Exhibit
10.1


 


THE J.
JILL GROUP, INC.

2004 Fall Season Special Bonus Plan


 


 


Purpose


 


The 2004 Fall Season
Special Bonus Plan (the “Special Bonus Plan”) is designed to provide financial
reward to the executive officers of The J. Jill Group, Inc. for their contributions
toward the Company’s exceeding its financial targets for the 2004 Fall Season.


 


Participation


 


•                  A
“Participating Employee” shall mean each of the following employees of
the Company:  (i) the President and Chief
Executive Officer; and (ii) any Executive Vice President.


 


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


 


Eligibility
Criteria


 


•                  A Participating Employee who has been
notified that he or she is in “performance counseling” pursuant to the
Company’s “Performance Improvement Process”  at
any time during the performance period will not be eligible for a bonus for the
performance period.


 


•                  To be eligible to receive a bonus for
the performance period, a Participating Employee must be actively employed for
a minimum of three months in the performance period.  Time on leave does not count as active
employment.


 


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


 


Performance Period


 


This performance period
for the Special Bonus Plan runs from June 27, 2004 to December 25, 2004.


 
















 


Calculation of Bonus Payment


 


•                  
Definitions:


 


•                  The
“Bonus Percentage” for a Participating Employee shall be a percentage
assigned to the Participating Employee for the purpose of calculating the
Participating Employee’s bonus, if any, under the Special Bonus Plan.  Bonus Percentages shall be as follows:


 


	
  Employee

  	
   

  	
  Bonus Percentage

  	
   

  
	
  President and CEO

  	
   

  	
  20%

  	
   

  
	
  Executive Vice
  President

  	
   

  	
  10%

  	
   

  



 


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


 


•                  “Earnings
Per Share Percentage” for the performance period means a fraction, the
numerator of which is the Company’s Preliminary Earnings Per Share for the
performance period minus the Company’s Earnings Per Share Target for the
performance period and the denominator of which is $0.35, expressed as a
percentage.  If the Earnings Per Share
Percentage for the performance period would be a negative number, the Earnings
Per Share Percentage for the performance period shall be 0.


 


•                  “Earnings
Per Share Target” for the performance period means the Company’s fully
diluted earnings per share target for the performance period as set forth in
the Company’s 2004 Financial Plan.


 


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


 


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


 


•                  If
the Company’s Preliminary Earnings Per Share for the performance period are
greater than the Company’s Earnings Per Share Target for the performance
period, each eligible Participating Employee shall receive a bonus under the
Special Bonus Plan as follows:


 


2
















 


	
  Earnings Per Share Percentage

  	
   

  	
  Number of Special Bonus Units

  	
   

  
	
  Less than 20%

  	
   

  	
  0

  	
   

  
	
  At least 20% but less
  than 40%

  	
   

  	
  1

  	
   

  
	
  At least 40% but less
  than 60%

  	
   

  	
  2

  	
   

  
	
  At least 60% but less
  than 80%

  	
   

  	
  3

  	
   

  
	
  At least 80% but less
  than 100%

  	
   

  	
  4

  	
   

  
	
  100% or more

  	
   

  	
  5

  	
   

  



 


Additional
Bonuses


 


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


 


Payments


 


Bonus payments will be
made promptly following the close of the performance period.


 


Example


 


Assume the Participating
Employee’s annual base salary is $400,000, his or her Bonus Percentage is 10%,
and the Company’s Earnings Per Share Ratio for the performance period is 33%:


 


	
  Base

  Salary

  	
   

  	
  Salary for

  Performance

  Period

  	
   

  	
  Bonus %

  	
   

  	
  EPS %

  	
   

  	
  Bonus

  Units

  	
   

  	
  Bonus

  Amount

  	
   

  
	
  $

  	
  400,000

  	
   

  	
  $

  	
  200,000

  	
   

  	
  10

  	
  %

  	
  33

  	
  %

  	
  1

  	
   

  	
  $

  	
  20,000

  	
   

  
															



 


3