Exhibit No. 10.1

 

INCENTIVE COMPENSATION AWARD AGREEMENT

(Date)

 

PERSONAL AND CONFIDENTIAL:

(Name and Address)

Dear (Salutation):

We are pleased to inform you that, as a key associate of United Retail Group,
Inc. (herein called the “Company”) or one of its subsidiaries, you have been
granted an incentive compensation award under the Company’s 2006 Equity-Based
Compensation and Performance Incentive Plan (herein called the “Plan”) for the
six-month selling season ending _______ (the “Season”), subject to your
acceptance of the award as provided in Section 1 below and the terms and
conditions that follow in this letter agreement or are contained in the Plan. A
copy of the Plan is enclosed. The terms and conditions of the award, including
non-standard provisions permitted by the Plan, are set forth below, provided,
however, that in the event of any inconsistency between the provisions of this
letter agreement and the Plan, the provisions of the Plan shall prevail.

1.          Acceptance of Award. The award can be accepted by (i) signing your
name in the space provided on the enclosed copy of this letter agreement, and
(ii) delivering one signed copy of this letter agreement to the Secretary of the
Company, 365 West Passaic Street, Rochelle Park, New Jersey, 07662, before 4:30
p.m. Eastern time on the 30th day after the date set forth above. If the
Secretary does not receive properly executed documents before 4:30 p.m. Eastern
time on the 30th day after the date set forth above, then, anything in this
letter agreement to the contrary notwithstanding, the award will be void ab
initio and of no effect.

2.

Award Formula.

(a)    Your individual participation percentage is ___%. This percentage shall
be multiplied by base salary paid to you during the Season and by the percentage
payout based on operating income (as provided below) to determine the amount of
your incentive compensation, which shall be paid in cash.

 

 

 

(b)    There shall be a 100% incentive compensation payout if the Company’s
consolidated operating income for the Season determined in accordance with
generally accepted accounting principles plus any expenses (or minus any gains)
based on (i) the market price of Company Common Stock, (ii) extraordinary items
or (iii) transactions outside the ordinary course of business (or the portion of
the consolidated total allocated to the business activity in which you are
principally engaged) reaches the median performance level that has been set by
the Company’s Board of Directors (the “Median Performance Level”) for the
Company (or the business activity in which you are principally engaged).

(c)    There shall be a 200% incentive compensation payout if such income
reaches the maximum performance level that has been set by the Company’s Board
of Directors (the “Maximum Performance Level”).

(d)    In the event such income is greater than the Median Performance Level and
less than the Maximum Performance Level, the incentive compensation payout shall
be determined by straight-line proration between those two amounts.

(e)    In the event such income is equal to or greater than the minimum
performance level that has been set by the Company’s Board of Directors (the
“Minimum Performance Level”) but less than the Median Performance Level, the
incentive compensation payout shall be determined by straight line proration
between a 20% incentive compensation payout for the Minimum Performance Level
and a 100% incentive compensation payout for the Median Performance Level.

(f)    The incentive compensation payout percentage for the Season to be
factored into the incentive compensation formula shall be determined by the
Company’s Chief Financial Officer, whose good faith determination shall be final
and binding on you and the Company.

3.      Transfer of Employment; Leave of Absence. A transfer of your employment
from the Company to a subsidiary or vice versa, or from one subsidiary to
another, without an intervening period, shall not be deemed a termination of
employment. If you are granted an authorized leave of absence, you shall be
deemed to have remained in the employ of the Company or a subsidiary during such
leave of absence.

 

 

 

 

4.

Employment.

Nothing contained in this letter agreement shall confer any right to continue in
the employ of the Company or a subsidiary or limit in any way the right of the
Company or a subsidiary to change your compensation or other benefits or to
terminate your employment with or without cause.

5.

Recruiting Company Associates.

For a period of five years after the date set forth above, you shall not,
directly or indirectly, (i) induce or attempt to influence any employee of, or
consultant under contract with, the Company to leave its employ; or (ii) take an
active part in aiding any competitor of the Company or any other person in any
attempt to induce or influence any employee of, or consultant under contract
with, the Company to leave its employ.

6.

Confidential Information.

You shall never use, disclose or divulge, furnish or make accessible to anyone,
directly or indirectly, any (i) trade secrets, confidential or proprietary
information, and any other non-public knowledge, information, documents or
materials, owned, developed or possessed by the Company, whether in tangible or
intangible form, and learned or obtained while in the employ of the Company,
including, but not limited to, the Company’s research and development
operations, identities of employees, business relationships, products (including
prices, costs, sales or content), processes, techniques, contracts, financial
information or measures, business methods, future business plans, data bases,
computer programs, designs, models and operating procedures, and (ii) private
information about any of the Company’s other employees learned or obtained while
in the employ of the Company (collectively, “Information”), but excluding any
Information that shall become generally known to the public or in the trade
without violation of this Section 6.

7.

Making Disparaging Statements.

Neither you nor the Company shall ever make or authorize any public statement
disparaging the other party, provided, however, that neither party shall be
restricted in responding to any legal process.

8.

Successors.

This letter agreement is binding on your heirs and personal representatives and
on the successors of the Company.

 

 

 

 

 

 

9.

Counterparts.

This letter agreement may be executed in duplicate counterparts, each of which
shall be deemed to be an original.

 

Very truly yours,

UNITED RETAIL GROUP, INC.

 

By

 

 

Chief Executive Officer

 

I hereby agree to the terms and conditions set forth above and acknowledge that
I have received and read a copy of the United Retail Group, Inc. 2006
Equity-Based Compensation and Performance Incentive Plan.

 

 

_________________________________

 

(please sign your name)

(date stamp of Company Secretary)