Document:

exv10w79

Exhibit 10.79

December 5, 2008          

Edward L. Larsen

Senior Vice President, Finance,

   Chief Financial Officer and Treasurer

c/o The Talbots, Inc.

One Talbots Drive

Hingham, MA 02043

	 	Re: 	 	 Retirement Arrangements

Dear Ed:

          This letter is intended to confirm the agreements between you and The Talbots, Inc. (with its
subsidiaries, “Talbots” or the “Company”) concerning your retirement from Talbots, which you have
advised us will be on January 16, 2010 (“Retirement Date”), as well as your transition from the
chief financial officer and other officer duties with Talbots, and the terms of your interim
responsibilities with Talbots preceding your Retirement Date.

          Retirement Arrangement. This confirms that as of January 5, 2009 you will voluntarily
relinquish your responsibilities as senior vice president, chief financial officer, treasurer and
officer of Talbots (as well as your responsibilities and officer and committee positions in
connection with Talbots subsidiaries and its affiliates, foundation and benefit plans and
programs). From January 5, 2009 up through and ending on your Retirement Date, you will continue
as a regular employee with Talbots, serving exclusively as special advisor to the CEO in connection
with strategic initiatives and assisting the CFO’s transition.

          Compensation Arrangement from January 5, 2009 Until Your January 16, 2010 Retirement Date. In
such capacity and during your continued employment hereunder, you will continue to receive your
base salary at the rate currently in effect, continue to receive your

 

 

customary health and welfare benefits and continue to participate in all customary benefit
plans made available generally at the SVP level, including the qualified defined benefit pension
plan, defined benefit Supplemental Executive Retirement Plan (“SERP”), Retirement Savings Voluntary
Plan (“RSVP”), Supplemental Savings Plan (“SSP”), Company-paid term life insurance, long-term
disability, Executive Auto Program, vacation pay accrual, and Deferred Compensation Plan (“DCP”),
in each case subject to all terms and conditions therein and to such changes in or termination of
any of the foregoing plans or arrangements as may hereafter be made by Talbots. In such position,
however, you will not be entitled to new grants or programs under the annual incentive program, new
grants pursuant to the equity incentive program under the ESBIP or any benefits under any severance
agreement, plan or arrangement.

          Equity Awards. Your March 14, 2008 retention restricted stock grant (covering 21,000 shares)
will vest in full on January 5, 2009, subject to your satisfaction of the terms of this agreement
prior to such vesting date (including, without limitation, the Company’s receipt of a release of
claims which is no longer subject to revocation).

          During your continued employment, your outstanding stock options, PARS and your March 14, 2008
restricted stock grant covering 29,600 shares (“2008 Restricted Stock Grant”) will continue to vest
through your Retirement Date (or through any earlier employment termination as provided below).

          Provided you remain in Talbots employ up to your Retirement Date:

	 	•	 	All of your then outstanding and unvested PARS grants and your then outstanding and
unvested 2008 Restricted Stock Grant will continue to vest until the end of the 120-day
period following your Retirement Date (on which date Talbots will be deemed to have
exercised its repurchase option on any then unvested shares as set forth in the award

 

 

	 	 	 	agreement, and Talbots will thereafter pay you the $0.01 par value per share for the
unvested shares covered by the outstanding PARS grants and the 2008 Restricted Stock Grant).
	 
	 	•	 	All of your then outstanding unvested stock options will terminate on your Retirement
Date and all of your then outstanding vested stock options will continue to be exercisable
until the earlier of three (3) years from your Retirement Date or the original expiration
date of the option.

          Except as otherwise expressly provided in this retirement agreement, your outstanding stock
options, restricted stock awards and PARS awards will be governed by and subject to the terms and
conditions of such equity awards.

          On the vesting of any of the above PARS and restricted stock grants, the Company is authorized
and directed to withhold a sufficient number of vested shares upon such vesting in order to satisfy
the minimum Federal, state and local income tax withholding obligations.

          You agree that during your employment under this agreement and up through your Retirement Date
or any earlier termination of employment and for 6 months thereafter you will not engage in the
purchase or sale of Talbots common stock (including without limitation any “cashless exercise” of
any stock options involving the sale of any Talbots common stock as part of such option exercise)
during any trading window “blackout” or “quiet period” applicable to management employees (“Quiet
Period”). You acknowledge that Talbots reserves the right to modify the Quiet Period from time to
time in its sole and absolute discretion. Talbots will also provide you with notice of Quiet
Periods and changes thereto at the time it provides such notice to Talbots management level
employees. In addition, you agree to notify Talbots General Counsel prior to exercising any
options or trading in Talbots common stock during the above

 

 

period to ascertain whether such transaction would violate any Quiet Period covered by this
paragraph.

          Effect on Existing Severance Arrangements. You and the Company acknowledge and agree that
your separation from employment on your Retirement Date will for all purposes be deemed your
voluntary resignation from employment with Talbots.

          This agreement constitutes the entire agreement between you and the Company with respect to
the subject matter of this agreement and supersedes any and all prior representations, agreements,
understandings, promises or arrangements between you and the Company whether written or oral
concerning any of the subject matter hereof. Your rights during your continued employment and in
connection with your separation from employment will be exclusively governed by this retirement
agreement and you will not be entitled to severance pay or benefits under any other agreement, plan
or arrangement. Without limiting the foregoing, this agreement expressly supersedes the Change in
Control Agreement between you and Talbots dated November 11, 1993 and the Severance Agreement
between you and Talbots dated August 6, 2007 (together, the “Prior Agreements”) and each of the
Prior Agreements is hereby terminated and of no further force or effect.

          Nothing in this agreement will modify or otherwise limit any of your rights and benefits as
they may exist under the written terms and conditions of any qualified, nonqualified or
supplemental retirement, 401(k), savings or deferred compensation plans of the Company (excluding
any severance or severance compensation plans).

          Termination of Employment Prior to Your January 16, 2010 Retirement Date. Should your
employment end prior to your Retirement Date due to your voluntary resignation or due to

 

 

your death or Disability, you will be entitled to (subject to any application of Section 409A
of the Internal Revenue Code of 1986, as amended (“Code”)) and your rights will be limited to:

	 	•	 	earned base salary up to your employment separation date;
	 
	 	•	 	continued base salary up to your January 16, 2010 Retirement Date;
	 
	 	•	 	accrued and unpaid benefits due and payable to you under plan terms up to your
employment separation date;
	 
	 	•	 	continued participation (except in case of death), through COBRA or otherwise, on
substantially the same terms and conditions as in effect for you (including any required
employee contribution) immediately prior to such termination, in the medical and dental
programs provided to you immediately prior to such termination or as subsequently modified,
until the earlier of (i) January 16, 2010 or (ii) such time as you are eligible to be
covered by comparable benefits of a subsequent employer (you agree to notify the Company
promptly if and when you begin employment with another employer and if and when you become
eligible to participate in any benefit or other welfare plans, programs or arrangements of
another employer);
	 
	 	•	 	benefits under the qualified pension plan, SERP, RSVP, DCP and SSP based on your service
up to your employment separation date and subject to satisfaction of plan requirements; and
	 
	 	•	 	your equity awards will vest up to your employment separation date, on which date (a)
any unvested outstanding restricted stock (including PARS) will terminate (unless your
employment is terminated due to your death or Disability in which case your outstanding
unvested restricted stock would continue to vest for 120 days following such employment
separation date, on which date any unvested restricted stock would then terminate and

 

 

	 	 	 	Talbots will be deemed to have exercised its repurchase option), and (b) any unvested
outstanding options that you hold will terminate and you will have three (3) years from your
employment separation date (or up to the original option expiration date, if earlier) to
exercise your vested options.

          Should your employment be terminated by the Company for Cause (as defined below) prior to your
Retirement Date, you will be entitled to (subject to any application of Code Section 409A) and your
rights will be limited to:

	 	•	 	earned base salary up to your employment separation date;
	 
	 	•	 	accrued and unpaid benefits due and payable to you under plan terms up to your
employment separation date;
	 
	 	•	 	benefits under the qualified pension plan, SERP, RSVP, DCP and SSP based on your service
up to your employment separation date and subject to satisfaction of plan requirements; and
	 
	 	•	 	your equity awards will be governed by the terms of the equity award agreements.

          “Cause” means (1) your material breach of your obligations under this retirement agreement
(not cured within 45 days following notice), (2) your commission of fraud, a crime involving moral
turpitude or a felony, or (3) your material breach of your confidentiality and non-solicitation
covenants under this agreement.

          Restrictive Covenants. You agree that prior to and during the one year period following your
Retirement Date, you will not directly or indirectly solicit, attempt to hire, or hire any employee
of Talbots (or any person who may have been employed by Talbots during the last year of the term of
your employment with Talbots) or actively 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 Talbots. You also agree not to make any statement,
written or oral, prior to or in the one year period following your Retirement Date which materially
disparages the reputation of the Company or its business.

          You also agree not to, prior to or following your Retirement Date, directly or indirectly,
without the express prior written consent of Talbots, disclose or use any Confidential Information
of Talbots. “Confidential Information” includes all information concerning Talbots or any parent,
affiliate, employee, customer or supplier or other business associate of Talbots or any affiliate
(including but not limited to any trade secrets or other confidential, proprietary or private
matters), which has been or is received by you or is otherwise in your possession, and which is not
known or generally available to the public.

          If you voluntarily resign prior to your Retirement Date, you will be subject to a non-compete
obligation prohibiting you from working directly or indirectly for Ann Taylor, Chico’s FAS and
Coldwater Creek for the period following your employment separation date up to January 16, 2010.

          Miscellaneous. During your continued employment with Talbots prior to your Retirement Date,
you acknowledge and agree to maintain compliance with, at a minimum, Code Section 409A and all
regulations and other guidance issued thereunder concerning working hours and employment service so
that no separation from service under Code Section 409A shall at any time be deemed to have
occurred during your continued employment with Talbots hereunder, as well as all minimum hour or
working requirements under ERISA or under any qualified or nonqualified plan of Talbots in which
you participate (including without limitation the qualified defined benefit pension plan and RSVP)
as may be applicable for continued participation on a regular basis in any such plan. You also
agree to abide by all Talbots policies applicable to

 

 

Talbots employees including without limitation the Code of Business Conduct and Ethics. You also
agree to provide any signed certifications or subcertifications as may be reasonably requested by
the Company in connection with the preparation of any SEC filings which cover any period during
which you served as the chief financial officer of the Company.

          It is the intention of the parties that this agreement comply with Code Section 409A, and all
regulations or other guidance issued thereunder, and this agreement and the payments of any
benefits hereunder will be operated and administered accordingly. Specifically, but not by
limitation, you agree that if, at the time of your termination of employment (as interpreted and
understood within the meaning and guidance of Code Section 409A), Talbots is considered to be
publicly traded and you are considered to be a specified employee, as defined in Code Section 409A
(and as determined as of December 31 preceding such termination of employment, unless such
termination of employment occurs prior to April 30, in which case the determination will be made as
of the second preceding December 31), then some or all of such payments to be made under this
agreement as a result of such termination of employment will be deferred for no more than 6 months
following such termination of employment, if and to the extent the delay in such payments is
necessary in order to comply with the requirements of Code Section 409A. Upon expiration of such 6
month period (or, if earlier, your death), any payments so withheld from you hereunder will be
distributed to you, 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).

          Talbots obligation to make the payments and provide the benefits to you set forth in this
agreement is specifically conditioned upon and subject to your having delivered to Talbots, both at
the time of your entering into this agreement as well as at the time of your Retirement Date or any
earlier separation from employment, an executed full and unconditional release (that is no

 

 

longer subject to revocation) of any and all claims against Talbots, its parent entities,
affiliates, employee benefit plans and fiduciaries, and their respective officers, employees,
directors, agents and representatives, satisfactory in form and content to Talbots legal counsel.

          While you continue in Talbots employment under this agreement, you will not be permitted to be
employed by any other company. However, you will be permitted to serve as a director on the board
of directors of any company (other than a women’s apparel company, except with the consent of the
CEO) so long as your director responsibilities do not materially interfere with your
responsibilities under this agreement.

          You agree that the Company may deduct from your payments and benefits due to you under this
agreement such withholding taxes and similar governmental payments and charges as may be required.

          Effective upon relinquishing your officer responsibilities pursuant to this agreement, you
hereby expressly resign from all officer, trustee, committee member and director positions with
Talbots, including Talbots subsidiaries and its affiliates, foundation, and benefits plans and
programs. Notwithstanding the foregoing and if requested by the Company, you agree to remain as an
officer, Board member and Chairman of Talbots Classics National Bank for such period as may be
reasonably required by the Company or any applicable policies, rules or regulations.

          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 transaction, assigns, executors, administrators, personal representatives, heirs and
distributees). This agreement is personal in nature and your rights and obligations under this
agreement shall not be assigned or transferred by you.

 

 

          This agreement may be modified only in a writing signed by both parties. 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 or principles. 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 both parties.

          Ed, if the foregoing accurately sets forth your understanding in connection with your
retirement, kindly sign and return this letter agreement.

	 	 	 	 	 
	 	Sincerely,

The Talbots, Inc.

 	 
	 	By:  	/s/ John Fiske, III
 	 
	 	 	Duly Authorized 	 
	 	 	 	 
	 

	 	 	 	 	 
	Agreed to and accepted:

 	 	 
	/s/ Edward L. Larsen
 	 	 
	Edward L. Larsen 	 	 
	December 7, 2008exv10w80

Exhibit 10.80

December 4, 2008

By Overnight Mail

Michael Scarpa

[Home Address]

Dear Michael,

On behalf of The Talbots, Inc. (including its subsidiaries, “Talbots” or the “Company”) and subject
to review and approval by the Company’s Board of Directors, we are pleased to offer you the
position of Chief Operating Officer and Chief Financial Officer of Talbots in accordance with the
following:

Base Salary, Signing Bonus, Benefits and Perquisites

	•	 	Your initial salary will be at the rate of $775,000 per annum. Your salary will be paid to
you on a bi-weekly basis. Your first review for a possible salary increase based on
demonstrated job performance will be scheduled for the first quarter of FY 2010 and annually
thereafter.
	 
	•	 	You will receive a $150,000 signing bonus, payable as of your employment start date. If
you voluntarily leave Talbots or resign other than for Good Reason (as defined below) or your
employment is terminated by Talbots for Cause (as defined below) in your first year of
employment, you will be required to reimburse the Company for this signing bonus.
	 
	•	 	Effective one month from your employment start date, you will be eligible to participate in
the Company’s medical and dental benefit plans currently in effect and generally available at
the time to Talbots senior executives, subject to plan terms and eligibility conditions.
Beginning on your employment start date, you will be eligible to participate in all other
benefit plans currently in effect and generally available at the time to Talbots senior
executives, subject to plan terms and eligibility conditions. Plans are subject to
modification or termination by the Company in its discretion. Included in your benefit
package is an annual vacation benefit of four weeks. You will also be eligible for all
perquisites at a level commensurate with the Chief Operating Officer level at Talbots,
including an auto allowance of $42,000 over each two year period during the term of your
employment ($21,000 annually) to be paid incrementally in your bi-weekly paycheck,
reimbursement of financial planning expenses and a change in control agreement (a copy of
which is attached as Exhibit A (the “Change in Control Agreement”)). Perquisites will
not be grossed up for taxes.

 

 

Michael Scarpa

December 4, 2008

Page 2

	•	 	You will report directly to the President and Chief Executive Officer and your employment
start date will be on or about December 4, 2008, on which date you will assume the position
and title of Chief Operating Officer of the Company. Upon the effective date of retirement of
the Company’s current Chief Financial Officer from such position (currently expected to be
January 5, 2009), you will also assume the position and title of Chief Financial Officer of
the Company.

Annual Incentive Award Opportunity

	•	 	You will be eligible for participation in the Company’s annual incentive plan commencing in
FY 2009. Your target award opportunity under the Company’s annual incentive plan (MIP/TIP)
will be 100% of your base salary. For FY 2009 only, you will receive a minimum FY 2009 bonus
equal to $387,500 (which equals one-half your target award opportunity for FY 2009). This
$387,500 bonus payment (payable in the second quarter of 2010 at the same time as other FY
2009 bonuses would customarily be paid to other executive Company officers) is guaranteed and
will be paid to you whether or not the Company’s and your performance goals under the
Company’s 2009 incentive plan are achieved, unless you voluntarily leave Talbots or resign
other than for Good Reason (as defined below) or your employment is terminated by Talbots for
Cause (as defined below) prior to the date that FY 2009 bonuses are paid to senior Company
officers.

Equity Compensation

	•	 	You will be eligible to receive such equity incentive compensation as may be awarded from
time to time by the Company’s Compensation Committee of the Board of Directors (the
“Compensation Committee”) pursuant to The Talbots, Inc. 2003 Executive Stock Based Incentive
Plan as same may be amended or superseded from time to time (“Equity Plan”). All incentive
awards granted to you will be subject to the terms of the Equity Plan.
	 
	•	 	As a special hiring inducement award in consideration for your joining the Company, you
will be awarded a one-time restricted stock award for 125,000 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, to be executed by the Company and you. This
restricted stock award will be effective on the later of your employment commencement date and
the effective date of the Compensation Committee’s approval, and, subject to the terms of the
Restricted Stock Award Agreement, will vest over a three-year period as follows: 25% on the
first anniversary of the effective date of the grant; 25% on the second anniversary of the
effective date of the grant; and 50% on the third anniversary of the effective date of the
grant.
	 
	•	 	You will also be eligible to receive a one-time Non-Qualified Stock Option to purchase
75,000 shares of Common Stock (pursuant to and subject to the terms and

 

 

Michael Scarpa

December 4, 2008

Page 3

	 	 	conditions of a Nonqualified Stock Option Agreement, to be executed by the Company and you)
upon your joining the Company. The option price will be equal to the closing stock price on the
grant date which will be the later of your employment commencement date and the effective date
of the Compensation Committee’s approval. The option will vest in one-third annual increments
beginning one year from the effective date of the award.
	 
	•	 	You understand and agree that the number and timing of any future stock option and
restricted stock awards to you will be subject to Compensation Committee’s sole discretion.

Relocation Expenses

	•	 	You will eligible for the Company’s executive relocation benefits under the Company’s
executive relocation policy (“Executive Relocation Policy”) during the first two years of your
employment. In the event you are reimbursed by the Company for relocation costs in accordance
with the Executive Relocation Policy, if you voluntarily leave Talbots or resign for other
than Good Reason or if your employment is terminated by Talbots for Cause (as defined below)
during the one-year period following your relocation, you will be required to reimburse the
Company for the total relocation expenses paid to you. Unless and until you relocate to the
Hingham, MA area, you will receive a Boston, MA housing and commuting allowance (for travel
from your current residence to the Boston, MA area) for you and your spouse of $10,000 per
month to be paid incrementally in your bi-weekly paycheck; provided that, in the event of your
termination of employment by the Company without Cause (as defined below) or due to death or
Disability (as defined below) or termination of employment by you for Good Reason (as defined
below), the Company will assume responsibility for a period of up to one year immediately
following your employment termination for lease payments for your Boston area housing rental
(not to exceed an amount equal to 12 months of your above stated housing and commuting monthly
allowance), subject to your vacating such rental property and using your best reasonable
efforts to mitigate such continuing lease payment obligation and the Company also reserves the
right to assume such lease.

Severance

	•	 	It is understood and agreed that either you or Talbots may terminate the employment
relationship at any time and for any reason upon giving thirty days’ prior written notice.
Your eligibility for severance benefits will be pursuant to and subject to the terms and
conditions of the Severance Agreement being executed between you and the Company at the same
time and attached hereto as Exhibit B (the “Severance Agreement”). Subject to the
terms and conditions of such Agreement, in the event of a termination of your employment by
the Company without Cause (as defined in the Severance Agreement) or by you for Good Reason
(as defined in the Severance Agreement), you would be entitled to receive 1.5 times your
annual base salary and

 

 

Michael Scarpa

December 4, 2008

Page 4

	18	 	months benefits continuation, subject to the Company’s receipt of a release and waiver as
required by the Severance Agreement.

Restrictive Covenants

	•	 	Confidentiality. You agree that you will not, at any time during or following your
employment, directly or indirectly, without the express prior written consent of the Company,
disclose or use any Confidential Information of the Company. “Confidential Information” will
include all information concerning the Company or any parent, subsidiary, affiliate, employee,
customer or supplier or other business associate of the Company or any affiliate (including
but not limited to any trade secrets or other confidential, proprietary or private matters),
which has been or is received by you or in your possession whether received from the Company
or from any parent, subsidiary, affiliate or customer or supplier or other business associate
of the Company or otherwise, or developed by you during the term of your employment, and which
is not known or generally available to the public.
	 
	•	 	Non-Solicitation. You agree that, for a period of one year after the termination or
cessation of your employment for any reason, you will not 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 your employment with the Company), or actively 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.
	 
	•	 	Non-Competition. You agree that throughout your employment, and for a period of
eighteen (18) months after termination or cessation of employment for any reason, you will not
work directly or indirectly in any capacity or perform any services (including as an officer,
director, employee, agent, advisor, in any consulting capacity or as an independent
contractor) for any person, partnership, division, corporation or other entity in any business
in competition with the principal businesses carried on by the Company in any jurisdiction in
which the Company actively conducts business, including for illustrative purposes only and not
limited to, Ann Taylor, Gap Inc., Chico’s FAS, J. Crew, Coldwater Creek, Polo Ralph Lauren or
Nordstroms (or any of their affiliated brands, subsidiaries or successors) or J. Jill
following the sale or other disposition of the J. Jill brand business.
	 
	 	 	However, and notwithstanding the immediately foregoing paragraph, in the event that your
employment is terminated without Cause within twelve months following a Change in Control and
you are paid severance pursuant to and as calculated under the terms of the Change in Control
Agreement or any amendment or successor agreement thereto, you agree to abide by this
non-competition covenant for (i) a period of twelve (12) months following such termination of
employment, or (ii) if greater, the period of time not to exceed eighteen (18) months that is
the same as the period of time used to calculate the salary portion of your severance payment
(without regard to any

 

 

Michael Scarpa

December 4, 2008

Page 5

	 	 	portion of the severance payment that may be attributable to bonus or incentive compensation)
to which you may be entitled under any such agreement following such termination, even if such
severance payment is payable to you in a lump sum.
	 
	 	 	You acknowledge, with the advice of legal counsel, that you understand the foregoing
non-competition agreement and other restrictive covenants, that they are binding and
enforceable against you, and that these provisions are fair, reasonable, and necessary for the
protection of the Company’s business.
	 
	•	 	In addition to all other rights and remedies of the Company under this offer letter or
otherwise, upon a material breach of any of the restrictive covenants set forth under the
“Confidentiality,” “Non-Solicitation” and “Non-Competition” provisions above, which is not
cured within 10 days following written notice to you from the Company, such notice to be
provided in the same manner as set forth in Paragraph 6(g) of the Severance Agreement, the
Company will have the right to terminate any severance payment and benefits provided pursuant
to this offer letter (including all related agreements) or any other or successor severance
agreement covering you and the Company will also have the right to recover any severance
payment and benefits previously paid under this offer letter or any other or successor
severance agreement covering you and such related agreements.

Definition

	•	 	“Cause” will have the meaning set forth in the Severance Agreement.
	 
	•	 	“Good Reason” will have the meaning set forth in the Severance Agreement.
	 
	•	 	“Disability” will have the meaning set forth in the Severance Agreement.

Arbitration; Mediation

	•	 	Any dispute, controversy or claim between the parties arising out of or relating to this
offer letter or all related agreements referenced herein, will be settled by arbitration
conducted in The Commonwealth of Massachusetts (before a single arbitrator who shall be a
former federal or state court judge), in accordance with the Commercial Rules of the American
Arbitration Association then in force and each party shall bear their own expenses including
attorneys’ fees (except that, in the case of the Company initiating such arbitration/mediation
proceedings, the Company will be responsible for the arbitration and mediation filing or
initiation fees and the cost of the mediator and arbitrator, but not attorneys’ fees);
provided, however, you acknowledge that in the event of a violation of the restrictive
covenants set forth above, the Company would suffer irreparable damages and the Company may be
entitled to obtain from a state or federal court in The Commonwealth of Massachusetts or a
federal or state court of any other state or jurisdiction, temporary, preliminary or permanent
injunctive relief (without the necessity of posting any bond or other security), which

 

 

Michael Scarpa

December 4, 2008

Page 6

	 	 	rights will be in addition to any other rights or remedies to which it may be entitled. You
hereby irrevocably consent to the exclusive jurisdiction of any federal court or state court
located in The Commonwealth of Massachusetts, and you hereby agree that process in any suit,
action or proceeding may be served anywhere in the world in the same manner as provided for
notices to a party as provided in the Severance Agreement. Moreover, nothing in this provision
prevents you 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 you
acknowledge that you may not recover any monetary benefits in connection with any such
proceeding). The decision of the arbitrator conducting any such arbitration proceedings will
be in writing, will set forth the basis therefor and such arbitrator’s decision or award will
be final and binding upon the Company and you. The Company and you will 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, the Company and you agree that, prior to submitting
a dispute under this offer letter 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 will not
suspend or otherwise delay any termination or other action of the Company or affect the
Company’s other rights).

Taxes

	•	 	Notwithstanding anything to the contrary in this offer letter or the related agreements
referenced herein or in any other severance agreement or severance arrangement between you and
the Company, including without limitation the Severance Agreement and Change in Control
Agreement (for purposes of this subsection, all collectively referred to as the “agreements”),
it is the intention of the parties that each of such agreements comply with Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), and any regulations or other
guidance issued thereunder, and the agreements and the payments of any benefits thereunder
will be operated and administered accordingly. Specifically, but not by limitation, you agree
that if, at the time of termination of employment, the Company is considered to be publicly
traded and you are considered to be a specified employee, as defined in Section 409A (and as
determined as of December 31 preceding your termination of employment, unless your termination
of employment occurs prior to April 30, in which case the determination will be made as of the
second preceding December 31), then some or all of such payments to be made under the
agreements as a result of your termination of employment will be deferred for no more than 6
months following such termination of employment, if and to the extent the delay in such
payments is necessary in order to comply with the requirements of Section 409A of the Code
after utilizing the short-term deferral and involuntary separation pay plan regulations.

 

 

Michael Scarpa

December 4, 2008

Page 7

	 	 	Upon expiration of such 6 month period (or, if earlier, your death), any payments so withheld
will be distributed to you, 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). The foregoing
provisions of this subsection are hereby incorporated into and made a part of the Severance
Agreement and the Change in Control Agreement.

Release and Waiver

	•	 	The Company’s obligation to make the payments and provide the benefits to you under or in
connection with this offer letter or the related agreements referenced herein, or under any
other severance agreement or severance arrangement (including, without limitation, under the
Severance Agreement or the Change in Control Agreement) will be conditioned upon and subject
to your delivery to the Company of an executed release (which will be effective when such
release is no longer subject to revocation) of any and all claims against the Company, its
parent entities, affiliates, employee benefit plans and fiduciaries (to the extent permissible
under ERISA), and their respective officers, employees, directors, agents and representatives
satisfactory in form and content to the Company’s counsel.

Miscellaneous

	•	 	This offer letter together with all related agreements referenced herein (collectively, the
“Documents”) constitute the entire understanding between you and the Company and cannot be
modified, altered or waived unless it is done in a writing signed by both you and the Company.
If there is any conflict between the terms of these Documents and any other document related
to your employment, the terms of these Documents will control. This offer letter is governed
by the laws of The Commonwealth of Massachusetts (other than its rules for conflicts of laws).
This offer letter is personal in nature to the Company and your rights and obligations under
this offer letter may not be assigned by you. This offer letter will be binding upon and
inure to the benefit of the parties hereto and their successors (including successors by
merger, consolidation, sale or similar transaction, permitted assigns, executors,
administrators, personal representatives, and heirs).
	 
	•	 	It is the intention of the parties that the provisions of this offer letter will 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, will not
render unenforceable or impair the remainder of this offer letter. Accordingly, if any
provision of this offer letter will be determined to be invalid or unenforceable, either in
whole or in part, this offer letter will be deemed amended to delete or modify, as necessary,
the offending provisions and to alter the balance of this offer letter in order to render the
same valid and enforceable to the fullest extent permissible.

 

 

Michael Scarpa

December 4, 2008

Page 8

	•	 	By accepting this offer, you represent that you are not under any obligation or covenant to
any former employer or any person, firm or corporation, which would prevent, limit or impair
in any way the performance by you of your duties as an employee of Talbots. You have also
provided to the Company a true and complete copy of any non-competition and/or
non-solicitation obligation or agreement to which you may be subject.
	 
	•	 	You unconditionally agree not to: (1) use in connection with your employment with Talbots
any confidential or proprietary information which you have acquired in connection with any
former employment; or (2) reveal or disclose to Talbots or any of Talbots employees, agents,
representatives or vendors, any confidential or proprietary information which you have
acquired in connection with any former employment. You acknowledge that this policy and
practice of Talbots is to be strictly followed and adhered to you by you. You also agree that
you have not taken and do not have in your possession any confidential information of a prior
employer and have returned to your prior employer any confidential information which was in
your possession.
	 
	•	 	You represent that the information (written or oral) provided to the Company by you or your
representatives in connection with obtaining employment or in connection with your former
employments, work history, circumstances of leaving your former employments and educational
background is true and complete.
	 
	•	 	This offer is effective only through December 5, 2008. If you wish to accept our offer as
outlined above, please sign and return this letter to me. The enclosed copy is for your
records.

Michael, we are thrilled you are joining the “Talbots Team” and look forward to the contributions
you will make to the overall continued success of the Company!

	 	 	 	 	 
	Very truly yours,

 	 	 
	/s/ Trudy F. Sullivan
 	 	 
	Trudy F. Sullivan 	 	 
	President and Chief Executive Officer 	 	 
	 
	Accepted and agreed

this 4th day of December, 2008

 	 	 
	/s/ Michael Scarpa
 	 	 
	Michael Scarpa

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