Document:

Exhibit 10.19

 

Private and Confidential

 

REVISED:  October 6, 2014

 

William E. Mote, Jr

[Address]

 

Dear Bill:

 

Further to recent discussions in respect of your employment with Summer Infant (USA), Inc. (“Summer”), Summer is pleased to offer you a full-time position as Chief Financial Officer (CFO) commencing on [TBD]. This offer is being extended in consideration of the mutual covenants and agreements contained in this letter (“Letter”), which sets forth our mutual understanding and agreement regarding your employment with Summer pursuant to the following terms and conditions.  All offers of employment are conditional, subject to satisfactory results of background investigation, reference checks, pre-employment alcohol and drug tests, and production of documents sufficient to demonstrate identity and authorization to work.

 

Position and Responsibilities:

 

Your employment with Summer will commence on [TBD]. Your responsibilities will include, but are not limited to, CFO for Summer Infant, Inc. in our Corporate Office in Woonsocket Rhode Island and in such capacity, you will report directly to the CEO of Summer, Carol Bramson.   The duties and services to be performed by you are collectively referred to herein as the “Services”.

 

You agree that you shall at all times conscientiously perform all of the duties and obligations assigned to you to the best of your ability and experience and in compliance with law.

 

You agree to use your best efforts to promote the interests of Summer and to devote your full business time and energies to the business and affairs of Summer and the performance of your Services. You represent and warrant to Summer that your execution of this Letter and the performance of your Services to Summer shall not violate any obligations you may have to any former employer, person or entity, including, without limitation, any restrictive obligations that would prevent you from the performance of your Services to Summer or any obligation with respect to proprietary or confidential information of any other person or entity.

 

 

 

Compensation:

 

You will receive a bi-weekly (every two weeks) base salary of $10,961.54 (annualized equivalent of $285,000), subject to applicable withholding and other lawful deductions.

 

In addition to your base salary, you will be eligible to participate in Summer’s annual STI (Short-Term Incentive) bonus program with a target equal to 40% of your base salary compensation.  This plan provides the opportunity to earn a bonus up to 80% of your base salary (double your targeted bonus) based on corporate and personal performance.

 

You will also be eligible to participate in the company’s long-term incentive plan, and, subject to the approval of the Compensation Committee of the Board of Directors of Summer Infant, Inc. (“Parent”) you will be eligible for a hiring grant of 20,000 shares of restricted stock and 40,000 Stock Options; such grant to be made in accordance with the company’s Incentive Compensation Plan.   The equity will vest in 4 equal annual installments on our standard schedule of 25% per year, with the first 25% being fully vested on the first anniversary from date of hire.

 

The specific mix and number of shares granted in future years as part of the annual equity grant program will be determined annually in line with the Company’s equity plan(s) and at the discretion of the Board of Directors.

 

Performance Review and Benefits:

 

You will be eligible for a performance and salary review in February 2016.    You will also be eligible for Summer’s standard benefits subject to plan eligibility requirements. Summer’s current benefits include Medical benefits, Dental benefits, Vision Care, (available the first of the month following your date of hire), a 401K plan and match program (after 90 days), Long-Term Disability (after 90 days), a Health Care Reimbursement Account, generous Product Discounts and 20 days of Paid Time Off per year, accrued at a rate of 6.15 hours bi-weekly (PTO includes vacation, sick and personal time).

 

Relocation:

 

We have agreed that you will not be expected to relocate while your son is still in high school, that your standard work-week would encompass 5 days per week in the office, and that you will relocate within 3 months of your son’s graduation from high school.

 

In the interim, we have also agreed that Summer will reimburse you for air travel expenses incurred in traveling between your home in Alabama and Summer’s headquarters for a period of up to 12 months.  In addition, to assist you with lodging expenses, Summer will provide you with a gross amount of $30,000 (payable $2,500 per month for 12 months beginning with the month in which you are hired).   In order to facilitate your transition, Summer will provide you with relocation support via reimbursement of up to $20,000 of relocation expenses upon presentation of appropriate receipts.  In addition, Summer agrees to provide a “signing bonus” of $30,000, payable on the first regular paydate following your move to a new residence within 60 miles of our corporate headquarters.  In the unlikely event that you should choose to voluntarily terminate your employment with the Company within twelve (12) months of the end of your relocation window, you agree to reimburse Summer 100% of your total relocation expenses as described above (including relocation and signing bonus, but excluding lodging expenses).

 

 

Governing Law/At Will Employment:

 

Your employment with Summer shall be governed by and interpreted in accordance with the laws of the State of Rhode Island. By execution and delivery of this Letter, you irrevocably submit to and accept the exclusive jurisdiction of the courts in the State of Rhode Island and waive any objection (including any objection to venue or any objection based upon the grounds of forum non conveniens) which might be asserted against the bringing of any such action, suit or other legal proceeding in such courts.

 

While it is Summer’s desire to have a long-term employment relationship with you, your employment with Summer is “at will”, in that either you or Summer have the right to terminate the employment relationship at any time, with or without cause.  This status may only be altered by written agreement, which is specific as to all material terms and is signed by an authorized officer of Summer.  The terms of this employment letter do not, and are not, intended to create either an express and/or implied contract of employment with Summer for a definitive term.

 

Notwithstanding the foregoing, in the event that your employment is terminated by Summer without cause or in the event that you terminate your employment with Summer for Good Reason (as hereinafter defined), then you shall be entitled to receive your base salary, then in effect, for a period of six (6) months following the termination of your employment payable in accordance with Summer’s customary payroll periods and practices and shall be less applicable taxes and withholdings (the “Severance Consideration”). You shall not be entitled to receive the Severance Consideration in the event that: (i) you voluntarily leave your employment for whatever the reason other than for Good Reason, (ii) your employment is terminated for Cause (as hereinafter defined), or (iii) as the result of your death or Disability (as hereinafter defined).

 

You acknowledge and agree that Summer’s obligation to pay to you the Severance Consideration shall be conditioned upon you executing a General Release and Termination Agreement in favor of Summer.

 

“Cause” means the occurrence of one or more of the following:  (i) your willful and continued failure to substantially perform your Services for Summer, which failure continues for a period of at least thirty (30) days after written demand for substantial performance has been delivered by Summer to you which specifically identifies the manner in which you have failed to substantially perform your Services; (ii) your willful conduct which constitutes misconduct and is materially and demonstrably injurious to Summer, as determined in good faith by a vote of at least two-thirds of the non-Executive directors of the Board at a meeting of the Board at which you are provided an opportunity to be heard; (iii) your being convicted of, or pleading nolo contendere to a felony; or (iv) your being convicted of, or pleading nolo contendere to a misdemeanor based in dishonesty or fraud.

 

“Disability” means that you have been unable to perform the Services as the result of your incapacity due to physical or mental illness, and such inability, at least four (4) weeks after its commencement, is determined to be total and permanent by a physical selected by Summer or its insurers and acceptable to you or your 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 Summer of its intention to terminate your employment.  In the event that you resume the performance of substantially all of the Services hereunder before the

 

 

termination of your employment becomes effective, the notice of intent to terminate shall automatically be deemed to have been revoked.

 

“Good Reason” means (i) the material diminution in your authority, duties or responsibilities; (ii) a material diminution in your annual base salary as in effect immediately prior to such diminution, other than in connection with a general diminution in Summer’s compensation levels and in amounts commensurate with the percentage diminutions of other Summer employees of comparable seniority and responsibility; or (iii) if applicable, any other action or inaction which constitutes a material breach by Summer of an agreement with you pursuant to which you provide services to Summer.

 

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

 

In addition, you will be entitled to protection against a change of control of Summer pursuant to the terms of a Change of Control Agreement in the form attached hereto as Exhibit 1 (the “CC Agreement”). The CC Agreement provides you, upon the occurrence of an event constituting a Change of Control, with certain Severance Benefits (as defined in the CC Agreement). In consideration of the Severance Benefits, you will be required to abide by the restrictive covenants contained in the CC Agreement. As a condition to your employment you will be required to execute and deliver the CC Agreement to Summer on the commencement date of your employment.

 

Employment Documentation:

 

Your employment with Summer is contingent upon your submission of satisfactory proof of your identity and legal authorization to work in the United States as well as completion of all employment related forms required by Summer.  If you fail to provide satisfactory documentation, federal law prohibits Summer from hiring you.

 

Expense Reimbursement:

 

Summer will pay and/or reimburse you for all expenses reasonably and necessarily incurred by you in the performance of your services while employed by Summer, including reasonable and customary travel related expenses consistent with Summer’s corporate travel policy. Pursuant to Summer’s corporate travel policy, you may travel business class for air travel having a duration of 5 or more hours of flight time. Such payment/reimbursement shall be made upon presentation of such receipts or other documentation, as Summer customarily requires prior to making such payment or reimbursement.

 

 

Employment Manual:

 

During your employment with Summer you will be required to abide by Summer’s code of conduct, policies, and procedures as set forth in Summer’s Employee Handbook or as otherwise communicated to you in writing.

 

Restrictive Covenants:

 

Please be advised that by accepting this offer of employment and in consideration of your employment with Summer, and the grant of restrictive stock in accordance with the terms hereof, you are agreeing to be bound by and adhere to the terms and conditions set forth in Appendix A, attached hereto and incorporated herein, which terms and conditions form a material condition to Summer in extending this letter to you.

 

Return of Letter:

 

We are excited about this opportunity to work with you to build the Summer Brand and Business.  To accept this offer, please sign and date this Letter below (as well as Appendix A and Exhibit 1), keep a copy for your records, and return a copy to Human Resources.  We are extremely confident that your employment with us will prove mutually beneficial and we look forward to having you join our winning team!

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
Summer Infant USA, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark Strozik
    
	
 
    	
 
    
	
 
    	
Name:
    	
Mark Strozik
    
	
 
    	
Title:
    	
Senior Vice President / Human Resources
    
	
 
    	
 
    	
 
    
				

 

I accept your offer of employment as set forth in this letter and agree to be bound by the terms and conditions set forth in Appendix A, attached hereto.  I understand that my employment is “at will” and that either you or I can terminate my employment at any time, for any reason.  No oral commitments have been made concerning my employment.

 

	
William E.   Mote, Jr.
    	
 
    	
/s/ William E. Mote, Jr.
    
	
Executive Name   (please print)
    	
 
    	
Executive Signature
    
	
 
    	
 
    	
 
    
	
October 7,   2014
    	
 
    	
 
    
	
Datemm03-0415_8ke101.htm

EXHIBIT 10.1

 

 

 

 

March 4, 2015

 

Jeff Leonard

13572 Sunset Lakes Circle

Winter Garden, FL 34787

 

 

Re: Offer Letter

 

Dear Jeff:

 

We are pleased to offer you a position with The Hillman Group, Inc. (“Hillman” or the “Company”) as the Executive Vice President of Finance and Chief Financial Officer of the Company, reporting to the Chief Executive Officer. You will be based at the Company’s corporate headquarters, which are in Cincinnati, Ohio.

 

In accordance with our discussions, set forth below are the terms and conditions of your employment. This letter, and the exhibits attached hereto, when signed by you, will constitute your employment agreement with the Company (this “Agreement”).

 

1. Start Date. We look forward to a start date no later than March 16, 2015 (the “Start Date”) as mutually agreed. Your employment with the Company shall be on an at-will basis.

 

2. Time Commitment to Duties. You shall devote all of your business time to the proper and efficient performance of services under this Agreement.

 

3. Base Salary. Your initial Base Salary shall be at the rate of $400,000 per annum, commencing as of the Start Date. Your Base Salary may be increased from time to time by the Board of Directors of the Company (the “Board”) or the Compensation Committee of the Board (the “Compensation Committee”), and we have agreed to increase your Base Salary to $417,500 and $435,000 respectively effective on the first and second anniversaries of your Start Date.

 

4. Annual Performance Bonus.

 

(a) Amount. For each complete calendar year of your employment, you shall have the opportunity to earn an annual bonus (the “Annual Performance Bonus”) pursuant to the terms of a performance-based bonus plan. The bonus plan will provide for performance-based targets to be agreed to annually by the Chief Executive Officer and the Board. If 100% of such bonus targets are met in a year, you shall be entitled to a bonus equal to 75% of your Base Salary for that year. If the Company and its subsidiaries perform at a level in excess of 100% of the bonus targets, you shall be entitled to a higher amount of bonus compensation up to a maximum of 150% of your Base Salary for that year in 

 

 

  

  

  

 

 

accordance with the bonus plan. You shall be entitled to bonus compensation in a reduced amount if the Company and its subsidiaries perform at a level that is less than 100% of the bonus targets but in excess of a minimum level established by the Board. For the 2015 calendar year, your Annual Performance Bonus will be prorated from your Start Date.

 

(b) Payment. The amount of any Annual Performance Bonus in respect of a calendar year shall be paid to you in a lump sum payment at the same time that other members of senior management receive annual bonuses generally which shall be as soon as reasonably practicable after the Company’s audited financial statements for such year are finalized, subject to your continued employment through the payment date (except as otherwise provided in Section 10 hereof).

 

 

5. Benefits.

 

(a) General. You shall be entitled to participate in all employee benefit plans, practices and programs maintained by the Company, as in effect from time to time. In addition, you shall be eligible to participate in the Company’s deferred compensation plan and the executive supplemental long term disability plan and you shall receive a company car or car allowance not to exceed $700 per month.

 

6. Business Expenses. You shall be entitled to reimbursement for all reasonable and necessary out-of-pocket business expenses incurred by you in connection with the performance of your duties hereunder in accordance with the Company’s expense reimbursement policies and procedures.

 

7. Relocation Expenses. You will paid a relocation allowance of $25,000 for expenses related to your transition and relocation to Cincinnati. This relocation allowance will be grossed up for applicable withholding taxes and is further subject to your continued employment through March 16, 2016 unless Terminated Without Cause as defined in Section 10(b).

 

8. Vacation. You shall be entitled to twenty (20) working days of paid vacation per annum, accruing in accordance with the Company’s vacation policy.

 

9. Equity Participation.

 

(a) You will be eligible to participate in the HMAN Group Holdings, Inc. Equity Investment Plan (the “Investment Plan”) and HMAN Group Holdings, Inc. 2014 Equity Incentive Plan (the “Equity Plan”), subject to the terms of: the Equity Plan, the Nonqualified Stock Option Award Agreement (the “Option Award Agreement”), the terms of the Shareholders Agreement (the “Shareholders Agreement”) and Subscription Agreement (the “Subscription Agreement”) (all 

 

 

  

2

  

 

 

attached hereto). Capitalized terms used but not otherwise defined in this Section 9 shall have the meanings ascribed thereto in the Shareholders Agreement, Subscription Agreement, Equity Plan, Option Award Agreement and the Investment Plan.

 

(b) In consideration of you entering into this Agreement, and as an inducement to join the Company, on the Start Date, Hillman will grant you the following equity investment right subject to the terms and conditions of the Shareholders Agreement, Subscription Agreement, and the Investment Plan which will set forth the terms of such award:

 

	
(i)  

	
A minimum of $500,000 worth of Common Shares, of which $400,000 shall be funded by you in a lump sum at Hillman’s request and upon receipt of your capital commitment, $100,000 will be funded by Hillman in the form of a stock grant which is subject to your continued employment through March 16, 2016 unless Terminated Without Cause as defined in Section 10(b). You are responsible for any applicable taxes associated with the restricted stock grant.

 

(c) In consideration of you entering into this Agreement, and as an inducement to join the Company, on the Start Date, Hillman will grant you the following equity award subject to the terms and conditions of the Shareholders Agreement, the Equity Plan, and the Option Award Agreement which will set forth the terms of such award:

 

	
(i)

	
2,861 Nonqualified Stock Options at a strike price of $1,000 per share.

 

(d) You recognize that this right to participate in the Equity Plan and to receive the equity award described herein is an additional benefit that you would not have been entitled to but for the execution of this Agreement.

 

10. Termination of Employment.

 

(a) Termination of Employment. Your employment hereunder may be terminated by either the Company or by you at any time and for any reason; provided that, unless otherwise provided herein or in the event of a termination for “Cause,” either party shall be required to give the other party at least thirty (30) days advance written notice of any termination of your employment. Upon termination of your employment, the Company will pay you, in a lump sum, within thirty (30) days after such termination of employment, (1) any Base Salary earned but not yet paid and (2) the amount of any business expenses incurred by you prior to such termination that were incurred in accordance with the Company’s policies 

 

 

  

3

  

 

 

and which have not yet been reimbursed (collectively, (1) and (2) being, the “Unpaid Amounts”).

 

(b) Severance Upon Termination Without Cause or Resignation With Good Reason. If your employment is terminated by the Company without “Cause,” or if you resign with Good Reason (as such terms are defined in the Shareholders Agreement and the Equity Plan), in addition to the Unpaid Amounts and subject to your compliance with the Restrictive Covenant Agreement referenced in Section 11 of this Agreement and your execution of a release of claims in favor of the Company, its affiliates and their respective officers and directors in a form provided by the Company (the “Release”) and such Release becoming effective and irrevocable in accordance with its terms within sixty (60) days following the date of termination, you shall be entitled to receive (i) continued Base Salary: for eighteen months following the date of termination if your termination date is on or prior to June 30, 2016 and for one year (twelve months) following the date of termination if your termination date is July 1, 2016 or later. Severance is payable in equal installments in accordance with the Company’s normal payroll practices, which shall commence on the date that is sixty (60) days following such termination of employment, provided that, prior to the date the Release has become effective and irrevocable, the first installment payment shall include all amounts of Base Salary that would otherwise have been paid to you during the period beginning on the date of termination and ending on the first payment date if no delay had been imposed; and (ii) a pro rated portion of the bonus for the year in which termination occurs as determined pursuant to Section 4(a) above. (the “Prorated Bonus”). The Prorated Bonus shall be paid in lump sum as soon as reasonably practicable after the Company’s audited financial statements for such year are finalized but in no event earlier than sixty (60) days following such termination date.

 

11. Restrictive Covenant Agreement . Prior to the issuance of the equity awards set forth in Section 9 you agree to execute the Restrictive Covenant Agreement attached to the Option Award Agreement as Exhibit B.

 

12. Assignment and Binding Effect. This Agreement shall be binding upon and inure to the benefit of you and your heirs, executors, administrators, estate, beneficiaries, and legal representatives. Neither this Agreement nor any rights or obligations under this Agreement shall be assignable by either party without the prior express written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives. Notwithstanding the foregoing, the Company may assign this Agreement to any existing or future subsidiary or affiliate of the Company, any purchaser of all or substantially all of the Company’s business or assets, any successor to the Company or any assignee thereof, whether direct or indirect, by purchase, merger, consolidation, operation of law or otherwise.

 

 

 

  

4

  

 

 

 

13. Choice of Law. This Agreement is made in Delaware and shall be construed and interpreted in accordance with the laws of Delaware. Each of the parties hereto agrees to the exclusive jurisdiction of the state and federal courts located in the State of Delaware for any and all actions between the parties. Any controversy or claim arising out of or relating to this Agreement or the breach thereof, whether involving remedies at law or in equity, shall be adjudicated in Delaware. The parties hereby irrevocably waive any objection they may now or hereafter have to the laying of venue of any such action in such court(s), and further irrevocably waive any claim they may now or hereafter have that any such action brought in such court(s) has been brought in an inconvenient forum.

 

14. Integration. This Agreement contains the entire agreement of the parties relating to the subject matter of this Agreement, and supersedes all prior oral and written employment agreements or arrangements between the parties. This Agreement cannot be amended or modified except by a written agreement signed by you and the Company.

 

15. Waiver. No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the party against whom the waiver is claimed, and any waiver of any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach. No failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by either party hereto shall constitute a waiver thereof or shall preclude any other or further exercise of the same or any other right, power or remedy.

 

16. Severability. The unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal.

 

17. Tax Withholding. The Company shall deduct or withhold the minimum statutory amount to satisfy federal, state or local taxes required by law or regulation to be withheld with respect to any payment or benefit provided hereunder.

 

18. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall together constitute an original hereof.

 

19. Section 409A of the Code. The Company intends for this Agreement to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) in accordance with the regulations and guidance promulgated thereunder (collectively “Section 409A”). In no event whatsoever will the Company be liable for any additional tax, interest or penalties that may be imposed 

 

 

 

  

5

  

 

 

on you under Section 409A or any damages for failing to comply with Section 409A.

 

20. General Obligations. As an employee, you will be expected to adhere to the Company’s standards of professionalism, loyalty, integrity and honesty. You will also be required to comply with the Company’s policies and procedures. Further, your employment is contingent upon successful completion of the Company’s application process including a pre-employment background check and providing proof of your eligibility to work in the United States.

 

[the remainder of this page intentionally left blank.]

 

 

 

 

 

 

 

 

 

 

 

 

  

6

  

 

 

 

We are pleased to offer you this opportunity and look forward to our long and mutually rewarding relationship.

 

 

	 	Very truly yours, 	 
	 	 	 
	 	THE HILLMAN GROUP, INC.	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	    /s/ James P. Waters	 
	 	 	Name:	James P. Waters 	 
	 	 	Title:	CEO and President 	 
	 	 	 	 	 
	 	Date: 	  March 4, 2015 	 

 

 

	ACCEPTED AND AGREED: 	 
	 	 
	JEFF LEONARD: 	 
	 	 
	 	 
	   /s/  Jeff Leonard	 
	 	 	 
	Date: 	  March 4, 2015 	 

 

 

 

 

 

 

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00241-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00241-of-00352.parquet"}]]