Raphael Benaroya
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 Raphael Benaroya (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.
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Parties:
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Raphael Benaroya, the Company and Parent.
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“Contract Term” (as defined in the Current
Agreement):
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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 ”).
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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.
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Transaction Payment:
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The “ Transaction Payment ” shall mean
$3,500,000.
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The Transaction Payment will be paid at the Accep-
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tance Time
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Position & Duties:
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Section 3(a) of the Current Agreement shall be amended as
follows:
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References to the Company’s Board of Directors in Section
3(a) of the Current Agreement shall be replaced with references to
the CEO;
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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.”
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Compensation:
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Annual base salary of $760,929, payable in equal monthly
installments (“ Annual Base Salary
”), not subject to increase.
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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
.”
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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).
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Definition of Cause:
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Section 1(f) of the Current Agreement shall be modified as
follows:
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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”
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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.”
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Paragraph (iv) thereof shall be deleted in its
entirety.
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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.
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Termination:
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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).
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The reference to Section 4 in clause 14(c)(ii)(A) shall refer to
the Executive’s compensation as set forth above.
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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.
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Change of Control:
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Section 15(d) shall be amended to read in its entirety as set forth
on Annex A hereto.
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Severance:
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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.
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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.
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The payments to the Executive pursuant to the preceding two bullets
are referred to below as “ Severance
.”
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Transfer of Insurance:
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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.
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No Mitigation; No Offset:
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The Executive shall be under no obligation to seek other employment
and there shall be no offset against a
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