Exhibit
10.4


 


SEVERANCE
AGREEMENT


 


This Severance Agreement (the “Agreement”) is
entered into this 21st day of December, 2005, by and between The J.
Jill Group, Inc., a Delaware corporation (“J. Jill”), on behalf of itself
and the other entities encompassed within the definition of the term “Company”
as set forth in Section 7(c), and Lisa T. Bayne (the “Employee”).  This Agreement sets forth the agreement of
the parties relating to the severance arrangements for the Employee under
certain circumstances.  Capitalized terms
used in this Agreement are defined in Section 7 hereof.


 


1.             Severance
Pay and Associated Benefits Upon a Qualified Termination.


 


(a)           Severance
Benefits.  In the event of a
Qualified Termination, and subject to the provisions of Sections 2 and 5 below,
the Company will provide the payments and benefits described in this Section 1
(collectively, the “Severance Benefits”).


 


(b)           Severance
Pay.  The Company will make a
one-time, lump-sum payment to the Employee in the gross amount of one year of the
Employee’s annual base salary in effect immediately prior to the Qualified
Termination (the “Severance Payment”).


 


(c)           Medical
Insurance.  The Employee’s rights
under the so-called COBRA statute (which gives the Employee the right to
continue to participate in the Company’s group medical plans for a period of
time at the Employee’s own expense) shall become effective as of the
Termination Date.  For a 12-month period
from the Termination Date, or until the Employee becomes eligible for group
medical plans from a new employer offering substantially equal insurance,
whichever is sooner, the Company
will pay the same portion of the premium for the Employee’s existing medical
and/or dental insurance as it would have paid (and the Employee will pay the
same portion of the premium for such insurance as the Employee would have paid)
if the Employee had continued to be employed at the Company.  The Employee will notify the Company’s Human
Resources Department in writing within 72 hours of accepting any such reemployment
with such insurance eligibility.  Nothing
herein shall prevent the Company from making changes in its medical insurance
plan, to the extent that such changes are generally applicable to employees of
the Company.


 


(d)           Withholdings.  The Company may deduct from the Employee’s
Severance Payment and any other payments otherwise due to the Employee, such
withholding taxes and similar governmental payments and charges as may be
required.


 


(e)           Timing
for Payment; Section 409A Restrictions.  Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), places certain restrictions on when
severance payments may be issued.  In the
event the Severance Benefits become due, the Severance Payment shall be issued
on the earlier of (i) the date six (6) months after the Termination
Date, or (ii) the death of the Employee. 
However, the restrictions in the previous sentence shall not apply, and
the Severance Payment shall be made not later than the fifth day following the
expiration of the seven-day revocation period described in Section 2
without revocation of the Release and Waiver by the Employee, if (i) the
Company determines in good faith that the Severance Payment can be made at that
time without violating the restrictions under Section 409A , or (ii) the
Severance Payment meets the following requirements:


 





















 


(A) The entire amount of the Severance
Payment does not exceed the lesser of (I) two times the Employees’ annual
compensation or (II) two times the §401(a)(17) limit of the Code.  Each limit is determined using the
compensation or §401(a)(17) limit in the calendar year before the year in which
the Termination Date occurs, and for purposes of this exception, the Employee’s
annual compensation is determined with reference to Treasury Regulation Section 1.415-2(d)(2),
which generally includes base salary and bonuses; and


 


(B) All amounts are paid by December 31
of the second calendar year following the year in which the Termination Date
occurs (e.g. if employment terminates in 2005, all payments must be made by December 31,
2007).


 


2.             Release
and Waiver.


 


In return for the payments and benefits
provided to the Employee as set forth in Section 1 above, the Employee
agrees to execute the Release and Waiver in the form attached as Exhibit A
hereto.  For a period of seven days after
the Employee has executed such Release and Waiver, the Employee may revoke the
Release and Waiver.  The Release and
Waiver shall become effective, and the Severance Benefits described in Section 1
shall become due, only upon the expiration of the seven-day revocation period
without revocation of the Release and Waiver by the Employee.  Notwithstanding the foregoing, the Company
and the Employee 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.


 


3.             Cooperation.


 


In connection with any termination of the
Employee’s employment, the Employee agrees to cooperate with the Company in
promptly transitioning the Employee’s duties and activities within the Company
to the person or persons designated by the Company to receive them.


 


4.             Confidentiality;
Nondisparagement.


 


(a)           Confidentiality.  The Employee agrees to keep the terms of this
Agreement confidential, and agrees not to disclose the terms of this Agreement
to third parties except to the Employee’s immediate family and legal or
financial advisers and except as required by law or legal process and then only
after notice is given to the Company in accordance with Section 6(g) below
such that, where feasible, the Company will have a reasonable opportunity to
oppose disclosure.  The Employee
understands that any breach of this confidentiality provision will constitute
grounds for termination by the Company of the Employee’s employment for Cause
as defined in Section 7(a).


 


(b)           Nondisparagement.  The Employee agrees not to take any action or
make any statement, written or oral, which disparages the Company, its
officers, or its management, business or personnel practices, or which disrupts
or impairs the Company’s normal operations. 
The provisions of this Section 4(b) shall not apply to any
truthful statement required to be made by the Employee in any legal proceeding
or pursuant to any governmental or regulatory investigation.


 


(c)           Non-Solicitation.  The Employee agrees that, during the Employee’s
employment with the Company and for a period of one year after the termination
of the Employee’s employment with the Company for any reason, the Employee will
not directly or 


 


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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 Employee’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.             Remedies.  


 


The Employee acknowledges and agrees that the
Employee’s obligations arising under Section 4 above are of the essence to
this Agreement and that the Employee’s breach of any of these obligations will
terminate the Company’s obligations to the Employee under Section 1 of
this Agreement.  Should the Employee
breach any such obligations the Employee shall further be required to pay back
to the Company the full value of any benefit that the Employee has derived
under Section 1 above.  The Employee
further acknowledges and affirms that money damages cannot adequately
compensate the Company for any breach by the Employee of Section 4 of this
Agreement and that the Company is entitled to equitable relief in any
Massachusetts or other court of competent jurisdiction to prevent or otherwise
restrain any actual or threatened breach of the provisions of said Sections
and/or compel specific performance of, or other compliance with, the terms
thereof.    


 


6.             Miscellaneous.


 


(a)           At-Will
Employment.  This Agreement is not a contract to
employ the Employee for a definite time period, and is not intended to be and
does not constitute a contract or part of a contractual agreement for continued
employment, either express or implied, between the Company and the Employee, it
being acknowledged that the Employee’s employment is “at will” and that either
the Employee or the Company may terminate the employment relationship at any
time, for any or no reason, with or without Cause and with or without prior
notice.


 


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


 


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


 


(d)           Governing
Law.  This Agreement shall be
interpreted in accordance with the substantive laws of The Commonwealth of
Massachusetts and without regard to any conflict of laws provisions.


 


(e)           Effect
on Other Agreements; Modification. 
This Agreement supersedes any prior oral or written understanding or
agreement relating to severance payments to be made to the Employee following
termination of employment with the Company (including without limitation the
letter agreement between the Employee and the Company dated October 17,
2005, except as set forth in the next sentence), except the Change in Control
Severance Agreement between the Employee and the Company dated as of the date
hereof and the Agreement to Protect Corporate Property between the Employee and
the Company dated on or about October 17, 2005.  Notwithstanding the foregoing, the fourth
bullet paragraph of the letter agreement between the Employee and the Company
dated October 17, 2005, relating to guaranteed bonus 


 


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payments to be paid to the Employee for the
Spring 2006 and Fall 2006 seasons, shall remain in full force and effect.  This Agreement may be modified only in a
writing signed by both parties.


 


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


 


(g)           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: Senior Vice President/Human
Resources


 


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 Employee:


 


Lisa T. Bayne


33 Aladdin Terr.


San Francisco, CA 94133


 


7.             Definitions.


 


For purposes of this Agreement, the following
terms shall have the meanings indicated below:


 


(a)           “Cause” for termination by the Company of the
Employee’s employment shall mean (i) any material breach by the Employee
of this Agreement or any other agreement to which the Employee and the Company
are both parties, (ii) any act or omission to act by the Employee which
may have a material and adverse effect on the Company’s business or on the
Employee’s ability to perform services for the Company, including, without
limitation, the commission of any crime involving moral turpitude or any
felony, or (iii) any material misconduct or material neglect of duties by
the Employee in connection with the business or affairs of the Company.


 


(b)           “Code”
shall have the meaning given that term in Section 1(e) hereof.


 


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(c)           “Company” shall mean The J. Jill Group, Inc., any successor to
its business or assets which assumes this Agreement, by operation of law or
otherwise, and any of its Subsidiaries.


 


(d)           “Employee” shall mean the individual named in the first paragraph of
this Agreement.


 


(e)           “Good Reason” for termination by the Employee of the
Employee’s employment shall be a termination based on one or more of the
following events occurring without the Employee’s express written consent:  (a) a substantial adverse alteration in
the nature or status of the Employee’s responsibilities; (b) a reduction
by the Company in the Employee’s annual base salary as in effect on the date
hereof or as the same may be increased from time to time; or (c) the
Company’s requiring that the Employee’s principal place of business be at an
office located more than 25 miles from (i) the site of the Employee’s
principal place of business immediately prior to the resignation or (ii) San
Francisco, CA, except for required
travel on the Company’s business to an extent substantially consistent with the
Employee’s past business travel obligations.


 


(f)            “Qualified
Termination” shall mean the Employee’s employment by the Company is
terminated (i) by the Employee for Good Reason or (ii) by the Company
for any reason other than for Cause.


 


(g)           “Severance
Benefits” shall have the meaning given that term in Section 1(a) hereof.


 


(h)           “Severance Payment” shall have the meaning given that term in
Section 1(b) hereof.


 


(i)            “Subsidiary” shall mean any corporation, partnership
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 The J. Jill Group, Inc. or another Subsidiary.


 


(j)            “Termination Date” shall mean the date that the Employee’s
employment by the Company terminates for any reason or no reason.


 


[signature page follows]


 


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


 


	
   

  	
  THE J. JILL GROUP, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Olga L. Conley

  	
   

  
	
   

  	
   

  	
  Duly Authorized

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Lisa T. Bayne

  	
   

  	
   

  
	
   

  	
  Lisa T. Bayne

  	
   

  
					



 


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EXHIBIT A


 


GENERAL RELEASE AND WAIVER OF ALL CLAIMS


(INCLUDING AGE
DISCRIMINATION IN EMPLOYMENT ACT CLAIMS AND SECTION 1542 OF THE CIVIL CODE
OF THE STATE OF CALIFORNIA CLAIMS)


 


In
consideration of the payment, benefits and other agreements set forth in the
Severance Agreement dated December 21, 2005 between The J. Jill Group, Inc.
(“J. Jill”) and Lisa T. Bayne (the “Employee”) to which this General Release
and Waiver Of All Claims is attached (the “Agreement”), the Employee, for
herself and for her 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 Employee’s employment by the Company
(including her 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 Employee represents and warrants that the
Employee knowingly and voluntarily waives all rights or claims arising prior to
the Employee’s execution of this Release and Waiver that the Employee 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 Employee’s behalf
in any state or federal agency and/or as a consequence of any litigation
concerning any facts alleged in any such action.


 


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The Employee waives and relinquishes all
rights and benefits afforded by Section 1542 of the Civil Code of the
State of California, and does so understanding and acknowledging the
significance of such specific waiver of Section 1542. Section 1542 of
the Civil Code of the State of California states as follows:


 


“A general release does not extend to claims which the creditor does
not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have
materially affected his settlement with the debtor.”


 


The Employee expressly waives and
relinquishes all rights and benefits under that section and under any law
of any jurisdiction of similar effect with respect to the Employee’s release of
any unknown or unsuspected claims the Employee may have against the Releasees.


 


The Employee further represents that:


 


(a)           The Company has advised the Employee to
consult with an attorney of the Employee’s choosing concerning the rights
waived in this Release and Waiver.  The
Employee has carefully read and fully understands this Release and Waiver, and
is voluntarily entering into this Release and Waiver.


 


(b)           The Employee understands that the Employee
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 Employee executes this Release and Waiver, the Employee
acknowledges that such early execution is a knowing and voluntary waiver of the
Employee’s right to consider this Release and Waiver for at least 21 days and
is due to the Employee’s belief that the Employee 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 Employee understands that, for a period of seven
days after the Employee has executed this Release and Waiver, the Employee may
revoke this Release and Waiver by giving notice in writing of such revocation
to the Company in accordance with Section 6(g) of the Agreement.  If at any time after the end of the seven-day
period the Employee accepts any of the payments or benefits provided by the
Company as described in the Agreement, such acceptance will constitute an
admission by the Employee that the Employee did not revoke this Release and
Waiver during the revocation period and will further constitute an admission by
the Employee that this Release and Waiver has become effective and enforceable.


 


(d)           The Employee understands the effect of this Release
and Waiver and that the Employee gives up any rights the Employee may have, in
particular but without limitation, under the Federal Age Discrimination in
Employment Act, Section 1542 of the Civil Code of the State of California
and the Massachusetts Law Against Discrimination (Mass. Gen. Laws ch. 151B§1 et
seq.).


 


(e)           The Employee understands that the Employee is
receiving benefits pursuant to the Agreement that the Employee would not
otherwise be entitled to if the Employee did not enter into this Release and
Waiver.


 


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(f)            The Employee acknowledges that the
severance pay and associated benefits specified in the Agreement represent all
payments and benefits owed to the Employee and that upon receipt of said
payments and benefits, the Employee shall have received all payments and
benefits owed to the Employee in connection with the Employee’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.


 


 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lisa T. Bayne

  	
   

  



 


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