<PAGE>   1
                                                                Exhibit No. 10.2

                             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