Document:

exv10w67

 

Exhibit 10.67

December 11, 2007

By Overnight Mail

Basha Cohen

[Home Address]

Dear Basha,

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 Executive Vice President/Chief Merchandising Officer, Talbots Brand in accordance with
the following:

Base Salary, Signing Bonus, Benefits and Perquisites

	•	 	Your initial salary will be at the rate of $550,000 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 2009 and annually
thereafter.

	•	 	You will receive a $100,000 signing bonus, payable on 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 such $100,000 signing bonus.

	•	 	You will be immediately eligible to participate in all benefit plans generally available at
the time to Talbots senior executives, subject to plan terms and customary 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 executive vice
president level at Talbots, including an auto allowance, reimbursement of financial planning
expenses and a change in control agreement (attached as Exhibit A). Perquisites will
not be grossed up for taxes.

	•	 	You will report directly to the President and Chief Executive Officer and your start date
will be December 17, 2007.

Annual Incentive Award Opportunity

	•	 	You will be eligible for participation in the Company’s incentive plan commencing in FY
2008. Your target award opportunity under the Company’s incentive plan will be 50% of your
base salary. There will be no bonus paid to you for the partial FY 2007. For FY 2008 only,
you will receive a minimum bonus equal to $137,500 (which

 

 

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December 11, 2007

Page 2

	 	 	equals one-half of your target award opportunity of $275,000 for FY 2008). This $137,500 bonus
payment (payable as of the first day of FY 2009) is guaranteed and will be paid to you whether
or not the Company’s performance goals under the Company’s 2008 incentive plan are achieved,
unless your employment is terminated by Talbots for Cause (as defined below) prior to the first
day of FY 2009.

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. All incentive awards granted to
you will be subject to the terms of the Plan.

	•	 	Contingent upon approval by the Compensation Committee, as a special hiring inducement
award in consideration for your joining the Company, you will be awarded a one-time restricted
stock award for 40,000 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. Contingent upon approval by the
Compensation Committee, this restricted stock award will be effective on the later of December
17, 2007 and your employment commencement date and will vest in one-quarter annual increments
beginning one year from the effective date of the award.

	•	 	Contingent upon approval by the Compensation Committee, you will also be eligible to
receive a one-time Non-Qualified Stock Option to purchase 15,000 shares of Common Stock upon
your joining the Company. Contingent upon approval by the Compensation Committee, the option
price will be equal to the closing stock price on the grant date which will be the later of
December 17, 2007 and your employment commencement date. 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 Package

	•	 	You will relocate to either the Hingham, Massachusetts area or the New York metropolitan
area not more than two years from your employment start date. The Company will reimburse you
for relocation expenses incurred by you during the period beginning with your employment start
date and ending two years from your employment start date in accordance with the Company’s
relocation policy (a copy of which has been previously provided to you), including up to two
years of temporary

 

 

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December 11, 2007

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	 	 	living either in the Hingham, Massachusetts area or the New York metropolitan area and related
travel for you and your immediate family (including your domestic partner) at a maximum of
$10,000 per month during the period and up to a $15,000 reimbursement in equity loss on the
sale of your home in Denver, Colorado once it is sold. 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 (excluding all temporary
living expenses paid by the Company on your behalf).

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 of such Agreement, in the event of a termination of your employment by the Company
without Cause or by you for “good reason”, you would be entitled to receive 1.5 times your
annual base salary and 18 months benefits continuation, subject to the Company’s receipt of a
release and waiver.

Restrictive Covenants

	•	 	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 from the Company, or from any parent, subsidiary, affiliate or
customer or supplier or other business associate of the Company or developed by you during the
term of your employment, and which is not known or generally available to the public.

	•	 	You agree that, for a period of one year after termination or cessation of your employment
for any reason, you will not to take action or make any statement, written or oral, which is
intended to materially disparage the Company or its business.

	•	 	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,

 

 

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	 	 	induce or attempt to induce any such employee to terminate his or her employment with the
Company.
	 
	•	 	You agree that throughout your employment, and for a period of 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 or corporation in any business in competition with the principal businesses carried
on by the Company in any jurisdiction in which the Company actively conducts business (herein,
the “Business Competitors”), including for illustrative purposes only and not limited to, Ann
Taylor, Chico’s FAS, Coldwater Creek, Gap Inc. or Liz Claiborne (or any of their affiliated
brands, subsidiaries or successors) (herein, the “Named Competitors”); provided, however, that
the 18-month restriction set forth in this paragraph is contingent upon the Company’s
compliance with its payment obligations under the terms of the Severance Agreement or any
other or successor severance agreement to which you are then covered. In the event Talbots
terminates your employment for Cause and you are not entitled to severance under the Severance
Agreement or any other or successor severance agreement to which you are then covered, this
18-month restriction shall continue in effect without any payment of severance with respect to
the Named Competitors, but, with respect to any other Business Competitor, only for as long as
Talbots elects to continue to pay you (in accordance with its then current payroll practices)
at a rate equal to your base salary in effect at the time of termination.

	•	 	You acknowledge that you understand the foregoing restrictive covenants 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 breach of any of the restrictive covenants outlined above, 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 will 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.

 

 

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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, in accordance with the Commercial Rules of the
American Arbitration Association then in force, provided, however, you acknowledge that in the
event of a violation of the restrictive covenants set forth above, the Company will 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 will be in addition to any other rights or remedies to
which it may be entitled. 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 or arbitrators conducting any such arbitration proceedings will be
in writing, will set forth the basis therefore and such arbitrator’s or arbitrators’ 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

	•	 	All payments will be subject to rules under Internal Revenue Code Section 409A. If any
payment is withheld from you for Section 409A compliance purposes, such payment will be
distributed to you following the expiration of the applicable period, 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); provided, however, that any payment of interest will be made only
if and to the extent such payment is consistent with Section 409A and any regulations and
other guidance issued thereunder.

Miscellaneous

	•	 	This offer letter together with all related agreements referenced herein (including the
Company’s relocation policy, collectively, the “Documents”) constitute the entire

 

 

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	 	 	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).

	•	 	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 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 Wednesday, December 12, 2007 and is contingent upon a
satisfactory background check. 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.

     Basha, 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/ John Fiske, III

 

	 	 

John Fiske, III

Senior Vice President

Human Resources

Accepted and agreed

this 12th day of December, 2007

	 	 	 
	/s/ Basha Cohen

 

Basha Cohenexv10w68

 

Exhibit 10.68

THE TALBOTS, INC.

CHANGE IN CONTROL AGREEMENT

Basha Cohen

Executive Vice President/

Chief Merchandising Officer, Talbots Brand

c/o The Talbots, Inc.

One Talbots Drive

Hingham, Massachusetts 02043

Dear Basha:

     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
the later of December 17, 2007 and 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 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 or
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, III
 	 
	 	 	John Fiske, III 	 
	 	 	Senior Vice President

Human Resources 	 
	 

Executive:

	 	 	 	 	 
	 	 	 
	                       /s/ Basha Cohen
 	 	 
	Name:  	Basha Cohen 	 	 
	Title:  	EVP/CMO, Talbots Brand
 	 	 
	Date:  	12/17/07 	 	 

 

 

	 	 	 	 	 

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 periods 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, (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.

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