ex10_2.htm


  
    Exhibit
10.2

    


    [DATE]

    


    


    


    THE
TALBOTS, INC.

    


    


    2003
EXECUTIVE STOCK BASED INCENTIVE PLAN

    


    


    NONQUALIFIED STOCK OPTION
AGREEMENT

    


    


    


    To:             [NAME]

    


    


    We are pleased to notify you that by
the determination of the Compensation Committee (the "Committee") of the Board
of Directors of The Talbots, Inc. (together with its subsidiaries, the
“Company”) a nonqualified stock option to purchase ___ shares of Common Stock
of the Company, $0.01 par value (“Common Shares”), at a price of $___ per share
has been granted to you effective ______ __, 200_ under the 2003 Executive Stock
Based Incentive Plan, as amended and restated (the "Plan").  This
nonqualified stock option (the "Option") may be exercised only upon the terms
and conditions set forth below.

    


    1.           Purpose of
Option.

    


    The purpose of the Plan under which
this Option has been granted is to advance the interests of the Company and its
shareholders by providing incentives to certain key employees of the Company and
its Affiliates (as such term is defined in the Plan).

    


    2.           Acceptance of Option
Agreement.

    


    Your execution of this nonqualified
stock option agreement (the “Agreement”) will indicate your acceptance of and
your willingness to be bound by all of its terms.  It imposes no
obligation upon you to purchase any shares subject to the Option unless you
choose to exercise the Option in the manner set forth in paragraph
4.

    


    3.           When Option May Be
Exercised.

    


    Your entitlement to exercise this
Option shall vest as follows: _______________.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This Option may not be exercised for
less than ten (10) shares at any one time (or the remaining shares then
purchasable, if less than ten) and expires at the end of ten (10) years from the
date of grant whether or not it has been duly exercised, unless sooner
terminated as provided in paragraphs 5, 6, 7 and 8 below.

    


    


    4.           How Option May Be
Exercised.

    


    This Option is exercisable by a written
notice signed by you and delivered to the Company at its executive offices,
signifying your election to exercise the Option.  The notice must
state the number of Common Shares as to which your Option is being exercised and
must be accompanied by cash, shares of Common Stock, or any combination thereof,
or other payment in such form as the Committee may determine in its discretion,
for (i) the full purchase price of the shares being acquired at the time of
exercise plus (ii) such amount as is required for withholding
taxes.  Any shares of Common Stock delivered to the Company in
satisfaction of all or any portion of such purchase price or withholding taxes
shall be appropriately endorsed for transfer and assignment to the
Company.  In all events (including any "cashless exercise" procedure)
no share shall be issued upon an Option exercise until full payment therefor has
been delivered to and received by the Company.

    


    The Company shall prepare and file or
has filed with the Securities and Exchange Commission a Form S-8 registration
statement under the Securities Act of 1933 with respect to the Plan and the
Common Shares underlying the Option covered by this Agreement.  The
Company will endeavor to keep such registration statement effective at all times
that this Agreement is outstanding, but in the event that the Company notifies
you that such registration statement is not effective at the time of exercise,
your written notice of exercise to the Company must contain a statement by you
(in form acceptable to the Company) that such shares are being acquired by you
for investment only and not with a view to their distribution or resale, and you
agree to refrain from sales of Common Shares until such time as the Company
advises you that such registration statement has become
effective.  You agree that any such sales will be effected by means of
a broker’s transaction using the facilities of the stock exchange where the
Common Shares are then listed.

    


    If a person or persons other than you
give notice of the exercise of this Option, and provided notice of exercise by
such person or persons is permitted under the Plan, then the Company may require
the submission to the Company of appropriate proof of the authority of such
person or persons to exercise this Option.

    


    Certificates for the Common Shares
purchased or issued hereunder will be issued as soon as practicable, unless such
Common Shares shall be uncertificated.  The Company, however, shall
not be required to issue or deliver a certificate for any shares until it has
complied with all requirements of the Securities Act of 1933, the Securities
Exchange Act of 1934, any stock exchange on which the Company's Common Shares
may then be listed and all applicable state laws in connection with the issuance
or sale of such shares or the listing of such shares on such stock
exchange.  Until the date of issuance of such shares to you (or any
person succeeding to your rights pursuant to the Plan), you (or such other
person, as the case may be) shall have no rights as a stockholder with respect
to any Common Shares subject to this Option.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    5.           Termination of
Employment.

    


    If your employment with the Company or
an Affiliate (as such term is defined in the Plan) is terminated or shall cease
for any reason other than by death, disability (as such term is defined in
Paragraph 12 of the Plan), retirement or a period of Related Employment (as such
term is defined in the Plan), the unvested portion of this Option shall
immediately lapse and expire and you may exercise, within three (3) months from
the date of such termination, or in the case of your "termination without
cause", within such longer period as the Committee (or its delegates) may
hereafter determine in its discretion or as expressly set forth in any written
employment agreement executed between you and the Company, but in no event
beyond three (3) years from such date (and in no event after the Option has
expired), that portion of this Option which was vested at the date of such
termination.

    


    


    6.           Period of Related
Employment.

    


    If your employment with the Company or
an Affiliate shall cease solely by reason of a period of Related Employment (as
such term is defined in the Plan), you may, during such period of Related
Employment, exercise the Option as if you continued such
employment.

    


    


    7.           Retirement or
Disability.

    


    If your employment with the Company or
an Affiliate is terminated by reason of your disability (as such term is defined
in Paragraph 12 of the Plan) or your Retirement and this Option has not expired
and has not been fully exercised, the unvested portion of this Option shall
immediately lapse and expire and you, at any time within three (3) years after
the date you ceased such employment (but in no event after the Option has
expired), may exercise that portion of the Option which was vested at the date
of such termination.  For purposes of this paragraph 7, “Retirement”
shall mean termination or separation from employment with the Company or an
Affiliate on or after (i) attaining age 65 and having completed at least five
(5) Years of Service (as defined under The Talbots, Inc. Pension Plan) or (ii)
attaining age 55 and having completed at least ten (10) Years of
Service.  

    


    8.           Death.

    


    If you die while employed by the
Company or an Affiliate and this Option has not expired and has not been fully
exercised, the unvested portion of this Option shall immediately lapse and
expire and your executors, administrators, heirs or distributees, as the case
may be, may, at any time within one (1) year after the date of death (but in no
event after the Option has expired), exercise that portion of the Option which
was vested at the time of your death.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    9.           Non-Transferability of
Option.

    


    This Option may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of by you, except by
will or the laws of descent and distribution, and shall be exercisable during
your lifetime only by you, except as otherwise set forth herein or in the
Plan.

    


    10.           Dilution and Other
Adjustments.

    


    If at any time after the date of the
grant of this Option, there is any change in the outstanding Common Stock of the
Company by reason of any stock split, stock dividend, split-up, spin-off,
recapitalization, merger, consolidation, rights offering, reorganization,
combination or exchange of shares, a sale by the Company of all or part of its
assets, any distribution to shareholders other than a normal cash dividend, or
other extraordinary or unusual event, then the number of Common Shares available
for this Option as well as the terms of this Option shall be appropriately
adjusted for any such change by the Committee, whose adjustment shall be
conclusive and binding.

    


    11.           Trading Black Out
Periods.

    


    By entering into this Agreement you
expressly agree that: (i) during all periods of your employment with the Company
or its Affiliates, or while you are otherwise maintained on the payroll of the
Company or its Affiliates, you shall abide by all trading "black out" periods
with respect to purchases or sales of Company stock or exercises of stock
options for the Company’s stock established from time to time by the Company
("Trading Black Out Periods") and (ii) upon any cessation or termination of
employment with the Company or its Affiliates for any reason, you agree that for
a period of six (6) months following the effective date of any termination of
employment or, if later, for a period of six (6) months following the date as of
which you are no longer on the payroll of the Company or its Affiliates, you
shall continue to abide by all such Trading Black Out Periods established from
time to time by the Company; provided that in no event shall you be prohibited
from making a purchase or sale of the Company’s stock or exercising stock
options for the Company’s stock under this paragraph 11 if such sale, purchase
or exercise is made pursuant to a written plan for trading securities within the
meaning of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (a
“10b5-1 Trading Plan”), and such 10b5-1 Trading Plan is consistent with the
Company’s insider trading policy and has been approved by the
Company.

    


    12.           Change in
Control.

    


    This Option, to the extent then
outstanding and unvested, shall become immediately exercisable and fully vested
upon a Change in Control Event (as such term is defined in the
Plan).

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    13.           Subject to Terms of the
Plan.

    


    This Agreement shall be subject in all
respects to the terms and conditions of the Plan and in the event of any
question or controversy relating to the terms of the Plan, the decision of the
Committee shall be final and conclusive, except as expressly set forth in this
Agreement.

    


    


    14.           Tax
Status.

    


    It is the intent of the Company that
this Option not be classified as an "incentive stock option" under the
provisions of Section 422 of the Internal Revenue Code of 1986, as
amended.  The income tax implications of your receipt of this Option
and your exercise of this Option should be discussed with your tax
counsel.

     

     

    
      
        	 	

                Sincerely
      yours,

                 

                THE
      TALBOTS, INC.

              	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	[NAME] 	 


      



    


    
      
        	
                Agreed
      to and accepted:

              	 
	 	 
	 	 
	 	 
	 	 
	[NAME]	 
	 	 
	 Date:	 	 ,
      200