Exhibit 10.1

 

December 7, 2005

 

 

Stephen L. Pearson

Executive Vice President/Merchandising and Product Development
14 Holly Circle
Weston, Massachusetts 02493

 

Dear Steve:

 

This letter agreement confirms the understanding between you and The J. Jill
Group, Inc. (the “Company” or “J. Jill”) relating to the termination of your
employment with the Company.

 

1.  Resignation and Cooperation in Transition.   You hereby resign your position
as Executive Vice President/ Merchandising and Product Development and from all
other offices you hold with the Company or any of its subsidiaries or
affiliates, effective as of December 7, 2005 (the “Resignation Date”).  Your
resignation shall be effective regardless of the continued effectiveness of this
letter agreement.  Thereafter through January 20, 2006 (the “Termination Date”),
you shall remain an employee of the Company and shall make yourself available
upon reasonable request by the Company and at mutually agreeable times to assist
in transitioning your former responsibilities to the person or persons
designated by the Company to receive them on an as needed basis.  Your
employment shall terminate on the Termination Date.  From and after the
Resignation Date, your obligations to the Company and the Company’s obligations
to you shall be solely those provided for in this letter agreement, inclusive of
the exhibits attached hereto.

 

2.  Severance Pay and Associated Benefits.

 

(a)  Severance Pay.  Subject to your continuing compliance with the provisions
of Sections 5,  6 and 10(c) of this letter agreement and the provisions of the
Agreement to Protect Corporate Property, effective as of December 10, 2004,
between the Company and you (the “Agreement to Protect Corporate Property”), on
the date seven days after execution of this letter agreement by you as set forth
in Section 9(c) hereof, provided that the seven-day revocation period has run
without revocation by you, the Company will make a lump sum payment to you in
the gross amount of your annual base salary, i.e. $400,000 (the “Severance
Payment”), subject to the provisions of Section 2(m) below.

 

(b)  Salary Continuation.  After the Resignation Date, your compensation shall
continue at the current rate of $400,000 per year through the Termination Date
and you shall also be entitled to continue all benefits provided to employees on
the same basis on which you have been receiving them through the Termination
Date, subject to the provisions of Section 2(m) below and further subject to
your continuing (i) compliance with the provisions of Sections 5, 6 and 10(c) of
this letter agreement and the Agreement to Protect Corporate Property, and (ii) 

 

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fulfillment of your responsibilities to transition your former responsibilities
in accordance with the provisions of Section 1 above.

 

(c)  Supplemental Compensation Other Than Severance Pay.  In the event a Change
in Control (as defined below) shall occur at any time during the period from the
Resignation Date through and including December 31, 2006 (the “Supplemental
Compensation Period”), you will be paid supplemental compensation, in the
lump-sum amount of $729,552.00, not later than the fifth business day following
the occurrence of such Change in Control, subject to (i) the provisions of
Section 2(m) below; (ii) your continuing compliance with the provisions of
Sections 4, 5, 6, 8 and 10(c) of this letter agreement and of the Agreement to
Protect Corporate Property; and (iii) your executing the Release and Waiver of
Claims that is attached hereto as Exhibit C.

 

For purposes of this Section 2(c), a “Change in Control” shall be deemed to have
occurred if the conditions set forth in any one of the following paragraphs
shall have been satisfied:

 

(I)            any Person (as defined below) becomes the beneficial owner as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
directly or indirectly, of securities of J. Jill (not including in the
securities beneficially owned by such Person any securities acquired directly
from J. Jill or its affiliates) representing 50% or more of the combined voting
power of J. Jill’s then outstanding securities; or

 

(II)           during the Supplemental Compensation Period individuals who at
the beginning of such period constitute the Board of Directors of J. Jill (the
“Board”) and any new director (other than a director designated by a Person who
has entered into an agreement with J. Jill to effect a transaction described in
clause (I), (III) or (IV) of this paragraph) whose election by the Board or
nomination for election by J. Jill’s stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved (a “Continuing Director”), cease for any
reason to constitute a majority thereof; or

 

(III)         the stockholders of J. Jill approve a merger or consolidation of
J. Jill with any other corporation, other than (i) a merger or consolidation
which would result in the voting securities of J. Jill outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least 50% of
the combined voting power of the voting securities of J. Jill or such surviving
entity outstanding immediately after such merger or consolidation, or (ii) a
merger or consolidation effected to implement a recapitalization of J. Jill (or
similar transaction) in which no Person acquires more than 50% of the combined
voting power of the Company’s then outstanding securities; or

 

(IV)         the stockholders of J. Jill approve a plan of complete liquidation
of J. Jill or an agreement for the sale or disposition by J. Jill of all or
substantially all J. Jill’s assets.

 

The foregoing to the contrary notwithstanding, a Change in Control shall not be
deemed to have occurred with respect to the you if you are “part of a purchasing
group” which

 

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consummates the Change in Control transaction. You shall be deemed “part of a
purchasing group” for purposes of the preceding sentence if you are an equity
participant or have agreed to become an equity participant in the purchasing
company or group (except for (i) passive ownership of less than 5% of the stock
of the purchasing company or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not deemed to be significant, as
determined prior to the Change in Control by a majority of the nonemployee
Continuing Directors).

 

For purposes of this Section 2(c), the term “Person” shall have the meaning
given in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended;
provided, however, that a Person shall not include (i) J. Jill or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company, (iiii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of J. Jill in substantially
the same proportions as their ownership of stock of J. Jill.

 

In addition, in the event a Change in Control shall not have occurred during the
Supplemental Compensation Period — but during the Supplemental Compensation
Period the Company shall have entered into an agreement or series of related
agreements that will result in a Change in Control, as defined in subparagraph
(I) above, when the transactions contemplated by such agreement or agreements
are consummated, and such transactions are consummated and result in a Change in
Control, as defined in subparagraph (I) above, on or before March 31, 2007 — you
will be paid supplemental compensation in the lump-sum amount of $729,552.00 not
later than the fifth (5th) day following such Change in Control, subject to the
provisions of Section 2(m) below and further subject to your continuing
compliance with the provisions of Sections 5, 6 and 10(c) of this letter
agreement and the Agreement to Protect Corporate Property.  Notwithstanding the
foregoing, you understand and agree that, if any such Change in Control is not
consummated, no supplemental compensation will be paid to you pursuant to this
Section 2(c).

 

(d)  Stock Options.  The Company has previously issued to you certain stock
options under the Company’s 2001 Incentive and Non-Statutory Stock Option Plan,
which are summarized in Exhibit A.  You have thirty days from the Termination
Date to exercise any such options that vested during your employment.  You shall
forfeit any options unvested as of the Termination Date.

 

(e)  Medical Insurance.  Your rights under the so-called COBRA statute (which
gives you the right to continue to participate in the Company’s group medical
and dental plans for a period of time at your own expense) shall become
effective as of the Termination Date.  For the period of eighteen (18) months
from the Termination Date, or until you become eligible for group medical and/or
dental plans from a new employer offering substantially equal insurance,
whichever is sooner, and subject to your continuing compliance with the
provisions of Sections 5, 6 and 10(c) of this letter agreement and the Agreement
to Protect Corporate Property, the Company will pay the same portion of the
premium for your existing medical and/or dental insurance as it would have paid
(and you will pay the same portion of the premium for such insurance as you
would have paid) if you had continued to be employed at the Company.  You will
notify the Company’s Human Resources Department in writing within 72 hours of
accepting

 

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any such reemployment with such insurance eligibility.  Nothing herein shall
prevent the Company from making changes in its medical and dental insurance
plans, to the extent that such changes are generally applicable to employees of
the Company.

 

(f)  401(k) Plan.  Your eligibility to participate in the Company’s 401(k) Plan
terminates on the Termination Date.

 

(g)  Deferred Compensation Plans.  Your right to participate in the Company’s
Deferred Compensation Plans terminates on the Termination Date.  You will be
paid your vested account balance as of the Termination Date in accordance with
the terms of the Plans.

 

(h)  Executive Term Life Insurance.  Premiums on the executive term life
insurance policy maintained by the Company for your benefit are paid quarterly
and have been paid through the coverage period ending February 17, 2006.  If you
wish to continue coverage under this policy after February 17, 2006, you will
need to pay the premiums for subsequent periods in accordance with the terms of
the policy.

 

(i)  Group Life and Disability Insurance.  Your coverage under the group term
life insurance and disability insurance policies maintained by the Company for
employees terminates on the Termination Date.  You will be provided with
information regarding your rights, if any, with regard to continuing your basic
life insurance coverage on an individual basis.

 

(j)  Supplemental Long-Term Disability Insurance.  Premiums on the executive
supplemental long-term disability insurance policy maintained by the Company for
your benefit are paid monthly and will be paid through the coverage period
ending January 31, 2006.  If you wish to continue coverage under this policy
after January 31, 2006, you will need to pay the premiums for subsequent periods
in accordance with the terms of the policy.

 

(k)  Vacation Pay.  You will continue to accrue vacation benefits through the
Termination Date, at which time you will have accrued 89.23 hours of unused
vacation for which you will be paid the gross amount of $17,160.71, subject to
the provisions of Section 2(m) below.  Thereafter, you shall not accrue or be
entitled to any additional vacation benefits.

 

(l)  No Other Pay or Benefits.  You acknowledge that the Company has previously
paid all amounts payable to you under all other compensation or reimbursement
arrangements, if any.  From and after the Termination Date you shall have no
right to compensation or benefits, including benefits accrual, beyond those
specifically provided for in this letter agreement.

 

(m)  Withholdings.  The Company may deduct from the payments described in
Section 2 and any other payments otherwise due to you under this letter
agreement, such legally required withholdings, payments and/or deductions as may
be required.

 

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3.  Releases.

 

(a)  General Release and Waiver.  In return for the payments and benefits
provided to you as set forth in Sections 2(a), (b), (c) and (e) above, you agree
to execute (in accordance with the provisions of Section 9 below) the final and
binding general General Release and Waiver of all claims (the “General Release
and Waiver”) in the form attached hereto as Exhibit B to this letter agreement,
said General Release and Waiver to include claims against age discrimination and
all other claims arising out of or relating to your hiring, employment, or
termination of employment.  Notwithstanding the foregoing, the Company and you
agree that the terms of this letter agreement shall survive the General Release
and Waiver and that claims to enforce the terms of this letter agreement are not
discharged by said General Release and Waiver.

 

(b)  Release and Waiver.  In addition to the foregoing General Release and
Waiver, and in return for the payments and benefits provided to you as set forth
in Section 2(c) above, you agree to execute (in accordance with the provisions
of Sections 9(a) and 9(e) below) the final and binding Release and Waiver of
Claims (the “Release and Waiver”) in the form attached hereto as Exhibit C to
this letter agreement, said Release and Waiver to encompass claims of
defamation.

 

4.  Return of Company Property and Retrieval of Personal Effects.   On or before
the close of business on the Termination Date, or such later date as the Company
may agree:  (i) you will return to the Company all property of the Company,
including without limitation all tangible work product and including any keys,
passwords, reference materials, books, audit or other specialized software,
Company documents and files, computers, laptops and computer disks or files, if
any, in your possession, custody or control; and (ii) you will retrieve from the
Company all of your personal effects.

 

5.  Nondisparagement.   You agree not to take any action or make any statement,
written or oral, which disparages the Company, its directors or officers, or its
management, business or personnel practices, or which disrupts or impairs the
Company’s normal operations.  The Company and its executive officers agree not
to take any action or make any statement, written or oral, which disparages
you.  The provisions of this Section 5 shall not apply to any truthful statement
required to be made by you, or by the Company or its executive officers, in any
legal proceeding, required filing pursuant to the securities laws, or pursuant
to any governmental or regulatory investigation.

 

6.  Covenant Not to Sue/Encourage Third Party Action.  Except as otherwise
provided in this Section 6, you represent and warrant that you have never
commenced or filed, and covenant and agree never to commence, file, aid, solicit
or in any way prosecute or cause to be commenced or prosecuted against the
Releasees (as defined in the General Release and Waiver) the bringing of any
legal proceeding or the making of any legal claim against the Company by any
state or federal agency or by any applicant for employment, employee or former
employee of the Company (“third party action”), and further you shall not reveal
any information about the Company to be used for, and shall not testify in, any
third party action except as required to do so by properly issued subpoena and
then only after giving the Company a reasonable opportunity to review any such
subpoena and oppose the giving of any such testimony.  Notwithstanding the

 

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foregoing, the Company and you agree that this letter agreement will not affect
the rights and responsibilities of the U.S. Equal Employment Opportunity
Commission, the Securities and Exchange Commission, or any other federal or
state agency to enforce laws subject to such agencies enforcement authority, and
further agree that this letter agreement will not be used to justify interfering
with your right to participate in an investigation or proceeding conducted by
such agencies.  You represent and warrant that you knowingly and voluntarily
waive all rights or claims arising prior to your execution of this letter
agreement that you may have against the Releasees, or any of them, to receive
any payment, benefit or remedial relief as a consequence of an action brought
on your behalf in any such agency and/or as a consequence of any litigation
concerning any facts alleged in any such action.

 

7.  Remedies.  You acknowledge and agree that your obligations arising under
Sections 4, 5 and 6 above are of the essence to this letter agreement and that
your breach of any of these obligations, or of your obligations under the
Agreement to Protect Corporate Property, which is incorporated herein by
reference, will terminate the Company’s obligations to you under Section 2 of
this letter agreement.  Should you commit a breach of any such obligations, you
shall further be required to pay back to the Company the full value of any
benefit that you have derived under Sections 2 above.  You further acknowledge
and affirm that money damages cannot adequately compensate the Company for any
breach by you of Sections 4, 5 and 6 of this letter agreement or of the
Agreement to Protect Corporate Property, and that the Company is entitled to
equitable relief in any Massachusetts or other court of competent jurisdiction
to prevent or otherwise restrain any actual or threatened breach of the
provisions of such Sections or of the Agreement to Protect Corporate Property,
and/or to compel specific performance of, or other compliance with, the terms of
this letter agreement or the Agreement to Protect Corporate Property.

 

8.  Non-Assignment.  You warrant and represent to the Company that you have not
heretofore assigned or transferred or attempted to assign or transfer to any
person any claim or matter recited in the General Release and Waiver or any part
or portion thereof, and agree to indemnify and hold harmless the Releasees from
and against any claim, demand, damage, debt, liability, account, reckoning,
obligation, cost, expense (including the payment of attorney’s fees and costs
actually incurred whether or not litigation be commenced), lien, action and
cause of action, based on, in connection with, or arising out of any such
assignment or transfer or attempted assignment or transfer.

 

9.  Representations and Recitals.  You represent that:

 

(a)  The Company has advised you to consult with an attorney of your choosing
concerning the rights waived in this letter agreement.  You have carefully read
and fully understand this letter agreement, and are voluntarily entering into
this letter agreement and providing the General Release and Waiver attached
hereto as Exhibit B and the Release and Waiver attached hereto as Exhibit C.

 

(b)  You understand that you have 21 days to review this letter agreement and
the General Release and Waiver prior to their execution.  If at any time prior
to the end of the 21 day period, you execute this letter agreement and the
General Release and Waiver, you acknowledge that such early execution is a
knowing and voluntary waiver of your right to consider this letter agreement and
the General Release and Waiver for at

 

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least 21 days and is due to your belief that you have had ample time in which to
consider and understand this letter agreement and the General Release and Waiver
and in which to review this letter agreement and the General Release and Waiver
with an attorney.

 

(c)  You understand that, for a period of seven (7) days after you have executed
this letter agreement and the General Release and Waiver, you may revoke the
letter agreement and the General Release and Waiver by giving notice in writing
of such revocation to the Company, c/o Chairman of the Board of Directors at the
Company’s headquarters, with a copy to David R. Pierson, Foley Hoag LLP, Seaport
World Trade Center West, 155 Seaport Blvd., Boston, Massachusetts 02210.  If at
any time after the end of the seven-day period you accept any of the payments or
benefits provided by the Company as described in Section 2 of this letter
agreement, such acceptance will constitute an admission by you that you did not
revoke this letter agreement or the General Release and Waiver during the
revocation period and will further constitute an admission by you that this
letter agreement and the General Release and Waiver have become effective and
enforceable.

 

(d)  You understand the effect of the General Release and Waiver and that you
give up any rights you may have, in particular but without limitation, under the
Federal Age Discrimination in Employment Act and the Massachusetts Law Against
Discrimination (Mass. Gen. Laws ch. 151B, § 1 et seq.).

 

(e)  You understand that you are receiving benefits pursuant to this letter
agreement that you would not otherwise be entitled to if you did not enter into
this letter agreement and execute the General Release and Waiver that is
Exhibit B hereto.  You further understand and agree that you will not be
entitled to receive, and shall not receive, the supplemental compensation
described in Section 2(c) of this letter agreement if you do not enter into this
letter agreement and execute the General Release and Waiver that is Exhibit B
hereto and the Release and Waiver that is Exhibit C hereto.

 

10.  Miscellaneous.

 

(a)  Successors and Assigns.   This letter agreement shall be binding upon and
inure to the benefit of the respective legal representatives, heirs, successors,
assigns, and present and former employees and agents of the parties hereto to
the extent permitted by law.

 

(b)  Attorneys Fees.  Each party shall bear his or its own attorney’s fees and
expenses.

 

(c)  Challenge to Validity of Agreement.  After the revocation period of seven
(7) days described in Section 9(c) of this letter agreement has expired, this
letter agreement and the General Release and Waiver shall be forever binding. 
You acknowledge that you may hereafter discover facts not now known to you
relating to your hire, employment or cessation of employment, and agree that
this letter agreement, the General Release and Waiver, and the Release and
Waiver shall remain in effect notwithstanding any such discovery of any such
facts.  You shall not bring a proceeding to challenge the validity of this
letter agreement, the General Release and Waiver, and the Release and Waiver. 
Should you do so notwithstanding this

 

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Section 10(c), you will first be required to pay back to the Company all
remuneration received pursuant to Section 2 hereof.

 

(d)  Governing Law.  This letter agreement shall be interpreted in accordance
with and governed for all purposes by the substantive laws and public policy of
the Commonwealth of Massachusetts, without giving effect to its choice or
conflict of law provisions.

 

(e)  Complete Agreement; Modification.  This letter agreement recites the full
terms of the understanding between us, and supersedes any prior oral or written
understanding between us, relating to your employment with the Company or
severance payments and benefits to be made or provided to you following the
termination of your employment with the Company (including the employment letter
agreement between you and the Company dated May 23, 2003 and the Severance
Agreement between you and the Company dated November 13, 2003), except the
Agreement to Protect Corporate Property, which shall remain in effect in
accordance with its terms and is incorporated into this letter agreement by
reference and attached hereto as Exhibit D.  This letter agreement may be
modified only in a writing signed by both parties.

 

(f)  Execution.  This letter agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
and all such counterparts together shall constitute but one and the same
instrument.

 

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Please note that you have 21 days to accept the offer set forth herein, and may
revoke your acceptance within 7 days of signing as set forth in
Section 9(c) above, in which case this letter agreement (other than provisions 1
and 4, and the Agreement to Protect Corporate Property) shall be void.

 

 

Very truly yours,

 

 

 

 

 

 

By:

/s/ Olga L. Conley

 

 

 

Olga L. Conley

 

 

EVP/CAO & CFO

 

 

Agreed, accepted and signed this 19th day

of January, 2006 under seal:

 

 

/s/ Stephen L. Pearson

 

Stephen L. Pearson

 

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EXHIBIT A

 

OPTION
TYPE

 

GRANT
DATE

 

SHARES
GRANTED

 

STRIKE
PRICE

 

VESTED
@ 12/31/05

 

EXERCISED

 

VESTED
BALANCE

 

FULLY
VESTED

 

TERM
DATE

 

ISO

 

6/4/2003

 

18,000

 

$

15.940

 

12,000

 

0

 

12,000

 

6/4/2006

 

6/4/2013

 

NQO

 

6/4/2003

 

7,000

 

$

15.940

 

4,666

 

0

 

4,666

 

6/4/2006

 

6/4/2013

 

NQO

 

10/20/2003

 

25,000

 

$

12.780

 

16,666

 

0

 

16,666

 

10/20/2006

 

10/20/2013

 

NQO

 

2/25/2004

 

25,000

 

$

15.510

 

8,333

 

0

 

8,333

 

2/25/2007

 

2/25/2014

 

NQO

 

12/10/2004

 

25,000

 

$

16.990

 

25,000

 

0

 

25,000

 

12/10/2004

 

12/10/2014

 

NQO

 

6/20/2005

 

15,000

 

$

14.730

 

15,000

 

0

 

15,000

 

6/20/2005

 

6/20/2015

 

 

 

 

 

115,000

 

 

 

81,665

 

0

 

81,665

 

 

 

 

 

 

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EXHIBIT B

 

GENERAL RELEASE AND WAIVER OF ALL CLAIMS

(INCLUDING AGE DISCRIMINATION IN EMPLOYMENT ACT CLAIMS)

 

In consideration of the payment, benefits and other agreements set forth in the
letter agreement dated December 7, 2005 between The J. Jill Group, Inc. (“the
Company”) and Stephen L. Pearson (“Pearson”) (to which this General Release and
Waiver Of All Claims is attached), Pearson, for himself and for his heirs,
executors, estates, agents, representatives, attorneys, insurers, successors and
assigns (collectively, the “Releasors”), hereby voluntarily releases and forever
discharges (i) the Company and its subsidiaries (direct and indirect),
affiliates, related companies, divisions, and predecessor and successor
companies, (ii) in their capacities as such, each of its and their present,
former and future officers, directors and employees, and (iii) in their
capacities as such, each of the Company’s and its subsidiaries’ (direct and
indirect), affiliates’, related companies’, divisions’, and predecessor and
successor companies’ present, former and future shareholders, agents,
representatives, attorneys, insurers, heirs, successors and assigns
(collectively, the “Releasees”) from all actions, causes of action, suits,
debts, sums of money, accounts, covenants, contracts, agreements, promises,
damages, judgments, demands and claims which the Releasors ever had, or now
have, or hereafter can, shall or may have, for, upon or by reason of any matter
or cause whatsoever arising from the beginning of the world to the date of the
execution of this General Release and Waiver, whether known or unknown, in law
or equity, whether statutory or common law, whether federal, state, local or
otherwise, including but not limited to claims arising out of or in any way
related to Pearson’s employment by the Company (including his hiring), or the
termination of that employment, whether as a contractor or employee, or any
related matters (including but not limited to claims, if any, arising under the
Age Discrimination in Employment Act of 1967, as amended, the Civil Rights Act
of 1866, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1991, as amended, the Americans With Disabilities Act of 1990, as
amended, the Family and Medical Leave Act of 1993, the Immigration Reform and
Control Act of 1986, the Massachusetts Law Against Discrimination (Mass. Gen.
Laws ch. 151B§1 et seq.), the Massachusetts Payment of Wages Act, the
Massachusetts Civil and Equal Rights Acts, and federal, Massachusetts or local
laws, statutes and regulations, including common or constitutional law). 
Notwithstanding the foregoing, nothing in this General Release and Waiver is
intended to or does waive any rights Pearson may have to enforce the terms of
the above-referenced letter agreement dated December 7, 2005.

 

Signed and sealed this 19th day of January, 2006.

 

 

 

 

/s/ Stephen L. Pearson

 

 

 

Stephen L. Pearson

 

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EXHIBIT C

 

RELEASE AND WAIVER OF CLAIMS

 

In consideration of the payment, benefits and other agreements set forth in
Section 2(c) of the letter agreement dated December 7, 2005 between The J. Jill
Group, Inc. (“the Company”) and Stephen L. Pearson (“Pearson”) (to which this
Release and Waiver Of Claims is attached), Pearson, for himself and for his
heirs, executors, estates, agents, representatives, attorneys, insurers,
successors and assigns (collectively, the “Releasors”), hereby voluntarily
releases and forever discharges (i) the Company and its subsidiaries (direct and
indirect), affiliates, related companies, divisions, and predecessor and
successor companies, (ii) in their capacities as such, each of its and their
present, former and future officers, directors and employees, and (iii) in their
capacities as such, each of the Company’s and its subsidiaries’ (direct and
indirect), affiliates’, related companies’, divisions’, and predecessor and
successor companies’ present, former and future shareholders, agents,
representatives, attorneys, insurers, heirs, successors and assigns
(collectively, the “Releasees”) from all actions, causes of action, suits,
debts, sums of money, accounts, covenants, contracts, agreements, promises,
damages, judgments, demands and claims for breaches by the Releasees of
Section 5 of that certain letter agreement referenced above (whether in the
nature of disparagement, defamation, libel, slander or otherwise) which the
Releasors ever had, or now have, or hereafter can, shall or may have against the
Releasees, from the beginning of the world to the date of the execution of this
Release and Waiver, whether known or unknown, in law or equity, whether
statutory or common law, whether federal, state, local or otherwise.

 

Signed and sealed this              day of                       , 200   .

 

 

 

 

 

 

 

 

Stephen L. Pearson

 

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EXHIBIT D

 

AGREEMENT TO PROTECT CORPORATE PROPERTY

 

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Agreement to Protect Corporate Property

 

In consideration of my receipt of a stock option on or about the date hereof
from The J. Jill Group, Inc. (“J. Jill”), I agree to the following:

 

1.               Confidential Information.  While employed by J. Jill and /or
one or more of its subsidiaries (J. Jill and such subsidiaries referred to
collectively as the “Company”) and thereafter, I will not, directly or
indirectly, use any Confidential Information other than pursuant to my
employment by and for the benefit of the Company, or disclose any Confidential
Information to anyone outside of the Company other than to the Company’s
professional advisors on a need to know basis or as required by law.  For
purposes of this Agreement “Confidential Information” includes but is not
limited to all information that relates to the Company’s past, present and
future businesses, products, technologies, customers, vendors, distribution
methods, databases, computer systems, employees, hiring and training practices,
operations and marketing strategies and all trade secrets, proprietary
information, know-how, data, designs, patterns, specifications, processes,
financial or business records, business or financial plans, marketing materials,
customer lists or other customer or prospective customer information and other
technical or business information (and any tangible evidence, record or
representation thereof), whether conceived, developed or otherwise made by me or
any employee of the Company or received by the Company from an outside source,
which is in the possession of the Company, which in any way relates to the past,
present or future business of the Company, which is maintained in confidence by
the Company, or which might be of use to competitors or harmful to the Company
or its customers, if disclosed.   “Confidential Information” does not include
information which the Company has voluntarily disclosed to the public without
restriction, which has otherwise lawfully entered the public domain without my
participation or fault, or which is otherwise generally known by persons of
comparable experience in the women’s retail apparel industry.

 

2.               Ownership of Corporate Property.  All equipment, documents,
information and other property that I receive or develop in the course of my
employment by the Company, and all Confidential Information (as defined in
Section 1) and Intellectual Property (as defined in Section 3), will be and
remain the sole property of the Company.  The products of all of my efforts in
the course of my employment belong exclusively to the Company and I will not
retain any rights in any such work product.  I agree to return all property and
information immediately and without keeping any copies when my employment
terminates for any reason.  This section does not restrict my use of the general
knowledge that I have acquired through the course of my employment by the
Company so long as such knowledge does not constitute Confidential Information
or Intellectual Property.

 

3.               Assignment of Intellectual Property.  I assign, and agree to
assign, to the Company all my right, title and interest throughout the world in
and to all Intellectual Property and to anything tangible that evidences,
incorporates, constitutes, represents or records any Intellectual Property.  I
agree that all Intellectual Property will constitute works made for hire under
copyright laws of the United States.  I assign, and agree to assign, to the
Company all copyrights, patents and other proprietary rights I may have in any
Intellectual Property, together with the right to file for and/or own wholly
without restriction United States and foreign patents, trademarks, and
copyrights.  I waive, and agree to waive, all moral rights or proprietary rights
in or to any Intellectual Property and, to the extent that such rights may not
be waived, agree not to assert such rights against the Company or its licensees,
successors or assigns.  For purposes of this Agreement “Intellectual Property”
includes but is not limited to: (i) all Confidential Information and (ii) all
other business ideas and methods, store concepts,  inventions, innovations,
developments, graphic designs (including, for example, catalog designs, in-store
signage and posters), web site designs, patterns, specifications, procedures or
processes, market research, databases, works of authorship, products, and other
works of creative authorship, or parts thereof conceived, developed or otherwise
made by me, alone or jointly with

 

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others and in any way relating to the Company’s past, present or proposed
products, programs or services or to tasks assigned to me during the course of
my employment, whether or not patentable or subject to copyright protection and
whether or not reduced to tangible form or reduced to practice during the period
of my employment with the Company, whether or not made during my regular working
hours, whether or not made on the Company’s premises, and whether or not
disclosed by me to the Company.

 

4.               Certification of Information and Property.  I hereby certify
Exhibit A sets forth any and all confidential information and intellectual
property that I claim as my own or otherwise intend to exclude from this
Agreement because it was developed by me prior to the date of this Agreement.  I
understand that after execution of this Agreement I will have no right to
exclude confidential information or intellectual property from this Agreement.

 

5.               Non-Competition.  During my employment with the Company and
(A) for a period of one year after termination of my employment with the Company
if my employment is terminated by me for any reason or by the Company for Cause
(as defined below), or (B) for the Severance Pay Period (as defined below), if
any, if my employment is terminated by the Company for any reason other than for
Cause, I will not, on my own behalf, or as owner, manager, stockholder (except
as a holder of not more than five percent of the stock of a publicly held
company), consultant, independent contractor, director, officer, or employee of
any specialty retailer or specialty catalog company (regardless of its form of
organization and including a division of an organization if the division is
operating a specialty retail or catalog business) participate, directly or
indirectly, in any capacity, in any business activity that targets the same or
similar customer demographics as and is in competition with the Company.  (For
example, the restrictions set forth in the previous sentence would restrict you
from working for (i) a specialty retailer or specialty catalog company that
targets the same or similar customer demographics as and is in competition with
the Company, (ii) a division of a specialty retailer or specialty catalog
company if that division targets the same or similar customer demographics as
and is in competition with the Company, even though other divisions of the
specialty retailer or specialty catalog company do not target the same or
similar customer demographics as and are not in competition with the Company, or
(iii) a division of a general retailer, such as a department store, if the
division is engaged in a specialty retail or specialty catalog business that
targets the same or similar customer demographics as and is in competition with
the Company.  They would not restrict you from working for (i) a specialty
retailer or specialty catalog company that does not target the same or similar
customer demographics as and is not in competition with the Company, (ii) a
division of a specialty retailer or specialty catalog company if that division
does not target the same or similar customer demographics as and is not in
competition with the Company, even though other divisions of the specialty
retailer or specialty catalog company do target the same or similar customer
demographics as and are in competition with the Company, or (iii) a general
retailer, such as a department store, as long as you are not working for a
division of that general retailer that is engaged in a specialty retail or
specialty catalog business that targets the same or similar customer
demographics as and is in competition with the Company.)  The restrictions in
this Section 5 extend to all geographic areas in which the Company conducts
business.  The restrictions set forth in subsections (A) and (B) of this
Section 5 will not apply to any termination of my employment with the Company
that occurs after three years from the date of this Agreement.  For purposes of
this Agreement, “Cause” means (i) any act or omission to act by me which has a
material and adverse effect on the Company’s business or on my ability to
perform services for the Company, or (ii) any material misconduct or material
neglect of my duties in connection with the business or affairs of the Company;
and the “Severance Pay Period” means any period during or with respect to which
I am receiving severance payments from the Company at a rate per month at least
equal to my base salary rate per month immediately prior to my termination.  If
I receive a lump sum severance payment or severance payments that are not
specifically tied to my base salary, the Severance Pay

 

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Period will be a number of months calculated by dividing the aggregate severance
payments to be made to me by my monthly base salary immediately before the
termination of my employment, rounded up or down to the nearest whole number. 
The Company’s rights under this Section 5 may not be assigned by the Company
without my consent, except to any direct or indirect subsidiary of any entity
affiliated with J. Jill.

 

6.               Non-Solicitation.  During my employment with the Company and
for a period of one year after the termination of my employment with the Company
for any reason, I will not directly or indirectly (i) solicit, attempt to hire,
or hire any present or future employee of the Company (or any person who may
have been employed by the Company during the last year of the term of my
employment with the Company), or assist in such hiring by any other person or
business entity or encourage, induce or attempt to induce any such employee to
terminate his or her employment with the Company or (ii) affect to the Company’s
detriment any relationship of the Company with any customer, supplier or
employee of the Company, or cause any customer or supplier to refrain from
entrusting additional business to the Company or any affiliate.  For example,
with respect to (i) above, I will not inform any such employee of a job
opportunity with me or any other company, or suggest that any person or entity
contact any such employee to discuss or mention such a job opportunity.

 

7.  Miscellaneous.

 

•                  This Agreement contains the entire and only agreement between
the Company and me with respect to its subject matter, superseding any previous
oral or written communications, representations, understandings, or agreements
with the Company concerning such subject matter.  The foregoing notwithstanding,
this Agreement will neither supersede, nor affect any of my obligations under,
the Agreements (if any) listed on Exhibit B.  Nothing in this Agreement in any
way affects my obligations under The J. Jill Group, Inc. Code of Business
Conduct and Ethics.  This Agreement may not be amended, in whole or in part,
except by an instrument in writing signed by the Company and me.

 

•                  My obligations under this Agreement will survive the
termination of my employment with the Company regardless of the manner of or
reasons for such termination, and regardless of whether such termination
constitutes a breach of any other agreement I may have with the Company.

 

•                  If any provision of this Agreement will be determined to be
unenforceable by any court of competent jurisdiction by reason of its extending
for too great a period of time or over too large a geographic area or over too
great a range of activities, it will be interpreted to extend only over the
maximum period of time, geographic area or range of activities as to which it
may be enforceable.  Any invalid, illegal or unenforceable provision of this
Agreement will be severable, and after any such severance, all other provisions
hereof will remain in full force and effect.

 

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•                  In the event the Company has reason to believe this Agreement
has or may be breached, I acknowledge and consent that this Agreement may be
disclosed to my then current or prospective employer without risk or liability
to the Company.  I acknowledge and agree that violation of this Agreement by me
would cause irreparable harm to the Company not adequately compensable by money
damages alone, and I therefore agree that, in addition to all other remedies
available to the Company at law, in equity or otherwise, the Company will be
entitled to injunctive relief to prevent an actual or threatened violation of
this Agreement and to enforce the provisions hereof, without showing or proving
any actual damage to the Company or posting any bond in connection therewith.

 

•                  Except with respect to Section 5 above, this Agreement may be
assigned by the Company without my consent.

 

I have carefully read this Agreement, I understand it and agree to all of its
terms.  I acknowledge that I have been given a copy of this Agreement.

 

 

Signature:

/s/ Stephen L. Pearson

 

 

 

Name: Stephen L. Pearson

 

 

 

Date:

12-8-04

 

 

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EXHIBIT A

 

EXCLUDED CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY

 

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EXHIBIT B

 

EXCLUDED AGREEMENTS

 

1.               Employment Letter Agreement, dated May 3, 2003, between the
Company and Stephen Pearson

 

2.               Severance Agreement, dated November 13, 2003, between the
Company and Stephen L. Pearson

 

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