Raphael Benaroya Amendment to Employment Agreement

Xxxxxxx
        Xxxxxxxx
Amendment
        to Employment Agreement

This
        document (the “Amendment”) constitutes an amendment to the Employment
        Agreement, as restated on June 15, 2007 (the “Current Agreement”),
        between Xxxxxxx Xxxxxxxx (the “Executive”) and United Retail Group, Inc.
        (the “Company”), effective as of, and subject to, the occurrence of the
“Acceptance Time” (as such term is defined in the Agreement and Plan of Merger
        (the “Merger Agreement”) by and among Redcats USA, Inc.
        (“Parent”), Boulevard Merger Sub, Inc. and the Company).  To
        the extent this Amendment conflicts with any provision of the Current Agreement
        or addresses subject matters not addressed in the Current Agreement, this
        Amendment shall govern.  Otherwise, the Current Agreement shall remain
        in effect until and unless terminated in accordance with its
        terms.  Capitalized terms that are used and not defined herein shall
        have the meaning set forth in the Merger Agreement.

              Parties:
 
              Xxxxxxx
                  Xxxxxxxx, the Company and Parent.
 
              “Contract
                  Term” (as defined in the Current Agreement):
 
              ·
 
              Amended
                  to mean the period of time commencing at the Acceptance Time and
                  ending on
                  a date that is on or after the first anniversary of the Acceptance
                  Time
                  and on or prior to the second anniversary of the Acceptance Time,
                  as
                  determined by the President and Chief Executive Officer (the "CEO")
                  of
                  Parent (such date, the “End Date”).

              ·

              On
                  or prior to the date that is 60 days prior to the first anniversary
                  of the
                  Acceptance Time, the CEO shall notify the Executive in writing
                  of the date
                  that shall be the End Date.  If the Executive ceases to be
                  employed by the Company following receipt of such notice (except
                  if the
                  Executive is terminated by the Company for Cause or the Executive
                  terminates his employment other than pursuant to Section 14(c)(ii)
                  of the
                  Current Agreement (as amended)) and prior to the End Date, then,
                  in
                  addition to any payments set forth below, the Company shall pay
                  to the
                  Executive as of the date of such termination of employment an amount
                  equal
                  to the portion of the Executive’s Annual Base Salary that would otherwise
                  have been paid to the Executive had he remained employed by the
                  Company
                  through the End Date, and shall continue through the End Date to
                  provide
                  the benefits to which the Executive would have been entitled had
                  he
                  continued working through the End Date.
 
              Transaction
                  Payment:
 
              ·

              The
                  “Transaction Payment” shall mean $3,500,000.

              ·

              The
                  Transaction Payment will be paid at the
                  Accep-

              tance
                  Time

              Position
                  & Duties:
 
              Section
                  3(a) of the Current Agreement shall be amended as follows:
 
              ·

              References
                  to the Company’s Board of Directors in Section 3(a) of the Current
                  Agreement shall be replaced with references to the CEO;

              ·

              The
                  following shall be added at the end of the second sentence of Section
                  3(a)
                  (with the terms “Merger” and “Parent” having the definitions ascribed to
                  them in this Amendment): “, taking into account the Merger and the fact
                  that the Company is no longer a stand-alone publicly traded company.
                  Additionally, the Executive shall assist Parent in the integration
                  of the
                  Company and Parent including, but not limited to, assisting Parent
                  in
                  realizing synergies in connection with the Merger.”

              Compensation:
 
              ·

              Annual
                  base salary of $760,929, payable in equal monthly
                  installments  (“Annual Base Salary”), not subject to
                  increase.

              ·

              An
                  annual bonus for each of the first two full years immediately following
                  the Acceptance Time in the amount of $600,000, with the first such
                  bonus
                  being referred to herein as the “Year-One Bonus” and the second
                  such bonus being referred to herein as the “Year-Two
                  Bonus.”

              ·

              The
                  Year-One Bonus shall be paid on the first anniversary of the Acceptance
                  Date and the Year-Two Bonus shall be paid on the second anniversary
                  of the
                  Acceptance Date, subject in each case to the Executive’s continued
                  employment with the Company through such date (except as set forth
                  under
                  Severance below).
 
              Definition
                  of Cause:
 
              Section
                  1(f) of the Current Agreement shall be modified as follows:
 
              ·

              Paragraph
                  (ii) thereof shall be modified to read as follows: “(A) the Executive has
                  willfully and continuously failed to perform his material duties
                  to the
                  Company or (B) the Executive has failed in any material respect
                  to follow
                  specific directions of the President and Chief Executive Officer
                  of Parent
                  in the performance of his duties, in either case of (A) or (B)
                  (i) other
                  than any such failure resulting from the Executive's incapacity
                  due to
                  physical or mental illness and (ii)

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              following
                  delivery of written notice to the Executive from the Board of Parent
                  identifying such failure in detail and identifying the manner in
                  which
                  such failure can be cured (if capable of cure) and the failure
                  of the
                  Executive to cure such failure in the manner so identified within
                  fourteen
                  (14) days following the delivery of such notice; or”
 
              ·

              Paragraph
                  (iii) thereof shall be modified to read as follows: “the Executive has
                  engaged in willful misconduct in the performance of his duties
                  to the
                  Company in any material respect and material economic harm to the
                  Company
                  has resulted.”
 
              ·

              Paragraph
                  (iv) thereof shall be deleted in its entirety.

The
                  parties hereto agree that any breach (including a material breach)
                  of this
                  Amendment or the Current Agreement by the Executive following the
                  Acceptance Time that does not constitute “Cause” (as modified above) shall
                  not relieve the Company or Parent of its or their obligations under
                  the
                  Current Agreement or this Amendment.
 
              Termination:
 
              ·

              Sections
                  7, 8 and 14(a), (c) (other than for purposes of clause 14(c)(ii),
                  which
                  shall remain in effect as amended below solely for purposes of
                  references
                  thereto in this Amendment), (d), (e) and (f)(ii) (other than (f)(ii)(A),
                  (C) and (D)) of the Current Agreement shall be deleted.  Section
                  14(g)(iv) shall remain, and additionally shall be incorporated
                  by
                  reference into Section 14(f)(ii).

              ·

              The
                  reference to Section 4 in clause 14(c)(ii)(A) shall refer to the
                  Executive’s compensation as set forth above.

              ·

              In
                  no event shall (i) the fact that the Company is no longer a stand-alone
                  publicly traded company or (ii) the Executive’s failure to be Chairman of
                  the Board constitute a breach by the Company for purposes of Section
                  14(c)(ii) of the Current Agreement.
 
              Change
                  of Control:
 
              Section
                  15(d) shall be amended to read in its entirety as set forth on
                  Annex A
                  hereto.
 
              Severance:
 
              ·

              If
                  the Executive remains employed with the Company through the End
                  Date, then
                  the Company shall pay to the Executive, promptly following (but
                  in any
                  event no

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              later
                  than 15 days after) the End Date, a lump sum cash amount (the
                  “Severance Payment”) equal to (x) minus (y) (but not less than
                  zero), where (x) is $4,700,000 and (y) is the aggregate amount
                  of the
                  Transaction Payment, the Year-One Bonus and the Year-Two Bonus
                  paid to the
                  Executive pursuant to this Amendment through the End
                  Date.

              ·

              If
                  the Executive’s employment ceases prior to the End Date for any reason
                  (including, without limitation, as a result of the Executive’s death or
                  “Permanent Disability” (as defined in the Current Agreement)) other than
                  (i) being terminated by the Company for Cause or (ii) being terminated
                  by
                  the Executive other than pursuant to Section 14(c)(ii) of the Current
                  Agreement (as amended), if applicable, then the Company shall pay
                  to the
                  Executive, promptly following (but in any event no later than 15
                  days
                  after) such termination, a lump sum cash amount equal to (x) minus
                  (y)
                  (but not less than zero), where (x) is $4,700,000 and (y) is the
                  aggregate
                  amount of the Transaction Payment, the Year-One Bonus and the Year-Two
                  Bonus paid to the Executive pursuant to this Amendment through
                  the date of
                  such termination.

              ·

              The
                  payments to the Executive pursuant to the preceding two bullets
                  are
                  referred to below as “Severance.”
 
              Transfer
                  of Insurance:
 
              In
                  the event that the Executive’s employment with the Company terminates on
                  the End Date, or prior to the End Date unless (i) the Executive
                  is
                  terminated by the Company for Cause or (ii) the Executive terminates
                  his
                  employment other than pursuant to Section 14(c)(ii) of the Current
                  Agreement (as amended), then the Company will transfer to the Executive
                  ownership of all term life insurance policies (including any “key man”
                  policies) insuring the life of the Executive and then held by the
                  Company;
                  provided, that (i) such transfer is allowed under the terms of
                  the
                  applicable policies and (ii) the Executive shall pay any costs
                  incurred in
                  connection with such transfer.
 
              No
                  Mitigation; No Offset:
 
              ·

              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
                  Amendment or the Current Agreement on account of any remuneration
                  attributable to any subsequent employment that the Executive may
                  obtain.
                  Additionally, amounts owed to the Executive under this Amendment
                  or
                  the

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              Current
                  Agreement shall not be offset by any claims the Company or Parent
                  may have
                  against the Executive.

              ·

              Section
                  14(f)(i) of the Current Agreement shall be deleted and replaced
                  with the
                  preceding bullet.
 
              Restrictive
                  Covenants:
 
              ·

              The
                  Executive shall be bound by the provisions of Sections 11(a) and
                  (d) of
                  the Current Agreement, during the Contract Term and for 36 months
                  thereafter; provided, however, that in the event of a termination
                  of
                  employment pursuant to which the Executive is entitled to receive
                  Severance, the Executive shall be bound by the provisions of such
                  Sections
                  11(a) and (d) only in the event that the Company shall timely remit
                  the
                  Severance.

              ·

              Section
                  11(e) of the Current Agreement shall be deleted and replaced with
                  the
                  preceding bullet.
 
              Tax
                  Considerations:
 
              This
                  Amendment is intended to comply with the requirements of Section
                  409A of
                  the Internal Revenue Code of 1986, as amended, (the "Code"), and
                  the
                  regulations and guidance issued thereunder, and shall be interpreted
                  in a
                  manner consistent therewith.  In the event the parties determine
                  in good faith that there is a reasonable likelihood that any portion
                  of
                  this Amendment does not comply with final regulations or other
                  guidance
                  under Section 409A, the parties agree that they shall further amend
                  this
                  agreement and that such amendment shall be drafted in compliance
                  with
                  Section 409A, but in such manner as will preserve the terms and
                  intent of
                  this Amendment to the extent reasonably possible and in such a
                  manner that
                  will not result in a material negative economic impact to the Company
                  or
                  the Executive.
 
              Notwithstanding
                  any provision of this Amendment to the contrary, (i) the Current
                  Agreement
                  and this Amendment are intended to provide payments that shall
                  not
                  constitute "parachute payments" within the meaning of Section 280G
                  of the
                  Code and (ii) in the event that the parties determine in good faith
                  that
                  there is a likelihood that any payments to the Executive hereunder
                  will
                  constitute parachute payments, the parties agree that they shall
                  amend the
                  Current Agreement and this Amendment in such manner as they shall
                  determine is reasonably necessary to cause such payments to not
                  be so
                  treated; provided however (1)

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              in
                  no event shall the sum of the Transaction Payment and the One-Year
                  Bonus
                  be less than $4.1 million and (2) in no event shall the sum of
                  the
                  Transaction Payment, the One-Year Bonus and the Two-Year Bonus
                  be less
                  than $4.7 million, or be paid to the Executive later than the earlier
                  of
                  the End Date or the termination of the Executive's employment other
                  than
                  by the Company for Cause or by the Executive other than pursuant
                  to
                  Section 14(c)(ii) of the Current Agreement (as
                  amended).

              Other
                  Definitions:
 
              ·

              “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 groups of persons, whether or not
                  a legal
                  entity, that is directly or indirectly controlled by, controlling
                  or under
                  common control with the Company.

              ·

              “Business
                  of the Company” shall mean the operation of a retail operation 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
                  or Parent’s consolidated sales.
 
              Compensation
                  Arrangement
 
              The
                  Company represents and warrants to Parent and the Executive that
                  the
                  Compensation Committee of the Board of Directors of the Company,
                  consisting solely of independent directors, has approved by resolution
                  the
                  Employment Agreement and this Amendment and the transactions contemplated
                  thereby and hereby as an employment compensation, severance or
                  other
                  employee benefit arrangement, in accordance with the requirements
                  of Rule
                  14d-10(d)(2) under the Securities Exchange Act of 1934, as amended,
                  and
                  the instructions thereto.
 
              Notices
 
              Section
                  21 of the Current Agreement shall be amended to read in its entirety
                  as
                  follows:
 
              “all
                  notices, requests and other communications to any party hereunder
                  shall be
                  in writing and shall be deemed given if delivered personally or
                  sent by
                  overnight courier (providing proof of delivery) to the parties
                  at the
                  following addresses:

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              If
                  to Parent or the Company, to:
Redcats
                  USA, Inc.
000
                  Xxxxxxx Xxxxxx
Xxx
                  Xxxx, XX 00000
Attention:  Chief
                  Executive Officer
 
              with
                  a copy (which shall not constitute notice) to:
Wachtell,
                  Lipton, Xxxxx & Xxxx
00
                  Xxxx 00xx Xxxxxx
Xxx
                  Xxxx, Xxx Xxxx 00000
Attention:  Xxxxxxx
                  X. Xxxxx, Esq.
 
              If
                  to the Executive, to the address of the Executive most recently
                  on the
                  books and records of the Company.
 
              with
                  a copy (which shall not constitute notice) to:
Xxxxxx
                  Xxxxxx Xxxxxxxx LLP
000
                  Xxxxxxx Xxx
Xxx
                  Xxxx, Xxx Xxxx 00000
Attention:  Xxxxxx
                  X. Xxxxxx, Esq.”
 
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By
        signing below, the parties hereto agree to be bound by the terms of this
        Amendment as described above.
 
Signed,
 
              Redcats
                  USA, Inc.
 
              By:

              /s/
                Xxxxxxx Xxxxxxxx
              By:

              /s/
                Faintreny Xxxx
            
              Xxxxxxx
                  Benaroya

              Name:
                  Faintreny Xxxx

United
                  Retail Group, Inc.
 
              By:

              /s/
                Xxxxxx Xxxxxx
            
              Name:
                  Xxxxxx Xxxxxx

Date:
        September 10, 2007

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ANNEX
        A

In
        the event that any payment or benefit received or to be received by Executive
        pursuant to the terms of the Current Agreement or this Amendment (the
        "Contract Payments") or in connection with the Executive's termination of
        employment or contingent upon a Change of Control of the Company pursuant
        to any
        plan or arrangement or other agreement with the Company (or any affiliate)
        ("Other Payments" and, together with the Contract Payments, the
        "Payments") would be subject to the excise tax (the "Excise Tax")
        imposed by Section 4999 of the Code, as determined as provided below, the
        Company shall pay to Executive, at the time specified below, an additional
        amount (the "Gross-Up Payment") such that the net amount retained by the
        Executive, after deduction of the Excise Tax on the Payments and any federal,
        state and local income or other tax and Excise Tax upon the payment provided
        for
        by this paragraph, and any interest, penalties or additions to tax payable
        by
        the Executive with respect thereto, shall be equal to the total value of
        the
        Payments at the time such Payments are to be made.  All financial
        determinations required to be made under this Annex A, including whether
        and
        when a Gross-Up Payment is required, the amount of such Gross-Up Payment
        and the
        assumptions to be utilized in arriving at such determination, shall be made
        by a
        nationally recognized certified public accounting firm designated by the
        Company
        and reasonably acceptable to the Executive (the “Accounting
        Firm”).  The Accounting Firm 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.  All fees and expenses of
        the Accounting Firm shall be borne solely by the Company.  Any
        determination by the Accounting Firm shall be binding upon the Company and
        the
        Executive.  For purposes of determining the amount of the Gross-Up
        Payment, the Executive shall be deemed to pay federal income tax at the highest
        marginal rates of federal income taxation applicable to individuals in the
        calendar year in which the Gross-Up Payment is to be made and state and local
        income taxes at the highest effective rates of taxation applicable to
        individuals as are in effect in the state and locality of the Executive's
        residence or place of employment in the calendar year in which the Gross-Up
        Payment is to be made, net of the maximum reduction in federal income taxes
        that
        can be obtained from deduction of such state and local taxes, taking into
        account any limitations applicable to individuals subject to federal income
        tax
        at the highest marginal rates.
 
The
        Gross-Up Payments provided for in the preceding paragraph shall be made prior
        to
        the imposition upon the Executive or payment by the Executive of any Excise
        Tax.
 
The
        Executive shall notify the Company in writing of any claim by the Internal
        Revenue Service that, if successful, would require the payment by the Company
        of
        a Gross-Up Payment. Such notification shall be given as soon as practicable
        but
        no later than 30 days after the Executive is informed in writing of such
        claim and shall apprise the Company of the nature of such claim and the date
        on
        which such claim is requested to be paid.  The Executive shall not pay
        such claim prior to the expiration of the 30 day period following the date
        on
        which the Executive gives such notice to the Company (or such shorter period
        ending on the date that any payment of taxes with respect to such claim is
        due).
        If the Company notifies the Executive in writing prior to the expiration
        of such
        period that it desires to contest such claim, the Executive shall:
 
give
        the Company any information reasonably requested by the Company relating
        to such
        claim;
 
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take
        such action in connection with contesting such claim as the Company shall
        reasonably request in writing from time to time, including, without limitation,
        accepting legal representation with respect to such claim by an attorney
        reasonably selected by the Company and reasonably satisfactory to the
        Executive;
 
cooperate
        with the Company in good faith in order to effectively contest such claim;
        and
 
permit
        the Company to participate in any proceedings relating to such
        claim;
 
provided,
        however, that the Company shall bear and pay directly all costs and
        expenses (including, but not limited to, additional interest and penalties
        and
        related legal, consulting or other similar fees) incurred in connection with
        such contest and shall indemnify and hold the Executive harmless, on an
        after-tax basis, for any Excise Tax or other tax (including interest and
        penalties with respect thereto) imposed as a result of such representation
        and
        payment of costs and expenses.
 
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 claim and may, at its sole option, either direct the Executive to pay
        the
        tax claimed and xxx for a refund or contest the claim 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 claim
        and
        xxx for a 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 other 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
provided, further, that if the Executive is required to extend the
        statute of limitations to enable the Company to contest such claim, the
        Executive may limit this extension solely to such contested amount. 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. In addition, no position
        may be taken nor any final resolution be agreed to by the Company without
        the
        Executive's consent if such position or resolution could reasonably be expected
        to adversely affect the Executive (including any other tax position of the
        Executive unrelated to the matters covered hereby).
 
As
        a result of the uncertainty in the application of Section 4999 of the Code
        at
        the time of the initial determination by the Company or the Tax Counsel
        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 and the Executive thereafter is required to pay to
        the
        Internal Revenue Service an additional amount in respect of any Excise Tax,
        the
        Company or the Tax Counsel shall determine the amount of the Underpayment
        that
        has occurred and any such Underpayment shall promptly be paid by the Company
        to
        or for the benefit of the Executive.
 
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The
        Executive shall file his tax returns in a manner consistent with the position
        taken by the Company in respect of the matters described in this Annex
        A.
 
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Document Metadata

Table of Contents

Raphael Benaroya Amendment to Employment Agreement

Document Metadata

Parties:	Xxxxxxx Xxxxxxxx, the Company and Parent.
“Contract Term” (as defined in the Current Agreement):	·	Amended to mean the period of time commencing at the Acceptance Time and ending on a date that is on or after the first anniversary of the Acceptance Time and on or prior to the second anniversary of the Acceptance Time, as determined by the President and Chief Executive Officer (the "CEO") of Parent (such date, the “End Date”).
	·	On or prior to the date that is 60 days prior to the first anniversary of the Acceptance Time, the CEO shall notify the Executive in writing of the date that shall be the End Date. If the Executive ceases to be employed by the Company following receipt of such notice (except if the Executive is terminated by the Company for Cause or the Executive terminates his employment other than pursuant to Section 14(c)(ii) of the Current Agreement (as amended)) and prior to the End Date, then, in addition to any payments set forth below, the Company shall pay to the Executive as of the date of such termination of employment an amount equal to the portion of the Executive’s Annual Base Salary that would otherwise have been paid to the Executive had he remained employed by the Company through the End Date, and shall continue through the End Date to provide the benefits to which the Executive would have been entitled had he continued working through the End Date.
Transaction Payment:	·	The “Transaction Payment” shall mean $3,500,000.
	·	The Transaction Payment will be paid at the Accep-

		tance Time
Position & Duties:	Section 3(a) of the Current Agreement shall be amended as follows:
	·	References to the Company’s Board of Directors in Section 3(a) of the Current Agreement shall be replaced with references to the CEO;
	·	The following shall be added at the end of the second sentence of Section 3(a) (with the terms “Merger” and “Parent” having the definitions ascribed to them in this Amendment): “, taking into account the Merger and the fact that the Company is no longer a stand-alone publicly traded company. Additionally, the Executive shall assist Parent in the integration of the Company and Parent including, but not limited to, assisting Parent in realizing synergies in connection with the Merger.”
Compensation:	·	Annual base salary of $760,929, payable in equal monthly installments (“Annual Base Salary”), not subject to increase.
	·	An annual bonus for each of the first two full years immediately following the Acceptance Time in the amount of $600,000, with the first such bonus being referred to herein as the “Year-One Bonus” and the second such bonus being referred to herein as the “Year-Two Bonus.”
	·	The Year-One Bonus shall be paid on the first anniversary of the Acceptance Date and the Year-Two Bonus shall be paid on the second anniversary of the Acceptance Date, subject in each case to the Executive’s continued employment with the Company through such date (except as set forth under Severance below).
Definition of Cause:	Section 1(f) of the Current Agreement shall be modified as follows:
	·	Paragraph (ii) thereof shall be modified to read as follows: “(A) the Executive has willfully and continuously failed to perform his material duties to the Company or (B) the Executive has failed in any material respect to follow specific directions of the President and Chief Executive Officer of Parent in the performance of his duties, in either case of (A) or (B) (i) other than any such failure resulting from the Executive's incapacity due to physical or mental illness and (ii)

		following delivery of written notice to the Executive from the Board of Parent identifying such failure in detail and identifying the manner in which such failure can be cured (if capable of cure) and the failure of the Executive to cure such failure in the manner so identified within fourteen (14) days following the delivery of such notice; or”
	·	Paragraph (iii) thereof shall be modified to read as follows: “the Executive has engaged in willful misconduct in the performance of his duties to the Company in any material respect and material economic harm to the Company has resulted.”
	·	Paragraph (iv) thereof shall be deleted in its entirety.
	The parties hereto agree that any breach (including a material breach) of this Amendment or the Current Agreement by the Executive following the Acceptance Time that does not constitute “Cause” (as modified above) shall not relieve the Company or Parent of its or their obligations under the Current Agreement or this Amendment.
Termination:	·	Sections 7, 8 and 14(a), (c) (other than for purposes of clause 14(c)(ii), which shall remain in effect as amended below solely for purposes of references thereto in this Amendment), (d), (e) and (f)(ii) (other than (f)(ii)(A), (C) and (D)) of the Current Agreement shall be deleted. Section 14(g)(iv) shall remain, and additionally shall be incorporated by reference into Section 14(f)(ii).
	·	The reference to Section 4 in clause 14(c)(ii)(A) shall refer to the Executive’s compensation as set forth above.
	·	In no event shall (i) the fact that the Company is no longer a stand-alone publicly traded company or (ii) the Executive’s failure to be Chairman of the Board constitute a breach by the Company for purposes of Section 14(c)(ii) of the Current Agreement.
Change of Control:	Section 15(d) shall be amended to read in its entirety as set forth on Annex A hereto.
Severance:	·	If the Executive remains employed with the Company through the End Date, then the Company shall pay to the Executive, promptly following (but in any event no

		later than 15 days after) the End Date, a lump sum cash amount (the “Severance Payment”) equal to (x) minus (y) (but not less than zero), where (x) is $4,700,000 and (y) is the aggregate amount of the Transaction Payment, the Year-One Bonus and the Year-Two Bonus paid to the Executive pursuant to this Amendment through the End Date.
	·	If the Executive’s employment ceases prior to the End Date for any reason (including, without limitation, as a result of the Executive’s death or “Permanent Disability” (as defined in the Current Agreement)) other than (i) being terminated by the Company for Cause or (ii) being terminated by the Executive other than pursuant to Section 14(c)(ii) of the Current Agreement (as amended), if applicable, then the Company shall pay to the Executive, promptly following (but in any event no later than 15 days after) such termination, a lump sum cash amount equal to (x) minus (y) (but not less than zero), where (x) is $4,700,000 and (y) is the aggregate amount of the Transaction Payment, the Year-One Bonus and the Year-Two Bonus paid to the Executive pursuant to this Amendment through the date of such termination.
	·	The payments to the Executive pursuant to the preceding two bullets are referred to below as “Severance.”
Transfer of Insurance:	In the event that the Executive’s employment with the Company terminates on the End Date, or prior to the End Date unless (i) the Executive is terminated by the Company for Cause or (ii) the Executive terminates his employment other than pursuant to Section 14(c)(ii) of the Current Agreement (as amended), then the Company will transfer to the Executive ownership of all term life insurance policies (including any “key man” policies) insuring the life of the Executive and then held by the Company; provided, that (i) such transfer is allowed under the terms of the applicable policies and (ii) the Executive shall pay any costs incurred in connection with such transfer.
No Mitigation; No Offset:	·	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 Amendment or the Current Agreement on account of any remuneration attributable to any subsequent employment that the Executive may obtain. Additionally, amounts owed to the Executive under this Amendment or the

		Current Agreement shall not be offset by any claims the Company or Parent may have against the Executive.
	·	Section 14(f)(i) of the Current Agreement shall be deleted and replaced with the preceding bullet.
Restrictive Covenants:	·	The Executive shall be bound by the provisions of Sections 11(a) and (d) of the Current Agreement, during the Contract Term and for 36 months thereafter; provided, however, that in the event of a termination of employment pursuant to which the Executive is entitled to receive Severance, the Executive shall be bound by the provisions of such Sections 11(a) and (d) only in the event that the Company shall timely remit the Severance.
	·	Section 11(e) of the Current Agreement shall be deleted and replaced with the preceding bullet.
Tax Considerations:	This Amendment is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, (the "Code"), and the regulations and guidance issued thereunder, and shall be interpreted in a manner consistent therewith. In the event the parties determine in good faith that there is a reasonable likelihood that any portion of this Amendment does not comply with final regulations or other guidance under Section 409A, the parties agree that they shall further amend this agreement and that such amendment shall be drafted in compliance with Section 409A, but in such manner as will preserve the terms and intent of this Amendment to the extent reasonably possible and in such a manner that will not result in a material negative economic impact to the Company or the Executive.
	Notwithstanding any provision of this Amendment to the contrary, (i) the Current Agreement and this Amendment are intended to provide payments that shall not constitute "parachute payments" within the meaning of Section 280G of the Code and (ii) in the event that the parties determine in good faith that there is a likelihood that any payments to the Executive hereunder will constitute parachute payments, the parties agree that they shall amend the Current Agreement and this Amendment in such manner as they shall determine is reasonably necessary to cause such payments to not be so treated; provided however (1)

	in no event shall the sum of the Transaction Payment and the One-Year Bonus be less than $4.1 million and (2) in no event shall the sum of the Transaction Payment, the One-Year Bonus and the Two-Year Bonus be less than $4.7 million, or be paid to the Executive later than the earlier of the End Date or the termination of the Executive's employment other than by the Company for Cause or by the Executive other than pursuant to Section 14(c)(ii) of the Current Agreement (as amended).

Other Definitions:	·	“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 groups of persons, whether or not a legal entity, that is directly or indirectly controlled by, controlling or under common control with the Company.
	·	“Business of the Company” shall mean the operation of a retail operation 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 or Parent’s consolidated sales.
Compensation Arrangement	The Company represents and warrants to Parent and the Executive that the Compensation Committee of the Board of Directors of the Company, consisting solely of independent directors, has approved by resolution the Employment Agreement and this Amendment and the transactions contemplated thereby and hereby as an employment compensation, severance or other employee benefit arrangement, in accordance with the requirements of Rule 14d-10(d)(2) under the Securities Exchange Act of 1934, as amended, and the instructions thereto.
Notices	Section 21 of the Current Agreement shall be amended to read in its entirety as follows:
		“all notices, requests and other communications to any party hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) to the parties at the following addresses:

		If to Parent or the Company, to: Redcats USA, Inc. 000 Xxxxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: Chief Executive Officer
		with a copy (which shall not constitute notice) to: Wachtell, Lipton, Xxxxx & Xxxx 00 Xxxx 00xx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxx X. Xxxxx, Esq.
		If to the Executive, to the address of the Executive most recently on the books and records of the Company.
		with a copy (which shall not constitute notice) to: Xxxxxx Xxxxxx Xxxxxxxx LLP 000 Xxxxxxx Xxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxx X. Xxxxxx, Esq.”

		Redcats USA, Inc.
By:	/s/ Xxxxxxx Xxxxxxxx	By:	/s/ Faintreny Xxxx
	Xxxxxxx Benaroya		Name: Faintreny Xxxx
		United Retail Group, Inc.
		By:	/s/ Xxxxxx Xxxxxx
			Name: Xxxxxx Xxxxxx