Document:

exv10w5

Exhibit 10.5

THE TALBOTS, INC.

CHANGE IN CONTROL AGREEMENT

Gregory I. Poole

EVP/Chief Supply Chain Officer

c/o The Talbots, Inc.

One Talbots Drive

Hingham, Massachusetts 02043

Dear Greg:

     This agreement (the “Agreement”) reflects our mutual understanding regarding payments to be
made to, and benefits to be received by, you in the event your employment with The Talbots, Inc., a
Delaware corporation (including its subsidiaries, the “Company”), is terminated by the Company
within twelve (12) months following a Change in Control. This Agreement shall become effective on
your employment commencement date. The capitalized termed used in this Agreement that are not
otherwise defined herein shall have the meanings given to such terms in Appendix A hereto,
incorporated herein by this reference and hereby made a part hereof.

     1. Termination after Change In Control. In the event that the Company
terminates your employment Without Cause within twelve (12) months after the occurrence of a Change in Control,
then the following shall occur:

	 	(a)	 	The Company shall pay to you on the effective date of such termination: (i)
salary for services rendered up to and including the date of termination, (ii) any and
all compensation to which you may be entitled as of the date of termination pursuant to
The Talbots, Inc. 2003 Executive Stock Based Incentive Plan (the “Plan”) or any other
compensation or benefit plan to the extent permitted by such plans, and (iii)
reimbursement for outstanding ordinary and reasonable expenses incurred by you in
connection with the performance of your duties for the Company up to and including the
date on which your employment is terminated;
	 
	 	(b)	 	The Company shall pay to you, within thirty (30) days after the effective date
of such termination, an amount of severance pay equal to one times the sum of:

	 	(i)	 	your annual base salary at the rate in effect on the date of such
termination, and
	 
	 	(ii)	 	your “target” annual cash incentive bonus as then established for
you and determined in accordance with the applicable annual cash incentive bonus
arrangement in place from time to time (provided that the target annual cash
incentive bonus shall be no less than 50% of your annual base salary).

     You shall continue to participate, on the same terms and conditions, in any benefit programs
of the Company in which you participated immediately prior to such termination (including, without
limitation, as applicable, any disability insurance benefit program, any medical insurance program,
and dental insurance program, and any life insurance program) from time of such termination until
the earlier of: (i) the end of the one (1) year period beginning from the effective date of the
termination of your employment, or (ii) such time as you are eligible to be covered by a comparable
program of a subsequent employer. You hereby 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 pension or other benefit plans, programs or arrangements of
another employer.

     2. Assignment. None of the parties hereto shall, without the consent of
the other, assign or transfer this Agreement or any rights or obligations hereunder. 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 or similar transactions), permitted
assigns, executors, administrators, personal representatives, heirs and distributees.

     3. Miscellaneous.

     (a) Entire Agreement. This Agreement contains the entire understanding between and
among the parties hereto with respect to the subject matter hereof and supersedes any prior or
contemporaneous understandings and agreements, written or oral, between us respecting such subject
matter; provided however, that this Agreement shall not be construed to impair or otherwise
adversely affect the grant of any Award (as such term is defined in the Plan) hereafter made to you
under the Plan or the Restricted Stock Award Agreement, the Non-Qualified Stock Option Agreement,
the Severance Agreement, and the Offer Letter, each as effective as of an even date hereof between
Company and you and all of which remain in full force and effect. For as long as this Agreement
is in effect, to the degree there is any conflict between the severance payments and benefit
provisions to which you are then entitled under this Agreement and those of any other written
agreement which continues to be in effect between the Company and you, such conflict shall be
resolved by the Company in good faith by affording you the more favorable severance payments and
benefits contained in any such agreement. Notwithstanding the foregoing, nothing herein relieves
you from the obligation to comply with the restrictive covenants of all such agreements or from the
consequences of noncompliance therewith regardless under which agreement the severance payments
and/or severance benefits may be deemed to have been made. Furthermore, for purposes of
clarification only, if you receive severance pay and benefits under one agreement, you shall not be
entitled to severance pay or benefits under any other agreement, plan or arrangement.

     (b) Governing Law. 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.

 

 

     If this letter sets forth our agreement on the subject matter hereof, kindly sign, date and
return to The Talbots, Inc. the enclosed copy of this letter which will then constitute our binding
agreement on the subject.

	 	 	 	 	 
	 	Sincerely,

THE TALBOTS, INC.

 	 
	 	By:  	/s/ John Fiske
 	 
	 	 	John Fiske, III 	 
	 	 	Senior Vice President
Human Resources 	 

	 	 	 	 	 
	Executive:

 	 	 
	/s/ Gregory I. Poole
 	 	 
	Name:  	Gregory I. Poole 	 	 
	Title:  	EVP/Chief Supply Chain Officer
 	 	 
	Date:  	June 5, 2008 	 	 

 

 

	 	 	 	 	 

Appendix A

     Definitions. As used in the Change in Control Agreement.

	 	(a)	 	“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 or 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.
	 
	 	(b)	 	“Without Cause” shall mean termination by Talbots of your employment as a
result of an event or condition other than (i) your death, (ii) your inability
substantially to perform your employment duties as a result of physical or mental
illness or injury for a continuous period of at least six months (any dispute as to
your incapacities shall be resolved by an independent physician, reasonably acceptable
to you or your legal representative and the Company’s Board of Directors, whose
determination shall be final and binding upon you and the Company), (iii) any material
breach by you of this Agreement or any other agreement to which you and the Company are
both parties (which is not cured within 45 days following written notice from the
Company), (iv) any act or omission to act by you which may have a material and adverse
effect on the Company’s business or on your ability to perform services for the
Company, including, without limitation, the commission of any crime involving moral
turpitude or any felony, or (v) any material misconduct or material neglect of duties
by you in connection with the business or affairs of the Company.exv10w6

Exhibit 10.6

SEVERANCE AGREEMENT

     This Severance Agreement (the “Agreement”) is made as of the Executive’s employment
commencement date, between The Talbots, Inc., a Delaware corporation (together with its
subsidiaries, the “Company”) and Gregory I. Poole (the “Executive”). This Agreement sets forth the
agreement of the parties relating to the severance arrangements for the Executive under certain
circumstances. Capitalized terms used in this Agreement are defined in Section 7 hereof.

     1. Severance Pay and Associated Benefits Upon a Qualified Termination.

          (a) Severance Benefits. In the event of a Qualified Termination, and subject to the
terms of this Agreement, the Company will provide to the Executive the payments and benefits
described in this Section 1 (collectively, the “Severance Benefits”).

          (b) Severance Pay. Subject to the terms of this Agreement, in the event of a
Qualified Termination, the Company will pay to the Executive severance pay in the gross amount
equal to 1.5 times the Executive’s annual base salary in effect immediately prior to such
termination (the “Severance Payment”), payable in equal installments in accordance with normal
Company payroll practices over a 18 month period beginning immediately following the Termination
Date (the “Severance Period”).

          (c) Benefits Continuation. Subject to the terms of this Agreement, upon any such
Qualified Termination, the Company will also 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 employee contribution) immediately prior to such termination, in
the medical and dental programs provided to the Executive immediately prior to such termination
until the earlier of (i) the end of the Severance Period, or (ii) such time as the Executive is
eligible to be covered by comparable benefits of a subsequent employer. The Executive agrees to
notify the Company promptly if and when the Executive begins employment with another employer and
if and when the Executive becomes eligible to participate in any benefit or other welfare plans,
programs or arrangements of another employer. Executive agrees that any automobile/housing
allowance or other personal benefits provided by the Company to the Executive immediately prior to
such termination will cease as of the Termination Date. The Company, however, may choose to make
any separate arrangements with the Executive to assist with the transfer of any such benefits.

          (d) Retirement Benefits. Nothing in this Agreement will modify or otherwise limit any
of the Executive’s rights and benefits as may exist under the terms of any qualified, nonqualified
or supplemental retirement, 401(k), savings or deferred compensation plans of the Company
(excluding any severance or severance compensation plans) (“Retirement Plans”), nor will any
benefits or amounts payable under any such Retirement Plans reduce or offset any Severance Benefits
afforded to the Executive under this Agreement.

          (e) Equity Awards.

 

 

               (i) If in the event of a Qualified Termination the Executive still holds one or more options
to purchase shares of Company stock which have not expired and have not been fully exercised, the
Executive (or his or her heirs or estate), at any time within 3 years after the Termination Date
(but in no event after the option has expired), may exercise any such options with respect to any
shares as to which the Executive could have exercised the options on the Termination Date.

               (ii) The Executive agrees that until the expiration of 6 months from the Termination Date, the
Executive will not engage in the purchase or sale of the Company’s common stock (including without
limitation any “cashless exercise” of any stock options involving the sale of any Company common
stock as part of such option exercise) during any trading window “blackout” or “quiet period”
applicable to management level employees (“Quiet Period”); provided that in no event shall the
Executive 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. The Executive acknowledges
that the Company reserves the right to modify the Quiet Period from time to time in its sole and
absolute discretion. The Company will provide the Executive with notice of Quiet Periods and
changes thereto at the time it provides such notice to the Company’s management level employees.
In addition, the Executive agrees to notify the Company’s General Counsel prior to exercising any
options or trading in the Company’s common stock within such 6 month period following the
Termination Date to ascertain whether such transaction would violate any Quiet Period covered by
this subsection (e)(ii).

          (f) Withholdings. The Company may deduct from the Executive’s Severance Payment and
any other payments otherwise due to the Executive, such withholding taxes and similar governmental
payments and charges as may be required.

          (g) Timing for Payment; Section 409A Restrictions. Notwithstanding anything in this
Agreement to the contrary, it is the intention of the parties that this Agreement comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and any 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, the Executive
agrees that if, at the time of termination of employment, the Company is considered to be publicly
traded and the Executive is considered to be a specified employee, as defined in Section 409A (and
as determined as of December 31 preceding the Executive’s termination of employment, unless the
Executive’s 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 the Executive’s 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.
Upon expiration of such 6 month period (or, if earlier, the Executive’s death), any payments so
withheld hereunder from the Executive hereunder will 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).

     2. Release and Waiver.

 

 

     The Company’s obligation to make the payments and provide the benefits to the Executive as set
forth in Section 1 above will be conditioned upon and subject to the Executive having delivered to
the Company an executed full and unconditional release (that is not subject to revocation) of any
and all claims against the Company, its parent entities, affiliates, employee benefit plans and
fiduciaries, and their respective officers, employees, directors, agents and representatives
satisfactory in form and content to the Company’s counsel.

     3. Cooperation.

     In connection with a Qualified Termination or any other termination of the Executive’s
employment, the Executive agrees to reasonably cooperate with the Company prior to and in the 60
day period immediately following the Termination Date, subject to the Executive’s other
commitments, in promptly transitioning the Executive’s duties and activities within the Company to
the person or persons designated by the Company to receive them.

     4. Nondisparagement; Non-Solicitation; Confidentiality.

          (a) Nondisparagement. In connection with a Qualified Termination or any other
termination of the Executive’s employment, Executive agrees not to take action or make any
statement, written or oral, in the 1 year period following the Termination Date which is intended
to materially disparage the Company or its business.

          (b) Non-Solicitation. The Executive agrees that, during the 1 year period following a
Qualified Termination or any other termination of the Executive’s employment, the Executive 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 the term of the
Executive’s 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.

          (c) Confidentiality. The Executive will not in any manner following a Qualified
Termination or any other termination of the Executive’s 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 the Executive from the Company,
or from any parent, subsidiary, affiliate or customer or supplier or other business associate of
the Company, and which is not known or generally available to the public.

     5. Remedies.

     The Executive acknowledges and affirms that money damages cannot adequately compensate the
Company for any breach by the Executive of Section 4 of this Agreement and that the Company is
entitled to equitable relief (without posting any bond) in any federal or state court in
Massachusetts or other court of competent jurisdiction to prevent or otherwise restrain any actual
or threatened breach of the provisions of said Section and/or compel specific performance of, or
other compliance with, the terms thereof.

 

 

     6. Miscellaneous.

          (a) At-Will Employment. This Agreement is not a contract to employ the Executive for
a definite time period, and is not intended to be and does not constitute a contract or part of a
contractual agreement for continued employment, either express or implied, between the Company and
the Executive, it being acknowledged that the Executive’s employment is “at will” and that either
the Executive or the Company may terminate the employment relationship at any time, for any or no
reason, with or without Cause and with or without prior notice, but subject to the Executive’s
rights to Severance Benefits under the terms provided hereunder.

          (b) Successors and Assigns. 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, permitted assigns, executors,
administrators, personal representatives, heirs and distributees). This Agreement is personal in
nature and the rights and obligations of the Executive under this Agreement shall not be assigned
or transferred by the Executive.

          (c) Attorneys Fees. Each party shall bear his or her or its own attorney’s fees and
expenses.

          (d) Governing Law. This Agreement shall be interpreted in accordance with the
substantive laws of The Commonwealth of Massachusetts and without regard to any conflict of laws
provisions.

          (e) Effect on Other Agreements; Modification. This Agreement constitutes the entire
agreement between the Executive and the Company with respect to the subject matter of this
Agreement. This Agreement may be modified only in a writing signed by both parties. For as long
as this Agreement is in effect, to the degree there is any conflict between the severance payments
and benefit provisions to which the Executive is then entitled under this Agreement and those of
any other written agreement which continues to be in effect between the Company and the Executive,
such conflict shall be resolved by the Company in good faith by affording the Executive the more
favorable severance payments and benefits contained in any such agreement. Notwithstanding the
foregoing, nothing herein relieves the Executive from the obligation to comply with the restrictive
covenants of all such agreements or from the consequences of noncompliance therewith regardless
under which agreement the severance payments and/or severance benefits may be deemed to have been
made. Furthermore, for purposes of clarification only, if an Executive receives severance pay and
benefits under one agreement, the Executive shall not be entitled to severance pay or benefits
under any other agreement, plan or arrangement.

          (f) Execution. This Agreement may be executed in one or more counterparts, each of
which when so executed shall be deemed to be an original, and all such counterparts together shall
constitute but one and the same instrument.

          (g) Notices. For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have been duly given when
delivered or when mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below, or to such other address as

 

 

either party may have furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon actual receipt:

To the Company:

The Talbots, Inc.

One Talbots Drive

Hingham, Massachusetts 02043

Attention: Senior Vice President/Human Resources, Talbots

with a copy to:

The Talbots, Inc.

211 South Ridge Street

Rye Brook, New York 10573

Attn: General Counsel

To the Executive:

Gregory I. Poole

[Home Address]

     7. Definitions.

     For purposes of this Agreement, the following terms shall have the meanings indicated below:

          (a) “Cause” for termination by the Company of the Executive’s employment shall mean
(i) any material breach by the Executive of this Agreement or any other agreement to which the
Executive and the Company are both parties (which is not cured within 45 days following written
notice from the Company), (ii) any act or omission to act by the Executive which may have a
material and adverse effect on the Company’s business or on the Executive’s ability to perform
services for the Company, including, without limitation, the commission of any crime involving
moral turpitude or any felony, or (iii) any material misconduct or material neglect of duties by
the Executive in connection with the business or affairs of the Company.

          (b) “Code” shall have the meaning given that term in Section 1(g) hereof.

          (c) “Disability” shall mean the Executive’s inability, because of physical or mental
illness or injury, substantially to perform his or her duties of his or her position as a result of
physical incapacity for a continuous period of at least six (6) months. Any dispute at to the
Executive’s incapacitation shall be resolved by an independent physician selected by the Company’s
Board of Directors and reasonably acceptable to the Executive or his or her legal representative,
whose determination shall be final and binding upon both the Executive and the Company.

          (d) “Executive” shall mean the individual named in the first paragraph of this
Agreement.

 

 

          (e) “Good Reason” for termination by the Executive of the Executive’s employment shall
be a termination based on one or more of the following events occurring without the Executive’s
express written consent: (a) a substantial adverse reduction in the Executive’s duties, other than
during any period of illness or incapacity, such that the Executive no longer has the title of, or
serves, as a senior executive of a major branded business of the Company; (b) a material reduction
by the Company in the Executive’s annual base salary as in effect on the date hereof or as the same
may be increased from time to time; (c) the Company’s requiring that the Executive’s principal
place of business be at an office located more than 35 miles from the site of the Executive’s then
principal place of business, except for required travel on the Company’s business, including
regular travel to and from the Company’s corporate headquarters and its other locations; or (d) a
material breach of the Company’s obligations to Executive under the June 4, 2008 Offer Letter
(“Offer Letter”) except for matters covered in (a) through (c) of this provision; which, with
respect to subsections (a) through (d) above, is not remedied by the Company within 45 days of
receipt of written notice of such event delivered by the Executive to the Company; provided, that
the Executive may only exercise his or her right to terminate employment for Good Reason within the
90 day period immediately following the occurrence of any of the events described in subsections
(a) through (d) above.

          (f) “Qualified Termination” shall mean the Executive’s employment by the Company is
terminated, (i) by the Executive for Good Reason or (ii) by the Company for any reason other than
for Cause, death, Disability, or retirement at or after age 65.

          (g) “Quiet Period” shall have the meaning given that term in Section 1(e)(ii) hereof.

          (h) “Retirement Plans” shall have the meaning given that term in Section 1(d) hereof.

          (i) “Severance Benefits” shall have the meaning given that term in Section 1(a)
hereof.

          (j) “Severance Payment” shall have the meaning given that term in Section 1(b) hereof.

          (k) “Severance Period” shall have the meaning given that term in Section 1(b) hereof.

          (l) “Termination Date” shall mean the date that the Executive’s employment with the
Company terminates for any reason or no reason.

[signature page follows]

 

 

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

	 	 	 	 	 
	 	THE TALBOTS, INC.

 	 
	 	By:  	/s/ John Fiske
 	 
	 	 	Duly Authorized 	 

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	/s/ Gregory I. Poole
 	 
	 	Gregory I. Poole 	 
	 	EVP/Chief Supply Chain Officer

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