Exhibit No. 10.3

 

RESTRICTED  

STOCK AWARD AGREEMENT

(Date)

No. of Shares: ___,000

Date of Grant:

Serial No.: _________

 

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 a restricted stock award under the Company’s 2006 Equity-Based
Compensation and Performance Incentive Plan (herein called the “Plan”). The
restricted stock award is composed of units, each consisting of one share of
common stock, $.001 par value per share, with a stock purchase warrant attached
(herein collectively called “shares”) of the Company, 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. The date of the
grant evidenced by this letter agreement (herein called the date of grant) and
the maximum number of shares are set forth above. 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.

(a) The award can be accepted by signing your name in the space provided on the
enclosed copy of this letter agreement and delivering it 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 of grant. If the Secretary does
not receive a signed copy before 4:30 p.m. Eastern time on the 30th day after
the date of grant, then, anything in this letter agreement to the contrary
notwithstanding, the award will be void ab initio and of no effect.

(b)  Please sign a stock power in blank, have your signature guaranteed by a
stock brokerage firm and deliver the signed stock power to the Secretary of the
Company before 4:30 p.m. Eastern time on the 30th day after the date of grant.

 

 

 

 

2.      Issuance of the Restricted Shares. Subject to the provisions of this
letter agreement, the Company shall issue a certificate in respect of the
restricted shares which shall be registered in your name and shall bear an
appropriate legend referring to the terms, conditions and restrictions in
respect of such shares, substantially in the following form:

"The shares of Common Stock represented by this certificate and the
transferability thereof are subject to the terms and conditions (including
possible forfeiture) of a Restricted Stock Award Agreement between the
registered holder and United Retail Group, Inc. A copy of such Agreement is on
file in the office of the Secretary of United Retail Group, Inc."

The certificate evidencing the restricted shares shall be held in the custody of
the Treasury Desk of the Company until the restrictions thereon shall have
expired.

3.      Restrictions. Except as otherwise provided below, the restricted shares
shall be subject to the restrictions set forth in this Section 3 from the date
the restricted shares are issued in your name:

(a)    You may not sell, assign, transfer, pledge or otherwise encumber the
restricted shares other than by will.

(b)    Except as otherwise provided in this Section 3, you shall have, with
respect to the restricted shares, all of the rights of a holder of shares,
including the right to vote such shares and to receive any cash dividends
thereon. The Compensation Committee of the Company’s Board of Directors (the
“Committee”), however, may determine that cash dividends shall be automatically
reinvested in additional shares which shall become restricted shares and shall
be subject to the same restrictions and other terms of this award. Unless
otherwise determined by the Committee, dividends payable in shares shall be
treated as additional restricted shares subject to the same restrictions and
other terms of this award and you shall deliver a stock power, duly endorsed in
blank, relating to the additional restricted shares upon payment of any such
dividend.

(c)    Except to the extent otherwise provided in this Section 3, upon
termination of your employment with the Company and its subsidiaries for any
reason during the Restriction Period (as defined below), you shall forfeit all
restricted shares that shall not have been previously released to you, provided,
however, that if your employment shall terminate by reason of disability (as
defined in the Plan) or death, the Restriction Period shall be deemed completed
and satisfied as of the date of such disability or death with respect to the
restricted shares, but only as to that portion of such shares as is equivalent
to the portion of the Restriction Period preceding the date of disability or
death. The portion of such shares as to which the Restriction Period is deemed
completed and satisfied by reason of disability or death shall be nonforfeitable
and all the other shares shall be forfeited.

(d)    In the event the Committee determines that you willfully violated any
noncompetition agreement with the Company in any material respect, you shall
forfeit all restricted shares that shall not have been previously released to
you.

 

 

(e)  Unless a prior forfeiture shall have occurred, the Company shall deliver to
you, or your devisees in the event of death, certificates representing the
following percentages of restricted shares on the following dates:

(i)

20% of the shares on the third anniversary of the date of grant;

(ii)           an additional 20% of the shares on the fourth anniversary of the
date of grant; and

(iii)          the remaining 60% of the shares on the fifth anniversary of the
date of grant (the time prior to the fifth anniversary of the date of grant
being herein called the “Restriction Period”).

The certificates delivered shall not contain the legend referred to in Section 2
but shall contain any legend required by federal and state securities laws.

4.      Listing Requirements. The Company shall not be obligated to deliver any
certificates representing shares until all applicable requirements imposed by
federal and state securities laws and by any stock exchanges or NASDAQ upon
which the shares may be listed have been fully met.

5.      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.

6.

Adjustments in Shares.

(a)    The existence of this letter agreement and the restricted shares shall
not affect or restrict in any way the right or power of the Board of Directors
or the stockholders of the Company to make or authorize any reorganization or
other change in its capital or business structure, any merger or consolidation
of the Company, any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the shares or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business.

(b)   Any change in or affecting the outstanding unrestricted shares by reason
of a stock dividend or split, merger or consolidation (whether or not the
Company is the surviving corporation), recapitalization, spin-off,
reorganization, combination or exchange of shares or other similar corporate
changes or an extraordinary dividend in cash, securities or other property shall
also apply to restricted shares.

 

 

 

 

7.      Change in Control. Subject to the following sentence, in the event a
change in control (as defined in the Plan) of the Company occurs, all
restrictions shall be removed from all the shares, the Restriction Period shall
be deemed completed and satisfied and the Company shall deliver to you
certificates representing all the shares within 10 business days. The
certificates delivered shall not contain the legend referred to in Section 2 but
shall contain any legend required by federal and state securities laws. The
penultimate sentence to the contrary notwithstanding, during the Restriction
Period and prior to the occurrence of a change in control, the Committee may
provide that in the event of a change in control all the restricted shares shall
be cashed out on the basis of the fair market value on the date of the change in
control with payment to be made within 10 business days after the change in
control takes place.

8.

Tax Matters.

Federal income tax withholding (and state and local income tax withholding, if
applicable) may be required in respect of taxes on income realized when
restrictions are removed from shares. You are required to deliver to the Company
the amounts that it determines should be withheld, provided, however, that a
portion or all of such withholding taxes may be paid by electing to have (i) the
Company withhold a portion of the restricted shares or (ii) you deliver shares
that have been owned for at least six months, in either case, having a fair
market value on the date that the amount of tax to be withheld is to be
determined of the amount to be withheld, provided that the election shall be
irrevocable and subject to the approval of the Committee.

9.

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.

10.

Short-Swing Trading.

An executive officer of the Company or one of its subsidiaries who receives a
restricted stock award must report the transaction on a Form 4 Statement of
Changes in Beneficial Ownership filed within two trading days with the EDGAR
database of the Securities and Exchange Commission. (The General Counsel of the
Company will draft the Form 4 on request but the filing is your personal
responsibility.) Further, executive officers should review the Company’s Policy
Statement On Insider Trading before making arrangements for the sale of shares.

11.

Recruiting Company Associates.

For a period of eight years after the date of grant 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.

 

 

 

12.

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 12.

13.

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.

14.

Successors.

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

15.

Time of Essence.

Time is of the essence of the provisions of this letter agreement with respect
to delivering notices and making payments. There is no grace period.

16.

Equitable Remedies.

Each party acknowledges and agrees that the other party may be irreparably
injured by a breach of this letter agreement by such party and that money
damages may be an inadequate remedy for breach of this letter agreement because
of the difficulty of ascertaining the amount of damage that may be suffered in
the event that this letter agreement is breached. Accordingly, each party agrees
that the other party may seek specific performance of this letter agreement and
injunctive or other equitable relief as a remedy for any such breach, without
proof of actual damages, and further agrees to waive any requirement for the
securing or posting of any bond in connection with any such remedy. Such remedy
shall not be deemed to be the exclusive remedy for a breach of this letter
agreement, but shall be in addition to all other remedies available at law or
equity. In the event of litigation relating to this letter agreement, the
non-prevailing party (as determined by a court of competent jurisdiction in a
final, nonappealable order) will reimburse the prevailing party for its
reasonable out-of-pocket expenses (including, without limitation, reasonable
out-of-pocket legal fees and expenses) incurred in connection with all such
litigation.

 

 

 

17.

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)