Exhibit 10.1

 

Summer Infant, Inc.

2010 Employee

Performance Incentive Plan

 

This plan document outlines the 2010 Summer Infant, Inc. (the “Company”)
Employee Performance Incentive Plan (the “Plan”).  Each participant will also
receive a personal confirmation letter.  The Compensation Committee of the Board
of Directors (the “Compensation Committee”) has sole discretion for the Plan
except with respect to the Chief Executive Officer (the “CEO”) as set forth is
his Employment Agreement dated February 1, 2010.

 

PLAN OBJECTIVES

 

·                  Align the compensation of executive and management employees
to key financial drivers.

·                  Provide variable pay opportunities and targeted total cash
compensation that is competitive within our labor markets.

 

EFFECTIVE DATE

 

This Employee Performance Incentive Plan is for the fiscal year ending
December 31, 2010.  However, this Plan may be changed at any time at the sole
discretion of the Compensation Committee or the Board of Directors. 
Notwithstanding, it is the intent of the Company and the Board of Directors to
maintain an annual performance incentive plan.

 

PARTICIPATION ELIGIBILITY

 

All executive officers and management employees above salary grade 27 who are
employed continuously from January 1, 2010 through December 31, 2010 are
qualified to participate in the Plan.  At the discretion of the Chief Executive
Officer, any executive officer or management employee who is employed before
July 1, 2010 may participate in the Plan on a pro-rata basis determined by his
or her full months of service during fiscal 2010.  Any additions or changes the
executive officer composition that result in changes to the Plan distribution
will be recommended by the Chief Executive Officer and approved by the
Compensation Committee.  Participants of the 2010 Plan and award targets are set
forth in Exhibits I (Executive Officers) and Exhibit II (management employees).

 

COMPANY FINANCIAL PERFORMANCE

 

For fiscal 2010, the determination of the year-end accrual for the Plan expense
will be based on the achievement of the EBITDA target before the accrual for the
Plan expense, as set forth in the Company’s Annual Budget for fiscal 2010 as
approved by the Board of Directors (the “Target”).  For the purposes of this
Plan the term “EBITDA” shall represent net income (loss) before income taxes,
interest expense, and depreciation and amortization and non-cash stock option
expense.

 

Following the completion of the Company’s audited financial statements for
fiscal 2010, the Chief Financial Officer will provide the Compensation Committee
with a computation of the Company’s EBITDA and any other financial measurements
as deemed necessary by the Compensation Committee.

 

Compensation Committee may in its sole and absolute discretion remove from the
calculation of EBITDA any revenue or expense items that it determines to be
non-recurring in nature.

 

The scale below will be used to calculate the accrual for the 2010 Plan.

 

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Financial Performance Bonus Payment Scale

 

Company Performance Level

 

EBITDA
Performance vs. Target

 

Bonus Achievement
Percentage of Bonus
Target

 

Below Threshold

 

0%-79%

 

0

%

Threshold

 

80%-89%

 

50

%

 

 

90%-99%

 

75

%

Target

 

100%-109%

 

100

%

Acceleration

 

110%-119%

 

125

%

 

 

120%-129%

 

150

%

 

 

130%-139%

 

160

%

 

 

140%-149%

 

170

%

 

 

150%-174%

 

180

%

 

 

175%-199%

 

190

%

Maximum

 

200%

 

200

%

 

·                  Rounding.  Performance results will be rounded up to the
nearest whole percentage point.  For example, if calculated performance
achievement percentage is 89.1%, it will be rounded up to 90%.

 

INDIVIDUAL PERFORMANCE AWARDS

 

Allocation and payment of the 2010 accrual to individual participants of the
Plan will be based on the achievement of individual goals and objectives
established by the Company for each management employee.  The Chief Executive
Offices will submit goals and objectives for each executive officer
participating in the Plan to the Compensation Committee for their approval.  The
goals and objectives of the Chief Executive Officer for 2010 will be established
mutually by the Compensation Committee.

 

BONUS CALCULATION EXAMPLE

 

An example is illustrated below for a Plan participant who has 50% bonus target,
and an annualized base salary of $200,000.

 

Performance
Achievement vs.
Target

 

Bonus Achievement
Percentage
“A”

 

Base Salary
“B”

 

Bonus
Target
“C”

 

Calculated
Annual
Bonus
AxBxC

 

107

%

100

%

$

200,000

 

50

%

$

100,000

 

 

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EXHIBIT I

 

Executive Officers

 

 

 

Bonus Target

 

Executive Officers

 

(Percentage of Annual Base Salary)

 

 

 

 

 

Jason Macari, Chief Executive Officer

 

100

%

 

[Additional Executive Officers and bonus targets will be determined at a later
date]

 

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EXHIBIT II

 

Management Employees

 

 

 

Bonus Target

 

Management Employees

 

(Percentage of Annual Base Salary)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[To be determined at a later date]

 

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