) may exercise any stock options vested as of the
      Termination Date (after giving effect to any acceleration of vesting pursuant
      to
      Section 6(e)) at any time prior to the original expiration date of the
      stock option or within twelve months after the Termination Date, whichever
      period is shorter.





7.Noncompetition
      and Nonsolicitation.  The Employee acknowledges
      and agrees that the contacts and relationships of the Company and its Affiliates
      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 Affiliates 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 she will be able to establish a unique relationship with
      those Persons that will enable her, both during and after employment, to
      unfairly compete with the Company and its
      Affiliates.  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 Affiliates and to
      prevent great damage or loss to the Company and its Affiliates 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 she could continue to actively pursue her career and earn sufficient
      compensation in the same or similar business without breaching any of the
      restrictions contained in this Agreement.


3




(a)Noncompetition.  The
      Employee hereby
      covenants and agrees that during the Employment Period and for two years
      thereafter (the "Noncompete Period"), except if employment is terminated by
      the
      Company or its successor after a Change of Control or this Agreement is not
      renewed or extended by the Company or its successor after the Expected
      Completion Date then the Noncompete Period shall be six months, 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 Affiliates or any successor or assign of the Company
      or
      any of its Affiliates.  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.  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.  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 Noncompete Period, 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:


4


(i)canvass,
      solicit or accept from any
      Person who is a customer or licensor of the Company or any of its Affiliates
      (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 Affiliates or the successors or assigns
      of
      the Company or any of its Affiliates, including, without limitation, the
      canvassing, soliciting or accepting of business from any Person which is or
      was
      a Customer of the Company or any of its Affiliates within two years
      preceding the date of this Agreement, during the Employment Period or 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 Affiliates who currently have or have had business
      relationships with the Company or any of its Affiliates within two years
      preceding the date of this Agreement, during the Employment Period or during
      the
      Noncompete Period, to withdraw, curtail or cancel any of its business or
      relations with the Company or any of its Affiliates; and





(iii)hire
      or induce or attempt to induce any
      officer or other senior manager of the Company or any of its Affiliates to
      terminate his or her relationship or breach any agreement with the Company
      or
      any of its Affiliates unless such person has previously been terminated by
      the
      Company; or





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 Affiliates (the
      "Confidential Information") are established at great expense and protected
      as
      confidential information and provide the Company and its Affiliates 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 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 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 of its Affiliates which she 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
      Affiliate's 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 Affiliates ("Work Product")
      belong to the Company or such Affiliate, as the case may be.


5




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 Affiliates
      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 30% or more of either (i) the then outstanding shares
      of common stock of The Company (the "Outstanding Common Stock") or (ii) the
      combined voting power of the then outstanding voting securities of the 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 the Company, (ii) any acquisition by the Company, (iii) any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any corporation controlled by the 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 the Company (the "Incumbent Board") cease
      for any reason to constitute at least a majority of the Board of Directors
      of
      the Company; provided, however, that any individual becoming a director
      subsequent to the date hereof whose election, or nomination for election by
      the
      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 the Company; or


6




(c)approval
      by the stockholders of the
      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 the Company 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 the Company or such corporation resulting from such Business
      Combination) beneficially owns, directly or indirectly, 30% 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 the Company, providing for such Business Combination;
      or





(d)approval
      by the stockholders of the
      Company of (i) a complete liquidation or dissolution of the Company or
      (ii) the sale or other disposition of all or substantially all of the
      assets of the 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 30% 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 the Company or
      such corporation), except to the extent that such Person owned 30% 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 the Company, providing for such sale or other disposition of assets
      of the Company or were elected, appointed or nominated by the Board of Directors
      of the Company.


7




"Code"
      means the Internal Revenue Code of
      1986, as amended or corresponding provisions of subsequent superseding federal
      tax laws, as amended.





"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.





"Specified
      Employee" shall mean a "key
      employee" of the Company while any of its stock is publicly traded on an
      established securities market or otherwise.  A "key employee" for this
      purpose means an individual whose compensation hereunder is subject to Code
      Section 409A and who meets the requirements of Code
      Section 416(i)(1)(A)(i), (ii) or (iii), applied in accordance with the
      regulations under Code Section 416, but disregarding Code Section 416(i)(5),
      and
      Treasury Regulation Section 1.409A-1(i) at any time during the 12 month
      period ending on December 31 of each year.  If the individual
      meets the definition of a "key employee" as of a December 31 of an
      applicable year, the individual shall be treated as a key employee for the
      entire 12 month period beginning on April 1 of the following
      year.





"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.


8


"Treasury
      Regulations" shall include
      proposed, temporary and final regulations promulgated under the Code in effect
      as of the date of this Agreement and the corresponding sections of any
      regulations subsequently issued that amend or supersede such
      regulations.





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 otherwise
      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.  Without limiting the
      generality of the foregoing, this Agreement supersedes the Employment Agreement,
      dated as of April 1, 2008, between the Company and the Employee (together with
      all amendments thereto, the "Prior Agreement").  The Prior Agreement
      is hereby terminated and shall cease to be of any further force or
      effect.


9





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





17.Governing
      Law.  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.





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.








[Remainder
      of page intentionally left
      blank.  Signature page to follow.]





10


IN
      WITNESS WHEREOF, the parties have
      executed or caused this Employment Agreement to be executed as of the date
      first
      above written.





RC2
      CORPORATION




BY
/s/
      Curtis W.
      Stoelting


Its
CEO




/s/ 
Jody
      L.
      Taylor


Jody
      L. Taylor




11