Exhibit 10.4

 

RESTATED SEVERANCE PAY AGREEMENT

 

This Severance Pay Agreement (the “Agreement”), dated as of June 15, 2007 (the
“date first set forth above”), is made between United Retail __________, a
Delaware corporation, with principal offices at 365 West Passaic Street,
Rochelle Park, New Jersey 07662 (the “Company”) and the undersigned officer of
the Company (the “Executive”).

 

WHEREAS, the availability of severance pay and certain other post-employment
benefits will encourage those entitled to them to remain in the Company’s
employ;

 

WHEREAS, the Executive previously entered into a Severance Pay Agreement with
the Company, dated December 22, 2006 (the “Prior Agreement”);

 

WHEREAS, the Company and the Executive desire to amend and restate the Prior
Agreement in order to comply with final regulations recently published under
Section 409A of the Internal Revenue Code, as amended;

 

WHEREAS, Section 11 of the Prior Agreement requires that the Company give the
Executive one year of advance notice before amending the Prior Agreement, and,
to the extent such notice is applicable to this amendment and restatement, the
Company and the Executive hereby waive the one-year notice requirement in order
to comply with the December 31, 2007 deadline imposed by Section 409A; and

 

WHEREAS, this Agreement was reviewed and approved by the Company’s Board of
Directors on June 15, 2007.

 

NOW, THEREFORE, in consideration of the Executive’s continued employment with
the Company and other good and valuable consideration, the parties, intending to
be legally bound, hereby agree, effective as of the date first set forth above,
as follows:

 

1.

Definitions.

 

(a)

By-laws shall mean the By-laws of the Company as in force on the date first set
forth above.

 

(b)

Cause shall mean the occurrence after the date first set forth above 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 or her personal actions
(excluding liability imputed by reason of his or her position as an associate of
the Company) and involves common law fraud, embezzlement, breach of duty as a
fiduciary, willful dishonesty or moral turpitude (the entry of a judgment or
plea being the only event or circumstance sufficient to constitute Cause under
this clause (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)

the Executive has willfully and continuously failed to perform his or her duties
to the Company in any material respect, except in the case of Short Term
Disability, and material economic harm to the Company has resulted;

 

 

(iii)

the Executive has willfully failed in any material respect to follow specific
directions of the President of the Company in the performance of his or her
duties, except in the case of Short Term Disability;

 

 

(iv)

there has been a breach in any material respect of any of the provisions of
Section 7; or

 

 

(v)

the Executive has willfully failed to report promptly in writing to the Senior
Vice President-General Counsel of the Company any fraud of which he or she is
aware, or has reasonable grounds to suspect, on the part of any officer of the
Company that involves the Company, whether or not the fraud is material and
whether it occurred before or after the date first set forth above;

 

provided, however, that the judgment of conviction or a plea of guilty referred
to in clause (i), the failure of performance referred to in clause (ii) and
(iii) and the breach referred to in clause (iv) shall constitute Cause for a
maximum of only 90 days after the judgment of conviction or plea of guilty was
entered, the material economic harm commenced, the directions were not followed
or the breach first took place, as the case may be. For purposes of determining
Cause, no act or omission by the Executive shall be considered “willful” unless
it is done or omitted in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any act
or failure to act based upon advice of counsel for the Company shall be
conclusively presumed to be done or omitted to be done by the Executive in good
faith and in the best interests of the Company. Termination of employment shall
be deemed to be for Cause only if the Company sends the Executive by certified
mail to his or her residence before the termination of employment a notice of
termination for Cause specifying in reasonable detail the circumstance that is
the basis for termination. Short Term Disability shall not be a basis for
termination of employment.

(c)

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 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 7.

 

(d)

Severance Pay shall have the meaning set forth in Section 2(b).

 

(e)

Short Term Disability shall mean the inability of the Executive to substantially
perform his or her duties and responsibilities to the Company by reason of a
physical or mental disability or infirmity for a continuous period of less than
six months.

 

(f)

Successor shall have the meaning set forth in Section 10(b).

 

(g)

Termination Without Cause shall have the meaning set forth in Section 2(a).

 

(h)

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, provided, however, that the Executive in
his or her discretion may disclose Protected Information to the extent necessary
in the performance of his or her duties on behalf of the Company.

 

2.

Severance Pay.

 

(a)

If, while this Agreement remains in force, either:

 

 

(i)

the Company unilaterally terminates the Executive’s employment without Cause;

 

 

 

 

(ii)

the Executive’s base salary, incentive compensation or group benefits are
reduced materially by the Company, and the Executive, within 15 days after first
learning of the reduction sends a notice of resignation to the Company at its
address first set forth above to the attention of the Associate Services Dept.
by certified mail; or

 

 

(iii)

the Company fails to obtain the consent of a Successor required pursuant to
Section 10(c), and the Executive, within 15 days after first learning of the
failure sends a notice of resignation to the Company at its address first set
forth above to the attention of the Associate Services Dept. by certified mail;

 

then a Termination Without Cause shall have occurred at the time the Executive’s
employment is terminated by the Company or due to his resignation, as
applicable.

 

(b)

If Termination Without Cause shall occur and within 21 days thereafter the
Executive shall send to the Company’s Senior Vice President-Human Resources a
general release that excludes rights under outstanding equity-based compensation
grants and is in form and substance satisfactory to the Company, then, subject
to Section 2(e), the Company shall remit Severance Pay equivalent to 26 weeks’
base pay at the higher of the rate paid on the date first set forth above or on
the date on which Termination Without Cause occurred plus an additional week for
each full year of service in excess of 10 years of service as of the date of
termination but in no event more than a total of 52 weeks. Subject to Section
2(e), Severance Pay shall be remitted to the Executive’s residence in equal
weekly installments commencing on the fourth Thursday following Termination
Without Cause, payable over the same number of weeks to which the amount of
Severance Pay relates (e.g., 30 weeks of Severance Pay will be payable in equal
installments over 30 weeks). Subject to Section 2(e), no grace period shall be
allowed for remittance of Severance Pay, time being of the essence.

 

(c)

Following any termination of the Executive’s employment, whether or not
Severance Pay is due:

 

 

(i)

the Executive shall use reasonable efforts to seek other employment and keep the
Company informed of all remuneration from employment received during the period
Severance Pay is otherwise due;

 

 

(ii)

there shall be set off against each weekly installment of Severance Pay
otherwise due all remuneration from employment that the Executive may have
obtained during the previous week; and

 

 

 

(iii)

the Executive shall be entitled to the following additional payments within ten
days of the employment termination date:

 

 

(A)

any base salary accrued or incentive compensation vested but not yet paid;

 

 

(B)

pay for any vacation days not taken; and

 

 

(C)

reimbursement for business expenses incurred, but not paid, prior to termination
of employment.

 

(d)

Payments made pursuant to this Section 2 shall be final and the Company shall
not seek to recover all or any part of such payments from the Executive or from
whomsoever may be entitled thereto, for any reasons whatsoever other than the
Executive’s breach in any material respect of the provisions of Section 7.

 

(e)

To the extent that any amount payable under this Agreement constitutes an amount
payable under a “nonqualified deferred compensation plan” (as defined in Section
409A) following a “separation from service” (as defined in Section 409A),
including any amount payable under Sections 2 or 4, then, notwithstanding any
other provision in this Agreement to the contrary, such payment will not be made
to the Executive until the date that is six months following the Executive’s
“separation from service,” but only if the Executive is deemed to be a
“specified employee” under Section 409A at the time the Executive “separates
from service.” Any amount not paid to the Executive as a result of this
six-month delay, but which amount otherwise would have been paid to the
Executive during the six-month wait but for this Section 2(e), will be payable
to the Executive by the Company in a lump-sum on the six-month anniversary of
his “separation from service” (or, if earlier, to the Executive’s estate in the
event of his death).

 

3.         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 statutes and/or regulations from time to time in effect.

 

 

 

 

 

4.

Group Benefits.

 

(a)

Subject to Sections 2(e) and 4(c), for six months after Termination Without
Cause, the Company shall remit to the Executive monthly an amount equal to the
excess of the monthly life insurance premium for a converted policy issued to
the Executive over the premium previously paid by the Executive for his or her
group life insurance; provided that (i) the amount of any expenses reimbursed
under this Section 4(a) in any one year will not affect the amount of expenses
reimbursed in any other year, and (ii) at no time will the Executive’s right to
reimbursements under this Section 4(a) be subject to liquidation or exchange for
any other benefit.

 

(b)

The Company shall make available to the Executive and his or her dependents
health, dental and prescription drug benefits in accordance with COBRA
regulations. Subject to Section 4(c), for six months after Termination Without
Cause, the Company shall remit to the Executive monthly an amount equal to the
excess of the monthly premium for COBRA coverage over the payroll withholding
previously paid by the Executive for group health benefits.

 

(c)

The premium reimbursements provided in Sections 4(a) and (b) shall be available
upon submission to the Company of evidence of payment of the premiums by the
Executive, provided that any such reimbursement will be made no later than the
end of the year following the year in which the underlying expense is incurred.

 

5.

Indemnification.

 

(a)

The Company shall indemnify the Executive as provided in the By-laws.

 

(b)

The Company shall use reasonable efforts to continue the existing directors’ and
officers’ liability policies covering officers of the Company for $20 million
and to maintain the policies for 12 months after Termination Without Cause.

 

(c)

The provisions of this Section 5 shall survive the termination of the
Executive’s employment, irrespective of the reason therefor.

 

6.         Death. In the event of the death of the Executive, no Severance Pay
and other benefits under this Agreement shall thereafter accrue.

 

 

 

 

7.

Restrictive Covenants and Confidentiality.

 

(a)

Until the termination of this Agreement and for 12 months thereafter, the
Executive shall not solicit, raid, entice, encourage or induce any person who at
any time in the prior year shall have been an associate of the Company to become
employed by any person, firm or corporation, and the Executive shall not
approach any such associate 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)

Until the termination of this Agreement and for 12 months 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 7(b) 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 or her counsel that such disclosure is necessary to
comply with such court order, decree, rules, regulation or law, the Executive
may disclose such information without liability hereunder.

 

(c)

Until the termination of this Agreement and for any period afterwards for which
Severance Pay is owing, the Executive shall report promptly in writing to the
Senior Vice President-General Counsel of the Company any fraud of which he or
she is aware, or has reasonable grounds to suspect, on the part of any officer
of the Company that involves the Company, whether or not the fraud is material.

 

(d)

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 with the Company
shall become and be the sole property of the Company.

 

(e)

Neither the Company nor the Executive shall publicly disparage the other either
before or after the termination of this Agreement.

 

(f)

The provisions of this Section 7 shall survive the termination of the
Executive’s employment with the Company, irrespective of the reason therefor.

 

 

8.

Enforcement; Interest.

 

(a)

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 sent to the Company to the attention of its
Associate Services Dept. by certified mail, time being of the essence, 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 reimbursed for reasonable attorneys’ fees
and expenses (including disbursements and court costs) incurred by him in
prosecuting such suit, subject to the following conditions:

 

 

(i)

only fees and expenses incurred during the Executive’s employment with the
Company and during the five-year period immediately thereafter will be eligible
for reimbursement;

 

 

(ii)

the amount of fees and expenses reimbursed in any one year will not affect the
amount of fees and expenses reimbursed in any other year;

 

 

(iii)

the reimbursement of any fee or expense may be made no later than the end of the
year following the year in which the fee or expense is incurred; and

 

 

(iv)

the right to reimbursement under this Section 8(a) is not subject to liquidation
or exchange for any other benefit.

 

Interest shall be payable from the date any amount is first due and payable to
the Executive at a rate equal to the prime rate published from time to time by
J.P. Morgan Chase Bank, but in no event at a rate higher than the maximum rate
then permitted by law.

 

(b)

The provisions of this Section 8 shall survive the termination of the
Executive’s employment hereunder, irrespective of the reason therefor.

 

9.         Governing Law. This Agreement shall be subject to, and governed by,
the internal laws of the State of New Jersey, without regard to conflicts of
laws.

 

10.

Assignability.

 

(a)

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 benefits under
this Agreement. Any such attempted delegation or disposition shall be null and
void ab initio and without effect.

(b)

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. Except as provided in this Section 10(b), this
Agreement may not otherwise be assigned by the Company. (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.)

 

(c)

The Company shall obtain the agreement of any Successor that the Successor shall
assume and be bound by the terms of this Agreement prior to the effectiveness of
any such succession. Failure of the Company to obtain the agreement of any
Successor to assume and be bound by the terms of this Agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement.

 

11.       Amendment and Termination of Agreement. This Agreement may be amended
or terminated by the Company without liability to the Executive upon one year’s
prior written notice to the Executive. The rights of the Executive under this
Agreement shall be vested irrevocably until expiration of the notice period
referred to in the preceding sentence. However, this Agreement shall not confer
any right to continued employment on the Executive.

 

12.       Integration. This Agreement supersedes the Prior Agreement and all
other prior contracts and other agreements, written or oral, with respect to
severance pay.

IN WITNESS WHEREOF, the parties have subscribed their names this ___ day of
_____, ____, in Rochelle Park, New Jersey, in the case of the Company by an
officer thereunto duly authorized.

 

 

_______________________________

 

(Please sign your name)

 

 

_______________________________

 

[Name]

 

 

 

UNITED RETAIL __________

 

 

By: ____________________________

 

Chief Administrative Officer