Exhibit 10.1
Execution Version
AMENDMENT NO. 1
TO
EMPLOYMENT AGREEMENT OF TRUDY F.
SULLIVAN
THIS AMENDMENT NO. 1 (this
“Amendment”), dated as of June 16, 2009, to the
Employment Agreement dated June 28, 2007 (the “Employment
Agreement”), by and between The Talbots, Inc., a Delaware
corporation (the “Company”), and Trudy F. Sullivan (the
“Executive”).
WHEREAS, Section 5(c) of the Employment
Agreement currently provides, prior to this Amendment, that
“In the event the Company materially reduces or discontinues
the Executive’s benefits under the defined benefit SERP, the
Company shall provide Executive with substantially comparable
benefit(s) in replacement for the reduced or discontinued benefits,
as reasonably determined by the Compensation Committee with the
assistance of its outside compensation consultant.”;
and
WHEREAS, the Company has recently amended The
Talbots, Inc. Pension Plan, which is its tax-qualified defined
benefit pension plan (“Qualified Defined Benefit
Plan”), and The Talbots, Inc. Supplemental Executive
Retirement Plan, which is its nonqualified defined benefit plan
(the “defined benefit SERP”), to discontinue all future
benefit accruals under the Qualified Defined Benefit Plan and the
defined benefit SERP for all participants, including the Executive,
effective as of May 1, 2009; and
WHEREAS, pursuant to current Section 5(c) of the
Employment Agreement, the Company has agreed to provide the
Executive with a substantially comparable benefit (as provided
below, the “Replacement Benefit”) in replacement for
and as a result of the above cessation of future benefit accruals
under the defined benefit SERP; and
WHEREAS, the Replacement Benefit reflects the
Compensation Committee’s consideration, with its outside
compensation consultant, of a “discounted” or reduced
net present value calculation to reflect a buyout of the
Executive’s future benefit accrual rights which were
eliminated by reason of the Company’s freeze of the Qualified
Defined Benefit Plan and defined benefit SERP, including
assumptions concerning future potential compensation levels and
periods of employment for which future benefit accruals could have
been earned were it not for the freezing of such plans;
and
WHEREAS, the Executive agrees that the
Replacement Benefit provides substantially comparable benefits in
replacement for the discontinuance of future benefits that might
otherwise have accrued to Executive under the defined benefit SERP
for periods beginning on and after May 1, 2009; and
WHEREAS, in consideration of the Replacement
Benefit, the Executive agrees to waive and release the Company and
its parent entities, affiliates, officers, directors and employees
(including, without limitation, the Company’s employee
benefit plans and the trustees, fiduciaries and administrators of
those plans, and all persons acting under, by, through or in
concert with any of them) from any and all known or unknown
actions, causes of action, claims or liabilities of any kind that
have or could be asserted against the Company arising out of or
related to the subject matter of this Amendment, including without
limitation any such claim or liability relating to the Replacement
Benefit or Section 5(c) of the Employment Agreement as in effect
prior to this Amendment;
NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the
parties agree as follows:
1.
Capitalized terms in this Amendment have the meanings defined
in the Employment Agreement.
2.
Section 5 of the Employment Agreement is amended by
deleting subsection (c) and inserting the following new subsection
(c):
“(c)
Retirement Benefits . Executive will be eligible
to participate in the Company’s existing tax-qualified
retirement plans and the Company’s defined contribution
supplemental retirement plan (“defined contribution
SERP”) and defined benefit
