Exhibit No. 10.4

# SEVERANCE PAY AGREEMENT

This Severance Pay Agreement (the
Agreement), dated September 9, 2004 (the date first set forth above) between United Retail Group, Inc., 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; and

WHEREAS, this Agreement was
authorized by the Companys Board of Directors on September 3, 2004;

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 as
follows:

1.    Definitions.

1. By-laws  shall mean the  By-laws of the  Company as in force on the date first set forth
                  above.
2. Cause shall mean the  occurrence  after the date first set forth above of one or more of
                  the following events:

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| | (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 United Retail  Group,  Inc. any fraud of which he or
                           she is aware,  or has  reasonable  grounds  to  suspect,  on the part of any  officer of
                           United  Retail  Group,  Inc. or one of its  subsidiaries  that  involves  United  Retail
                           Group,  Inc.  or one of its  subsidiaries,  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.

1. 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.
2. Severance Pay shall have the meaning set forth in Section 2(b).
3. 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.
4. Successor shall have the meaning set forth in Section 10(b).
5. Term shall  mean the year  ending on the first  anniversary  of the date first set forth
                  above.
6. Termination Without Cause shall have the meaning set forth in Section 2(a).
7. 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.    Severance Pay.

1. If, before the end of the Term either:

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| | (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);                                                                                                                                                                                                                                                                                                                                                     

then Termination Without Cause shall
have occurred.

1. If  Termination  Without Cause shall occur and within 21 days  thereafter  the Executive
                  shall send to the  Company's  Vice  President-Associate  Services  a general  release in form and
                  substance  satisfactory to the Company,  then the Company shall remit Severance Pay equivalent to
                  __ 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.  Severance  Pay  shall be  remitted  to the
                  Executive's  residence  in ___  equal  weekly  installments  commencing  on the  fourth  Thursday
                  following  Termination  Without  Cause.  No grace  period  shall be  allowed  for  remittance  of
                  Severance Pay, time being of the essence.
2. In the event Severance Pay is due:

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| | (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:                                                                                                                                                                                       

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| |  | (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.

1. 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.

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.

1. Subject to Section 4(c), for ____ 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.
2. 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 ____ 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.
3. The premium  reimbursements  provided in Section  4(a) and (b) shall be  available  upon
                  submission to the Company of evidence of payment of the premiums by the Executive.

5.    Indemnification.

1. The Company shall indemnify the Executive as provided in the By-laws.
2. 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 during the Term, whether or not the Executive shall be in the Company's employ.
3. 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, all Severance Pay and other benefits under this Agreement shall automatically
terminate.

7.    Restrictive Covenants and Confidentiality.

1. During the Term and for 12 months  thereafter,  the Executive  shall not solicit,  raid,
                  entice,  encourage  or induce any person who at any time  within one year prior to the end of the
                  Term 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.
2. During the Term 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.
3. During the Term 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
                  United Retail Group,  Inc. any fraud of which he or she is aware,  or has  reasonable  grounds to
                  suspect,  on the part of any officer of United  Retail  Group,  Inc.  or one of its  subsidiaries
                  that involves United Retail Group, Inc. or one of its  subsidiaries,  whether or not the fraud is
                  material.
4. 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.
5. Neither the Company nor the  Executive  shall  publicly  disparge  the other  during the
                  Term or afterwards.
6. 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.

1. 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 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  first set forth  above but in no event at a rate  higher
                  than the maximum rate then permitted by law.
2. 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.

1. 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.
2. 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.)
3. 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
at any time after the first anniversary of the date first set forth above. The rights of
the Executive under this Agreement shall be vested irrevocably until the first anniversary
of the date first set forth above. However, this Agreement shall not confer any right to
continued employment on the Executive.

IN WITNEES WHEREOF, the
parties have subscribed their names, in Rochelle Park, New Jersey, in the case of the
Company by an officer thereunto duly authorized.

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| | ____________________(Please sign your name)____________________(Please print your name)
UNITED RETAIL GROUP, INC.By: ____________________Chief Administrative Officer

URGI Severance Pay
Agreement 9.7.04

***

The Company entered into Severance Pay Agreements in the form set forth above with Paul McFarren, the Companys Senior Vice President-Chief Information
Officer, and Jon Grossman, the Companys Vice President-Finance.  The total severance pay and insurance premium reimbursements payable by the
Company at September 9, 2004 would be $155,000 to Mr. McFarren and $147,000 to Mr. Grossman.

On September 9, 2004, the Companys respective subsidiaries also entered into Severance Pay Agreements in the form set
forth above with their respective officers.  Twelve officers of subsidiaries would be entitled to average severance pay and
insurance premium reimbursements totaling $144,000 at September 9, 2004.