option will be exercisable with respect to such unvested shares of Restricted Stock (i) if theundersigned’s continuous employment for the Company or an Affiliate (as such term is defined in thePlan) shall terminate for any reason, except solely by reason of a period of Related Employment (assuch term is defined in the Plan), or except as otherwise provided in paragraph 3 hereof, prior tothe expiration of the Restricted Period with respect to such unvested shares of Restricted Stock,(ii) if, on or prior to the expiration of the Restricted Period with respect to such unvestedshares of Restricted Stock or the earlier lapse of this repurchase option with respect to suchunvested shares of Restricted Stock, the undersigned has not paid to the Company an amount equal toany federal, state, local or foreign income or other taxes which the Company determines is requiredto be withheld in respect of such shares, or (iii) under such other circumstances as determined bythe Committee in its discretion.     (b) Pursuant to the foregoing, and consistent with SEC Rule 10b5-1, the Company is herebyinstructed to, and the Company hereby agrees to, withhold as of each vesting date of the RestrictedStock 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 bewithheld in respect of such Restricted Stock then vesting, determined based on the Fair MarketValue (as defined below) of such vested shares as of such vesting date. Any shares of Common Stockwithheld by the Company in satisfaction of withholding taxes shall be appropriately endorsed fortransfer and assignment to the Company, as necessary, and in no event shall a share be issued untilfull payment therefor has been received by the Company.     “Fair Market Value” means, as of any date, the value of the Common Stock determined asfollows: if the Common Stock are listed on any established stock exchange or traded on any marketsystem, the Fair Market Value of a Common Stock shall be the closing sales price for such stock (orthe closing bid if no sales were reported) as quoted on such exchange or market (or the exchange ormarket with the greatest volume of trading in the Common Stock) on the date in question, asreported by The Wall Street Journal or such other source as the Committee deems reliable. Unlessotherwise provided by the Committee, if there is no closing sales price (or closing bid if no saleswere reported) for the Common Stock on the date in question, then the Fair Market Value shall bethe closing sales price (or closing bid if no sales were reported) on the last preceding date forwhich such quotation exists; or in the absence of such markets for the Common Stock, the FairMarket Value shall be determined by the Committee in good faith and in a manner that complies withSections 409A and 422 of the Internal Revenue Code (“Code”).     (c) Any attempt by the undersigned to dispose of any unvested Restricted Stock incontravention of the foregoing repurchase option of the Company under (a) above shall be null andvoid and without effect. If the Company’s repurchase option under (a) above is not exercised bythe Company with respect to any unvested shares of Restricted Stock within one hundred twenty (120)days after the later of (i) the date the undersigned is finally removed from the payroll of theCompany or its Affiliates or (ii) any later effective date of employment termination (in each case,as determined by the Committee and to include any period of challenge or appeal by theundersigned), such repurchase option shall terminate and be of no further force or effect.
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     3. Potential Cancellation of Repurchase Option.     If the undersigned has been in continuous employment for the Company or an Affiliate since thedate on which the Award was granted, and while in such employment, the undersigned dies, orterminates such employment by reason of disability (as such term is defined in Paragraph 12 of thePlan) or by reason of Retirement (as defined below), and any of such events shall occur prior tothe end of the Restricted Period with respect to any unvested Restricted Stock, the Committee maydetermine to cancel the repurchase option described in paragraph 2(a) hereof and any and all otherrestrictions on any or all of the unvested Restricted Stock subject to the Award; and suchrepurchase option shall become exercisable at such time as to any remaining unvested RestrictedStock. If and to the extent such repurchase option is so canceled as to any such shares ofRestricted Stock, such shares shall no longer be subject to the restrictions hereunder and shall bedeemed vested. For purposes of this paragraph 3, “Retirement” shall mean termination or separationfrom employment with the Company or an Affiliate on or after (i) attaining age 65 and havingcompleted at least five (5) Years of Service (as defined under The Talbots, Inc. Pension Plan,whether or not you are a participant in The Talbots, Inc. Pension Plan) or (ii) attaining age 55and having completed at least ten (10) Years of Service.     4. Issuance and Repurchase of Restricted Stock.     Each certificate for Restricted Stock issued pursuant to this Award shall be deposited by theundersigned with the Company, together with a stock power endorsed in blank, or shall be evidencedin such other manner permitted by applicable law (including in uncertificated form) as determinedby the Committee in its discretion. If the Company chooses to exercise its option to repurchaseunvested Restricted Stock as described in paragraph 2(a) hereof, title to such shares shall bedeemed transferred to the Company without further action by the undersigned. Contemporaneouslywith such transfer of title to such shares to the Company, the Company shall pay to theundersigned, or in the event of the undersigned’s death, his or her personal representative, as thecase may be, the $0.01 per share purchase price for such shares of repurchased Restricted Stock.     5. Certificates.     (a) The undersigned acknowledges that any certificates evidencing shares of Restricted Stockof the Company issued pursuant to this Award and this Agreement shall bear a restrictive legend asfollows:“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. UNDERCERTAIN CIRCUMSTANCES, PURSUANT TO THE PROVISIONS OF THE TALBOTS, INC. 2003 EXECUTIVESTOCK BASED INCENTIVE PLAN, AS AMENDED, AND A RESTRICTED STOCK AGREEMENT DATED AS OF**[DATE]**BY AND BETWEEN **[NAME]**ANDTHE TALBOTS, INC. THE PLAN AND THE AGREEMENT ARE AVAILABLE FOR INSPECTION AT THEPRINCIPAL OFFICES OF THE TALBOTS, INC.”
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     (b) The undersigned acknowledges that any certificate evidencing the shares of RestrictedStock delivered pursuant to this Agreement may be issued in several denominations. The dateappearing immediately below the legend on each stock certificate will be the date on which sharesrepresented by such certificate are scheduled to become free of the restrictions as set forth inparagraph 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 ExchangeCommission a Form S-8 registration statement under the Securities Act of 1933 with respect to thePlan and the shares of Common Stock covered by this Agreement. The Company will endeavor to keepsuch registration statement effective at all times that this Agreement is outstanding. TheCompany, however, shall not be required to issue or deliver a certificate for any shares, or causeto be made any book entry for uncertificated shares, until it has complied with all requirements ofthe Securities Act of 1933, the Securities Exchange Act of 1934, any stock exchange on which theCompany’s Common Stock may then be listed and all applicable state laws in connection with theissuance or sale of such shares or the listing of such shares on such stock exchange. Theundersigned understands that once shares have become free of restrictions, new certificates will beissued by the Company’s transfer agent not containing the legend provided for in paragraph 5 hereof(unless such shares shall be uncertificated), and that the undersigned will be free to sell theseshares of Common Stock, subject to applicable requirements of federal and state securities laws andthe requirements of this Agreement. The undersigned agrees that any such sales will be effected bymeans of a broker’s transaction.     7. Rights with Respect to Shares.     The undersigned shall have, after issuance of the Restricted Stock pursuant to this Award andprior to the expiration of any Restricted Period (or the earlier repurchase of unvested shares ofRestricted Stock by the Company), the right to vote the same and to receive dividends or otherdistributions 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.     8. Subject to Terms of the Plan.     This Agreement shall be subject in all respects to the terms and conditions of the Plan and inthe event of any question or controversy relating to the terms of the Plan, the decision of theCommittee shall be final and conclusive except as expressly set forth in this Agreement.     9. Trading Black Out Periods.     By entering into this Agreement the undersigned expressly agrees that: (i) during all periodsof employment of the undersigned with the Company or its Affiliates, or while the undersigned isotherwise maintained on the payroll of the Company or its Affiliates, the undersigned shall abideby all trading “black out” periods with respect to purchases or sales of the Company’s stock orexercises of stock options for the Company’s stock established from time to time by the Company(“Trading Black
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Out Periods”) and (ii) upon any cessation or termination of employment with the Company or itsAffiliates for any reason, the undersigned agrees that for a period of six (6) months following theeffective date of any termination of employment or, if later, for a period of six (6) monthsfollowing the date as of which the undersigned is no longer on the payroll of the Company or itsAffiliates, the undersigned shall continue to abide by all such Trading Black Out Periodsestablished from time to time by the Company; provided that in no event shall the undersigned beprohibited from making a purchase or sale of the Company’s stock or exercising stock options forthe Company’s stock under this paragraph 9 if such sale, purchase or exercise is made pursuant to awritten plan for trading securities within the meaning of Rule 10b5-1 under the SecuritiesExchange Act of 1934, as amended (a “10b5-1 Trading Plan”), and such 10b5-1 Trading Plan isconsistent with the Company’s insider trading policy and has been approved by the Company.     10. Change in Control.     All restrictions on any then outstanding Restricted Stock, as well as the Company’s repurchaseoption under paragraph 2(a) above, shall lapse upon a Change in Control Event (as such term isdefined in the Plan).      Sincerely yours,