Exhibit No. 10.2

 

UNITED RETAIL GROUP, INC.

2006 TANDEM BONUS PLAN AGREEMENT

 

The annual Tandem Bonus Plan that supplements the United Retail Group, Inc.
Incentive Compensation (“IC”) Plan has been extended through fiscal 2006.
Selected Senior Vice Presidents, Vice Presidents and Directors whose activities
support product directors, planners, designers, marketing executives, and sales
executives of the business have been named as participants.

 

The purpose of the 2006 Tandem Bonus Plan is to provide appropriate financial
incentives to key executives whose support of the other executives who drive
sales is essential to the success of the business.

 

The 2006 Tandem Bonus Plan shall operate in the following manner.

 

•

The Chairman of the Board of United Retail Group, Inc. and his designees shall
assign operational performance goals and projects for fiscal 2006 to each
participant; all performance goals and projects shall have measurable completion
criteria and fixed deadlines.

                

•

The Chairman shall be authorized in his sole discretion to make cash bonus
awards with respect to the fiscal year to participants who successfully achieve
their assigned performance goals and complete projects on time.

 

•

The amount of each award shall reflect, among other things, the difficulty of
the performance goals achieved and the projects completed, the degree of
success, the positive effect on annual consolidated operating income and the
general job performance of the participant.

 

•

The merit bonus award to each participant for fiscal 2006 shall not exceed the
remainder of (i) the equivalent of the amount that would be payable to the
participant under the 2006 IC Plan in the event 40% of the 100% target operating
income is achieved in both seasons in the fiscal year, minus (ii) the amount
actually paid to the participant for both seasons under the 2006 IC Plan, either
in accordance with its terms or as a guaranteed minimum payment as part of a
hiring package for a newly employed participant. (For example, if two seasonal
IC payouts are actually made based on achieving the 20% operating income target,
the maximum annual merit bonus to a participant would be equal to the two IC
payouts combined.)

 

•

Merit bonus awards shall be subject to withholding taxes.

 

(over)

 

 

 

 

•

Merit bonus awards will vest on the first business day after the Audit Committee
of the Board of Directors of United Retail Group, Inc. reviews the consolidated
financial statements for fiscal 2006. (Prior to that time, the Company has the
legal right to cancel the entire program without notice for any reason and
without incurring any liability.) An associate must be in the Company’s employ
on that date, and must return to work if on vacation or leave on that date, in
order to receive a merit bonus.

 

Participation in the Tandem Bonus Plan confers no right to continued employment.
Employment remains “at will” and may be terminated without cause at any time by
the associate or by the Company, without any entitlement to future payment of a
bonus.

 

Please acknowledge that you have read and understood and accept the above terms
and conditions that will apply during fiscal 2006 by dating and signing the
attached copy and returning it to the Associates Services Department.

 

Only associates who sign and return the attached copy may participate in the
2006 Tandem Bonus Plan.

 

Dated:

February

, 2006

________________________

 

(please sign your name)

 

 

________________________

(please print your name)

 

 

 

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