reason” termination, and such termination of employment by Participant satisfies such “goodreason” termination under that employment agreement or severance agreement; or               (iii) the Participant’s death or disability (as defined in the Plan); or               (iv) a Change in Control Event (as defined in this Plan) occurs (provided that such Change inControl Event is also a change in ownership, effective control or a substantial portion of theassets of the Company, in each case within the meaning of Section 409A of the Internal Revenue Codeof 1986, as amended (“Code”) and the regulations and guidance thereunder).          (d) Settlement of Units. Subject to the limitations set forth in Section 3, promptlyafter the date, if any, the Units vest pursuant to this Section 2, the Company shall deliver to theParticipant certificates for Shares underlying the vested Units.     3. Distribution of Shares.          (a) Code Section 409A. Notwithstanding anything to the contrary in this Agreement, itis the intention of the parties that this Agreement comply with Code Section 409A, and theregulations and guidance issued thereunder from time to time by the Department of the Treasurythereunder, and this Agreement and the payments of any benefits hereunder will be operated andadministered accordingly. The Participant shall be entitled to receive payment in the form ofShares for each vested Unit no later than ninety days following the event which results in anacceleration of vesting under Section 2(b).          (b) Cancellation and Forfeiture. Any Unit not vested pursuant to Section 2 above thatremains unvested on the date of Participant’s termination of employment (after taking into accountany applicable acceleration of vesting of Units pursuant to Section 2(b) above) shall thereupon becancelled and forfeited to the Company and shall terminate immediately.     4. Rights as a Stockholder. The Participant shall not have any rights as astockholder of the Company with respect to any Shares subject to the Units unless and until suchShares have been issued to the Participant.     5. Dividend Equivalents. The Company will credit each outstanding Unit with anyDividend Equivalents from the grant date to the date of vesting under Section 2 and the delivery ofShares hereunder. A “Dividend Equivalent” is an amount equal to the cash dividend payable perShare, if any, multiplied by the number of Shares then underlying each Unit. Such amount shall becredited to a book entry account on Participant’s behalf at the time the Company pays any cashdividend on its Shares. Dividend Equivalents shall vest at the same time as the underlying Units,and shall be distributed at the same time as the underlying Units convert to Shares. In the eventUnits do not vest and are forfeited pursuant to this Agreement, the Participant shall have norights and the Company shall have no liability as to such Dividend Equivalent.     6. Award Subject to the Plan. By accepting this Agreement and the Award evidencedhereby, the Participant agrees and acknowledges that the Award is subject to the Plan,
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and the terms of the Plan are hereby incorporated herein by reference.     7. No Right to Continued Employment. Neither the Plan nor this Agreement shall beconstrued as giving the Participant the right to be retained in the employ of the Company.     8. Transferability. Except as expressly contemplated in the Plan, the Units may notat any time be sold, assigned, transferred, pledged or otherwise encumbered.     9. Withholding. (a) By accepting this Award, the Participant agrees to makeappropriate arrangements with the Company for satisfaction of all applicable federal, state orlocal income tax withholding requirements, including the payment to the Company of all such taxesin connection with the distribution or delivery of the Shares or other settlement in respect of theUnits. In all events, no Share shall be issued until full payment therefor has been delivered toand received by the Company.     (b) Participant hereby irrevocably elects to satisfy such withholding tax obligation, inwhole, by the Company withholding Shares deliverable upon vesting of the Participant’s Award.Pursuant to the foregoing, and consistent with SEC Rule 10b5-1, the Company is hereby instructed towithhold as of the vesting date of this Award a sufficient number of Shares so vesting to satisfyall federal, state, local and foreign income, employment and other taxes which the Companydetermines is required to be withheld in respect of such Award then vesting, determined based onthe fair market value of the Shares (as determined under the Plan) as of such vesting date;provided that in no event shall the value of Shares so withheld by the Company exceed the minimumwithholding required by applicable statutes.     10. Notices. Any notice necessary under this Agreement shall be addressed to theCompany in care of its Secretary at the principal executive office of the Company and to theParticipant at the address appearing in the personnel records of the Company for such Participantor to either party at such other address as either party may hereafter designate in writing to theother. Any such notice shall be deemed effective upon receipt thereof by the addressee.     11. Failure to Enforce Not a Waiver. The failure of the Company to enforce at any timeany provision of this Agreement shall in no way be construed to be a waiver of such provision or ofany other provision hereof.     12. Choice of Law. The interpretation, performance and enforcement of this agreementshall be governed by the laws of the Commonwealth of Massachusetts without regard to principles ofconflicts of law.     13. Modification. No provision of this Agreement may be modified, waived ordischarged unless such waiver, modification or discharge is agreed to in writing signed by theParticipant and an appropriate officer of the Company.     IN WITNESS WHEREOF, the parties have each has caused this Agreement to be duly executed thisAgreement.
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       THE TALBOTS, INC.            By:                     Name:         Title:                         Participant:
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