Exhibit 10.2


 


CHANGE OF CONTROL AGREEMENT


 


This Change of Control Agreement (the “Agreement”), dated and
effective as of February 5, 2010 (the “Effective
Date”), is entered into by and between Summer Infant
(USA), Inc., a Rhode Island corporation (the “Company”), and the Employee of the Company named
on the signature page hereto (the “Employee”).


 


Preliminary
Statements


 


The Board of Directors of the Company (the “Board”) has determined that it is in
the best interest of the Company and its shareholders to assure itself of the
continued availability of the services of the Employee, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company.


 


In order to provide the Employee with enhanced
financial security and sufficient encouragement to remain with the Company
notwithstanding the possibility of a Change of Control,  the Board believes that it is imperative to
provide the Employee with certain severance benefits upon a Change of Control.


 


Agreement


 


In consideration of the foregoing premises and the
respective covenants and agreements of the parties set forth below, and
intending to be legally bound hereby, the parties agree as follows:


 


1.                                      Incentive for Continuous
Employment.  If prior to the last day of the 12th full calendar
month following the date of occurrence of an event constituting a Change of
Control (it being recognized that more than one event constituting a Change of
Control may occur in which case the 12-month period shall run from the date of
occurrence of each such event) (i) the Company terminates the Employee’s
employment other than (A) for Cause (as herein defined), or (B) because
of the Employee’s Disability (as defined below) or death, or (ii) the
Employee terminates his employment for Good Reason (as herein defined) (any
such termination in clauses (i) or (ii) being referred to as a “Payment Event”), then, within ten (10) business
days (or such other time as specified in Section 9(r) hereof)
after such termination (the “Payment Date”)
the Employee shall be entitled to receive from the Company a cash payment (the “Payment”) in one lump sum equal to
the sum of: (i) the Payment Percentage provided for on Schedule 1
attached to this Agreement (“Schedule 1”),
multiplied by the Employee’s annual base salary as in effect at the time of
such termination and (ii) the average of the Employee’s annual cash
bonuses from the Company for the two fiscal years (whether or not paid so long
as accrued and declared by the Company) preceding the fiscal year in which such
termination occurs.  In addition, the
Employee shall be entitled to the severance benefits listed on Schedule 1
(the “Severance Benefits”). The
Employee shall not be entitled to any Payment or any Severance Benefits if the
Employee terminates the Employee’s employment without Good Reason.


 


2.                                      Definitions. 
In addition to the capitalized terms used and defined elsewhere in this
Agreement, the following capitalized terms used in this Agreement shall, for
purposes of this Agreement, have the meanings set forth below.


 

















 


“Affiliate” shall mean any Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person, and with respect to any natural person, includes the members of such
person’s immediate family (spouse, children and parents, whether by blood,
marriage or adoption, or anyone residing in such person’s home).


 


“Cause” shall mean the occurrence of one or more
of the following:  (i) Employee’s
willful and continued failure to substantially perform Employee’s reasonably
assigned duties with the Company (other than any such failure resulting from
incapacity due to disability or from the assignment to Employee of duties that
would constitute Good Reason), which failure continues for a period of at least
thirty (30) days after written demand for substantial performance has been
delivered by the Company to the Employee which specifically identifies the
manner in which the Employee has failed to substantially perform his duties; (ii) Employee’s
willful conduct which constitutes misconduct and is materially and demonstrably
injurious to the Company, as determined in good faith by a vote of at least
two-thirds of the non-employee directors of the Company at a meeting of the
Board at which the Employee is provided an opportunity to be heard; (iii) Employee
being convicted of, or pleading nolo contendere to a felony; or (iv) Employee
being convicted of, or pleading nolo contendere to a misdemeanor based in
dishonesty or fraud.


 


“Change
of Control” shall mean (i) individuals who, as of the
Effective Date, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board, provided
that any individual becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934) shall be considered as though such individual
was a member of the Incumbent Board; or (ii) the approval by the
shareholders of the Company of a reorganization, merger, consolidation or other
form of corporate transaction or series of transactions (but not including an
underwritten public offering of the Company’s common stock or other voting
securities (or securities convertible into voting securities of the Company)
for the Company’s own account registered under the Securities Act of 1933), in
each case, with respect to which Persons who were shareholders of the Company
immediately prior to such reorganization, merger, consolidation or other
corporate transaction do not, immediately thereafter, own more than fifty
percent (50%) of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated entity’s then
outstanding voting securities, or a liquidation or dissolution of the Company
or the sale of all or substantially all of the assets of the Company (unless
such reorganization, merger, consolidation or other corporate transaction,
liquidation, dissolution or sale is subsequently abandoned or terminated prior
to being consummated); or (iii) the acquisition by any Person, entity or “group”, within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, of more than thirty
percent (30%) of either the then outstanding shares of the Company’s common
stock or the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors (hereinafter
referred to as a “Controlling Interest”)
excluding any acquisitions by (x) the Company or any of its Affiliates, (y) any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any of its Affiliates or (z) any Person, 


 


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entity or “group” that as
of the Effective Date owns beneficially (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934) a Controlling Interest.


 


“Disability” shall mean that the Employee has been
unable to perform his or her Company duties as the result of his or her
incapacity due to physical or mental illness, and such inability, at least
                    
(    ) weeks after its commencement, is determined to be
total and permanent by a physical selected by the Company or its insurers and
acceptable to the Employee or the Employee’s legal representative (such
Agreement as to acceptability not to be unreasonably withheld).  Termination resulting from Disability may
only be affected after at least thirty (30) days’ written notice by the Company
of its intention to terminate the Employee’s employment.  In the event that the Employee resumes the
performance of substantially all of his or her duties hereunder before the
termination of his or her employment becomes effective, the notice of intent to
terminate shall automatically be deemed to have been revoked


 


“Good Reason” shall mean (i) the material
diminution in Employee’s authority, duties or responsibilities; (ii) the
relocation of Employee to a location more than thirty (30) miles from his
employment location at the Effective Date; (iii) a material diminution in
the Employee’s annual base salary as in effect immediately prior to such diminution,
other than in connection with a general diminution in Company compensation
levels and in amounts commensurate with the percentage diminutions of other
Company employees of comparable seniority and responsibility; or (iv) any
other action or inaction which constitutes a material breach by the Company or
any of its Affiliates of any agreement under which the Employee provides
services to the Company or any of its Affiliates.


 


No violation described in
clauses (i) through (iv) above shall constitute Good Reason unless
the Employee has given written notice to the Company specifying the applicable
clause and related facts giving rise to such violation within ninety (90) days
after the occurrence of such violation and the Company has not remedied such violation
to the Employee’s reasonable satisfaction within thirty (30) days of its
receipt of such notice.


 


“Person” shall mean any natural person or entity with legal
status.


 


“Restricted Period” shall mean the period of time after
termination of the Employee’s employment with the Company identified on Schedule
1.


 


3.                                      Restrictive Covenants.  The Employee
acknowledges that in order to assure the Company that it will retain the value
of its business relationships, it is reasonable that the Employee be limited in
utilizing trade secrets and other confidential information of the Company,
Employee’s special knowledge of the business of the Company and Employee’s
relationships with customers, suppliers and others having business
relationships with the Company in any manner or for any purpose other than the
advancement of the interests of the Company, as hereinafter provided.  The Employee acknowledges that the Company
would not enter into this Agreement and provide the benefits provided for
herein without the covenants and agreements of the Employee set forth in this Section 3.  Notwithstanding anything else herein
contained, the term “Company”, as
used in this Section 3, shall refer to the Company and its
Affiliates and their respective successors and assigns.


 


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(a)                                  Confidentiality. 
The Employee acknowledges that in the course of the Employee’s
employment with the Company, Employee has had and is expected to continue to
have extensive contact with Persons with which the Company has, had or
anticipates having business relationships (including current and anticipated
customers and suppliers), and to have knowledge of and access to trade secrets
and other proprietary and confidential information of the Company, including, without
limitation, the identity of Persons with whom the Company has, had or
anticipates having business relationships, technical information, know-how,
plans, specifications, and information relating to the financial condition,
results of operations, employees, products and services, sources, leads or
methods of obtaining new business, pricing formulae, methods or procedures,
cost of supplies or services and marketing strategies of the Company or any
other information relating to the Company that could reasonably be regarded as
confidential or proprietary or which is not in the public domain (other than by
reason of Employee’s breach of the provisions of this section) (collectively,
the “Confidential  Information”), and that such information, even to
the extent it may be developed or acquired by or through the efforts of the
Employee, constitutes valuable, special and unique assets of the Company
developed or acquired at great expense which are the exclusive property of the
Company.  Accordingly, the Employee shall
not at any time, either during the time Employee is employed by the Company or
thereafter, use or purport to authorize any Person to use, reveal, report,
publish, transfer or otherwise disclose to any Person, any Confidential
Information without the prior written consent of the Company, except for
disclosures by the Employee required by applicable law (but only to the extent
the Company is given a reasonable opportunity to object to such disclosure and
protect the Confidential Information) to responsible officers of the Company
and other responsible Persons who are in a contractual or fiduciary
relationship with the Company and who have a need for such information for
purposes in the best interests of the Company. 
Without limiting the generality of the foregoing, the Employee shall
not, directly or indirectly, disclose or otherwise make known to any Person any
information as to the Company’s employees and others providing services to the
Company, including with respect to their abilities, compensation, benefits and
other terms of employment or engagement. 
Upon the termination of the Employee’s employment with the Company, the
Employee shall promptly deliver to the Company all files, correspondence,
manuals, notes, notebooks, computer diskettes, tapes, reports and copies
thereof, and all other materials relating to the Company’s business, including
without limitation any materials incorporating Confidential Information, which
are in the possession or control of the Employee.


 


(b)                                  Restriction on Competition. 
During the Employee’s employment with the Company and thereafter during
the Restricted Period, the Employee shall not, and shall not permit any Persons
subject to Employee’s direction or control (including Employee’s Affiliates)
to, directly or indirectly, whether alone or in association with others, as
principal, officer, agent, consultant, employee, director or owner of any
corporation, partnership, association or other entity, or through the
investment of capital, lending of money or property, rendering of services or
otherwise, engage in, influence, control, have an interest in or otherwise
become actively involved with any business that competes with the Company.  The Employee acknowledges that the business
of the Company is national and international in scope, as its current and
anticipated customers and suppliers are located throughout the United States
and abroad, and that it is therefore reasonable that the restrictions set forth
in this Section 3(b) not be limited to any specified
geographic area.


 


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(c)                                  Non-solicitation. 
During the Employee’s employment with the Company and thereafter during
the Restricted Period, the Employee shall not, and shall not permit any Persons
subject to Employee’s direction or control (including Employee’s Affiliates)
to, directly or indirectly, on their own behalf or on behalf of any other
Person (except the Company or its Affiliates), (i) call upon, accept
business from, or solicit the business of any Person who is, or who had been at
any time during the preceding twelve months, a customer or supplier of the
Company, (ii) otherwise divert or attempt to divert any business from the
Company, (iii) interfere with the business relationships between the
Company and any of its customers, suppliers or others with whom they have
business relationships or (iv) recruit or otherwise solicit or induce, or
enter into or participate in any plan or arrangement to cause, any Person who
is an employee of, or otherwise performing services for, the Company to
terminate his or her employment or other relationship with the Company, or hire
any Person who has left the employ of or ceased providing services to the
Company during the preceding twelve months.


 


(d)                                  Nondisparagement. 
The Employee shall not at any time, either during the time Employee is
employed by the Company or thereafter, directly or indirectly, engage in any
conduct or make any statement, whether in commercial or noncommercial speech,
disparaging or criticizing in any way the Company (including its directors and
employees and other providing services to the Company), or any of its products
or services, nor shall the Employee engage in any other conduct or make any
other statement that could reasonably be expected to impair the goodwill of any
of them, the reputation of any products or services of the Company or the
marketing of such products or services, in each case except as may be required
by law, and then only after consultation with the Company to the extent
possible.


 


(e)                                  Exception. 
The ownership or control by the Employee or Employee’s Affiliates, as a
passive investor, of up to two percent of the outstanding voting securities or
securities of any class of an entity with a class of securities registered
under the Securities Exchange Act of 1934, as amended, shall not be deemed to
be a violation of the provisions of this Section 3.


 


4.                                      Remedies. 
The Employee agrees that the restrictions set forth in Section 3,
including the length of the Restricted Period, the geographic area covered and
the scope of activities proscribed, are reasonable for the purposes of
protecting the value of the business and goodwill of the Company.  The Employee acknowledges that compliance
with the restrictions set forth in Section 3 will not prevent
Employee from earning a livelihood, and that in the event of a breach by the
Employee of any of the provisions of Section 3, monetary damages
would not provide an adequate remedy to the Company.  Accordingly, the Employee agrees that, in
addition to any other remedies available to the Company, the Company shall be
entitled to seek injunctive and other equitable relief (without having to
post bond or other security and without having to prove damages or the
inadequacy of available remedies at law) to secure the enforcement of these
provisions, and shall be entitled to receive reimbursement from the Employee
for attorneys’ fees and expenses incurred by it in enforcing these
provisions.  In addition to its other
rights and remedies hereunder, the Company shall have the right to require the
Employee to account for and pay over to it all compensation, profits, money,
accruals and other benefits derived or received, directly or indirectly, by the
Employee from any breach of the covenants of Section 3, and may set
off any such amounts due it from the Employee against any amounts otherwise due
Employee from the Company.  If the
Employee breaches any covenant 


 


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set forth in Section 3,
the running of the Restricted Period as to such covenant only shall be tolled
for so long as such breach continues.  It
is the desire and intent of the parties that the provisions of Sections 3
and 4 be enforced in full; however, if any court of competent jurisdiction
shall at any time determine that, but for the provisions of this paragraph, any
part of this Agreement relating to the time period, scope of activities or
geographic area of restrictions is invalid or unenforceable, the maximum time
period, scope of activities or geographic area, as the case may be, shall be
reduced to the maximum which such court deems enforceable with respect only to
the jurisdiction in which such adjudication is made.  If any other part of this Agreement is determined
by such a court to be invalid or unenforceable, the invalid or unenforceable
provisions shall be deemed amended (with respect only to the jurisdiction in
which such adjudication is made) in such manner as to render them enforceable
and to effectuate as nearly as possible the original intentions and agreement
of the parties.


 


5.                                      Termination of this Agreement. 
This Agreement shall commence on the Effective Date and terminate on December 31,
2012, provided, however, that if an event
constituting a Change of Control shall occur while this Agreement is in effect,
this Agreement shall automatically be extended for twelve (12) months from the
date the Change of Control occurs; provided that the Company may extend this
Agreement in its sole discretion by written notice to the Employee.  For purposes of this Section 5
only (and not for purposes of determining whether the Payment and the Severance
Benefits have become payable), a Change of Control shall be deemed to have
occurred if the event constituting a Change of Control has been consummated on
or prior to expiration of the term of this Agreement or if such event or one or
more other events constituting a Change of Control have not been consummated
but the material agreements for any of such events have been executed and
delivered by the parties to any such event on or prior to expiration of the
term of this Agreement (each such event being referred to as a “Pending Event”). For any Pending
Event, this Agreement shall automatically be extended until such time as the
related material agreements have been unconditionally terminated without
consummation of the applicable Pending Event and if any such Pending Event is
consummated pursuant to the related material agreements (as amended, restated,
supplemented or otherwise modified), this Agreement shall further automatically
be extended for twelve (12) months from the date each such Pending Event is so
consummated. For avoidance of doubt and ambiguity, any event constituting a
Change of Control that occurs after expiration of the term of this Agreement and
during any extension of this Agreement as so extended by virtue of a Pending
Event shall not result in this Agreement being extending after expiration of
its term in accordance with the immediately preceding sentence.


 


6.                                      No Alteration of Employment Terms
or Status.  Except as expressly provided in this
Agreement, nothing herein shall alter in any way any of the terms of employment
of the Employee, including without limitation the Employee’s rights with
respect to any stock options or other equity based awards Employee may have
been granted under the Summer Infant, Inc. 2006 Performance Equity
Plan.  The Company and the Employee
acknowledge that the Employee’s employment is and shall continue to be “at-will”, as defined under applicable law.  If the Employee’s employment is terminated
for any reason, the Employee shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement or as
may otherwise be established under the Company’s existing employee benefit
plans or policies at the time of termination.


 


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7.                                      Parachute Payments. (a) If Independent Tax Counsel (as defined below) determines that the
aggregate payments and benefits provided or to be provided to the Employee pursuant to this Agreement, and any other
payments and benefits provided or to be provided to the Employee from the
Company or any of its Affiliates or any successors thereto constitute “parachute payments” as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”) (or any
successor provision thereto) (“Parachute  Payments”) that would be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, except as otherwise provided in the next
sentence, such Parachute Payments shall be reduced to the extent necessary so
that no portion thereof shall be subject to the Excise Tax. If Independent Tax
Counsel determines that the Employee would receive in the aggregate greater
payments and benefits on an after tax basis if the Parachute Payments were not
reduced pursuant to this Section 7(a), then no such reduction shall
be made; provided, however, that in such case the
provisions of Sections 7(b)(i) and 7(b)(ii) shall not be
operative. The determination of the Independent Tax Counsel under this
subsection (a) shall be final and binding on all parties hereto. The
determination of which payments or benefits to reduce in order to avoid the
Excise Tax shall be determined in the sole discretion of the Employee; provided, however, that unless the Employee gives written
notice to the Company specifying the order to effectuate the limitations
described above within ten (10) days of the Independent Tax Counsel’s
determination to make such reduction, the Company shall first reduce those
payments or benefits that will cause a dollar-for-dollar reduction in total
Parachute Payments, and then by reducing other Parachute Payments, to the
extent possible, in reverse order beginning with payments or benefits that are to
be paid the farthest in time from the date the reduction is to be made. Any
notice given by the Employee pursuant to the preceding sentence, unless
prohibited by law, shall take precedence over the provisions of any other plan,
arrangement or agreement governing the Employee’s rights and entitlement to any
benefits or compensation. For purposes of this Section 7(a), “Independent Tax Counsel” shall mean
an attorney, a certified public accountant with a nationally recognized
accounting firm, or a compensation consultant with a nationally recognized
actuarial and benefits consulting firm with expertise in the area of Employee
compensation tax law, who shall be selected by the Company and shall be
acceptable to the Employee (the Employee’s acceptance not to be unreasonably
withheld), and whose fees and disbursements shall be paid by the Company.


 


(b) (i) The Employee shall notify the Company in writing within thirty
(30) days of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Employee of an Excise Tax. Upon receipt of
such notice, the Company may, in its sole discretion, contest such claim or
provide the Employee with an additional payment (a “Gross-Up  Payment”) intended to
reimburse the Employee for any such Excise Tax and all taxes (including any
Excise Tax) imposed upon the Gross-Up Payment and any interest or penalties
with respect to such taxes (except to the extent such interest or penalty
results from the Employee’s failure to act in accordance with the Company’s or
a Affiliate’s reasonable directions or the Employee’s failure to exercise due
care), or do nothing. If the Company notifies the Employee in writing that it
desires to contest such claim and that it will bear the costs and provide the
indemnification as required by this sentence, the Employee shall:


 


(A) give the Company any information reasonably requested by the
Company relating to such claim,


 


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(B) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,


 


(C) cooperate with the Company in good faith in order to
effectively contest the claim, and


 


(D) permit the Company to participate in any proceedings relating
to the claim; provided, however, that the
Company shall pay (or cause to be paid) directly all costs and expenses (including any
interest and penalties, except to the extent such interest or penalty results
from the Employee’s failure to act in accordance with the Company’s or an
Affiliate’s reasonable directions or the Employee’s failure to exercise due
care) incurred in connection with the contest and shall indemnify and hold the
Employee harmless, on an after-tax basis, for any Excise Tax or income or other
tax, including interest and penalties with respect thereto (except to the extent
such interest or penalty results from the Employee’s failure to act in
accordance with the Company’s or a Affiliate’s reasonable directions or the
Employee’s failure to exercise due care), imposed as a result of such
representation and payment of costs and expenses. The Company shall control all
proceedings taken in connection with such contest; provided,
however, that if the Company directs the Employee to pay such claim
and sue for a refund, the Company shall, unless prohibited by law, advance (or
cause to be advanced) the amount of such payment to the Employee, on an
interest-free basis and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or income or other tax, including interest
or penalties with respect thereto (except to the extent such interest or
penalty results from the Employee’s failure to act in accordance with the
Company’s or a Affiliate’s reasonable directions or the Employee’s failure to
exercise due care), imposed with respect to such advance or with respect to any
imputed income with respect to such advance. If the advancement described in
the preceding sentence is prohibited by law, the Company and the Employee shall
cooperate in an effort to determine an alternative approach to payment of the
claim in a manner permitted by applicable law and consistent with the original
intent and economic benefit to the Employee of this provision.


 


(ii) If, after the receipt by the Employee of an amount advanced by
the Company pursuant to Section 7(b)(i), the Employee becomes
entitled to receive a refund with respect to a payment by the Company with respect to
such claim, the Employee shall, within ten (10) days after the receipt of
such refund, pay to the Company the amount of such refund, together with any interest
paid or credited thereon after taxes applicable thereto.


 


(iii) Notwithstanding anything herein to the contrary, this Section 7(b) shall
be interpreted (and, if determined by the Company to be necessary, reformed) to
the extent
necessary to fully comply with the Sarbanes-Oxley Act and Section 409A of
the Code; provided that the Company agrees to maintain, to the maximum extent
practicable, the original intent and economic benefit to the Employee of the
applicable provision without violating the  provisions of
the Sarbanes-Oxley Act and Code Section 409A.


 


8.                                      Code Section 409A. 
(a)                 If any provision of this Agreement (or of any payment of compensation,  including benefits) would cause the Employee to incur any additional tax  or interest under Code Section 409A or any regulations or Treasury
guidance promulgated  thereunder, the
Company shall, after consulting with the Employee, reform such provision to  


 


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comply with Code Section 409A; provided that the Company agrees to
make only such  changes as are
necessary to bring such provisions into compliance with Code Section 409A
and  to maintain, to the maximum extent practicable, the original intent and
economic benefit to the Employee of the applicable provision without violating
the provisions of Code Section 409A.


 


(b)                                  Notwithstanding any provision to the contrary in this Agreement, if the
Employee is deemed on the date of termination of employment to be a “specified employee” within the meaning of that term under
Code Section 409A(a)(2)(B), then with regard to any payment or the
provision of any benefit that is required to be delayed in compliance with Section 409A(a)(2)(B) such
payment or benefit shall not be made or provided (subject to the last sentence
hereof) prior to the earlier of (i) the expiration of the six (6)-month
period measured from the date of the Employee’s “separation
from service” (as such term is defined in Treasury Regulations
issued under Code Section 409A) or (ii) the date of his death (the “Deferral Period”). Upon the
expiration of the Deferral Period, all payments and benefits deferred pursuant
to this Section 8 (whether they would have otherwise been payable
in a single sum or in installments in the absence of such deferral) shall be paid
or reimbursed to the Employee in a lump sum, and any remaining payments and
benefits due under this Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein. Notwithstanding the
foregoing, to the extent that the foregoing applies to the provision of any
ongoing welfare benefits to the Employee that would not be required to be
delayed if the premiums therefor were paid by the Employee, the Employee shall
pay the full cost of premiums for such welfare benefits during the Deferral
Period and the Company shall pay (or cause to be paid) to the Employee an
amount equal to the amount of such premiums paid by the Employee during the
Deferral Period promptly after its conclusion.


 


(c)                                  Any reimbursements by the
Company to the Employee of any eligible expenses under this Agreement that are
not excludable from the Employee’s income for Federal income tax purposes (the “Taxable Reimbursements”) shall be
made by no later than the earlier of the date on which they would be paid under
the Company’s normal policies and the last day of the taxable year of the
Employee following the year in which the expense was incurred.  The amount of any Taxable Reimbursements, and
the value of any in-kind benefits to be provided to the Employee, during any
taxable year of the Employee shall not affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year of
the Employee.  The right to Taxable
Reimbursements, or in-kind benefits, shall not be subject to liquidation or
exchange for another benefit.


 


(d)                                  Payment of any Taxable Reimbursements under this
Agreement must be made by no later than the end of the taxable year of the
Employee following the taxable year of the Employee in which the Employee
remits the related taxes.


 


9.                                      Miscellaneous.


 


(a)                                  Entire Agreement. 
This Agreement (including Schedule 1) sets forth the entire
understanding of the parties with respect to the subject matter hereof and
merges and supersedes any prior or contemporaneous agreements (whether written
or oral) between the parties pertaining thereto, including without limitation
any prior agreements, arrangements, understandings or commitments of any nature
whatsoever relating to severance payments or 


 


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other compensation in
connection with termination of Employee’s employment.  The Employee acknowledges that he has read
and understands the provisions of this Agreement.  The Employee further acknowledges that he has
been given an opportunity for his legal counsel to review this Agreement and
that the provisions of this Agreement are reasonable.


 


(b)                                  Amendment. 
This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.


 


(c)                                  Waiver. 
No waiver by any party of any of its rights under this Agreement shall
be effective unless in writing and signed by the party against which the same
is sought to be enforced.  No such waiver
by any party of its rights under any provision of this Agreement shall
constitute a waiver of such party’s rights under such provisions at any other
time or a waiver of such party’s rights under any other provision of this
Agreement.  No failure by any party
hereto to take any action against any breach of this Agreement or default by
another party shall constitute a waiver of the former party’s right to enforce
any provision of this Agreement or to take action against such breach or
default or any subsequent breach or default by such other party.


 


(d)                                  Successors and Assigns. 
The Employee shall not have the right to assign Employee’s rights or
obligations hereunder.  The Company shall
not have the right to assign its rights or obligations under this Agreement
without the prior written consent of the Employee, except in accordance with
subsection (j) below.  Subject to
the foregoing, this Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their legal representatives, heirs, successors and
permitted assigns.  Except as otherwise
specifically provided herein, the rights and obligations of the parties under
this Agreement shall be unaffected by a Change of Control of the Company.


 


(e)                                  Additional Acts. 
The Employee and the Company shall execute, acknowledge and deliver and
file, or cause to be executed, acknowledged and delivered and filed, any and
all further instruments, agreements or documents as may be necessary or
expedient in order to consummate the transactions provided for in this
Agreement and do any and all further acts and things as may be necessary or
expedient in order to carry out the purpose and intent of this Agreement.


 


(f)                                    Communications. 
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been given at the time
personally delivered, on the business day following the day such communication
is sent by national overnight delivery service, upon electronic confirmation of
recipient’s receipt of a facsimile of such communication, or five days after
being deposited in the United States mail enclosed in a registered or certified
postage prepaid envelope, return receipt requested, and addressed to the
recipient at the address set forth beneath the recipient’s signature to this
Agreement, or sent to such other address as a party may specify by notice to
the other party in accordance herewith, provided that notices of change of
address shall only be effective upon receipt.


 


(g)                                 Severability. 
If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, such invalidity or
unenforceability shall not affect the validity and enforceability of the other
provisions of this Agreement and the provision 


 


10

















 


held to be invalid or unenforceable
shall be enforced as nearly as possible according to its original terms and
intent to eliminate such invalidity or unenforceability.


 


(h)                                 Withholding Taxes. 
The Company may withhold from amounts payable under this Agreement such
federal, state and local taxes as are required to be withheld pursuant to any
applicable law or regulation and the Company shall be authorized to take such
action as may be necessary in the opinion of the Company’s counsel to satisfy
all obligations for the payment of such taxes.


 


(i)                                    Governing Law. 
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Rhode Island applicable
to agreements made and to be performed entirely in such state, without regard to
the conflict of laws principles of such state.


 


(j)                                    Consolidation, Merger or Sale of
Assets.  If the Company consolidates or merges into or with, or transfers all or
substantially all of its assets to, another entity the term “Company” as used in this Agreement shall mean such other
entity and this Agreement shall continue in full force and effect. In the case
of any transaction in which a successor would not by the foregoing provision or
by operation of law be bound by this Agreement, the Company shall require such
successor expressly and unconditionally to assume and agree to perform the
Company’s obligations under this Agreement, in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.


 


(k)                                Headings. 
The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
any provisions of this Agreement.


 


(l)                                    Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.  In the
event that any signature to this Agreement is delivered by facsimile transmission
or email attachment, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile or email-attached signature page were
an original thereof.


 


(m)                              Litigation; Prevailing Party. 
If any litigation is instituted regarding this Agreement, the prevailing
party shall be entitled to receive from the non-prevailing party, and the
non-prevailing party shall pay, all reasonable fees and expenses of counsel for
the prevailing party.


 


(n)                                 Waiver of Jury Trial. 
Each party hereto knowingly, irrevocably and voluntarily waives its
right to a trial by jury in any litigation which may arise under or involving
this Agreement.


 


(o)                                  Venue; Jurisdiction. 
If any litigation is to be instituted regarding this Agreement, it shall
be instituted in the state and federal courts located in Providence County,
Rhode Island, and each party irrevocably consents and submits to the personal
jurisdiction of such courts in any such litigation, and waives any objection to
the laying of venue in such courts. 
Service of process in any such litigation shall be effective as to any
party if given to such party 


 


11

















 


by registered or
certified mail, return receipt requested, or by any other means of mail that
requires a signed receipt, postage prepaid, mailed to such party as provided in
Section 9(f).


 


(p)                                  Remedies Cumulative. 
No remedy made available by any of the provisions of this Agreement is
intended to be exclusive of any other remedy, and each and every remedy shall
be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity.


 


(q)                                  No Duty to Mitigate. 
The Employee shall not be required to mitigate the amount of any payment
contemplated by this Agreement, nor shall any such payment be reduced by any
earnings that the Employee may receive from any other source.


 


(r)                                  Release.  Notwithstanding any provision herein to the contrary, the Company shall
not have any obligation to pay (or cause to be paid) any amount or provide any
benefit under this Agreement unless and until the Employee executes, within sixty (60) days
after a Payment Event, a release of the Company and its Affiliates and related
parties, in such form as the Company may reasonably request, of all claims
against the Company and its Affiliates and related parties relating to the
Employee’s employment and termination thereof and unless and until any  revocation period applicable to such release has
expired.


 


[Remainder of Page Left
Intentionally Blank]


 


12

















 


IN WITNESS WHEREOF, the parties hereto have each duly executed this
Agreement as of the date set forth above.


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUMMER
  INFANT (USA), INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason Macari

  
	
   

  	
   

  	
  Name:

  	
  Jason Macari

  
	
   

  	
   

  	
  Title:

  	
  /s/ President and Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Steven Gibree

  
	
   

  	
  Steve
  Gibree

  
	
   

  	
  1275
  Park East Drive

  
	
   

  	
  Woonsocket,
  RI 02895

  



 

















 


Schedule
1


 


	
  Employee:

  	
   

  	
  Steve Gibree

  
	
   

  	
   

  	
   

  
	
  Position/Title:

  	
   

  	
  EVP — Product
  Development

  
	
   

  	
   

  	
   

  
	
  Payment Percentage:

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  
	
  Severance Benefits:

  	
   

  	
  For a period commencing
  with the month in which termination of employment shall have occurred and
  ending - 12 months thereafter, the Employee and, as applicable, the
  Employee’s covered dependents shall be entitled to all benefits under the
  Company’s welfare benefit plans (within the meaning of
  Section 3(1) of the Employee Retirement Income Security Act of
  1974, as amended), as if the Employee were still employed during such period,
  at the same level of benefits and at the same dollar cost to the Employee as
  is in effect at the time of termination. If and to the extent that equivalent
  benefits shall not be payable or provided under any such plan, the Company
  shall pay or provide (or cause to be paid or provided) equivalent benefits on
  an individual basis. The benefits provided in accordance herewith shall be
  secondary to any comparable benefits provided to the Employee and, as
  applicable, the Employee’s covered dependents by another employer of the
  Employee.

  
	
   

  	
   

  	
   

  
	
  Restricted Period:

  	
   

  	
  12 months