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                                                                   Exhibit 10(v)


                                                               August 8, 1999




Mr. Jerome M. Karp
131 Windward Drive
Palm Beach Garden, FL  33418

Dear Mr. Karp:

This letter sets forth the payments and benefits you have received or will
receive as compensation while you are serving as (i) a director of The First
Years Inc., the Massachusetts corporation (the "Parent Company") and (ii) as a
director and non-employee, non-executive President and Chairman of The First
Years Inc., the Delaware corporation and subsidiary of the Parent Company (the
"Delaware Subsidiary").

You will receive the following payments and benefits commencing on August 8,
1999, the date of (i) the termination of the Transition Agreement dated August
8, 1994 between you and the Parent Company (the "Transition Agreement"), and
(ii) your retirement from the Parent Company as Vice-Chairman of the Board;
provided however, that for calendar year 1999 you will receive such payments and
benefits in full without any pro-ration. You agree that notwithstanding the
termination of the Transition Agreement, your obligations under Paragraphs 7, 8,
9, and 10 of the Transition Agreement shall continue in full force and effect.

I.       DIRECTOR OF PARENT COMPANY. So long as and provided you are serving as
         a director of the Parent Company, you will receive the following:

         1.   ONE-TIME STOCK OPTION FOR 20,000 SHARES. In order to bring you in
              line with the other non-employee directors of the Parent Company
              (who received a one-time option for 20,000 shares upon their
              initial election to the Board of Directors of the


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              Parent Company), and to align your interests with the interests of
              outside stockholders of the Parent Company, you were granted in
              1999 a one-time non-qualified stock option for 20,000 shares of
              the Parent Company's common stock under the Parent Company's 1993
              Stock Option Plan for Directors.

         2.   ANNUAL RETAINER FEE. The annual retainer fee paid to non-employee
              directors of the Parent Company, as established from time to time
              by the Board of Directors of the Parent Company (the "Board"). The
              Board has established $17,500 as the annual retainer fee for
              calendar year 1999.

         3.   MEETINGS ATTENDED FEES. The fee paid to non-employee directors of
              the Parent Company for each meeting of the Board attended, as
              established from time to time by the Board. The Board has
              established $1,050 as the fee for meetings attended for calendar
              year 1999.

         4.   ANNUAL STOCK OPTION. You will receive the annual equity-based
              award or such other award granted each year to non-employee
              directors under the Parent Company's 1993 Stock Option Plan for
              Directors (the "Directors Plan"), the 1993 Equity Incentive Plan,
              or any other similar plan of the Parent Company in effect from
              time to time. Currently, under the Directors Plan, the date of
              grant is the date of each Annual Meeting of Stockholders of the
              Parent Company; the amount of the option, exercise price, the
              vesting and duration of the option are all subject each year to
              the terms of the Directors Plan and the discretion of the Board or
              the Committee administering the Directors Plan. The amount of the
              option under the Directors Plan granted to you in calendar year
              1999 was equal to 6,000 shares of the Parent Company's common
              stock.

         5.   MEDICAL BENEFITS. You and your spouse will continue to be provided
              coverage under the Parent Company's group health plan, so long as
              and provided that you are serving as a director of the Parent
              Company and provided further that the Parent Company's current
              health insurance carrier of such plan (and any subsequent carrier)
              is willing to provide coverage to non-employee directors of the
              Company. You will


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              also continue to be provided coverage under the medical
              reimbursement plan being provided to you as of this date, so long
              as and provided that you are serving as a director of the Parent
              Company; and provided further that the Parent Company's current
              carrier for such policy (and any subsequent carrier) is willing to
              provide coverage to non-employee directors; that the Company
              continues to provide such plan to certain senior officers and
              non-employee directors; and that such coverage will only be
              provided within the limits for such reimbursement established by
              the Company.

         6.   GROUP LIFE INSURANCE. You will continue to be provided coverage of
              up to, but not to exceed, a face amount of fifty thousand dollars
              ($50,000.) under the Parent Company's group life insurance plan,
              for a one-year period commencing August 8, 1999 and terminating on
              August 8, 2000, so long as and provided that the Parent Company's
              current group life insurance carrier of such plan (and any
              subsequent carrier) is willing to provide coverage for
              non-employee directors of the Company.

         7.   AUTOMOBILE. The Company will, at its expense, continue to provide
              you only the leased car currently provided to you until the lease
              for such car that is in effect on this date expires. The Company
              will pay the cost of insuring such car and all other expenses
              including maintenance and repairs.

         8.   NO OTHER BENEFITS. Upon your retirement from the Parent Company on
              August 8, 1999, contributions on your behalf from the Parent
              Company to the pension plan and 401(K) plan of the Parent Company
              will terminate as of such date.

II.      DIRECTOR, PRESIDENT, AND CHAIRMAN OF DELAWARE SUBSIDIARY. So long as
         and provided that you are serving as a director and non-employee,
         non-executive President and Chairman of the Delaware Subsidiary, you
         will receive the following:

         1.   ANNUAL RETAINER FEE. An annual retainer fee equal to one-half
              (1/2) of the annual retainer fee paid to non-employee directors of
              the Parent Company as


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              established from time to time by the Board of the Parent Company.
              For calendar year 1999, one half (1/2) of the annual retainer fee
              paid to non-employee Directors of the Board of the Parent Company
              is equal to $8,750.

         2.   MEETINGS ATTENDED FEE AND EXPENSES. A fee for each meeting
              attended of the Board of Directors of the Delaware Subsidiary in
              an amount equal to the meetings attended fee paid to non-employee
              directors of the Parent Company, as established form time to time
              by the Board of the Parent Company. For calendar year 1999, the
              meetings attended fee paid to non-employee directors of the Parent
              Company is equal to $1,050. You will also be reimbursed for all
              expenses which you incur related to your service to the Delaware
              Subsidiary.

         3.   ANNUAL STOCK OPTION. You will receive the annual award equal to
              one half (1/2) of the annual equity-based award or such other
              award granted to non-employee directors of the Parent Company
              under the Parent Company's 1993 Stock Option Plan for Directors,
              the 1993 Equity Incentive Plan, or any other similar plan of the
              Parent Company in effect from time to time. Currently, under the
              Directors Plan, the date of grant is the date of each Annual
              Meeting of Stockholders of the Parent Company; the amount of such
              option, exercise price, the duration and vesting, are all subject
              each year to the terms of the Directors Plan and the discretion of
              the Board or the Committee administering the Directors Plan. The
              option granted to you for calendar year 1999 under the Directors
              Plan was equal to 3,000 shares of the Parent Company's common
              stock.

III.     NO EMPLOYMENT RELATIONSHIP. You agree that this letter does not
         constitute an employment agreement with the Parent Company or the
         Delaware Subsidiary, that you are not an employee of the Parent Company
         (as of August 8, 1999) or the Delaware Subsidiary and that you shall
         render your services to the Delaware Subsidiary as an independent
         contractor. You agree that your directorships on the Boards of the
         Parent Company and the Delaware Subsidiary are subject to the
         nomination by the respective Boards of each Company and election by the
         stockholders of the each Company.


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IV.      TERMINATION. Either you or the Parent Company may terminate the
         Agreement without cause upon thirty (30) days prior written notice to
         the other.

V.       GOVERNING LAW AND OTHER MISCELLANEOUS TERMS. This letter Agreement
         shall be governed by and construed in accordance with the laws of the
         Commonwealth of Massachusetts without reference to its principles of
         conflicts of law. This Agreement shall not be amended except by an
         agreement in writing signed by both parties. This Agreement contains
         the entire agreement between the parties with respect to the subject
         matter of this Agreement and all other understandings, arrangements,
         and prior agreements are merged into and superceded by this Agreement,
         except that your obligations under Paragraphs 7, 8, 9, and 10 of the
         Transition Agreement will continue in full force and effect.

Please acknowledge your assent to the terms of this letter Agreement by signing
below.

                                                    Sincerely yours,

                                                    THE FIRST YEARS INC.



                                                    By: /s/ Ronald J. Sidman
                                                        ------------------------

                                                    Title: President and CEO
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Agreed and Accepted by:

/s/ Jerome M. Karp                                  Date: 11/11/99
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Jerome M. Karp



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