Document:

exv10w38

 

Exhibit 10.38

AMENDMENT NO. 2 TO THE

TALBOTS, INC. DEFERRED COMPENSATION PLAN

          The Talbots, Inc. Deferred Compensation Plan (the “Plan”) is hereby amended as follows,
effective as of January 1, 2007:

          1. Section 2 of the Plan is hereby amended by adding the following new paragraph to the end
thereof:

     “Effective January 1, 2007, an individual who is employed by The J.
Jill Group, Inc. (“Jill”) at a director level or above, shall be eligible to
participate in the Plan, provided however, that such individual must first
be designated by the Administrative Committee as a participant in the Plan
(hereinafter, such designated individual shall be referred to as a ‘Jill
Participant’).”

          2. Section 3 of the Plan is hereby amended by adding the following new paragraph to the end
thereof:

     “Notwithstanding the foregoing, any and all amounts due under the Plan
to a Jill Participant shall be paid at the time, and in the form, elected by
such Jill Participant at the time he or she makes a deferral election.”

          3. Section 5 of the Plan is hereby amended by adding the following new paragraphs to the end
thereof:

          “Notwithstanding anything else herein to the contrary, for Jill
Participants only, Jill may elect to make matching contributions hereunder,
at such levels (if at all) as Jill, in its sole discretion, elects. Any
such matching contributions will become vested upon such terms as Jill
elects. Matching contribution levels, and vesting terms, need not be
consistent for all Jill Participants.

          In addition, and notwithstanding anything else herein to the contrary,
for Jill Participants only, Jill may elect to make annual discretionary
contributions hereunder, at such levels (if at all) as Jill, in its sole
discretion, elects. Any such annual discretionary contribution will become
vested upon such terms as Jill elects. Discretionary contribution levels,
and vesting terms, need not be consistent for all Jill Participants. .”

* * *

          IN WITNESS WHEREOF, The Talbots, Inc. has caused this amendment to be adopted by its duly
authorized representative as of the date first set forth above:

	 	 	 	 	 
	 	THE TALBOTS, INC.

 	 
	 	By:  	/s/ Arnold B. Zetcherexv10w64

 

Exhibit 10.64

January 3, 2008

By Electronic Mail and Overnight Mail

Paula Bennett

[Home Address]

Dear Paula,

On behalf of The Talbots, Inc. (including its subsidiaries, “Talbots” or the “Company”), we are
pleased to offer you the position of President, J. Jill Brand in accordance with the following:

Base Salary, Signing Bonus, Benefits and Perquisites

	•	 	Your initial salary will be at the rate of $600,000 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 as of your employment start date. If
you voluntarily leave the Company or resign other than for Good Reason (as defined below) or
your employment is terminated by the Company 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.

	•	 	Commencing on your employment start date, you will be eligible to participate in all
benefit plans at a level commensurate with the brand president level at Talbots, 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. Beginning on your employment start date, you will also be
eligible for all perquisites at a level commensurate with the brand 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 employment
start date will be a date in January 2008 as mutually established by you and the Company. You
will be an employee of The J. Jill Group, Inc. (or its successor entity).

 

 

Paula Bennett

January 3, 2008

Page 2

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 60% 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 $180,000 (which equals one-half of your target award
opportunity of $360,000 for FY 2008). This $180,000 bonus payment (payable in the second
quarter of FY 2009 at the same time as other FY 2008 bonuses would customarily be paid to
other senior Company officers) 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 you
voluntarily leave the Company or resign other than for Good Reason (as defined below) or your
employment is terminated by the Company for Cause (as defined below) prior to the date that FY
2008 bonuses are paid to senior Company officers.
	 
	 	 	The Company agrees to protect Executive (by cash payment, or restricted stock, or a
combination, at the Company’s election), up to a maximum amount of $75,000, for any net value
which has been earned by Executive and would have been realized by and paid to Executive from
Executive’s immediately prior employer on Executive’s 2007 annual cash incentive bonus award
from her prior employer, if and to the extent that any such award is caused to be forfeited by
Executive by reason of her accepting her position with the Company. Executive will keep the
Company advised of the status and the manner in which such outstanding award is addressed by
her prior employer and Executive will use her best good faith efforts to realize such award.
Documentation and information related to such award will be made available to the Company.

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.
	 
	•	 	As a special hiring inducement award in consideration for your joining the Company, you
will be awarded a one-time restricted stock award for 50,000 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 in the form of Exhibit B to be
executed by the Company and you. This restricted stock
award will be effective on your employment commencement date and will vest in one-quarter
annual increments beginning one year from the effective date of the award.

 

 

Paula Bennett

January 3, 2008

Page 3

	•	 	You will also be eligible to receive a one-time Non-Qualified Stock Option to purchase
20,000 shares of Common Stock upon your joining the Company in the form of Exhibit C.
The option price will be equal to the closing stock price on the grant date which will be 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

	•	 	The Company will reimburse you for relocation expenses incurred by you in moving your
“household items” from your rental property on the North Shore in Massachusetts to a residence
closer to the Company’s headquarters in accordance with the Company’s relocation policy (a
copy of which will be provided to you). If you chose to relocate your primary residence from
Chappaqua, New York to a primary residence in the greater Boston area, the Company will
reimburse you for such relocation expenses incurred by you during the period beginning with
your employment start date and ending one year from your employment start date in accordance
with the Company’s relocation policy. If you voluntarily leave the Company or resign for
other than Good Reason or if your employment is terminated by the Company 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.

Severance

	•	 	It is understood and agreed that either you or the Company 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 D (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

	•	 	Confidentiality. You agree that you will not, at any time during or following your
employment, directly or indirectly, without the express prior written consent of the Company,
disclose or use any Confidential Information of the Company. “Confidential Information” will
include all information concerning the Company or 

 

 

Paula Bennett

January 3, 2008

Page 4

	 	 	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.

	•	 	Non-Disparagement. You agree that, for a period of one year after termination or
cessation of your employment for any reason, you will not take action or make any statement,
written or oral, which is intended to materially disparage the Company or its business.
	 
	•	 	Non-Solicitation. You agree that, for a period of one year after the termination
or cessation of your employment for any reason, you will not directly or indirectly solicit,
attempt to hire, or hire any employee of the Company (or any person who may have been employed
by the Company during the last year of your employment with the Company), or actively assist
in such hiring by any other person or business entity or encourage, induce or attempt to
induce any such employee to terminate his or her employment with the Company.
	 
	•	 	Non-Competition. You agree that throughout your employment, and for a period of 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, entity 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, including for illustrative purposes only and not limited to, Ann
Taylor, Chico’s FAS, Coldwater Creek, Gap Inc., Liz Claiborne, Ralph Lauren or Sundance
Catalog Company (or any of their affiliated brands, subsidiaries or successors).
	 
	•	 	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

 

 

Paula Bennett

January 3, 2008

Page 5

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

 

 

Paula Bennett

January 3, 2008

Page 6

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 by one arbitrator 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. You hereby irrevocably consent to the exclusive
jurisdiction of any federal court or state court located in The Commonwealth of Massachusetts,
and you hereby agree that process in any suit, action or proceeding may be served anywhere in
the world in the same manner as provided for notices to a party as provided in the Severance
Agreement. Moreover, nothing in this provision prevents you from filing, cooperating with, or
participating in any proceeding before the EEOC or a state Fair Employment Practices Agency
relating to discrimination or bias (except that you acknowledge that you may not recover any
monetary benefits in connection with any such proceeding). The decision of the arbitrator
conducting any such arbitration proceedings will be in writing, will set forth the basis
therefore and such arbitrator’s decision or award will be final and binding upon the Company
and you. The Company and you will abide by all awards rendered in such arbitration
proceedings, and all such awards may be enforced and executed upon in any court having
jurisdiction over the party against whom or which enforcement of such award is sought.
Notwithstanding the foregoing, the Company and you agree that, prior to submitting a dispute
under this offer letter to arbitration, the parties agree to submit, for a period of sixty
(60) days, to voluntary mediation before a jointly selected neutral third party mediator under
the auspices of JAMS, Boston, Massachusetts, Resolution Center (or any successor location),
pursuant to the procedures of JAMS International Mediation Rules conducted in The Commonwealth
of Massachusetts (however, such mediation or obligation to mediate will not suspend or
otherwise delay any termination or other action of the Company or affect the Company’s other
rights).

Taxes

	•	 	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.

 

 

Paula Bennett

January 3, 2008

Page 7

Miscellaneous

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

 

 

Paula Bennett

January 3, 2008

Page 8

	•	 	This offer is effective only through Monday, January 7, 2008 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.

Paula, we are thrilled you are joining as the J. Jill Brand President 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 4th day of January, 2008

	 	 	 	 	 
	/s/ Paula Bennett
 	 	 
	Paula Bennett

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