Exhibit 10.1

 

THE J. JILL GROUP, INC.

AMENDED AND RESTATED

2005 INCENTIVE COMPENSATION PLAN

 

PURPOSE

 

This Amended and Restated 2005 Incentive Compensation Plan (the “Incentive
Compensation Plan”) is designed to provide financial reward to employees of The
J. Jill Group, Inc. (the “Company”) for their contribution toward the attainment
of the Company’s financial goals for the fiscal year ending December 31, 2005
(“FY 2005”).

 

PARTICIPATION

 

•                  A “Participating Employee” shall mean each of the following
employees of the Company:  (i) the President and Chief Executive Officer; (ii)
any Executive Vice President; (iii) any Senior Vice President; (iv) any Vice
President; (v) any Operating Vice President; and (vi) any employee below the
level of Operating Vice President who is selected for participation in this
Incentive Compensation Plan by the President and Chief Executive Officer.  No
employee below the level of Operating Vice President shall be entitled to
participate in this Incentive Compensation Plan unless and until selected to do
so by the President and CEO.

 

•                  No Participating Employee shall be entitled to receive a
bonus under this Incentive Compensation Plan unless the Participating Employee
satisfies the eligibility criteria set forth below.

 

ELIGIBILITY CRITERIA

 

•                  A Participating Employee who is in performance counseling at
any time during a performance period will not be eligible for a bonus for the
performance period.

 

•                  To be eligible to receive a bonus for a performance period, a
Participating Employee must be actively employed by the Company for a minimum of
three months in the performance period.  Time on leave does not count as active
employment.  Employment by a subsidiary of the Company shall be considered
employment by the Company for purposes of this Incentive Compensation Plan.

 

•                  To be eligible to receive a bonus for a performance period, a
Participating Employee must be employed on the last day of the performance
period.

 

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Performance Period

 

This Incentive Compensation Plan pertains to FY 2005.  For measurement purposes,
FY 2005 will be divided into two seasonal performance periods:

 

Spring — December 26, 2004 to June 25, 2005

Fall — June 26, 2005 to December 31, 2005

 

ADDITIONAL BONUSES

 

Nothing in this Incentive Compensation Plan shall be deemed to limit the
authority of the Board of Directors, the Compensation Committee of the Board of
Directors or the President and CEO to award additional bonuses outside the
Incentive Compensation Plan in their discretion.

 

Payments

 

Bonus payments under this Incentive Compensation Plan will be made promptly
following the close of the performance period.

 

Calculation of Bonus Payment

 

•                  Definitions:

 

•                  The “Bonus Percentage” for a Participating Employee shall be
the percentage assigned to the Participating Employee for the purpose of
calculating the Participating Employee’s bonus, if any, under this Incentive
Compensation Plan.  Bonus Percentages for employees at the level of Operating
Vice President and above shall be determined by the Board of Directors or the
Compensation Committee of the Board of Directors.  Bonus Percentages for
Participating Employees below the level of Operating Vice President shall be
determined by the President and CEO.

 

•                  “Earnings Per Share Percentage” for a performance period
means the lesser of (i) 100% or (ii) a fraction, the numerator of which is the
Company’s Preliminary Earnings Per Share for the performance period minus the
Company’s Earnings Per Share Target for the performance period, and the
denominator of which is $0.07, expressed as a percentage. 

 

•                  “Earnings Per Share Target” for a performance period means:
 (i) for the Spring performance period, the Company’s fully diluted earnings per
share target for the

 

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performance period as set forth in the Company’s 2005 Financial Plan; and (ii)
for the Fall performance period, the fully diluted earnings per share target for
the performance period established by the Compensation Committee for purposes of
this Incentive Compensation Plan before the beginning of the performance period.

 

•                  “Maximum Bonus” for a performance period with respect to any
Participating Employee means the Participating Employee’s Bonus Percentage times
the base salary paid to him or her for the performance period.

 

•                  “Preliminary Earnings Per Share” for a performance period
means the amount the Company’s fully diluted earnings per share for the
performance period would be if no bonuses under this Incentive Compensation Plan
were paid for the performance period.

 

•                  If the Company’s Preliminary Earnings Per Share for a
performance period are less than or equal to the Company’s Earnings Per Share
Target for the performance period, no bonuses shall be paid under this Incentive
Compensation Plan for the performance period.

 

•                  If the Company’s Preliminary Earnings Per Share for a
performance period are greater than the Company’s Earnings Per Share Target for
the performance period, then each eligible Participating Employee shall receive
a bonus for the performance period under this Incentive Compensation Plan in an
amount equal to the Participating Employee’s Maximum Bonus for the performance
period times the Earnings Per Share Percentage for the performance period.

 

EXAMPLE

 

CASE 1:                 Assume the Participating Employee’s annual base salary
is $50,000, his or her Bonus Percentage is 10%, the Company’s Earnings Per Share
Percentage for the Spring performance period is 100% and the Company’s Earnings
Per Share Percentage for the Fall performance period is 100%:

 

Season

 

Salary for
Performance
Period

 

Bonus %

 

Maximum
Bonus

 

EPS %

 

Bonus
Amount

 

Spring

 

$

25,000

 

10

%

$

2,500

 

100

%

$

2,500

 

Fall

 

$

25,000

 

10

%

$

2,500

 

100

%

$

2,500

 

Total

 

$

50,000

 

 

 

$

5,000

 

 

 

$

5,000

 

 

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CASE 2:                 Assume the Participating Employee’s annual base salary
is $50,000, his or her Bonus Percentage is 10%, the Company’s Earnings Per Share
Percentage for the Spring performance period is 100% and the Company’s Earnings
Per Share Percentage for the Fall performance period is 0:

 

Season

 

Salary for
Performance
Period

 

Bonus %

 

Maximum
Bonus

 

EPS %

 

Bonus
Amount

 

Spring

 

$

25,000

 

10

%

$

2,500

 

100

%

$

2,500

 

Fall

 

$

25,000

 

10

%

$

2,500

 

0

 

$

0

 

Total

 

$

50,000

 

 

 

$

5,000

 

 

 

$

2,500

 

 

CASE 3:                 Assume the Participating Employee’s annual base salary
is $50,000, his or her Bonus Percentage is 10%, the Company’s Earnings Per Share
Percentage for the Spring performance period is 50% and the Company’s Earnings
Per Share Percentage for the Fall performance period is 10%:

 

Season

 

Salary for
Performance
Period

 

Bonus %

 

Maximum Bonus

 

EPS %

 

Bonus Amount

 

Spring

 

$

25,000

 

10

%

$

2,500

 

50

%

$

1,250

 

Fall

 

$

25,000

 

10

%

$

2,500

 

10

%

$

250

 

Total

 

$

50,000

 

 

 

$

5,000

 

 

 

$

1,500

 

 

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