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Exhibit No. 10.3
EMPLOYMENT AGREEMENT
Agreement made as of the 20th day of November, 1998, between UNITED RETAIL
GROUP, INC., a Delaware corporation, with principal offices at 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxx Xxxx, Xxx Xxxxxx 00000-0000 (the "Company), and XXXXXXX X.
XXXXXXX, residing at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx 00X, Xxxxxxxxxx, Xxx Xxxxxx
00000 (the "Executive").
WHEREAS, the Executive is an attorney admitted to practice before the
courts of the State of New York and the United States District Court for the
Southern District of New York;
WHEREAS, the Executive has been employed by the Company as its Senior Vice
President - General Counsel to provide, among other things, advice on the laws
of the State of New York and the federal laws of the United States and to
supervise the representation before courts and legislative and administrative
bodies of the Company and its subsidiaries;
WHEREAS, the Company desires to continue the professional services of the
Executive, and the Executive desires to continue to provide such services to the
Company, on the terms set forth in this Agreement;
WHEREAS, the provisions of this Agreement were recommended by the
Compensation Committee of the Company's Board of Directors on November 9, 1998;
and
WHEREAS, this Agreement was reviewed by special counsel retained by the
Compensation Committee of the Board of Directors of the Company and approved by
the Company's Board of Directors on November 20, 1998.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS.
(a) Affiliated Companies shall mean, with respect to the Company, any
corporation, limited partnership, general partnership, association,
joint-stock company, joint venture, trust, bank, trust company, land
trust, business trust, fund or any organized group of persons,
whether or not a legal entity, that is directly or indirectly
controlled by the Company.
(b) Base Salary shall have the meaning set forth in Section 4(a).
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(c) Board of Directors shall mean the Board of Directors of the Company.
(d) Business of the Company shall mean the operation of a retail store
chain which markets and sells apparel for women principally in sizes
14 and larger and any other future business in which the Company and
its subsidiaries and Affiliated Companies engage that produces more
than 10% of the Company's consolidated sales.
(e) By-laws shall mean the Restated By-laws of the Company as currently
in force.
(f) Cause shall mean the occurrence of one or more of the following
events:
(i) a judgment of conviction against the Executive or a plea
of guilty has been entered for any felony which is both based on his
personal actions (excluding liability imputed to him by reason of
his position as an executive of the Company) and involves common law
fraud, embezzlement, willful dishonesty or moral turpitude (the
entry of a judgment or plea being the only event or circumstance
sufficient to constitute Cause under this subparagraph (i)),
provided, however, that any felony an essential element of which is
predicated on the operation of a vehicle shall be deemed not to
involve moral turpitude;
(ii) the Executive has been disbarred by the New York Supreme
Court or permanently barred from practice before the Securities and
Exchange Commission ("SEC");
(iii) (A) the Executive has willfully and continuously failed
to perform his duties to the Company in any material respect, or (B)
the Executive has failed in any material respect to follow specific
directions of the Board of Directors or the Chief Executive Officer
in the performance of his duties;
(iv) the Executive has demonstrated willful misconduct in the
performance of his duties to the Company in any material respect and
material economic harm to the Company has resulted; or
(v) there has been a breach in any material respect of any
of the provisions of Section 11;
provided, however, that the judgment of conviction or plea of guilty
referred to in subparagraph (i), the disbarment referred to in
subparagraph (ii), the failure of performance referred to in
subparagraph (iii), the misconduct referred to in subparagraph (iv),
and the breach referred to in subparagraph (v) shall constitute
Cause for a maximum of only 90 days after the judgment of
conviction, plea of guilty or disbarment was entered, the failure of
performance commenced, the material economic harm resulted, or the
breach first took place, as the case may be.
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(g) Change of Control shall mean resignation or removal (including
failure to reelect) for any reason of the Chief Executive Officer of
the Company, within 90 days after either (i) the acquisition after
the date first set forth above by any person (defined for the
purposes of this paragraph to mean any person within the meaning of
Section 13(d) of the Securities Exchange Act of 1934 ("Exchange
Act")), other than the Company, the resigned or removed Chief
Executive Officer, the Executive or an employee benefit plan created
by the Board of Directors for the benefit of the Company's
Associates, either directly or indirectly, of the beneficial
ownership (determined under Rule 13d-3 of the Regulations
promulgated by the SEC under Section 13(d) of the Exchange Act) of
any securities issued by the Company if, after such acquisition,
such person is the beneficial owner of securities issued by the
Company having 30% or more of the voting power in the election of
Directors at the next meeting of the holders of voting securities to
be held for such purpose of all of the voting securities issued by
the Company, (ii) the election of a majority of the Directors,
elected at any meeting of the holders of voting securities of the
Company, who were not nominated for such election by the Board of
Directors or a duly constituted committee of the Board of Directors,
or (iii) the merger or consolidation of the Company with, or
transfer of substantially all of the assets of the Company to,
another person; provided, however that any such acquisition,
election, merger, consolidation or transfer that is approved in
advance in writing by the Executive shall not be a predicate for a
Change of Control.
(h) CPI shall have the meaning set forth in Section 4(a).
(i) Cure Period shall have the meaning set forth in Section 14(b).
(j) Group Benefits shall have the meaning set forth in Section 6(a).
(k) Options shall mean employee stock options under a benefit plan or
arrangement between the Company and the Executive, including those
which may be granted during the Term of Employment, held by the
Executive or his assigns or donees.
(l) Performance Bonus shall have the meaning set forth in Section 4(b).
(m) Permanent Disability shall mean the inability of the Executive to
perform his duties and responsibilities to the Company by reason of
a physical or mental disability or infirmity (i) for a continuous
period of four months or (ii) at such earlier time as the Executive
submits medical evidence satisfactory to the Company that the
Executive has a physical or mental disability or infirmity that will
likely
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prevent him from substantially performing his duties and
responsibilities for four months or longer (the date of such
Permanent Disability shall be on the last day of such four-month
period or the day on which the Executive submits such evidence, as
the case may be).
(n) Protected Information shall mean trade secrets, confidential or
proprietary information, and all other knowledge, know-how,
information, documents or materials, owned or developed by the
Company, or otherwise in the possession of the Company, whether in
tangible or intangible form, pertaining to the Business of the
Company, the confidentiality of which the Company takes reasonable
measures to protect, including, but not limited to, the Company's
research and development, store operating results, identities and
habits of customers and prospective customers, suppliers, business
relationships, products (including prices, costs, sales or content),
processes, techniques, machinery, contracts, financial information
or measures, business methods, future business plans, data bases,
computer programs, designs, models, operating procedures, knowledge
of the organization, and other information owned, developed or
possessed by the Company; provided, however, that Protected
Information shall not include information that shall become
generally known to the public or the trade without violation of
Section 11.
(o) Resignation Compensation shall have the meaning set forth in Section
14(c).
(p) Severance Pay shall have the meaning set forth in Section 14(b).
(q) Successor shall have the meaning set forth in Section 20.
(r) Tax shall mean all taxes on income, which shall be assumed to be at
a rate equal to the sum of the highest marginal rates, including any
applicable surcharges, of federal income tax, state income tax,
local income tax, Medicare payroll tax and any similar income or
payroll tax for a married citizen filing a joint return from the
county of the Executive's residence, as now in effect or as amended
from time to time.
(s) Term of Employment shall mean the period of time commencing on the
date first set forth above and ending on August 3, 2003 or such
later date as may be mutually agreed upon by the Board of Directors
and the Executive.
(t) Termination Without Cause shall have the meaning set forth in
Section 14(b).
(u) Unauthorized shall mean: (i) in contravention of the Company's
policies or procedures; (ii) otherwise inconsistent with the
Company's measures to protect its interests in its Protected
Information; or (iii) in contravention of any duty existing under
law or contract.
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2. TERM.
The Company hereby employs the Executive, and the Executive hereby accepts
such employment, in the capacities and upon the terms and conditions hereinafter
set forth, during the Term of Employment.
3. DUTIES.
(a) During the Term of Employment, the Executive shall serve as the
Senior Vice President - General Counsel of the Company. The
Executive shall also occupy a similar position in the Company's
subsidiaries other than The Avenue, Inc. and United Retail
International, Ltd. In such capacity, the Executive shall (i)
provide advice on the laws of the State of New York and the federal
laws of the United States, (ii) supervise the representation before
courts and legislative and administrative bodies of the Company and
its subsidiaries, (iii) engage and approve the fees of all attorneys
who represent or advise the Company or a subsidiary of the Company,
(iv) approve the form of all material contracts entered into by the
Company or one of its subsidiaries, (v) comment on drafts of all
documents to be filed by the Company with the SEC, and (vi) perform
such other professional duties as may be determined and assigned to
the Executive from time to time by the Board of Directors and the
Chief Executive Officer. Notwithstanding the above, the Executive
shall not be required to perform any duties and responsibilities
which would be likely to result in a non-compliance with or
violation of any applicable law or regulation or canon of legal
ethics. The Executive shall report solely and directly to the Chief
Executive Officer.
(b) The Executive accepts such employment and hereby agrees to serve the
Company faithfully, industriously and to the best of his ability in
such capacities, with undivided loyalty, devoting substantially all
of his professional time, attention, knowledge, energy and skills to
such employment except during vacation not to exceed three weeks in
any year. The Executive may oversee personal and family investments
in a manner in which the Executive does not actively operate
portfolio companies in the ordinary course of business.
4. COMPENSATION. As compensation to the Executive for performance of
the services required hereunder and as consideration for his execution and
delivery of this Agreement, the Company shall pay him (subject to Sections 7 and
14), and the Executive agrees to accept, the following salary and other
compensation:
(a) A base salary, payable in accordance with the regular executive
payroll practices of the Company, at a rate of $220,000 per annum
during the period ending on January 31, 1999 and thereafter at such
higher rate as may be determined by the
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Compensation Committee of the Board of Directors, but in any event
base salary shall increase as of February 1, 1999 by a percentage at
least equal to the increase, if any, in the Consumer Price Index for
All Urban Consumers for New York and Northern New Jersey published
by the Bureau of Labor Statistics of the Department of Labor ("CPI")
since January 31, 1998 and shall increase as of each anniversary of
February 1, 1999 by a percentage at least equal to the increase, if
any, in the CPI since the previous January 31st (as increased from
time to time, the "Base Salary").
(b) The Executive shall continue to be eligible to receive, and the
Company shall continue to pay, a semi-annual cash incentive
compensation payment ("Performance Bonus") based on the Company's
consolidated operating income for the six-month periods ending
January 31st and July 31st, respectively, with a semi-annual award
ranging from zero to 80% of Base Salary for the six-month period in
accordance with past practice, provided, however, that the
Performance Bonus shall be earned and fully vested in the Executive
as of January 31st or July 31st, as the case may be, whether or not
the Executive shall remain in the Company's employ after the
Performance Bonus shall have vested and provided, further, that the
Performance Bonus shall be paid to the Executive as soon as
practicable after the consolidated operating income for the period
in question shall be determined.
(c) If the federal excise tax pursuant to Section 280G of the Code or
any successor provision on "golden parachute" payments applies to
any acceleration of the vesting of Options during the Term of
Employment, the Company shall immediately pay the Executive (w) an
amount equal to the excise tax incurred plus (x) an amount equal to
the Tax with respect to the payment made pursuant to clause (w) of
this sentence, plus (y) an amount equal to the federal excise tax on
"golden parachute" payments with respect to the payment, if any,
made pursuant to clause (x) of this sentence plus (z) an amount
equal to the Tax with respect to the payment made pursuant to clause
(y) of this sentence.
5. EXPENSES. The Executive will continue to be required to incur
reasonable and necessary travel, business entertainment and other business
expenses. The Company agrees to reimburse the Executive for all reasonable and
necessary travel, business entertainment and other business expenses incurred or
expended by the Executive incident to the performance of the Executive's duties
hereunder, upon submission by the Executive to the Company of vouchers or
expense statements satisfactorily evidencing such expenses.
6. EXECUTIVE BENEFITS.
(a) The Company shall provide the Executive with benefits ("Group
Benefits"), taken as a whole, that are at least equal to those
provided by the Company to the other senior executives of the
Company, including, without limitation, enhanced disability
insurance benefits at the level insured on the date first set forth
above
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(or, if the group disability insurance can not be continued in
force, the Company shall provide other disability benefits
equivalent to the benefits under the group policy).
(b) Group Benefits shall be provided while the Executive is employed by
the Company under this Agreement and thereafter as provided pursuant
to the terms of this Agreement.
(c) All Options shall be fully vested and immediately exercisable after
either Termination Without Cause or a Change of Control, anything in
any stock option agreement between the Company and the Executive to
the contrary notwithstanding. In the event of Termination Without
Cause, Options shall be exercisable for the lesser of 90 days
thereafter or the remainder of the term of the Option. In the event
of Change of Control, Options shall be exercisable until the earlier
of 90 days after the termination of the Executive's employment
hereunder (including resignation) or the expiration of the term of
the Option.
7. PERMANENT DISABILITY; DEATH.
(a) In the event of the Permanent Disability of the Executive during the
Term of Employment, the Company shall, upon written notice to the
Executive, have the right to terminate the Executive's employment
hereunder by reason of Permanent Disability.
(b) In the event of the death of the Executive during the Term of
Employment, this Agreement shall automatically terminate.
8. BENEFITS UPON DEATH OR DISABILITY. In the event of the Executive's
death or a termination of the Executive's employment by the Company due to
Permanent Disability, the Executive, his executor or his heirs at law, as the
case may be, shall be entitled to:
(a) any Base Salary accrued or any Performance Bonus vested but not yet
paid;
(b) a pro rata Performance Bonus for the season in which death or
Permanent Disability occurs determined and payable on the basis of
the number of days worked during the season and the bonus percentage
established for the season;
(c) any accrued vacation pay;
(d) reimbursement for expenses incurred but not yet paid prior to such
death or Permanent Disability;
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(e) any other compensation and benefits as may be provided in accordance
with the terms and provisions of the Group Benefits or of this
Agreement; and
(f) in the case of Permanent Disability, for five years following the
date of Permanent Disability, first, COBRA health insurance benefits
for the Executive and his dependents at the Company's expense until
the COBRA benefits expire and thereafter, for the remainder of such
five-year period, equivalent reimbursement of healthcare expenses
directly by the Company.
The provisions of this Section 8 shall survive the termination of the
Executive's employment hereunder.
9. REPRESENTATION, WARRANTY AND COVENANT OF EXECUTIVE. The Executive
represents, warrants and covenants to the Company that he is not and will not
become a party to any agreement, contract or understanding, whether employment
or otherwise, which would in any way restrict or prohibit him from undertaking
or performing his employment in accordance with the terms and conditions of this
Agreement.
10. REPRESENTATION, WARRANTY AND COVENANT OF THE COMPANY. The Company
represents and warrants that this Agreement constitutes a valid and legally
binding obligation of the Company enforceable in accordance with the terms
herein set forth, except to the extent that the enforceability of this Agreement
may be affected by bankruptcy, insolvency, reorganization, moratorium, or
similar laws or equitable principles affecting creditors' rights generally. The
Company covenants that it shall give notice promptly to the Executive of the
occurrence of Change of Control pursuant to Section 21.
11. RESTRICTIVE COVENANTS AND CONFIDENTIALITY.
(a) The Executive agrees that he shall not:
(i) solicit, raid, entice, encourage or induce any person, firm or
corporation that at any time within one year prior to the
termination of this Agreement shall have been an exclusive
supplier to the Company, or any of its subsidiaries or
Affiliated Companies, to become a supplier to any other
person, firm or corporation that derives more than 10% of its
sales, directly or indirectly, from a business the same as the
Business of the Company and the Executive shall not approach
any such person, firm or corporation for such purpose or
authorize or knowingly approve the taking of such actions by
any other person, firm or corporation or assist any such
person, firm or corporation in taking such action; or
(ii) solicit, raid, entice, encourage or induce any person who at
any time within one year prior to the termination of this
Agreement shall have been an employee of the Company, or any
of its subsidiaries or Affiliated Companies, to become
employed by any person, firm or corporation, and
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the Executive shall not approach any such employee for such
purpose or authorize or knowingly approve the taking of such
actions by any other person, firm or corporation or assist any
such person, firm or corporation in taking such action.
(b) During the Term of Employment and thereafter, the Executive will not
use, disclose or divulge, furnish or make accessible to anyone,
directly or indirectly, any Protected Information in any
Unauthorized manner or for any Unauthorized purpose, provided,
however, that in the event that the Executive is required to
disclose any Protected Information by court order or decree or in
compliance with the rules and regulations of a governmental agency
or in compliance with law, the Executive will provide the Company
with prompt notice of such required disclosure so that the Company
may seek an appropriate protective order and/or waive the
Executive's compliance with the provisions of this Section 11 and
provided, further, that if, in the absence of a protective order or
the receipt of a waiver hereunder, the Executive is advised by his
counsel that such disclosure is necessary to comply with such court
order, decree, rules, regulation or law, he may disclose such
information without liability hereunder.
(c) The Executive agrees that all processes, techniques, know-how,
inventions, plans, products, and devices developed, made or invented
by the Executive, alone or with others in connection with the
Executive's employment hereunder, during the Term of Employment,
shall become and be the sole property of the Company unless released
in writing by the Company.
(d) The Executive agrees that the Executive shall not, directly or
indirectly, within any area in the United States or elsewhere where
the Company or any of its subsidiaries or Affiliated Companies is
transacting business during the Term of Employment, engage or
participate or make any financial investments in or become employed
by, or act as an attorney, agent or principal of, or render advisory
or other services to or for any person, firm or corporation, or in
connection with any business activity (other than that of the
Company and its subsidiaries or Affiliated Companies), that derives
more than 10% of its sales, directly or indirectly, from a business
the same as the Business of the Company. Nothing herein contained,
however, shall restrict the Executive from overseeing personal and
family investments, including any investments in not more than 3% of
the voting securities in any company whose stock is listed on a
national securities exchange or actively traded in the
over-the-counter market, so long as in connection with such
investments the Executive does not actively operate any such
business or enterprise that derives more than 10% of its sales,
directly or indirectly, from a business the same as the Business of
the Company. The
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Executive further agrees that the Executive shall not act as trial
counsel for any party in a lawsuit against the Company or any of its
subsidiaries or Affiliated Companies, provided, however, that the
Executive shall be permitted to appear pro se.
(e) The Executive shall be bound by the provisions of Section 11(a) and
(d), and shall perform his obligations pursuant to Section 11(a) and
(d), during the Term of Employment and for 18 months thereafter,
provided, however, that in the event of Termination Without Cause or
resignation by the Executive in accordance with Section 14(c) the
Executive shall be bound by the provisions of Section 11(a) and (d),
and shall perform his obligations pursuant to Section 11(a) and (d),
only in the event that the Company shall pay his Severance Pay in
accordance with the provisions of Section 14(b) no later than the
15th day after the termination of the Executive's employment under
this Agreement or his Resignation Compensation in accordance with
the provisions of Section 14(c) no later than the 15th day after the
effective date of the Executive's resignation, as the case may be.
For purposes of the proviso in the preceding sentence only, payment
of Severance Pay or Resignation Compensation within the time
specified above in an amount at least equal to the amount determined
in advance to be due and owing to the Executive by a firm of
independent public accountants of nationally recognized standing
shall satisfy the condition of said proviso, and cause the Executive
to be bound by the provisions of Section 11(a) and (d) and shall
obligate the Executive to perform his obligations pursuant to
Section 11(a) and (d) even if such amount is less than the amount
actually due and owing.
(f) The provisions of this Section 11 shall survive the termination of
the Executive's employment hereunder, irrespective of the reason
therefor.
(g) The Executive acknowledges that the services to be rendered by the
Executive are of a special, unique and extraordinary character and,
in connection with such services, the Executive will have access to
confidential information vital to the Company's and its subsidiaries
and Affiliated Companies' businesses. By reason of this, the
Executive consents and agrees that if the Executive violates any of
the provisions of this Section 11, the Company and its subsidiaries
and Affiliated Companies would sustain irreparable harm, and
therefore, in addition to any other remedies which the Company may
have under this Agreement or otherwise, the Company shall be
entitled to an injunction from any court of competent jurisdiction
restraining the Executive from committing or continuing any such
violation of this Section 11. The Executive acknowledges that
damages at law would not be an adequate remedy for violation of this
Section 11, and the Executive therefore agrees that the provisions
of this Section 11 may be specifically enforced against the
Executive in any court of competent jurisdiction. Nothing herein
shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company for such breach or
threatened breach, including the recovery of damages from the
Executive.
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12. DEDUCTIONS AND WITHHOLDING. The Executive agrees that the Company
shall withhold from any and all compensation required to be paid to the
Executive pursuant to this Agreement all Federal, state, local and/or other
taxes which the Company determines are required to be withheld in accordance
with applicable statues and/or regulations from time to time in effect.
13. MUTUAL NON-DISPARAGEMENT. Neither the Executive nor the Company will
make or authorize any public statement disparaging the other in its or his
business interests and affairs. Notwithstanding the foregoing, neither party
shall be (i) required to make any statement which it or he believes to be false
or inaccurate, or (ii) restricted in connection with any litigation, arbitration
or similar proceeding or with respect to its response to any legal process. The
provisions of this Section shall survive the termination of the Executive's
employment hereunder, irrespective of the reason therefor.
14. TERMINATION.
(a) For purposes of this Agreement, removal of the Executive from office
shall be deemed to be for "Cause" as defined in Section 1(f) only if
the Company delivers to the Executive within a reasonable time
before the removal of the Executive from office a notice of
termination for Cause specifying in reasonable detail the
conviction, plea or disbarment, material failure, misconduct and
economic harm or breach by the Executive that is the basis for
termination and the Executive shall have failed prior to his removal
to correct the stated failure, misconduct and economic harm or
breach in all material respects.
(b) Subject to Section 7(a), in the event:
(i) the Company terminates the Executive's employment under this
Agreement without Cause,
(ii) the Company terminates the Executive 's employment under this
Agreement for Cause by reason of a conviction or disbarment
that is later reversed on appeal and fails to reinstate him
with full back pay, or
(iii) (A) the Company breaches any of the covenants and agreements
set forth in Sections 3(a), 4, 5, 6, or 15 (a) or (c), in any
material respect, and (B) the Executive tenders to the Company
a letter of resignation specifying such breach in reasonable
detail and demanding Severance Pay,
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(any termination or resignation under the circumstances
referred to in Section 14(b)(i) through (iii) above being
referred to as "Termination Without Cause" whether or not
Cause shall exist) the Company shall pay the Executive within
15 days following the termination of the Executive's
employment under this Agreement, an amount equal to three
times the sum of (A) the annual Base Salary at the rate
payable immediately prior to termination plus (B) the
aggregate Performance Bonus with respect to the two
consecutive most recently completed six-month seasons
immediately prior to termination. If the federal excise tax
pursuant to Section 280G of the Internal Revenue Code (the
"Code") or any successor provision on "golden parachute"
payments applies to the payment made pursuant to the preceding
sentence, to any acceleration of vesting of Options or to any
other benefit or distribution to the Executive from the
Company, the Company shall immediately pay the Executive an
amount equal to the excise tax incurred plus (x) an amount
equal to the Tax with respect to the amount of the excise tax,
plus (y) an amount equal to the federal excise tax on "golden
parachute" payments with respect to the payment, if any, made
pursuant to clause (x) of this sentence plus (z) an amount
equal to the Tax with respect to the payment made pursuant to
clause (y) of this sentence (collectively with the payment
made pursuant to the preceding sentence, "Severance Pay"). No
demand or other notice from the Executive with respect to
Severance Pay shall be necessary in connection with Section
14(b) (i) above. Anything in this Section 14(b) to the
contrary notwithstanding, the Executive shall not be entitled
to Severance Pay, and the Company shall have no obligation to
pay Severance Pay, if:
(x) within 15 days after the delivery of a letter of
resignation to the Company (the "Cure Period") pursuant to
Section 14(b)(iii) the Company shall cure the Company's breach
specified in the letter of resignation in all material
respects (or shall begin in good faith to cure a breach of a
nature that requires more than 15 days to cure in all material
respects) and shall deliver to the Executive a notice to that
effect;
(y) during the Cure Period the Chief Executive Officer shall
request in writing that the Executive withdraw his letter of
resignation pursuant to Section 14(b)(iii); and
(z) the Company shall deliver to the Executive during the Cure
Period a written offer to reinstate the Executive with full
back pay and uninterrupted Group Benefits and other benefits
under this Agreement, including eligibility for a Performance
Bonus.
(c) In the event (A) a Change of Control occurs on a day at the
beginning of which the Executive is an employee of the
Company, and (B) the Executive within 10 business days after
first receiving notice from the Company of the Change of
Control tenders a letter of resignation to the Company
specifying such Change of
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Control (whether or not the Executive shall be an employee of the
Company during the period between the end of the day preceding
Change of Control and the tender of such letter) and demanding
Resignation Compensation, the Company shall pay the Executive
immediately upon the resignation of the Executive under this Section
14(c), an amount equal to three times the annual Base Salary at the
rate payable immediately prior to resignation. If the federal excise
tax pursuant to Section 280G of the Code or any successor provision
on "golden parachute" payments applies to the payment made pursuant
to the preceding sentence or to any other benefit or distribution to
the Executive from the Company, the Company shall immediately pay
the Executive an amount equal to the excise tax incurred plus (x) an
amount equal to the Tax with respect to the amount of the excise
tax, plus (y) an amount equal to the federal excise tax on "golden
parachute" payments with respect to the payment, if any, made
pursuant to clause (x) of this sentence plus (z) an amount equal to
the Tax with respect to the payment made pursuant to clause (y) of
this sentence (collectively with the payment made pursuant to the
preceding sentence, "Resignation Compensation"). Notice of Change of
Control shall be given to the Executive by the Company pursuant to
Section 21, provided, however, that the Executive, in his
discretion, may accept as notice filing with the SEC of reports
setting forth facts that, taken together, constitute Change of
Control.
(d) In the event of Termination Without Cause or resignation by the
Executive in accordance with Section 14(c):
(i) the Executive shall be under no obligation to seek other
employment and there shall be no offset against any amounts
due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that
the Executive may obtain (Severance Pay or Resignation
Compensation is in the nature of liquidated damages and not in
the nature of a penalty); and
(ii) the Executive shall be entitled to the following benefits and
additional payments:
(A) any Base Salary accrued or Performance Bonus vested but
not yet paid;
(B) a pro rata Performance Bonus for the season in which
employment is terminated determined and payable on the basis of the
number of days worked during the season and the bonus percentage
established for the season;
(C) any accrued vacation pay;
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(D) reimbursement for expenses incurred, but not paid prior to
such termination of employment; and
(E) (x) COBRA health insurance benefits for the Executive and
his dependents at the Company's expense until the COBRA benefits
expire and thereafter, through the remainder, if any, of the Term of
Employment equivalent reimbursement of healthcare expenses directly
by the Company, (y) conversion at the Company's expense through the
remainder of the Term of Employment of the group life insurance
coverage on the Executive's life and (z) payment to the Executive on
April 15th of each year of an amount equal to the Tax with respect
to the payments made to the Executive pursuant to clauses (x) and
(y) of this sentence in the preceding calendar year.
(e) If the Company terminates the Executive's employment hereunder for
Cause (except as provided in Section 14(b)(ii)), or in the event the
Executive resigns (except as provided in Section 14(b)(iii) or
14(c)), the Executive shall be entitled to:
(i) any Base Salary accrued and any Performance Bonus vested but
not paid;
(ii) any accrued vacation pay;
(iii) reimbursement for expenses incurred, but not yet paid prior to
such termination of employment; and
(iv) any other compensation and benefits that accrued prior to
termination of employment as may be provided in accordance
with the terms and provisions of the Group Benefits.
(f) In the event the Company removes the Executive from office, and
terminates the Executive's employment under this Agreement, or in
the event the Executive resigns, the Executive shall continue to
have the obligations provided for in Section 11 hereof. The
provisions of this Section 14 shall survive the termination of the
Executive's employment hereunder, irrespective of the reason
therefor.
(g) The Executive shall accept the payments referred to in this Section
14 in full discharge and release of the Company of and from any
further payment obligations under this Agreement except obligations
under Sections 15 and 16.
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15. INDEMNIFICATION.
(a) The Company shall indemnify the Executive as provided in the
By-laws.
(b) In the event of payment of indemnities under this Agreement, the
Company shall be subrogated to the extent of such payment to all of
the rights of recovery of the Executive.
(c) The Company shall use reasonable efforts to obtain a directors' and
officers' liability insurance policy covering the Executive at the
level insured on the date first set forth above and to maintain the
policy during the Term of Employment and for three years thereafter.
(d) The provisions of this Section 15 shall survive the termination of
the Executive's employment hereunder.
16. ENFORCEMENT; INTEREST.
If any amount owing to the Executive under this Agreement is not
paid by the Company, or on its behalf, within 15 days after a written demand,
claim or request for payment has been delivered or sent to the Company, the
Executive may at any time thereafter bring suit against the Company to recover
the unpaid amount and interest thereon and, if successful in whole or in part,
the Executive shall be entitled to be paid also the expenses of prosecuting such
suit, including reasonable attorneys' fees. Interest shall be payable from the
date any amount is first due and payable to the Executive at a rate equal to the
highest rate payable on any of the Company's indebtedness after the date of this
Agreement but in no event at a rate higher than the maximum rate then permitted
by law.
17. ENTIRE AGREEMENT.
This Agreement, the By-laws, the stock option agreements between the
Company and the Executive and the provisions of the Group Benefits embody the
entire agreement of the parties with respect to the Executive's employment and
shall be interpreted in accordance with the past practice of the parties. This
Agreement may not be changed or terminated orally but only by an agreement in
writing signed by the parties hereto. This Agreement cancels and supersedes any
and all prior agreements and understandings between the parties hereto
respecting the employment of the Executive by the Company and/or its
subsidiaries or any Affiliated Company and the payment of severance pay.
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18. WAIVER.
The waiver by the Company of a breach of any provision of this
Agreement by the Executive shall not operate or be construed as a waiver of any
subsequent breach by him. The waiver by the Executive of a breach of any
provision of this Agreement by the Company shall not operate or be construed as
a waiver of any subsequent breach by the Company.
19. GOVERNING LAW.
This Agreement shall be subject to, and governed by, the laws of the
State of New Jersey.
20. ASSIGNABILITY.
The obligations of the Executive may not be delegated and, except as
to the designation of beneficiaries of insurance and similar benefits, the
Executive may not, without the Company's written consent thereto, assign,
transfer, convey, pledge, encumber, hypothecate or otherwise dispose of this
Agreement or any interest herein. Any such attempted delegation or disposition
shall be null and void ab initio and without effect. This Agreement and all of
the Company's rights and obligations hereunder may be assigned or transferred by
the Company to, and shall be binding upon and inure to the benefit of, any
subsidiary of the Company or any Successor to the Company, but any such
assignment shall not relieve the assigning party of any of its obligations
hereunder. (The term "Successor" shall mean, with respect to the Company or any
of its subsidiaries, any corporation or other business entity which, by merger,
consolidation, purchase of the assets, or otherwise, acquires all or
substantially all of the assets of the Company or such subsidiary.)
21. NOTICES.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be delivered personally or sent by registered or
certified mail, return receipt requested, to the other party hereto at his or
its address as set forth at the beginning of this Agreement and, in the case of
the Company, addressed to the attention of its Secretary. Either party may
change the address to which notices, requests, demands and other communications
hereunder shall be sent by sending written notice of such change of address to
the other party.
22. SEVERABILITY.
If any provision of this Agreement as applied to either party or to
any circumstances shall be adjudged by a court of competent jurisdiction to be
void or unenforceable, the same shall in no way affect any other provision of
this Agreement or the validity or enforceability of this Agreement.
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23. SECTION HEADINGS.
The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
24. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, which
shall, collectively and separately, constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
in Xxxxxxxx Park, New Jersey, in duplicate originals on November 20, 1998.
UNITED RETAIL GROUP, INC.
By: /s/ XXXXXXX XXXXXXXX
------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chairman of the Board
/s/ XXXXXXX X. XXXXXXX
----------------------------
Xxxxxxx X. Xxxxxxx
empagkpc.xxx
KPC:JW 11/98
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