Edward L.
Larsen
Senior Vice President, Finance,
Chief Financial Officer and Treasurer
c/o The Talbots, Inc.
One Talbots Drive
Hingham, MA 02043
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Re:
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Retirement
Arrangements
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This
letter is intended to confirm the agreements between you and The
Talbots, Inc. (with its subsidiaries, “Talbots” or the
“Company”) concerning your retirement from Talbots,
which you have advised us will be on January 16, 2010
(“Retirement Date”), as well as your transition from
the chief financial officer and other officer duties with Talbots,
and the terms of your interim responsibilities with Talbots
preceding your Retirement Date.
Retirement Arrangement. This confirms that as of
January 5, 2009 you will voluntarily relinquish your
responsibilities as senior vice president, chief financial officer,
treasurer and officer of Talbots (as well as your responsibilities
and officer and committee positions in connection with Talbots
subsidiaries and its affiliates, foundation and benefit plans and
programs). From January 5, 2009 up through and ending on your
Retirement Date, you will continue as a regular employee with
Talbots, serving exclusively as special advisor to the CEO in
connection with strategic initiatives and assisting the CFO’s
transition.
Compensation Arrangement from January 5, 2009 Until Your
January 16, 2010 Retirement Date. In such capacity and
during your continued employment hereunder, you will continue to
receive your base salary at the rate currently in effect, continue
to receive your
customary
health and welfare benefits and continue to participate in all
customary benefit plans made available generally at the SVP level,
including the qualified defined benefit pension plan, defined
benefit Supplemental Executive Retirement Plan
(“SERP”), Retirement Savings Voluntary Plan
(“RSVP”), Supplemental Savings Plan
(“SSP”), Company-paid term life insurance, long-term
disability, Executive Auto Program, vacation pay accrual, and
Deferred Compensation Plan (“DCP”), in each case
subject to all terms and conditions therein and to such changes in
or termination of any of the foregoing plans or arrangements as may
hereafter be made by Talbots. In such position, however, you will
not be entitled to new grants or programs under the annual
incentive program, new grants pursuant to the equity incentive
program under the ESBIP or any benefits under any severance
agreement, plan or arrangement.
Equity Awards. Your March 14, 2008 retention restricted
stock grant (covering 21,000 shares) will vest in full on
January 5, 2009, subject to your satisfaction of the terms of
this agreement prior to such vesting date (including, without
limitation, the Company’s receipt of a release of claims
which is no longer subject to revocation).
During
your continued employment, your outstanding stock options, PARS and
your March 14, 2008 restricted stock grant covering 29,600
shares (“2008 Restricted Stock Grant”) will continue to
vest through your Retirement Date (or through any earlier
employment termination as provided below).
Provided
you remain in Talbots employ up to your Retirement Date:
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All
of your then outstanding and unvested PARS grants and your then
outstanding and unvested 2008 Restricted Stock Grant will continue
to vest until the end of the 120-day period following your
Retirement Date (on which date Talbots will be deemed to have
exercised its repurchase option on any then unvested shares as set
forth in the award
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agreement, and
Talbots will thereafter pay you the $0.01 par value per share for
the unvested shares covered by the outstanding PARS grants and the
2008 Restricted Stock Grant).
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All
of your then outstanding unvested stock options will terminate on
your Retirement Date and all of your then outstanding vested stock
options will continue to be exercisable until the earlier of three
(3) years from your Retirement Date or the original expiration
date of the option.
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Except
as otherwise expressly provided in this retirement agreement, your
outstanding stock options, restricted stock awards and PARS awards
will be governed by and subject to the terms and conditions of such
equity awards.
On
the vesting of any of the above PARS and restricted stock grants,
the Company is authorized and directed to withhold a sufficient
number of vested shares upon such vesting in order to satisfy the
minimum Federal, state and local income tax withholding
obligations.
You
agree that during your employment under this agreement and up
through your Retirement Date or any earlier termination of
employment and for 6 months thereafter you will not engage in
the purchase or sale of Talbots common stock (including without
limitation any “cashless exercise” of any stock options
involving the sale of any Talbots common stock as part of such
option exercise) during any trading window “blackout”
or “quiet period” applicable to management employees
(“Quiet Period”). You acknowledge that Talbots reserves
the right to modify the Quiet Period from time to time in its sole
and absolute discretion. Talbots will also provide you with notice
of Quiet Periods and changes thereto at the time it provides such
notice to Talbots management level employees. In addition, you
agree to notify Talbots General Counsel prior to exercising any
options or trading in Talbots common stock during the
above
period to
ascertain whether such transaction would violate any Quiet Period
covered by this paragraph.
Effect on Existing Severance Arrangements. You and the
Company acknowledge and agree that your separation from employment
on your Retirement Date will for all purposes be deemed your
voluntary resignation from employment with Talbots.
This
agreement constitutes the entire agreement between you and the
Company with respect to the subject matter of this agreement and
supersedes any and all prior representations, agreements,
understandings, promises or arrangements between you and the
Company whether written or oral concerning any of the subject
matter hereof. Your rights during your continued employment and in
connection with your separation from employment will be exclusively
governed by this retirement agreement and you will not be entitled
to severance pay or benefits under any other agreement, plan or
arrangement. Without limiting the foregoing, this agreement
expressly supersedes the Change in Control Agreement between you
and Talbots dated November 11, 1993 and the Severance
Agreement between you and Talbots dated August 6, 2007
(together, the “Prior Agreements”) and each of the
Prior Agreements is hereby terminated and of no further force or
effect.
Nothing
in this agreement will modify or otherwise limit any of your rights
and benefits as they may exist under the written terms and
conditions of any qualified, nonqualified or supplemental
retirement, 401(k), savings or deferred compensation plans of the
Company (excluding any severance or severance compensation
plans).
Termination of Employment Prior to Your January 16, 2010
Retirement Date. Should your employment end prior to your
Retirement Date due to your voluntary resignation or due
to
your death or
Disability, you will be entitled to (subject
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