Document:

Exhibit 10.23

 

DITECH
COMMUNICATIONS CORPORATION

2005 NEW RECRUIT STOCK OPTION PLAN

 

OPTION GRANT NOTICE

 

Ditech
Communications Corporation (the “Company”), pursuant to its 2005 New Recruit
Stock Option Plan (the “Plan”),
hereby grants to Optionholder an option to purchase the number of shares of the
Company’s Common Stock set forth below. 
This option is subject to all of the terms and conditions as set forth
herein and in the Option Agreement, the Plan, and the Notice of Exercise, all
of which are attached hereto and incorporated herein in their entirety.

 

	
  Optionholder:

  	
   

  
	
  Date of Grant:

  	
   

  
	
  Vesting Commencement
  Date:

  	
   

  
	
  Number of Shares
  Subject to Option:

  	
   

  
	
  Exercise Price (Per
  Share):

  	
   

  
	
  Total Exercise Price:

  	
   

  
	
  Expiration Date:

  	
   

  

 

	
  Type of
  Grant:

  	
   

  	
  Nonstatutory
  Stock Option

  
	
   

  	
   

  	
   

  
	
  Exercise Schedule:

  	
   

  	
  1/4th
  of the shares vest and become exercisable one year after the Vesting
  Commencement Date; the balance of the shares vest and become exercisable in a
  series of thirty-six (36) successive equal monthly installments measured from
  the first anniversary of the Vesting Commencement Date.

  
	
   

  	
   

  	
   

  
	
  Payment:

  	
   

  	
  By
  one or a combination of the following items (described in the Option
  Agreement):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ý

  	
  By
  cash or check

  
	
   

  	
   

  	
  ý

  	
  Pursuant
  to a Regulation T Program if the Shares are publicly traded

  
	
   

  	
   

  	
  ý

  	
  By
  delivery of already-owned shares if the Shares are publicly traded

  

 

Additional
Terms/Acknowledgements: The undersigned Optionholder
acknowledges receipt of, and understands and agrees to, this Option Grant
Notice, the Option Agreement, and the Plan. 
Optionholder further acknowledges that as of the Date of Grant, this
Option Grant Notice, the Option Agreement, and the Plan set forth the entire
understanding between Optionholder and the Company regarding the acquisition of
stock in the Company and supersede all prior oral and written agreements on
that subject with the exception of (i) options previously granted and
delivered to Optionholder under the Plan, and (ii) the following
agreements only:

 

OTHER
AGREEMENTS:

 

 

	
  DITECH COMMUNICATIONS
  CORPORATION

  	
  OPTIONHOLDER:

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
  Signature

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
								

 

ATTACHMENTS:  Option Agreement, 2005 New Recruit Stock
Option Plan, and Notice of Exercise

 

1

 

DITECH
COMMUNICATIONS CORPORATION

2005 NEW
RECRUIT STOCK OPTION PLAN

 

OPTION AGREEMENT

(NONSTATUTORY STOCK OPTION)

 

Pursuant to your Option Grant Notice (“Grant Notice”) and
this Option Agreement, Ditech Communications Corporation (the “Company”) has granted
you an option under its 2005 New Recruit Stock Option Plan (the “Plan”) to purchase
the number of shares of the Company’s Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice.  Defined terms not explicitly defined in this
Option Agreement but defined in the Plan shall have the same definitions as in
the Plan.

 

The details of your option are as follows:

 

1.             VESTING.  Subject to the limitations contained herein,
your option will vest as provided in your Grant Notice, provided that vesting
will cease upon the termination of your Continuous Service.

 

2.             NUMBER
OF SHARES AND EXERCISE PRICE.  The
number of shares of Common Stock subject to your option and your exercise price
per share referenced in your Grant Notice may be adjusted from time to time for
Capitalization Adjustments.

 

3.             EXERCISE
RESTRICTION FOR NON-EXEMPT EMPLOYEES. 
In the event that you are an Employee eligible for overtime compensation
under the Fair Labor Standards Act of 1938, as amended (i.e., a “Non-Exempt Employee”), you may not
exercise your option until you have completed at least six (6) months of
Continuous Service measured from the Date of Grant specified in your Grant
Notice, notwithstanding any other provision of your option.

 

4.             METHOD
OF PAYMENT.  Payment of the exercise
price is due in full upon exercise of all or any part of your option.  You may elect to make payment of the exercise
price in cash or by check or in any other manner permitted
by your Grant Notice, which may include one or more of the following:

 

(a)           In
the Company’s sole discretion at the time your option is exercised and provided
that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, pursuant
to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the
receipt of cash (or check) by the Company or the receipt of irrevocable
instructions to pay the aggregate exercise price to the Company from the sales
proceeds.

 

(b)           In
the Company’s sole discretion at the time your option is exercised and provided
that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, by
delivery to the Company (either by actual delivery or attestation) of
already-owned shares of Common Stock either that you have held for the period
required to avoid a charge to the Company’s reported earnings (generally six (6) months)
or that you did not

 

2

 

acquire, directly or
indirectly from the Company, that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market
Value on the date of exercise.  “Delivery”
for these purposes, in the sole discretion of the Company at the time you
exercise your option, shall include delivery to the Company of your attestation
of ownership of such shares of Common Stock in a form approved by the
Company.  Notwithstanding the foregoing,
you may not exercise your option by tender to the Company of Common Stock to
the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Company’s stock.

 

5.             WHOLE
SHARES.  You may exercise your option
only for whole shares of Common Stock.

 

6.             SECURITIES
LAW COMPLIANCE.  Notwithstanding
anything to the contrary contained herein, you may not exercise your option
unless the shares of Common Stock issuable upon such exercise are then
registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act.  The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may
not exercise your option if the Company determines that such exercise would not
be in material compliance with such laws and regulations.

 

7.             TERM.  You may not exercise your option before the
commencement or after the expiration of its term.  The term of your option commences on the Date
of Grant and expires upon the earliest of the following:

 

(a)           three
(3) months after the termination of your Continuous Service for any reason
other than your Disability or death; provided,
however, that (i) if during any part of such three (3) month
period your option is not exercisable solely because of the condition set forth
in Section 6, your option shall not expire until the earlier of the Expiration
Date or until it shall have been exercisable for an aggregate period of three (3) months
after the termination of your Continuous Service and (ii) if (x) you are a
Non-Exempt Employee, (y) you terminate your Continuous Service within six (6) months
after the Date of Grant specified in your Grant Notice, and (z) you have vested
in a portion of your option at the time of your termination of Continuous
Service, your option shall not expire until the earlier of (A) the later
of the date that is seven (7) months after the Date of Grant specified in
your Grant Notice or the date that is three (3) months after the
termination of your Continuous Service or (B) the Expiration Date;

 

(b)           twelve
(12) months after the termination of your Continuous Service due to your
Disability;

 

(c)           eighteen
(18) months after your death if you die either during your Continuous Service
or within three (3) months after your Continuous Service terminates;

 

(d)           the
Expiration Date indicated in your Grant Notice; or

 

(e)           the
day before the tenth (10th) anniversary of the Date of Grant.

 

3

 

8.             EXERCISE.

 

(a)           You
may exercise the vested portion of your option (and the unvested portion of
your option if your Grant Notice so permits) during its term by delivering a
Notice of Exercise (in a form designated by the Company) together with the
exercise price to the Secretary of the Company, or to such other person as the
Company may designate, during regular business hours, together with such additional
documents as the Company may then require.

 

(b)           By
exercising your option you agree that, as a condition to any exercise of your
option, the Company may require you to enter into an arrangement providing for
the payment by you to the Company of any tax withholding obligation of the
Company arising by reason of (i) the exercise of your option, (ii) the
lapse of any substantial risk of forfeiture to which the shares of Common Stock
are subject at the time of exercise, or (iii) the disposition of shares of
Common Stock acquired upon such exercise.

 

9.             TRANSFERABILITY.  Your option is not transferable, except by
will or by the laws of descent and distribution, and is exercisable during your
life only by you.  Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory
to the Company, you may designate a third party who, in the event of your
death, shall thereafter be entitled to exercise your option.  In addition, you may transfer your option to
a trust if you are considered to be the sole beneficial owner (determined under
Section 671 of the Code and applicable state law) while the option is held
in the trust, provided that you and the trustee enter into transfer and other
agreements required by the Company.

 

10.          OPTION
NOT A SERVICE CONTRACT.  Your option
is not an employment or service contract, and nothing in your option shall be
deemed to create in any way whatsoever any obligation on your part to continue
in the employ of the Company or an Affiliate, or of the Company or an Affiliate
to continue your employment.  In
addition, nothing in your option shall obligate the Company or an Affiliate,
their respective stockholders, Boards of Directors, Officers or Employees to
continue any relationship that you might have as a Director or Consultant for
the Company or an Affiliate.

 

11.          WITHHOLDING
OBLIGATIONS.

 

(a)           At
the time you exercise your option, in whole or in part, or at any time
thereafter as requested by the Company, you hereby authorize withholding from
payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a “cashless exercise” pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or
an Affiliate, if any, which arise in connection with the exercise of your
option.

 

(b)           Upon
your request and subject to approval by the Company, in its sole discretion,
and compliance with any applicable legal conditions or restrictions, the
Company may withhold from fully vested shares of Common Stock otherwise
issuable to you upon the exercise of your option a number of whole shares of
Common Stock having a Fair Market Value, determined by the Company as of the
date of exercise, not in excess of the minimum amount of

 

4

 

tax required to be
withheld by law (or such lower amount as may be necessary to avoid variable
award accounting).  Any adverse
consequences to you arising in connection with such share withholding procedure
shall be your sole responsibility.

 

(c)           You
may not exercise your option unless the tax withholding obligations of the
Company and/or any Affiliate are satisfied. 
Accordingly, you may not be able to exercise your option when desired
even though your option is vested, and the Company shall have no obligation to
issue a certificate for such shares of Common Stock or release such shares of
Common Stock from any escrow provided for herein unless such obligations are
satisfied.

 

12.          NOTICES.  Any notices provided for in your option or
the Plan shall be given in writing and shall be deemed effectively given upon
receipt or, in the case of notices delivered by mail by the Company to you,
five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.

 

13.          GOVERNING
PLAN DOCUMENT.  Your option is
subject to all the provisions of the Plan, the provisions of which are hereby
made a part of your option, and is further subject to all interpretations,
amendments, rules and regulations, which may from time to time be
promulgated and adopted pursuant to the Plan. 
In the event of any conflict between the provisions of your option and
those of the Plan, the provisions of the Plan shall control.

 

5

 

NOTICE OF EXERCISE

 

	
  Ditech Communications Corporation

  	
   

  	
   

  
	
  825 East Middlefield
  Rd.

  	
   

  	
   

  
	
  Mountain View, CA 94043

  	
   

  	
  Date of Exercise: 

  

 

Ladies and Gentlemen:

 

This
constitutes notice under my stock option that I elect to purchase the number of
shares for the price set forth below.

 

	
  Type
  of option:

  	
   

  	
  Nonstatutory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Stock option dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of shares as to
  which option is exercised:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Certificates to be
  issued in name of:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total exercise price:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Cash payment delivered
  herewith:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Value
  of
                
  shares of Ditech Communications Corporation Common Stock delivered herewith(1):

  	
   

  	
  $

  	
   

  	
   

  

 

By
this exercise, I agree (i) to provide such additional documents as you may
require pursuant to the terms of the Ditech Communications Corporation 2005 New Recruit Stock Option Plan, and (ii) to
provide for the payment by me to you (in the manner designated by you) of your
withholding obligation, if any, relating to the exercise of this option.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

(1)           Shares
must meet the public trading requirements set forth in the option.  Shares must be valued in accordance with the
terms of the option being exercised, must have been owned for the minimum
period required in the option, and must be owned free and clear of any liens,
claims, encumbrances or security interests. 
Certificates must be endorsed or accompanied by an executed assignment
separate from certificate.

 

6Exhibit 10.1

 

 

THE J. JILL GROUP, INC.

Plan Document

 

 

Effective January 1, 2005

 

 

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

  

 

i

 

	
  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

  

 

ii

 

	
  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

  

 

iii

 

	
  15.16

  	
  Distribution Upon Income
  Inclusion Under Code §409A.

  	
  23

  
	
  15.17

  	
  Insurance

  	
  23

  

 

iv

 

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

 

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

 

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.

 

3

 

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

 

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

 

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.

 

6

 

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.

 

7

 

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

 

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

 

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

 

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

 

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.

 

12

 

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

 

13

 

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.

 

14

 

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

 

15

 

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:

 

16

 

(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

 

17

 

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.

 

18

 

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;

 

19

 

(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

 

20

 

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.

 

21

 

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.

 

22

 

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

  
					

 

23

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