Exhibit 10.1

 

THE TALBOTS, INC. UMBRELLA

SUPPLEMENTAL RETIREMENT PLAN

 

(Effective as of May 25, 2005)

 

 

 

 

 

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THE TALBOTS, INC. UMBRELLA

SUPPLEMENTAL RETIREMENT PLAN

 

WHEREAS, The Talbots, Inc. (the “Company”) sponsors The Talbots, Inc. Retirement
Plan (the “Pension Plan”), which is a tax-qualified defined benefit pension plan
that provides for the payment of certain retirement benefits to Pension Plan
participants; and

                 WHEREAS, the Company also sponsors The Talbots, Inc.
Supplemental Retirement Plan (the “SERP”), which is a nonqualified pension plan
that provides for the payment to selected employees of certain defined benefit
pension benefits that cannot be provided under the Pension Plan due to
limitations imposed by law; and

 

                 WHEREAS, with the approval of the Compensation Committee of the
Company’s Board of Directors, the Company wishes to establish an umbrella
supplemental pension plan for one of its senior executive officers, which plan
shall be separate from the Pension Plan and from the SERP, to provide for the
payment of certain additional pension benefits to or for such senior executive
officer;

NOW, THEREFORE, the following shall constitute the terms and conditions of The
Talbots, Inc. Umbrella Supplemental Retirement Plan (the “Umbrella Plan”):

1.

Definitions.

Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Pension Plan and/or the SERP.

(a)     “Administrative Committee” means the Administrative Committee appointed
under the Pension Plan.

(b)    “Employment Agreement” means the Participant’s employment agreement with
the Company dated as of October 22, 1993, as amended on May 11, 1994.

2.

Participation and Vesting.

 

The sole participant in this Umbrella Plan shall be Arnold B. Zetcher (the
“Participant”). The added and enhanced defined benefits provided to the
Participant under Section 3(a) of this Umbrella Plan shall vest at the

 

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close of each quarter, in equal quarterly increments, over a two year period
commencing with the second fiscal quarter of the Company’s 2005 fiscal year,
which quarter began on May 1, 2005, and continuing through the first quarter of
the Company’s 2007 fiscal year (the “Vesting Period”). In the event that, prior
to the completion of the Vesting Period: (i) the Participant voluntarily
terminates employment with the Company, other than as a result of the occurrence
of any condition or event set forth in the definition of “Good Reason” (as that
term generally is defined in Section 6(H) of the Employment Agreement, except
that “May 25, 2005” shall be substituted for any other measurement date therein)
(“Good Reason”); or (ii) the Participant is terminated by the Company for
“cause” (which shall be limited to a termination pursuant to Section
6(D)(ii)-(viii) of the Employment Agreement) (“Cause”), no additional vesting
will occur following such termination of employment and the Participant shall be
vested through the end of the quarter immediately preceding the date of
termination. For any other termination of employment during the Vesting Period,
including, without limitation, a termination of employment by reason of the
Participant’s death or disability (as set forth in Section 6(D)(i) of the
Employment Agreement), a termination of employment by the Participant for Good
Reason, or a termination of employment by the Company other than for Cause, the
added and enhanced benefit set forth in Section 3(a) of this Umbrella Plan will
accelerate and become fully vested upon such termination of employment.

3.

Amount, Form and Time of Benefit under the Umbrella Plan.

(a)     Amount of Benefit. Subject to the vesting provisions of Section 2 above,
the annual benefit payable hereunder (calculated on the basis of a single life
annuity for the life of the Participant, although such benefit will be paid to
the Participant in the (actuarially equivalent) form and at the time described
in Section 3(b) below) shall be equal to fifty percent (50%) of the
Participant’s Average Final Compensation, as defined in the Pension Plan, but
modified to include as compensation for purposes of such calculation any
Deferred Cash Award (as if actually paid at the time of the award); minus the
Participant’s annual pension benefit payable under the Pension Plan (determined
as if the annual pension benefit under the Pension Plan were to commence as of
the date of commencement of benefits under this Umbrella Plan and as if such
benefit were to be paid in the form of a single life annuity for the life of the
Participant); minus the benefits, if any, payable to the Participant under the
supplemental retirement plan of General Mills, Inc. (the “General Mills Plan”)
(which benefit under the General Mills Plan shall be actuarially adjusted for
this purpose, if necessary, to a single life annuity for the life of the
Participant commencing as of the date of commencement of benefits under this
Umbrella Plan); and also minus the Participant’s annual pension benefit payable
under the SERP (determined as if the annual pension benefit payable under the
SERP were to commence as of the date of commencement of benefits under this
Umbrella Plan and determined under the SERP as if such benefit were to be paid
in the form of a single life annuity for the life of the Participant). In the
event that benefits under this Umbrella Plan commence prior to the commencement
of the Participant’s benefits under the Pension Plan, the General Mills Plan, or
the SERP, the determination of the annual benefit payable hereunder shall take
into account the actuarial equivalent of benefits the Participant would have
received had benefits under the Pension Plan, the General Mills Plan, or the
SERP commenced on such date. In the event that benefits under this Umbrella Plan
commence after the commencement of the Participant’s benefits under the Pension
Plan, the General Mills Plan, or the SERP, the determination of the annual
benefit payable hereunder shall be made as if the pension benefit under such
other plan or plans were to commence as of the date of commencement of benefits
under this Umbrella Plan, and shall be determined without regard to or giving
effect to any actual prior commencement of the Participant’s benefits under such
other plan or plans. All actuarial adjustments required under this Umbrella Plan
will be made using the actuarial factors set forth in the Pension Plan as of the
date of the determination.

(b)    Form and Time of Benefit. The benefits payable under this Umbrella Plan
to the Participant shall be paid in the normal form of payment specified under
Section 4.1 of the Pension Plan (including any death benefits provided under
Section 5.1 of the Pension Plan), which payment shall commence upon the
Participant’s termination of employment or death; provided, however, any spousal
benefits shall be payable only if Participant has a spouse on: (i) his
termination date (and that spouse survives him); or (ii) his date of death.

(c)     Section 409A of the Code. Notwithstanding the above, if pursuant to
Section 409A of the Code and any guidance issued thereunder the Company is
treated as or considered “publicly traded,” the Participant is a “key employee”
of the Company, and the Participant terminates employment with the Company, then
no payments may be made to the Participant under this Umbrella Plan until at
least six (6) months have elapsed since his termination of employment (or, if
earlier, his death). Upon expiration of such six-month period (or, if earlier,
his death), any payments withheld hereunder from the Participant shall be
distributed to the

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Participant or his beneficiary, with a payment of interest thereon credited at a
rate of prime plus 1% (with such rate to be determined as of the actual payment
date); provided, however, that any payment of interest shall be made only if and
to the extent such payment is consistent with Section 409A of the Code and any
guidance issued thereunder. “Termination of employment” as used in this Umbrella
Plan shall mean “separation from service” within the meaning of Section 409A of
the Code and any guidance issued thereunder. Notwithstanding anything herein to
the contrary, this Umbrella Plan is intended to comply with Section 409A of the
Code and any guidance issued thereunder, and this Umbrella Plan and any benefits
paid hereunder shall be interpreted, operated and administered accordingly.

 

                        (d)    Tax Matters. There shall be deducted from all
payments and benefits under this Umbrella Plan any taxes required to be withheld
and/or paid pursuant to federal, state and local taxing authorities.
Notwithstanding anything in this Umbrella Plan to the contrary, the Company does
not guarantee the tax treatment of any distributions under this Umbrella Plan,
including without limitation pursuant to the Code or any other applicable
federal, state or local law and any guidance issued thereunder.

 

4.      Source of Benefits. Benefits under this Umbrella Plan shall not be paid
from the assets of the trust maintained in connection with the Pension Plan, but
shall be paid from the general assets of the Company. Notwithstanding the above,
the Company may, in its sole discretion, at any time elect to establish a
grantor trust (or utilize an existing grantor trust) to assist it in satisfying
the payment obligations hereunder. Any such trust shall be considered to be an
asset of the Company, and the Participant shall have no claim to any assets held
thereunder, other than any rights that he may have as a general unsecured
creditor of the Company.

5.      Amendment; Termination. The Company may amend, modify or terminate this
Umbrella Plan at any time; provided that (other than with respect to any
amendment the Company deems necessary or appropriate to comply with applicable
law, including without limitation Section 409A of the Code), no such amendment,
modification or termination of this Umbrella Plan shall be effective without the
specific written consent of the Participant; provided further that, no such
amendment, modification or termination shall deprive the Participant of any
benefit or right granted hereunder without the Participant’s written consent.

6.      Administration; Interpretation; Construction; Enforcement. This Umbrella
Plan shall be administered by the Administrative Committee. The Administrative
Committee shall make all rules and regulations deemed necessary or appropriate
to administer this Umbrella Plan. The Administrative Committee shall have the
discretionary authority and responsibility to determine all matters under this
Umbrella Plan. In the event that any disputed matter shall arise under this
Umbrella Plan, including, without limiting the generality of the foregoing,
matters relating to the amount of any benefit payable under this Umbrella Plan,
or the interpretation of the provisions of this Umbrella Plan, the claims
procedures set forth in the SERP shall apply to any such matters. The decision
of the Administrative Committee upon such matters shall be binding and
conclusive upon all persons, including, but not limited to, the Company and the
Participant, and their respective beneficiaries, and the respective successors,
assigns, executors, administrators, heirs, next-of-kin and distributees of all
of the foregoing, unless such decision of the Administrative Committee is found
by a court of competent jurisdiction to be arbitrary and capricious. In the
event of any claim by the Participant for benefits hereunder which are disputed
by the Company or Administrative Committee, the Participant shall be entitled to
be reimbursed for his costs and expenses (including reasonable attorneys’ fees)
in enforcing such claim to the extent he is successful with respect to such
claim.

7.      Non-Assignability. No interest of the Participant shall be transferred,
assigned, garnished, anticipated or alienated in any manner (except by will or
the laws of descent and distribution), nor shall it be subject to attachment,
bankruptcy proceedings or to any other legal process or to the interference or
control of creditors of the Participant.

8.      Governing Law. To the extent that state law shall not have been
preempted by the provisions of the Employee Retirement Income Security Act of
1974, or any other laws of the United States, as the same may be amended from
time to time, this Umbrella Plan shall be administered, construed and enforced
according to the laws of the Commonwealth of Massachusetts. This Umbrella Plan
shall be considered to a nonqualified deferred compensation plan, maintained for
a select group of management or highly compensated individuals.

9.

Effective Date. This Umbrella Plan is effective as of May 25, 2005.

 

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IN WITNESS WHEREOF, The Talbots, Inc. and Arnold B. Zetcher hereby agree to all
of the foregoing terms, conditions and obligations.

 

THE TALBOTS, INC.

ARNOLD B. ZETCHER

 

 

/s/ Stuart M. Stolper                      

          /s/ Arnold B. Zetcher

By:

Stuart M. Stolper

 

Title:

Senior Vice President,

Human Resources, and

Assistant Secretary

 

 

 

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