Exhibit 10.7

 

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (the “Agreement”) dated as of
December 21, 2005, is made by and between The J. Jill Group, Inc., a Delaware
corporation (“J. Jill”; J. Jill and its Subsidiaries being hereafter referred to
as the “Company”), and Gordon R. Cooke (the “Executive”).

 

WHEREAS, the Company and the Executive are parties to a Severance Agreement
dated April 3, 2000, as amended (the “Prior Agreement”) and now desire to amend
and restate the Prior Agreement in its entirety; and

 

WHEREAS the Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel;
and

 

WHEREAS the Board of Directors of J. Jill recognizes that, as is the case with
many publicly held corporations, the possibility of a Change in Control (as
defined in the last Section hereof) exists and that such possibility, and the
uncertainty and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its stockholders; and

 

WHEREAS the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company’s management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control;

 

NOW THEREFORE, in consideration of the promises and the mutual covenants herein
contained, the Company and the Executive hereby agree as follows:

 

1.                                       DEFINED TERMS.  THE DEFINITION OF
CAPITALIZED TERMS USED IN THIS AGREEMENT IS PROVIDED IN THE LAST SECTION HEREOF.

 

2.                                       TERM OF AGREEMENT. THIS AGREEMENT SHALL
COMMENCE ON THE DATE HEREOF AND SHALL CONTINUE IN EFFECT THROUGH DECEMBER 31,
2006; PROVIDED, HOWEVER, THAT COMMENCING ON JANUARY 1, 2007 AND EACH JANUARY 1
THEREAFTER, THE TERM OF THIS AGREEMENT SHALL AUTOMATICALLY BE EXTENDED FOR ONE
ADDITIONAL YEAR UNLESS, NOT LATER THAN DECEMBER 1 OF THE PRECEDING YEAR, THE
COMPANY OR THE EXECUTIVE SHALL HAVE GIVEN NOTICE NOT TO EXTEND THIS AGREEMENT OR
A CHANGE IN CONTROL SHALL HAVE OCCURRED PRIOR TO SUCH JANUARY 1; PROVIDED,
HOWEVER, IF A CHANGE IN CONTROL SHALL HAVE OCCURRED DURING THE TERM OF THIS
AGREEMENT, THIS AGREEMENT SHALL CONTINUE IN EFFECT FOR A PERIOD OF NOT LESS THAN
TWENTY-FOUR (24) MONTHS BEYOND THE MONTH IN WHICH SUCH CHANGE IN CONTROL
OCCURRED.

 

3.                                       COMPANY’S COVENANTS SUMMARIZED.  IN
ORDER TO INDUCE THE EXECUTIVE TO REMAIN IN THE EMPLOY OF THE COMPANY AND IN
CONSIDERATION OF THE EXECUTIVE’S COVENANTS SET FORTH IN SECTION 4 HEREOF, THE
COMPANY AGREES, UNDER THE CONDITIONS DESCRIBED HEREIN, TO PAY THE EXECUTIVE THE
SEVERANCE PAYMENTS AND THE OTHER PAYMENTS AND BENEFITS DESCRIBED HEREIN IN THE
EVENT THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY IS TERMINATED FOLLOWING A
CHANGE IN CONTROL AND DURING THE TERM OF THIS AGREEMENT. NO AMOUNT OR BENEFIT
SHALL BE PAYABLE UNDER THIS AGREEMENT UNLESS THERE SHALL HAVE BEEN (OR, UNDER
THE TERMS HEREOF, THERE SHALL BE DEEMED TO

 

--------------------------------------------------------------------------------

 

HAVE BEEN) A TERMINATION OF THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY
FOLLOWING A CHANGE IN CONTROL. THIS AGREEMENT SHALL NOT BE CONSTRUED AS CREATING
AN EXPRESS OR IMPLIED CONTRACT OF EMPLOYMENT AND, EXCEPT AS OTHERWISE AGREED IN
WRITING BETWEEN THE EXECUTIVE AND THE COMPANY, THE EXECUTIVE SHALL NOT HAVE ANY
RIGHT TO BE RETAINED IN THE EMPLOY OF THE COMPANY.

 

4.                                       THE EXECUTIVE’S COVENANTS.

 

4.1                                 THE EXECUTIVE AGREES THAT, SUBJECT TO THE
TERMS AND CONDITIONS OF THIS AGREEMENT, IN THE EVENT OF A POTENTIAL CHANGE IN
CONTROL DURING THE TERM OF THIS AGREEMENT, THE EXECUTIVE WILL REMAIN IN THE
EMPLOY OF THE COMPANY UNTIL THE EARLIEST OF (I) A DATE WHICH IS SIX (6) MONTHS
FROM THE DATE OF SUCH POTENTIAL CHANGE OF CONTROL, (II) THE DATE OF A CHANGE IN
CONTROL, (III) THE DATE OF TERMINATION BY THE EXECUTIVE OF THE EXECUTIVE’S
EMPLOYMENT FOR GOOD REASON (DETERMINED BY TREATING THE POTENTIAL CHANGE IN
CONTROL AS A CHANGE IN CONTROL IN APPLYING THE DEFINITION OF GOOD REASON), OR BY
REASON OF DEATH, DISABILITY OR RETIREMENT, OR (IV) THE TERMINATION BY THE
COMPANY OF THE EXECUTIVE’S EMPLOYMENT FOR ANY REASON.

 

4.2                                 THE EXECUTIVE AGREES THAT, DURING THE
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY AND FOR A PERIOD OF ONE YEAR AFTER THE
TERMINATION OF THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY FOR ANY REASON, THE
EXECUTIVE WILL NOT DIRECTLY OR INDIRECTLY SOLICIT, ATTEMPT TO HIRE, OR HIRE ANY
EMPLOYEE OF THE COMPANY (OR ANY PERSON WHO MAY HAVE BEEN EMPLOYED BY THE COMPANY
DURING THE LAST YEAR OF THE TERM OF THE EXECUTIVE’S 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.

 

5.                                       COMPENSATION OTHER THAN SEVERANCE
PAYMENTS.

 

5.1                                 FOLLOWING A CHANGE IN CONTROL AND DURING THE
TERM OF THIS AGREEMENT, DURING ANY PERIOD THAT THE EXECUTIVE FAILS TO PERFORM
THE EXECUTIVE’S FULL-TIME DUTIES WITH THE COMPANY AS A RESULT OF INCAPACITY DUE
TO PHYSICAL OR MENTAL ILLNESS, THE COMPANY SHALL PAY THE EXECUTIVE’S FULL SALARY
TO THE EXECUTIVE AT THE RATE IN EFFECT AT THE COMMENCEMENT OF ANY SUCH PERIOD,
TOGETHER WITH ALL COMPENSATION AND BENEFITS PAYABLE TO THE EXECUTIVE UNDER THE
TERMS OF ANY COMPENSATION OR BENEFIT PLAN, PROGRAM OR ARRANGEMENT MAINTAINED BY
THE COMPANY DURING SUCH PERIOD, UNTIL THE EXECUTIVE’S EMPLOYMENT IS TERMINATED
BY THE COMPANY FOR DISABILITY.

 

5.2                                 IF THE EXECUTIVE’S EMPLOYMENT SHALL BE
TERMINATED FOR ANY REASON FOLLOWING A CHANGE IN CONTROL AND DURING THE TERM OF
THIS AGREEMENT, THE COMPANY SHALL PAY THE EXECUTIVE’S FULL SALARY TO THE
EXECUTIVE THROUGH THE DATE OF TERMINATION AT THE RATE IN EFFECT AT THE TIME THE
NOTICE OF TERMINATION IS GIVEN, TOGETHER WITH ALL COMPENSATION AND BENEFITS
PAYABLE TO THE EXECUTIVE THROUGH THE DATE OF TERMINATION UNDER THE TERMS OF ANY
COMPENSATION OR BENEFIT PLAN, PROGRAM OR ARRANGEMENT MAINTAINED BY THE COMPANY
DURING SUCH PERIOD.

 

5.3                                 IF THE EXECUTIVE’S EMPLOYMENT SHALL BE
TERMINATED FOR ANY REASON FOLLOWING A CHANGE IN CONTROL AND DURING THE TERM OF
THIS AGREEMENT, THE COMPANY SHALL PAY TO THE EXECUTIVE ANY SUCH POST-TERMINATION
COMPENSATION AND BENEFITS AS ARE DUE TO THE EXECUTIVE UNDER ANY APPLICABLE
SEPARATION, SEVERANCE OR EMPLOYMENT AGREEMENT BETWEEN THE COMPANY AND THE
EXECUTIVE (“POST-TERMINATION PAYMENTS”) AS SUCH PAYMENTS BECOME DUE; PROVIDED
THAT IN NO

 

2

--------------------------------------------------------------------------------

 

EVENT SHALL ANY POST-TERMINATION PAYMENTS BE PAID IF THE EXECUTIVE IS ENTITLED
TO THE SEVERANCE PAYMENTS (AS DEFINED IN SECTION 6.1) AS A RESULT OF SUCH
TERMINATION.

 

6.                                       SEVERANCE PAYMENTS.

 

6.1                                 IF THE EXECUTIVE’S EMPLOYMENT IS TERMINATED
FOLLOWING A CHANGE IN CONTROL AND DURING THE TERM OF THIS AGREEMENT, UNLESS SUCH
TERMINATION IS (I) BY THE COMPANY FOR CAUSE, (II) BY REASON OF DEATH OR
DISABILITY OR (III) BY THE EXECUTIVE WITHOUT GOOD REASON, AND PROVIDED THAT THE
SEVEN-DAY REVOCATION PERIOD DESCRIBED IN SECTION 6.6 HAS EXPIRED WITHOUT
REVOCATION OF THE RELEASE AND WAIVER BY THE EXECUTIVE, THE COMPANY SHALL PAY THE
EXECUTIVE THE PAYMENTS DESCRIBED IN THIS SECTION 6.1 (THE “SEVERANCE PAYMENTS”)
IN ADDITION TO THE PAYMENTS AND BENEFITS DESCRIBED IN SECTIONS 5.1 AND 5.2
HEREOF (BUT NOT SECTION 5.3 HEREOF).  THE EXECUTIVE’S EMPLOYMENT SHALL BE DEEMED
TO HAVE BEEN TERMINATED FOLLOWING A CHANGE IN CONTROL BY THE COMPANY WITHOUT
CAUSE OR BY THE EXECUTIVE WITH GOOD REASON IF THE EXECUTIVE’S EMPLOYMENT IS
TERMINATED PRIOR TO A CHANGE IN CONTROL WITHOUT CAUSE AT THE DIRECTION OF A
PERSON WHO HAS ENTERED INTO AN AGREEMENT WITH THE COMPANY THE CONSUMMATION OF
WHICH WILL CONSTITUTE A CHANGE IN CONTROL OR IF THE EXECUTIVE TERMINATES HIS
EMPLOYMENT WITH GOOD REASON PRIOR TO A CHANGE IN CONTROL (DETERMINED BY TREATING
A POTENTIAL CHANGE IN CONTROL AS A CHANGE IN CONTROL IN APPLYING THE DEFINITION
OF GOOD REASON) IF THE CIRCUMSTANCE OR EVENT WHICH CONSTITUTES GOOD REASON
OCCURS AT THE DIRECTION OF SUCH PERSON.

 

(A)                              IN LIEU OF ANY FURTHER SALARY PAYMENTS TO THE
EXECUTIVE FOR PERIODS SUBSEQUENT TO THE DATE OF TERMINATION AND IN LIEU OF ANY
SEVERANCE BENEFIT OTHERWISE PAYABLE TO THE EXECUTIVE, THE COMPANY SHALL PAY TO
THE EXECUTIVE A LUMP SUM SEVERANCE PAYMENT, IN CASH, EQUAL TO (I) TWO TIMES THE
EXECUTIVE’S ANNUAL BASE SALARY AS APPROVED BY THE COMPENSATION COMMITTEE OF THE
BOARD TO BE PAID TO THE EXECUTIVE (OR, IF THE EXECUTIVE’S ANNUAL BASE SALARY IS
NOT PRESENTED FOR APPROVAL AT THE COMPENSATION COMMITTEE LEVEL, THEN AS
OTHERWISE ESTABLISHED BY J. JILL OR ONE OF ITS SUBSIDIARIES) WITH RESPECT TO THE
YEAR IN WHICH THE DATE OF TERMINATION OCCURS, PLUS (II) TWO TIMES THE TARGET
BONUS AMOUNT PAYABLE TO THE EXECUTIVE UNDER ALL BONUS PLANS WITH RESPECT TO THE
YEAR (OR ANY PORTION THEREOF) IN WHICH THE DATE OF TERMINATION OCCURS, TREATING
ANY AND ALL PERFORMANCE GOALS UNDER SUCH BONUS PLANS AS HAVING BEEN MET.

 

(B)                                NOTWITHSTANDING ANY PROVISION OF ANY BONUS
PLAN, THE COMPANY SHALL PAY TO THE EXECUTIVE A LUMP SUM AMOUNT, IN CASH, EQUAL
TO THE SUM OF (I) ANY INCENTIVE COMPENSATION WHICH HAS BEEN ALLOCATED OR AWARDED
TO THE EXECUTIVE FOR A COMPLETED YEAR OR OTHER MEASURING PERIOD PRECEDING THE
DATE OF TERMINATION UNDER ANY SUCH BONUS PLAN BUT HAS NOT YET BEEN PAID
(PURSUANT TO SECTION 5.2 HEREOF OR OTHERWISE), AND (II) A PRO RATA PORTION TO
THE DATE OF TERMINATION OF THE MAXIMUM BONUS AMOUNT PAYABLE TO THE EXECUTIVE
UNDER ALL BONUS PLANS WITH RESPECT TO THE YEAR (OR ANY PORTION THEREOF) IN WHICH
THE DATE OF TERMINATION OCCURS, TREATING ANY AND ALL PERFORMANCE GOALS UNDER
SUCH BONUS PLANS AS HAVING BEEN MET AND CALCULATED BY MULTIPLYING SUCH MAXIMUM
BONUS AMOUNT BY A FRACTION, THE NUMERATOR OF WHICH IS THE NUMBER OF DAYS IN SUCH
YEAR (OR PORTION THEREOF) WHICH ELAPSED TO THE DATE OF TERMINATION AND THE
DENOMINATOR OF WHICH IS THE NUMBER OF DAYS IN SUCH YEAR (OR PORTION THEREOF).

 

(C)                                FOR A TWENTY-FOUR (24) MONTH PERIOD AFTER THE
DATE OF TERMINATION, THE COMPANY SHALL ARRANGE TO PROVIDE THE EXECUTIVE WITH
LIFE, DISABILITY, ACCIDENT AND HEALTH INSURANCE BENEFITS SUBSTANTIALLY SIMILAR
TO THE LIFE, DISABILITY, ACCIDENT AND HEALTH INSURANCE

 

3

--------------------------------------------------------------------------------

 

BENEFITS WHICH THE EXECUTIVE IS RECEIVING IMMEDIATELY PRIOR TO THE NOTICE OF
TERMINATION (WITHOUT GIVING EFFECT TO ANY REDUCTION IN SUCH BENEFITS SUBSEQUENT
TO A CHANGE IN CONTROL WHICH REDUCTION CONSTITUTES GOOD REASON).  BENEFITS
OTHERWISE RECEIVABLE BY THE EXECUTIVE PURSUANT TO THIS SECTION 6.1(C) SHALL BE
REDUCED TO THE EXTENT COMPARABLE BENEFITS ARE ACTUALLY RECEIVED BY OR MADE
AVAILABLE TO THE EXECUTIVE WITHOUT COST DURING THE TWENTY-FOUR (24) MONTH PERIOD
FOLLOWING THE EXECUTIVE’S TERMINATION OF EMPLOYMENT (AND ANY SUCH BENEFITS
ACTUALLY RECEIVED BY THE EXECUTIVE SHALL BE REPORTED TO THE COMPANY BY THE
EXECUTIVE).

 

6.2                                 THE PAYMENTS PROVIDED FOR IN SECTION 6.1
(OTHER THAN SECTION 6.1(C)) HEREOF SHALL BE MADE NOT LATER THAN THE FIFTH (5TH)
DAY FOLLOWING THE EXPIRATION OF THE SEVEN-DAY REVOCATION PERIOD DESCRIBED IN
SECTION 6.6 WITHOUT REVOCATION OF THE RELEASE AND WAIVER BY THE EXECUTIVE,
UNLESS THE COMPANY DETERMINES IN GOOD FAITH THAT SUCH PAYMENTS ARE REQUIRED TO
BE DELAYED FOR A PERIOD OF SIX (6) MONTHS IN ORDER TO SATISFY THE REQUIREMENTS
OF INTERNAL REVENUE CODE §409A(A)(2)(B)(I), IN WHICH CASE THE COMPANY SHALL SO
ADVISE THE EXECUTIVE, AND SUCH PAYMENTS SHALL BE MADE ON THE EARLIER OF (I) SIX
(6) MONTHS AFTER THE DATE OF TERMINATION OR (II) THE DEATH OF THE EXECUTIVE.

 

6.3                                 IF THE EXECUTIVE’S EMPLOYMENT IS TERMINATED
FOLLOWING A CHANGE IN CONTROL AND DURING THE TERM OF THIS AGREEMENT, UNLESS SUCH
TERMINATION IS (I) BY THE COMPANY FOR CAUSE, (II) BY REASON OF DEATH OR
DISABILITY OR (III) BY THE EXECUTIVE WITHOUT GOOD REASON, ALL OUTSTANDING STOCK
OPTIONS HELD BY THE EXECUTIVE FOR THE PURCHASE OF SHARES OF COMMON STOCK OF J.
JILL SHALL IMMEDIATELY BECOME VESTED IN FULL.  THE EXECUTIVE AGREES NOT TO
EXERCISE THE PORTION OF SUCH STOCK OPTIONS FOR WHICH VESTING HAS BEEN
ACCELERATED UNTIL THE SEVEN-DAY REVOCATION PERIOD DESCRIBED IN SECTION 6.6 HAS
EXPIRED WITHOUT REVOCATION OF THE RELEASE AND WAIVER BY THE EXECUTIVE, AND ANY
SUCH EXERCISE BEFORE THE SEVEN-DAY REVOCATION PERIOD HAS EXPIRED WITHOUT
REVOCATION OF THE RELEASE AND WAIVER BY THE EXECUTIVE SHALL BE NULL AND VOID. 
THE EXECUTIVE’S EMPLOYMENT SHALL BE DEEMED TO HAVE BEEN TERMINATED FOLLOWING A
CHANGE IN CONTROL BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE WITH GOOD
REASON IF THE EXECUTIVE’S EMPLOYMENT IS TERMINATED PRIOR TO A CHANGE IN CONTROL
WITHOUT CAUSE AT THE DIRECTION OF A PERSON WHO HAS ENTERED INTO AN AGREEMENT
WITH THE COMPANY THE CONSUMMATION OF WHICH WILL CONSTITUTE A CHANGE IN CONTROL
OR IF THE EXECUTIVE TERMINATES HIS EMPLOYMENT WITH GOOD REASON PRIOR TO A CHANGE
IN CONTROL (DETERMINED BY TREATING A POTENTIAL CHANGE IN CONTROL AS A CHANGE IN
CONTROL IN APPLYING THE DEFINITION OF GOOD REASON) IF THE CIRCUMSTANCE OR EVENT
WHICH CONSTITUTES GOOD REASON OCCURS AT THE DIRECTION OF SUCH PERSON.

 

6.4                                 (I)                                     IF
ANY PAYMENT OR BENEFIT MADE AVAILABLE TO THE EXECUTIVE IN CONNECTION WITH A
CHANGE IN CONTROL (INCLUDING, WITHOUT LIMITATION, ANY PAYMENT MADE PURSUANT TO
ANY LONG-TERM INCENTIVE PLANS, STOCK OPTION OR EQUITY PARTICIPATION RIGHT PLANS)
OR TERMINATION OF THE EXECUTIVE’S EMPLOYMENT FOLLOWING A CHANGE IN CONTROL (IN
EITHER CATEGORY, A “CHANGE IN CONTROL PAYMENT”) IS SUBJECT TO THE EXCISE TAX (AS
HEREINAFTER DEFINED), THE COMPANY SHALL PAY TO THE EXECUTIVE ADDITIONAL AMOUNTS
(THE “GROSS UP AMOUNTS”) SUCH THAT THE TOTAL AMOUNT OF ALL CHANGE IN CONTROL
PAYMENTS NET OF THE EXCISE TAX SHALL EQUAL THE TOTAL AMOUNT OF ALL CHANGE IN
CONTROL PAYMENTS TO WHICH THE EXECUTIVE WOULD HAVE BEEN ENTITLED IF THE EXCISE
TAX HAD NOT BEEN IMPOSED. FOR PURPOSES OF THIS SECTION 6.4, THE TERM “EXCISE
TAX” SHALL MEAN THE TAX IMPOSED BY SECTION 4999 OF THE CODE AND ANY SIMILAR TAX
THAT MAY HEREAFTER BE IMPOSED.

 

4

--------------------------------------------------------------------------------

 

(II)                                  THE GROSS UP AMOUNTS DUE TO THE EXECUTIVE
UNDER THIS SECTION 6.4 SHALL BE ESTIMATED BY A NATIONALLY RECOGNIZED FIRM OF
CERTIFIED PUBLIC ACCOUNTANTS SELECTED BY THE INDIVIDUAL HOLDING THE POSITION OF
CHIEF FINANCIAL OFFICER OF THE COMPANY IMMEDIATELY BEFORE THE CHANGE IN CONTROL
OR SUCH OFFICER’S DESIGNEE, AT ANY TIME THAT THE EXECUTIVE IS TO RECEIVE A
CHANGE IN CONTROL PAYMENT.  THE GROSS UP AMOUNTS WILL BE BASED UPON THE
FOLLOWING ASSUMPTIONS:

 

(A)                              ALL CHANGE IN CONTROL PAYMENTS SHALL BE DEEMED
TO BE “PARACHUTE PAYMENTS” WITHIN THE MEANING OF SECTION 280G(B)(2) OF THE CODE,
AND ALL “EXCESS PARACHUTE PAYMENTS” SHALL BE DEEMED TO BE SUBJECT TO THE EXCISE
TAX EXCEPT TO THE EXTENT THAT, IN THE OPINION OF THE CERTIFIED PUBLIC
ACCOUNTANTS CHARGED WITH ESTIMATING THE GROSS UP AMOUNTS FOR THE EXECUTIVE UNDER
THIS SECTION 6.4, SUCH CHANGE IN CONTROL PAYMENTS ARE NOT SUBJECT TO THE EXCISE
TAX; AND

 

(B)                                THE EXECUTIVE SHALL BE DEEMED TO PAY FEDERAL,
STATE AND LOCAL TAXES AT THE HIGHEST MARGINAL RATE OF TAXATION FOR THE
APPLICABLE CALENDAR YEAR.

 

(III)                               THE ESTIMATED GROSS UP AMOUNT DUE THE
EXECUTIVE WITH RESPECT TO ANY CHANGE IN CONTROL PAYMENT PURSUANT TO THIS
SECTION 6.4 SHALL BE PAID TO THE EXECUTIVE IN A LUMP SUM NOT LATER THAN THIRTY
(30) BUSINESS DAYS AFTER SUCH CHANGE IN CONTROL PAYMENT IS PROVIDED TO THE
EXECUTIVE.  IN THE EVENT THAT THE GROSS UP AMOUNT IS LESS THAN THE AMOUNT
ACTUALLY DUE TO THE EXECUTIVE UNDER THIS SECTION 6.4, THE AMOUNT OF ANY SUCH
SHORTFALL SHALL BE PAID TO THE EXECUTIVE WITHIN TEN (10) DAYS AFTER THE
EXISTENCE OF THE SHORTFALL IS DISCOVERED.  IN THE EVENT THE GROSS UP AMOUNT IS
MORE THAN THE AMOUNT ACTUALLY DUE THE EXECUTIVE UNDER THIS SECTION 6.4, THE
EXECUTIVE SHALL REPAY THE AMOUNT OF SUCH OVERPAYMENT TO THE COMPANY WITHIN A
REASONABLE TIME AFTER THE OVERPAYMENT IS DISCOVERED.

 

6.5                                 THE SEVERANCE PAYMENTS AND OTHER BENEFITS
PROVIDED FOR IN THIS SECTION 6 ARE IN ADDITION TO ANY OTHER PAYMENTS OR BENEFITS
ARISING UPON A CHANGE OF CONTROL UNDER ANY OTHER AGREEMENT OR PLAN, PROGRAM OR
ARRANGEMENT MAINTAINED BY THE COMPANY OTHER THAN THE POST-TERMINATION PAYMENTS
DESCRIBED IN SECTION 5.3.

 

6.6                                 IN RETURN FOR THE SEVERANCE PAYMENTS AND
OTHER BENEFITS PROVIDED FOR IN THIS SECTION 6, THE EXECUTIVE AGREES TO EXECUTE
THE RELEASE AND WAIVER IN THE FORM ATTACHED AS EXHIBIT A HERETO, SAID RELEASE
AND WAIVER TO INCLUDE, WITHOUT LIMITATION, CLAIMS PURSUANT TO THE AGE
DISCRIMINATION IN EMPLOYMENT ACT AND ALL OTHER CLAIMS, INCLUDING CLAIMS UNDER
FEDERAL AND/OR STATE LAW, ARISING OUT OF OR RELATING TO THE EXECUTIVE’S HIRING,
EMPLOYMENT, OR TERMINATION OF EMPLOYMENT.  FOR A PERIOD OF SEVEN DAYS AFTER THE
EXECUTIVE HAS EXECUTED SUCH RELEASE AND WAIVER, THE EXECUTIVE MAY REVOKE THE
RELEASE AND WAIVER.  THE RELEASE AND WAIVER SHALL BECOME EFFECTIVE, AND THE
SEVERANCE PAYMENTS AND OTHER BENEFITS PROVIDED FOR IN THIS SECTION 6 SHALL
BECOME DUE, ONLY UPON THE EXPIRATION OF THE SEVEN-DAY REVOCATION PERIOD WITHOUT
REVOCATION OF THE RELEASE AND WAIVER BY THE EXECUTIVE.  NOTWITHSTANDING THE
FOREGOING, THE COMPANY AND THE EXECUTIVE AGREE THAT THE TERMS OF THIS AGREEMENT
SHALL SURVIVE THE RELEASE AND WAIVER AND THAT CLAIMS TO ENFORCE THE TERMS OF
THIS AGREEMENT ARE NOT DISCHARGED BY THE RELEASE AND WAIVER.

 

5

--------------------------------------------------------------------------------

 

7.                                       TERMINATION PROCEDURES AND COMPENSATION
DURING DISPUTE.

 

7.1                                 NOTICE OF TERMINATION. AFTER A CHANGE IN
CONTROL AND DURING THE TERM OF THIS AGREEMENT, ANY PURPORTED TERMINATION OF THE
EXECUTIVE’S EMPLOYMENT (OTHER THAN BY REASON OF DEATH) SHALL BE COMMUNICATED BY
WRITTEN NOTICE OF TERMINATION FROM ONE PARTY HERETO TO THE OTHER PARTY HERETO IN
ACCORDANCE WITH SECTION 10 HEREOF. FOR PURPOSES OF THIS AGREEMENT, A “NOTICE OF
TERMINATION” SHALL MEAN A NOTICE WHICH INDICATES THE SPECIFIC TERMINATION
PROVISION IN THIS AGREEMENT RELIED UPON AND SETS FORTH IN REASONABLE DETAIL THE
FACTS AND CIRCUMSTANCES CLAIMED TO PROVIDE A BASIS FOR TERMINATION OF THE
EXECUTIVE’S EMPLOYMENT UNDER THE PROVISION SO INDICATED. FURTHER, A NOTICE OF
TERMINATION FOR CAUSE MUST INCLUDE A COPY OF A RESOLUTION DULY ADOPTED BY THE
AFFIRMATIVE VOTE OF NOT LESS THAN TWO-THIRDS OF THE ENTIRE MEMBERSHIP OF THE
BOARD AT A MEETING OF THE BOARD WHICH WAS CALLED AND HELD FOR THE PURPOSE OF
CONSIDERING SUCH TERMINATION (AFTER REASONABLE NOTICE TO THE EXECUTIVE AND AN
OPPORTUNITY FOR THE EXECUTIVE, TOGETHER WITH THE EXECUTIVE’S COUNSEL, TO BE
HEARD BEFORE THE BOARD) FINDING THAT, IN THE GOOD FAITH OPINION OF THE BOARD,
THE EXECUTIVE WAS GUILTY OF CONDUCT SET FORTH IN CLAUSE (I) OR (II) OF THE
DEFINITION OF CAUSE HEREIN, AND SPECIFYING THE PARTICULARS THEREOF IN DETAIL.

 

7.2                                 DATE OF TERMINATION. “DATE OF TERMINATION,”
WITH RESPECT TO ANY PURPORTED TERMINATION OF THE EXECUTIVE’S EMPLOYMENT AFTER A
CHANGE IN CONTROL AND DURING THE TERM OF THIS AGREEMENT, SHALL MEAN (I) IF THE
EXECUTIVE’S EMPLOYMENT IS TERMINATED FOR DISABILITY, THIRTY (30) DAYS AFTER
NOTICE OF TERMINATION IS GIVEN (PROVIDED THAT THE EXECUTIVE SHALL NOT HAVE
RETURNED TO THE FULL-TIME PERFORMANCE OF THE EXECUTIVE’S DUTIES DURING SUCH
THIRTY (30) DAY PERIOD), AND (II) IF THE EXECUTIVE’S EMPLOYMENT IS TERMINATED
FOR ANY OTHER REASON, THE DATE SPECIFIED IN THE NOTICE OF TERMINATION (WHICH, IN
THE CASE OF A TERMINATION BY THE COMPANY, SHALL NOT BE LESS THAN THIRTY (30)
DAYS (EXCEPT IN THE CASE OF A TERMINATION FOR CAUSE) AND, IN THE CASE OF A
TERMINATION BY THE EXECUTIVE, SHALL NOT BE LESS THAN FIFTEEN (15) DAYS NOR MORE
THAN SIXTY (60) DAYS, RESPECTIVELY, FROM THE DATE SUCH NOTICE OF TERMINATION IS
GIVEN).

 

7.3                                 DISPUTE CONCERNING TERMINATION. IF PRIOR TO
THE DATE OF TERMINATION (AS DETERMINED WITHOUT REGARD TO THIS SECTION 7.3), THE
PARTY RECEIVING A NOTICE OF TERMINATION NOTIFIES THE OTHER PARTY THAT A DISPUTE
EXISTS CONCERNING THE TERMINATION, THE DATE OF TERMINATION SHALL BE THE DATE ON
WHICH THE DISPUTE IS FINALLY RESOLVED, EITHER BY MUTUAL WRITTEN AGREEMENT OF THE
PARTIES OR BY A FINAL JUDGMENT, ORDER OR DECREE (WHICH IS NOT APPEALABLE OR WITH
RESPECT TO WHICH THE TIME FOR APPEAL THEREFROM HAS EXPIRED AND NO APPEAL HAS
BEEN PERFECTED) OF A COURT OF COMPETENT JURISDICTION; PROVIDED, HOWEVER, THAT
THE DATE OF TERMINATION SHALL BE EXTENDED BY A NOTICE OF DISPUTE ONLY IF SUCH
NOTICE IS GIVEN IN GOOD FAITH AND THE PARTY GIVING SUCH NOTICE PURSUES THE
RESOLUTION OF SUCH DISPUTE WITH REASONABLE DILIGENCE.

 

7.4                                 COMPENSATION DURING DISPUTE. IF A PURPORTED
TERMINATION OCCURS FOLLOWING A CHANGE IN CONTROL AND DURING THE TERM OF THIS
AGREEMENT, AND SUCH TERMINATION IS DISPUTED IN ACCORDANCE WITH SECTION 7.3
HEREOF, THE COMPANY SHALL CONTINUE TO PAY THE EXECUTIVE THE FULL COMPENSATION IN
EFFECT WHEN THE NOTICE GIVING RISE TO THE DISPUTE WAS GIVEN (INCLUDING, BUT NOT
LIMITED TO, SALARY) AND CONTINUE THE EXECUTIVE AS A PARTICIPANT IN ALL
COMPENSATION, BENEFIT AND INSURANCE PLANS IN WHICH THE EXECUTIVE WAS
PARTICIPATING WHEN THE NOTICE GIVING RISE TO THE DISPUTE WAS GIVEN, UNTIL THE
DISPUTE IS FINALLY RESOLVED IN ACCORDANCE WITH SECTION 7.3 HEREOF. AMOUNTS PAID
UNDER THIS SECTION 7.4 ARE IN ADDITION TO ALL OTHER AMOUNTS DUE UNDER THIS

 

6

--------------------------------------------------------------------------------

 

AGREEMENT (OTHER THAN THOSE DUE UNDER SECTION 5.2 HEREOF) AND SHALL NOT BE
OFFSET AGAINST OR REDUCE ANY OTHER AMOUNTS DUE UNDER THIS AGREEMENT.

 

8.                                       NO MITIGATION. THE COMPANY AGREES THAT,
IF THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY IS TERMINATED DURING THE TERM OF
THIS AGREEMENT, THE EXECUTIVE IS NOT REQUIRED TO SEEK OTHER EMPLOYMENT OR TO
ATTEMPT IN ANY WAY TO REDUCE ANY AMOUNTS PAYABLE TO THE EXECUTIVE BY THE COMPANY
PURSUANT TO SECTION 6 OR SECTION 7.4 HEREOF. FURTHER, THE AMOUNT OF ANY PAYMENT
OR BENEFIT PROVIDED FOR IN SECTION 6 (OTHER THAN SECTION 6.1(C)) OR SECTION 7.4
HEREOF SHALL NOT BE REDUCED BY ANY COMPENSATION EARNED BY THE EXECUTIVE AS THE
RESULT OF EMPLOYMENT BY ANOTHER EMPLOYER, BY RETIREMENT BENEFITS, BY OFFSET
AGAINST ANY AMOUNT CLAIMED TO BE OWED BY THE EXECUTIVE TO THE COMPANY, OR
OTHERWISE.

 

9.                                       SUCCESSORS; BINDING AGREEMENT.

 

9.1                                 IN ADDITION TO ANY OBLIGATIONS IMPOSED BY
LAW UPON ANY SUCCESSOR TO J. JILL, J. JILL WILL REQUIRE ANY SUCCESSOR (WHETHER
DIRECT OR INDIRECT, BY PURCHASE, MERGER, CONSOLIDATION OR OTHERWISE) TO ALL OR
SUBSTANTIALLY ALL OF THE BUSINESS OR ASSETS OF J. JILL TO EXPRESSLY ASSUME AND
AGREE TO PERFORM THIS AGREEMENT IN THE SAME MANNER AND TO THE SAME EXTENT THAT
J. JILL WOULD BE REQUIRED TO PERFORM IT IF NO SUCH SUCCESSION HAD TAKEN PLACE.
FAILURE OF J. JILL TO OBTAIN SUCH ASSUMPTION AND AGREEMENT PRIOR TO THE
EFFECTIVENESS OF ANY SUCH SUCCESSION SHALL BE A BREACH OF THIS AGREEMENT AND
SHALL ENTITLE THE EXECUTIVE TO COMPENSATION IN THE SAME AMOUNT AND ON THE SAME
TERMS AS THE EXECUTIVE WOULD BE ENTITLED TO HEREUNDER IF THE EXECUTIVE WERE TO
TERMINATE THE EXECUTIVE’S EMPLOYMENT FOR GOOD REASON AFTER A CHANGE IN CONTROL,
EXCEPT THAT, FOR PURPOSES OF IMPLEMENTING THE FOREGOING, THE DATE ON WHICH ANY
SUCH SUCCESSION BECOMES EFFECTIVE SHALL BE DEEMED THE DATE OF TERMINATION.

 

9.2                                 THIS AGREEMENT SHALL INURE TO THE BENEFIT OF
AND BE ENFORCEABLE BY THE EXECUTIVE’S PERSONAL OR LEGAL REPRESENTATIVES,
EXECUTORS, ADMINISTRATORS, SUCCESSORS, HEIRS, DISTRIBUTEES, DEVISEES AND
LEGATEES. IF THE EXECUTIVE SHALL DIE WHILE ANY AMOUNT WOULD STILL BE PAYABLE TO
THE EXECUTIVE HEREUNDER (OTHER THAN AMOUNTS WHICH, BY THEIR TERMS, TERMINATE
UPON THE DEATH OF THE EXECUTIVE) IF THE EXECUTIVE HAD CONTINUED TO LIVE, ALL
SUCH AMOUNTS, UNLESS OTHERWISE PROVIDED HEREIN, SHALL BE PAID IN ACCORDANCE WITH
THE TERMS OF THIS AGREEMENT TO THE EXECUTORS, PERSONAL REPRESENTATIVES OR
ADMINISTRATORS OF THE EXECUTIVE’S ESTATE.

 

10.                                 NOTICES.  FOR THE PURPOSE OF THIS AGREEMENT,
NOTICES AND ALL OTHER COMMUNICATIONS PROVIDED FOR IN THIS AGREEMENT SHALL BE IN
WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY GIVEN WHEN DELIVERED OR WHEN
MAILED BY UNITED STATES REGISTERED MAIL, RETURN RECEIPT REQUESTED, POSTAGE
PREPAID, ADDRESSED TO THE RESPECTIVE ADDRESSES SET FORTH BELOW, OR TO SUCH OTHER
ADDRESS AS EITHER PARTY MAY HAVE FURNISHED TO THE OTHER IN WRITING IN ACCORDANCE
HEREWITH, EXCEPT THAT NOTICE OF CHANGE OF ADDRESS SHALL BE EFFECTIVE ONLY UPON
ACTUAL RECEIPT:

To the Company:

The J. Jill Group, Inc.

4 Batterymarch Park

Quincy, Massachusetts  02169-7468

Attention: Chief Financial Officer

 

7

--------------------------------------------------------------------------------

 

with a copy to:

 

David R. Pierson, Esq.

Foley Hoag LLP

Seaport World Trade Center West

155 Seaport Boulevard

Boston, Massachusetts 02210-2600

 

To the Executive:

 

Gordon R. Cooke

400 East 57th Street

New York, New York 10022

 

11.                                 MISCELLANEOUS.  NO PROVISION OF THIS
AGREEMENT MAY BE MODIFIED, WAIVED OR DISCHARGED UNLESS SUCH WAIVER, MODIFICATION
OR DISCHARGE IS AGREED TO IN WRITING AND SIGNED BY THE EXECUTIVE AND SUCH
OFFICER AS MAY BE SPECIFICALLY DESIGNATED BY THE BOARD.  NO WAIVER BY EITHER
PARTY HERETO AT ANY TIME OF ANY BREACH BY THE OTHER PARTY HERETO OF, OR
COMPLIANCE WITH, ANY CONDITION OR PROVISION OF THIS AGREEMENT TO BE PERFORMED BY
SUCH OTHER PARTY SHALL BE DEEMED A WAIVER OF SIMILAR OR DISSIMILAR PROVISIONS OR
CONDITIONS AT THE SAME OR AT ANY PRIOR OR SUBSEQUENT TIME.  NO AGREEMENTS OR
REPRESENTATIONS, ORAL OR OTHERWISE, EXPRESS OR IMPLIED, WITH RESPECT TO THE
SUBJECT MATTER HEREOF HAVE BEEN MADE BY EITHER PARTY WHICH ARE NOT EXPRESSLY SET
FORTH IN THIS AGREEMENT.  THIS AGREEMENT SUPERSEDES THE PRIOR AGREEMENT IN ITS
ENTIRETY.  THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS,
WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.  ALL REFERENCES TO
SECTIONS OF THE EXCHANGE ACT SHALL BE DEEMED ALSO TO REFER TO ANY SUCCESSOR
PROVISIONS TO SUCH SECTIONS. ANY PAYMENTS PROVIDED FOR HEREUNDER SHALL BE PAID
NET OF ANY APPLICABLE WITHHOLDING REQUIRED UNDER FEDERAL, STATE OR LOCAL LAW AND
ANY ADDITIONAL WITHHOLDING TO WHICH THE EXECUTIVE HAS AGREED. THE OBLIGATIONS OF
THE COMPANY AND THE EXECUTIVE UNDER SECTIONS 6 AND 7 HEREOF SHALL SURVIVE THE
EXPIRATION OF THE TERM OF THIS AGREEMENT.

 

12.                                 VALIDITY. THE INVALIDITY OR UNENFORCEABILITY
OR ANY PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR
ENFORCEABILITY OF ANY OTHER PROVISION OF THIS AGREEMENT, WHICH SHALL REMAIN IN
FULL FORCE AND EFFECT.

 

13.                                 COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED
IN SEVERAL COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL BUT ALL
OF WHICH TOGETHER WILL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

14.                                 SETTLEMENT OF DISPUTES; ARBITRATION. ALL
CLAIMS BY THE EXECUTIVE FOR BENEFITS UNDER THIS AGREEMENT SHALL BE DIRECTED TO
AND DETERMINED BY THE BOARD AND SHALL BE IN WRITING. ANY DENIAL BY THE BOARD OF
A CLAIM FOR BENEFITS UNDER THIS AGREEMENT SHALL BE DELIVERED TO THE EXECUTIVE IN
WRITING AND SHALL SET FORTH THE SPECIFIC REASONS FOR THE DENIAL AND THE SPECIFIC
PROVISIONS OF THIS AGREEMENT RELIED UPON. THE BOARD SHALL AFFORD A REASONABLE
OPPORTUNITY TO THE EXECUTIVE FOR A REVIEW OF THE DECISION DENYING A CLAIM AND
SHALL FURTHER ALLOW THE EXECUTIVE TO APPEAL TO THE BOARD A DECISION OF THE BOARD
WITHIN SIXTY (60) DAYS AFTER NOTIFICATION BY THE BOARD

 

8

--------------------------------------------------------------------------------

 

THAT THE EXECUTIVE’S CLAIM HAS BEEN DENIED. ANY FURTHER DISPUTE OR CONTROVERSY
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT SHALL BE SETTLED EXCLUSIVELY
BY ARBITRATION IN BOSTON, MASSACHUSETTS, IN ACCORDANCE WITH THE RULES OF THE
AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT.  JUDGMENT MAY BE ENTERED ON THE
ARBITRATOR’S AWARD IN ANY COURT HAVING JURISDICTION; PROVIDED, HOWEVER, THAT THE
EXECUTIVE SHALL BE ENTITLED TO SEEK SPECIFIC PERFORMANCE OF THE EXECUTIVE’S
RIGHT TO BE PAID UNTIL THE DATE OF TERMINATION DURING THE PENDENCY OF ANY
DISPUTE OR CONTROVERSY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT.

 

15.                                 DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT,
THE FOLLOWING TERMS SHALL HAVE THE MEANINGS INDICATED BELOW:

 

(A)                              “BENEFICIAL OWNER” SHALL HAVE THE MEANING
DEFINED IN RULE 13D-3 UNDER THE EXCHANGE ACT.

 

(B)                                “BOARD” SHALL MEAN THE BOARD OF DIRECTORS OF
J. JILL.

 

(C)                                “BONUS PLAN” SHALL MEAN A J. JILL INCENTIVE
COMPENSATION PLAN, SUPPLEMENTAL BONUS PLAN OR OTHER BONUS OR SUPPLEMENTARY
COMPENSATION PLAN OR ARRANGEMENT APPLICABLE TO THE EXECUTIVE.

 

(D)                               “CAUSE” FOR TERMINATION BY THE COMPANY OF THE
EXECUTIVE’S EMPLOYMENT, AFTER ANY CHANGE IN CONTROL, SHALL MEAN (I) THE WILLFUL
AND CONTINUED FAILURE BY THE EXECUTIVE TO SUBSTANTIALLY PERFORM THE EXECUTIVE’S
DUTIES WITH THE COMPANY (OTHER THAN ANY SUCH FAILURE RESULTING FROM THE
EXECUTIVE’S INCAPACITY DUE TO PHYSICAL OR MENTAL ILLNESS OR ANY SUCH ACTUAL OR
ANTICIPATED FAILURE AFTER THE ISSUANCE OF A NOTICE OF TERMINATION FOR GOOD
REASON BY THE EXECUTIVE PURSUANT TO SECTION 7.1 HEREOF) AFTER A WRITTEN DEMAND
FOR SUBSTANTIAL PERFORMANCE IS DELIVERED TO THE EXECUTIVE BY THE BOARD, WHICH
DEMAND SPECIFICALLY IDENTIFIES THE MANNER IN WHICH THE BOARD BELIEVES THAT THE
EXECUTIVE HAS NOT SUBSTANTIALLY PERFORMED THE EXECUTIVE’S DUTIES, OR (II) THE
WILLFUL ENGAGING BY THE EXECUTIVE IN CONDUCT WHICH IS DEMONSTRABLY AND
MATERIALLY INJURIOUS TO THE COMPANY, MONETARILY OR OTHERWISE. FOR PURPOSES OF
CLAUSES (I) AND (II) OF THIS DEFINITION, NO ACT, OR FAILURE TO ACT, ON THE
EXECUTIVE’S PART SHALL BE DEEMED “WILLFUL” UNLESS DONE, OR OMITTED TO BE DONE,
BY THE EXECUTIVE NOT IN GOOD FAITH AND WITHOUT REASONABLE BELIEF THAT THE
EXECUTIVE’S ACT, OR FAILURE TO ACT, WAS IN THE BEST INTEREST OF THE COMPANY.

 

(E)                                 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 BECOMES THE BENEFICIAL OWNER,
DIRECTLY OR INDIRECTLY, OF SECURITIES OF J. JILL REPRESENTING 50% OR MORE OF THE
COMBINED VOTING POWER OF J. JILL’S THEN OUTSTANDING SECURITIES; OR

 

(II)                                DURING ANY PERIOD OF TWO (2) CONSECUTIVE
YEARS (NOT INCLUDING ANY PERIOD PRIOR TO THE EXECUTION OF THIS AGREEMENT),
INDIVIDUALS WHO AT THE BEGINNING OF SUCH PERIOD CONSTITUTE 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

 

9

--------------------------------------------------------------------------------

 

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 Executive if the Executive is “part
of a purchasing group” which consummates the Change in Control transaction. The
Executive shall be deemed “part of a purchasing group” for purposes of the
preceding sentence if the Executive is an equity participant or has 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 non-employee Continuing Directors).

 

(F)                                 “CHANGE IN CONTROL PAYMENT” SHALL HAVE THE
MEANING STATED IN SECTION 6.4 HEREOF.

 

(G)                                “CODE” SHALL MEAN THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED.

 

(H)                               “COMPANY” SHALL MEAN J. JILL AND ITS
SUBSIDIARIES.

 

(I)                                    “DATE OF TERMINATION” SHALL HAVE THE
MEANING STATED IN SECTION 7.2 HEREOF.

 

(J)                                   “DISABILITY” SHALL BE DEEMED THE REASON
FOR THE TERMINATION BY THE COMPANY OF THE EXECUTIVE’S EMPLOYMENT, IF, AS A
RESULT OF THE EXECUTIVE’S INCAPACITY DUE TO PHYSICAL OR MENTAL ILLNESS, THE
EXECUTIVE SHALL HAVE BEEN ABSENT FROM THE FULL-TIME PERFORMANCE OF THE
EXECUTIVE’S DUTIES WITH THE COMPANY FOR A PERIOD OF SIX (6) CONSECUTIVE MONTHS,
THE COMPANY SHALL HAVE GIVEN THE EXECUTIVE A NOTICE OF TERMINATION FOR
DISABILITY, AND, WITHIN THIRTY (30) DAYS AFTER SUCH NOTICE OF TERMINATION IS
GIVEN, THE EXECUTIVE SHALL NOT HAVE RETURNED TO THE FULL-TIME PERFORMANCE OF THE
EXECUTIVE’S DUTIES.

 

(K)                               “EXCHANGE ACT” SHALL MEAN THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED FROM TIME TO TIME.

 

(L)                                 “EXCISE TAX” SHALL HAVE THE MEANING STATED
IN SECTION 6.4 HEREOF.

 

10

--------------------------------------------------------------------------------

 

(M)                            “EXECUTIVE” SHALL MEAN THE INDIVIDUAL NAMED IN
THE FIRST PARAGRAPH OF THIS AGREEMENT.

 

(N)                               “GOOD REASON” FOR TERMINATION BY THE EXECUTIVE
OF THE EXECUTIVE’S EMPLOYMENT SHALL MEAN THE OCCURRENCE (WITHOUT THE EXECUTIVE’S
EXPRESS WRITTEN CONSENT) OF ANY ONE OF THE FOLLOWING ACTS BY THE COMPANY, OR
FAILURES BY THE COMPANY TO ACT, UNLESS, IN THE CASE OF ANY ACT OR FAILURE TO ACT
DESCRIBED IN PARAGRAPH (I), (V), (VI), (VII), OR (VIII) BELOW, SUCH ACT OR
FAILURE TO ACT IS CORRECTED PRIOR TO THE DATE OF TERMINATION SPECIFIED IN THE
NOTICE OF TERMINATION GIVEN IN RESPECT THEREOF:

 

(I)                                    THE ASSIGNMENT TO THE EXECUTIVE OF ANY
DUTIES INCONSISTENT WITH THE EXECUTIVE’S STATUS AS A SENIOR OFFICER OF THE
COMPANY OR A SUBSTANTIAL ADVERSE ALTERATION IN THE NATURE OR STATUS OF THE
EXECUTIVE’S RESPONSIBILITIES FROM THOSE IN EFFECT IMMEDIATELY PRIOR TO THE
CHANGE IN CONTROL;

 

(II)                                A REDUCTION BY THE COMPANY IN THE
EXECUTIVE’S ANNUAL BASE SALARY AS IN EFFECT ON THE DATE HEREOF OR AS THE SAME
MAY BE INCREASED FROM TIME TO TIME;

 

(III)                            THE COMPANY’S REQUIRING THAT THE EXECUTIVE’S
PRINCIPAL PLACE OF BUSINESS BE AT AN OFFICE LOCATED MORE THAN 25 MILES FROM
(I) THE SITE OF THE EXECUTIVE’S PRINCIPAL PLACE OF BUSINESS IMMEDIATELY PRIOR TO
THE CHANGE IN CONTROL OR (II) NEW YORK, NEW YORK, EXCEPT FOR REQUIRED TRAVEL ON
THE COMPANY’S BUSINESS TO AN EXTENT SUBSTANTIALLY CONSISTENT WITH THE
EXECUTIVE’S PRESENT BUSINESS TRAVEL OBLIGATIONS;

 

(IV)                            THE FAILURE BY THE COMPANY, WITHOUT THE
EXECUTIVE’S CONSENT, TO PAY TO THE EXECUTIVE ANY PORTION OF THE EXECUTIVE’S THEN
CURRENT COMPENSATION, OR TO PAY TO THE EXECUTIVE ANY PORTION OF AN INSTALLMENT
OF DEFERRED COMPENSATION UNDER ANY DEFERRED COMPENSATION PROGRAM OF THE COMPANY,
WITHIN SEVEN (7) DAYS OF THE DATE SUCH COMPENSATION IS DUE;

 

(V)                                THE FAILURE BY THE COMPANY TO CONTINUE IN
EFFECT ANY COMPENSATION PLAN IN WHICH THE EXECUTIVE PARTICIPATES IMMEDIATELY
PRIOR TO THE CHANGE IN CONTROL WHICH IS MATERIAL TO THE EXECUTIVE’S TOTAL
COMPENSATION, UNLESS AN EQUITABLE ARRANGEMENT (EMBODIED IN AN ONGOING SUBSTITUTE
OR ALTERNATIVE PLAN) HAS BEEN MADE WITH RESPECT TO SUCH PLAN, OR THE FAILURE BY
THE COMPANY TO CONTINUE THE EXECUTIVE’S PARTICIPATION THEREIN (OR IN SUCH
SUBSTITUTE OR ALTERNATIVE PLAN) ON A BASIS NOT MATERIALLY LESS FAVORABLE, BOTH
IN TERMS OF THE AMOUNT OF BENEFITS PROVIDED AND THE LEVEL OF THE EXECUTIVE’S
PARTICIPATION RELATIVE TO OTHER PARTICIPANTS, AS EXISTED AT THE TIME OF THE
CHANGE IN CONTROL;

 

(VI)                            THE FAILURE BY THE COMPANY TO CONTINUE TO
PROVIDE THE EXECUTIVE WITH BENEFITS SUBSTANTIALLY SIMILAR TO THOSE ENJOYED BY
THE EXECUTIVE UNDER ANY OF THE COMPANY’S PENSION, LIFE INSURANCE, MEDICAL,
HEALTH AND ACCIDENT, OR DISABILITY PLANS IN WHICH THE EXECUTIVE WAS
PARTICIPATING AT THE TIME OF THE CHANGE IN CONTROL, THE TAKING OF ANY ACTION BY
THE COMPANY WHICH WOULD DIRECTLY OR INDIRECTLY MATERIALLY REDUCE ANY OF SUCH
BENEFITS OR DEPRIVE THE EXECUTIVE OF ANY MATERIAL FRINGE BENEFIT ENJOYED BY THE
EXECUTIVE AT THE TIME OF THE CHANGE IN CONTROL, OR THE FAILURE BY THE COMPANY TO
PROVIDE THE EXECUTIVE WITH THE NUMBER OF PAID VACATION DAYS TO WHICH THE
EXECUTIVE IS ENTITLED ON THE BASIS OF YEARS OF SERVICE WITH THE

 

11

--------------------------------------------------------------------------------

 

COMPANY IN ACCORDANCE WITH THE COMPANY’S NORMAL VACATION POLICY IN EFFECT AT THE
TIME OF THE CHANGE IN CONTROL; OR

 

(VII)                        ANY PURPORTED TERMINATION OF THE EXECUTIVE’S
EMPLOYMENT WHICH IS NOT EFFECTED PURSUANT TO A NOTICE OF TERMINATION SATISFYING
THE REQUIREMENTS OF SECTION 10 HEREOF; FOR PURPOSES OF THIS AGREEMENT, NO SUCH
PURPORTED TERMINATION SHALL BE EFFECTIVE.

 

The Executive’s right to terminate the Executive’s employment for Good Reason
shall not be affected by the Executive’s incapacity due to physical or mental
illness. The Executive’s continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.

 

(O)                               “GROSS UP AMOUNTS” SHALL HAVE THE MEANING
STATED IN SECTION 6.4 HEREOF.

 

(P)                                 “J. JILL” SHALL MEAN THE J. JILL GROUP, INC.
AND ANY SUCCESSOR TO ITS BUSINESS OR ASSETS WHICH ASSUMES AND AGREES TO PERFORM
THIS AGREEMENT BY OPERATION OF LAW, OR OTHERWISE (EXCEPT IN DETERMINING, UNDER
SECTION 15(E) HEREOF, WHETHER OR NOT ANY CHANGE IN CONTROL OF J. JILL HAS
OCCURRED IN CONNECTION WITH SUCH SUCCESSION).

 

(Q)                               “NOTICE OF TERMINATION” SHALL HAVE THE MEANING
STATED IN SECTION 7.1 HEREOF.

 

(R)                                “PERSON” SHALL HAVE THE MEANING GIVEN IN
SECTION 3(A)(9) OF THE EXCHANGE ACT, AS MODIFIED AND USED IN SECTIONS 13(D) AND
14(D) THEREOF; 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, (III) 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.

 

(S)                                 “POST-TERMINATION PAYMENTS” SHALL HAVE THE
MEANING STATED IN SECTION 5.3 HEREOF.

 

(T)                                A “POTENTIAL 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)                                    J. JILL ENTERS INTO AN AGREEMENT, THE
CONSUMMATION OF WHICH WOULD RESULT IN THE OCCURRENCE OF A CHANGE IN CONTROL;

 

(II)                                J. JILL OR ANY PERSON PUBLICLY ANNOUNCES AN
INTENTION TO TAKE OR TO CONSIDER TAKING ACTIONS WHICH, IF CONSUMMATED, WOULD
CONSTITUTE A CHANGE IN CONTROL;

 

(III)                            ANY PERSON WHO IS OR BECOMES THE BENEFICIAL
OWNER, DIRECTLY OR INDIRECTLY, OF SECURITIES OF J. JILL REPRESENTING AT LEAST
20% OR MORE OF THE COMBINED VOTING POWER OF J. JILL’S THEN OUTSTANDING
SECURITIES INCREASES SUCH PERSON’S BENEFICIAL OWNERSHIP OF SUCH SECURITIES BY 5%
OR MORE OVER THE PERCENTAGE SO OWNED BY SUCH PERSON ON THE DATE HEREOF; OR

 

12

--------------------------------------------------------------------------------

 

(IV)                            THE BOARD ADOPTS A RESOLUTION TO THE EFFECT
THAT, FOR PURPOSES OF THIS AGREEMENT, A POTENTIAL CHANGE IN CONTROL HAS
OCCURRED.

 

The foregoing to the contrary notwithstanding, a Potential Change in Control
shall not be deemed to have occurred with respect to the Executive if (i) the
event first giving rise to the Potential Change in Control involves a publicly
announced transaction or publicly announced proposed transaction which at the
time of the announcement has not been previously approved by the Board and
(ii) the Executive is “part of a purchasing group” proposing the transaction. 
The Executive shall be deemed “part of a purchasing group” for purposes of the
preceding sentence if the Executive is an equity participant or has 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 Potential
Change in Control by a majority of the non-employee Continuing Directors).

 

(U)                               “SEVERANCE PAYMENTS” SHALL MEAN THOSE PAYMENTS
DESCRIBED IN SECTION 6.1 HEREOF.

 

(V)                                “SUBSIDIARY” SHALL MEAN ANY CORPORATION,
PARTNERSHIP, LIMITED LIABILITY COMPANY OR OTHER ENTITY, AT LEAST A MAJORITY OF
THE OUTSTANDING VOTING SHARES OR CONTROLLING INTEREST OF WHICH IS AT THE TIME
DIRECTLY OR INDIRECTLY OWNED OR CONTROLLED (EITHER ALONE OR THROUGH SUBSIDIARIES
OR TOGETHER WITH SUBSIDIARIES) BY J. JILL OR ANOTHER SUBSIDIARY.

 

[signature page follows]

 

13

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Change In Control Severance
Agreement as of the date first above written.

 

 

THE J. JILL GROUP, INC.

 

 

 

 

 

By

/s/ Ruth M. Owades

 

 

 

Authorized Officer

 

 

 

 

/s/ Gordon R. Cooke

 

 

Gordon R. Cooke

 

14

--------------------------------------------------------------------------------

 

EXHIBIT A

 

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
Change In Control Severance Agreement dated December 21, 2005 between The J.
Jill Group, Inc. (“J. Jill”) and Gordon R. Cooke (the “Executive”) to which this
General Release and Waiver Of All Claims is attached (the “Agreement”), the
Executive, for himself and for his heirs, executors, estates, agents,
representatives, attorneys, insurers, successors and assigns (collectively, the
“Releasors”), hereby voluntarily releases and forever discharges J. Jill and its
subsidiaries (direct and indirect), affiliates, related companies, divisions,
and predecessor and successor companies (J. Jill and such subsidiaries,
affiliates, related companies, divisions and predecessor and successor companies
being collectively referred to as the “Company”), and each of its and their
present, former and future shareholders, officers, directors, employees, agents,
representatives, attorneys, insurers, heirs, successors and assigns in their
capacities as such (J. Jill, its subsidiaries, affiliates, related companies,
divisions and predecessor and successor companies and its and their present,
former and future shareholders, officers, directors, employees, agents,
representatives, attorneys, insurers, heirs, successors and assigns in their
capacities as such being collectively referred to as 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 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 the Executive’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 or
Massachusetts laws, statutes and regulations, including common or constitutional
law).

 

THE EXECUTIVE REPRESENTS AND WARRANTS THAT THE EXECUTIVE KNOWINGLY AND
VOLUNTARILY WAIVES ALL RIGHTS OR CLAIMS ARISING PRIOR TO THE EXECUTIVE’S
EXECUTION OF THIS RELEASE AND WAIVER THAT THE EXECUTIVE 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 THE EXECUTIVE’S BEHALF IN ANY STATE OR
FEDERAL AGENCY AND/OR AS A CONSEQUENCE OF ANY LITIGATION CONCERNING ANY FACTS
ALLEGED IN ANY SUCH ACTION.

 

THE EXECUTIVE FURTHER REPRESENTS THAT:

 

(a)                                  The Company has advised the Executive to
consult with an attorney of the Executive’s choosing concerning the rights
waived in this Release and Waiver.  The

 

A-1

--------------------------------------------------------------------------------

 

Executive has carefully read and fully understands this Release and Waiver, and
is voluntarily entering into this Release and Waiver.

(b)                                  The Executive understands that the
Executive has 21 days to review this Release and Waiver prior to its execution. 
If at any time prior to the end of the 21 day period, the Executive executes
this Release and Waiver, the Executive acknowledges that such early execution is
a knowing and voluntary waiver of the Executive’s right to consider this Release
and Waiver for at least 21 days and is due to the Executive’s belief that the
Executive has had ample time in which to consider and understand this Release
and Waiver and in which to review this Release and Waiver with an attorney.

 

(c)                                  The Executive understands that, for a
period of seven days after the Executive has executed this Release and Waiver,
the Executive may revoke this Release and Waiver by giving notice in writing of
such revocation to the Company in accordance with Section 10 of the Agreement. 
If at any time after the end of the seven-day period the Executive accepts any
of the payments or benefits provided described in Section 6 of the Agreement,
such acceptance will constitute an admission by the Executive that the Executive
did not revoke this Release and Waiver during the revocation period and will
further constitute an admission by the Executive that this Release and Waiver
has become effective and enforceable.

 

(d)                                  The Executive understands the effect of
this Release and Waiver and that the Executive gives up any rights the Executive
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)                                  The Executive understands that the
Executive is receiving benefits pursuant to the Agreement that the Executive
would not otherwise be entitled to if the Executive did not enter into this
Release and Waiver.

 

(f)                                    The Executive acknowledges that the
severance pay and associated benefits specified in the Agreement represent all
payments and benefits owed to the Executive and that upon receipt of said
payments and benefits, the Executive shall have received all payments and
benefits owed to the Executive in connection with the Executive’s employment
with the Company and that no additional payments or benefits are due.

 

Signed and sealed this          day of           , 200  .

 

Please note that you may revoke this Release and Waiver within 7 days of
signing, in which case this Release and Waiver shall be void.

 

 

 

 

 

Gordon R. Cooke

 

A-2

--------------------------------------------------------------------------------