Document:

Exchange Agreement

 Exhibit 10.3 
 EXECUTION COPY 
 EXCHANGE AGREEMENT 
 EXCHANGE AGREEMENT dated as of November 13, 2006 (this “Agreement”), among VERIZON COMMUNICATIONS INC., a Delaware corporation
(“Verizon”), BEAR, STEARNS & CO. INC., a Delaware corporation (the “Investment Entity”), and, solely with respect to Sections 2, 3(b), 5, 6, 7, 8, 9 and 10 hereof, IDEARC INC., a Delaware corporation
(“SpinCo”). 
 WHEREAS, SpinCo intends to issue (a) the obligations set forth on Schedule I hereto (collectively, the
“SpinCo Notes”), and (b) the obligations set forth on Schedule II hereto (collectively, the “Term Loan Notes” and, together with the SpinCo Notes, the “SpinCo Obligations”), in each case, to
Verizon; 
 WHEREAS, the Investment Entity has purchased the debt obligations of Verizon set forth on Schedule III hereto (collectively, the
“Verizon Debt”) through open market purchases; 
 WHEREAS, Verizon desires to exchange 50% of the SpinCo Obligations with
the Investment Entity for some or all of the Verizon Debt; 
 WHEREAS, the Investment Entity desires to exchange some or all of the Verizon
Debt for such portion of the SpinCo Obligations; and 
 WHEREAS, concurrently with the execution and delivery of this Agreement, Verizon,
J.P. Morgan Ventures Corporation (the “Parallel Investment Entity”) and SpinCo are entering into an exchange agreement (the “Parallel Exchange Agreement”) pursuant to which Verizon intends to exchange the remaining
50% of the SpinCo Obligations with the Parallel Investment Entity for certain debt obligations of Verizon held by the Parallel Investment Entity, and the Parallel Investment Entity has indicated its desire to exchange certain debt obligations of
Verizon held by the Parallel Investment Entity for such portion of the SpinCo Obligations, subject to the same terms and conditions as set forth in this Agreement. 
 NOW THEREFORE, in consideration of the representations, warranties and agreements contained in this Agreement, the parties agree as follows: 
 1. The Exchange. (a) Subject to the terms and conditions and in reliance upon the representations and warranties in this Agreement, at the
Closing (as defined below) (i) Verizon shall transfer to the Investment Entity, and the Investment Entity shall accept, the SpinCo Obligations set forth on Schedule IV hereto (the “Exchange Notes”), and (ii) the Investment
Entity shall transfer to Verizon, and Verizon shall accept, the debt obligations of Verizon set forth on Schedule V hereto (collectively, the “Debt Obligations”) (the transactions described in clauses (i) and (ii) above,
collectively, the “Exchange”). 

 (b) The Exchange shall occur at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New
York, New York (the “Closing”), on November 17, 2006, or at such other place or time, or on such later date, as may be agreed upon by Verizon, the Investment Entity and the Parallel Investment Entity (the date on which the
Closing occurs, the “Closing Date”). At the Closing, (i) Verizon shall deliver the Exchange Notes that are SpinCo Notes to the Investment Entity, and the Investment Entity shall accept such Exchange Notes, through the
facilities of The Depository Trust Company (“DTC”) or as otherwise agreed by Verizon and the Investment Entity, (ii) Verizon shall deliver the Exchange Notes that are Term Loan Notes to the Investment Entity, and the Investment
Entity shall accept such Exchange Notes, by executing the Assignment and Assumption attached as Exhibit A hereto (such agreement, the “Assignment and Assumption”), and (iii) the Investment Entity shall deliver the Debt
Obligations to Verizon, and Verizon shall accept the Debt Obligations, through the facilities of DTC or as otherwise agreed by the Investment Entity and Verizon. 
 (c) As used in this Agreement, the term “Business Day” shall mean those days on which both the New York Stock Exchange and banking institutions located in New York City are open for trading or
banking, as the case may be, in the ordinary course of business. 
 2. Assignment of Rights by Verizon. Effective as of the Closing,
Verizon hereby assigns to the Investment Entity all its rights arising out of or in respect of the Exchange Notes, and SpinCo hereby consents to such assignment. 
 3. Representations and Warranties. (a) Verizon hereby represents and warrants to the Investment Entity that: 
 (i) Verizon is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Verizon has all requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. This Agreement has been duly executed and delivered by Verizon and constitutes a legal, valid and binding obligation of Verizon, enforceable against Verizon in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. 
 (ii) No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Federal, state,
local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a “Governmental Entity”) or nongovernmental third party
is required to be obtained or made by or with respect to Verizon or any of its subsidiaries (including SpinCo) in connection with the execution, delivery and performance of this Agreement except as have been previously obtained or made. 

 

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 (iii) Neither the Exchange nor the consummation of any other transaction contemplated
herein nor the fulfillment of the terms hereof shall result in a breach of any of the terms and provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which Verizon or any of its
subsidiaries (including SpinCo) is a party or by which it is bound, or Verizon’s Certificate of Incorporation or By-Laws, or any order, rule or regulation applicable to Verizon of any court, Federal or state regulatory body, administrative
agency or other governmental body having jurisdiction over Verizon or its properties. 
 (iv) Prior to the Closing, Verizon
will have good and valid title to the Exchange Notes, free and clear of any liens, claims, equities, encumbrances, security interests, options, charges or restrictions of any kind (collectively “Liens”). Upon the Exchange, done in
accordance with clause (b) of Section 1, good and valid title to the Exchange Notes shall pass to the Investment Entity, free and clear of any Liens, other than those arising from acts of the Investment Entity. 
 (v) Verizon has made its own independent inquiry as to the legal, tax and accounting aspects of the transactions contemplated by this
Agreement and any related transactions, and Verizon has not relied on the Investment Entity, the Investment Entity’s legal counsel or the Investment Entity’s accounting advisors for legal, tax or accounting advice in connection with the
transactions contemplated by this Agreement or any related transactions. 
 (b) SpinCo hereby represents and warrants to the Investment
Entity that when the Exchange Notes are (i) issued by SpinCo to Verizon and (ii) transferred by Verizon to the Investment Entity at the Closing in exchange for the Debt Obligations, (1) the Exchange Notes that are SpinCo Notes will
(x) be duly and validly authorized and issued, (y) constitute valid and legally binding obligations of SpinCo enforceable against SpinCo in accordance with their terms and (z) be in the form contemplated by, and entitled to the
benefits of, the indenture governing the SpinCo Notes (the “Indenture”), and (2) the Credit Agreement (as defined below) will (x) be duly authorized, executed and delivered by the parties thereto and (y) constitute a
valid and legal obligation of SpinCo enforceable against SpinCo in accordance with its terms, in the case of clause (1)(y) and clause (2)(y), subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. 
 (c) The Investment Entity hereby represents and warrants to Verizon that: 
 (i) The Investment Entity is a
corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Investment Entity has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder.
This Agreement has been duly executed and delivered by the Investment Entity and constitutes a legal, valid and binding 

  

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obligation of the Investment Entity, enforceable against the Investment Entity in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. 
 (ii) No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental
Entity or nongovernmental third party is required to be obtained or made by or with respect to the Investment Entity in connection with the execution, delivery and performance of this Agreement except as have been previously obtained or made.

 (iii) Neither the Exchange nor the consummation of any other transaction contemplated herein nor the fulfillment of the
terms hereof shall result in a breach of any of the terms and provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Investment Entity is a party or by which it is bound, or
the Investment Entity’s Certificate of Incorporation or By-Laws, or, to the best of its knowledge, any order, rule or regulation applicable to the Investment Entity of any court, Federal or state regulatory body, administrative agency or other
governmental body having jurisdiction over the Investment Entity or its properties. 
 (iv) Prior to the Closing, the
Investment Entity will have good and valid title to the Debt Obligations, free and clear of any Liens. Upon the Exchange, done in accordance with clause (b) of Section 1, good and valid title to the Debt Obligations shall pass to Verizon,
free and clear of any Liens, other than those arising from acts of Verizon. 
 (v) The Investment Entity is an accredited
investor within the meaning of Rule 501(a) under the Securities Act of 1933, as amended. 
 (vi) The Investment Entity has
made its own independent inquiry as to the legal, tax and accounting aspects of the transactions contemplated by this Agreement and any related transactions and the Investment Entity has not relied on Verizon, Verizon’s legal counsel or
Verizon’s accounting advisors for legal, tax or accounting advice in connection with the transactions contemplated by this Agreement or any related transactions. 
 4. Conditions. (a) The obligations of the Investment Entity to exchange the Debt Obligations for the Exchange Notes at the Closing shall be subject to the satisfaction (or waiver) of the following
conditions: 
 (i) Verizon shall have furnished to the Investment Entity an opinion of Debevoise & Plimpton LLP dated
the Closing Date, with respect to (A) due authorization, execution and enforceability of this Agreement, (B) no required governmental consents and (C) no adverse claims; 
  

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 (ii) no statute, rule, regulation, executive order, decree, temporary restraining order,
preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Entity or other legal restraint or prohibition shall be in effect preventing the consummation of the transactions contemplated
to occur at the Closing; 
 (iii) (A) the representations and warranties of Verizon in this Agreement shall be true and
correct in all material respects on and as of the Closing Date, with the same effect as if made on the Closing Date, (B) Verizon shall have complied with all the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date and (C) Verizon shall have furnished to the Investment Entity a certificate of Verizon in a form reasonably satisfactory to the Investment Entity, signed by a Vice President or Treasurer of Verizon and
dated the Closing Date, to the effect set forth in clauses (A) and (B) above; 
 (iv) the private letter ruling
Verizon received from the Internal Revenue Service in September 2006 (as may be supplemented from time to time prior to the date hereof), shall continue to be in full force and effect as of the Closing Date; 
 (v) the Purchase Agreement dated November 1, 2006 (the “Purchase Agreement”), among the Investment Entity and the
Parallel Investment Entity, as selling noteholders, SpinCo, the Guarantors (as defined therein), and J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc., as representatives of the initial purchasers named in Schedule 1 thereto, shall
remain in full force and effect and all the conditions precedent set forth in the Purchase Agreement shall have been satisfied, provided that this clause (v) shall not apply to any condition that the Exchange shall have occurred;

 (vi) the Indenture shall have been executed substantially in the form attached as Exhibit B hereto and shall be in full
force and effect as of the Closing Date, without any amendments or modifications thereto; 
 (vii) the Credit Agreement to be
dated as of the Closing Date (the “Credit Agreement”), among SpinCo, as borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, Bear Stearns Corporate Lending Inc., as
syndication agent, and J.P. Morgan Securities Inc. and Bear, Stearns & Co. Inc., as joint lead arrangers and joint bookrunners, shall have been executed substantially in the form attached as Exhibit C hereto and shall be in full force and
effect as of the Closing Date, without any amendments or modifications thereto; 
 (viii) the spin-off of SpinCo to
Verizon’s stockholders as described in the Form 10 Registration Statement filed by SpinCo shall have occurred; and 
  

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 (ix) no default or event of default has occurred and is continuing under the Indenture or
the Credit Agreement. 
 In the event that any of the conditions set forth in this clause (a) shall not have been fulfilled (or waived by the Investment
Entity) on the Closing Date, this Agreement may be terminated by the Investment Entity by delivering a written notice of termination to Verizon, provided that such termination shall not be effective until the Parallel Investment Entity has
also delivered a notice of termination to Verizon pursuant to Section 4(a) of the Parallel Exchange Agreement. 
 (b) The obligations of
Verizon to exchange the Exchange Notes for the Debt Obligations at the Closing shall be subject to the satisfaction (or waiver) of the following conditions: 
 (i) the Investment Entity shall have furnished to Verizon an opinion of Cravath, Swaine & Moore LLP, counsel for the Investment
Entity, dated the Closing Date, with respect to (A) due authorization, execution and enforceability of this Agreement, (B) no required governmental consents and (C) no adverse claims; 
 (ii) (A) the representations and warranties of the Investment Entity in this Agreement shall be true and correct in all material respects
on and as of the Closing Date, with the same effect as if made on the Closing Date, (B) the Investment Entity shall have complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to
the Closing Date and (C) the Investment Entity shall have furnished to Verizon a certificate of the Investment Entity in form reasonably satisfactory to Verizon, signed by an authorized officer and dated the Closing Date, to the effect set
forth in clauses (A) and (B) above; 
 (iii) the Purchase Agreement shall remain in full force and effect and all
the conditions precedent set forth in the Purchase Agreement shall have been satisfied, provided that this clause shall not apply to any condition that the Exchange shall have occurred; 
 (iv) the Indenture shall have been executed substantially in the form attached as Exhibit B hereto and shall be in full force and effect
as of the Closing Date, without any amendments or modifications thereto; 
 (v) the Credit Agreement shall have been executed
substantially in the form attached as Exhibit C hereto and shall be in full force and effect as of the Closing Date, without any amendments or modifications thereto; and 
 (vi) the spin-off of SpinCo to Verizon’s stockholders as described in the Form 10 Registration Statement filed by SpinCo shall have
occurred. 
 In the event that any of the conditions set forth in this clause (b) shall not have been fulfilled (or waived by Verizon) on the Closing
Date, this Agreement may be terminated by Verizon by delivering a written notice of termination to the Investment Entity and the Parallel Investment Entity. 
  

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 5. Relationship of Parties. All acquisitions of Verizon Debt by the Investment Entity, all
exchanges of Debt Obligations for Exchange Notes by the Investment Entity pursuant to this Agreement, all distributions by the Investment Entity of Exchange Notes and all other acts or omissions of the Investment Entity in connection with this
Agreement, are for the Investment Entity’s own account and not for the account of Verizon. No principal-agent relationship is, nor is intended to be, created between Verizon and the Investment Entity by any of the provisions of this Agreement.
Each of Verizon and SpinCo acknowledges and agrees that the Investment Entity is acting solely in the capacity of an arm’s length contractual counterparty to Verizon and SpinCo with respect to the transactions contemplated hereby (including in
connection with determining the terms of the offering under the Purchase Agreement) and not as a financial advisor or fiduciary to, or an agent of, Verizon, SpinCo or any other person. 
 6. Representations to Survive. The respective agreements, representations, warranties and other statements of Verizon or its officers and of the
Investment Entity or its officers and the agreements of SpinCo, in each case set forth in or made pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation made by or on behalf of the Investment Entity,
Verizon, SpinCo or any of their respective officers, and shall survive the Closing. 
 7. Notices. All communications hereunder shall
be in writing and addressed to the applicable party at its address set forth below or to such other address as such party may specify in writing: 
  

	 	(a)	if to the Investment Entity, to it at: 

 Bear,
Stearns & Co. Inc. 
 383 Madison Avenue 
 New York, New York 10179 
 Attention: John C. Maguire 
 Facsimile No.: (212) 272-5100 
  

	 	(b)	if to Verizon, to it at: 

 Attention: John W. Diercksen

 Facsimile No.: (212) 385-3904 
 With copies to: 
 Verizon Financial Services LLC 
 3900 Washington St., 2nd Fl. 
 Wilmington, DE 19802 
 Attention: Janet Garrity 
 Facsimile No.:
(302) 761-4245 
 and 
  

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 Verizon 
 One Verizon Way 
 Basking Ridge, NJ 07920 
 Attention: Philip Marx 
 Facsimile No.:
(908) 696-2067 
  

	 	(c)	if to SpinCo, to it at: 

 2200 West Airfield Drive

 DFW Airport, TX 75261 
 Attention: William G. Mundy 
 Facsimile No.: (972) 453-7920 
 All communications hereunder shall be effective upon receipt and any such communication shall be deemed received (i) in the case of delivery by U.S. mail, on the date that such communication shall have been
delivered to the recipient thereof, (ii) in the case of delivery by receipted delivery service, on the date and at the time that such communication shall have been delivered to the recipient thereof, as evidenced by the delivery service receipt
therefor, or (iii) in the case of delivery by a facsimile transmission, on the date and at the time that such communication shall have been delivered to the recipient thereof, as evidenced by the facsimile equipment confirmation. 
 8. Successors. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and no other
person shall have any right or obligation hereunder. 
 9. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State. 
 10. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together
shall constitute one and the same agreement. 
 [This space left intentionally blank] 
  

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 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first
written above. 
  

			
	 VERIZON COMMUNICATIONS INC.,

		
	 by
	 	/s/ John W. Diercksen
		 	 Name: John W. Diercksen

		 	 Title: Executive Vice President

	
	 BEAR, STEARNS & CO. INC.,

		
	 by
	 	/s/ John C. Maguire
		 	 Name: John C. Maguire

		 	 Title: Senior Managing Director

 As to Sections 2, 3(b), 5, 6, 7, 8, 9 and 10 only: 
  

			
	
	 IDEARC INC.,

		
	 by
	 	/s/ Andrew Coticchio
		 	 Name: Andrew Coticchio

		 	 Title: Chief Financial Officer and Treasurer

  

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 Schedule I 
 SpinCo Notes 
  

	1.	8% senior unsecured notes due 2016 in aggregate principal amount of $2,850,000,000 issued pursuant to the Indenture (the “Senior Unsecured Notes”).

 Schedule II 
 Term Loan Notes 
  

	1.	senior secured term loans due 2014 in an aggregate principal amount of $4,300,000,000 issued pursuant to the Credit Agreement. 

 Schedule III 
 Verizon Debt 
  

								
	 Debt Description
	  	CUSIP	  	Maturity	  	Principal Amount
	 Commercial Paper
	  	92344MNC3	  	01/12/2007	  	$	1,800,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0BW9	  	04/13/2007	  	$	37,500,000
	 Floating Rate Exchangeable Notes
	  	9234E0BY5	  	04/13/2007	  	$	5,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0CD0	  	10/15/2007	  	$	425,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0CE8	  	10/15/2007	  	$	245,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0BT6	  	01/12/2007	  	$	250,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0CC2	  	10/15/2007	  	$	93,000,000
	 Floating Rate Notes
	  	92343VAD6	  	08/15/2007	  	$	85,000,000
	 Commercial Paper
	  	92344MMF7	  	12/15/2006	  	$	600,000,000

 Schedule IV 
 Exchange Notes 
  

	1.	Senior Unsecured Notes in an aggregate principal amount of $1,425,000,000. 

  

	2.	Term Loan Notes in an aggregate principal amount of $2,150,000,000. 

 Schedule V 
 Debt Obligations 
  

								
	 Debt Description
	  	CUSIP	  	Maturity	  	Principal Amount
	 Commercial Paper
	  	92344MNC3	  	01/12/2007	  	$	1,800,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0BW9	  	04/13/2007	  	$	37,500,000
	 Floating Rate Exchangeable Notes
	  	9234E0BY5	  	04/13/2007	  	$	5,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0CD0	  	10/15/2007	  	$	425,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0CE8	  	10/15/2007	  	$	245,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0BT6	  	01/12/2007	  	$	250,000,000
	 Floating Rate Exchangeable Notes
	  	9234E0CC2	  	10/15/2007	  	$	93,000,000
	 Floating Rate Notes
	  	92343VAD6	  	08/15/2007	  	$	85,000,000
	 Commercial Paper
	  	92344MMF7	  	12/15/2006	  	$	596,970,000Stock Option Grant Agreement between J. Crew Group, Inc. and Jeffrey Pfeifle

 Exhibit 10.1 
 STOCK OPTION GRANT AGREEMENT 
 THIS AGREEMENT (the “Agreement”) is made as of this
15th day of November, 2006 between J.CREW GROUP INC. (the “Company”) and Jeffrey Pfeifle (the
“Participant”). 
 WHEREAS, the Company has adopted and maintains the J. Crew Group, Inc. 2005 Equity Incentive Plan (the
“Plan”) to promote the interests of the Company and its shareholders by providing the Company’s key employees and others with an appropriate incentive to encourage them to continue in the employ of the Company and to improve
the growth and profitability of the Company; and 
 WHEREAS, the Plan provides for the Grant to Participants in the Plan of Non-Qualified
Stock Options to purchase shares of Common Stock of the Company; 
 NOW, THEREFORE, in consideration of the promises and the mutual covenants
hereinafter set forth, the parties hereto hereby agree as follows: 
  

	 	1.	Grant of Options. Pursuant to, and subject to, the terms and conditions set forth herein and in the Plan, the Company hereby Grants to the Participant a NON-QUALIFIED STOCK
OPTION (the “Option”) with respect to 25,000 shares of Common Stock of the Company. 

  

	 	2.	Grant Date. The Grant Date of the Option hereby granted is November 15, 2006. 

  

	 	3.	Incorporation of Plan. All terms, conditions and restrictions of the Plan are incorporated herein and made part hereof as if stated herein. If there is any conflict between
the terms and conditions of the Plan and this Agreement, the terms and conditions of this Agreement, as interpreted by the Committee, shall govern. All capitalized terms used herein shall have the meanings given to such terms in the Plan.

  

	 	4.	Exercise Price. The exercise price of each share underlying the Option hereby granted is $33.18. 

 Vesting Date. The Option shall become exercisable as follows: 50% of Common Stock underlying the Option shall vest on November 15, 2010 and
50% of Common Stock underlying the Option shall vest on November 15, 2011; provided that the Participant remains continuously employed by the Company through each applicable vesting date. Notwithstanding the foregoing, if within the one-year
period following a Change in Control the Participant’s employment is terminated by the Company or its affiliate without Cause or by the Participant for Good Reason, all outstanding Options held by such Participant shall become immediately
exercisable as of the effective date of such termination of the Participant’s employment. 

	 	5.	Expiration Date. Subject to the provisions of the Plan, with respect to the Option or any portion thereof which has not become exercisable, the Option shall expire on the
date the Participant’s employment is terminated for any reason, and with respect to any Option or any portion thereof which has become exercisable, the Option shall expire on the earlier of (i) 90 days after the Participant’s
termination of employment other than for Cause, Retirement, death, or Disability; (ii) one year after termination of the Participant’s employment by reason of death, Retirement or Disability; (iii) the commencement of business on the
date the Participant’s employment is, or is deemed to have been, terminated for Cause; or (iv) the seventh anniversary of the grant date. 

  

	 	6.	Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party hereto upon any breach or default of any party under this Agreement,
shall impair any such right, power or remedy of such party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of
any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party or any provisions or conditions of this Agreement, shall be in writing and shall be effective only to the extent specifically set forth in such writing. 

  

	 	7.	Limitation on Transfer. During the lifetime of the Participant, the Option shall be exercisable only by the Participant. The Option shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution. Notwithstanding the foregoing, the Participant may request authorization from the Committee to assign the Participant’s rights with respect to the Option granted herein to a
trust or custodianship, the beneficiaries of which may include only the Participant, the Participant’s spouse or the Participant’s lineal descendants (by blood or adoption), and, if the Committee Grants such authorization, the Participant
may assign the Participant’s rights accordingly. In the event of any such assignment, such trust or custodianship shall be subject to all the restrictions, obligations, and responsibilities as apply to the Participant under the Plan and this
Stock Option Grant Agreement and shall be entitled to all the rights of the Participant under the Plan. All shares of Common Stock obtained pursuant to the Option granted herein shall not be transferred except as provided in the Plan.

  

	 	8.	Integration. This Agreement and the Plan contain the entire understanding of the parties with respect to its subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein and the Plan. This Agreement and the Plan supersede all prior agreements and understandings between the
parties with respect to the subject matter of this Agreement. 

  

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	 	9.	Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same
instrument. 

  

	 	10.	Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of NEW YORK, without regard to the provisions governing
conflict of laws. 

  

	 	11.	Participant Acknowledgment. The Participant hereby acknowledges receipt of a copy of the Plan. The Participant hereby acknowledges that all decisions, determinations and
interpretations of the Committee in respect of the Plan, this Agreement and the Option shall be final and conclusive. 

 IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer and said Participant has hereunto signed this Agreement on the Participant’s own behalf, thereby representing that the Participant has
carefully read and understands this Agreement and the Plan as of the day and year first written above. 
  

			
	J.CREW GROUP INC.
	
	 /s/ Millard S. Drexler

	By:	 	Millard S. Drexler
	Title:	 	Chief Executive Officer
	
	 /s/ Jeffrey Pfeifle

	Jeffrey Pfeifle

  

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