ex10_1.htm


  
     

    
      	
               

            	
              Exhibit
                10.1

            


    

     

    


    EMPLOYMENT
      AGREEMENT


    


    EMPLOYMENT
      AGREEMENT
(this “Agreement”), dated as of November 20, 2007, between PHILIP
      KOWALCZYK (the “Executive”) and THE TALBOTS, INC., a Delaware corporation
      (together with it subsidiaries, the “Company”).

    WITNESSETH

    WHEREAS,
      the Executive has heretofore been employed by the Company as the
      President of its wholly owned subsidiary, The J. Jill Group, Inc. (“J. Jill”),
      pursuant to that certain employment agreement dated November 3, 2004, by and
      between the Company and the Executive, as amended by Amendment No. 1 to the
      Original Agreement dated May 3, 2006, by and between the Executive and the
      Company (as amended, the “Original Agreement”);

    WHEREAS,
      the Company has promoted the Executive to the position of Chief Operating
      Officer of the Company and the Executive desires to serve in such position,
      on
      the terms and conditions provided below;

    WHEREAS,
      this Agreement shall govern the employment relationship between Executive and
      the Company and supersedes all previous agreements and understandings with
      respect to such employment relationship, including without limitation the
      Original Agreement and the Term Sheet between the Company and the Executive
      dated October 4, 2007 (the “Term Sheet”);

    NOW,
      THEREFORE, in
      consideration of the mutual representations, warranties, covenants and
      undertakings herein set forth, the parties hereto agree as follows:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    1.  Engagement.  The
      Company hereby agrees to  employ the Executive, and the Executive
      hereby accepts such employment, as Chief Operating Officer (“COO”) of the
      Company, on the terms and conditions set forth herein, unless and until such
      employment hereunder shall have been terminated as provided in this
      Agreement.

    2.  Title
      and
      Duties.  During his employment by the
      Company, the Executive shall render his services as COO of the Company, shall
      perform duties consistent with his title as the Company shall reasonably
      request, and shall devote his full business time and best efforts to his duties
      hereunder and the business and affairs of the Company (except during vacation
      periods and reasonable periods of illness or other incapacity).  The
      Executive also agrees to continue to serve as the President of J. Jill on an
      interim basis until his successor is appointed, or such other time as the Chief
      Executive Officer or the Company’s Board of Directors (the “Board”) may
      determine.  The Executive may from time to time engage in such other
      pursuits, including, without limitation personal legal and personal financial
      affairs as shall not materially interfere with the proper performance of his
      duties and obligations hereunder, provided the Executive may serve on the board
      of directors of a public or private “for profit” company with the prior written
      consent of the Board.

    3.  Compensation.  As
      compensation for his services to the Company hereunder, the Company shall pay
      to
      the Executive the following:

    (A)  Base
      Salary

    (i)  Effective
      September 6,
      2007, the Executive’s base salary shall be $725,000 per annum (“Base Salary”),
      payable in substantially equal installments, in accordance with the normal
      payroll practices of the Company.

    (ii)  Base
      Salary may be
      increased during the term but may not be decreased, and the Board or the
      Compensation Committee of the Board (the “Compensation Committee”) shall
      consider, on an annual basis, the nature, extent and advisability, if any,
      of an
      increase in the Executive’s Base Salary.  Executive’s first
      eligibility for a salary increase will be scheduled for the first quarter of
      2008.

    
      
        
        

      

      
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    (B)           Annual
      Incentive Bonus.  For each fiscal year
      of the Company that ends during the term, Executive will be eligible to
      participate in the Company’s annual incentive plan established and developed by
      the Compensation Committee, as it may then be in effect (the “AIP”). Executive’s
      target annual bonus opportunity (“Target Bonus”) shall be determined in
      accordance with the applicable bonus arrangement in place from time to time,
      provided that the Target Bonus shall be no less than 45% of Base Salary, and
      the
      Target Bonus may be increased but not decreased from time to time in the
      Compensation Committee’s sole discretion.

    (C)    Special
      Inducement Award.  As a special inducement award, in
      consideration for Executive’s entering into this Agreement, the Executive shall
      be awarded a restricted stock award covering 53,476 shares of Common Stock
      of
      the Company, $0.01 par value per share (“Common Stock”) pursuant to and subject
      to the terms and conditions of a restricted stock award agreement, in the form
      of Exhibit A, to be executed by the Company and the Executive.  The
      restricted stock will vest in the following increments:  26,738 shares
      on October 4, 2008 and 26,738 shares on October 4, 2009.  Upon a
      termination of Executive’s employment without Cause (as defined in Section 6(C))
      or due to his death or Disability (as defined in Section 6(A)) or upon a
      termination of employment by the Executive for Good Reason (as defined in
      Section 6(D)), or upon a Change-in-Control (as defined in Exhibit B), then
      all
      such unvested restricted stock shall vest in full, the restricted period as
      to
      such shares shall automatically expire and the Company waives any repurchase
      option as to such shares (all subject to the Company’s receipt from the
      Executive of a release of claims as referred to in Section 6(H) below), and
      upon
      a termination of Executive’s employment for Cause or termination by the
      Executive without Good Reason, any then unvested restricted stock shall be
      forfeited.


    
      
        
        

      

      
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    (D)  Executive
      Stock Based Incentive Plan.

    (i)  General.  The
      Executive shall be eligible to receive such equity incentive compensation as
      may
      be awarded from time to time pursuant to the Company’s Executive Stock Based
      Incentive Plan as same may be amended or superseded from time to time (the
      Executive Stock Based Incentive Plan, as same may be amended or superseded
      from
      time to time, is hereinafter referred to as the “Equity Plan”).  All
      incentive awards granted to the Executive shall be subject to the terms of
      the
      Equity Plan.  The Company agrees that the terms of any grant of stock
      options the Compensation Committee makes to the Executive under the Plan shall
      provide that upon the termination of the Executive’s employment without Cause
      (as defined in Section 6(C)) or due to his Disability (as defined in Section
      6(A)) or upon termination of employment by the Executive for Good Reason (as
      defined in Section 6(D)), the Executive’s right to exercise any then
      unexercised, vested stock options shall be a period of not less than three
      (3)
      years (and in the case of the Executive’s death, one year) from the date of such
      termination, but not beyond the expiration date of the options.

    (ii)  Future
      Stock Option and Restricted Stock
      Awards.  The Executive understands and
      agrees that the number and timing of any future stock option and restricted
      stock awards to be granted to the Executive shall be subject to the Compensation
      Committee’s sole discretion.

    


    4.  Benefits.  Subject
      to the provisions of this Agreement, the Company shall provide the following
      benefits to the Executive for services rendered during the Term of
      Employment:


    
      
        
        

      

      
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    (A)  Insurance
      and
      Retirement Benefits.  The Executive
      shall be entitled to such insurance benefits of the Company as may be in effect
      from time to time and generally available to employees at the senior executive
      level, including, but not limited to, disability insurance and business travel
      accident insurance.  The Executive shall also be entitled to
      participate in benefit programs provided by the Company, including, but not
      limited to, the retirement program, the supplemental retirement program, the
      R.S.V.P. 401(k) Savings Program and the supplemental R.S.V.P. 401(k) Savings
      Program as in effect from time to time.  The Executive’s participation
      in the programs referred to in this Section 4(A) shall be subject to the terms
      and conditions of the respective programs as they may be amended by the Company
      from time to time in its sole discretion.

    (B)  Other
      Insurance and Welfare Benefits.  During
      the term, Executive will be eligible to participate, on terms which are
      generally available to the other senior executives of the Company and subject
      to
      the eligibility requirements of the applicable Company plans as in effect from
      time to time, in the Company’s deferred compensation, medical, dental, vacation,
      and life insurance programs, and other benefits generally available to the
      Company’s senior executives from time to time.

    (C)  Automobile
      Program.  The Executive shall be
      entitled to participate in the Company’s Executive Automobile Program, pursuant
      to which the Company, at the Executive’s election, shall either: (i) provide the
      Executive with an automobile (which automobile shall be replaced every two
      (2)
      years) for his use with a value, when new, of up to $42,800 and shall reimburse
      the Executive for all costs and expenses associated with such automobile
      (including, but not limited to, automobile insurance, repairs, and gas), or
      (ii)
      provide the Executive with a monthly automobile allowance, which allowance
      shall
      be based upon the annualized imputed value of the automobile to which the
      Executive is entitled under such program.  The value of the automobile
      to which the Executive is entitled shall be subject to an annual review and
      may
      be increased at the discretion of the Compensation Committee, in accordance
      with
      the terms of the Company’s Executive Automobile Program; provided, however, the
      Executive shall be entitled to receive any benefit to which participants in
      the
      Company’s Executive Automobile Program may from time to time hereafter generally
      become entitled thereunder that is broader or greater than the benefits to
      which
      participants are currently generally entitled (e.g., an across-the-board
      increase in the value of automobiles received under such program).

    
      
        
        

      

      
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    (D)  Financial
      Counseling Program.  The Executive shall
      be entitled to participate in the Company’s Key Management Financial Counseling
      Program.  The Executive’s initial annual allowance shall be $3,500 per
      calendar year, which allowance shall be subject to periodic review by the
      Compensation Committee and may be increased at the discretion of the Board,
      in
      accordance with the terms of the Key Management Financial Counseling
      Program.

    (E)  Vacation.  The
      Executive shall be entitled to an aggregate of not less than four (4) weeks
      of
      paid vacation in each full calendar-year during the Executive’s employment
      hereunder.

    (F)  Employee
      Discount.  The Executive shall be
      entitled to receive the benefit of any Company Discount which may be in effect
      from time to time and is generally available to the employees of the
      Company.  The Company Discount currently is forty (40%)
      percent.

    (G)  Perquisites.  Perquisites
      will not be grossed up for taxes.

    5.  Expenses.  The
      Executive is authorized to incur and the Company shall either pay directly
      or
      reimburse the Executive for ordinary and reasonable expenses in connection
      with
      the performance of his duties hereunder, including, without limitation, expenses
      for (A) transportation, (B) business meals, (C) travel and lodging, and (D)
      similar items.  The Executive agrees to comply with the Company’s
      policies with respect to record keeping in connection with such
      expenses.

    
      
        
        

      

      
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    6.  Termination
      of
      Employment.

    The
      employment of the Executive
      hereunder may be terminated by the Company at any time, subject to the Company
      providing the compensation and benefits in accordance with the terms of this
      Agreement.  The Executive acknowledges and agrees that Executive’s
      rights in the event of any termination or cessation of his employment with
      the
      Company at any time shall be governed solely and exclusively by the terms set
      forth in this Section 6, together with any rights expressly provided under
      Sections 3(C), 3(D), 7-9 and 13-18 of this Agreement.  Subject to the
      rights of the Company set forth in this Agreement (including Sections 11 and
      12), a voluntary termination of employment by the Executive without Good Reason
      under Section 6(G) will not constitute a breach by the Executive of this
      Agreement.

    (A)           Termination
      due to Death or Disability.  In the event of the Executive’s
      death, Executive's employment shall automatically cease and terminate as of
      the
      date of death.  If Executive becomes Disabled, the Company may
      terminate Executive's employment upon thirty (30) days written notice to
      Executive.  For purposes of this Agreement, the terms "Disabled" or
      "Disability" shall mean Executive's inability, because of physical or mental
      illness or injury, substantially to perform his duties hereunder as a result
      of
      physical incapacity for a continuous period of at least six (6)
      months.  Any dispute as to the Executive’s incapacitation shall be
      resolved by an independent physician selected by the Board and reasonably
      acceptable to the Executive or his legal representative, whose determination
      shall be final and binding upon both the Executive and the
      Company.  In the event of the termination of employment due to
      Executive's death or Disability, Executive or his estate or legal
      representatives shall be entitled to receive:

    
      
        
        

      

      
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    (i)           payment
      for all accrued but unpaid Base Salary as of the date of Executive's termination
      of employment;

    (ii)           reimbursement
      for expenses incurred by the Executive pursuant to Section 4 (C), 4 (D) and 5 up
      to and including the date on which employment is terminated;

    (iii)           any
      earned benefits to which the Executive may be entitled as of the date of
      termination pursuant to the terms of any compensation or benefit plans to the
      extent permitted by such plans (with the payments described in subsections
      (i)
      through (iii) above collectively called the “Accrued Payments”);

    (iv)           any
      annual incentive bonus earned but not yet paid for any completed full fiscal
      year immediately preceding the employment termination date; and

    (v)           if
      employment termination occurs prior to the end of any fiscal year, a pro rata
      annual incentive bonus for the fiscal year in which employment termination
      occurs (based on actual business days in such fiscal year prior to such
      employment termination, divided by the total annual business days) determined
      and paid based on actual performance achieved for such fiscal year against
      the
      performance goals for that fiscal year (provided that, if Executive’s own
      individual performance rating constitutes a separate component under the annual
      incentive plan, it will be deemed to have been achieved at a target individual
      performance rating).

     (B)                      Termination
      on or following Normal Retirement Date.  The employment
      of the Executive hereunder may be terminated by the Company or by the Executive
      on or after the Executive’s normal retirement date, which is age 65 (“Normal
      Retirement”).  In the event of termination of employment under this
      Section 6(B), Executive shall be entitled to receive:

    
      
        
        

      

      
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    (i)            
      the Accrued Payments;

    (ii)           
      any annual incentive bonus earned but not yet paid for any completed full fiscal
      year immediately preceding the employment termination date; and

    (iii)           if
      employment termination occurs prior to the end of any fiscal year, a pro rata
      annual incentive bonus for such fiscal year in which employment termination
      occurs (based on actual business days in such fiscal year prior to such
      employment termination, divided by the total annual business days) determined
      and paid based on actual performance achieved for such fiscal year against
      the
      performance goals for that fiscal year (provided that, if Executive’s own
      individual performance rating constitutes a separate component under the annual
      incentive plan, it will be deemed to have been achieved at a target individual
      performance rating).

    (C)           Termination
      for Cause.  The Company may, by providing written notice
      to Executive, terminate Executive's employment for Cause.   The
      term "Cause" for purpose of this Agreement shall mean:

    (i)            
      Executive's conviction of, or entrance of a plea of guilty or nolo contendere
      to, a felony under federal law or state law; or

    (ii)            fraudulent
      conduct by Executive in connection with the business affairs of the Company;
      or

    (iii)           theft,
      embezzlement, or other criminal misappropriation of funds by Executive (other
      than good faith expense account disputes or de minimis amounts); or

    (iv)           Executive's
      willful refusal to materially perform his executive duties hereunder;
      or

    
      
        
        

      

      
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    (v)            Executive's
      willful misconduct, which has, or would have if generally known, a materially
      adverse effect on the business or reputation of the Company; or

    (vi)          
      Executive's material breach of a covenant, representation, warranty or
      obligation of Executive under this Agreement.

    For
      purposes of this Section 6(C), an act or failure to act shall be considered
      “willful” only if done or omitted to be done without a good faith reasonable
      belief that such act or failure to act was in the best interests of the
      Company.

    Any
      determination of Cause by the Company will be made by a resolution approved
      by a
      majority of the members of the Board, provided that no such determination may
      be
      made until Executive has been given written notice detailing the specific event
      constituting such Cause and a period of thirty (30) days following receipt
      of
      such notice to cure such event (if susceptible to cure), and, if such event
      is
      not curable or is not cured, an opportunity to appear before the Board (with
      legal counsel if so requested in writing by Executive) to discuss the specific
      circumstances alleged to give rise to the Cause event. Subject to Executive's
      right to cure and/or appear before the Board, if Executive's employment is
      terminated for Cause, the termination shall take effect on the effective date
      of
      such termination as specified in the written notice of such termination
      delivered to Executive.

    In
      the
      event of the termination of Executive's employment hereunder by the Company
      for
      Cause, then Executive shall be entitled to receive payment of the Accrued
      Payments.

    If
      the
      Company attempts to terminate Executive's employment pursuant to this Section
      6(C) and it is ultimately determined that the Company lacked Cause, the
      provisions of Section 6(D), Section 6(E) or Section 6(F) (as applicable) shall
      apply and Executive shall be entitled to receive the payments set forth under
      Section 6(D), Section 6(E) or Section 6(F) (as applicable).

    
      
        
        

      

      
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    (D)           Termination
      without Cause or for Good Reason prior to Change-in-Control through the end
      of
      Fiscal 2009. The Company may terminate Executive's employment
      hereunder without Cause at any time, by providing Executive 30 days’ written
      notice of such termination. Such notice shall specify the effective date of
      the
      termination of Executive's employment. The Executive may terminate his
      employment for Good Reason by providing 30 days’ prior written notice to the
      Company.  In the event of the termination of Executive's employment
      under this Section 6(D) without Cause or by the Executive for Good Reason,
      in
      each case from the date of this Agreement through the end of the Company’s
      fiscal year 2009 and in each case prior to, or more than 24 months following,
      a
      Change-in-Control (as defined in Exhibit B), then Executive shall be entitled
      to:

    (i)            
      payment of the Accrued Payments;

    (ii)            a
      separation allowance, payable in separate, equal installments in accordance
      with
      normal payroll practices over a 24 month period beginning immediately following
      the date of termination, in an aggregate amount equal to two (2) times the
      sum
      of (x) Executive’s then Base Salary and (y) the Executive’s then Target
      Bonus;

    (iii)           any
      annual incentive bonus earned but not yet paid for any completed full fiscal
      year immediately preceding the employment termination date;

    (iv)           if
      employment termination occurs prior to the end of any fiscal year, a pro rata
      annual incentive bonus for such fiscal year in which employment termination
      occurs (based on actual business days in such fiscal year prior to such
      employment termination, divided by the total annual business days) determined
      and paid based on actual performance achieved for such fiscal year against
      the
      performance goals for that fiscal year (provided that, if Executive’s own
      individual performance rating constitutes a separate component under the annual
      incentive plan, it will be deemed to have been achieved at a target individual
      performance rating); and

    
      
        
        

      

      
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      (v)           the Company
      shall arrange for the Executive to continue to participate (through COBRA or
      otherwise), on substantially the same terms and conditions as in effect for
      the
      Executive (including any required contribution) immediately prior to such
      termination, in the medical, dental, disability and life insurance programs
      provided to the Executive pursuant to Section 4(A) and Section 4(B) hereof
      (the
“Benefits Continuation”) until the earlier of (i) the end of the 24 month period
      beginning on the effective date of the termination of Executive’s employment
      hereunder, or (ii) such time as the Executive is eligible to be covered by
      comparable benefit(s) of a subsequent employer (determined on a
      benefit-by-benefit and coverage-by-coverage basis).  The Executive
      agrees to notify the Company promptly if and when he begins employment with
      another employer and if and when he becomes eligible to participate in any
      benefit or other welfare plans, programs or arrangements of another
      employer.

    For
      purposes of this Agreement, the term "Good Reason" means, without Executive’s
      written consent:

    (a)            a
      reduction by the Company in Executive's Base Salary or Target
      Bonus  as in effect from time to time (or its equivalent as reasonably
      determined by the Compensation Committee); or

    
      
        
        

      

      
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    (b)            a
      material reduction of Executive’s duties, other than during any period of
      illness or incapacity, such that Executive no longer has the title of, or serves
      or functions as, chief operating officer of the Company; provided that
      realignments in direct marketing functions will not constitute Good Reason;
      and
      provided further that neither a Change-in-Control nor a going private event
      will
      be an event which constitutes Good Reason or be considered a separate factor
      in
      determining whether any material reduction in duties constituting Good Reason
      under this subsection (b) has occurred; or

     (c)           the
      Company requiring Executive to be based at a location in excess of thirty-five
      (35) miles from the location of the Company's principal executive
      office  in Hingham, Massachusetts as of the effective date of this
      Agreement, except for required travel on Company business; or

    (d)            the
      Company fails to obtain the written assumption of its obligations under this
      Agreement by a successor not later than the consummation of a merger,
      consolidation or sale of the Company; or 

    (e)            a
      material breach by the Company of its obligations under this Agreement,
which,
      in
      each of subsections (a) through (e) above, is not remedied by the Company within
      30 days of receipt of written notice of such event or breach delivered by
      Executive to the Company; provided, that the Executive may only exercise his
      right to terminate this Agreement for Good Reason within the 120 day period
      immediately following the occurrence of any of the events described in
      subsections (a) through (e) above.

    
      
        
        

      

      
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    (E)    Termination
      without Cause or for Good Reason prior to Change-in-Control beginning with
      Fiscal 2010. The Company may terminate Executive's employment
      hereunder without Cause at any time, by providing Executive 30 days’ written
      notice of such termination. Such notice shall specify the effective date of
      the
      termination of Executive's employment. The Executive may terminate his
      employment for Good Reason by providing 30 days’ prior written notice to the
      Company.  In the event of the termination of Executive's employment
      under this Section 6(E) without Cause or by the Executive for Good Reason,
      in
      each case beginning with the Company’s fiscal year 2010 and in each case prior
      to or more than 24 months following a Change-in-Control (as defined in Exhibit
      B), then Executive shall be entitled to:

    (i)            
      payment of the Accrued Payments;

    (ii)            a
      separation allowance, payable in lump sum within 30 days from the date of
      termination, equal to one and one-half times (1.5) times the sum of (x)
      Executive’s then Base Salary and (y) the annual cash AIP bonus paid to Executive
      for the last full fiscal year immediately prior to termination;

    (iii)           any
      annual incentive bonus earned but not yet paid for any completed full fiscal
      year immediately preceding the employment termination date;

    (iv)           if
      employment termination occurs prior to the end of any fiscal year, a pro rata
      annual incentive bonus for such fiscal year in which employment termination
      occurs (based on actual business days in such fiscal year prior to such
      employment termination, divided by the total annual business days) determined
      and paid based on actual performance achieved for such fiscal year against
      the
      performance goals for that fiscal year (provided that, if Executive’s own
      individual performance rating constitutes a separate component under the annual
      incentive plan, it will be deemed to have been achieved at a target individual
      performance rating).; and

    
      
        
        

      

      
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    (v)            Benefits
      Continuation until the earlier of 18 months after termination of employment
      or
      such time as Executive is eligible to be covered by comparable benefit(s) of
      a
      subsequent employer (determined on a benefit-by-benefit and coverage-by-coverage
      basis).  The Executive agrees to notify the Company promptly if and
      when he begins employment with another employer and if and when he becomes
      eligible to participate in any benefit or other welfare plans, programs or
      arrangements of another employer.

     (F)    Termination
      of Employment without Cause or for Good Reason following a
      Change-in-Control. If the Company terminates
      Executive’s employment without Cause or Executive terminates his employment for
      Good Reason by providing 30 days’ prior written notice to the Company, in each
      case within 24 months following a Change-in-Control (as defined in Exhibit
      B),
      the Company will provide to Executive:

            (i)           
       payment of the Accrued Payments;

    (ii)            a
      lump sum separation allowance equal to two (2) times the sum of (x) Executive’s
      then Base Salary and (y) Executive’s then Target Bonus;

    (iii)           any
      annual incentive bonus earned but not yet paid for any completed full fiscal
      year immediately preceding the employment termination date;

    (iv)           if
      employment termination occurs prior to the end of any fiscal year, a pro rata
      annual incentive bonus for such fiscal year in which employment termination
      occurs (based on actual business days in such fiscal year prior to such
      employment termination, divided by the total annual business days) determined
      and paid based on actual performance achieved for such fiscal year against
      the
      performance goals for that fiscal year (provided that, if Executive’s own
      individual performance rating constitutes a separate component under the annual
      incentive plan, it will be deemed to have been achieved at a target individual
      performance rating); and

    
      
        
        

      

      
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    (v)           Benefits
      Continuation until the earlier of 24 months after termination of employment
      or
      such time as Executive is eligible to be covered by comparable benefit(s) of
      a
      subsequent employer (determined on a benefit-by-benefit and coverage-by-coverage
      basis).  The Executive agrees to notify the Company promptly if and
      when he begins employment with another employer and if and when he becomes
      eligible to participate in any benefit or other welfare plans, programs or
      arrangements of another employer.

    Upon
      the
      occurrence of a Change-in-Control, all of Executive’s then outstanding stock
      options, stock appreciation rights, restricted stock and restricted stock unit
      awards (including the equity award referred to in Section 3(C) above) will
      vest
      in full.

    (G)           Voluntary
      Termination by the Executive without Good Reason.  In the
      event Executive terminates his employment without Good Reason, he shall provide
      not less than 60 days’ prior written notice of such termination to the
      Company.  Upon such voluntary termination, the Executive will be
      entitled to the Accrued Payments.

    (H)           Release
      of Claims as Condition.  The Company’s obligation to pay
      the separation allowance and provide all other benefits and rights (including
      equity vesting) referred to in this Section 6 (other than Accrued Payments)
      and
      in Section 3(C) above shall be conditioned upon the Executive having delivered
      to the Company an executed separation agreement and full and unconditional
      release (that is not subject to revocation) of claims against the Company,
      its
      parent entities,  affiliates, employee benefit plans and fiduciaries,
      officers, employees, directors, agents and representatives satisfactory in
      form
      and content to the Company’s counsel.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (I)           No
      Mitigation; No Offset.  In no event shall Executive be
      obligated to seek other employment or take any other action by way of mitigation
      of the amounts payable to Executive under any of the provisions of this
      Agreement, nor shall the amount of any payment hereunder be reduced by any
      compensation earned by Executive as a result of subsequent
      employment.  The Company’s payment obligations under this Section 6
      shall not be subject to offset or recoupment, except as specifically provided
      in
      this Agreement (including Section 11(C)) and subject to the Executive’s
      satisfaction of his obligations under Section 6(H); and except that nothing
      herein shall affect the impact of any applicable law, including but not limited
      to Sarbanes-Oxley, which requires Executive to forfeit any compensation or
      benefits or to repay to the Company any compensation or benefits previously
      paid
      to him by the Company.


    7.     Indemnification.

    (A)  The
      Company shall
      indemnify, defend and hold the Executive harmless, to the maximum extent
      permitted by law, against all judgments, fines, amounts paid in settlement
      and
      all reasonable expenses, including attorneys’ fees incurred by the Executive, in
      connection with the defense of, or as a result of any action or proceeding
      (or
      any appeal from any action or proceeding) in which the Executive is made or
      is
      threatened to be made a party by reason of the fact that the Executive is or
      was
      an officer or director of the Company, regardless of whether such action or
      proceeding is one brought by or in the right of the Company, to procure a
      judgment in its favor (or other than by or in the right of the
      Company).  Each of the parties hereto shall give prompt notice to the
      other of any action or proceeding from which the Company is obligated to
      indemnify, defend and hold harmless the Executive of which it or he (as the
      case
      may be) gains knowledge.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (B)  The
      Company hereby represents and warrants that the Executive shall be covered
      and
      insured up to the maximum limits provided by all insurance which the Company
      then maintains to indemnify its directors and officers (and to indemnify the
      Company for any obligations which it incurs as a result of its undertaking
      to
      indemnify its officers and directors), subject to applicable deductibles and
      to
      the terms and conditions of such policies.

    8.  Arbitration;
      Mediation.  Any dispute, controversy or
      claim between the parties hereto arising out of or relating to this Agreement
      either during or after the term hereof, shall be settled by arbitration
      conducted in the Commonwealth of Massachusetts, in accordance with the
      Commercial Rules of the American Arbitration Association then in force,
      provided, however, the Executive acknowledges that in the event of a violation
      of Sections 11 and 12 of this Agreement, the Company shall be entitled to obtain
      from a state or federal court in the Commonwealth of Massachusetts, temporary,
      preliminary or permanent injunctive relief (without the necessity of posting
      any
      bond or other security), which rights shall be in addition to any other rights
      or remedies to which it may be entitled.  Moreover, nothing in this
      provision prevents the Executive from filing, cooperating with, or participating
      in any proceeding before the EEOC or a state Fair Employment Practices Agency
      relating to discrimination or bias (except that the Executive acknowledges
      that
      he may not recover any monetary benefits in connection with any such
      proceeding).  The decision of the arbitrator or arbitrators conducting
      any such arbitration proceedings shall be in writing, shall set forth the basis
      therefor and such arbitrator’s or arbitrators’ decision or award shall be final
      and binding upon the parties hereto.  The parties hereto shall abide
      by all awards rendered in such arbitration proceedings, and all such awards
      may
      be enforced and executed upon in any court having jurisdiction over the party
      against whom or which enforcement of such award is
      sought.  Notwithstanding the foregoing of this Section 8, each of the
      parties agrees that, prior to submitting a dispute under this Agreement to
      arbitration, the parties agree to submit, for a period of sixty (60) days,
      to
      voluntary mediation before a jointly selected neutral third party mediator
      under
      the auspices of JAMS, Boston, Massachusetts, Resolution Center (or any successor
      location), pursuant to the procedures of JAMS International Mediation Rules
      conducted in the Commonwealth of Massachusetts (however, such mediation or
      obligation to mediate shall not suspend or otherwise delay any termination
      or
      other action of the Company or affect the Company’s other rights).

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

          9.  Enforceability.  It
      is the intention of the parties that the provisions of this Agreement shall
      be
      enforced to the fullest extent permissible under the laws and public policies
      of
      each state and jurisdiction in which such enforcement is sought, but that the
      unenforceability (or the modification to conform with such laws or public
      policies) of any provisions hereof, shall not render unenforceable or impair
      the
      remainder of this Agreement.  Accordingly, if any provision of this
      Agreement shall be determined to be invalid or unenforceable, either in whole
      or
      in part, this Agreement shall be deemed amended to delete or modify, as
      necessary, the offending provisions and to alter the balance of this Agreement
      in order to render the same valid and enforceable to the fullest extent
      permissible.

    10.  Assignment.  This
      Agreement is personal in nature to the Company and the rights and obligations
      of
      the Executive shall not be assigned or transferred by the
      Executive.  This Agreement and all of the provisions hereof shall be
      binding upon, and inure to the benefit of, the parties hereto, and their
      successors (including successors by merger, consolidation, sale or similar
      transactions, permitted assigns, executors, administrators, personal
      representatives, heirs and distributees).


    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    11.  Non-Disclosure;
      Non-Solicitation; Cooperation.

    (A)  The
      Executive shall not, at any time during or following the period of employment,
      disclose, use, transfer or sell, except in the course of such employment, any
      confidential information or proprietary data of the Company or its affiliates
      so
      long as such information or data remains confidential and has not been disclosed
      or is not otherwise in the public domain, except as required by law or pursuant
      to legal process or in connection with an administrative proceeding before
      a
      governmental agency.  The Company and the Executive agree that the
      Executive’s obligations under this Section 11(A) shall not apply if (1) any
      disclosure by the Executive is made with the express written permission of
      the
      Company; or (2) if the Executive can show by documentary evidence that he had
      knowledge of the confidential information, or it was in his possession, prior
      to
      disclosure by the Company, or that it was lawfully received by the Executive
      from a third party who is not or was not bound, at the time the information
      was
      conveyed, by any confidential relationship or obligation to the
      Company.

    (B)  The
      Executive agrees that, for a period of eighteen (18) months after the
      termination or cessation of the Executive’s employment with the Company for any
      reason, the Executive will not:

    (i)
      directly or indirectly solicit,
      attempt to hire, or hire any employee of the Company (or any person who may
      have
      been employed by the Company during the last year of the Executive’s employment
      with the Company), or assist in such hiring by any other person or business
      entity or encourage, induce or attempt to induce any such employee to terminate
      his or her employment with the Company; or 
      (ii)
        take action intended to encourage
        any vendor or supplier of the Company to cease to do business with the Company
        or materially reduce the amount of business the vendor or supplier does with
        the
        Company; or

      (iii)
        materially disparage the
        Company.

      (C)  In
        addition to all other rights and remedies of the Company under this Agreement
        or
        otherwise, upon breach of Section 11(B)(i) above and Section 12 below, the
        Company will have the right to terminate any severance payment and benefits
        under Section 6 above and will have the right to recover any severance payment
        and benefits previously paid under Section 6 above.

    

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    12.  Non-Competition
      Agreement.  The Executive agrees that
      throughout the term of his employment, and for a period of twelve (12) months
      after termination or cessation of employment for any reason, he will not work
      directly or indirectly in any capacity or perform any services anywhere in
      the
      world (including as an officer, director, employee, agent, advisor, in any
      consulting capacity or as an independent contractor) for Ann Taylor, Chico’s
      FAS, Coldwater Creek, Gap Inc., Liz Claiborne, Ralph Lauren or Sundance Catalog
      Company (or any of their affiliated brands, subsidiaries or
      successors).  The Executive acknowledges, with the advice of legal
      counsel, that he understands the foregoing provisions of this Section 12 and
      that these provisions are fair, reasonable, and necessary for the protection
      of
      the Company’s business.

    13.  Taxes.

    (A)  All
      payments to be made
      to and on behalf of the Executive under this Agreement will be subject to
      required withholding of federal, state and local income and employment taxes
      and
      to related reporting requirements.

    (B)  Gross-Up
      Payment.  (i) In the event that any payment or benefit received or
      to be received by the Executive in connection with a Change-in-Control or the
      termination of the Executive’s employment, whether such payments or benefits are
      received pursuant to the terms


    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    


    of
      this
      Agreement or any other plan, arrangement or agreement with the Company, with
      any
      other person whose actions result in a Change-in-Control or with any person
      affiliated with the Company or such other persons (all such payments and
      benefits being hereinafter called “Total Payments”), would be subject (in whole
      or part), to the tax (the “Excise Tax”) imposed under Section 4999 of the
      Internal Revenue Code of 1986, as amended (the “Code”), the Company shall pay to
      the Executive such additional amounts (the “Gross-Up Payment”) as may be
      necessary to place the Executive in the same after-tax position (taking into
      account the fact that the Gross-Up Payment itself is or may be subject to
      federal, state and local income, employment and excise taxes) as if no portion
      of the Total Payments had been subject to the Excise Tax.  The amount
      of the Gross-Up Payment shall be calculated at the Company’s expense using the
      highest marginal tax rates, and shall be calculated by a “Big Four” accounting
      firm or nationally-recognized benefits consulting firm selected by the Company
      and reasonably acceptable to the Executive.  In the event that the
      Excise Tax is subsequently determined to be less than the amount taken into
      account hereunder, the Executive shall repay to the Company, at the time that
      the amount of such reduction in Excise Tax is finally determined, the portion
      of
      the Gross-Up Payment attributable to such reduction (plus that portion of the
      Gross-Up Payment attributable to the Excise Tax and federal, state and local
      income, employment and excise tax imposed on the Gross-Up Payment being repaid
      by the Executive, to the extent that such repayment results in a reduction
      in
      Excise Tax and/or a federal, state and local income, employment and excise
      tax
      deduction).  In the event that the Excise Tax is determined to exceed
      the amount taken into account hereunder (including by reason of any payment
      the
      existence or amount of which cannot be determined at the time of the Gross-Up
      Payment), the Company shall make an additional Gross-Up Payment in respect
      of
      such excess (plus any interest, penalties or additions payable by the Executive
      with respect to such excess) 


    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    


    at
      the
      time that the amount of such excess is finally determined.  The
      Executive (who shall immediately notify the Company of the commencement of
      any
      audit, administrative or judicial proceedings) and the Company shall each
      reasonably cooperate with the other in connection with any administrative or
      judicial proceedings concerning the existence or amount of liability for Excise
      Tax with respect to the Total Payments.  The Executive will allow and
      hereby authorizes the Company to control any such audit, administrative or
      judicial proceedings on the Executive’s behalf.

    (ii)  Notwithstanding
      any
      provision of this Agreement to the contrary, if but for this sentence, the
      Company would be obligated to make “parachute payments” to the Executive,
      whether under this Agreement, the terms of any stock-based compensation award
      or
      any other agreement, contract or arrangement, but the aggregate “present value”
of all such parachute payments does not exceed the lesser of (i) (x) 1.10
      multiplied by (y) three (3) times the Executive’s “base amount,” or (ii)
      $250,000 plus three (3) times the Executive’s “base amount,” then the payments
      and benefits to be paid or provided under this Agreement will be reduced to
      the
      minimum extent necessary (but in no event less than zero) so that no portion
      of
      the total payments or benefits due to the Executive on account of a
      Change-in-Control of the Company, determined after the reduction under this
      Agreement, constitutes an “excess parachute payment.”  For purposes of
      this Section 13(B)(ii), the terms “Change-in-Control,” “excess parachute
      payment,” “present value,” “parachute payment,” and “base amount” have the
      meanings assigned to them by Section 280G of the Code.  The
      determination of whether any reduction in such payments or benefits to be
      provided under this Agreement is required pursuant to the preceding sentence
      will be made, if requested by the Executive or the Company, at the expense
      of
      the Company by a “Big Four” accounting firm or nationally-recognized benefits
      consulting firm selected by the Company and reasonably acceptable to the
      Executive.  The fact that the Executive’s right to payments or
      benefits may


    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    be
      reduced by reason of the limitations contained in this Section 13(B)(ii) will
      not of itself limit or otherwise affect any other rights of the Executive other
      than pursuant to this Agreement.  In the event that any payment or
      benefit intended to be provided under this Agreement or otherwise is required
      to
      be reduced pursuant to this Section 13(B)(ii), the Executive will be entitled
      to
      designate the payments and/or benefits to be so reduced (whether under this
      Agreement or otherwise) in order to give effect to this Section
      13(B)(ii).  The Company will provide the Executive with all
      information reasonably requested by the Executive to permit the Executive to
      make such designation.  In the event that the Executive fails to make
      such designation within ten (10) business days of the date of request by the
      Company, the Company may effect such reduction in any manner it deems
      appropriate.  If, despite a reduction in payments and/or benefits in
      accordance with this Section 13(B)(ii), the Executive is required to pay an
      Excise Tax, the Executive shall be paid a Gross-Up Payment in accordance with
      Section 13(B)(i), but shall not be entitled to any additional amounts relating
      to such reduction in payments and/or benefits, notwithstanding the failure
      of
      the reduction to achieve the goal of avoiding an Excise Tax
      liability.

    14.  Term.  This
      Agreement shall commence as of October 4, 2007 and shall continue in effect
      until the last day of the Company’s fiscal year 2009 (the “Term of Employment”);
      provided, however, that commencing at the beginning of the Company’s fiscal year
      immediately thereafter and at the beginning of the Company’s fiscal year each
      year thereafter, the term of this Agreement shall automatically be extended
      for
      one additional year unless at least 6 months prior to such date, the Company
      or
      the Executive shall have given notice to the other party that this Agreement
      shall not be extended.  It is acknowledged and agreed by the parties
      hereto that if this Agreement is not renewed by the Company pursuant to this
      Section 14, and not as a result of Executive’s death, Disability, Normal
      Retirement or Cause pursuant to Section 6(A), 6(B) or 6(C), such non-renewal
      by
      the Company will be deemed a termination without Cause pursuant to Section
      6(D),
      6(E) or 6(F) (as applicable).   In the event that Executive’s
      employment with the Company ceases at the end of any term because Executive
      (not
      the Company) has given a non-renewal notice set forth in this Section 14, and
      not as a result of the occurrence of Normal Retirement or Good Reason pursuant
      to Section 6(B), 6(D), 6(E) or 6(F), then such termination of employment shall
      be treated as a voluntary termination by Executive without Good
      Reason.

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    15.  Special
      Rule for U.S. Income Tax Compliance.  Notwithstanding
      anything in this Agreement to the contrary, the parties hereto intend that
      this
      Agreement comply with Section 409A of the Code and all guidance or regulations
      thereunder (“Section 409A”), and this Agreement and the payment of any benefits
      hereunder shall be operated and administered
      accordingly.  Specifically, but not by limitation, the Executive
      agrees that if, at the time of termination of employment, the Company is
      considered to be publicly traded and he is considered to be a specified
      employee, as defined in Section 409A (and as determined as of December 31
      preceding his termination of employment, unless his termination of employment
      occurs prior to April 30, in which case the determination shall be made as
      of
      the second preceding December 31), then some or all of such payments to be
      made
      hereunder as a result of his termination of employment shall be deferred for
      no
      more than six (6) months following such termination of employment, if and to
      the
      extent the delay in such payment is necessary in order to comply with the
      requirements of Section 409A of the Code, including the right to rely upon
      the
      exclusions for short term deferrals and separation pay upon an involuntary
      separation from service.  Upon expiration of such six (6) month period
      (or, if earlier, his death), any payments so withheld hereunder from the
      Executive hereunder shall be distributed to the Executive, with a payment of
      interest thereon credited at a rate of prime plus 1% (with such prime rate
      to be
      determined as of the actual payment date).

    16.  Survival.  Anything
      in Section 6 hereof to the contrary notwithstanding, the provisions of Sections
      7 through 17 shall survive the expiration or termination hereof, regardless
      of
      the reasons therefor.

    17.  No
      Conflict.  The Executive and the Company
      each hereby represents and warrants to the other that the execution, delivery
      and performance of this Agreement by him or it (as the case may be) shall not
      violate any agreement or other obligation of any kind, written or oral, to
      which
      he or it (as the case may be) is subject.

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    


    18.  Miscellaneous.

    (A)  Notices.  All
      notices hereunder shall be given in writing, clearly marked “Personal and
      Confidential,” by personal delivery (which shall include delivery by overnight
      couriers such as Federal Express), or prepaid registered or certified mail,
      return receipt requested, to the addresses of the proper parties as set forth
      below:

    TO
      THE
      EXECUTIVE:

    PHILIP
      KOWALCZYK

    [Home
      Address]

    


    TO
      THE
      COMPANY:

    


    The
      Talbots, Inc.

    One
      Talbots Drive

    Hingham,
      MA 02043

    Attn:  Senior
      Vice President/Human Resources

    


    Copy
      to:

    


    The
      Talbots, Inc.

    211
      South
      Ridge Street

    Rye
      Brook, NY 10573

    Attn:  General
      Counsel

     

    Any
      notice given as set forth above will be deemed given on the business day sent
      when delivered by hand during normal business hours, on the business day after
      the business day sent if delivered by a nationally-recognized overnight courier,
      or on the third business day after the business day sent if delivered by
      registered or certified mail, return receipt requested.


    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    (B)  Law
      Governing.  This Agreement shall be
      governed by and construed in accordance with the laws of the Commonwealth of
      Massachusetts applicable to contracts made and to be wholly performed in that
      state without regard to its conflicts of laws provisions.

    (C)  Headings.  The
      Section headings contained in this Agreement are for convenience of reference
      only and are not intended to determine, limit or describe the scope or intent
      of
      any provision of this Agreement.

    (D)  Number
      and
      Gender.  Whenever in this Agreement the
      singular is used, it shall include the plural if the context so requires, and
      whenever the masculine gender is used in this Agreement, it shall be construed
      as if the masculine, feminine or neuter gender, respectively, has been used
      where the context so dictates, with the rest of the sentence being construed
      as
      if the grammatical and terminological changes thereby rendered necessary have
      been made.

    (E)  Entire
      Agreement.  This Agreement contains the
      entire understanding between the parties with respect to the subject matter
      hereof and supersedes any prior or contemporaneous understandings and
      agreements, written or oral, between and among them respecting such subject
      matter, including, without limitation, the Original Agreement and the Term
      Sheet.

    (F)  Counterparts.  This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original but both of which taken together shall constitute one
      instrument.

    (G)  Amendments.

    This
      Agreement may not be amended except by a writing executed by each of the parties
      to this Agreement.

    (H)  Expenses.  All
      reasonable legal fees and expenses incurred by the Executive in negotiating
      and
      entering into this Agreement, up to $20,000, will be paid by the
      Company.  All such fees and expenses will be paid by the Company
      within 30 days after the Company’s receipt of the invoices
      therefor.


    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (I)  No
      Waiver.  No provision of this Agreement
      may be modified, waived or discharged unless such waiver, modification or
      discharge is agreed to in writing and signed by the Executive and such officer
      as may be specifically designated by the Board.  No waiver by either
      party at any time of any breach by the other party of, or compliance with,
      any
      condition or provision of this Agreement to be performed by such other party
      shall be deemed a waiver of similar or dissimilar provisions or conditions
      at
      the same or at any prior or subsequent time.

    


    


    IN
      WITNESS WHEREOF,
the parties hereto have duly executed this Agreement as of the date
      first written above.

     

    
      	PHILIP
              KOWALCZYK 	 	THE
              TALBOTS, INC.	 
	 	 	 	 	 
	 	 	 	 	 
	
              /s/
                Philip
                Kowalczyk

            	 	By:	
              /s/
                John
                Fiske

            	 
	
              Philip
                Kowalczyk   

            	 	Name:
	
              John
                Fiske
                III

            	 
	
               

            	 	Title:	
              Senior
                Vice
                President,

              Human
                Resources

            	 


         


    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    THE
      TALBOTS, INC.

    


    2003
      EXECUTIVE STOCK BASED INCENTIVE PLAN

    


    RESTRICTED
      STOCK AGREEMENT

    


    November
      __, 2007

    


    The
      Talbots, Inc.

    One
      Talbots Drive

    Hingham,
      Massachusetts 02043

    


    The
      undersigned acknowledges receipt
      from The Talbots, Inc. (together with its subsidiaries, the “Company” or
“Talbots”) of (i) this Restricted Stock Agreement providing the terms and
      conditions of a grant of restricted stock made on November __, 2007 under the
      2003 Executive Stock Based Incentive Plan, as amended and restated (the “Plan”),
      and (ii) a copy of the Plan.

     

    The
      restricted stock grant (the
“Award”) is for 53,476 shares of Common Stock of the Company, $.01 par value
      (the “Restricted Stock”).

    


    The
      amount of $534.76 in full payment
      of the purchase price for each share of Restricted Stock (being $.01 per share)
      has been paid by the Company on behalf of the undersigned, as additional
      compensation to the undersigned.

    


    In
      consideration of the Company’s
      accepting this Agreement and delivering the shares of Restricted Stock provided
      for herein, the undersigned hereby agrees with the Company as
      follows:

    


    
      	
               

            	
              1.

            	
              Restricted
                Period.

            


    

    


    
      	
               

            	
              (a)

            	
              No
                Transfer of Shares.  During the period of time that any
                shares of Restricted Stock are unvested as set forth in paragraphs
                1(b)
                below (the “Restricted Period”), such unvested shares shall not be sold,
                assigned, transferred, pledged, hypothecated or otherwise disposed
                of,
                except by will or the laws of descent and distribution or as provided
                in
                this Agreement.

            


    

    


    
      	
               

            	
              (b)

            	
              Vesting
                Period.  Except as otherwise provided below, the Restricted
                Stock subject to this Award shall vest as follows: (i) fifty percent
                (50%)
                on October 4, 2008 and (ii) fifty percent (50%) on October 4,
                2009.

            


    

    


    


    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      2.           The
        Company will have the option to repurchase the Restricted Stock that has
        not yet
        vested at a price of $.01 per share, which price may be amended from time
        to
        time by the Compensation Committee of the Company (the “Committee”) at its
        discretion.  Such option will be exercisable with respect to such
        unvested shares of Restricted Stock (i) if the undersigned’s continuous
        employment for the Company or an Affiliate (as such term is defined below)
        shall
terminate
        for any reason, except solely by reason of a period of Related Employment
        (as
        such term is defined in the Plan), or except as otherwise provided in paragraphs
        3(a), 3(b) and 3(c) hereof, prior to the expiration of the Restricted Period
        with respect to such unvested shares of Restricted Stock, and (ii) if, on
        or
        prior to the expiration of the Restricted Period with respect to such unvested
        shares of Restricted Stock or the earlier lapse of this repurchase option
        with
        respect to such unvested shares of Restricted Stock, the undersigned has
        not
        paid to the Company an amount equal to any federal, state, local or foreign
        income or other taxes which the Company determines is required to be withheld
        in
        respect of such shares.  At your election, the Committee hereby
        authorizes you to satisfy any such withholding tax obligation in whole or
        in
        part by the Company withholding, or your transferring to the Company, shares
        of
        Common Stock of the Company in satisfaction of any such obligations, determined
        using the fair market value of such shares at the time of such
        vesting.  Any such shares of Common Stock delivered to the Company in
        satisfaction of all or any portion of such withholding taxes shall be
        appropriately endorsed for transfer and assignment to the Company.  In
        all events, no share shall be issued until full payment therefor has been
        delivered to and received by the Company.  Pursuant to the foregoing,
        and consistent with SEC Rule 10b5-1, the Company is hereby instructed to
        withhold as of each vesting date of the Restricted Stock a sufficient number
        of
        shares of Restricted Stock so vesting to satisfy all federal, state, local
        and
        foreign income, employment and other taxes which the Company determines is
        required to be withheld in respect of such Restricted Stock then vesting,
        determined based on the fair market value (as determined under the Plan)
        as of
        such vesting date.

    

    


    Any
      attempt by the undersigned to dispose of any unvested Restricted Stock in
      contravention of the foregoing repurchase option of the

    Company
      shall be null and void and without effect.  If the Company’s
      repurchase option is not exercised by the Company with respect to any unvested
      shares of Restricted Stock within 120 days after the later of (i) the date
      the
      undersigned is finally removed from the payroll of the Company or its Affiliates
      or (ii) any later effective date of employment termination (in each case,
      including any period of challenge or appeal by the undersigned), such repurchase
      option shall terminate and be of no further force and effect.

    


    For
      purposes of this Agreement,
“Affiliates” means all direct or indirect subsidiaries of the Company, including
      without limitation The J. Jill Group, Inc., as well as any other entity which
      is
      now or may later be directly or indirectly controlled by the
      Company.

    


    
      	
               

            	
              3.

            	
              Death
                or Disability; Termination without Cause or for Good Reason; Change
                in
                Control.

            


    

    


    
      	
               

            	
              (a)

            	
              If
                the undersigned has been in continuous employment for the Company
                or an
                Affiliate since the date on which the Award was granted, and while
                in such
                employment, the undersigned dies, or his employment is terminated
                by
                reason of disability (as such term is defined in Paragraph 12 of
                the
                Plan), and any such event shall occur prior to the end of the Restricted
                Period with respect to any unvested Restricted Stock, the Committee
                shall
                immediately cancel the repurchase option described in paragraph 2
                hereof
                and any and all other restrictions on the unvested Restricted Stock
                subject to the Award; and such shares shall no longer be subject
                to the
                restrictions under paragraph 2 hereof and shall be deemed
                vested.

            


    

    


    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    


    
      	
               

            	
              (b)

            	
              In
                the event that the undersigned’s employment is terminated without Cause
                (as defined below) by the Company or by an Affiliate, or in the event
                that
                the undersigned terminates his employment with the Company or an
                Affiliate
                for Good Reason (as defined below), in each case prior to the end
                of the
                Restricted Period, with respect to any unvested Restricted Stock,
                then (i)
                the Restricted Period shall be deemed to have expired on such date
                with
                respect to such unvested Restricted Stock, (ii) the Company agrees
                not to
                exercise any repurchase option described in paragraph 2 with respect
                to
                such unvested Restricted Stock and (iii) such shares shall therefore
                no
                longer be subject to the restrictions under paragraph 2 hereof and
                shall
                be deemed vested.

            


    

    


    
      	
               

            	
              (c)

            	
              If
                a Change in Control Event (as such term is defined in the Plan) occurs
                prior to the end of the Restricted Period, with respect to any unvested
                Restricted Stock, then (i) the Restricted Period shall be deemed
                to have
                expired on such date with respect to such unvested Restricted Stock,
                (ii)
                the Company agrees not to exercise any repurchase option described
                in
                paragraph 2 with respect to such unvested Restricted Stock and (iii)
                such
                shares shall therefore no longer be subject to the restrictions under
                paragraph 2 hereof and shall be deemed
                vested.

            


    

    


    
      	
               

            	
              (d)

            	
              For
                purposes of clarity, in the event that (i) the undersigned’s employment is
                terminated for Cause by the Company or by an Affiliate or (ii) the
                undersigned terminates his employment with the Company or an Affiliate
                without Good Reason, in each case prior to the end of the Restricted
                Period, then with respect to any then unvested Restricted Stock,
                the
                Company shall have the repurchase option described in paragraph 2
                above.

            


    

    


    “Termination
      without Cause,” “termination for Good Reason,” “termination for Cause” and
“termination without Good Reason” shall have the meanings set forth in the
      amended Employment Agreement between you and the Company dated November __,
      2007
      (“Employment Agreement”).

    


    
      	
               

            	
              4.

            	
              Issuance
                and Repurchase of Restricted
                Stock.

            


    

    


    Each
      certificate for Restricted Stock issued pursuant to this Award shall be
      deposited by the undersigned with the Company, together with a stock power
      endorsed in blank, or shall be evidenced in such other manner permitted by
      applicable law as determined by the Committee in its discretion.  If
      the Company chooses to exercise its option to repurchase unvested Restricted
      Stock as described in paragraph 2 hereof, title to such shares shall be deemed
      transferred to the Company without further action by the
      undersigned.  Contemporaneously with such transfer of title to such
      shares, the Company shall pay to the undersigned, or in the event of his death,
      his personal representative, as the case may be, the $0.01 per share purchase
      price for such shares of repurchased Restricted Stock.

     

    
      
        	
                 

              	
                5.

              	
                Certificates.

              


      

    

               

    
      	
               

            	
              (a)

            	
              The
                undersigned acknowledges that all certificates evidencing shares
                of
                Restricted Stock of the Company issued pursuant to this Award and
                this
                Agreement shall bear a restrictive legend as
                follows:

            


    

    


    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    “THE
      SHARES EVIDENCED BY THIS CERTIFICATE ARE PARTLY PAID AND ARE SUBJECT TO (i)
      RESTRICTIONS ON TRANSFER AND (ii) A REPURCHASE OPTION OF THE TALBOTS,
      INC.  UNDER CERTAIN CIRCUMSTANCES, PURSUANT TO THE PROVISIONS OF THE
      TALBOTS, INC. 2003 EXECUTIVE STOCK BASED INCENTIVE PLAN, AS AMENDED AND
      RESTATED, AND A RESTRICTED STOCK AGREEMENT DATED AS OF NOVEMBER  __,
      2007 BY AND BETWEEN PHILIP H. KOWALCZYK AND THE TALBOTS,
      INC. THE PLAN AND THE AGREEMENT ARE AVAILABLE FOR INSPECTION AT THE PRINCIPAL
      OFFICES OF THE TALBOTS, INC.”

    


    (Place
      date stamp)

    


    
      	
               

            	
              (b)

            	
              The
                undersigned acknowledges that the certificate evidencing the shares
                of
                Restricted Stock delivered pursuant to this Agreement may be issued
                in
                several denominations.  The date appearing immediately below the
                legend on each stock certificate will be the date on which shares
                represented by such certificate are scheduled to become free of the
                restrictions as set forth in paragraph 1(b) above, subject to all
                of the
                other terms and conditions of this
                Agreement.

            


    

    


    6.           Restriction.

    


    The
      undersigned understands that the Company 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 shares covered by this
      Agreement.  The undersigned understands that once shares have become
      free of restrictions, new certificates will be issued by the Company’s transfer
      agent not containing the legend provided for in paragraph 5 hereof, and that
      the
      undersigned will be free to sell the shares of Common Stock evidenced by such
      certificates not bearing such legend, subject to applicable requirements of
      federal and state securities laws and the requirements of this
      Agreement.  The undersigned agrees that any such sales will be
      effected by means of a broker’s transaction using the facilities of the stock
      exchange where the Common Stock is then listed.  The Company will
      endeavor to keep such registration statement effective to permit such sale,
      but
      in the event the Company notifies the undersigned that such registration
      statement is not then effective, the undersigned agrees to refrain from sales
      of
      shares of Common Stock until such time as the Company advises him that such
      registration statement has become effective.


    


    7.           Rights
      with Respect to Shares.

    


    The
      undersigned shall have, after issuance of a certificate for the number of shares
      of Restricted Stock awarded and prior to the expiration of any Restricted Period
      (or the earlier repurchase of unvested shares of Restricted Stock by the
      Company), the right to vote the same and to receive dividends or other
      distributions made or paid with respect to such Restricted Stock, subject,
      however, to the options, restrictions and limitations imposed thereon pursuant
      to this Agreement and the Plan.

    


    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

    8.           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 or as expressly set forth in the
      Employment Agreement.

    


    9.           Trading
      Black Out Periods.

    


    By
      entering into this Agreement the undersigned expressly agrees that: (i) during
      all periods of employment of the undersigned with the Company or its Affiliates,
      or while the undersigned is otherwise maintained on the payroll of the Company
      or its Affiliates, the undersigned shall abide by all trading “black out”
periods with respect to purchases or sales of the Company’s 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, the undersigned
      agrees that for a period of six (6) months following the effective date of
      any
      termination of employment or, if later, for a period or six (6) months following
      the date as of which the undersigned is no longer on the payroll of the Company
      or its Affiliates, the undersigned 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 the undersigned be prohibited from making a purchase or sale
      of
      the Company’s stock or exercising stock options for the Company’s stock 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.

    


    
      	
               Executive:  

            	 	 
	 	PHILIP
              H. KOWALCZYK	 


    

    


    


    Agreed:

    


    THE
      TALBOTS, INC.

                                                       
      
        	By:   	 	 
	 	John
                Fiske III
                Senior
                  Vice President, 

                Human
                  Resources

              	 


      

    

     

     

    


    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    


    


    EXHIBIT
      B

    


    For
      purposes of this Agreement, “Change in Control” shall mean (i) the acquisition
      (including as a result of a merger) by any “person” (as such term is used in
      Sections 3(a)(9), 13(d) and 14(d) of the Securities Exchange Act of 1934, as
      amended (the “Exchange Act”), or persons “acting in concert” (which for purposes
      of this Agreement shall include two (2) or more persons voting together on
      a
      consistent basis pursuant to an agreement or understanding between them to
      act
      in concert and/or as a “group” within the meaning of Sections 13(d)(3) and
      14(d)(2) of the Exchange Act), other than the Company of any of its
      subsidiaries, and other than AEON (U.S.A.), Inc.  or any of its
      subsidiaries or “affiliates” (as such term is defined in Rule 12b-2 under the
      Exchange Act; (collectively, an “Acquiring Person”), of beneficial ownership
      (within the meaning of Rule 13d-3 under the Exchange Act), directly or
      indirectly, of securities of the Company representing more than 25 percent
      of
      the combined voting power of the then outstanding securities of the Company
      entitled to then vote generally in the election of directors of the Company,
      and
      no other stockholder is the beneficial owner (within the meaning of Rule 13d-3
      under the Exchange Act), directly or indirectly, of a percentage of such
      securities higher than that held by the Acquiring Person; or (ii) individuals,
      who, as of the effective date of this Agreement (the “Effective Date”),
      constitute the Board (the “Incumbent Board”) cease for any reason to constitute
      at least a majority of the Board; provided that any individual becoming a
      director subsequent to the Effective Date, whose election or nomination for
      election by the Company’s stockholders was approved by a vote of at least
      two-thirds of the directors then comprising the Incumbent Board shall be
      considered as though such individual were a member of
      the
      Incumbent Board, but excluding as a member of the Incumbent Board, any such
      individual whose initial assumption of office is in connection with an actual
      or
      threatened election contest relating to the election of the directors of the
      Company (as such terms are used in Rule 14a-11 of Regulation 14A under the
      Exchange Act) and further excluding any individual who is an “affiliate”,
“associate” (as such terms are defined in Rule 12b-2 under the Exchange Act) or
      designee of an Acquiring Person having or proposing to acquire beneficial
      ownership (within the meaning of Rule 13d-3 under the Exchange Act), directly
      or
      indirectly, of securities of the Company representing more than 10 percent
      of
      the combined voting power of the then outstanding securities of the Company
      entitled to then vote generally in, the election of directors of the
      Company.