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                                                                Exhibit No. 10.1


                              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
RAPHAEL BENAROYA, residing at 179 Lincoln Street, Englewood, New Jersey 07631
(the "Executive").

          WHEREAS, the Executive has been employed by the Company as its
Chairman of the Board, President and Chief Executive 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.
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          (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 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 a 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 (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 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 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 

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                  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 constitute 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(c).

         (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, store
                  operating results, identities and habits of customers and
                  prospective

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                  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(d).

         (r)      Severance Pay shall have the meaning set forth in Section
                  14(c).

         (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 Board of
                  Directors and the Executive.

         (v)      Termination Without Cause shall have the meaning set forth in
                  Section 14(c).

         (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; AND LOCATION.

         (a)      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.

         (b)      In no event shall the Executive's office be relocated without
                  his prior consent.




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          3.      DUTIES.

         (a)      During the Term of Employment, the Executive shall serve as
                  the President and Chief Executive Officer of the Company. In
                  such capacity, the Executive shall perform such duties and
                  shall have such responsibilities as are set forth in the
                  By-laws and such additional duties and responsibilities,
                  commensurate with his position and title, as may be determined
                  and assigned to the Executive from time to time by the Board
                  of Directors. 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 Board of Directors;
                  all other officers and other employees of the Company shall
                  report directly to the Executive or the Executive's designees.
                  No other employee of the Company or any subsidiary shall have
                  authority and responsibilities that are generally equal to or
                  greater than those of the Executive.

         (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 business time, attention,
                  knowledge, energy and skills to such employment as President
                  and Chief Executive Officer of the Company except during
                  vacation not to exceed three weeks in any year. The Executive
                  may engage in the following additional activities:

                           (i) continuing through a controlled corporation,
                           Raphael Benaroya, Inc., to manage American Licensing
                           Group Limited Partnership, subject to the
                           restrictions contained in Section 11(h);

                           (ii) serving as a director of not more than four
                           business corporations in addition to Raphael
                           Benaroya, Inc. that do not engage in the Business of
                           the Company;

                           (iii) overseeing personal and family investments in a
                           manner in which the Executive does not actively
                           operate portfolio companies in the ordinary course of
                           business; and

                           (iv) engaging in local, national and international
                           charitable, relief, human rights, civic, religious,
                           military and related activities on behalf of private
                           organizations and governmental agencies;



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                  provided, however, that the Executive's duties and
                  responsibilities as President and Chief Executive Officer of
                  the Company shall take precedence over his other activities
                  except for not more than 45 consecutive days of military
                  service in the event he is called to active duty in the armed
                  forces of the United States or any other country.

         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
                  $550,000 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") during the
                  four-year period ending on January 31, 1999 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 120% 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.

         (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.

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          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 an
                  amount of $3 million 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
                  $20,000 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.

         (e)      The Executive will cooperate with the Company in maintaining
                  key man life insurance up to $4 million during the Term of
                  Employment.

         (f)      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


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                  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 Board of Directors 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 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

         (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 Supplementary Social Security
                  Benefits.

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          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 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.



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         (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.

         (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(d), 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(c) no later than
                  the 15th day after the termination of the 

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                  Executive's employment under this Agreement or his Resignation
                  Compensation in accordance with the provisions of Section
                  14(d) 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.

         (h)      The provision of paragraphs (a), (b) and (d) of this Section
                  11 shall not apply to or restrict the activities of the
                  Executive as the chief executive officer, a director and a
                  principal stockholder of Raphael Benaroya, Inc., which is the
                  sole general partner of American Licensing Group Limited
                  Partnership ("ALG"), for so long as, and only for so long as,
                  Raphael Benaroya, Inc. and ALG do not engage in the Business
                  of the Company. The Executive's duties and responsibilities as
                  President and Chief Executive Officer of the Company shall at
                  all times take precedence over his activities on behalf of
                  ALG.



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         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)      Subject to Section 7(a), the Company shall terminate the
                  Executive's employment under this Agreement prior to the
                  expiration of the Term of Employment only if the Board of
                  Directors of the Company removes the Executive from office by
                  the affirmative vote of a majority of the directors of the
                  Company who have not disqualified themselves because of a
                  potential conflict of interest, at a meeting at which the
                  Executive is accorded an opportunity to speak. In such case,
                  this Agreement shall terminate and the Executive shall be
                  removed from office effective when such vote is taken by the
                  Board or on such later date as may be specified by the Board.

         (b)      For purposes of this Agreement, removal of the Executive from
                  office in accordance with subparagraph (a) 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.

         (c)      Subject to Section 7(a), in the event:

                  (i)      the Company terminates the Executive's employment
                           under this Agreement pursuant to Section 14(a)
                           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,

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                  (iii)    (A) the Company breaches any of the covenants and
                           agreements set forth in Sections 3(a), 4(a), (b) or
                           (c), 5, 6(c) or (d), 14(a) 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, or

                  (iv)     a person other than the Executive is elected Chairman
                           or Cochairman of the Board of the Company and the
                           Executive tenders to the Company a letter of
                           resignation specifying such election and demanding
                           Severance Pay,

                  (any termination or resignation under the circumstances
                  referred to in Section 14(c)(i) through (iv) 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 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) $20,000. 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, 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(c) (i) above.
                  Anything in this Section 14(c) 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 (the "Cure Period"), 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) the Board of Directors shall approve a resolution during
                  the Cure Period requesting the Executive to withdraw his
                  letter of resignation; and


                                       13
<PAGE>   14
                  (z) the Company shall deliver to the Executive during the Cure
                  Period a certified copy of the Board resolution referred to in
                  clause (y) hereof and 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.

         (d)      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 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(d), an amount equal to three times the sum of (A) the
                  annual Base Salary at the rate payable immediately prior to
                  resignation, plus (B) $20,000. 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.

         (e)      In the event of Termination Without Cause or resignation by
                  the Executive in accordance with Section 14(d):

                  (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:

                                       14
<PAGE>   15
                           (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

                           (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.

         (f)      If the Company terminates the Executive's employment hereunder
                  for Cause (except as provided in Section 14(c)(ii)), or in the
                  event the Executive resigns (except as provided in Section
                  14(c)(iii) or (iv) or 14(d)), 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.

         (g)      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 

                                       15
<PAGE>   16
                  termination of the Executive's employment hereunder,
                  irrespective of the reason therefor.

         (h)      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.

         (c)      The Company shall use reasonable efforts to obtain a
                  directors' and officers' liability 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.


                                       16
<PAGE>   17
          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.

          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 Secretary. A
copy of each notice, request, demand, and other communication to the Company
hereunder shall be sent by first class mail to Richard W. Rubenstein, Esq.,
Squire, Sanders & Dempsey, Huntington Center, 41 South High Street, 13th Floor,
Columbus, Ohio 43215. 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.



                                       17
<PAGE>   18
          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.

          24.     COUNTERPARTS.

                  This Agreement may be executed in one or more counterparts,
which shall, collectively and separately, constitute one agreement.


          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/GEORGE R. REMETA    
                                                      Name:  George R. Remeta
                                                      Title:     Vice Chairman

                                                      /s/RAPHAEL BENAROYA       
                                                      Raphael Benaroya


empagRB.sam
KPC:JM 11/98


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