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                                                                   Exhibit 10(u)


                              EMPLOYMENT AGREEMENT


EMPLOYMENT AGREEMENT (this "Agreement") made and entered into as of the 30th
day of September, 1999 (the "Effective Date") by and between THE FIRST YEARS
INC., a Massachusetts corporation (the "Company") and RONALD J. SIDMAN, of
Marstons Mills, Massachusetts (the "Executive").

The Executive is currently serving as Chairman, President and Chief Executive
Officer of the Company, and the Board of Directors of the Company (the "Board of
Directors") desires to secure the continued employment of the Executive in
accordance herewith;

The Company is party to an employment agreement (the "Employment Agreement")
with the Executive dated March 23, 1995 and amended on January 16, 1997;

The Executive is willing to commit himself to be employed by the Company on the
terms and conditions herein set forth and in lieu of the terms and conditions of
the Employment Agreement; and

The parties desire to enter into this Agreement as of the Effective Date,
setting forth the terms and conditions for the employment relationship of the
Executive with the Company;

NOW, THEREFORE, in consideration of the mutual premises and the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:

1.       OPERATION OF AGREEMENT, EMPLOYMENT AND TERM.

         (a)  OPERATION. This Agreement shall commence on the Effective Date,
              immediately upon its execution by the parties.

         (b)  EMPLOYMENT. The Company agrees to employ the Executive, and the
              Executive agrees to be employed by the Company, in accordance with
              the terms and provisions of this Agreement.

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         (c)  TERM.

              (i)   INITIAL TERM. The term of this Agreement shall commence on
                    the Effective Date and shall continue until the fifth (5th)
                    anniversary of the Effective Date (the "Initial Term"),
                    subject to earlier termination of the Agreement in
                    accordance with Section 4 of this Agreement.

              (ii)  RENEWAL TERMS. Unless either party gives to the other party
                    at least ninety (90) days prior written notice that the
                    Agreement shall terminate on the expiration of the Initial
                    Term or any subsequent Renewal Term of this Agreement, this
                    Agreement shall continue in full force and effect for
                    further successive terms of five (5) years on the same terms
                    and conditions as are set forth herein, subject to earlier
                    termination of this Agreement in accordance with Section 4
                    of this Agreement and any written amendments agreed to by
                    the parties. For purposes of this Agreement, a "Renewal
                    Term" shall be defined as any successive term of five (5)
                    years following the Initial Term and the "Term" shall be
                    defined as the Initial Term and any subsequent Renewal
                    Terms.

2.       DUTIES AND POWERS OF EXECUTIVE.

         (a)  POSITION.

              (i)   During the Term, the Executive shall serve in his current
                    positions as Chairman, President, and Chief Executive
                    Officer of the Company. The Executive shall report directly
                    and solely to the Board of Directors. During the Term, the
                    Board shall not remove the Executive from the positions of
                    Chairman, President, and Chief Executive Officer of the
                    Company.

              (ii)  During the Term, and excluding any periods of vacation, sick
                    leave, and disability to


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                    which the Executive is entitled, the Executive shall devote
                    substantially all of his attention and time during normal
                    business hours to the business and affairs of the Company
                    and shall use his reasonable best efforts to carry out his
                    responsibilities faithfully and efficiently. It shall not
                    be considered a violation of the foregoing for the Executive
                    to serve on corporate, industry, civic or charitable boards
                    or committees, as long as such activities do not materially
                    interfere with the performance of his responsibilities with
                    the Company in accordance with this Agreement.

         (b)  BOARD MEMBERSHIP. The Company agrees to nominate the Executive for
              election to the Board as a member of the management slate at each
              Annual Meeting of Stockholders during the Term at which the
              Executive's director class comes up for election. The Executive
              agrees to serve on the Board if elected.

         (c)  LOCATION. The Company's current headquarters and executive offices
              are in Avon, Massachusetts. The Executive's services shall be
              performed at such location except for such reasonable travel
              obligations as are substantially consistent with the Executive's
              travel obligations as of the Effective Date. Throughout the Term,
              the Executive shall be provided with appropriate office space and
              secretarial services commensurate with his title, position, and on
              a basis no less favorable than that of the Executive on the
              Effective Date.

3.       COMPENSATION.

         The Executive shall receive the following compensation for his services
         hereunder to the Company:

         (a)  SALARY. During the Term, the Executive's annual base salary ("Base
              Salary") shall be THREE HUNDRED SIXTY-FOUR THOUSAND DOLLARS
              ($364,000), payable in accordance with the Company's general
              payroll practices as are in effect from time to time.



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              Executive's Base Salary shall be reviewed at least annually by the
              Compensation Committee of the Board of Directors (the "Committee")
              or by the Board of Directors, and may be increased from time to
              time by the Committee or the Board of Directors during the Term.
              The Executive's Base Salary shall not be reduced after any
              increase in Base Salary is made by the Committee or the Board of
              Directors, and the term "Base Salary" as used in this Agreement
              shall refer to the Base Salary as so increased. Notwithstanding
              the discretion of the Committee and the Board of Directors to
              increase the Executive's Base Salary, if the Committee does not
              increase the Base Salary for any fiscal year during the Term, the
              Base Salary nonetheless will automatically be increased for such
              fiscal year by an amount equal to the average of the increases in
              Base Salary in respect of the (3) fiscal years ended prior to such
              fiscal year.

         (b)  ANNUAL INCENTIVE COMPENSATION. During the Term, the Executive
              shall be eligible to participate in all annual incentive
              compensation plans, including all cash-based and equity-based
              compensation plans, on a basis no less favorable than that of the
              Executive on the Effective Date and in accordance with the
              Company's practices in effect on the Effective Date and in effect
              from time to time throughout the Term.

         (c)  LIFE AND DISABILITY INSURANCE POLICIES. The Company shall, during
              the Term, pay the annual premium or premiums on (i) a life
              insurance policy or policies, the total face amount of which shall
              not exceed seven and a half million dollars ($7,500,000); and (ii)
              a long-term disability insurance policy with the Paul Revere Life
              Insurance Company or a similar long-term disability insurance
              policy with any other insurance carrier providing substantially
              similar benefits.

         (d)  BENEFITS. During the Term, the Executive shall be eligible to
              participate in all savings, retirement, pension, profit-sharing,
              401-K, and welfare (including without limitation, group medical,
              dental, hospitalization, disability, life insurance) plans, the
              medical reimbursement plan



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              for certain officers of the Company, and fringe benefit plans,
              practices, policies and programs on a basis no less favorable than
              that of the Executive on the Effective Date (the "Benefits").

         (e)  AUTOMOBILE. During the Term, the Company shall make available to
              the Executive, at the Company's cost and expense, an automobile of
              a type and quality similar to the automobile being provided to the
              Executive on the Effective Date. The Company will also pay all
              expenses related to the repair, maintenance, and operation of such
              automobile.

         (f)  FINANCIAL, TAX PLANNING AND ESTATE PLANNING. During the Term, the
              Company shall provide the Executive with financial planning
              services, including tax-related advice and estate planning
              services, without cost or expense to him.

         (g)  VACATION AND OTHER ABSENCES. The Executive shall be entitled to
              paid vacation and other paid absences, whether for holidays,
              illness, personal time, or any similar purposes during the Term in
              accordance with the Company's policies applicable to the Executive
              as of the Effective Date, provided however that the Executive
              shall always be entitle to at least five (5) weeks of paid
              vacation in each calendar year.

         (h)  EXPENSES. The Company shall reimburse the Executive for all
              reasonable expenses, including those for travel and entertainment,
              incurred by him in the performance of his duties hereunder, in
              accordance with policies established from time to time by the
              Board of Directors or the Compensation Committee of the Board of
              Directors.

4.       TERMINATION OF EMPLOYMENT.

         (a)  BY THE COMPANY FOR ANY REASON OTHER THAN FOR CAUSE PRIOR TO A
              CHANGE OF CONTROL. The Company may terminate the Executive's
              employment for any reason prior to the occurrence of a Change of
              Control. If the Company terminates the Executive's employment for
              any reason other than for Cause prior to the occurrence of a
              Change of Control, the Executive



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              shall be entitled to the payments and benefits set forth in
              Section 5(a) of this Agreement.

         (b)  BY THE EXECUTIVE FOR GOOD REASON PRIOR TO A CHANGE OF CONTROL. The
              Executive may terminate his employment for Good Reason prior to
              the occurrence of a Change of Control. If the Executive terminates
              his employment for Good Reason prior to the occurrence of a Change
              of Control, the Executive shall be entitled to the payments and
              benefits set forth in Section 5(a) of this Agreement. For purposes
              of this Agreement, "Good Reason" shall mean the occurrence,
              without the written consent of the Executive, of an event
              constituting a material breach of this Agreement (including
              without limitation, a breach of any clause of Sections 2 or 3 of
              this Agreement) by the Company that has not been fully cured
              within ten (10) days after written notice thereof has been given
              by the Executive to the Company.

         (c)  DEATH OR DISABILITY. The Executive's employment shall terminate
              automatically upon the Executive's death or Disability, in which
              case the Executive shall be entitled to the applicable payments
              and benefits set forth in Section 5(b) of this Agreement. For
              purposes of this Agreement, "Disability" shall be deemed to occur
              if, as a result of the Executive's incapacity due to physical or
              mental illness, (i) the Executive shall have been absent from the
              full-time performance of his duties with the Company for a period
              of twelve (12) consecutive months; (ii) the Company shall have
              given the Executive a Notice of Termination for Disability (as
              defined in Paragraph (i) of this Section 4) and, (iii) within
              thirty (30) days after such Notice of Termination is given, the
              Executive shall not have returned to the full-time performance of
              his duties.

         (d)  BY THE EXECUTIVE FOR ANY REASON FOLLOWING A CHANGE OF CONTROL. The
              Executive may terminate his employment for any reason, in his
              discretion, within three (3) years following the occurrence of a
              Change of Control, in which case the Executive shall be entitled
              to the payments and benefits set forth in Section 5(c) of this
              Agreement. For


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              purposes of this Agreement, the Executive's termination of his
              employment within three (3) months prior to the occurrence of a
              Change of Control shall be treated as a termination of employment
              within three (3) years following a Change of Control.

         (e)  BY THE COMPANY FOR ANY REASON FOLLOWING A CHANGE OF CONTROL. The
              Company may terminate the Executive's employment for any reason
              within three (3) years following the occurrence of a Change of
              Control, and in such case the Executive shall be entitled to the
              payments and benefits set forth in Section 5(c) of this Agreement.
              For purposes of this Agreement, the Company's termination of the
              Executive's employment other than for Disability or death within
              three (3) months prior to the occurrence of a Change of Control
              shall be treated as a termination within three (3) years following
              a Change of Control.

         (f)  BY THE COMPANY FOR CAUSE PRIOR TO A CHANGE OF CONTROL. The Company
              may terminate the Executive's employment for Cause, but only prior
              to the occurrence of a Change of Control, and in such case, the
              Executive shall be entitled to the payments and benefits set forth
              in Section 5(d) of this Agreement. For purposes of this Agreement,
              "Cause" shall mean (i) the willful and continued failure by the
              Executive to substantially perform the Executive's duties with the
              Company (other than any such failure resulting from the
              Executive's incapacity due to physical or mental illness) after a
              written demand for substantial performance is delivered to the
              Executive by the Board of Directors, which demand specifically
              identifies the manner in which such Board believes that the
              Executive has not substantially performed the Executive's duties;
              or (ii) the willful engaging by the Executive in conduct which is
              demonstrably and materially injurious to the Company, monetarily
              or otherwise. For purposes of clauses (i) and (ii) of this
              definition, (x) no act, or failure to act, on the Executive's part
              shall be deemed "willful" unless done, or omitted to be done, by
              the Executive not in good faith and without reasonable belief that
              the Executive's act, or failure to act,


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              was in the best interest of the Company, and (y) in the event of a
              dispute concerning the application of this provision, no claim by
              the Company that Cause exists shall be given effect unless the
              Company establishes to the Board of Directors by clear and
              convincing evidence that Cause exists in accordance with Section
              4(i).

         (g)  BY THE EXECUTIVE OTHER THAN FOR GOOD REASON PRIOR TO THE
              OCCURRENCE OF A CHANGE OF CONTROL. The Executive may terminate his
              employment other than for Good Reason prior to the occurrence of a
              Change of Control, and in such case the Executive shall be
              entitled to the payments and benefits set forth in Section 5(d) of
              this Agreement.

         (h)  DEFINITION OF CHANGE OF CONTROL. A "Change of Control" shall be
              deemed to have occurred if the event set forth in any one of the
              following paragraphs shall have occurred:

              (i)   any Person is or becomes the Beneficial Owner, directly or
                    indirectly, of securities of the Company (not including in
                    the securities beneficially owned by such Person any
                    securities acquired directly from the Company) representing
                    25% or more of the combined voting power of the Company's
                    then outstanding securities, excluding any Person who
                    becomes such a Beneficial Owner in connection with a
                    transaction described in Clause (i) of paragraph (iii)
                    below; or

              (ii)  the following individuals cease for any reason to constitute
                    a majority of the number of directors then serving;
                    individuals who, on the date hereof, constitute the Board of
                    Directors and any new director (other than a director whose
                    initial assumption of office is in connection with an actual
                    or threatened election contest), whose appointment or
                    election by the Board was approved or recommended by a vote
                    of at least two-thirds (2/3) of the directors then still in
                    office who either were directors on the



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                    date hereof or whose appointment, election or nomination for
                    election was previously so approved or recommended; or

              (iii) there is consummated a merger or consolidation of the
                    Company with any other corporation, other than (A) a merger
                    or consolidation which would result in the voting securities
                    of the Company outstanding immediately prior to such merger
                    or consolidation continuing to represent (either by
                    remaining outstanding or by being converted into voting
                    securities of the surviving entity or any parent thereof) at
                    least 60% of the combined voting power of the securities of
                    the Company or such surviving entity or any parent thereof
                    outstanding immediately after such merger or consolidation;
                    or (B) a merger or consolidation effected to implement a
                    re-capitalization of the Company (or similar transaction) in
                    which no Person is or becomes the Beneficial Owner, directly
                    or indirectly, of securities of the Company (not including
                    in the securities beneficially owned by such Person any
                    securities acquired directly from the Company) representing
                    25% or more of the combined voting power of the Company's
                    then outstanding securities; or

              (iv)  the stockholders of the Company approve a plan of complete
                    liquidation or dissolution of the Company or there is
                    consummated an agreement for the sale or disposition of the
                    Company of all or substantially all of the Company's assets,
                    other than a sale or disposition by the Company of all or
                    substantially all of the Company's assets to an entity, at
                    least 60% of the combined voting power of the voting
                    securities of which are owned by stockholders of the Company
                    in substantially the same proportions as their ownership of
                    the Company immediately prior to such sale.


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                    For purposes of this Section 4(h) "Beneficial Owner" shall
                    have the meaning set forth in Rule 13d-3 under the Exchange
                    Act; "Exchange Act" shall mean the Securities Exchange Act
                    of 1934, as amended from time to time; and "Person" shall
                    have the meaning given in Section 3(a)(9) of the Exchange
                    Act, as modified and used in Sections 13(d) and 14(d)
                    thereof, except that such term shall not include (A) the
                    Company or any of its subsidiaries; (B) a trustee or other
                    fiduciary holding securities under an employee benefit plan
                    of the Company or any of its "affiliates" within the meaning
                    set forth in Rule 12b-2 promulgated under Section 12 of the
                    Exchange Act; (C) an underwriter temporarily holding
                    securities pursuant to an offering of such securities; or
                    (D) a corporation owned, directly or indirectly, by the
                    stockholders of the Company in substantially the same
                    proportions as their ownership of stock of the Company.

              (i)   NOTICE OF TERMINATION. Any termination by the Company or by
                    the Executive shall be communicated by Notice of Termination
                    to the other party hereto given in accordance with Section
                    10(b) of this Agreement. For purposes of this Agreement, a
                    "Notice of Termination" means a written notice which (i)
                    indicates the specific termination provision in this
                    Agreement, relied upon; (ii) to the extent applicable, sets
                    forth in reasonable detail the facts and circumstances
                    claimed to provide a basis for termination of the
                    Executive's employment under the provision so indicated; and
                    (iii) if the Date of Termination (as defined in Section
                    4(j)) is other than the date of receipt of such notice,
                    specifies the termination date (which date shall be not more
                    than thirty (30) days after the giving of such notice). The
                    failure by the Executive or the Company to set forth in the
                    Notice of Termination any fact or circumstance which
                    contributes to a showing of Good Reason shall not waive any
                    right of the Executive hereunder or preclude the Executive
                    from asserting such fact or circumstance in enforcing the
                    Executive's rights hereunder. Further, a Notice of
                    Termination for Cause is required to include a copy of a
                    resolution duly adopted by the affirmative vote of not less



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                    than three-quarters (3/4) of the membership of the Board of
                    Directors (excluding the Executive if the Executive is then
                    a member of such Board) at a meeting of such Board which was
                    called and held for the purpose of considering such
                    termination (after reasonable notice to the Executive and an
                    opportunity for the Executive, together with the Executive's
                    counsel, to be heard before such Board) finding that, in the
                    good faith opinion of such Board, the Executive was guilty
                    of conduct set forth in clauses (i) or (ii) of the
                    definition of Cause herein, and specifying the particulars
                    thereof in detail.

              (j)   DATE OF TERMINATION. "Date of Termination" means (i) if the
                    Executive's employment is terminated by the Executive for
                    Good Reason, or for any reason, the date of receipt of the
                    Notice of Termination or any later date specified therein,
                    as the case may be; (ii) if the Executives' employment is
                    terminated by the Company, the date on which the Company
                    notifies the Executive of such termination (except in the
                    event of a termination for Cause); (iii) if the Executive's
                    employment is terminated for Disability, thirty (30) days
                    after Notice of Termination is given (provided that the
                    Executive shall not have returned to the full-time
                    performance of his duties during such thirty (30) day
                    period); and (iv) if the Executive's employment is
                    terminated by reason of death, the date of death.

5.       OBLIGATIONS OF THE COMPANY UPON TERMINATION.

         (a)  TERMINATION BY THE EXECUTIVE FOR GOOD REASON OR BY THE COMPANY
              OTHER THAN FOR CAUSE PRIOR TO A CHANGE OF CONTROL. If the
              Executive shall terminate his employment for Good Reason prior to
              a Change of Control, or if the Company shall terminate the
              Executive's employment for any reason other than for Cause prior
              to the occurrence of a Change of Control, the Executive shall be
              entitled to the following benefits:

              (i)   ACCRUED OBLIGATION. The Company shall pay to the Executive a
                    lump sum amount in cash equal to the sum of (A) the
                    Executive's


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                    Base Salary through the Date of Termination to the extent
                    not theretofore paid; and (B), any accrued vacation pay and
                    any other amounts due the Executive as of the Date of
                    Termination, in each case to the extent not theretofore
                    paid. (The amounts specified in Clauses (A) and (B) shall be
                    hereinafter referred to as the "Accrued Obligation".) The
                    amounts specified in this Section 5(a)(i) shall be paid
                    within ten (10) days after the Date of Termination;

              (ii)  PAYMENTS. The Company shall pay to the Executive within ten
                    (10) days following the Date of Termination a lump sum
                    amount in cash equal to the greater of:

                    (A) the sum of (x) Executive's Base Salary which would have
                    been paid to the Executive for the remaining years and
                    months of the Initial or the Renewal Term then in effect on
                    the Date of Termination at the annual Base Salary rate then
                    in effect on the Date of Termination, and (y) the targeted
                    amount of Annual Incentive Compensation which would have
                    been paid to the Executive for the remaining years and
                    months of the Initial or Renewal Term but at an annual rate
                    no less than the highest amount of Annual Incentive
                    Compensation in respect of the three most recent fiscal
                    years of the Company ended prior to the Date of Termination;
                    or,

                    (B) three (3) times the sum of the Executive's Base Salary
                    then in effect on the Date of Termination, and the highest
                    amount of Annual Incentive Compensation paid to the
                    Executive in respect of the three most recent fiscal years
                    of the Company ended prior to the Date of Termination;

              (iii) BENEFITS. The Executive will continue to participate in the
                    Benefits set forth in Sections 3(d), (e), (f), (g), and (h)
                    of this Agreement, in effect on the Date of


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                    Termination, for a period equal to the greater of (A) the
                    remainder of the Initial or Renewal Term then in effect on
                    the Date of Termination, or (B) three (3) years from the
                    Date of Termination (the "Benefit Period"). For purposes of
                    the application of all Benefit plans, the Executive shall be
                    treated as if he had remained in the employ of the Company
                    for the Benefit Period. In the event the Executive is not
                    permitted to participate in any Benefit plan, including
                    without limitation any pension or 401-K plans, the Company
                    will make equivalent payments to the Executive on an
                    after-tax basis equal to the payments which would have been
                    made to such plans;

              (iv)  MEDICAL BENEFITS. Notwithstanding the foregoing Paragraph
                    (iii), with respect to medical, dental, hospitalization and
                    medical reimbursement benefits provided to the Executive on
                    the Date of Termination ("Medical Benefits"), the Executive
                    will continue to participate in such Medical Benefits until
                    the Executive is eligible for and entitled to coverage under
                    Medicare; provided, however, that to the extent such Medical
                    Benefits cannot be provided to Executive under the terms of
                    any Plan, the Company shall pay to the Executive, on an
                    after-tax basis, an amount necessary for Executive to
                    acquire substantially equivalent Medical Benefits until the
                    Executive is eligible for and entitled to coverage under
                    Medicare, and provided further that such Medical Benefits
                    shall terminate if the Executive becomes employed by or is
                    otherwise affiliated with another party that provides
                    benefits substantially equivalent to the Medical Benefits;

              (v)   LIFE AND DISABILITY INSURANCE. For a period equal to the
                    greater of (A) the remainder of the Initial or Renewal Term
                    then in effect on the Date of Termination or (B) three (3)
                    years from the Date of


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\

                    Termination, the Company will continue to pay the annual
                    premium or premiums on the life insurance policy or policies
                    and the long-term disability insurance policy as described
                    in Section 3(c) of this Agreement; and

              (vi)  STOCK OPTIONS. With respect to each option to purchase
                    common stock of the Company held by the Executive on the
                    Date of Termination, all such options shall become
                    immediately exercisable in full and each option may be
                    exercised by the Executive until the earlier of (A) the
                    three (3) year anniversary date of the Date of Termination
                    or the expiration of the Initial or Renewal Term then in
                    effect on the Date of Termination, whichever is longer; or
                    (B), the expiration date of such option. Notwithstanding the
                    foregoing, any incentive stock options ("ISO's") held by
                    the Executive on the Date of Termination may not be
                    exercised more than three (3) months after the Date of
                    Termination.

         (b)  TERMINATION BY REASON OF DISABILITY OR DEATH. If the Executive's
              employment terminates by reason of Disability or death, the
              Executive shall be entitled to the following benefits:

              (i)   ACCRUED OBLIGATION. The Company shall pay to the Executive
                    (or, in the event of his death, to his legal representative)
                    the Accrued Obligation within ten (10) days after the Date
                    of Termination;

              (ii)  BASE SALARY. The Company shall continue to pay the Executive
                    (or, in the event of his death, his legal representative)
                    (A) for a period of one (1) year following the Date of
                    Termination the Executive's Base Salary in effect
                    immediately prior to the Date of Termination, in accordance
                    with the Company's general payroll practices; provided,
                    however, that in the event of termination of Executive's
                    employment by reason of Disability, such Base Salary
                    payments shall



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                    be reduced by the amount of any disability insurance
                    proceeds paid to the Executive under any individual or group
                    policies, the premiums of which had been paid by the Company
                    or by the Executive and reimbursed by the Company; and (B),
                    a pro-rata portion of any Annual Incentive Compensation
                    earned by the Executive in respect of the fiscal year in
                    which occurs the Date of Termination, payable in accordance
                    with the Company's practices with respect to the payment of
                    bonuses;

              (iii) STOCK OPTIONS. With respect to any vested options to
                    purchase the common stock of the Company, including ISO's,
                    held by the Executive on the Date of Termination, the
                    Executive (or, in the event of his death, his legal
                    representative) may exercise such options until the earlier
                    of one (1) year from the Date of Termination or the
                    expiration date of such option. With respect to any unvested
                    non-qualified stock options held by the Executive on the
                    Date of Termination, such non-qualified options shall
                    continue to vest for a period of one (1) year from the Date
                    of Termination; and

              (iv)  BENEFITS. In the event of termination by reason of
                    Disability, the Executive shall, for a period of one (1)
                    year from the Date of Termination, continue to participate
                    in all the Benefits set forth in Section 3(d) of this
                    Agreement, in effect on the Date of Termination; provided,
                    however, that if such Benefits cannot be provided because of
                    a prohibition in the terms of any Benefit plan, the Company
                    shall provide a substantially equivalent Benefit on an
                    after-tax basis.

         (c)  TERMINATION FOLLOWING A CHANGE OF CONTROL. If the Company shall
              terminate the Executive's employment within three (3) years
              following the occurrence of a Change of Control, or if the
              Executive shall terminate his employment for any reason, at his
              discretion, within three (3) years


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              following a Change of Control, the Executive shall be entitled to
              the following benefits:

              (i)   ACCRUED OBLIGATION. The Company shall pay to the Executive
                    the Accrued Obligation within ten (10) days after the Date
                    of Termination.

              (ii)  PAYMENTS. The Company shall pay to the Executive a lump sum
                    amount in cash, within ten (10) days following the Date of
                    Termination, equal to two and ninety-nine one-hundredths
                    (2.99) times the sum of (A) the Executive's Base Salary then
                    in effect on the Date of Termination, and (B) the highest
                    amount of Annual Incentive Compensation paid to the
                    Executive in respect of the three most recent fiscal years
                    of the Company ended prior to the Date of Termination;

              (iii) BENEFITS. The Executive will continue to participate in the
                    benefits set forth in Sections 3(d), (e), (f), (g), and (h)
                    of this Agreement, in effect on the Date of Termination, for
                    a period of three (3) years from the Date of Termination.
                    For purposes of the application of all Benefit plans, the
                    Executive shall be treated as if he had remained in the
                    employ of the Company for such three-year period. In the
                    event the Executive is not permitted to participate in any
                    Benefit plan, including without limitation any pension or
                    401-K plans, the Company will make equivalent payments to
                    the Executive on an after-tax basis equal to the payments
                    which would have been made to such plans;

              (iv)  MEDICAL BENEFITS. Notwithstanding the foregoing Paragraph
                    (iii), with respect to medical, dental, hospitalization and
                    medical reimbursement benefits provided to the Executive on
                    the Date of Termination ("Medical Benefits), the Executive
                    will continue to participate in such Medical Benefits until
                    the Executive is eligible for and entitled to coverage under
                    Medicare; provided, however, that to the extent such


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<PAGE>   17


                    Medical Benefits cannot be provided to Executive under the
                    terms of any Plan, the Company shall pay to the Executive,
                    on an after-tax basis, an amount necessary for Executive to
                    acquire substantially equivalent Medical Benefits until the
                    Executive is eligible for and entitled to coverage under
                    Medicare; and provided further that such Medical Benefits
                    shall terminate if the Executive becomes employed by or is
                    otherwise affiliated with another party that provides
                    benefits substantially equivalent to the Medical Benefits;

              (v)   LIFE AND DISABILITY INSURANCE. For a period of three (3)
                    years from the Date of Termination, the Company will
                    continue to pay the annual premium or premiums on the life
                    insurance policy or policies and the long-term disability
                    insurance policy as described in Section 3(c) of this
                    Agreement; and

              (vi)  STOCK OPTIONS. With respect to each option to purchase
                    common stock of the Company held by the Executive on the
                    Date of Termination, all such options shall become
                    immediately exercisable in full, and each option may be
                    exercised by the Executive until the earlier of (A) the
                    three (3) year anniversary date of the Date of Termination
                    or (B) the expiration date of such option. Notwithstanding
                    the foregoing, any incentive stock options ("ISO's") held by
                    the Executive on the Date of Termination may not be
                    exercised more than three (3) months after the Date of
                    Termination.

         (d)  TERMINATION FOR OTHER REASON. If the Executive's employment shall
              be terminated by the Company for Cause prior to the occurrence of
              a Change of Control, or by the Executive other than for Good
              Reason prior to the occurrence of a Change of Control, the Company
              shall not have any further obligations to the Executive under this
              Agreement other than the obligation to pay to the Executive the
              Accrued Obligation within ten (10) days of the Date of Termination
              and any post-employment


                                       17
<PAGE>   18


              benefits to which the Executive is entitled under the terms of the
              Company's employee benefit plans.

         (e)  LEGAL FEES. The Company shall also pay to the Executive all
              reasonable legal fees and expenses incurred by the Executive in
              disputing in good faith any issue hereunder relating to the
              termination of the Executive's employment, in seeking in good
              faith to obtain or enforce any benefit or right provided by this
              Agreement, or in connection with any tax audit or proceeding to
              the extent attributable to the application of Section 4999 of the
              Internal Revenue Code (the "Code") to any payment or benefit
              provided hereunder. Such payments shall be made within ten (10)
              business days after delivery of the Executive's written requests
              for payment accompanied with such evidence of fees and expenses
              incurred as is reasonable.

         (f)  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

              (i)   Anything in this Agreement to the contrary notwithstanding,
                    in the event that any "payments in the nature of
                    compensation" within the meaning of Section 280G of the Code
                    by the Company to or for the benefit of the Executive
                    (whether paid or payable or distributed or distributable
                    pursuant to the terms of this Agreement or otherwise, but
                    determined without regard to any additional payments
                    required under this Section 5(f) (a "Payment") would be
                    subject to the excise tax imposed by Section 4999 of the
                    Code or any interest or penalties are incurred by the
                    Executive with respect to such excise tax (the excise tax
                    imposed by Section 4999 of the Code, together with any such
                    interest and penalties, are hereinafter collectively
                    referred to as the "Excise Tax"), then the Executive shall
                    be entitled to receive an additional payment (a "Gross-up
                    Payment") in an amount such that after payment by the
                    Executive of all taxes imposed upon the Gross-up Payment,
                    including without limitation, any income taxes, FICA taxes
                    (and



                                       18
<PAGE>   19


                    any interest and penalties imposed with respect to income
                    taxes or any other taxes) and Excise Tax, the Executive
                    retains an amount of the Gross-up Payment equal to the
                    Excise Tax imposed upon the Payment.

              (ii)  Subject to the provisions of Section 5(f)(iii) below, all
                    determinations required to be made under this Section 5(f),
                    including whether and when a Gross-up Payment is required
                    and the amount of such Gross-up Payment, and the assumptions
                    to be utilized in arriving at such determination, shall be
                    made by the accounting firm representing the Company at such
                    time (the "Accounting Firm") which shall provide detailed
                    supporting calculations both to the Company and the
                    Executive within 15 business days of the receipt of notice
                    from the Executive that there has been a Payment, or such
                    earlier time as is requested by the Company. In the event
                    that the Accounting Firm is serving as accountant or auditor
                    for the individual, entity or group effecting the Change of
                    Control, the Executive shall appoint another nationally
                    recognized accounting firm to make the determinations
                    required hereunder (which accounting firm shall then be
                    referred to as the Accounting Firm hereunder). All fees and
                    expenses of the Accounting Firm shall be paid by the
                    Executive and then reimbursed to him by the Company. Any
                    Gross-up Payment, as determined pursuant to this Section
                    5(f), shall be paid by the Company to the Executive within
                    five days of the receipt of the Accounting Firm's
                    determination. If the Accounting Firm determines that no
                    Excise Tax is payable, it shall furnish the Executive with a
                    written opinion that failure to report the Excise Tax on the
                    Executive's applicable federal income tax return would not
                    result in the imposition of a negligence or similar penalty.
                    Any determination by the Accounting Firm shall be binding
                    upon the Company and the Executive. As a result of the
                    uncertainty in the application of


                                       19
<PAGE>   20


                    Section 4999 of the Code at the time of the initial
                    determination by the Accounting Firm hereunder, it is
                    possible that Gross-up Payments which will not have been
                    made by the Company should have been made ("Underpayment"),
                    consistent with the calculations required to be made
                    hereunder. In the event that the Company exhausts its
                    remedies pursuant to Section 5(f)(iii) and the Executive
                    thereafter is required to make a payment of any Excise Tax,
                    the Accounting Firm shall determine the amount of the
                    Underpayment that has occurred within 15 business days of
                    receipt of notice from the Executive that there has been an
                    Under-payment, and any such Underpayment shall be promptly
                    paid by the Company to or for the benefit of the Executive.

              (iii) The Executive shall notify the Company in writing of any
                    assertion by the Internal Revenue Service that, if
                    successful, would require the payment by the Company of the
                    Gross-up Payment (An "Assertion"). Such notification shall
                    be given as soon as practicable after the Executive is
                    informed in writing of such Assertion, and shall apprise the
                    Company of the nature of such Assertion and the date on
                    which such Assertion is requested to be paid. The Executive
                    shall not pay such Assertion prior to the expiration of the
                    thirty (30) day period following the date on which it gives
                    such notice to the Company (or such shorter period ending on
                    the date that any payment of taxes with respect to such
                    Assertion is due). If the Company notifies the Executive in
                    writing prior to the expiration of such period that it
                    desires to contest such Assertion, the Executive shall:

                    (A) give the Company any information reasonably requested by
                        the Company relating to such Assertion;

                    (B) take such action in connection with contesting such
                        Assertion as the


                                       20
<PAGE>   21


                        Company shall reasonably request in writing from time to
                        time, including, without limitation, accepting legal
                        representation with respect to such Assertion by an
                        attorney selected by the Company and reasonably
                        acceptable to the Executive;

                    (C) cooperate with the Company in good faith in order
                        effectively to contest such Assertion; and

                    (D) permit the Company to participate in any proceedings
                        relating to such Assertion; provided, however, that the
                        Company shall bear and pay directly all costs and
                        expenses (including additional interest and penalties)
                        incurred in connection with such contest and shall
                        indemnify and hold the Executive harmless, on an
                        after-tax basis, for any Excise Tax or income tax
                        (including interest and penalties with respect thereto)
                        imposed as a result of such representation and payment
                        of costs and expenses. Without limitation on the
                        foregoing provisions of this Section 5(f)(iii), the
                        Company shall control all proceedings taken in
                        connection with such contest and, at its sole option,
                        may pursue or forego any and all administrative appeals,
                        proceedings, hearings and conferences with the taxing
                        authority in respect of such Assertion and may, at its
                        sole option, either direct the Executive to pay the tax
                        claimed and sue for a refund or contest the Assertion in
                        any permissible manner; and the Executive agrees to
                        prosecute such contest to a determination before any
                        administrative tribunal in a court of initial
                        jurisdiction and in one or more appellate courts, as the
                        Company shall determine; provided, however, that if the
                        Company directs the Executive to pay such Assertion and
                        sue for a


                                       21
<PAGE>   22


                        refund, the Company shall advance the amount of such
                        payment to the Executive, on an interest-free basis, and
                        shall indemnify and hold the Executive harmless, on an
                        after-tax basis, from any Excise Tax or income tax
                        (including interest or penalties with respect thereto)
                        imposed with respect to such advance or with respect to
                        any imputed income with respect to such advance; and
                        further provided that any extension of the statute of
                        limitations relating to payment of taxes for the taxable
                        year of the Executive with respect to which such
                        contested amount is claimed to be due is limited solely
                        to such contested amount. Furthermore, the Company's
                        control of the contest shall be limited to issues with
                        respect to which a Gross-up Payment would be payable
                        hereunder, and the Executive shall be entitled to settle
                        or contest, as the case may be, any other issue raised
                        by the Internal Revenue Service or any other taxing
                        authority.

              (iv)  If, after the receipt by the Executive of an amount advanced
                    by the Company pursuant to Section 5(f)(iii), the Executive
                    becomes entitled to receive any refund with respect to such
                    Assertion, the Executive shall (subject to the Company's
                    complying with the requirements of Section 5(f)(iii))
                    promptly pay to the Company the amount of such refund
                    (together with any interest paid or credited thereon after
                    taxes applicable thereto). If, after the receipt by the
                    Executive of an amount advanced by the Company pursuant to
                    Section 5(f)(iii), a determination is made that the
                    Executive shall not be entitled to any refund with respect
                    to such Assertion, and the Company does not notify the
                    executive in writing of its intent to contest such denial of
                    refund prior to the expiration of thirty (30) days after
                    such determination, then such advance shall be


                                       22
<PAGE>   23


                    forgiven and shall not be required to be repaid and the
                    amount of such advance shall offset, to the extent thereof,
                    the amount of Gross-up Payment required to be paid.

6.       RESTRICTIONS AND OBLIGATIONS OF THE EXECUTIVE.

         The parties agree and acknowledge that the principal consideration for
         the agreement to make and provide the payments and benefits provided in
         Section 5(a) of this Agreement from the Company to the Executive is the
         Executive's compliance with the undertakings set forth in this Section.

         (a)  Except as provided below, Executive agrees if his employment is
              terminated for any of the reasons set forth in Sections 4(a) or
              4(b), then for a period of three (3) years following the Date of
              Termination he shall not (i) directly or indirectly, whether as
              owner, partner, shareholder, agent, consultant, co-venturer,
              employee or otherwise, or through any person as hereafter defined,
              engage in the business of developing or selling products which are
              competitive with the products that at the termination of his
              employment are being sold or under development by the Company in
              any of the countries in which the Company is doing business on the
              Date of Termination ("Restricted Business"); or (ii) employ,
              recruit, or otherwise solicit or induce any employee, agent,
              distributor, supplier, customer, or consultant of the Company to
              terminate their employment or otherwise cease their relationship
              with the Company.

         (b)  This Section 6(a) shall not bind the Executive following the
              termination of the Executive's employment if a Change of Control
              occurs after the Date of Termination of his employment during the
              three (3) year period referenced in Section 6(a).

         (c)  For purposes of this section, the term "Person" shall mean an
              individual, a corporation, an association, a partnership, an
              estate, a trust, and any other entity or organization.



                                       23
<PAGE>   24


         (d)  Notwithstanding the foregoing, the Executive may purchase, for
              passive investment purposes not intended to circumvent this
              Agreement, on a national securities exchange or in the
              "over-the-counter" market any securities listed on such exchange
              or in such market, but such purchases shall not exceed 5% of any
              class of such securities of any Restricted Business.

         (e)  In the event that any provision of this section is determined by
              any court of competent jurisdiction to be unenforceable by reason
              of its extending for too great a period of time, or over too great
              a range of activities, it shall be interpreted to extend only over
              the maximum period of time, or range of activities, as to which it
              may be enforceable.

7.       FULL SETTLEMENT; MITIGATION.

         The Company's obligation to make the payments provided for in this
         Agreement and otherwise to perform their obligations hereunder shall
         not be subject to any set-off, counterclaim, recoupment, defense or
         other Assertion, right or action which the Company may have against the
         Executive or others. In no event shall the Executive be obligated to
         seek other employment or take any other action by way of mitigation of
         the amounts (including amounts for damages for breach) payable to the
         Executive under any of the provisions of this Agreement and such
         amounts shall not be reduced whether or not the Executive obtains other
         employment.

8.       CONFIDENTIAL INFORMATION.

         The Executive shall hold in a fiduciary capacity for the benefit of the
         Company all secret, confidential information, knowledge or data
         relating to the Company or any of its affiliates and their respective
         businesses which shall have been obtained by the Executive during his
         employment by the Company or any of their affiliates and that shall not
         have been or now or hereafter have become public knowledge (other than
         by acts by the Executive or representatives of the Executive in
         violation of this Agreement). The Executive shall not, without the
         prior written consent of the Company or as may otherwise be required by
         law or legal process,


                                       24
<PAGE>   25


         communicate or divulge any such information, knowledge or data to
         anyone other than the Company and those designated by it.

9.       SUCCESSORS.

         (a)  ASSIGNMENT BY EXECUTIVE. This Agreement is personal to the
              Executive and, without the prior written consent of the Company,
              shall not be assignable by the Executive otherwise than by will or
              the laws of descent and distribution. This Agreement shall inure
              to the benefit of and be enforceable by the Executive's legal
              representatives.

         (b)  SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
              of and be binding upon the Company and their respective successors
              and assigns.

         (c)  ASSUMPTIONS. The Company shall require any successor (whether
              direct or indirect, by purchase, merger, consolidation or
              otherwise) to all or substantially all of the business and/or
              assets thereof to expressly assume and agree to perform this
              Agreement in the same manner and to the same extent that the
              Company would be required to perform this Agreement if no
              succession had taken place.

10.      MISCELLANEOUS.

         (a)  GOVERNING LAW. This Agreement shall be governed by and construed
              in accordance with the laws of the Commonwealth of Massachusetts,
              without reference to its principles of conflict of laws. The
              captions of this Agreement are not part of the provisions hereof
              and shall have no force or effect. This Agreement may not be
              amended, modified, repealed, waived, extended or discharged except
              by an agreement in writing signed by the party against whom
              enforcement of such amendment, modification, repeal, waiver,
              extension or discharge is sought. No person, other than pursuant
              to a resolution of the Board of Directors, shall have authority on
              behalf of the Company to agree to amend, modify, repeal, waive,
              extend or discharge any provision of


                                       25
<PAGE>   26


              this Agreement or take any other action in respect thereto.

         (b)  NOTICES. All notices and other communications hereunder shall be
              in writing and shall be given by hand delivery to the other party
              or by registered or certified mail, return receipt requested,
              postage prepaid, addressed to the Company's headquarters and, in
              the case of the executive, to the address on the signature page of
              this Agreement or, in either case, to such other address as any
              party shall have subsequently furnished to the other parties in
              writing. Notice and communications shall be effective when
              actually received by the addressee.

         (c)  SEVERABILITY. The invalidity or unenforceability of any provision
              of this Agreement shall not affect the validity or enforceability
              of any other provision of this Agreement.

         (d)  TAXES. The Company may withhold from any amounts due and payable
              under this Agreement such federal, state or local taxes as shall
              be required to be withheld pursuant to any applicable law or
              regulation.

         (e)  NO WAIVER. Any party's failure to insist upon strict compliance
              with any provision hereof or the failure to assert any right such
              party may have hereunder, including, without limitation, the right
              of the Executive to terminate his employment pursuant to Sections
              4(b), 4(d) and 4(g) of this Agreement, shall not be deemed to be a
              waiver of such provision or right or any other provision or right
              of this Agreement.

         (f)  ENTIRE AGREEMENT; SURVIVAL. This Agreement entered into as of the
              date hereof between the Company and the Executive contains the
              entire agreement of the Executive and the Company with respect to
              the subject matter of the Agreement, and all promises,
              representations, understandings, arrangements and prior
              agreements, including without limitation the Employment Agreement,
              are merged into, and superseded by, this Agreement. Any provision
              hereof which by its terms applies in whole or part


                                       26
<PAGE>   27


              after a termination of the Executive's employment hereunder shall
              survive such termination.


IN WITNESS WHEREOF, the Executive has executed this Agreement and, pursuant to
due authorization from its Board of Directors, the company has caused this
Agreement to be executed as of the day and year first above written.


                                    THE FIRST YEARS INC.


/s/ Ronald J. Sidman                By:  /s/ John R. Beals
---------------------------            ---------------------------
     Ronald J. Sidman
                                    Name:  John R. Beals
                                         -------------------------

                                    Title: Senior Vice President,
                                           ----------------------
                                           Treasurer and Chief
                                           ----------------------
                                           Financial Officer
                                           ----------------------




                                       27