Exhibit 10.2

EDDIE BAUER HOLDINGS, INC.

NONQUALIFIED DEFERRED COMPENSATION PLAN

(Amended and Restated effective as of December 31, 2008)

 

Section 1. Introduction

1.1 Establishment and Purpose. Eddie Bauer Holdings, Inc. (the “Company”) hereby
establishes the Eddie Bauer Holdings, Inc. Nonqualified Deferred Compensation
Plan (the “Plan”) to provide an opportunity for Eligible Persons (as defined in
Section 2 hereof) designated by the Plan administrator described in Section 9
hereof (the “Administrator”) to defer receipt of all or a portion of their
annual cash compensation and certain forms of equity compensation related to
their performance of services for the Company or Affiliates that adopt this Plan
for the benefit of Eligible Persons providing services to such Affiliate. The
Plan is intended to attract and retain the services of qualified directors and
key management employees and to provide a vehicle to encourage savings for
retirement and to provide supplemental retirement income benefits for a select
group of management and highly compensated employees through deferrals of
compensation in excess of amounts that can be deferred under the Company’s
tax-qualified retirement plans. This Plan is an amendment and restatement of the
Plan that was originally adopted on the Effective Date.

1.2 Interpretation. For tax purposes and for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), this Plan is
intended to qualify as an unfunded “top-hat” plan maintained primarily for the
purpose of providing deferred compensation for a select group of directors,
management or highly compensated employees and shall be interpreted accordingly.
Notwithstanding any other provision herein, the Plan is intended to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and
shall at all times be interpreted in accordance with such intent such that
amounts credited to a Participant’s account shall not be taxable to such
Participant until such amounts are paid to the Participant in accordance with
the terms of the Plan. If any provision of the Plan would cause such payments or
benefits to fail to so comply, such provision shall not be effective and shall
be null and void with respect to such payments or benefits to the extent
necessary to comply with Code Section 409A, and such provision shall otherwise
remain in full force and effect. As provided in Internal Revenue Notice 2007-86,
notwithstanding any other provision of this Plan, with respect to an election or
amendment to change a time or form of payment under this Plan made on or after
January 1, 2008 and on or before December 31, 2008, the election or amendment
shall apply only with respect to payments that would not otherwise be payable in
2008, and shall not cause payments to be made in 2008 that would not otherwise
be payable in 2008.

Section 2. Definitions

Whenever the following words and phrases are used in this Plan, with the first
letter capitalized, they shall have the meanings specified below.

2.1 “Account” or “Accounts” means the record maintained by the Administrator to
determine each Participant’s interest under this Plan, which shall be equal to
the sum of a Participant’s Deferral Account and Company Contribution Account.
The Account, and each other

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specified account, shall be a bookkeeping entry only and shall be utilized
solely as a device for the measurement and determination of the amounts to be
paid to a Participant, or his or her designated Beneficiary, pursuant to this
Plan. Each Participant may have a Share Account or such other Investment Funds
Accounts as the Administrator deems appropriate to determine the allocation of
earning and loss equivalents pursuant to Section 5.3.

2.2 “Administrator” means the entity, individual or committee designated by the
Board, responsible for the administration and interpretation of the Plan in
accordance with Section 9. If no entity individual or committee is designated,
the Administrator shall be the Board.

2.3 “Affiliate” means any entity under common control with the Company, within
the meaning of Code Section 414(b), (c) or (m) and any “subsidiary” or “parent”
corporation (within the meaning of Section 424 of the Code) of the Company,
including an entity that becomes an Affiliate after the adoption of this Plan,
or any other entity that the Board determines is otherwise controlled by, in
control of, or under common control with the Company.

2.4 “Aggregated Plan” means any agreement, method, program or other arrangement
with respect to which deferrals of compensation are treated, together with
deferrals of Compensation under this Plan, as having been deferred under a
single nonqualified deferred compensation plan under Section 1.409A-1(c)(2) of
the Treasury Regulations.

2.5 “Beneficiary” or “Beneficiaries” means the person or persons, including a
trustee, personal representative or other fiduciary, last designated in writing
by a Participant in accordance with procedures established by the Administrator
to receive the benefits specified hereunder in the event of the Participant’s
death. No beneficiary designation shall become effective until it is filed with
the Administrator. If there is no Beneficiary designation in effect, or if there
is no surviving designated Beneficiary, then the Participant’s surviving spouse
shall be the Beneficiary. If there is no surviving spouse to receive any
benefits payable in accordance with the preceding sentence, the duly appointed
and currently acting personal representative of the participant’s estate (which
shall include either the Participant’s probate estate or living trust) shall be
the Beneficiary. In any case where there is no such personal representative of
the Participant’s estate duly appointed and acting in that capacity within 90
days after the Participant’s death (or such extended period as the Administrator
determines is reasonably necessary to allow such personal representative to be
appointed, but not to exceed 180 days after the Participant’s death), then
Beneficiary shall mean the person or persons who can verify by affidavit or
court order to the satisfaction of the Administrator that they are legally
entitled to receive the benefits specified hereunder. In the event any amount is
payable under the Plan to a minor, payment shall not be made to the minor, but
instead be paid (a) to that person’s living parent(s) to act as custodian,
(b) if that person’s parents are then divorced, and one parent is the sole
custodial parent, to such custodial parent, or (c) if no parent of that person
is then living, to a custodian selected by the Administrator to hold the funds
for the minor under the Uniform Transfers or Gifts to Minors Act in effect in
the jurisdiction in which the minor, resides. If no parent is living and the
Administrator decides not to select another custodian to hold the funds for the
minor, then payment shall be made to the duly appointed and currently acting
guardian of the estate for the minor or, if no guardian of the estate for the
minor is duly appointed and currently acting within 60 days after the date the
amount becomes payable, payment shall be deposited with the court having
jurisdiction over the estate of the minor.

 

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2.6 “Board of Directors” or “Board” means the Board of Directors of the Company
or the Compensation Committee of the Board, acting on behalf of the Board.

2.7 “Bonus” means any cash incentive compensation payable to a Participant in
addition to the Participant’s Salary prior to reduction for salary deferral
contributions to any plans qualified under Section 401(k) or Section 125 of the
Code.

2.8 “Code” means the Internal Revenue Code of 1986, as amended.

2.9 “Company” means Eddie Bauer Holdings, Inc. and any successor to all or
substantially all of the Company’s assets or business that assumes the
obligations under this Plan.

2.10 “Company Contribution Account” means the bookkeeping account maintained by
the Administrator for each Participant that is credited with an amount equal to
the Company Contribution Amount, if any, and earnings or losses pursuant to
Section 5.3.

2.11 “Company Contribution Amount” means the amount described in Section 5.2.

2.12 “Company Stock” means the common stock, $0.01 par value per share of the
Company.

2.13 “Compensation” means the Director Fees, Salary, Bonus and Equity Incentive
Compensation that the Participant is entitled to for services rendered to the
Company or an Affiliate.

2.14 “Deferral Account” means the bookkeeping account maintained by the
Administrator for each Participant that is credited with amounts equal to
(1) the portion of the Participant’s Salary that he or she elects to defer,
(2) the portion of the Participant’s Bonus that he or she elects to defer,
(3) the portion of the Participant’s Equity Incentive Compensation that he or
she elects to defer, (4) the portion of the Participant’s Director Fees that he
or she elects to defer, and (5) investment gains and losses pursuant to
Section 5.3.

2.15 “Director Fees” means the quarterly retainer fee and meetings fees paid to
non-employee directors in consideration for their service as members of the
Board.

2.16 “Effective Date” means August 3, 2005. This amendment and restatement of
the Plan is effective December 31, 2008.

2.17 “Eligible Person” means members of the Board, officers, selected management
and other highly compensated employees of the Company or an Employer who are
selected by the Administrator, in its sole discretion, to participate in the
Plan.

2.18 “Employer(s)” means the Company and/or any of its Affiliates that with the
consent of the Board have adopted the Plan for the benefit of their respective
employees who are Eligible Persons.

 

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2.19 “Enrollment Form” means the form executed by the Participant and the
Employer that sets forth the Participant’s deferral elections, payment form and
timing, Beneficiary designation, and other specifications of this Plan
applicable to the Participant.

2.20 “Equity Incentive Compensation” means a Restricted Stock Unit Award granted
under the terms of the Eddie Bauer Holdings, Inc. 2005 Stock Incentive Plan (or
any successor plan), provided such Award (or such portion thereof that is
treated as a separate payment) is subject to a substantial risk of forfeiture at
the time it is granted. A Participant may make a one-time election to defer the
timing of the payment of a Restricted Stock Unit Award and have such amount paid
in the form of Company Stock at a later date pursuant to the terms of this Plan,
subject to the following terms and conditions:

2.20.1 The deferral election must be made not later than 30 days after the grant
of the Award;

2.20.2 The portion of the Restricted Stock Unit Award that is the subject of the
deferral election must require the Participant to provide services for a period
of at least 12 months from the grant date of the Restricted Stock Unit Award in
advance of the earliest Vesting Date at which the forfeiture condition could
lapse, other than a lapse of the forfeiture condition that occurs earlier in the
event of death, disability or a change in control (as such terms are defined in
the Restricted Stock Unit Award); and

2.20.3 If death, disability, or a change in control occurs and the forfeiture
event lapses prior to 12 months from the grant date of the Restricted Stock Unit
Award, the deferral election may be given effect only if the deferral election
satisfies the requirements of Section 1.409A-2 of the Treasury Regulations
without regard to paragraph (a)(5) thereof.

2.21 “Financial Hardship” means a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s
spouse, Beneficiary or a dependent (as defined in Section 152(a) of the Code,
without regard to Section 152(b)(1), (b)(2), or (d)(1)(B)), loss of the
Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant. The circumstances that will constitute a Financial Hardship
will depend upon the facts of each case and will be determined by the
Administrator in its sole discretion, but distributions on account of Financial
Hardship may not be made to the extent such hardship is or may be relieved
(i) through reimbursement or compensation by insurance or otherwise; (ii) by
liquidation of the Participant’s assets, to the extent the liquidation of such
assets would not itself cause a severe financial hardship; or (iii) by cessation
of deferrals under the Plan.

2.22 “Investment Funds” means the mutual funds, insurance policies, investment
indexes or other measures of investment performance identified by the
Administrator that shall be used to determine the Investment Return increments
to be credited to each Participant’s Account. The Investment Funds may be
changed by the Administrator, in its sole discretion, from time to time. The
Administrator may discontinue, substitute or add an Investment Fund at any time.

 

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2.23 “Investment Return” means, for each Investment Fund, an amount equal to the
net investment performance of such Investment Fund for each reporting period, as
determined by the Administrator.

2.24 “Participant” means any Eligible Person (i) who is selected to participate
in the Plan, (ii) who elects to participate in the Plan in accordance with
Section 4.2, (iii) who signs an Election Form and a Beneficiary Designation
Form, (iv) whose signed Election Form and Beneficiary Designation Form are
accepted by the Administrator, (v) who commences participation in the Plan, and
(vi) whose Plan participation has not terminated. A spouse or former spouse of a
Participant shall not be treated as a Participant in the Plan or have an account
balance under the Plan, even if he or she has an interest in the Participant’s
benefits under the Plan as a result of applicable law or property settlements
resulting from legal separation or divorce.

2.25 “Plan” means the Eddie Bauer Holdings, Inc. Nonqualified Deferred
Compensation Plan set forth herein, now in effect, or as amended from time to
time.

2.26 “Plan Year” means the 12 consecutive month period beginning on January 1
and ending on December 31.

2.27 “Salary” or “Salaries” means the Participant’s base salary prior to
reduction for any salary deferral contributions to a plan qualified under
Section 125 or Section 401(k) of the Code.

2.28 “Separation from Service” means a Participant’s termination from employment
with the Company and its Affiliates and termination of service as a member of
the Board, provided that such termination qualifies as a “separation from
service” within the meaning of Section 1.409A-1(h) of the Treasury Regulations.

2.29 “Share Account” means the record maintained by the Administrator, for
bookkeeping purposes only, of a hypothetical number of shares of Company Stock
that the Account is deemed to be invested in. The Participant’s interest in the
Share Account may consist of amounts allocated to the Participant’s Deferral
Account and Company Contribution Account and shall be expressed in the form of
whole and fractional shares of Company Stock.

2.30 “Specified Employee” means a Participant who, as of the date of the
Participant’s “separation from service,” as defined in Treasury Regulation
Section 1.409A-1(h), is a “Key Employee” of the Company at a time when any stock
of the Company is publicly traded on an established securities market or
otherwise. For purposes of this definition, a Participant is a “Key Employee” if
the Participant meets the requirements of Section 416(i)(1)(A)(i), (ii) or
(iii) of the Code (applied in accordance with the Treasury Regulations
thereunder and disregarding Section 416(i)(5) of the Code) at any time during
the Testing Year. If a Participant is a “Key Employee” (as defined above) as of
a Specified Employee Identification Date, the Participant shall be treated as
“Key Employee” for the entire twelve (12) month period beginning on the
Specified Employee Effective Date. The Specified Employees shall be determined
in accordance with Section 409A(a)(2)(B)(i) of the Code and Treasury Regulation
Section 1.409A-1(i).

2.31 “Specified Employee Effective Date” means the April 1 following the
Specified Employee Identification Date.

 

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2.32 “Specified Employee Identification Date”, for purposes of Treasury
Regulation Section 1.409A-1(i)(3), means December 31. The “Specified Employee
Identification Date” will apply to all “nonqualified deferred compensation
plans” (as defined in Treasury Regulation Section 1.409A-1(a)) of the Company
and all affected Affiliates.

2.33 “Testing Year” means the twelve (12) month period ending on the Specified
Employee Identification Date.

 

Section 3. Eligibility

Only those Eligible Persons selected by the Administrator may participate in the
Plan. The Eligible Persons shall include those directors, officers and other
members of a “select group of management or highly compensated employees” as
described in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA who
are providing services to the Company or an adopting Affiliate and who have been
selected by the Administrator in its sole discretion to participate in the Plan.

 

Section 4. Deferral of Compensation

4.1 Deferrable Compensation. Eligible Persons shall have the right to defer a
portion of the following types of compensation in accordance with any rules or
policies that may be established by the Administrator hereunder:

4.1.1 Director Fees,

4.1.2 Salary,

4.1.3 Bonus, and

4.1.4 Equity Incentive Compensation.

4.2 Deferral Election. An Eligible Person shall be permitted to submit an
election form (the “Election Form”) to the Administrator specifying the portion
of Compensation, if any, that such employee wishes to defer. The deferred
amounts shall be subject to all applicable employment taxes that must be
withheld under applicable law. Any such election shall be irrevocable and,
except as permitted for Equity Incentive Compensation deferrals, shall be made
no later than December 31 of the calendar year that precedes the calendar year
with respect to which the compensation shall be earned. In the case of the first
year in which an Eligible Person becomes eligible to participate in the Plan
(including for this purpose, any Aggregated Plan), such irrevocable election may
be made with respect to services to be performed subsequent to the election
within 30 days after the date the Eligible Person becomes eligible to
participate in the Plan; provided, however, that the portion of Compensation
that is deferrable may be limited based upon the application of Section 409A of
the Code. The Company shall deduct from the Participant’s Compensation the
portion that such Participant elects to defer and credit the deferred amount to
an account established in accordance with Section 5.1 hereof. A Participant may
change his or her deferral amount or percentage(s) for any calendar year only by
filing a new election form with the Administrator prior to the beginning of such
year. Notwithstanding any other provision of the Plan to the contrary, the
Administrator may unilaterally restrict the maximum amount that a Participant
may defer under the Plan for any reason.

 

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Section 5. Accounts

5.1 Establishment of Accounts. The Company shall establish on its books a
bookkeeping account (the “Account”) with respect to each Participant who elects
to defer pursuant to Section 4.2 hereof and shall credit to such Account the
amounts deferred by the Participant pursuant to Section 4.2. Such credit shall
be made on the date that such compensation would have been paid to the
Participant, but for the election to defer pursuant to Section 4.2.

5.2 Discretionary Contributions. Any Employer may make a discretionary
allocation to the Company Contribution Account for one or more Participants in
an amount determined by the Employer. The Company Contribution Amount may be a
fixed dollar amount, a percentage of compensation or a matching contribution
specified by the Employer in its sole discretion. Any such Company Contribution
Amount may be made on a basis elected by the Employer, which need not be
consistent from year to year or among Participants for any year. The Employer
may determine whether any Company Contribution Amount is subject to a vesting
schedule and the time or times when such allocations will be vested in whole or
in part. The Administrator, in its sole discretion, may determine whether any
Company Contribution Amounts will be allocated to the Share Account or to the
Investment Funds.

5.3 Crediting of Earnings Equivalents. The Account of a Participant shall be
deemed to be allocated in multiples that are determined by the Administrator
from time to time in accordance with the Participant’s investment election,
among the Investment Funds, as if invested in the applicable Investment Fund as
of the date the compensation would otherwise have been paid. Such investment
election may be changed by written notice to the Administrator (or, if
applicable, the outside administrator of the Plan) with such frequency as the
Administrator may determine from time to time. The balance credited to such
Accounts shall be adjusted from time to time to reflect the Investment Return of
the applicable Investment Fund. The Administrator is not obligated to honor any
Participant’s investment election. The Administrator, in its sole discretion,
may determine that any Company Contribution Amount will be allocated to the
Share Account or to any other applicable Investment Fund and with respect to the
amounts allocated to the Share Account will designate whether such amounts will
be distributed in the form of cash or Company Stock. The number of hypothetical
shares of Company Stock allocated to the Share Account hereunder that are
designated to be distributed in the form of Company Stock will be treated as a
grant of Restricted Stock Units under the terms of the Company’s 2005 Stock
Incentive Plan for purposes of determining the number of shares of common stock
available for awards under the 2005 Stock Incentive Plan. Any deferral of
Director Fees or Company Contribution Amounts allocated to the Share Account
shall be allocated as a number of hypothetical shares of Company Stock
determined by dividing the amount allocated by the fair market value of a share
of Company Stock on the date such deferred amount otherwise would have been
paid. Deferrals other than Director Fees and Equity Incentive Compensation may
not be allocated to the Share Account unless specifically approved by the
Administrator at the date of deferral.

5.4 Account Statements. Each Participant shall receive a periodic statement of
his or her Account balance from time to time as determined by the Administrator.

 

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Section 6. Payment of Benefits

6.1 Election of Time of Payment. Each Participant, at the time he or she makes
the irrevocable deferral election pursuant to Section 4.2 hereof, shall also, by
filing the Election Form, elect the date(s) as of which he or she wishes the
amounts in his or her Account attributable to the applicable deferral to be
paid, which date(s) shall be among the available date(s) prescribed by the
Administrator in its sole discretion on the Election Form. Such election shall
become irrevocable at the same time as the Participant’s deferral election
pursuant to Section 4.2.

6.2 Election of Form of Distribution of Benefits. Each Participant, at the time
he or she makes the irrevocable deferral election pursuant to Section 4.2
hereof, shall also, by filing the Election Form, elect the form of distribution
in which he or she wishes the amounts in his or her Account attributable to the
applicable deferral to be paid with respect to each payment date selected by the
Participant. Except as otherwise provided herein, such Account may be
distributed either in a lump sum payment or in annual installments as prescribed
by the Administrator in its sole discretion on the Election Form. If the payment
is to be made at Separation from Service, the Participant may elect annual
installments over a period of 5, 10, or 15 years, except that if at any time on
or after distribution commences the aggregate value of the Participant’s Account
balance, together with the Participant’s account balances under all Aggregated
Plans, is not more than the applicable dollar amount under Section 402(g)(1)(B)
of the Code at the beginning of any Plan Year, the Administrator may require
that such benefit be distributed in a lump sum; provided that such distribution
shall result in the concurrent termination and liquidation of the entirety of
the Participant’s interest under this Plan and all Aggregated Plans. If a
transfer of Company Stock is made prior to Separation from Service, the number
of annual installments may not exceed 5 years. In the absence of a payment
election, the default form of distribution shall be a lump sum. If more than one
installment is contemplated, each such payment shall be determined by dividing
the value of the Account immediately prior to the payment by the number of years
remaining in the term of payment. Any undistributed portion of the Participant’s
Account shall remain subject to all of the terms of the Plan. Any election
pursuant to this Section 6.2 shall become irrevocable at the same time as the
Participant’s deferral election pursuant to Section 4.2 hereof.

6.3 Death after Benefit Commencement. If the distribution of an Account to a
Participant has commenced in installments and such Participant dies before all
installments are paid, the undistributed Account balance shall be distributed in
a lump sum to the Beneficiary as soon as practicable within 90 days following
the date of the Participant’s death.

6.4 Distribution in Accordance with Election. Except as provided under Sections
6.5 and 6.6 hereof, the Employer will pay (or the Administrator will cause to be
paid) to the Participant in the form elected pursuant to Section 6.2, within 60
days after the date elected pursuant to Section 6.1 hereof (without permitting
the Participant to designate the year of such payment), an amount equal to the
portion of the Participant’s Account balance attributable to the applicable
deferral election (as adjusted for the allocable equivalent of earnings and
losses pursuant to Section 5.2 hereof), valued as of the business day coinciding
with or last preceding the date elected by the Participant pursuant to
Section 6.1.

 

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6.5 Distribution by Reason of Separation from Service. In the event of the
Participant’s Separation from Service, for any reason or due to the
Participant’s death, in either case prior to the date elected pursuant to
Section 6.1 hereof, the Company shall pay (or cause to be paid) to the
Participant or, in the event of his or her death, to his or her Beneficiary, an
amount equal to the Participant’s Account balance valued as of the fifth
business day following the Participant’s Separation from Service or death.
Unless otherwise elected pursuant to Section 6.2, payments shall be made in one
lump sum within 60 days after the valuation date (without permitting the
Participant or Beneficiary to designate the year of such payment), as determined
by the Administrator in accordance with this Section 6.4. The Participant’s
Account shall cease to be credited with the equivalent of earnings and losses as
set forth in Section 5.3 hereof after the valuation date.

6.6 Hardship Distributions. Notwithstanding anything herein to the contrary, a
Participant may request and receive a hardship distribution of all or any
portion of his or her Account balance provided the Participant is able to
demonstrate, to the satisfaction of the Administrator, that he or she has
suffered a Financial Hardship. A hardship distribution request must be submitted
in writing to the Administrator and is subject to rules established by the
Administrator governing hardship distributions. The amount distributed shall not
exceed the lesser of (i) the Participant’s Account balance, or (ii) the amount
reasonably necessary to satisfy the Participant’s Financial Hardship plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution. The determination of amounts reasonably necessary to satisfy a
Financial Hardship shall take into account any additional compensation that is
available to the Participant as a result of the cancellation of a deferral
election upon payment of the distribution. No hardship distribution may be made
prior to the time the Administrator approves the distribution. If a hardship
distribution is made, such distribution shall be made from the portion of the
Participant’s Account attributable to deferrals with an earlier payment date
before distributions are made from any portion attributable to deferrals with a
later payment date.

 

Section 7. Rights Unsecured; Subordination

7.1 Unsecured Creditor. The rights of a Participant or his or her Beneficiary to
benefits under the Plan shall be solely those of an unsecured general creditor
of the Company. The Plan constitutes a mere promise by the Company to make
benefit payments in the future. The Plan is intended to be unfunded for tax
purposes and for purposes of Title I of ERISA. Any asset acquired or held by the
Company in connection with the Company’s liabilities under the Plan shall not be
deemed to be security for the performance of the Company’s obligations pursuant
to the Plan, but shall be and remain part of the general assets of the Company.

7.2 Subordination to Other Creditors. Anything in the Plan to the contrary
notwithstanding, the Company may, in its sole discretion, subordinate the rights
of Participant and their Beneficiaries to any payments under the Plan to claims
of any other creditors of the Company.

 

Section 8. Nonassignability

The rights and interests of a Participant and his or her Beneficiary to benefit
payments under the Plan shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by creditors of the Participant or the Participant’s Beneficiary,
and any such rights and interests under the Plan shall not be liable for or
subject to any obligation or liability of the Participant or Beneficiary.

 

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Section 9. Administration

The Plan shall be administered by, and in the sole discretion of the
Administrator, which by vote of a majority of the persons acting as or on behalf
of the Administrator, may establish such rules and regulations as it deems
necessary, make amendments in a manner consistent with Section 14 of this Plan,
interpret the Plan, make factual findings and determinations, and otherwise make
all determinations and take such action in connection with the Plan as it, in
it’s sole discretion deems appropriate. The decisions of the Administrator shall
be final, conclusive and binding upon all parties and no member of the
Administrator shall be liable for any action or determination made in good faith
with respect to the Plan and Awards under it. The Administrator and each person
to whom duties and responsibilities have been delegated shall be indemnified and
held harmless by the Company against all claims, liabilities, fines, and
penalties, and all expenses reasonably incurred by or imposed upon such
individuals (including but not limited to reasonable attorneys’ fees) which
arise as a result of actions or failure to act in connection with the operation,
administration and grant of Awards under the Plan. Any person acting as or on
behalf of the Administrator who is a Participant in the Plan shall abstain from
any determination under the Plan with respect to his or her own participation.
Any determination required under the Plan with respect to a member of the
Administrator shall be made by the other members of the Administrator, unless
the Administrator consists of a single individual, in which case the
determination shall be made by the Company’s Board.

 

Section 10. Claims Procedure; Arbitration

10.1 General.

10.1.1 Claims. Claims for benefits, benefit determinations, appeals and reviews
of any adverse benefit determination and all associated notifications shall, at
a minimum, comply with Section 503 of ERISA and the applicable provisions of 29
C.F.R. § 2560.503-1 (“ERISA Regulations”).

10.1.2 Claims Administrator. The Claims Administrator shall be designated by the
Administrator. The Administrator reserves the right to change the Claims
Administrator from time to time and to designate a special Claims Administrator
when deemed necessary to avoid a conflict of interest.

10.2 Claims Denial.

10.2.1 Claim for Benefits. If a Participant or Beneficiary (hereunder
“Applicant”) does not receive timely payment of any benefits which Applicant
believes are due and payable under the Plan, Applicant may file a claim for
benefits by notifying the Administrator in writing. The Administrator may
require any Applicant to submit an application therefor in writing to the Claims
Administrator or to any officer of the Company, together with such other
documents and information as the Claims Administrator may require.

 

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10.2.2 Notification of Benefit Determination. The Claims Administrator will
notify the Applicant of a benefit determination in writing within a reasonable
time. Notification that a claim is wholly or partially denied will normally be
given no later than 90 days after receipt of the claim. The notice shall
(1) specify the reasons for the adverse decision, (2) refer to the specific
provisions of the Plan on which the decision is based, (3) describe any
additional material necessary to complete the claim and the reasons that such
material is necessary, (4) describe the appeal and review procedures and the
applicable time limits, and (5) inform the Applicant of the right to bring a
civil action following review. Should special circumstances require an extension
of time for processing the claim, written notice of the extension shall be
furnished to the Applicant prior to the expiration of the initial ninety
(90) day period. The notice shall indicate the special circumstances requiring
an extension of time and the date by which a final decision is expected to be
rendered. In no event shall the period of the extension exceed ninety (90) days
from the end of the initial ninety (90) day period. Claims not acted upon within
the time prescribed herein shall be deemed denied for purposes of proceeding to
the review stage.

10.3 Appeal and Review of Denied Claims.

10.3.1 Review. An Applicant is entitled to have an adverse benefit determination
reviewed by the Administrator (the “Named Fiduciary”). The request for review
must be in writing and filed with the Claims Administrator no later than 60 days
following the Applicant’s receipt of the adverse determination. The Applicant
may submit written comments and other information and documents relating to the
claim, and have reasonable access to and receive copies of all documents and
information relevant to the claim. The Applicant may request a hearing. The
Claims Administrator will promptly forward the request for review and the claim
file to the Named Fiduciary. The decision of the Named Fiduciary shall be made
promptly, and not later than sixty (60) days after the Named Fiduciary’s receipt
of a request for review, unless special circumstances require an extension of
time for processing. In such a case, a decision shall be rendered as soon as
possible, but not later than one hundred twenty (120) days after receipt of the
request for review.

10.3.2 Named Fiduciary. The Named Fiduciary shall not be the Claims
Administrator nor subordinate to the Claims Administrator. The Board of
Directors reserves the right to change the Named Fiduciary from time to time,
and to designate a special Named Fiduciary for appeals when deemed necessary.

10.3.3 Review Procedure. The Named Fiduciary has the discretion to decide all
questions regarding relevance and reasonable access under Section 10.3.1 hereof.
In addition, the Named Fiduciary has the discretion as to whether a hearing
shall be held. The Named Fiduciary will afford no deference to the Claims
Administrator’s decision, and will insure a full and fair review de novo.

10.3.4 Notification of Benefit Determination on Review. The Named Fiduciary’s
decision will be in writing and sent to the Claims Administrator. The Claims
Administrator will then notify the Applicant either by hand delivery or by first
class mail within a reasonable time, and normally not later than 60 days after
receipt of the claim for review. If the Named Fiduciary issues an adverse
benefit decision to the Participant or his Beneficiary, the decision

 

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shall (1) specify the reasons for the decision, (2) refer to specific plan
provisions on which the decision was based, (3) inform the Applicant of the
right to review all information reviewed by the Named Fiduciary, even
information not relied on in making the decision, and (4) inform the Applicant
of the right to bring a civil action pursuant to the arbitration provisions of
Section 10.5.

10.4 Exhaustion of Remedies. No legal action for benefits under the Plan may be
brought unless and until the Applicant has exhausted his remedies under this
Section 10.

10.5 Arbitration. Subject to prior completion of the claims procedure described
above, any claim or controversy arising under the Plan shall be settled by
arbitration before a single arbitrator to be held in King County Washington in
accordance with the Commercial Rules of Arbitration of the American Arbitration
Association (the “Rules”), and any judgment upon the award rendered by the
arbitrator may be enforced in any court having competent jurisdiction thereof.
The arbitrator shall be selected in accordance with the Rules.

 

Section 11. Enforceability, Successors

The obligations of the Employers under the Plan shall inure to the benefit of,
and be enforceable by, a Participant and such Participant’s Beneficiary,
personal representatives, distributees and legatees, and shall be binding upon
the successors of the Company or an adopting Employer with respect to its
employees who are Participants.

 

Section 12. Communications

All communications by a Participant or Beneficiary to the Administrator relating
to the Plan shall be in writing and shall be directed to the Plan representative
designated by the Administrator.

 

Section 13. Taxes and Withholding

All payments made hereunder to a Participant or his or her Beneficiary shall be
subject to the withholding of such amounts by the Company as it reasonably may
determine it is required to withhold pursuant to any applicable federal, state,
local or foreign law or regulation. Neither the Administrator nor the Company
make any commitment or guarantee that any amounts subject to deferral under the
Plan will be excludable from a Participant’s gross income for federal, state,
local or foreign income tax purposes, or that any other federal, state, local or
foreign income or social security tax treatment will apply to or be available to
any Participant.

 

Section 14. Amendment

The Administrator may from time to time and in its sole discretion amend the
Plan in writing with respect to all Eligible Persons or with respect to any
single Eligible Person or group of Eligible Persons, and any such amendment
shall be binding upon the Company, Eligible Persons and Beneficiaries.
Notwithstanding the foregoing sentence, if any amendment of the Plan adversely
affects the amounts payable to a Participant on account of his or her Account
balance that has already accrued, such amendment shall not become effective with
respect to such accrued Account balance unless the Participant either gives his
or her consent or fails to object to

 

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such amendment in a writing delivered to the Administrator within 30 days after
receiving notice thereof. Any Eligible Person’s participation in the Plan may,
at the discretion of the Administrator, be on terms that differ from the
provisions of the Plan. Any such differing terms shall be in a writing signed by
a member of the Administrator or his or her authorized delegate.

 

Section 15. Termination of the Plan

15.1 Generally. The Administrator or the Board may at any time suspend or
terminate the Plan, and any such suspension or termination shall be binding upon
Eligible Persons, Participants and Beneficiaries.

15.2 Cessation of Future Deferrals. In the event of the termination of the Plan,
effective as of the date of termination, as determined by the Administrator, the
deferral elections of Participants under Section 4.2 hereof shall automatically
expire and no further deferrals may be made under the Plan.

15.3 Distribution of Accounts. On termination of the Plan, the Account of each
Participant shall be paid their Account balance in a lump sum payment as
follows:

15.3.1 If the termination of the Plan is (i) within 12 months of a corporate
dissolution taxed under Section 331 of the Code, or (ii) has been approved by a
bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), such payment will occur
and be included in the Participants’ gross incomes in the later of the calendar
year in which the Plan termination occurs or the first calendar year in which
the payment is administratively practicable.

15.3.2 If the termination of the Plan is within the 30 days preceding or the 12
months following a change in control event (as defined Section 1.409A-3(i)(5) of
the Treasury Regulations) and all Aggregated Plans are terminated, such payment
will occur within 12 months of the date the Administrator or the Board
irrevocably takes all necessary action to terminate the Plan.

15.3.3 Provided the termination does not occur proximate to a downturn in the
financial health of the Company and the Plan and all Aggregated Plans are
terminated, such payment will occur not earlier than 12 months after the date
the Administrator or the Board irrevocably takes all necessary action to
terminate the Plan and not later than 24 months after such date; provided,
however, neither the Company nor any adopting Employer may adopt a new plan that
would be an Aggregated Plan (if the Plan was still in effect) at any time within
three years following the date the Administrator or the Board irrevocably takes
all necessary action to terminate the Plan. In the event the termination occurs
proximate to a downturn in the financial health of the Company, the payment
shall occur at the time and in the form specified in the Election Form at the
time of the Participants’ irrevocable deferral elections.

 

Section 16. Plan Not an Employment Agreement, No Right to Awards

The Plan shall not constitute an agreement or contract of employment and shall
not be construed to limit in any way the right of the Company and its Affiliates
to terminate an Eligible Person’s employment as freely and with the same effect
as if the Plan were not in effect.

 

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Section 17. Section 409A

17.1 Delayed Distribution. If a Participant is a Specified Employee on the date
of Separation from Service, the payments under this Plan shall be delayed in
order to comply with Section 409A(a)(2)(B)(i) of the Code, and such delayed
payments shall be paid or distributed to such Participant during the five-day
period commencing on the earlier of: (i) the expiration of the six-month period
measured from the date of such Participant’s Separation from Service, or
(ii) the date of the Participant’s death. Upon the expiration of the applicable
six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments
deferred pursuant to this Section shall be paid to the Participant (or your
estate, in the event of your death) in a lump sum payment. Any remaining
payments due under the Plan shall be paid as otherwise provided in the Plan.

17.2 General Provisions. Participants shall not, directly or indirectly,
designate the taxable year of a payment made under this Plan, other than at the
time the deferral election is made. The portion of any payment under this Plan
that is paid within the short-term deferral period (within the meaning of Code
Section 409A and Treas. Regs. §1.409A-1(b)(4)) shall be treated as a short term
deferral and not aggregated with other plans or payments. Any amount that is
paid as a short-term deferral within the meaning of Treas. Regs. §1.409A-1(b)(4)
shall be treated as a separate payment. Payment dates provided for in this Plan
shall be deemed to incorporate “grace periods” within the meaning of Code
Section 409A. Neither the Company or any Affiliate guarantees or warrants the
tax consequences of this Plan and, except as specifically provided to the
contrary in this Plan, Executive shall, in all cases, be liable for any taxes
due as a result of this Plan.

 

Section 18. Governing Law

The Plan shall be governed by, and construed in accordance with, the laws of the
State of Washington, without regard to principles of conflicts of law.

 

Section 19. Execution

To record the adoption of the Plan by the Board, the Company has caused its
authorized officer to execute the Plan as of the date specified below.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, upon authorization of the Board of Directors, the
undersigned has caused this amendment and restatement of the Eddie Bauer
Holdings, Inc. Nonqualified Deferred Compensation Plan to be executed this 31st
day of December, 2008.

 

EDDIE BAUER HOLDINGS, INC. By:   /s/ Freya R. Brier  
Freya Brier, Senior Vice President & General Counsel

 

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