Item 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 7, 2018, the Board of Directors of Summer Infant, Inc. (the Company) approved the Companys Change in Control Plan (the Plan), pursuant to which the Companys Chief Executive Officer (CEO), the Companys Chief Financial Officer (CFO) and other designated employees of the Company will be entitled to certain payments and benefits in connection with a change in control of the Company. The Plan replaces prior individual change in control agreements with certain employees, including the CEO and CFO, that expired in October 2017.
Under the double trigger provisions of the Plan, a participant will be entitled to certain payments if (1) there is a change in control and (2) within the 12-month period following the change in control, the participants employment is terminated without cause by the Company or for good reason by the participant. If these events occur, a participant will be entitled to receive payments based on their tier under the Plan for a period of time following the termination, including:
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a cash payment equal to his or her annual base salary times the applicable tier multiplier (2.0x for the Tier 1 participant; 1.0x for Tier 2 participants, and 0.5x for Tier 3 participants), payable over a period of time following termination (24 months for the Tier 1 participant, 12 months for Tier 2 participants and 6 months for Tier 3 participants);
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a cash payment equal to the pro-rated portion of the participants annual cash bonus actually achieved for the fiscal year in which the termination occurs, payable when such payment would otherwise be paid after the end of the relevant performance period; and
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a cash payment equal to one times the monthly premiums for the participants group medical, dental and vision coverage for a period of time (24 months for the Tier 1 participant, 12 months for Tier 2 participants and 6 months for Tier 3 participants), payable monthly provided that such payments will end if the participant becomes eligible to participate in similar plans with a subsequent employer.
In addition, a participants unvested equity awards granted prior to the change in control will accelerate and vest in full as of the participants termination date, and any unvested performance-based equity awards will be deemed vested and earned assuming achievement at the target performance level. The CEO is the sole participant in Tier 1, the CFO and other designated senior management members participate in Tier 2 and designated key employees participate in Tier 3. As a condition to receiving payments under the Plan, participants must execute a severance agreement and release, which includes non-competition and similar covenants that remain in effect for 24 months for the Tier 1 participant, 12 months for Tier 2 participants and 6 months for Tier 3 participants.
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