Document:

exv10w2

Exhibit 10.2

Exhibit A

SEVERANCE AGREEMENT

     This Severance Agreement (the “Agreement”) is made as of March 20, 2009, between The Talbots,
Inc., a Delaware corporation (together with its subsidiaries, the “Company”) and John Fiske, III
(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-l 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 of
the Code (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 after utilizing the short-term deferral and involuntary separation pay plan
regulations. 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). Notwithstanding anything contained in this Agreement to
the contrary, the Company acknowledges that, for purposes of Section 409A of the Code, each and
every payment made under this Agreement shall be deemed a separate payment and not a series of
payments.

     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 hilt and unconditional release (which will be effective when such release
is no longer subject to revocation) of any and all claims against the Company, its parent entities,
affiliates, employee benefit plans and fiduciaries (to the extent permissible under ERISA), and
their respective officers, employees, directors, agents and representatives satisfactory in form
and content to the Company’s counsel.

     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, or is otherwise in the possession of the Executive 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 and supersedes the severance agreement between the Executive and the Company dated as of
June 15, 2008 (which is hereby terminated and of no further force or effect). 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 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) Term of Agreement. This Agreement shall be effective upon execution and shall
remain in effect at all times during the Executive’s employment with the Company, unless expressly
amended or superseded in writing by the parties hereto.

     (h) 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

with a copy to:

The Talbots, Inc.

211 South Ridge Street

Rye Brook, New York 10573

Attn: General Counsel

To the Executive:

John Fiske, III

[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 overall
responsibilities as an executive, 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 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; or (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 relocation to the Company’s then
principal headquarters location or for required travel on the Company’s business, including regular
travel to and from the Company’s corporate headquarters and its other locations; which, with
respect to subsections (a) through (c) 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 (c) 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.

          (1) “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/ Trudy F. Sullivan
 	 
	 	 	Duly Authorized 	 
	 	 	 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ John Fiske, III
 	 
	 	John Fiske, III 	 
	 	EVP, Chief Stores Officerexv10w3

Exhibit 10.3

	 	 	 	 	 	 	 
	To:

	 	Arnold B. Zetcher

Stuart M. Stolper

Richard T. O’Connell
	 	 
	 	Date:  June 19, 2007
	 
	 	 	 	 	 	 
	From:

	 	Gary Osborne, Managing
Director

Compensation and Benefits

The Talbots, Inc.	 	 	 	 
	 
	 	 	 	 	 	 
	Subject:	 	The Talbots, Inc. Retiree Medical/Dental Benefit Coverage for
Arnold Zetcher, Richard O’Connell and Stuart Stolper

     In response to your request concerning Medical and Dental coverage at the time of retirement
and continuing thereafter, we hereby provide you with this outline of the benefits that will apply
for each of you upon your retirement.

Coverage and Costs

     Each of these executives is currently eligible for “retirement” from the Company (age 55 and
10 or more years of service). Following separation from employment by each of the above Talbots
executives and continuing for their life and for their spouse’s life, each of Mr. Zetcher, Mr.
O’Connell and Mr. Stolper (and their spouses) are entitled to receive their current medical and
dental benefit coverage from the Company as detailed in Attachment A. (Attachment A, together with
this memorandum, constitutes the Summary Plan Description for this medical and dental plan.) We
call this the Retiree Executive Medical Plan.

     As with the current medical and dental coverage for each of these executives under the
existing Talbots Executive Medical Plan (which we call the Executive Medical Plan), there are no
deductible amounts or contribution or co-pay obligations with respect to this coverage under the
Retiree Executive Medical Plan.

 

 

Background

     The benefit coverage under the Retiree Executive Medical Plan is intended to be the same
coverage as the existing medical and dental coverage under the Executive Medical Plan which is in
effect and required to be provided by the Company for each of these executives during their
employment with Talbots. The Talbots Executive Medical Plan only covers these three executives and
is different than the medical and dental coverage for all other Talbots executives because of their
status as General Mills officers who agreed to continue following the Jusco acquisition of Talbots.

     The medical and dental coverage under the existing Executive Medical Plan for each of these
executives is intended to be generally consistent with the coverage which was in effect for each of
them when they were part of the General Mills Specialty Retail Group executive team at the time
Talbots was acquired by Jusco from General Mills Inc. in 1988. At the time of the 1988 acquisition
of Talbots from General Mills, the then senior executive team of the General Mills Specialty Retail
Group, in exchange for their continuing under Jusco following the acquisition, were promised that
Talbots would guarantee continuing coverage to this group of executives on the same terms and
conditions as the executives had under the executive medical and dental coverage at General Mills.
The General Mills plan included retiree coverage with no contribution, co-pay or deductible.

     The only current continuing Talbots executives who were part of the General Mills Specialty
Retail Group at the time of the 1988 Jusco acquisition of Talbots are Mr. Zetcher, Mr. O’Connell
and Mr. Stolper. Consequently, this coverage will be provided to each of these executives and
their spouses during their Talbots employment and during retirement. The

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principal difference from their current coverage under the Executive Medical Plan is that upon
becoming entitled to Medicare coverage as a Talbots retiree, Medicare will become the primary
payor.

     Notwithstanding anything in this Summary Plan Description or in any plan document to the
contrary, upon and following your “Retirement” from the Company (as defined below):

	 	•	 	For your life, you will continue to be in the Class of Eligible Employees
designated in the Retiree Executive Medical Plan and you will be entitled to
the benefit coverage described therein
	 
	 	•	 	For your spouse (including your spouse at the time of your death), she will
be entitled to coverage under the Retiree Executive Medical Plan for her life
	 
	 	•	 	For any other of your Dependents, coverage under the Retiree Executive
Medical Plan will continue so long as they continue to be your Dependent (as
defined)

     “Retirement” means leaving active employment with the Employer at any time and for any reason
following age 55 and ten (10) years of service.

     Coverage for the executives and their spouses, on the terms discussed above, is considered to
be fully vested, based upon consideration already rendered, and accordingly the benefits provided
under the Retiree Executive Medical Plan (and the fact that there is no cost to

3

 

the executives or their spouses) may not be modified or terminated. Furthermore, the
fundamental nature of the plan is that its benefits (including the value of the coverage
thereunder) are intended not to be taxable to the executive or his spouse.

     In the event any of these executives becomes covered by another employer’s medical, health or
dental benefit coverage, then on a “coverage-by-coverage” basis, the other employer’s coverage
would be primary to the Company’s coverage while that other employer’s coverage was in effect.

     The Company will be responsible for maintaining all eligibility or other plan documentation
for these executives. In the event the Company cancels or modifies its current policies for this
coverage with CIGNA, the benefit coverage under the Retiree Executive Medical Plan will be
continued under other one or more other insurance policies. As noted above, the Summary Plan
Description (of which the memorandum shall be deemed a part) for this retiree medical and dental
plan is attached. In the event of any conflict or inconsistency between the terms of this
memorandum and the attached plan documents, the terms of this memorandum are intended to control.

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