Exhibit 10.1

 

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THE J. JILL GROUP, INC.

Plan Document

 

 

Effective January 1, 2005

 

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Table of Contents

 

 

Page

ARTICLE 1 Definitions

1

1.1

“Account Balance”

1

1.2

“Annual Base Salary”

1

1.3

“Annual Company Contribution Amount”

1

1.4

“Annual Company Matching Amount”

1

1.5

“Annual Deferral Amount”

1

1.6

“Beneficiary”

2

1.7

“Beneficiary Designation Form”

2

1.8

“Board”

2

1.9

“Change in Control”

2

1.10

“Claimant”

3

1.11

“Code”

3

1.12

“Company”

3

1.13

“Company Contribution Account”

3

1.14

“Company Matching Account”

3

1.15

“Compensation Committee”

3

1.16

“Deferral Account”

3

1.17

“Disability”

3

1.18

“Disability Benefit”

3

1.19

“Effective Date”

3

1.20

“Election Form”

4

1.21

“Eligible Employee”

4

1.22

“ERISA”

4

1.23

“401(k) Plan”

4

1.24

“Incentive Payments”

4

1.25

“Key Employee”

4

1.26

“Leave of Absence”

4

1.27

“Participant”

4

1.28

“Plan”

5

1.29

“Plan Agreement”

5

1.30

“Plan Committee”

5

1.31

“Plan Year”

5

1.32

“Retirement”

5

1.33

“Retirement Benefit”

5

1.34

“Separation from Service”

5

1.35

“Short-Term Payout”

5

1.36

“Termination Benefit”

5

1.37

“Termination of Employment”

5

1.38

“Trust”

5

1.39

“Unforeseeable Financial Emergency”

5

1.40

“Yearly Installment Method”

6

1.41

“Years of Service”

6

 

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ARTICLE 2 Selection, Enrollment, Eligibility

6

2.1

Eligibility

6

2.2

Initial Enrollment Requirements

6

2.3

Commencement of Participation

6

2.4

Termination of Participation

6

 

 

 

ARTICLE 3 Deferral and Payment Elections, Company Contributions, Vesting,
Investment, Taxes

7

3.1

Minimum Deferral.

7

3.2

Maximum Deferral.

7

3.3

Election to Defer, Effect of Election Form.

7

3.4

Company Contribution Amount

8

3.5

Company Matching Amount

8

3.6

Election of Time and Form of Payment.

8

3.7

Investment of Trust Assets

9

3.8

Vesting.

9

3.9

Crediting, Debiting of Account Balances

9

3.10

FICA and Other Taxes.

11

3.11

Distributions.

12

 

 

 

ARTICLE 4 Short-Term Payout and Unforeseeable Financial Emergencies

12

4.1

Short-Term Payout

12

4.2

Other Benefits Take Precedence Over Short-Term Payout

13

4.3

Unforeseeable Financial Emergencies

13

 

 

 

ARTICLE 5 Retirement Benefit

13

5.1

Retirement Benefit

13

5.2

Payment of Retirement Benefit

13

5.3

Limitation on Key Employees.

13

5.4

Death Prior to Completion of Retirement Benefit

13

 

 

 

ARTICLE 6 Pre-Retirement Survivor Benefit

14

6.1

Pre-Retirement Survivor Benefit

14

6.2

Payment of Pre-Retirement Survivor Benefit

14

 

 

 

ARTICLE 7 Termination Benefit; Change in Control Benefit

14

7.1

Termination Benefit

14

7.2

Payment of Termination Benefit

14

7.3

Limitation on Key Employees.

14

7.4

Change in Control Benefit

14

 

 

 

ARTICLE 8 Disability Benefit

14

8.1

Disability Benefit.

14

8.2

Payment of Disability Benefit.

14

 

 

 

ARTICLE 9 Beneficiary Designation

15

9.1

Beneficiary

15

9.2

Beneficiary Designation, Change

15

9.3

Acknowledgment

15

9.4

No Beneficiary Designation

15

 

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9.5

Doubt as to Beneficiary

15

9.6

Discharge of Obligations

15

 

 

 

ARTICLE 10 Leave of Absence

16

10.1

Company Paid Leave of Absence

16

10.2

Unpaid Leave of Absence

16

10.3

Failure to Return.

16

 

 

 

ARTICLE 11 Termination or Amendment

16

11.1

Termination

16

11.2

Effect of Payment

17

11.3

Amendment

17

 

 

 

ARTICLE 12 Administration

18

12.1

Plan Committee Duties

18

12.2

Agents

18

12.3

Binding Effect of Decisions

18

12.4

Indemnity of Committee Members

18

12.5

Company Information

18

12.6

Delegation of Authority.

19

 

 

 

ARTICLE 13 Claims Procedure

19

13.1

Presentation of Claim

19

13.2

Notification of Decision

19

13.3

Review of a Denied Claim

19

13.4

Decision on Review

20

13.5

Legal Action

20

 

 

 

ARTICLE 14 Trust

20

14.1

Establishment of the Trust

20

14.2

Interrelationship of the Plan and the Trust

20

14.3

Distributions from the Trust

20

 

 

 

ARTICLE 15 Miscellaneous

20

15.1

Status of Plan

20

15.2

Unsecured General Creditor

21

15.3

Company’s Liability

21

15.4

Nonassignability

21

15.5

Not a Contract of Employment

21

15.6

Furnishing Information

21

15.7

Terms

21

15.8

Captions

21

15.9

Governing Law

22

15.10

Notice

22

15.11

Successors

22

15.12

Spouse’s Interest

22

15.13

Validity

22

15.14

Incompetent

22

15.15

Distribution Pursuant to Court Order/Divestiture Certificate

22

 

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15.16

Distribution Upon Income Inclusion Under Code §409A.

23

15.17

Insurance

23

 

iv

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THE J. JILL GROUP, INC.

 

2005 DEFERRED COMPENSATION PLAN

 

Effective January 1, 2005

 

Purpose

 

The purpose of this Plan is to provide specified benefits to a select group of
management or highly compensated employees of The J. Jill Group, Inc. (the
“Company”).  This Plan shall be unfunded for tax purposes and for purposes of
Title I of ERISA.

 

ARTICLE 1
DEFINITIONS

 

For purposes of this Plan, unless otherwise clearly apparent from the context,
the following phrases or terms shall have the following indicated meanings:

 

1.1                                 “Account Balance” shall mean, with respect
to a Participant, a credit on the records of the Company equal to the sum of
(i) the Deferral Account balance, (ii) the Company Contribution Account balance,
and (iii) the Company Matching Account balance.  The Account Balance, and each
other specified account balance, shall be a bookkeeping entry only and shall be
utilized solely as a device for the measurement and determination of the amounts
to be paid to a Participant, or his or her designated Beneficiary, pursuant to
this Plan.  With respect to a distribution event as set forth in Articles 5,6,7
and 8, the Account Balance shall be determined as of the date of the operative
event.

 

1.2                                 “Annual Base Salary” shall mean the annual
cash compensation paid during the Plan Year, excluding incentive payments and
other incentives, bonuses, commissions, overtime, fringe benefits, severance,
stock options, relocation expenses, non-monetary awards, fees, automobile and
other allowances paid to a Participant for employment services rendered (whether
or not such allowances are included in the Employee’s gross income).  Annual
Base Salary shall be calculated without regard to any reductions for
compensation voluntarily deferred or contributed by the Participant pursuant to
all qualified or non-qualified plans of the Company (and therefore shall be
calculated to include amounts not otherwise included in the Participant’s gross
income under Code Sections 125, 132(f), 402(e)(3) or 402(h) pursuant to plans
established by the Company).

 

1.3                                 “Annual Company Contribution Amount” shall
mean, for the Plan Year of reference, the amount determined in accordance with
Section 3.4.

 

1.4                                 “Annual Company Matching Amount” shall mean,
for the Plan Year of reference, the amount determined in accordance with
Section 3.5.

 

1.5                                 “Annual Deferral Amount” shall mean that
portion of a Participant’s Annual Base Salary and/or Incentive Payments that a
Participant elects to have, and is, deferred in accordance with Article 3, for
the Plan Year of reference.  In the event of a Participant’s Retirement,
Disability, death or a Termination of Employment prior to the end of a Plan

 

1

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Year, such year’s Annual Deferral Amount shall be the actual amount withheld
prior to such event.

 

1.6                                 “Beneficiary” shall mean one or more
persons, trusts, estates or other entities, designated in accordance with
Article 9, that are entitled to receive benefits under this Plan upon the death
of a Participant.

 

1.7                                 “Beneficiary Designation Form” shall mean
the form that a Participant completes, signs and returns to the Company to
designate one or more Beneficiaries.

 

1.8                                 “Board” shall mean the board of directors of
the Company.

 

1.9                                 “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 ONE PERSON, OR MORE THAN ONE PERSON
ACTING AS A GROUP, ACQUIRES (OR HAS ACQUIRED DURING THE TWELVE-MONTH PERIOD
ENDING ON THE DATE OF THE MOST RECENT ACQUISITION BY SUCH PERSON OR PERSONS)
OWNERSHIP, DIRECTLY OR INDIRECTLY, OF SECURITIES OF THE COMPANY (NOT INCLUDING
AS SECURITIES OWNED BY SUCH PERSON ANY SECURITIES ACQUIRED DIRECTLY FROM THE
COMPANY OR ITS AFFILIATES) REPRESENTING 50% OR MORE OF THE COMBINED VOTING POWER
OF THE COMPANY’S THEN OUTSTANDING SECURITIES; OR

 

(II)                                  DURING ANY TWELVE-MONTH PERIOD,
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 THE COMPANY TO EFFECT A TRANSACTION DESCRIBED IN CLAUSE (I),
(III) OR (IV) OF THIS PARAGRAPH) WHOSE ELECTION BY THE BOARD OR NOMINATION FOR
ELECTION BY THE COMPANY’S STOCKHOLDERS WAS APPROVED BY A VOTE OF AT LEAST A
MAJORITY 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)                               A MERGER OR CONSOLIDATION OF THE COMPANY
WITH ANY OTHER CORPORATION, OTHER THAN (A) A MERGER OR CONSOLIDATION WHICH WOULD
RESULT IN THE VOTING SECURITIES OF THE COMPANY 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 THE COMPANY OR SUCH SURVIVING
ENTITY OUTSTANDING IMMEDIATELY AFTER SUCH MERGER OR CONSOLIDATION, OR (B) A
MERGER OR CONSOLIDATION EFFECTED TO IMPLEMENT A RECAPITALIZATION OF THE COMPANY
(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 SALE OR DISPOSITION BY THE COMPANY OF ALL
OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS DURING A TWELVE-MONTH PERIOD.

 

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

 

2

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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 (a) passive ownership
of less than 5% of the stock of the purchasing company or (b) 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).

 

This “Change in Control” definition is intended to comply with §409A of the Code
and the Treasury regulations and guidance issued thereunder and shall be
construed in accordance with said regulations and guidance.

 

1.10                           “Claimant” shall have the meaning set forth in
Section 13.1.

 

1.11                           “Code” shall mean the Internal Revenue Code of
1986, as amended from time to time.

 

1.12                           “Company” shall mean The J. Jill Group, Inc.,
together with its wholly-owned affiliates, and any successor to all or
substantially all of the Company’s assets or business.

 

1.13                           “Company Contribution Account” shall mean (i) the
sum of the Participant’s Annual Company Contribution Amounts, plus (ii) amounts
credited or debited in accordance with all the applicable crediting provisions
of this Plan that relate to the Participant’s Company Contribution Account, less
(iii) all distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to the Participant’s Company Contribution
Account.

 

1.14                           “Company Matching Account” shall mean (i) the sum
of all of a Participant’s Annual Company Matching Amounts, plus (ii) amounts
credited or debited in accordance with all the applicable crediting provisions
of this Plan that relate to the Participant’s Company Matching Account, less
(iii) all distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to the Participant’s Company Matching Account.

 

1.15                           “Compensation Committee” shall mean the
compensation committee of the Board.

 

1.16                           “Deferral Account” shall mean (i) the sum of all
of a Participant’s Annual Deferral Amounts, plus (ii) amounts credited or
debited in accordance with all the applicable crediting provisions of this Plan
that relate to the Participant’s Deferral Account, less (iii) all distributions
made to the Participant or his or her Beneficiary pursuant to this Plan that
relate to his or her Deferral Account.

 

1.17                           “Disability” shall mean total and permanent
disability under the standards promulgated by the Social Security
Administration.

 

1.18                           “Disability Benefit” shall mean the benefit set
forth in Article 8.

 

1.19                           “Effective Date” of the Plan shall be January 1,
2005.

 

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1.20                           “Election Form” shall mean the form or forms
established from time to time by the Plan Committee that a Participant
completes, signs and returns to the Plan Committee to make an election under the
Plan.

 

1.21                           “Eligible Employee” shall mean a person (i) who
is an employee of the Company holding a director-level or above position, and
(ii) who the Plan Committee determines, in its sole discretion, is a member of a
select group of management or highly compensated employees of the Company, as
described under ERISA Sections 201(2), 301(a)(3) and 401(a)(1).

 

1.22                           “ERISA” shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.

 

1.23                           “401(k) Plan” shall mean the Company’s tax
qualified 401(k) retirement plan, as amended from time to time.

 

1.24                           “Incentive Payments” shall mean any compensation
payable to a Participant pursuant to the Company’s (i) Corporate Annual
Incentive Plan, (ii) Executive Annual Incentive Plan, and (iii) any supplemental
bonus plan relating to services performed during the Plan Year, whether or not
paid in such Plan Year.

 

1.25                           “Key Employee” shall be defined in accordance
with Code Section 416(i), without regard to paragraph (5) thereof, and shall
include:

 

(i)                                     an officer of the Company having an
annual compensation greater than $135,000 (as adjusted in accordance with the
Code); provided, however, that no more than fifty (50) employees (or, if lesser,
the greater of three (3) employees or ten percent (10%) of the employees) shall
be treated as officers;

 

(ii)                                  a five percent (5%) owner of the Company;
or

 

(iii)                               a one percent (1%) owner of the Company
having an annual compensation from the Company of more than $150,000.

 

The identification of a person as a Key Employee shall be based upon each
twelve-month period ending on December 31.  Persons who are identified as Key
Employees during each such identification period shall be considered Key
Employees for the purposes of this Plan for the twelve-month period commencing
on the April 1 following the end of the applicable twelve-month identification
period.  For example, any person identified as a Key Employee during the
calendar year ending December 31, 2005 shall be treated as a Key Employee for
purposes of Sections 5.3 and 7.3 of this Plan for the twelve-month period from
April 1, 2006 to March 31, 2007.

 

1.26                           “Leave of Absence” shall mean a military leave,
sick leave, or other bona fide leave of absence provided that the period of such
leave does not exceed six months, or, if longer, so long as the Employee’s right
to reemployment with the Company is provided either by statute or by contract.

 

1.27                           “Participant” shall mean any Employee (i) who
elects to participate in the Plan, (ii) who signs a Plan Agreement and an
Election Form(s), (iii) whose signed Plan Agreement and

 

4

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Election Form(s) are accepted by the Company, (iv) who commences participation
in the Plan, and (v) whose Plan Agreement has not terminated.

 

1.28                           “Plan” shall mean this 2005 Deferred Compensation
Plan, as evidenced by this instrument and by each Plan Agreement, as they may be
amended from time to time.

 

1.29                           “Plan Agreement” shall mean a written agreement,
as may be amended from time to time,  executed by a Participant and the Company
that shall provide for the entire benefit to which such Participant is entitled
under the Plan; should there be more than one Plan Agreement, the Plan Agreement
bearing the latest date of acceptance by the Company shall supersede all
previous Plan Agreements in their entirety and shall govern such entitlement.

 

1.30                           “Plan Committee” shall mean the committee
described in Section 12.1 or its designee, which committee is responsible
generally for performing the day-to-day ministerial functions associated with
operating the Plan.

 

1.31                           “Plan Year” shall mean a period beginning on
January 1 of each calendar year and continuing through December 31 of such
calendar year during which this Plan is in effect.

 

1.32                           “Retirement”, “Retire(s)” or “Retired” shall
mean, with respect to an Employee, Separation from Service with the Company on
or after the earlier of the attainment of (i) age sixty-five (65), or (ii) age
fifty-five (55) with ten (10) Years of Service, for any reason other than death
or Disability.

 

1.33                           “Retirement Benefit” shall mean the benefit set
forth in Article 5.

 

1.34                           “Separation from Service” shall have the meaning
determined pursuant to §409A of the Code and the Treasury regulations and
guidance issued thereunder.

 

1.35                           “Short-Term Payout” shall mean the payout set
forth in Section 4.1.

 

1.36                           “Termination Benefit” shall mean the benefit set
forth in Section 7.1.

 

1.37                           “Termination of Employment” shall mean the
Separation from Service as an Employee with the Company, voluntarily or
involuntarily, for any reason other than Retirement, Disability, death or an
authorized leave of absence.

 

1.38                           “Trust” shall mean the trust established pursuant
to this Plan, as amended from time to time.

 

1.39                           “Unforeseeable Financial Emergency” shall mean a
severe financial hardship to the Participant resulting from (i) an illness or
accident of the Participant, the Participant’s spouse, or a dependent of the
Participant, (ii) loss of the Participant’s property due to casualty, or
(iii) other similar extraordinary and unforeseeable circumstances arising out of
events beyond the control of the Participant.

 

This “Unforeseeable Financial Emergency” definition is intended to comply with
§409A of the Code and the Treasury regulations and guidance issued thereunder
and shall be construed in accordance with said regulations and guidance.

 

5

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1.40                           “Yearly Installment Method” shall be a yearly
installment payment over the number of years selected by a Participant who has
elected to receive his or her Retirement Benefit in the form of annual
installments in accordance with Section 3.6(b) and Section 5.2 of this Plan. 
The yearly installment shall be calculated by multiplying the Account Balance of
the Participant on each anniversary of the Participant’s date of Retirement (the
“Anniversary Date”) by a fraction, the numerator of which is one (1), and the
denominator of which is the remaining number of yearly payments due the
Participant.  By way of example, if the Participant elects a ten (10) year
Yearly Installment Method, the first payment shall be one-tenth (1/10) of the
Account Balance, calculated as described in this definition.  On the following
Anniversary Date, the payment shall be one-ninth (1/9) of the Account Balance,
calculated as described in this definition.

 

1.41                           “Years of Service” shall mean the total number of
full years in which a Participant has been employed by the Company.  For
purposes of this definition, a year of employment shall be a three hundred sixty
five (365) day period (or three hundred sixty six (366) day period in the case
of a leap year) that, for the first year of employment, commences on the
Employee’s date of hiring and that, for any subsequent year, commences on an
anniversary of that hiring date.  Any partial year of employment shall not be
counted.

 

ARTICLE 2
SELECTION, ENROLLMENT, ELIGIBILITY

 

2.1                                 Eligibility.  Participation in the Plan
shall be limited to Eligible Employees.

 

2.2                                 Initial Enrollment Requirements.  As a
condition to participation upon an Employee’s initial eligibility, each such
Eligible Employee shall complete, execute and return to the Company a Plan
Agreement and an Election Form(s), both within thirty (30) days after he or she
becomes eligible to participate in the Plan.  If an Employee fails to meet all
such requirements within the period required, said Employee shall not be
eligible to participate in the Plan until the first day of the following Plan
Year in accordance with the annual enrollment requirements of Section 3.6, again
subject to timely delivery to and acceptance by the Company of the required
documents.

 

2.3                                 Commencement of Participation.  In
connection with a Participant’s initial commencement of participation in the
Plan, provided an Eligible Employee has met all enrollment requirements set
forth in this Plan, including returning all required documents to the Company
within the specified time period, said Employee shall commence participation in
the Plan beginning with the first full payroll period following thirty (30) days
from the receipt by the Company of the completed enrollment documents.

 

2.4                                 Termination of Participation.  If the Plan
Committee determines in good faith that an Employee no longer qualifies as a
member of a select group of management or highly compensated employees, as
membership in such group is determined in accordance with Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA, the Plan Committee shall terminate said
Employee’s participation as of the end of the then current Plan Year, and no
further contributions shall be made by the Participant or by the Company on
behalf of the Participant.  The Participant shall remain subject to the
remaining provisions of the Plan.

 

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ARTICLE 3
DEFERRAL AND PAYMENT ELECTIONS, COMPANY CONTRIBUTIONS, VESTING, INVESTMENT,
TAXES

 

3.1                                 MINIMUM DEFERRAL.  FOR EACH PLAN YEAR, A
PARTICIPANT MAY ELECT TO DEFER, AS HIS OR HER ANNUAL DEFERRAL AMOUNT, ANNUAL
BASE SALARY AND/OR INCENTIVE PAYMENTS, IN THE MINIMUM AMOUNT OF TWO THOUSAND
DOLLARS ($2,000) IN THE AGGREGATE.  NOTWITHSTANDING THE FOREGOING, THE PLAN
COMMITTEE MAY, IN ITS SOLE DISCRETION, ESTABLISH FOR ANY PLAN YEAR A DIFFERENT
MINIMUM AMOUNT (INCLUDING ESTABLISHING DIFFERENT MINIMUM AMOUNTS FOR ANNUAL BASE
SALARY AND INCENTIVE PAYMENTS).

 

3.2                                 MAXIMUM DEFERRAL.

 

(A)                                  ANNUAL BASE SALARY AND INCENTIVE PAYMENTS.
FOR EACH PLAN YEAR, A PARTICIPANT MAY ELECT TO DEFER, AS HIS OR HER ANNUAL
DEFERRAL AMOUNT, ANNUAL BASE SALARY AND/OR INCENTIVE PAYMENTS, UP TO THE
FOLLOWING MAXIMUM PERCENTAGES FOR EACH DEFERRAL ELECTED:

 

Deferral

 

Maximum Amount

 

Annual Base Salary

 

75

%

Incentive Payments

 

100

%

 

(B)                                 NOTWITHSTANDING THE FOREGOING, THE PLAN
COMMITTEE MAY, IN ITS SOLE DISCRETION, ESTABLISH FOR ANY PLAN YEAR MAXIMUM
PERCENTAGES WHICH DIFFER FROM THOSE SET FORTH ABOVE.

 

3.3                                 ELECTION TO DEFER, EFFECT OF ELECTION FORM.

 

(A)                                  FIRST PLAN YEAR.  IN CONNECTION WITH A
PARTICIPANT’S INITIAL COMMENCEMENT OF PARTICIPATION IN THE PLAN, THE PARTICIPANT
SHALL COMPLY WITH THE REQUIREMENTS SET FORTH IN SECTION 2.2.  THE PARTICIPANT’S
DEFERRAL ELECTION SHALL APPLY ONLY WITH RESPECT TO COMPENSATION PAYABLE FOR
SERVICES RENDERED SUBSEQUENT TO THE EMPLOYEE’S COMMENCEMENT OF PARTICIPATION IN
THE PLAN.

 

(B)                                 SUBSEQUENT PLAN YEARS.  FOR EACH SUCCEEDING
PLAN YEAR, A ELECTION FORM FOR THAT PLAN YEAR, AND SUCH OTHER ELECTIONS AS THE
PLAN COMMITTEE DEEMS NECESSARY OR DESIRABLE UNDER THE PLAN, SHALL BE COMPLETED,
EXECUTED AND RETURNED TO THE COMPANY BEFORE THE END OF THE PLAN YEAR PRECEDING
THE PLAN YEAR FOR WHICH THE ELECTION IS MADE.  TO THE EXTENT PERMITTED BY THE
PLAN COMMITTEE, SAID ELECTIONS MAY BE MADE ELECTRONICALLY.

 

(C)                                  CHANGE IN ELECTION.  EXCEPT AS PROVIDED IN
SECTION 4.3, ONCE A PLAN YEAR HAS COMMENCED, THE PARTICIPANT’S DEFERRAL ELECTION
FOR THAT PLAN YEAR MAY NOT BE SUSPENDED OR CHANGED.

 

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3.4                                 Company Contribution Amount.  During each
Plan Year, the Compensation Committee, in its sole discretion, may, but is not
required to, credit any amount it desires to any Participant’s Company
Contribution Account under this Plan, which amount shall be for that Participant
the Annual Company Contribution Amount for that Plan Year.  The amount so
credited to a Participant may be smaller or larger than the amount credited to
any other Participant, and the amount credited to any Participant for a Plan
Year may be zero (0), even though one or more other Participants receive an
Annual Company Contribution Amount for that Plan Year.  Said Annual Company
Contribution Amount may be subject to a vesting schedule, if any, in accordance
with Section 3.8.  Notwithstanding the foregoing, if a Participant to whom an
Annual Company Contribution Amount is credited is not employed by the Company as
of the last day of a Plan Year for which such Annual Company Contribution is
made (other than by reason of his or her death or Disability or in the event of
a Change in Control or a termination of the Plan), the Annual Company
Contribution Amount for that Plan Year shall be zero (0).

 

3.5                                 Company Matching Amount.  Solely with
respect to a Participant who is making elective deferrals to the 401(k) Plan,
the Participant’s Annual Company Matching Amount, if any, for the Plan Year of
reference shall be equal to (i) the amount of the Company’s matching
contribution that would be made to the 401(k) Plan on the Participant’s behalf
for the plan year of the 401(k) Plan that corresponds to the Plan Year if the
401(k) Plan were permitted to include in its definition of “compensation” for
Company matching contribution purposes the Participant’s Annual Deferral Amount,
plus (ii) an amount equal to the difference between (x) the amount of the
Company’s matching contribution that would be made to the 401(k) Plan on the
Participant’s behalf for the plan year of the 401(k) Plan that corresponds to
the Plan Year if the Participant’s Annual Deferral Amount were aggregated with
the Participant’s 401(k) pre-tax deferrals up to the Code section 402(g) limit
and without regard to the nondiscrimination tests applicable to the 401(k) Plan
under Code sections 401(k)(3) and 401(m)(3), and (y) the sum of the amount of
the Company’s matching contributions that actually are made to the 401(k) Plan
on the Participant’s behalf for the plan year of the 401(k) Plan that
corresponds to the Plan Year and the amount of the match determined under
subparagraph (i) hereof.  A Participant who is not eligible for the plan year of
the 401(k) Plan (or for any portion thereof) to receive an allocation of Company
matching contributions under the 401(k) Plan shall not be eligible for the
allocation of an Annual Company Matching Amount hereunder.

 

3.6                                 ELECTION OF TIME AND FORM OF PAYMENT. 

 

(a)                                  Time of Payment.  At each time a
Participant makes a deferral election for a Plan Year in accordance with
Section 3.3 above, the Participant shall elect on an Election Form with respect
to the Annual Deferral Account balance and the vested Annual Company Matching
Contribution Account balance for said Plan Year either (i) a Short-Term Payout
to be payable in accordance with the terms and conditions of Section 4.1, or
(ii)  a distribution upon Retirement (subject to an earlier distribution event
pursuant to Article 6, 7 or 8 of this Plan).

 

On or before December 31 of the Plan Year prior to a Plan Year for which the
Compensation Committee credits an amount to the Company Contribution Account of
a Participant pursuant to Section 3.4 above, the Participant shall elect on an
Election Form, to the extent that the Participant actually receives an Annual
Company Contribution Amount in said Plan Year, either (i) a Short-Term Payout

 

8

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of vested amounts to be payable in accordance with terms and conditions of
Section 4.1, or (ii) a distribution upon Retirement (subject to an earlier
distribution event pursuant to Article 6, 7 or 8 of this Plan).

 

(b)                                 Form of Payment.  Each time a Participant
elects a distribution upon  Retirement pursuant to Section 3.6(a), said
Participant shall also elect at that time on an Election Form to receive the
Retirement Benefit in a lump sum or pursuant to a Yearly Installment  Method of
five (5), ten (10) or fifteen (15) years.  Such election shall be made
separately with respect to each Plan Year.  The Participant may change his or
her election with respect to a Plan Year to an allowable alternative payout
period by submitting a new Election Form to the Company, provided that (i) such
new election shall not take effect until twelve (12) months after the date on
which the election is made; (ii) the first payment with respect to which such
election is made shall be deferred for a period of not less than five (5) years
from the date such payment would otherwise have been made; and (iii) such new
election must be made not less than twelve (12) months prior to the date of the
first scheduled payment.

 

3.7                                 Investment of Trust Assets.  The trustee of
the Trust shall be authorized, upon written instructions received from the Plan
Committee, to invest and reinvest the assets of the Trust in accordance with the
applicable Trust agreement, including the investment of the assets of the Trust
in one or more investment vehicles designated by the Plan Committee.

 

3.8                                 VESTING.

 

(A)                                  A PARTICIPANT SHALL AT ALL TIMES BE ONE
HUNDRED PERCENT (100%) VESTED IN HIS OR HER DEFERRAL ACCOUNT.

 

(B)                                 A PARTICIPANT SHALL BECOME VESTED IN HIS OR
HER COMPANY CONTRIBUTION ACCOUNT PURSUANT TO A VESTING SCHEDULE, IF ANY,
APPROVED AND DOCUMENTED BY THE COMPENSATION COMMITTEE AT THE TIME THE ANNUAL
COMPANY CONTRIBUTION AMOUNT IS CREDITED TO THE PARTICIPANT’S COMPANY
CONTRIBUTION ACCOUNT FOR THAT PLAN YEAR.

 

(C)                                  A PARTICIPANT SHALL BECOME VESTED IN HIS OR
HER COMPANY MATCHING ACCOUNT AS AND TO THE EXTENT THAT THE PARTICIPANT BECOMES
VESTED IN COMPANY MATCHING CONTRIBUTIONS UNDER THE 401(K) PLAN.

 

(D)                                 EXCEPT AS OTHERWISE PROVIDED IN SECTION 3.4,
IN THE EVENT OF A CHANGE IN CONTROL, TERMINATION OF THE PLAN PURSUANT TO
SECTION 11.1, RETIREMENT, DISABILITY OR DEATH WHILE A PARTICIPANT IS IN THE
EMPLOY OF THE COMPANY, THE PARTICIPANT’S COMPANY CONTRIBUTION ACCOUNT AND
COMPANY MATCHING ACCOUNT, TO THE EXTENT NOT OTHERWISE VESTED, SHALL IMMEDIATELY
BECOME ONE HUNDRED PERCENT (100%) VESTED.

 

3.9                                 Crediting, Debiting of Account Balances.  In
accordance with, and subject to, the rules and procedures that are established
from time to time by the Plan Committee, in its sole discretion, amounts shall
be credited or debited to a Participant’s Account Balance in accordance with the
following rules:

 

(A)                                  ELECTION OF MEASUREMENT FUNDS.   A
PARTICIPANT, IN CONNECTION WITH HIS OR HER INITIAL DEFERRAL ELECTION IN
ACCORDANCE WITH SECTION 3.3(A) ABOVE, SHALL ELECT, ON THE ELECTION FORM(S), ONE
OR MORE MEASUREMENT FUND(S) (AS DESCRIBED IN

 

9

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SECTION 3.9(C) BELOW) TO BE USED TO DETERMINE THE ADDITIONAL AMOUNTS TO BE
CREDITED OR DEBITED TO HIS OR HER ACCOUNT BALANCE FOR THE FIRST BUSINESS DAY OF
THE PLAN YEAR, CONTINUING THEREAFTER UNLESS CHANGED IN ACCORDANCE WITH THE NEXT
SENTENCE.  COMMENCING WITH THE FIRST BUSINESS DAY OF THE PLAN YEAR, AND
CONTINUING THEREAFTER FOR THE REMAINDER OF THE PLAN YEAR (UNLESS THE PARTICIPANT
CEASES DURING THE PLAN YEAR TO PARTICIPATE IN THE PLAN), THE PARTICIPANT MAY
ELECT ON A DAILY BASIS TO ADD OR DELETE ONE OR MORE MEASUREMENT FUND(S) TO BE
USED TO DETERMINE THE ADDITIONAL AMOUNTS TO BE CREDITED OR DEBITED TO HIS OR HER
ACCOUNT BALANCE, OR TO CHANGE THE PORTION OF HIS OR HER ACCOUNT BALANCE
ALLOCATED TO EACH PREVIOUSLY OR NEWLY ELECTED MEASUREMENT FUND.  IF AN ELECTION
IS MADE IN ACCORDANCE WITH THE PREVIOUS SENTENCE, IT SHALL APPLY TO THE NEXT
BUSINESS DAY AND CONTINUE THEREAFTER FOR THE REMAINDER OF THE PLAN YEAR (UNLESS
THE PARTICIPANT CEASES DURING THE PLAN YEAR TO PARTICIPATE IN THE PLAN), UNLESS
CHANGED IN ACCORDANCE WITH THE PREVIOUS SENTENCE.

 

(B)                                 PROPORTIONATE ALLOCATION.  IN MAKING ANY
ELECTION DESCRIBED IN SECTION 3.9(A) ABOVE, THE PARTICIPANT SHALL SPECIFY ON THE
ELECTION FORM(S), IN WHOLE PERCENTAGE POINTS, THE PERCENTAGE OF HIS OR HER
ACCOUNT BALANCE TO BE ALLOCATED TO A MEASUREMENT FUND.

 

(C)                                  MEASUREMENT FUNDS.  THE PARTICIPANT MAY
ELECT ONE OR MORE OF THOSE MEASUREMENT FUNDS DESIGNATED BY THE PLAN COMMITTEE
FROM TIME TO TIME (THE “MEASUREMENT FUNDS”), FOR THE PURPOSE OF CREDITING OR
DEBITING ADDITIONAL AMOUNTS TO HIS OR HER ACCOUNT BALANCE.  THE PLAN COMMITTEE
MAY, IN ITS SOLE DISCRETION, DISCONTINUE, SUBSTITUTE OR ADD A MEASUREMENT FUND. 
EACH SUCH ACTION WILL TAKE EFFECT AS SOON AS PRACTICABLE.  IF THE COMPANY
RECEIVES AN INITIAL OR REVISED MEASUREMENT FUNDS ELECTION WHICH IT DEEMS TO BE
INCOMPLETE, UNCLEAR OR IMPROPER, THE PARTICIPANT’S MEASUREMENT FUNDS ELECTION
THEN IN EFFECT SHALL REMAIN IN EFFECT (OR, IN THE CASE OF A DEFICIENCY IN AN
INITIAL MEASUREMENT FUNDS ELECTION, THE PARTICIPANT SHALL BE DEEMED TO HAVE
FILED NO DEEMED INVESTMENT DIRECTION).  IF THE COMPANY POSSESSES (OR IS DEEMED
TO POSSESS AS PROVIDED IN THE PREVIOUS SENTENCE) AT ANY TIME DIRECTIONS AS TO
MEASUREMENT FUNDS OF LESS THAN ALL OF THE PARTICIPANT’S ACCOUNT BALANCE, THE
PARTICIPANT SHALL BE DEEMED TO HAVE DIRECTED THAT THE UNDESIGNATED PORTION OF
THE ACCOUNT BALANCE BE DEEMED TO BE INVESTED IN A MONEY MARKET, FIXED INCOME OR
SIMILAR MEASUREMENT FUND MADE AVAILABLE UNDER THE PLAN AS DETERMINED BY THE PLAN
COMMITTEE IN ITS DISCRETION.  EACH PARTICIPANT HEREUNDER, AS A CONDITION TO HIS
OR HER PARTICIPATION HEREUNDER, AGREES TO INDEMNIFY AND HOLD HARMLESS THE PLAN
COMMITTEE, THE COMPENSATION COMMITTEE AND THE COMPANY, AND THEIR AGENTS AND
REPRESENTATIVES, FROM ANY LOSSES OR DAMAGES OF ANY KIND RELATING TO (I) THE
MEASUREMENT FUNDS MADE AVAILABLE HEREUNDER AND (II) ANY DISCREPANCY BETWEEN THE
CREDITS AND DEBITS TO THE PARTICIPANT’S ACCOUNT BALANCE BASED ON THE PERFORMANCE
OF THE MEASUREMENT FUNDS AND WHAT THE CREDITS AND DEBITS OTHERWISE MIGHT BE IN
THE CASE OF AN ACTUAL INVESTMENT IN THE MEASUREMENT FUNDS.

 

(D)                                 CREDITING OR DEBITING METHOD.  THE
PERFORMANCE OF EACH ELECTED MEASUREMENT FUND (EITHER POSITIVE OR NEGATIVE) WILL
BE DETERMINED BASED ON THE PERFORMANCE OF THE MEASUREMENT FUNDS THEMSELVES. 
EACH PARTICIPANT’S ACCOUNT BALANCE SHALL BE CREDITED OR DEBITED ON A DAILY BASIS
BASED ON THE PERFORMANCE OF EACH MEASUREMENT FUND SELECTED BY THE PARTICIPANT AS
THOUGH (I) A PARTICIPANT’S ACCOUNT BALANCE WERE INVESTED IN THE MEASUREMENT
FUND(S) SELECTED BY THE

 

10

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PARTICIPANT, IN THE PERCENTAGES ELECTED BY THE PARTICIPANT AS OF SUCH DATE, AT
THE CLOSING PRICE ON SUCH DATE; (II) THE PORTION OF THE ANNUAL DEFERRAL AMOUNT
THAT WAS ACTUALLY DEFERRED WAS INVESTED IN THE MEASUREMENT FUND(S) SELECTED BY
THE PARTICIPANT, IN THE PERCENTAGES ELECTED BY THE PARTICIPANT, AS SOON AS
PRACTICABLE FOLLOWING THE DEFERRAL OF SUCH AMOUNTS FROM THE PARTICIPANT’S ANNUAL
BASE SALARY AND/OR INCENTIVE PAYMENTS THROUGH REDUCTIONS IN HIS OR HER PAYROLL,
AT THE CLOSING PRICE ON SUCH DATE; AND (III) ANY DISTRIBUTION MADE TO A
PARTICIPANT THAT DECREASES SUCH PARTICIPANT’S ACCOUNT BALANCE CEASED BEING
INVESTED IN THE MEASUREMENT FUND(S) AS OF THE DATE OF THE APPLICABLE
DISTRIBUTION EVENT.

 

(E)                                  NO ACTUAL INVESTMENT.  NOTWITHSTANDING ANY
OTHER PROVISION OF THIS PLAN THAT MAY BE INTERPRETED TO THE CONTRARY, THE
MEASUREMENT FUNDS ARE TO BE USED FOR MEASUREMENT PURPOSES ONLY, AND A
PARTICIPANT’S ELECTION OF ANY SUCH MEASUREMENT FUND, THE ALLOCATION TO HIS OR
HER ACCOUNT BALANCE THERETO, THE CALCULATION OF ADDITIONAL AMOUNTS AND THE
CREDITING OR DEBITING OF SUCH AMOUNTS TO A PARTICIPANT’S ACCOUNT BALANCE SHALL
NOT BE CONSIDERED OR CONSTRUED IN ANY MANNER AS AN ACTUAL INVESTMENT OF HIS OR
HER ACCOUNT BALANCE IN ANY SUCH MEASUREMENT FUND.  IN THE EVENT THAT THE COMPANY
OR THE TRUSTEE (AS THAT TERM IS DEFINED IN THE TRUST), IN ITS OWN DISCRETION,
DECIDES TO INVEST FUNDS IN ANY OR ALL OF THE MEASUREMENT FUNDS, NO PARTICIPANT
SHALL HAVE ANY RIGHTS IN OR TO SUCH INVESTMENTS THEMSELVES.  WITHOUT LIMITING
THE FOREGOING, A PARTICIPANT’S ACCOUNT BALANCE SHALL AT ALL TIMES BE A
BOOKKEEPING ENTRY ONLY AND SHALL NOT REPRESENT ANY INVESTMENT MADE ON HIS OR HER
BEHALF BY THE COMPANY OR THE TRUST; THE PARTICIPANT SHALL AT ALL TIMES REMAIN AN
UNSECURED GENERAL CREDITOR OF THE COMPANY.

 

(F)                                    BENEFICIARY ELECTIONS.  EACH REFERENCE IN
THIS SECTION 3.9 TO A PARTICIPANT SHALL BE DEEMED TO INCLUDE, WHERE APPLICABLE,
A REFERENCE TO A BENEFICIARY.

 

3.10                           FICA AND OTHER TAXES.

 

(A)                                  ANNUAL DEFERRAL AMOUNTS.  FOR EACH PLAN
YEAR IN WHICH AN ANNUAL DEFERRAL AMOUNT IS BEING WITHHELD FROM A PARTICIPANT,
THE COMPANY SHALL WITHHOLD FROM THAT PORTION OF THE PARTICIPANT’S ANNUAL BASE
SALARY AND/OR INCENTIVE PAYMENTS THAT ARE NOT BEING DEFERRED, IN A MANNER
DETERMINED BY THE COMPANY, THE PARTICIPANT’S SHARE OF FICA TAXES ON THE
PARTICIPANT’S ANNUAL DEFERRAL AMOUNT, ANNUAL COMPANY MATCHING AMOUNT AND ANNUAL
COMPANY CONTRIBUTION AMOUNT.  IF NECESSARY, THE PLAN COMMITTEE MAY REDUCE THE
ANNUAL DEFERRAL AMOUNT, ANNUAL COMPANY MATCHING AMOUNT AND ANNUAL COMPANY
CONTRIBUTION AMOUNT IN ORDER TO PAY THE PARTICIPANT’S SHARE OF FICA TAXES AND
ANY INCOME TAX WITHHOLDING RELATED TO SUCH FICA AMOUNT.

 

(B)                                 ANNUAL COMPANY MATCHING AMOUNTS OR ANNUAL
COMPANY CONTRIBUTION AMOUNTS.  WHEN A PARTICIPANT BECOMES VESTED IN A PORTION OF
HIS OR HER COMPANY MATCHING ACCOUNT OR COMPANY CONTRIBUTION ACCOUNT, THE COMPANY
SHALL HAVE THE DISCRETION TO WITHHOLD FROM THE PARTICIPANT’S ANNUAL BASE SALARY
AND/OR INCENTIVE PAYMENTS THAT ARE NOT DEFERRED, IN A MANNER DETERMINED BY THE
COMPANY, THE PARTICIPANT’S SHARE OF FICA TAXES.  IF NECESSARY, THE PLAN
COMMITTEE MAY REDUCE THE VESTED PORTION OF THE PARTICIPANT’S COMPANY MATCHING
ACCOUNT OR COMPANY CONTRIBUTION ACCOUNT IN ORDER TO PAY THE PARTICIPANT’S SHARE
OF FICA TAXES AND ANY INCOME TAX WITHHOLDING RELATED TO SUCH FICA AMOUNT.

 

11

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3.11                           Distributions.  The Company, or the trustee of
the Trust, shall withhold from any payments made to a Participant under this
Plan all Federal, state and local income, employment and other taxes required to
be withheld by the Company, or the trustee of the Trust, in connection with such
payments, in amounts and in a manner to be determined in the sole discretion of
the Company and the trustee of the Trust.

 

ARTICLE 4
SHORT-TERM PAYOUT AND UNFORESEEABLE FINANCIAL EMERGENCIES

 

4.1                                 Short-Term Payout.  Participants who have
elected to receive a Short-Term Payout pursuant to Section 3.6(a) shall receive,
in accordance with their election, a lump sum payment in an amount that is equal
to (i) the Annual Deferral and vested Annual Company Matching Amounts and/or
(ii) the vested Annual Company Contribution Amount, plus amounts credited or
debited thereto in the manner provided in Section 3.9, determined at the time
that each vested portion of a Short-Term Payout becomes payable.  Subject to the
terms and conditions of this Plan, each Short-Term Payout elected shall be paid
out, to the extent vested, during a period beginning one (1) day and ending
sixty (60) days after the last day of any Plan Year designated by the
Participant that is at least two (2) Plan Years after the Plan Year in which the
Annual Deferral Amount, the Annual Company Matching Amount and/or the Annual
Company Contribution Amount have been contributed to the Plan.  Unvested amounts
of an Annual Company Matching Amount or an Annual Company Contribution Amount
for which a Short-Term Payout has been elected shall be paid out during a sixty
(60) day period commencing on the first day of the Plan Year subsequent to the
Plan Year in which additional amounts of the Annual Company Matching Amount or
the Annual Company Contribution Amount vest.  By way of example, if a two
(2) year Short-Term Payout is elected for amounts that have been contributed in
the Plan Year commencing January 1, 2005, the two (2) year Short-Term Payout
would become payable, to the extent vested, during a sixty (60) day period
commencing January 1, 2008.  Amounts which vest during 2008 and 2009 would
become payable during the sixty (60) day period commencing January 1, 2009 and
January 1, 2010, respectively.

 

Notwithstanding any other provision of this Plan that may be construed to the
contrary, a Participant who is an active Employee may, with respect to each
Short-Term Payout, on a form determined by the Plan Committee, make one or more
additional deferral elections (a “Subsequent Election”) to defer payment of such
Short-Term Payout to a Plan Year subsequent to the Plan Year originally elected,
provided that (i) each such Subsequent Election shall not take effect until
twelve (12) months after the date on which the Subsequent Election is made;
(ii) payment pursuant to each Subsequent Election must be deferred for a period
of not less than five (5) Plan Years from the Plan Year in which the Short-Term
Payout, but for said Subsequent Election, would have  been paid; and (iii) each
such Subsequent Election must be made not less than twelve (12) months prior to
the date on which, but for said Subsequent Election, such Short-Term Payout
would have been payable.  For example, the Participant who elected a Short-Term
Payout of January 1, 2008 in the example in the prior paragraph subsequently
decides to make a Subsequent Election in order to defer the payment beyond
2008.   The election must be made at least twelve months prior to January 1,
2008, the date of the initial payment.  Therefore, the Subsequent Election must
be made no later than December 31, 2006 and must defer payment to a date no
earlier than January 1, 2113.

 

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4.2                                 Other Benefits Take Precedence Over
Short-Term Payout.  Should an event occur that triggers a benefit under
Article 5, 6, 7 or 8, any Annual Deferral Amount, vested Annual Company Matching
Amount and/or vested Annual Company Contribution Amount, plus amounts credited
or debited thereon, that is subject to a Short-Term Payout election under
Section 4.1 shall not be paid in accordance with Section 4.1 but shall be paid
in accordance with the other applicable Article.

 

4.3                                 Unforeseeable Financial Emergencies.  If the
Participant experiences an Unforeseeable Financial Emergency, the Participant
may petition the Plan Committee to receive a partial or full distribution from
the Plan. The distribution shall not exceed the lesser of (i) the Participant’s
vested Account Balance, calculated as if such Participant were receiving a
Termination Benefit, or (ii) the amounts necessary to satisfy the Unforeseeable
Financial Emergency and to pay taxes reasonably anticipated as a result of such
distribution.  Said determination shall take into account the extent to which
such financial hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Participant’s
assets, to the extent that the liquidation of assets would not itself cause
severe financial hardship. If, subject to the sole discretion of the Plan
Committee, the petition for a distribution is approved, any distribution shall
be made within thirty (30) days of the date of approval.  In addition, the
Participant’s deferral election for the Plan Year, if any, shall be cancelled
for the remainder of the Plan Year as of the date of approval of the petition.

 

ARTICLE 5
RETIREMENT BENEFIT

 

5.1                                 Retirement Benefit.  A Participant shall be
entitled to receive a benefit equal to the Participant’s Account Balance (the
“Retirement Benefit”) if the Participant retires while in the employ of the
Company.

 

5.2                                 Payment of Retirement Benefit.  A
Participant who has elected pursuant to Section 3.6(b) to receive the Retirement
Benefit with respect to a Plan Year in the form of a Yearly Installment Method
shall receive said Benefit in accordance with said election.  If a Participant
has elected pursuant to Section 3.6(b) a lump sum with respect to a Plan Year,
or has not made any election with respect to the payment of the Retirement
Benefit for said Year, then such benefit shall be payable in a lump sum.  The
lump sum payment shall be made, or installment payment shall commence, within
sixty (60) days following the date of the Participant’s Retirement; installment
payments shall be made within sixty (60) days of each subsequent Anniversary
Date.

 

5.3                                 LIMITATION ON KEY EMPLOYEES.

 

Notwithstanding anything herein to the contrary, no distribution shall be made
to a Key Employee of the Company upon Retirement before the earlier of (i) the
date which is six (6) months after the date of his or her Retirement, or
(ii) the death of said Key Employee.  In the event of a distribution pursuant to
a Yearly Installment Method, the first installment shall be made six (6) months
after the date of the Key Employee’s Retirement and each subsequent installment
shall be made on each Anniversary Date.

 

5.4                                 Death Prior to Completion of Retirement
Benefit.  If a Participant dies after Retirement but before the Retirement
Benefit is paid in full, the Participant’s unpaid

 

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Retirement Benefit payments shall be paid to the Participant’s Beneficiary in a
lump sum within sixty (60) days following the date of death.

 

ARTICLE 6
PRE-RETIREMENT SURVIVOR BENEFIT

 

6.1                                 Pre-Retirement Survivor Benefit. The
Participant’s Beneficiary shall receive a benefit equal to the Participant’s
Account Balance, if the Participant dies before he or she Retires or experiences
a Termination of Employment or suffers a Disability (the “Pre-Retirement
Survivor Benefit”).

 

6.2                                 Payment of Pre-Retirement Survivor Benefit.
The Pre-Retirement Survivor Benefit shall be paid in a lump sum within sixty
(60) days following the date of the Participant’s death.

 

ARTICLE 7
TERMINATION BENEFIT; CHANGE IN CONTROL BENEFIT

 

7.1                                 Termination Benefit.  A Participant shall
receive a benefit equal to the Participant’s Account Balance, to the extent
vested, if the Participant experiences a Termination of Employment prior to his
or her Retirement, death or Disability (the “Termination Benefit”).

 

7.2                                 Payment of Termination Benefit. The
Termination Benefit shall be paid in a lump sum within sixty (60) days following
the date of the Participant’s Termination of Employment.

 

7.3                                 LIMITATION ON KEY EMPLOYEES. NOTWITHSTANDING
THE PROVISIONS OF THIS ARTICLE 7, NO DISTRIBUTION SHALL BE MADE TO A KEY
EMPLOYEE OF THE COMPANY UPON TERMINATION OF EMPLOYMENT BEFORE THE EARLIER OF
(I) THE DATE WHICH IS SIX (6) MONTHS AFTER THE DATE OF HIS OR HER TERMINATION OF
EMPLOYMENT, OR (II) THE DEATH OF SAID KEY EMPLOYEE.

 

7.4                                 Change in Control Benefit.  Upon a Change in
Control of the Company, each Participant shall receive a benefit equal to the
Participant’s Account Balance in a single lump sum payment within sixty (60)
days following the Change in Control.

 

ARTICLE 8
DISABILITY BENEFIT

 

8.1                                 Disability Benefit.  A Participant who is
determined by the Plan Committee to have incurred a Disability shall receive a
benefit equal to the Participant’s Account Balance (the “Disability Benefit”).

 

8.2                                 Payment of Disability Benefit.  The
Disability Benefit shall be paid to the Participant in a lump sum within sixty
(60) days following the date of the determination of  the Participant’s
Disability.

 

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ARTICLE 9
BENEFICIARY DESIGNATION

 

9.1                                 Beneficiary.  Each Participant shall have
the right, at any time, to designate his or her Beneficiary(ies) (both primary
as well as contingent) to receive any benefits payable under the Plan upon the
death of a Participant.  The Beneficiary designated under this Plan may be the
same as or different from the Beneficiary designation under any other plan of
the Company in which the Participant participates.

 

9.2                                 Beneficiary Designation, Change.  A
Participant shall designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the Company.  A Participant
shall have the right to change a Beneficiary by completing, signing and
otherwise complying with the terms of the Beneficiary Designation Form and the
Plan  Committee’s rules and procedures, as in effect from time to time. Upon the
acceptance by the Company of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be canceled.  The Company shall be entitled
to rely on the last Beneficiary Designation Form filed by the Participant and
accepted by the Company prior to his or her death.

 

9.3                                 Acknowledgment.  No designation or change in
designation of a Beneficiary shall be effective until received and acknowledged
in writing by the Company.

 

9.4                                 No Beneficiary Designation.  If a
Participant fails to designate a Beneficiary as provided in Sections 9.1, 9.2
and 9.3 above or, if all designated Beneficiaries predecease the Participant or
die prior to complete distribution of the Participant’s benefits, then the
Participant’s designated Beneficiary shall be deemed to be his or her surviving
spouse, or, if the Participant has no surviving spouse, the benefits remaining
under the Plan to be paid to a Beneficiary shall be payable to the executor or
personal representative of the Participant’s estate.

 

9.5                                 Doubt as to Beneficiary.  If the Company has
any doubt as to the proper Beneficiary to receive payments pursuant to this
Plan, the Company shall have the right, exercisable in its discretion, to cause
to withhold such payments until this matter is resolved to the Company’s
satisfaction.

 

9.6                                 Discharge of Obligations.  The payment of
benefits under the Plan to a person believed in good faith by the Company to be
a valid Beneficiary shall fully and completely discharge the Company and the
Plan Committee from all further obligations under this Plan with respect to the
Participant, and that Participant’s Plan Agreement shall terminate upon such
full payment of benefits. Neither the Plan Committee nor the Company shall be
obliged to search for any Participant or Beneficiary beyond the sending of a
registered letter to such last known address.  If the Plan Committee notifies
any Participant or Beneficiary that he or she is entitled to an amount under the
Plan and the Participant or Beneficiary fails to claim such amount or make his
or her location known to the Plan Committee within three (3) years thereafter,
then, except as otherwise required by law, if the location of one or more of the
next of kin of the Participant is known to the Plan Committee, the Plan
Committee may direct distribution of such amount to any one or more or all of
such next of kin, and in such proportions as said Committee determines.  If the
location of none of the foregoing persons can be determined, the Plan Committee
shall

 

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have the right to direct that the amount payable shall be deemed to be a
forfeiture and paid to the Company, except that the dollar amount of the
forfeiture, unadjusted for deemed gains or losses in the interim, shall be paid
by the Company if a claim for the benefit subsequently is made by the
Participant or the Beneficiary to whom it was payable.  If a benefit payable to
an unlocated Participant or Beneficiary is subject to escheat pursuant to
applicable state law, neither the Plan Committee nor the Company shall be liable
to any person for any payment made in accordance with such law.

 

ARTICLE 10
LEAVE OF ABSENCE

 

10.1                           Company Paid Leave of Absence.  If a Participant
is authorized by the Company for any reason to take a leave of absence paid by
the Company, the Participant shall continue to be considered in the employ of
the Company and the Annual Deferral Amount shall continue to be withheld during
such paid leave of absence in accordance with Section 3.3.

 

10.2                           Unpaid Leave of Absence.  If a Participant is
authorized by the Company for any reason to take an unpaid leave of absence from
the employ of the Company, the Participant shall continue to be considered in
the employ of the Company. Participant deferrals shall cease until the
Participant returns to a paid employment status.  Upon such return, deferrals
shall resume for the remaining portion of the Plan Year in which the return
occurs, based on the deferral election, if any, made for that Plan Year.

 

10.3                           Failure to Return.  A Participant who fails to 
return from an authorized leave of absence shall be deemed to have experienced a
Termination of Employment.

 

ARTICLE 11
TERMINATION OR AMENDMENT

 

11.1                           Termination.  Although the Company anticipates
that it will continue the Plan for an indefinite period of time, there is no
guarantee that the Company will continue the Plan or will not terminate the Plan
at any time in the future.  Accordingly, the Company reserves the right to
discontinue its sponsorship of the Plan and/or to terminate the Plan at any time
by action of the Board.  Upon a termination of the Plan, the deferral elections
of the affected Participants shall terminate.  The termination of the Plan shall
not adversely affect any Participant or Beneficiary who has become entitled to
the payment of any benefits under the Plan as of the date of termination. 
Except as otherwise hereinafter provided, the Account Balances of Participants
shall be distributed at the times and in the manner as set forth in the
applicable provisions of the Plan, and the Plan shall continue in effect until
all of the Account Balances of Participants and Beneficiaries have been
distributed.

 

Notwithstanding the foregoing, the time and form of payment of the Participants’
Account Balances may be accelerated upon a plan termination in accordance with
the following rules:

 

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(a)                                  Dissolution or Bankruptcy.  The Company may
terminate the Plan within twelve (12) months of a corporate dissolution taxed
under Section 331 of the Code, or with the approval of a bankruptcy court
pursuant to 11 U.S.C. §503(b)(1)(A), provided that the Account Balances are
distributed and included in the Participants’ gross income in the latest of
(i) the calendar year in which the Plan termination occurs; (ii) the calendar in
which the Account Balance is no longer subject to a substantial risk of
forfeiture; or (iii) the first calendar year in which the payment is
administratively practicable.

 

(b)                                 Company Discretion.  The Company may in its
sole discretion terminate the Plan and distribute Participants’ Account
Balances, provided that (i) all arrangements sponsored by the Company that would
be aggregated with the Plan under Treasury regulation §1.409A-1(c) and in which
any Participant participates are terminated; (ii) no distributions, other than
distributions that would otherwise be payable under the terms of the Plan and
other aggregated arrangements if the termination had not occurred, are made
within twelve(12) months of date of termination; (iii) all distributions are
made within twenty-four (24) months of the termination of the arrangements; and
(iv) the Company does not adopt a new arrangement that would be aggregated with
the any terminated arrangement under Treasury regulation §409A-1(c) if any
Participant participated in both arrangements, at any time within five (5) years
following the date of termination of the arrangement.

 

(c)                                  Other Approved Events.  The Company may
terminate the Plan in accordance with such other events and conditions as the
Commissioner of the Internal Revenue Service may prescribe in generally
applicable guidance published in the Internal Revenue Bulletin.

 

11.2                           Effect of Payment.  The full payment of the
applicable benefit under Articles 4, 5, 6, 7 or 8 of the Plan shall completely
discharge all obligations to a Participant and his or her designated
Beneficiaries under this Plan and the Participant’s Plan Agreement shall
terminate.

 

11.3                           Amendment.  The Company may, at any time, amend
or modify the Plan in whole or in part by the action of the Board; provided,
however, that no amendment or modification shall be effective to decrease or
restrict the value of a Participant’s vested Account Balance in existence at the
time the amendment or modification is made, calculated as if the Participant had
experienced a Termination of Employment as of the effective date of the
amendment or modification or, if the amendment or modification occurs after the
date upon which the Participant was eligible to Retire, calculated as if the
Participant had Retired as of the effective date of the amendment or
modification.  The amendment or modification of the Plan shall not affect any
Participant or Beneficiary who has become entitled to the payment of benefits
under the Plan as of the date of the amendment or modification.

 

Notwithstanding anything herein to the contrary, the Plan may be amended at any
time, retroactively if required in the opinion of the Company, in order to
ensure that the Plan is characterized as a non-tax-qualified “top hat” plan of
deferred compensation maintained for a select group of management or highly
compensated employees, as described under

 

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ERISA Sections 201(2), 301(a)(3) and 401(a)(1), to ensure that amounts under the
Plan are not considered to be taxed to a Participant under the Federal income
tax laws prior to the Participant’s receipt of the amounts or to conform the
Plan and the Trust to the provisions and requirements of any applicable law
(including ERISA and the Code).

 

ARTICLE 12
ADMINISTRATION

 

 

12.1                           Plan Committee Duties.  This Plan shall be
administered by the Company’s Plan Committee, which, unless and until
reconstituted by the Board, shall be comprised of at least three(3) individuals
appointed by the Compensation Committee.  Members of the Plan Committee may be
Participants under this Plan.  The Plan Committee shall have the responsibility
for the administration of the Plan, except to the extent that any Plan
administrative functions have been assigned hereunder to the Compensation
Committee.  In carrying out its duties, the Plan Committee shall have the
discretion and authority to (i) interpret and enforce all appropriate rules and
regulations for the administration of this Plan and (ii) decide or resolve any
and all questions including interpretations of this Plan, as may arise in
connection with the Plan. Any individual serving on the Plan Committee who is a
Participant shall not vote or act on any matter relating solely to himself or
herself.  When making a determination or calculation, the Plan Committee shall
be entitled to rely on information furnished by a Participant or the Company.

 

12.2                           Agents.  In the administration of this Plan, both
the Plan Committee and the Compensation Committee may, from time to time, employ
agents and delegate to them such administrative duties as they see fit
(including acting through a duly appointed representative) and may from time to
time consult with counsel who may be counsel to the Company.

 

12.3                           Binding Effect of Decisions.  The decision or
action of both the Plan Committee and the Compensation Committee with respect to
any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all persons
having any interest in the Plan.

 

12.4                           Indemnity of Committee Members.  The Company
shall indemnify and hold harmless each of the members of the Plan Committee and
of the Compensation Committee, and any employee to whom any of the duties of the
Plan Committee or the Compensation Committee may be delegated, from and against
any and all claims, losses, costs, damages, expenses or liabilities arising from
any action or failure to act with respect to this Plan, except in the case of
willful misconduct by such member or such employee.  This indemnification shall
be in addition to, and not in limitation of, any other indemnification of any
such member or employee.

 

12.5                           Company Information.  To enable the Plan
Committee and the Compensation Committee to perform their functions, the Company
shall supply full and timely information to them on all matters relating to the
compensation of the Participants, the date and circumstances of the Retirement,
Disability, death or Termination of Employment of the Participants, and such
other pertinent information as the Plan Committee or the Compensation Committee
may reasonably require.

 

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12.6                           Delegation of Authority.  The Board may, to the
full extent permitted by or consistent with applicable laws or regulations
(including, without limitation, applicable state law), delegate any or all of
its powers under the Plan to the Compensation Committee or another committee
appointed by the Board and consisting of members of the Board, and, if such
delegation to the Compensation Committee or other committee is made, all
references to the Board in the Plan shall mean and relate to the Compensation
Committee or such other committee, as the case may be.

 

ARTICLE 13
CLAIMS PROCEDURE

 

13.1                           Presentation of Claim.  Any Participant or
Beneficiary of a deceased Participant (such Participant or Beneficiary being
referred to below as a “Claimant”) may deliver to the Plan Committee a written
claim for a determination with respect to the amounts distributable to such
Claimant from the Plan.  If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within sixty (60) days after
such notice was received by the Claimant.  All other claims must be made within
one hundred and eighty (180) days of the date on which the event that caused the
claim to arise occurred.  The claim must state with particularity the
determination desired by the Claimant.

 

13.2                           Notification of Decision.  The Plan Committee
shall consider a Claimant’s claim within a reasonable time, and shall notify the
Claimant in writing:

 

(A)                                  THAT THE CLAIMANT’S REQUESTED DETERMINATION
HAS BEEN MADE, AND THAT THE CLAIM HAS BEEN ALLOWED IN FULL; OR

 

(B)                                 THAT THE PLAN COMMITTEE HAS REACHED A
CONCLUSION CONTRARY, IN WHOLE OR IN PART, TO THE CLAIMANT’S REQUESTED
DETERMINATION, AND SUCH NOTICE MUST SET FORTH IN A MANNER CALCULATED TO BE
UNDERSTOOD BY THE CLAIMANT:

 

(I)                                     THE SPECIFIC REASON(S) FOR THE DENIAL OF
THE CLAIM, OR ANY PART OF IT;

 

(II)                                  SPECIFIC REFERENCE(S) TO PERTINENT
PROVISIONS OF THE PLAN UPON WHICH SUCH DENIAL WAS BASED;

 

(III)                               A DESCRIPTION OF ANY ADDITIONAL MATERIAL OR
INFORMATION NECESSARY FOR THE CLAIMANT TO PERFECT THE CLAIM, AND AN EXPLANATION
OF WHY SUCH MATERIAL OR INFORMATION IS NECESSARY; AND

 

(IV)                              AN EXPLANATION OF THE CLAIM REVIEW PROCEDURE
SET FORTH IN SECTION 13.3 BELOW.

 

13.3                           Review of a Denied Claim.  Within sixty (60) days
after receiving a notice from the Plan Committee that a claim has been denied,
in whole or in part, a Claimant (or the Claimant’s duly authorized
representative) may file with the  Plan Committee a written request for a review
of the denial of the claim.  Thereafter, but not later than thirty (30) days
after the review procedure began, the Claimant (or the Claimant’s duly
authorized representative):

 

(A)                                  MAY REVIEW PERTINENT DOCUMENTS;

 

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(B)                                 MAY SUBMIT WRITTEN COMMENTS OR OTHER
DOCUMENTS; AND/OR

 

(C)                                  MAY REQUEST A HEARING, WHICH THE PLAN
COMMITTEE, IN ITS SOLE DISCRETION, MAY GRANT.

 

13.4                           Decision on Review.  The Plan Committee shall
render its decision on review promptly, and not later than sixty (60) days after
the filing of a written request for review of the denial, unless a hearing is
held or other special circumstances require additional time, in which case the
Plan Committee’s decision must be rendered within one hundred and twenty
(120) days after such date.  Such decision must be written in a manner
calculated to be understood by the Claimant, and it must contain:

 

(A)                                  SPECIFIC REASONS FOR THE DECISION;

 

(B)                                 SPECIFIC REFERENCE(S) TO THE PERTINENT PLAN
PROVISIONS UPON WHICH THE DECISION WAS BASED; AND

 

(C)                                  SUCH OTHER MATTERS AS THE PLAN COMMITTEE
DEEMS RELEVANT.

 

13.5                           Legal Action.  A Claimant’s compliance with the
foregoing provisions of this Article 13 is a mandatory prerequisite to a
Claimant’s right to commence any legal action with respect to any claim for
benefits under this Plan.

 

ARTICLE 14
TRUST

 

14.1                           Establishment of the Trust.  The Company has
established the Trust, and the Company intends, but is not required, to transfer
over to the Trust at least annually such assets as the Company determines, in
its sole discretion, are necessary to provide for its respective future
liabilities created with respect to the Annual Deferral Amounts, Annual Company
Contribution Amounts and Annual Company Matching Amounts for the Participants.

 

14.2                           Interrelationship of the Plan and the Trust.  The
provisions of the Plan and the Plan Agreement shall govern the rights of a
Participant to receive distributions pursuant to the Plan.  The provisions of
the Trust shall govern the rights of the Company, Participants and the creditors
of the Company to the assets transferred to the Trust.  The Company shall at all
times remain liable to carry out its obligations under the Plan.

 

14.3                           Distributions from the Trust.  The Company’s
obligations under the Plan may be satisfied with Trust assets distributed
pursuant to the terms of the Trust, and any such distribution shall reduce the
Company’s obligations under this Plan.

 

ARTICLE 15
MISCELLANEOUS

 

15.1                           Status of Plan.  The Plan is intended to be a
plan that is not qualified within the meaning of Code Section 401(a) and that
“is unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of

 

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management or highly compensated employees” within the meaning of ERISA Sections
201(2), 301(a)(3) and 401(a)(1).  The Plan shall be administered and interpreted
to the extent possible in a manner consistent with that intent.

 

15.2                           Unsecured General Creditor.  Participants and
their Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of the Company. 
For purposes of the payment of benefits under this Plan, any and all of the
Company’s assets shall be, and remain, the general, unpledged unrestricted
assets of the Company.  The Company’s obligation under the Plan shall be merely
that of an unfunded and unsecured promise to pay money in the future.

 

15.3                           Company’s Liability.  The Company’s liability for
the payment of benefits shall be defined only by the Plan and the Plan
Agreement, as entered into between the Company and a Participant.  The Company
shall have no obligation to a Participant under the Plan except as expressly
provided in the Plan and his or her Plan Agreement.

 

15.4                           Nonassignability.  Neither a Participant nor any
other person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or
convey in advance of actual receipt, the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are expressly declared to
be, unassignable and non-transferable.  No part of the amounts payable shall,
prior to actual payment, be subject to seizure, attachment, garnishment or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, be transferable by
operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency or be transferable to a spouse as a result of a
property settlement or otherwise other than pursuant to a “domestic relations
order” as defined in §414(p)(1)(B) of the Code.

 

15.5                           Not a Contract of Employment.  The terms and
conditions of this Plan shall not be deemed to constitute a contract of
employment between the Company and the Participant.  Nothing in this Plan shall
be deemed to give a Participant the right to be retained in the service of the
Company as an Employee, or to interfere with the right of the Company to
discipline or discharge the Participant at any time.

 

15.6                           Furnishing Information.  A Participant or his or
her Beneficiary will cooperate with the Plan Committee or Compensation Committee
by furnishing any and all information requested by the Plan Committee or
Compensation Committee and take such other actions as may be requested in order
to facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as the
Plan Committee or Compensation Committee may deem necessary.

 

15.7                           Terms.  Whenever any words are used herein in the
masculine, they shall be construed as though they were in the feminine in all
cases where they would so apply; and whenever any words are used herein in the
singular or in the plural, they shall be construed as though they were used in
the plural or the singular, as the case may be, in all cases where they would so
apply.

 

15.8                           Captions.  The captions of the articles, sections
and paragraphs of this Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.

 

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15.9                           Governing Law.  Subject to ERISA, the provisions
of this Plan shall be construed and interpreted according to the internal laws
of Delaware without regard to its conflicts of laws principles.

 

15.10                     Notice.  Any notice or filing required or permitted to
be given to the Plan Committee under this Plan shall be sufficient if in writing
and hand-delivered, or sent by registered or certified mail, to the address
below:

 

The J. Jill Group, Inc.

Attn: Treasurer

4 Batterymarch Park

Quincy, Massachusetts  02169

Copy to: VP/General Counsel

 

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

 

Any notice or filing required or permitted to be given to a Participant under
this Plan shall be sufficient if in writing and hand-delivered, or sent by mail,
to the last known address of the Participant.

 

15.11                     Successors.  The provisions of this Plan shall bind
and inure to the benefit of the Company and its successors and assigns and the
Participant and the Participant’s designated Beneficiaries.

 

15.12                     Spouse’s Interest.  The interest in the benefits
hereunder of a spouse of a Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable by such
spouse in any manner, including but not limited to such spouse’s will, nor shall
such interest pass under the laws of intestate succession.

 

15.13                     Validity.  In case any provision of this Plan shall be
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and enforced
as if such illegal or invalid provision had never been inserted herein.

 

15.14                     Incompetent.  If the Plan Committee determines in its
discretion that a benefit under this Plan is to be paid to a minor, a person
declared incompetent or to a person incapable of handling the disposition of
that person’s property, the Plan Committee may direct payment of such benefit to
the guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person.  The Plan Committee may require proof of
minority, incompetence, incapacity or guardianship, as it may deem appropriate
prior to distribution of the benefit.  Any payment of a benefit shall be a
payment for the account of the Participant and the Participant’s Beneficiary, as
the case may be, and shall be a complete discharge of any liability under the
Plan for such payment amount.

 

15.15                     Distribution Pursuant to Court Order/Divestiture
Certificate.  The Plan Committee is authorized to make any payments directed by
court order in any action in which the Plan or the Plan Committee has been named
as a party, provided, however, that the order constitutes a “domestic relations
order” as defined in §414(p)(1)(B) of the Code.

 

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In addition, the Plan Committee is authorized to make any payments necessary to
comply with a “certificate of divestiture”, as defined in §1043(b)(2) of the
Code.

 

15.16                     Distribution Upon Income Inclusion Under Code §409A. 
Notwithstanding any other provision of this Plan to the contrary, the Committee
is authorized to make a distribution to a Participant due to a failure to comply
with the requirements of §409A of the Code and the regulations issued
thereunder.  Said distribution shall not exceed the amount required to be
included in the Participant’s income as a result of said failure.

 

15.17                     Insurance.  The Company, on its own behalf or on
behalf of the trustee of the Trust, and, in its sole discretion, may apply for
and procure insurance on the life of the Participant, in such amounts and in
such forms as the Trust may choose.  The Company or the trustee of the Trust, as
the case may be, shall be the sole owner and beneficiary of any such insurance. 
The Participant shall have no interest whatsoever in any such policy or
policies, and at the request of the Company shall submit to medical examinations
and supply such information and execute such documents as may be required by the
insurance company or companies to whom the Company has applied for insurance.

 

IN WITNESS WHEREOF, the Company has signed this Plan document, as of
November 10, 2005.

 

 

The J. Jill Group, Inc.

 

 

 

 

By:

/s/ OLGA L. CONLEY

 

 

 

 

Title:

EVP/CAO & CFO

 

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