Document:

exv4w3

 

Exhibit (4.3)

FORM OF GLOBAL SECURITY

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO QUÉBEC OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No.

CUSIP

QUÉBEC

[ ]% [     ] Series [ ] Due [      ]

This global security, registered in the name of [            ], as nominee of DTC (the “Global
Security”), is a global security in respect of the duly authorized issue of debt securities
referred to above (the “Securities”) of Québec, and which is issued pursuant to a Fiscal Agency
Agreement, dated as of [       ], between Québec and [       ], [       ], as registrar, fiscal agent,
transfer agent and principal paying agent (the “Registrar” which term includes any successor
registrar, fiscal agent, transfer agent and principal paying agent under the Fiscal Agency
Agreement) as such agreement may be supplemented or amended from time to time, as the case may be
(the “Fiscal Agency Agreement”). This Global Security also represents any further Securities which
Québec may issue, from time to time, pursuant to Section [       ] of the Fiscal Agency Agreement. In
the event such further Securities are issued, the word “Security” as defined above shall be deemed
to also refer to such further Securities. [This Security is a “Bond” within the meaning of the
Fiscal Agency Agreement.]

This Global Security and all the rights of the holder hereof are expressly subject to the Fiscal
Agency Agreement, and this Global Security and the Fiscal Agency Agreement constitute a contract to
all of the terms and conditions of which the holder by acceptance hereof assents, is bound by and
is deemed to have notice. All defined terms unless defined herein have the meaning ascribed to them
in the Fiscal Agency Agreement. Copies of the Fiscal Agency Agreement are available for inspection
at the principal office of the Registrar.

This is a fully registered Global Security without coupons attached. This Security is exchangeable
for certificated debt securities of like tenor and of an equal aggregate principal amount in
denominations of [       ] and integral multiples of [      ] only if (i) DTC notifies Québec that it
is unwilling or unable to continue as depositary for the Securities, or if at any time DTC ceases
to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time
when it is required to be so registered, and Québec does not appoint a successor depositary within
90 days after receiving that notice or becoming aware that the depositary is no

 

 

longer so registered; (ii) Québec notifies the Fiscal Agent that all of the Securities represented
hereby are to be exchanged for certificated debt securities; and (iii) upon request by one or more
owners of beneficial interests herein after an event of default entitling the holders to accelerate
the maturity hereof has occurred and is continuing.

FOR VALUE RECEIVED, Québec hereby promises to pay to [      ] or its registered assigns in the
manner hereinafter mentioned on [       ] (or on such earlier date as the Principal Amount (as
hereinafter defined) may become payable in accordance with the terms hereof) the principal sum of [          ] (the “Principal Amount”) [in lawful money of the United States
of America], on
presentation and surrender of this Global Security, [and to pay interest in arrears on the said
Principal Amount at the rate of [       ] % [per annum], from [       ], or from the most recent
Interest Payment Date to which interest has been paid or duly provided for [       ], in [       ] [equal]
[       ] installments on [       ] in each year (each an “Interest Payment Date”), commencing [     ], until the Principal Amount is
paid in full or duly made available for payment, [in each
case together with such further sum, if any, as may be payable by way of Additional Amounts in
accordance with the provisions set forth herein] [and should Québec at any time default in the
payment of any of the Principal Amount [or premium, if any,] [or interest] on this Global Security
[or any Additional Amounts], to pay interest on the amount in default (before as well as after
judgment) at the same rate, in like money, on the same dates]. [References herein to principal and
interest in respect of this Global Security or the Securities shall be deemed also to refer to any
Additional Amounts which may be payable concurrently therewith, unless the context otherwise
requires.] [Interest will cease to accrue on this Global Security on [       ] (or on such earlier date
as the Principal Amount may become payable in accordance with the terms hereof) unless, upon due
presentation of this Global Security, payment of the Principal Amount [and any applicable premium]
[or Additional Amounts, if any,] is improperly withheld or refused.]

This Global Security shall not become valid and obligatory for any purpose unless and until this
Global Security has been authenticated by the Registrar or its authorized representative.

TERMS AND CONDITIONS

The following terms and conditions of this Global Security and this Issue of Securities is
qualified in its entirety by the terms and conditions contained in the Fiscal Agency Agreement.

Form, Denomination and Registration

The Securities will be issued in the form of one or more fully registered global Securities and all
Securities will be recorded in a register held by a Registrar all as more fully set forth in the
Fiscal Agency Agreement which also contains detailed provisions concerning transfers of Securities.

This Global Security is registered in the name of a nominee of DTC. This Global Security is
exchangeable for Securities registered in the name of a person other than DTC or its nominee only
in the limited circumstances hereinafter described. Unless and until it is exchanged in whole or in
part for Physical Certificates, this Global Security may not be transferred except as a whole by
DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any
such nominee to a successor of DTC or a nominee of such successor.

The Securities will only be sold in denominations of [U.S.$1,000 ] or integral multiples thereof.

 

 

Physical Certificates

Québec will issue or cause to be issued Physical Certificates upon registration of transfer of, or
in exchange for, Securities represented by the Global Securities (i) if DTC notifies Québec that it
is unwilling or unable to continue as depository in connection with the Global Securities or ceases
to be a clearing agency registered under the United States Securities Exchange Act of 1934, as
amended, at a time when it is required to be and a successor depository is not appointed by Québec
within 90 days after receiving such notice or becoming aware that DTC is no longer so registered;
(ii) if Québec, in its sole discretion at any time, determines not to have any of the Securities
represented by the Global Securities; or (iii) upon request by DTC to the Registrar, acting on
direct or indirect instructions of a holder or any beneficial owner of an interest in a Global
Security, after an event of default entitling the holder to accelerate the stated maturity of the
Global Security has occurred and is continuing, or, if DTC does not promptly make that request,
then any beneficial owner of an interest in such Global Security shall be entitled to make such
request with respect to such interest.

Québec expressly acknowledges that if Physical Certificates are not promptly issued to the owners
of beneficial interests in a Global Security as described above, then an owner of a beneficial
interest will be entitled to pursue any remedy under the Fiscal Agency Agreement, the Global
Security or applicable law with respect to the portion of the Global Security representing that
owner’s interest in the Global Security as if Physical Certificates had been issued.

Interest

Whenever it is necessary to compute any amount of interest in respect of the Securities, other than
with respect to regular semi-annual payments, such interest shall be calculated on the basis of a
360-day year of twelve 30-day months. The rate of interest specified in the Securities is a
nominal rate and all interest payments and computations are to be made without allowances or
deductions for deemed reinvestment.

For purposes of disclosure pursuant to the Interest Act (Canada), the rate of interest payable on
any basis other than a full calendar year may be determined by multiplying the applicable annual
interest rate by a fraction the numerator of which is the actual number of days in the period for
which interest is payable and the denominator of which is 365 days or 366 days, as the case may be.

[
In the case of an Original Discount Security, insert — Notwithstanding anything to the contrary
contained in this Security, upon the redemption repayment or acceleration of the Stated Maturity of
this Security there shall be payable, in lieu of the Principal Amount due at the Stated Maturity
hereof, an amount equal to the Amortized Face Amount of this Security. The “Amortized Face Amount”
shall be the amount equal to (i) the Issue Price (as defined below) of this Security, plus (ii)
that portion of the difference between the Issue Price and the Principal Amount of this Security
that has been amortized at the Stated Yield (as defined below) of this Security (computed in
accordance with generally accepted United States bond yield computation principles) at the date of
which the Amortized Face Amount is calculated, but in no event shall the Amortized Face Amount
exceed the Principal Amount of this Security. As used in the previous sentence “Issue Price” means
the Principal Amount of this Security less the Total Amount of original issue discount of this
Security specified on the face hereof and the “Stated Yield” of this Security means the Yield to
Maturity specified on the face hereof (or if not so

 

 

specified, the Yield to Maturity compounded semi annually and computed in accordance with generally
accepted United States bond yield computation principles) for the period from the Issue Date of
this Security to the Stated Maturity hereof on the basis of its Issue Price and Principal Amount. ]

[ If the Security is denominated in a currency other than United States dollars, insert applicable
provisions. ]

Payments

Principal of and interest on the Securities and Additional Amounts, if any, are payable by Québec
in lawful money of the United States of America (“U.S. dollars”) [if applicable, insert alternative
currency ] to the person registered on the relevant record date in the register held by the
Registrar. With respect to Securities held by Cede & Co. for DTC participants, Euroclear and
Clearstream, Luxembourg, payment will be made to beneficial owners in accordance with customary
procedures established from time to time by DTC, Euroclear and Clearstream, Luxembourg.

If any date for payment to the registered holder hereof is not a Business Day in the applicable
place of payment, such registered holder shall not be entitled to payment until the next following
Business Day, and no further interest shall be paid in respect of the delay in such payment. In
this paragraph “Business Day” means a day on which banking institutions in The City of New York [
if applicable, insert other or alternative locations ]and in any other applicable place of payment
are not authorized or obligated by law or executive order to be closed.

[Payment of Additional Amounts

The principal of and interest on the Securities will be paid to any holder, who as to Canada or any
province, political subdivision or taxing authority therein or thereof is a non-resident, without
deduction for or on account of any present taxes or duties of whatsoever nature, imposed or levied
by or within Canada, or any province, political subdivision or taxing authority therein or thereof.
If as a result of any change in, or amendment to, or in the official application of, the laws of
Canada or the regulations of any taxing authority therein or thereof or any change in, or in the
official application of, or execution of, or amendment to, any treaty or treaties affecting
taxation to which Canada is a party, Québec shall be required to withhold any taxes or duties from
any payments due under the Securities, Québec will pay such additional amounts (the “Additional
Amounts”) as may be necessary in order that every net payment of the principal of and interest on
the Securities to any such holder will be not less than the amount provided for in the Securities.
Québec shall not, however, be obliged to pay such Additional Amounts on account of any such taxes
or duties to which any holder is subject otherwise than by reason of his ownership of Securities or
the receipt of income therefrom or which become payable as a result of any Security being presented
for payment on a date more than ten days after the date on which the same becomes due and payable,
or the date on which payment thereof is duly provided for, whichever is later. In addition, Québec
also shall not be obligated to pay any Additional Amounts where such withholding or deduction is
imposed on a payment to an individual and is required to be made pursuant to European Union
Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform
to, such Directive or presented for payment by or on behalf of a holder who would have been able to
avoid such withholding or deduction by presenting the relevant Security to another Paying Agent in
a Member State of the European Union.]

 

 

Maturity, Redemption and Purchases

Unless previously redeemed as provided below, or purchased, the principal amount of the Securities
shall be due and payable on [           ].

[If as a result of any change in, or amendment to, or in the official application of, the laws of
Canada or the regulations of any taxing authority therein or thereof (other than Québec) or any
change in, or in the official application of, or execution of, or amendment to, any treaty or
treaties affecting taxation to which Canada is a party, which change or amendment shall have become
effective after [          ], it is determined by Québec that Québec would be
required at, or at any time prior to, maturity of the Securities to pay Additional Amounts as
hereinabove described, the Securities may be redeemed in whole but not in part at the option of
Québec on not less than 30 days’ nor more than 45 days’ published notice in accordance with the
provisions set forth below under “Notices”, at the Principal Amount thereof together with accrued
interest.]

Québec may at any time purchase Securities in any manner and at any price. If purchases are made by
tender, tenders must be available to all Securityholders alike.

Status of the Securities

The Securities will be direct, unsecured and unconditional obligations of Québec for the payment
and performance of which the full faith and credit of Québec will be pledged and will not be
secured. The Securities will rank equally among themselves and with all Securities, debentures or
other similar debt securities issued by Québec and outstanding at the date of the issue of the
Securities or issued in the future.

Events of Default

In the event that (a) Québec shall default in the payment of the principal [or premium, if any,]
of, [interest] or [additional amounts, if any,] on the Securities, as the same shall become due and
payable, and such default shall continue for a period of 45 days or (b) default shall be made in
the due performance or observance by Québec of any covenant or agreement contained in the
Securities, other than the payment of principal [or premium, if any], [interest] or [additional
amounts], or the Fiscal Agency Agreement and such default shall continue for a period of 60 days or
(c) Québec shall default in the payment of any principal of, interest or additional amounts, if
any, on any indebtedness (direct or under a guarantee) for borrowed money, other than the
Securities, as the same shall become due and payable, and such default shall continue for a period
of 45 days, provided that the foregoing shall not be taken into account so long as the aggregate
principal amount of all such indebtedness (direct or under a guarantee) for borrowed money with
respect to which the foregoing has occurred does not exceed U.S.$50,000,000 (or its equivalent in
other currencies), then at any time thereafter and during continuance of such default the
registered holder of any Security (or its proxy) may deliver or cause to be delivered to Québec, a
written notice that such registered holder elects to declare the principal amount of the Securities
held by him (the serial number or numbers of the Security or Securities representing such
Securities and the principal amount of the Securities owned by him and the subject of such
declaration being set forth in such notice) to be due and payable and, in the cases falling within
either (a) or (c) above, on the 15th day after delivery of such notice, or, in the cases falling
within (b) above, on the 30th day after delivery of such notice, the principal of the Securities
referred to in such notice plus

 

 

accrued interest thereon shall become due and payable, unless prior to that time all such defaults
theretofore existing shall have been cured.

Notices

[All notices to the holders of Securities will be published in English in London, England in the
Financial Times (if and for so long as the Securities are admitted to the Official List of the UK
Listing Authority and to trading on the regulated market of the London Stock Exchange and the rules
of the London Stock Exchange so require), in New York, New York in The Wall Street Journal and in
Toronto, Ontario in The Globe & Mail and in French in Montréal, Québec in La Presse.

If at any time publication in any such newspaper is not practicable, notices will be valid if
published in an English language newspaper, or, if in Québec, a French language newspaper, with
general circulation in the respective market regions as Québec, with the approval of the Registrar,
shall determine. Any such notice shall be deemed to have been given on the date of such publication
or, if published more than once or on different dates, on the first date on which publication is
made.]

Prescription

Under current Québec law, this Global Security will become void unless presented for payment of
principal or interest within three years of the due date for payment.

Modification

The Fiscal Agency Agreement contains provisions with respect to modifying or amending said
Agreement either without notice to, or the consent of, the holder of any Security or with the
approval of the holders of Securities.

Future Holders

Any action by the Holder of this Security shall bind all future Holders of this Security, and of
any Security issued in exchange or substitution herefor or in place hereof, in respect of anything
done or permitted by Québec or by the Fiscal Agent in pursuance of such action.

[
If applicable, insert — Office or Agency of Québec

So long as this Security shall be outstanding, Québec will maintain an office or agency for the
payment of the principal of and premium, if any, and interest on this Security as herein provided
in The City of New York, and an office or agency in The City of New York for the registration
transfer and exchange as aforesaid of the Securities. Québec may designate other agencies for the
payment of said principal and premium, if any, and interest at such place or places (subject to
applicable laws and regulations) as Québec may decide. So long as there shall be a Fiscal Agent,
Québec shall keep the Fiscal Agent advised of the names and locations of such agencies, if any are
so designated.

No recourse under or upon any covenant contained in this Security or because of the creation of the
indebtedness represented hereby shall be had against any official or other representatives,

 

 

past, present or future, as such, of Québec whether by virtue of any statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, it being expressly agreed and understood
that this Security is solely the obligation of Québec and that no personal liability whatsoever
shall attach to or be incurred by any such officials or other representatives, as such, because of
the execution of this Security. ]

Governing Law

The Fiscal Agency Agreement and the Securities shall be construed in accordance with and governed
by the laws of Québec and the laws of Canada applicable therein.

Québec irrevocably consents to the fullest extent permitted by law to the giving of any relief
(including, without limitation, the making, enforcement or execution against any property of any
order or judgment) made or given in connection with any proceedings arising out of or in connection
with the Fiscal Agency Agreement and the Securities.

Executed in [     ] [by] [on behalf of] Québec as of [ ].

	 	 	 	 	 	 	 	 	 
	Authenticated by:	 	 	 	QUÉBEC
	 
	 	 	 	 	 	 	 	 
	(as Registrar)	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	Authentication Date:	 	 	 	 	 	Authorized Representative
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 

Authorized OfficerExhibit 10.1

 

Exhibit 10.1

 

AMENDMENT NO. 3

TO

EMPLOYMENT AGREEMENT OF ARNOLD B. ZETCHER

 

THIS AMENDMENT NO. 3 (this “Amendment”), dated as of September 28, 2006, to the Employment Agreement dated October 22, 1993 and as amended as of May 11, 1994 and as of May 25, 2005 (the “Employment Agreement”), by and between The Talbots, Inc., a Delaware corporation (the “Company”), and Arnold B. Zetcher (the “Executive”).

WHEREAS, the parties wish to amend the Employment Agreement to incorporate changes to the terms and conditions thereof to which they have agreed.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the parties agree as follows:

1.            
Capitalized terms in this Amendment No. 3 are to have the meaning defined in the Employment Agreement.

2.            
Paragraph 3 of the Employment Agreement is amended by deleting paragraph (D), and inserting the following new paragraph (D):

	
             
 	
             
 	
            (D)  2003 Executive Stock Based Incentive Plan
 

	
             
 	
             
 	
            (i)  Fiscal Year 2007 Awards. The Company acknowledges, and the Executive understands, that the Company currently intends to make awards in the Company’s fiscal year 2007 to the Company’s senior executives of Performance Accelerated Restricted Stock (the “PARS”) and non-qualified options to purchase shares of the Company’s Common Stock (the “Options”). The Company agrees that if it makes such awards, the Executive shall receive awards that shall be consistent with the Company’s past practice in granting awards of PARS and Options to the Executive. Except as provided below, any awards of PARS and Options the Executive receives pursuant to this paragraph 3(D)(i) shall be subject, respectively, to the terms and conditions of a Restricted Stock
Agreement and a Nonqualified Stock Option Agreement (the “Option Agreement”) between the Company and the Executive. In
			addition, if Executive’s employment is terminated on or before March
			31, 2008 for any reason other than:
 

 

 

	
             
 	
            (a)
 	
            by the Company pursuant to paragraphs 6(C) or 6(D) below; or
 

	
             
 	
            (b)
 	
            by the Executive without Good Reason (as such term is defined in paragraph 6(H) below),
 

	
             
 	
             
 	
            all Options awarded pursuant to this subparagraph that are then unvested shall vest on the earlier of the scheduled vesting date or March 31, 2008 (on which date all such Options then outstanding shall become fully vested), and all restrictions with respect to any PARS awarded pursuant to this subparagraph shall lapse on March 31, 2008 in accordance with the schedule attached as Exhibit A (the “Vesting Schedule”). 
 

	
             
 	
             
 	
            (ii)  Stock Options and PARS Awarded Prior to the Date Hereof. The Company and the Executive agree that notwithstanding the terms of the Nonqualified Stock Option and Restricted Stock agreements pertaining to Options and PARS awarded to the Executive prior to the date hereof, and provided the Executive’s employment is not terminated on or before March 31, 2008:
 

	
             
 	
            (a)
 	
            by the Company pursuant to paragraphs 6(C) or 6(D) below; or
 

	
             
 	
            (b)
 	
            by the Executive without Good Reason (as such term in defined in paragraph 6(H) below),
 

	
             
 	
             
 	
            the Executive shall vest in any such Options that are then unvested on the earlier of the scheduled vesting date or March 31, 2008 (on which date all such Options then outstanding shall become fully vested), and all restrictions with respect to any such outstanding PARS shall lapse on March 31, 2008 (or, if earlier, the scheduled lapse date) in accordance with the Vesting Schedule.
 

	
             
 	
             
 	
            (iii)  Termination Prior to Fiscal 2007 Equity Grants. In the event that, prior to the Compensation Committee of the Board of Directors of the Company making its fiscal 2007 equity grants to the Company’s executives generally, the Executive’s employment is terminated for any reason other than:
 

	
             
 	
            (a)
 	
            by the Company pursuant to paragraphs 6(C) or 6(D) below; or
 

	
             
 	
            (b)
 	
            by the Executive without Good Reason (as such term is defined in paragraph 6(H) below),
 

 

 

	
             
 	
             
 	
            such that Executive does not receive the expected fiscal 2007 equity grants in accordance with the foregoing paragraph 3(D)(i), then the Company shall pay to the Executive, in a single lump sum payment as soon as permitted pursuant to paragraph 13(C) below or, if elected by the Executive by written notice to the Company, within thirty (30) days from the grant date for such fiscal 2007 equity grants to the Company’s executives generally (the “fiscal 2007 grant date”), an amount in cash equal to:
 

 

	
             
 	
            (I)
 	
            the “fair value” of a grant of 150,000 stock options for the Company’s common stock (determined as of the fiscal 2007 grant date under FASB No. 123(R) in the same manner and using the same methodologies as used by the Company in calculating the “fair value” of its stock option grants made in fiscal 2006), but with such stock options to have a maximum exercise period and term of four (4) years (rather than the customary ten (10) years) from the date of grant; and
 

	
             
 	
            (II)
 	
            10,000 multiplied by the “fair market value” of a share of the Company’s common stock based on the closing price of such share at 4 pm on the New York Stock Exchange on the fiscal 2007 grant date.
 

3.            
Paragraph 4(A) of the Employment Agreement is amended by adding the following at the end thereof:

Notwithstanding the provisions of the Umbrella SERP, if, prior to March 31, 2008, the Executive’s employment is terminated:

	
             
 	
            (i)
 	
            by the Company for any reason other than pursuant to paragraphs 6(C) or 6(D) below; or
 

	
             
 	
            (ii)
 	
            by the Executive for “Good Reason” (as such term is defined in paragraph 6(H) below),
 

the Executive shall be entitled to receive a pension, which shall be the greater of the pension calculated in accordance with terms of the Umbrella SERP using his actual employment termination date or an assumed employment termination date of March 31, 2008 (and, in the event of an assumed March 31, 2008 termination date, for purposes of calculating his pension benefits under the Umbrella SERP, the Executive’s then current Compensation, as such term is defined under the Umbrella SERP, will be deemed to continue through March 31, 2008, such that, for example, the Executive’s Base Salary will be deemed continued through March 31, 2008 and his target bonus for fiscal years 2006 and 2007 (if actual termination occurs in 

 

 

fiscal
year 2006) or for fiscal year 2007 (if actual termination occurs in fiscal year 2007) shall be deemed calculated as set forth in paragraph 6(F)(i)(II)(2)(a) or (b) below).

4.            
Paragraph 6(B) of the Employment Agreement shall be deleted and the following shall be substituted in its place:

(B)     The employment of the Executive hereunder may be terminated by the Company or the Executive on or after the Executive’s normal retirement date, which for purposes of this agreement shall be deemed to be January 26, 2008.

5.            
Paragraph 6(F) of the Employment Agreement shall be deleted and the following shall be substituted in its place:

(F) (i)  In the event that the Executive’s employment hereunder is terminated on or before January 26, 2008:

	
             
 	
            (a)
 	
            by the Company and such termination is not a result of an event or condition referred to in paragraphs 6(C) or (D) above; or
 

	
             
 	
            (b)
 	
            by the Executive for Good Reason (as such term is defined in paragraph 6(H) below),
 

the following shall occur:

	
             
 	
            (I)
 	
            the Company shall pay to the Executive on the effective date of such termination:
 

	
             
 	
            (1)
 	
            salary for services rendered up to and including the date of termination;
 

	
             
 	
            (2)
 	
            reimbursement for expenses incurred by the Executive pursuant to paragraph 5 hereof up to and including the date on which his employment is terminated; and
 

	
             
 	
            (3)
 	
            any and all compensation to which the Executive may be entitled as of the date of termination pursuant to the Plan or any other compensation or benefit plan to the extent permitted by such plans,
 

	
             
 	
            (II)
 	
            the Company shall pay to the Executive, in a single lump sum payment as soon as permitted pursuant to paragraph 13(C) below or, if elected by the 
 

 

 

Executive by written notice to the Company, within thirty (30) days from the effective date of such termination, a separation allowance consisting of:

	
             
 	
            (1)
 	
            the Executive’s then current Base Salary Rate, from the date of such termination, through March 31, 2008; and
 

	
             
 	
            (2)
 	
            a. 	
            
			if such termination shall occur during the Company’s 2006 fiscal year, a target bonus for the Company’s fiscal years 2006 and 2007, which, for each such year shall be determined by multiplying the Executive’s then current Base Salary Rate by the Executive’s target bonus participation rate by an assumed Company rating of 1.0 by an assumed personal rating of 1.3; and
 

	
             
 	
            b.
 	
            if such termination shall occur during the Company’s 2007 fiscal year, a target bonus for such year, which shall be computed as described above (provided that if such termination is by the Company under Paragraph 6(B) and is to be effective as of January 26, 2008, which is the last day of the Company’s 2007 fiscal year, then the MIP bonus to which the Executive will be entitled for the 2007 fiscal year will be the bonus, if any, that is payable to him pursuant to the terms of the MIP in effect for the 2007 fiscal year), 
 

	
             
 	
            (III)
 	
            the Executive shall be entitled to receive the benefits provided under paragraph 6(G) below for the period through but not following 
 

March 31, 2008, and

	
             
 	
            (IV)
 	
            If the Executive’s employment hereunder shall have been terminated by the Company pursuant to paragraph 6(B), then the Executive agrees to serve as non-executive Chairman and a director (but not as an employee unless elected in writing by the Company at the time of such termination) for the period following January 26, 2008 and through but not after March 31, 2008. In such event and only to the extent consistent therewith, the Executive shall be entitled to receive the benefits referred to in paragraphs 
 

 

 

4(A)
though (F) above subject to the terms and conditions of the applicable programs through but not after March 31, 2008.

(ii)      In the event that the Executive’s employment is terminated by the Company after January 26, 2008 and through March 31, 2008 and such termination is not a result of an event or condition referred to in paragraphs 6(C) or (D) above, the following shall occur:

 

	
             
 	
            (a)
 	
            the Company shall pay to the Executive on the effective date of such termination;
 

	
             
 	
            (I)
 	
            salary for services rendered up to and including the date of termination;
 

	
             
 	
            (II)
 	
            reimbursement for expenses incurred by the Executive pursuant to paragraph 5 hereof up to and including the date on which his employment is terminated; and
 

	
             
 	
            (III)
 	
            any and all compensation to which the Executive may be entitled as of the date of termination pursuant to the Plan or any other compensation or benefit plan to the extent permitted by such plans,
 

	
             
 	
            (b)
 	
            the Executive shall be entitled to receive the benefits provided under paragraph 6(G) below for the period through but not following March 31, 2008;
 

 

	
             
 	
            (c)
 	
            the Company shall pay to the Executive, in a single lump sum payment as soon as permitted pursuant to paragraph 13(C) below or, if elected by the Executive by written notice to the Company, within thirty (30) days from the effective date of such termination, a separation allowance consisting of the Executive’s then current Base Salary Rate from the date of such termination through March 31, 2008;
 

 

	
             
 	
            (d)
 	
            if the Executive’s employment hereunder shall have been terminated by the Company pursuant to paragraph 6(B), then the Executive agrees to serve as non-executive Chairman and a director (but not as an employee unless elected in writing by the Company at the time of such termination) for the period following such termination and through but not after March 31, 2008. In such event and only to the extent consistent therewith, the Executive shall be entitled to receive the benefits referred to in
			paragraphs 
 

 

4(A) through (F) above subject to the terms and conditions of the applicable programs through but not after March 31, 2008; and

	
             
 	
            (e)
 	
            the Company agrees that the bonus (if any) the Executive shall have earned for the Company’s fiscal year 2007 pursuant to the MIP shall be paid to the Executive on the later of:  (i) the time it pays such bonuses to the Company’s then actively employed executives; or (ii) as soon as permitted pursuant to paragraph 13(C) below (unless the Executive otherwise elects upon written notice to the Company).
 

6.            Paragraph 6(G) of the Employment Agreement is amended to delete subparagraph (i) and substitute the following:  “(i) March 31, 2008”.

	
            
			7.
 	
            Paragraph 6(H) of the Employment Agreement is amended as follows:
 

	
             
 	
            (a)
 	
            by deleting the first clause of the first sentence of paragraph 6(H) up to and preceding subparagraph (ii) and substituting in its place:
 

“In the event there is a Change in Control (as hereinafter defined) before January 26, 2008 and the Executive’s employment hereunder is terminated after the occurrence of such Change in Control but before January 26, 2008 either (i) by the Company, and such termination is not the result of an event or condition referred to in paragraphs 6(C) or (D), or”.

	
             
 	
            (b)
 	
            by adding immediately following number (III) of subparagraph (a)(III) the following clause:
 

“if elected by the Executive by written notice to the Company, or if not so elected by the Executive, as soon as otherwise permitted pursuant to paragraph 13(C) below,”

	
             
 	
            (c)
 	
            by deleting subparagraphs (b)(III) and (c) in their entirety; and
 

 

 

	
             
 	
            (d)
 	
            by adding immediately following the phrase “paragraph 6(G) hereof” of subparagraph (d) the following clause:
 

“, provided that the Executive’s participation shall continue for a period of two (2) years following the effective date of the Executive’s termination of employment hereunder;” 

	
             
 	
            (e)
 	
            by deleting subparagraph (e)(i) and substituting in its place the following:
 

“(i) March 31, 2008 or”.

	
            8.
 	
            Paragraph 6(I) of the Employment Agreement is amended as follows:
 

	
             
 	
            (a)
 	
            by deleting the first clause of the first sentence of 6(I) and substituting in its place:
 

“The Company shall cause the following to occur on the date of the Change in Control if elected by the Executive by written notice to the Company, or if not so elected by the Executive, as soon as otherwise permitted under Section 409A of the Code so as to avoid the imposition of immediate inclusion in the Executive’s income under Section 409A of the Code:”

; and

	
             
 	
            (b)
 	
            by deleting subparagraphs (b)(II) and (III) in their entirety.
 

9.            Paragraph 13(C) of the Employment Agreement is amended to add the following sentence to the end thereof:

	
             
 	
             
 	
            Upon expiration of such six-month period (or, if earlier, his death), any payments withheld hereunder from the Participant shall be distributed to Participant and his beneficiary, with a payment of interest thereon credited at a rate of prime plus 1% (with such rate to be determined as of the actual payment date); provided, however, that any payment of interest shall be made only if and to the extent such payment is consistent with Section 409A of the Code and any guidance issued thereunder.
 

 

 

10.            
Paragraph 14 of the Employment Agreement shall be deleted, and the following shall be substituted in its place:

	
             
 	
             
 	
            14. Term. This Agreement shall commence on the Effective Date, and shall continue in effect up to and including March 31, 2008 (the “Term”). 
 

11.            Paragraph 17(A) of the Employment Agreement is amended to reflect that notices to the Company shall be directed to the attention of the General Counsel.

12.            Except as expressly modified by this Amendment, all terms and provisions of the Employment Agreement and all the respective rights and obligations of the parties to the Employment Agreement shall continue unchanged and in full force and effect.

13.            
This Amendment may be executed in counterparts, each of which shall be deemed an original but both of which taken together will constitute one instrument.

 

 

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

THE TALBOTS, INC.

	
 	
 	
 
	

/s/ Arnold B. Zetcher 
	
	

		
 	
By:  
	
		
/s/ Stuart M. Stolper
	
Arnold B. Zetcher 
	
		
 	
Name: 
	
		
Stuart M. Stolper 
	
	
	
Date of Signature: September 28, 2006 
	
		
 	
Title: 
	
		
Senior Vice President, 
	
	
	
 
	
		
 	
 
	
		
Human Resources and 
	
	
	
 
	
		
 	
 
	
		
Assistant Secretary 
	
	

 

 

	
             
 	
            Date of Signature:  September 28,  2006
 

 

 

 

Exhibit A

(Vesting Schedule)

 

	
             
 	
            Non-qualified Stock Options
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            Grant

Date
 	
            Grant Type
 	
            Date Due to Vest
 	
            NQ Stock Options

 
 	
            Options Price

Per Share
 	
            Vesting Date Under Amended

Agreement 3/31/2008
 
	
            Non-qualified Stock Options
 
	
            3/11/2004
 	
            150,000
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
            3/11/2005
 	
            50,000
 	
            $33.92
 	
            Vested on 3/11/2005
 
	
             
 	
             
 	
            3/11/2006
 	
            50,000
 	
            $33.92
 	
            Vested on 3/11/2006
 
	
             
 	
             
 	
            3/11/2007
 	
            50,000
 	
            $33.92
 	
            To Vest on 3/11/2007
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            3/11/2005
 	
            150,000
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
            3/11/2006
 	
            50,000
 	
            $31.62
 	
            Vested on 3/11/2006
 
	
             
 	
             
 	
            3/11/2007
 	
            50,000
 	
            $31.62
 	
            To Vest on 3/11/2007
 
	
             
 	
             
 	
            3/11/2008
 	
            50,000
 	
            $31.62
 	
            To Vest on 3/11/2008
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            3/3/2006
 	
            150,000
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
            3/3/2007
 	
            50,000
 	
            $25.56
 	
            To Vest on 3/03/2007
 
	
             
 	
             
 	
            3/3/2008
 	
            50,000
 	
            $25.56
 	
            To Vest on 3/03/2008
 
	
             
 	
             
 	
            3/3/2009
 	
            50,000
 	
            $25.56
 	
            3/31/2008
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            *3//2007
 	
            150,000*
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
            3//2008
 	
            50,000
 	
            * Not Available
 	
            To Vest on 3//2008
 
	
             
 	
             
 	
            3//2009
 	
            50,000
 	
            * Not Available
 	
            3/31/2008
 
	
             
 	
             
 	
            3//2010
 	
            50,000
 	
            * Not Available
 	
            3/31/2008
 

* Grants are scheduled to be made in March
of 2007 but exact day has not been determined. In addition, neither the number
of shares nor any option exercise price has been approved and are included for
illustrative purposes.

	
             
 	
            Restricted Stock (PARS)
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            Grant

Date
 	
            Grant Type
 	
            Prior Vesting Date

 
 	
            Price Paid

Per Share
 	
            Vesting Date Under

Amended Agreement
 	
            Vesting Percentage

as of 3/31/08
 	
            Shares Vesting

3/31/2008
 
	
            Restricted Stock PARS
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            3/13/2003
 	
            25,000
 	
            Vested on 4/13/06
 	
            $0.01
 	
            Vested on 4/13/2006
 	
            100%
 	
            25,000***
 
	
             
 	
            25,000
 	
            To Vest on 3/13/08
 	
            $0.01
 	
            To Vest on 3/13/2008
 	
            100%
 	
            25,000
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            3/11/2004
 	
            50,000
 	
            3/11/2009
 	
            $0.01
 	
            3/31/2008
 	
            80.00%
 	
            40,000
 
	
            3/11/2005
 	
            50,000
 	
            3/11/2010
 	
            $0.01
 	
            3/31/2008
 	
            60.00%
 	
            30,000
 
	
            3/3/2006
 	
            50,000
 	
            3/3/2011
 	
            $0.01
 	
            3/31/2008
 	
            40.00%
 	
            20,000
 
	
            **3//2007
 	
            50,000**
 	
            3//2012
 	
            $0.01
 	
            3/31/2008
 	
            20.00%
 	
            10,000
 

** Grants are scheduled to be made in March of 2007 but exact day has not been determined. In addition, the number of shares has not been approved and is included for illustrative purposes.

*** Shares previously received by the executive.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]