Kenneth Carroll
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 Kenneth Carroll (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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Kenneth Carroll, the Company and Parent.
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Contract Term:
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Amended to mean the period of time commencing at the
Acceptance Time and ending on the day that is 90 days
after the Acceptance Time (the “End
Date”).
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Transaction Payment
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Payment at Acceptance Time equal to $1,079,163.30.
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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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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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Monthly base salary of $27,550, payable in accordance with the
Company’s payroll practice.
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No semi-annual bonus eligibility.
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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 (iii) 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
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respect to follow specific directions of the President and Chief
Executive Officer of Parent or the Chief Executive Officer of the
Company 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;”
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Paragraph (iv) 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 (v) 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), (b) (other than for purposes of clause
14(b)(ii), which shall remain in effect as amended below solely for
purposes of references thereto in this Amendment), (c), (d) and
(e)(ii) (other than (e)(ii)(A), (C) and (D)) of the Current
Agreement shall be deleted. Section 14(f)(iv) shall remain, and
additionally shall be incorporated by reference into Section
14(e)(ii).
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The reference to Section 4 in clause 14(b)(ii)(A) shall refer to
the Executive’s compensation as set forth above.
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In no event shall the fact that the Company is no longer a
stand-alone publicly traded company constitute a breach by the
Company for purposes of Section 14(b)(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 later than 15 days after) the End
Date, a lump sum cash amount (the “ Severance Payment
”) equal to $539,581.66.
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The Severance Payment also will be paid upon any cessation of the
Executive’s employment prior to the End Date (including,
without limitation, as a result of the Executive’s death or
Permanent Disability) unless (i) the Executive is terminated by the
Company for Cause or (ii) the Executive terminates his employment
other than pursuant to Section 14(b)(ii) of the Current
Agreement).
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The Executive shall not be entitled under any circumstances to
severance payments or benefits other than the Severance Payment,
and only in accordance with the terms set forth above.
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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 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.
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Section 14(e)(i) of the Current Agreement shall be deleted and
replaced with the preceding bullet.
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Restrictive Covenants:
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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 Payment.
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Section 11(e) of the Current Agreement shall be deleted and
replaced with the preceding bullet.
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S
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