Exhibit 10.4

SEVERANCE AGREEMENT AND RELEASE

This Severance Agreement and Release (the “Agreement”) is made this 14 th  day of April, 2006 between Mario Ciampi (the “Employee”) and The Children’s Place Services Company, LLC, its parent and its direct and indirect affiliated corporations and other entities (collectively, the “Company”).

1.             Termination of Employment . The parties agree that the Employee’s employment with the Company shall terminate effective April 30, 2006 (the “Separation Date”).

2.             Separation Payments and Options .

(a)           In consideration for entering into this Agreement, the Company shall pay to the Employee the sum of Five Hundred Ten Thousand Dollars ($510,000), less legally required payroll deductions (the “Separation Payment”), which sum shall be paid to Employee in accordance with the Company’s regular payroll practices in twenty-six bi-weekly installments commencing the first pay period following the Separation Date. Notwithstanding the above, the final separation payment under this Section 2 shall be made on or before April 13, 2007.

(b)           The Company also agrees that the Transfer Restrictions under The Children’s Place Retail Stores, Inc. Transfer Restriction Agreement dated January 27, 2006 (the “Transfer Restriction Agreement”) shall lapse with respect to the Employee’s vested options to acquire 30,400 shares of the Company at the strike prices set forth in Exhibit A, upon execution of this Agreement.

(c)           The Company agrees that a total of 10,000 unvested stock options in the Company’s common stock at a strike price of $37.655, scheduled to vest on April 29, 2007, shall be accelerated to vest on April 27, 2006. All other unvested stock options as of the Separation Date shall be null and void. The Employee shall have a period of ninety (90) days from the Separation Date to exercise all vested but unexercised stock options, if applicable, after which time all such unexercised stock options shall expire.

(d)           The Company represents and warrants, and the Employee acknowledges, that the consideration paid to the Employee under this Agreement exceeds the amount the Employee would ordinarily be entitled to upon termination of the Employee’s employment.

3.             Other Benefits . Any and all other employment benefits received by the Employee shall terminate effective as of the Separation Date, except as follows:

(a)           In the event that the Employee elects to continue medical, dental, and vision benefits through COBRA, the Company agrees to waive the applicable premium cost that Employee would otherwise be required to pay for continuation of the existing group health coverage provided to him and his family under Employer’s medical and dental plans for a period of twelve (12) months or the date Employee commences full-time employment with another company that provides health benefits to Employee and his family which are comparable in

coverage and benefits to the medical, dental and vision available to Employee and his family through COBRA, whichever date is sooner.

(b)           The parties acknowledge that the Company is currently the lessee on a residence located in La Canada, California in which the Employee and his family currently resides. The Company agrees that Employee and his family shall be permitted to continue to reside in such residence and the Company will continue to pay the costs associated with the lease, including utilities charges, through June 30, 2006. Employee and his family shall vacate such premises not later than June 30, 2006. In addition, the Company agrees that any amounts paid by the Company pursuant to this Section 3(b) that is reported as income to the Employee shall be subject to a gross up of forty (40%) percent.

(c)           The Company agrees to reimburse the Employee for all reasonable costs incurred by Employee, upon presentation of signed, itemized accounts or receipts of such expenditures, for Employee and his family to relocate from California to New York, which amount shall not exceed Twenty Thousand Dollars ($20,000), provided that Employee and his family relocate to New York not later than April 28, 2007.

(d)           The Company agrees that, through June 30, 2006, Employee’s personal mail, emails and telephone calls shall be re-directed to a mail, email address and telephone number as instructed by Employee.

(e)           The Company agrees that Employee will be entitled to a lifetime employee discount at all Children’s Place and Disney Stores.

4.             Return of Company Property . The Company agrees that Employee shall retain his blackberry and laptop computer, provided that they shall each be scrubbed of any Company information. The Employee agrees to return to the Company all other Company property, including keys, locks, documents, records, identification cards, computer equipment, credit cards, and other materials and property of any type whatsoever that is the property of the Company. Such property shall be returned not later than the Separation Date.

5.             Removal from Company Positions and Indemnification . The Company agrees that as of the Separation Date the Employee shall be removed from all positions held on behalf of the Company, its parents, subsidiaries and affiliated companies and any other related entities including, but not limited to, officer, director, agent, representative, trustee, administrator, fiduciary and signatory. In addition, with respect to all acts or omissions of Employee which occurred prior to the Separation Date, the Company agrees to continue to indemnify the Employee to the same extent that the Employee was indemnified prior to the Separation Date and that the Employee shall retain the benefit of all directors and officer liability insurance and coverage maintained by Employer, in accordance with the terms of such policy.

6.             Consultation with Counsel and Voluntariness of Agreement .

(a)           The Employee acknowledges that the Company has advised the Employee in writing to consult with an attorney prior to executing this Agreement. The Employee further acknowledges that, to the extent desired, the Employee has consulted with the Employee’s own attorney in reviewing this Agreement, that the Employee has carefully read and

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fully understands all the provisions of this Agreement, and that the Employee is voluntarily entering into this Agreement.

(b)           The Employee further acknowledges that the Employee has had a period of at least twenty-one (21) days in which to consider the terms of this Agreement.

(c)           The Employee acknowledges that the Employee has been informed in writing that the Employee has seven (7) calendar days following the execution of this Agreement to revoke it, and that such revocation must be in writing, hand delivered or sent via overnight mail and actually received by the Company within such period. It is specifically understood that this Agreement shall not be effective or enforceable until the seven-day revocation period has expired.

7.             Confidentiality of Agreement; Non-Disparagement . The Employee agrees not to disclose the terms and conditions of this Agreement to any person or entity, except (a) to comply with this Agreement; (b) to the Employee’s legal, financial or tax advisors, spouse, and to the Internal Revenue Service or any similar state or local taxation authority; or (c) as otherwise required by law. The Employee agrees that the Employee will not publicly or privately disparage the Company or The Walt Disney Company or any of their respective properties, products, services, affiliates, or current or former officers, directors, trustees, employees, agents, administrators, representatives or fiduciaries. The Company agrees that the Company’s Chief Executive Officer, Ezra Dabah, will not publicly or privately disparage the Employee.

8.             Confidential and Proprietary Information; Work Product .

(a)           The Employee acknowledges that the Employee may possess certain confidential information, property or trade secrets of the Company (“Confidential Information”) which would damage the Company if disclosed or used by the Employee. Accordingly, the Employee acknowledges a continuing duty of confidentiality to the Company and agre