<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)*
United Retail Group, Inc.
-------------------------
(Name of Issuer)
Common Stock ($.001 Par Value)
------------------------------
(Title of Class of Securities)
911380103
---------
(CUSIP Number)
George R. Remeta, 365 West Passaic Street, Rochelle Park,
NJ 07662 (201) 909-2110
--------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 20, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box ___.
Check the following box if a fee is being paid with the statement ___. (A fee is
not required only if reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 911380103
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RAPHAEL BENAROYA
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a)
(b) X
3. SEC USE ONLY
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(E)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.; ISRAEL
7. SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 5,275,574
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON
WITH 10. SHARED DISPOSITIVE POWER
5,275,574
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,275,574
12. CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES [ ]
CERTAIN SHARES (SEE INSTRUCTIONS)
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.8%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
<PAGE> 3
13D
CUSIP NO. 911380103
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GEORGE R. REMETA
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a)
(b) X
3. SEC USE ONLY
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(E)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
7. SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 5,275,574
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON
WITH 10. SHARED DISPOSITIVE POWER
5,275,574
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,275,574
12. CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES [ ]
CERTAIN SHARES (SEE INSTRUCTIONS)
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.8%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
<PAGE> 4
13D
CUSIP NO. 911380103
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ELLEN DEMAIO
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a)
(b) X
3. SEC USE ONLY
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(E)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
7. SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 5,275,574
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON
WITH 10. SHARED DISPOSITIVE POWER
5,275,574
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,275,574
12. CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES [ ]
CERTAIN SHARES (SEE INSTRUCTIONS)
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.8%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
<PAGE> 5
13D
CUSIP NO. 911380103
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BRADLEY ORLOFF
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a)
(b) X
3. SEC USE ONLY
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(E)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
7. SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 5,275,574
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON
WITH 10. SHARED DISPOSITIVE POWER
5,275,574
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,275,574
12. CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES [ ]
CERTAIN SHARES (SEE INSTRUCTIONS)
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.8%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
<PAGE> 6
13D
CUSIP NO. 911380103
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FREDRIC E. STERN
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a)
(b) X
3. SEC USE ONLY
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED [ ]
PURSUANT TO ITEMS 2(d) or 2(E)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
7. SOLE VOTING POWER
-0-
NUMBER OF
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 5,275,574
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON
WITH 10. SHARED DISPOSITIVE POWER
5,275,574
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,275,574
12. CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES [ ]
CERTAIN SHARES (SEE INSTRUCTIONS)
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
38.8%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
<PAGE> 7
CUSIP No. 911380103
STATEMENT ON SCHEDULE 13D - AMENDMENT NO. 4
ITEM 1. SECURITY AND ISSUER.
Common Stock, $.001 par value per share ("Shares"), of United
Retail Group, Inc. (the "Issuer"), 365 West Passaic Street,
Rochelle Park, NJ 07662
ITEM 2. IDENTITY AND BACKGROUND.
(a) See Item 1 of the cover pages for the names of the
reporting persons.
(b) The business address of the reporting persons is:
c/o United Retail Group, Inc.
365 West Passaic Street
Rochelle Park, NJ 07662
(c) The present principal occupation or employment of each of
the reporting persons is employee of the Issuer. The Issuer
operates a chain of retail specialty stores selling large size
women's apparel and accessories.
(d) None of the reporting persons has been convicted in a
criminal proceeding during the last five years.
(e) None of the reporting persons has during the last five
years been a party to a civil proceeding of a judicial or
administrative body and as a result of such proceeding was or
is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) See Item 6 of the cover pages for the citizenship of the
reporting persons.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Not Applicable.
<PAGE> 8
ITEM 4. PURPOSE OF TRANSACTION.
All the reporting persons purchased Shares and acquired
employee stock options for investment. (Certain of the
reporting persons sold the Shares they purchased.)
The reporting persons have no plans or proposals that relate
to or would result in:
(a) The acquisition by any person of additional securities of
the Issuer, or the disposition of securities of the Issuer,
except the exercise of employee stock options;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of
its subsidiaries;
(c) A sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
<PAGE> 9
(d) Any change in the present board of directors or management
of the Issuer, including any plans or proposals to change the
number or term of directors, except to fill one vacancy;
(e) Any material change in the present capitalization or
dividend policy of the Issuer;
(f) Any other material change in the Issuer's business or
corporate structure;
(g) Changes in the Issuer's certificate of incorporation or
bylaws or other actions which may impede the acquisition of
control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(i) A class of equity securities of the Issuer becoming
eligible for termination of registration pursuant to Section
12(g) of the Securities Exchange Act (the "Act"); or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The aggregate number of Shares beneficially owned by each
reporting person, identifying Shares which there is a right to
acquire upon exercise of vested employee stock options, and
the percentage of the Shares owned beneficially by each
reporting person is as follows:
<TABLE>
<CAPTION>
Outstanding Vested Total %
Name Shares Owned Options Number of Class
---- ------------ ------- ------ --------
<S> <C> <C> <C> <C>
Raphael Benaroya 2,277,937 341,570 2,619,507 19.5%
Ellen Demaio -0- 20,000 20,000 0.2%
Bradley Orloff -0- 14,000 14,000 0.1%
George R. Remeta 341,888 139,000 480,888 3.6%
Fredric E. Stern 26,300 6,000 32,300 0.2%
</TABLE>
The reporting persons believe that the other persons who might
comprise a group with the reporting persons within the meaning
of Section 13(d) (3) of the Act are the beneficial owners of
the following shares:
<PAGE> 10
<TABLE>
<CAPTION>
Outstanding Vested Total %
Name Shares Owned Options Number of Class
---- ------------ ------- ------ --------
<S> <C> <C> <C> <C>
Mort Greenberg 3,500 -0- 3,500 --
Limited Direct Assoc. L.P. 2,100,000 -0- 2,100,000 16.0%
Cheryl A. Lutz 79 -0- 79 --
Jerry Silverman 5,300 -0- 5,300 --
</TABLE>
(b) the persons named in the preceding subsection, together
with the Issuer and Centre Capital Investors L.P. ("CCI"),
are parties to the Restated Stockholders' Agreement, dated
December 23, 1992 (as amended the "Restated Stockholders'
Agreement"), which is incorporated herein by reference to
Exhibit No. 2 hereto. The Restated Stockholders' Agreement
provides, among other things, that the parties other than the
Issuer and CCI shall take such action, including the voting
of Shares, as may be necessary to cause the Board to be
elected in the following manner:
(i) the Board shall consist of nine members, of whom two are
persons ("Management Directors") nominated by the Chairman of
the Board, one is a person nominated by Limited Direct
Associates, L.P. ("LDA") and six are persons ("Public
Directors") who are not affiliates of (w) Mr. Benaroya, (x)
certain executives of the Issuer or (y) Mr. Benaroya's or
such executives' Permitted Transferees under the Restated
Stockholders' Agreement (collectively, "Management
Investors") or (z) LDA, named by the Nominating
Committee and approved by the Board;
(ii) if the holdings of the Management Investors increase to
at least 3,010,000 Shares, the Chairman of the Board shall be
entitled to nominate one additional Management Director, for a
total Board membership of 10, for so long as he and his family
continue to hold at least 500,000 Shares, he remains Chairman
of the Board and the Management Investors continue to hold at
least 2,010,000 Shares, provided, that in the event the number
of Shares held by the Chairman (and his family) and the
Management Investors falls below 500,000 Shares and 2,010,000
Shares, respectively, the Chairman shall thereafter nominate
two persons, rather than three persons, for election as
Directors;
(iii) in the event of Mr. Benaroya's termination as Chairman
of the Board under any circumstances, (x) he shall be entitled
to nominate one Director so long as he and his family continue
to hold at least 100,000 Shares, (y) one other person, who
would otherwise have been nominated by him as a Director,
shall be named instead by the Nominating Committee and
approved by the Board and (z) if the Board then has 10
members, the Board membership shall be decreased to nine; and
<PAGE> 11
(iv) the rights of Mr. Benaroya and LDA to nominate a
Director shall expire if their stockholdings fall below
100,000 Shares and, in the case of Mr. Benaroya, he no longer
serves as Chairman of the Board; in which case the Director
who would otherwise be nominated by such party shall be named
instead by the Nominating Committee and approved by the
Board.
The Restated Stockholders' Agreement provides that the parties
other than the Issuer and CCI shall act together in connection
with the election of the Board, the removal of directors and
certain amendments to the by-laws of the Issuer. Accordingly,
the stockholders of the Issuer who are parties to the Restated
Stockholders' Agreement might be deemed to share voting power
with respect to all the Shares beneficially owned by them.
The voting arrangement under the Restated Stockholders'
Agreement described above expires on July 17, 1999.
Except for the provisions of the Restated Stockholders'
Agreement, each of the reporting persons has the power,
either solely or jointly with a spouse, to vote the Shares he
owns and believes that the other stockholders of the Issuer
who are parties to the Restated Stockholders' Agreement have
the power, either solely or jointly with a spouse, to vote
the Shares they own.
The Restated Stockholders' Agreement contains certain
restrictions on transfers of Shares held by the stockholders
of the Issuer who are parties to the Restated Stockholders'
Agreement but it unconditionally permits sales on the NASDAQ
National Market System and donations to charity. Accordingly,
the stockholders of the Issuer who are parties to the
Restated Stockholders' Agreement might be deemed to share the
power to dispose of all the Shares beneficially owned by
them. Except for the provisions of the Restated Stockholders'
Agreement and the pledges of shares of Common Stock referred
to in Item 6 below, each of the reporting persons has the
power, either solely or jointly with a spouse, to dispose
of the Shares he owns and he believes that the other
stockholders of the Issuer who are parties to the Restated
Stockholders' Agreement have the power, either solely or
jointly with a spouse, to dispose of the Shares they own.
Each of the reporting persons disclaims beneficial ownership
of the Shares held by all the other parties to the Restated
Stockholders' Agreement.
In addition to the reporting persons, CCI and the Issuer, the
current parties to the Restated Stockholders' Agreement are:
(i) Mort Greenberg
6866 Touchtown Circle
Palm Beach Gardens, FL 33418
<PAGE> 12
(ii) Limited Direct Associates, L.P.
Three Limited Parkway
Columbus, OH 43230
(iii) Cheryl A. Lutz
4408 F Street
Sacramento, CA 95819
(iv) Jerry Silverman
3017 Caminito Carboneras
Del Mar, CA 92014
Mr. Greenberg is retired and is a citizen of the United
States.
LDA is a Delaware limited partnership. The reporting persons
believe that LDA is controlled by The Limited, Inc.
Ms. Lutz is an employee of the Issuer and is a citizen of the
United States.
Mr. Silverman is the proprietor of Silverman & Associates, a
real estate consultancy, with offices at 3017 Caminito
Carboneras, Del Mar, CA 92014. He is a citizen of the United
States.
The reporting persons have no reason to believe that Mr.
Greenberg, LDA, Ms. Lutz or Mr. Silverman during the last five
years has either been convicted in a criminal proceeding or
was a party to a civil proceeding before a judicial or
administrative body and as a result of such proceeding was or
is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
(c) None of the reporting persons effected any transaction
involving Shares during the last 60 days.
(d) No other person has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the
sale of, Shares owned by the reporting persons.
<PAGE> 13
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
The reporting persons are parties to the Restated
Stockholders' Agreement, which is incorporated herein by
reference to Exhibit No. 2 hereto.
The Shares purchased on February 13, 1998 by each of Mr.
Benaroya and Mr. Remeta have been pledged to the
Company to secure payment of a loan to him by the Company to
finance the withholding taxes incurred by him in connection
with the purchase. Mr. Benaroya purchased 777,925 Shares. Mr.
Remeta purchased 116,888 Shares.The loans were in the amounts
of $1,637,087 to Mr. Benaroya and $245,543 to Mr. Remeta;
have a term of four years; and provide for full recourse.
The Employment Agreements, dated November 20, 1998, between
the Company and Raphael Benaroya and George R. Remeta,
respectively, contain provisions that accelerate the
exercisability of unvested employee stock options in the
event of termination without cause, as defined in the
Employment Agreements. In the event of termination without
cause, unvested employee stock options to purchase 258,430
shares by Mr. Benaroya and 121,000 shares by Mr. Remeta will
become fully exercisable immediately. The Employment
Agreements, and the stock option agreements between the
Company and Messrs. Benaroya and Remeta, respectively, also
provide for the acceleration of unvested options in the event
of a change of control of the Company, as defined therein.
The Employment Agreements are incorporated herein by
reference to Exhibit Nos. 3.7 and 3.8
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement among the reporting persons
(filed on July 22, 1993).
2. Restated Stockholders' Agreement among the Issuer, CCI,
LDA and the Management Stockholders, and Amendment Nos. 1,2
and 3 thereto (filed on November 16, 1998).
3.1. Restated 1990 Stock Option Plan as of March 6, 1998
(filed on November 16, 1998).
3.2. Restated 1990 Stock Option Plan as of May 28, 1996
(filed on November 16, 1998).
3.3. Restated 1996 Stock Option Plan as of March 6, 1998
(filed on November 16, 1998).
3.4. Restated 1989 Management Stock Option Plan as of
May 6, 1998 (filed on November 16, 1998).
3.5. 1998 Stock Option Agreement between the Issuer and
Raphael Benaroya (filed on November 16, 1998).
3.6. 1998 Stock Option Agreement between the Issuer and
George R. Remeta (filed on November 16, 1998).
3.7 Employment Agreement, dated November 20, 1998, between
the Issuer and Raphael Benaroya.
3.8 Employment Agreement, dated November 20, 1998, between
the Issuer and George R. Remeta.
<PAGE> 14
SIGNATURE:
This joint Schedule 13D Amendment No. 4 is filed on behalf of
each of the following stockholders of the Issuer.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in Schedule 13D Amendment No. 4 is true,
complete and correct.
Name Date
---- ----
RAPHAEL BENAROYA * December 2, 1998
----------------------
Raphael Benaroya
/s/ GEORGE R. REMETA December 2, 1998
----------------------
George R. Remeta
ELLEN DEMAIO * December 2, 1998
----------------------
Ellen Demaio
BRADLEY ORLOFF * December 2, 1998
----------------------
Bradley Orloff
FREDRIC E. STERN * December 2, 1998
----------------------
Fredric E. Stern
*By /s/ GEORGE R. REMETA, as attorney-in-fact pursuant to the power of
attorney contained in Exhibit 1 to the Statement on Schedule 13D filed on July
22, 1993.
Attention: Intentional misstatement or omissions of fact constitute federal
criminal violations (see U.S.C. 1001).
<PAGE> 15
EXHIBIT INDEX
-------------
Exhibit No. Description
----------- -----------
1. Joint Filing Agreement among the reporting persons
(filed on July 22, 1993).
2. Restated Stockholders' Agreement among the Issuer, CCI, LDA
and the Management Stockholders and Amendment Nos. 1,2
and 3 thereto (filed on November 16, 1998).
3.1. Restated 1990 Stock Option Plan as of March 6, 1998 (filed on
November 16, 1998).
3.2. Restated 1990 Stock Option Plan as of May 28, 1996 (filed on
November 16, 1998).
3.3. Restated 1996 Stock Option Plan as of March 6, 1998 (filed
on November 16, 1998).
3.4. Restated 1989 Management Stock Option Plan as of
May 6, 1998 (filed on November 16, 1998).
3.5. 1998 Stock Option Agreement between the Issuer and
Raphael Benaroya (filed on November 16, 1998).
3.6. 1998 Stock Option Agreement between the Issuer and
George R. Remeta (filed on November 16, 1998).
3.7 Employment Agreement, dated November 20, 1998, between the
Issuer and Raphael Benaroya.
3.8 Employment Agreement, dated November 20, 1998, between the
Issuer and George R. Remeta.
<PAGE> 1
Exhibit No. 3.7
EMPLOYMENT AGREEMENT
Agreement made as of the 20th day of November, 1998, between UNITED
RETAIL GROUP, INC., a Delaware corporation, with principal offices at 365 West
Passaic Street, Rochelle Park, New Jersey 07662-6563 (the "Company"), and
RAPHAEL BENAROYA, residing at 179 Lincoln Street, Englewood, New Jersey 07631
(the "Executive").
WHEREAS, the Executive has been employed by the Company as its
Chairman of the Board, President and Chief Executive Officer;
WHEREAS, the Company desires to continue the 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 to 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).
(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.
<PAGE> 2
(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) (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 in the performance of his duties;
(iii) 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
(iv) 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 a plea
of guilty referred to in subparagraph (i), the failure of
performance referred to in subparagraph (ii), the misconduct
referred to in subparagraph (iii), and the breach referred to
in subparagraph (iv) shall constitute Cause for a maximum of
only 90 days after the judgment of conviction or plea of
guilty was entered, the failure of performance commenced, the
material economic harm resulted, or the breach first took
place, as the case may be.
(g) Change of Control shall mean (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 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 Securities
and Exchange Commission ("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
2
<PAGE> 3
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 constitute 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(c).
(j) Group Benefits shall have the meaning set forth in Section
6(a).
(k) Individual Disability Policy shall have the meaning set forth
in Section 6(c).
(l) Individual Life Policy shall have the meaning set forth in
Section 6(b).
(m) 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.
(n) Performance Bonus shall have the meaning set forth in Section
4(b).
(o) 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 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).
(p) 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
3
<PAGE> 4
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.
(q) Resignation Compensation shall have the meaning set forth in
Section 14(d).
(r) Severance Pay shall have the meaning set forth in Section
14(c).
(s) Successor shall have the meaning set forth in Section 20.
(t) 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.
(u) 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.
(v) Termination Without Cause shall have the meaning set forth in
Section 14(c).
(w) 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.
2. TERM; AND LOCATION.
(a) 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.
(b) In no event shall the Executive's office be relocated without
his prior consent.
4
<PAGE> 5
3. DUTIES.
(a) During the Term of Employment, the Executive shall serve as
the President and Chief Executive Officer of the Company. In
such capacity, the Executive shall perform such duties and
shall have such responsibilities as are set forth in the
By-laws and such additional duties and responsibilities,
commensurate with his position and title, as may be determined
and assigned to the Executive from time to time by the Board
of Directors. 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. The Executive
shall report solely and directly to the Board of Directors;
all other officers and other employees of the Company shall
report directly to the Executive or the Executive's designees.
No other employee of the Company or any subsidiary shall have
authority and responsibilities that are generally equal to or
greater than those of the Executive.
(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 business time, attention,
knowledge, energy and skills to such employment as President
and Chief Executive Officer of the Company except during
vacation not to exceed three weeks in any year. The Executive
may engage in the following additional activities:
(i) continuing through a controlled corporation,
Raphael Benaroya, Inc., to manage American Licensing
Group Limited Partnership, subject to the
restrictions contained in Section 11(h);
(ii) serving as a director of not more than four
business corporations in addition to Raphael
Benaroya, Inc. that do not engage in the Business of
the Company;
(iii) overseeing personal and family investments in a
manner in which the Executive does not actively
operate portfolio companies in the ordinary course of
business; and
(iv) engaging in local, national and international
charitable, relief, human rights, civic, religious,
military and related activities on behalf of private
organizations and governmental agencies;
5
<PAGE> 6
provided, however, that the Executive's duties and
responsibilities as President and Chief Executive Officer of
the Company shall take precedence over his other activities
except for not more than 45 consecutive days of military
service in the event he is called to active duty in the armed
forces of the United States or any other country.
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
$550,000 per annum during the period ending on January 31,
1999 and thereafter at such higher rate as may be determined
by the 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") during the
four-year period ending on January 31, 1999 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 120% 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.
6
<PAGE> 7
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 group
disability insurance benefits at the level insured on the date
first set forth above (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) In addition to Group Benefits, the Company shall maintain in
force the existing term life insurance policy on the Executive
or a similar policy issued by an insurance company with an
equal or higher rating (the "Individual Life Policy") in an
amount of $3 million at the Company's expense. The Executive
shall have the right to select and change the beneficiary(ies)
of such life insurance policy.
(c) The Company shall reimburse the Executive in the amount of
$20,000 per annum with respect to the premium on the existing
special supplemental long-term disability insurance policy
covering the Executive (the "Individual Disability Policy")
and the federal and state income taxes on such premium amount.
(d) Group Benefits and the Individual Life Policy 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.
(e) The Executive will cooperate with the Company in maintaining
key man life insurance up to $4 million during the Term of
Employment.
(f) 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
7
<PAGE> 8
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 Board of Directors 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;
(e) in the case of death, the proceeds of the Individual Life
Policy and other compensation and benefits as may be provided
in accordance with the terms and provisions of the Group
Benefits or of this Agreement;
(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; and
(g) in the case of Permanent Disability, six monthly payments
after the date of Permanent Disability, each equal to
one-twelfth of the Base Salary in effect on the date of
Permanent Disability, offset by any payments in accordance
with the terms and provisions of the Group Benefits, the
Individual Disability Policy or Supplementary Social Security
Benefits.
8
<PAGE> 9
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 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.
9
<PAGE> 10
(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.
(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(d), 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(c) no later than
the 15th day after the termination of the
10
<PAGE> 11
Executive's employment under this Agreement or his Resignation
Compensation in accordance with the provisions of Section
14(d) 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.
(h) The provision of paragraphs (a), (b) and (d) of this Section
11 shall not apply to or restrict the activities of the
Executive as the chief executive officer, a director and a
principal stockholder of Raphael Benaroya, Inc., which is the
sole general partner of American Licensing Group Limited
Partnership ("ALG"), for so long as, and only for so long as,
Raphael Benaroya, Inc. and ALG do not engage in the Business
of the Company. The Executive's duties and responsibilities as
President and Chief Executive Officer of the Company shall at
all times take precedence over his activities on behalf of
ALG.
11
<PAGE> 12
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) Subject to Section 7(a), the Company shall terminate the
Executive's employment under this Agreement prior to the
expiration of the Term of Employment only if the Board of
Directors of the Company removes the Executive from office by
the affirmative vote of a majority of the directors of the
Company who have not disqualified themselves because of a
potential conflict of interest, at a meeting at which the
Executive is accorded an opportunity to speak. In such case,
this Agreement shall terminate and the Executive shall be
removed from office effective when such vote is taken by the
Board or on such later date as may be specified by the Board.
(b) For purposes of this Agreement, removal of the Executive from
office in accordance with subparagraph (a) 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 or
plea, 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.
(c) Subject to Section 7(a), in the event:
(i) the Company terminates the Executive's employment
under this Agreement pursuant to Section 14(a)
without Cause,
(ii) the Company terminates the Executive's employment
under this Agreement for Cause by reason of a
conviction that is later reversed on appeal and fails
to reinstate him with full back pay,
12
<PAGE> 13
(iii) (A) the Company breaches any of the covenants and
agreements set forth in Sections 3(a), 4(a), (b) or
(c), 5, 6(c) or (d), 14(a) 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, or
(iv) a person other than the Executive is elected Chairman
or Cochairman of the Board of the Company and the
Executive tenders to the Company a letter of
resignation specifying such election and demanding
Severance Pay,
(any termination or resignation under the circumstances
referred to in Section 14(c)(i) through (iv) 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, plus (c) $20,000. 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, 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(c) (i) above.
Anything in this Section 14(c) 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 (the "Cure Period"), 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) the Board of Directors shall approve a resolution during
the Cure Period requesting the Executive to withdraw his
letter of resignation; and
13
<PAGE> 14
(z) the Company shall deliver to the Executive during the Cure
Period a certified copy of the Board resolution referred to in
clause (y) hereof and 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.
(d) 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 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(d), an amount equal to three times the sum of (A) the
annual Base Salary at the rate payable immediately prior to
resignation, plus (B) $20,000. 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.
(e) In the event of Termination Without Cause or resignation by
the Executive in accordance with Section 14(d):
(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:
14
<PAGE> 15
(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;
(D) reimbursement for expenses incurred, but not paid
prior to such termination of employment; and
(E) (w) continuation at the Company's expense through
the remainder of the Term of Employment of the Individual Life
Policy, (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.
(f) If the Company terminates the Executive's employment hereunder
for Cause (except as provided in Section 14(c)(ii)), or in the
event the Executive resigns (except as provided in Section
14(c)(iii) or (iv) or 14(d)), 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.
(g) 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
15
<PAGE> 16
termination of the Executive's employment hereunder,
irrespective of the reason therefor.
(h) 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.
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 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.
16
<PAGE> 17
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. A
copy of each notice, request, demand, and other communication to the Company
hereunder shall be sent by first class mail to Richard W. Rubenstein, Esq.,
Squire, Sanders & Dempsey, Huntington Center, 41 South High Street, 13th Floor,
Columbus, Ohio 43215. 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.
17
<PAGE> 18
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.
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 Rochelle Park, New Jersey, in duplicate originals on November 20,
1998.
UNITED RETAIL GROUP, INC.
By:/s/GEORGE R. REMETA
Name: George R. Remeta
Title: Vice Chairman
/s/RAPHAEL BENAROYA
Raphael Benaroya
empagRB.sam
KPC:JM 11/98
18
<PAGE> 1
Exhibit No. 3.8
EMPLOYMENT AGREEMENT
Agreement made as of the 20th day of November, 1998, between UNITED
RETAIL GROUP, INC., a Delaware corporation, with principal offices at 365 West
Passaic Street, Rochelle Park, New Jersey 07662-6563 (the "Company"), and GEORGE
R. REMETA, residing at 25 Lee Way, Oakland, New Jersey 07436 (the "Executive").
WHEREAS, the Executive has been employed by the Company as its Vice
Chairman, Secretary and Chief Financial Officer;
WHEREAS, the Company desires to continue the 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 to 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).
(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.
<PAGE> 2
(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) (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;
(iii) 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
(iv) 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 failure of performance
referred to in subparagraph (ii), the misconduct referred to in
subparagraph (iii), and the breach referred to in subparagraph
(iv) shall constitute Cause for a maximum of only 90 days after
the judgment of conviction or plea of guilty was entered, the
failure of performance commenced, the material economic harm
resulted, or the breach first took place, as the case may be.
(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 Securities and Exchange Commission ("SEC")
under Section 13(d) of the Exchange Act) of any securities issued
by the Company if, after such
2
<PAGE> 3
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) Individual Disability Policy shall have the meaning set forth in
Section 6(c).
(l) Individual Life Policy shall have the meaning set forth in Section
6(b).
(m) 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.
(n) Performance Bonus shall have the meaning set forth in Section
4(b).
(o) 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 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).
(p) 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,
3
<PAGE> 4
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.
(q) Resignation Compensation shall have the meaning set forth in
Section 14(c).
(r) Severance Pay shall have the meaning set forth in Section 14(b).
(s) Successor shall have the meaning set forth in Section 20.
(t) 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.
(u) 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 Company and the
Executive.
(v) Termination Without Cause shall have the meaning set forth in
Section 14(b).
(w) 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.
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
Secretary and Chief Financial Officer of the Company. In such
capacity, the Executive shall supervise the preparation of the
Company's financial statements and budgets, shall attend all
meetings of the Board of Directors and shall perform such other
duties
4
<PAGE> 5
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. 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 $380,000 per annum
during the period ending on January 31, 1999 and thereafter at
such higher rate as may be determined by the 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 100% 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.
5
<PAGE> 6
(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 group disability
insurance benefits at the level insured on the date first set
forth above (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) In addition to Group Benefits, the Company shall maintain in force
the existing term life insurance policy on the Executive or a
similar policy issued by an insurance company with an equal or
higher rating (the "Individual Life Policy") in the same amount at
the Company's expense. The Executive shall have the right to
select and change the beneficiary(ies) of such life insurance
policy.
(c) The Company shall reimburse the Executive in the amount of $4,000
per annum with respect to the premium on the existing special
supplemental long-term disability insurance policy covering the
Executive (the "Individual Disability Policy") and the federal and
state income taxes on such premium amount.
(d) Group Benefits and the Individual Life Policy 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.
6
<PAGE> 7
(e) 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;
(e) in the case of death, the proceeds of the Individual Life Policy
and any other compensation and benefits as may be provided in
accordance with the terms and provisions of the Group Benefits or
of this Agreement;
(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; and
7
<PAGE> 8
(g) in the case of Permanent Disability, six monthly payments after
the date of Permanent Disability, each equal to one-twelfth of the
Base Salary in effect on the date of Permanent Disability, offset
by any payments in accordance with the terms and provisions of the
Group Benefits, the Individual Disability Policy or Supplemental
Social Security benefits.
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
8
<PAGE> 9
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.
9
<PAGE> 10
(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.
10
<PAGE> 11
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 or plea, 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 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(c) or (d),
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,
(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
11
<PAGE> 12
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, plus (C) $4,000. 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
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
12
<PAGE> 13
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 sum of (A) the annual Base Salary at the rate
payable immediately prior to resignation, plus (B) $4,000. 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;
(D) reimbursement for expenses incurred, but not paid prior
to such termination of employment; and
13
<PAGE> 14
(E) (w) continuation at the Company's expense through the
remainder of the Term of Employment of the Individual Life Policy,
(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.
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.
14
<PAGE> 15
(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.
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.
15
<PAGE> 16
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 General
Counsel. 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.
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.
16
<PAGE> 17
24. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, which
shall, collectively and separately, constitute one agreement as of the date
first set forth above.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
in Rochelle Park, New Jersey, in duplicate originals on November 20, 1998.
UNITED RETAIL GROUP, INC.
By:/s/RAPHAEL BENAROYA
Name: Raphael Benaroya
Title: Chairman of the Board
/s/GEORGE R. REMETA
George R. Remeta
empagGRR.sam
KPC:JW 11/98
17
