Document:

exv4w1

Exhibit 4.1

AMENDMENT NO. 3 TO AMENDED AND

RESTATED RIGHTS AGREEMENT

     THIS AMENDMENT NO. 3 TO AMENDED AND RESTATED RIGHTS AGREEMENT (the “Amendment”), is dated the
14th day of April, 2009 and effective as of the 31st day of March, 2009, by and between CROWN
CRAFTS, INC., a Delaware corporation (the “Company”), and COMPUTERSHARE TRUST COMPANY, N.A.
(successor Rights Agent to Computershare Investor Services, LLC) (the “Rights Agent”).

WITNESSETH:

     WHEREAS, the Company and the Rights Agent entered into that certain Amended and Restated
Rights Agreement dated as of August 6, 2003, as amended by that certain Amendment No. 1 to Amended
and Restated Rights Agreement dated as of July 12, 2006 and that certain Amendment No. 2 to Amended
and Restated Rights Agreement dated as of August 30, 2006 (as so amended, the “Rights Agreement”);

     WHEREAS, Section 27 of the Rights Agreement permits the amendment of the Rights Agreement by
the Board of Directors of the Company (the “Board”); and

     WHEREAS, pursuant to a resolution duly adopted, the Board authorized and directed the
execution and delivery of this Amendment;

     NOW, THEREFORE, the Company and the Rights Agent agree as follows:

     1. Amendment of Section 1(a). Section 1(a) of the Rights Agreement is hereby amended by deleting the text of
such Section 1(a) in its entirety and substituting the following in lieu thereof:

     “(a) “Acquiring Person” shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates (as
such terms are hereinafter defined) of such Person, shall be the Beneficial Owner
(as such term is hereinafter defined) of twenty percent (20%) or more of the Common
Shares of the Company then outstanding, but shall not include:

(i) the Company;

(ii) any Subsidiary (as such term is hereinafter defined) of the Company;

(iii) any employee benefit plan of the Company or any Subsidiary of the
Company; or

(iv) any entity holding Common Shares for or pursuant to the terms of any
such plan.

     The Persons described in clauses (i) through (iv) above are referred to herein
as “Exempt Persons.”

 

 

     Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as
the result of an acquisition of Common Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to twenty percent (20%) or more of the Common
Shares of the Company then outstanding; provided, however, that if a
Person shall become the Beneficial Owner of twenty percent (20%) or more of the
Common Shares of the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the Beneficial
Owner of any additional Common Shares of the Company, then such Person shall be
deemed to be an “Acquiring Person.” Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would otherwise
be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no longer
be an Acquiring Person as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an Acquiring Person for
any purposes of this Agreement.”

     2. Amendment of Section 1(f). Section 1(f) of the Rights Agreement is hereby amended
be deleting the reference therein to “State of Georgia” and substituting therefor “Commonwealth of
Massachusetts”.

     3. Amendment of Section 1(i). Section 1(i) of the Rights Agreement is hereby amended
by deleting the reference to “$1.00” in the first sentence thereof and substituting therefor
“$0.01”.

     4. Amendment to Section 2. Section 2 of the Rights Agreement is hereby amended by
deleting the reference in the first sentence thereof to “and the holders of the Rights (who in
accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the
Common Shares)” in its entirety.

     5. Amendment of Section 3(a). Section 3(a) of the Rights Agreement is hereby amended
by deleting the reference to “5%” in the first sentence thereof and substituting therefor “twenty
percent (20%)”.

     6. Amendment of Section 7(a). Section 7(a) of the Rights Agreement is hereby amended
by deleting the reference therein to “March 31, 2009” and substituting therefor “March 31, 2014”.
As a result of the foregoing, all references in the Rights Agreement to the “Final Expiration Date”
shall refer to March 31, 2014.

     7. Amendment of Section 21. Section 21 of the Rights Agreement is hereby amended as
follows:

     (a) by deleting the reference in the first sentence thereof to “, and to the holders of
the Rights Certificates by first-class mail” in its entirety;

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     (b) by deleting the reference in the sixth sentence thereof to “having an office in the
State of Georgia,” in its entirety; and

     (c) by inserting the phrase “, including its Affiliates,” immediately after the word
“surplus” in the sixth sentence thereof.

     8. Amendment of Section 26. The address information for the Rights Agent set forth in
Section 26 of the Rights Agreement is hereby amended and restated in its entirety as follows:

Computershare Trust Company, N.A.

250 Royall Street

Canton, Massachusetts 02021

Attention: Client Services

     9. Amendment of Section 32. Section 32 of the Rights Agreement is hereby amended by
deleting the reference therein to “Georgia” and substituting therefor “Delaware”.

     10. Amendment of Exhibits A and B to the Rights Agreement. Exhibits A and B to the
Rights Agreement are hereby amended by deleting each reference therein to “March 31, 2009” and
substituting therefor “March 31, 2014”.

     11. Effectiveness. This Amendment shall be effective as of the date hereof, and
except as specifically amended hereby, the Rights Agreement is hereby reaffirmed by each of the
parties hereto and shall remain unchanged and in full force and effect.

     12. Certification. The undersigned officer of the Company certifies by the execution
hereof that this Amendment complies with the terms of Section 27 of the Rights Agreement.

     13. Entire Agreement; Severability. This Amendment (together with the Rights
Agreement) contains the entire agreement among the parties hereto relating to the matters provided
herein, and no representations, promises or agreements, oral or otherwise, not expressly contained
or incorporated by reference herein or therein shall be binding on the parties hereto. The
provisions of this Amendment are severable and the invalidity of one or more of the provisions
herein shall not have any effect upon the validity or enforceability of any other provision hereof.

     14. Governing Law. This Amendment shall be governed by, construed and enforced in
accordance with the laws of the State of Delaware, without giving effect to any principles of
conflict of laws.

     15. Counterparts. This Amendment may be executed and delivered (including delivery
electronically or by facsimile) in any number of counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same agreement.

[Signature page follows.]

3

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed to be
effective as of the 31st day of March, 2009.

	 	 	 	 	 
	 	CROWN CRAFTS, INC.

 	 
	 	By:  	/s/ E. Randall Chestnut
 	 
	 	 	E. Randall Chestnut 	 
	 	 	President and Chief Executive Officer 	 
	 
	 	COMPUTERSHARE TRUST COMPANY, N.A., as Rights Agent

 	 
	 	By:  	/s/ Kellie Gwinn	 
	 	 	Name: 	Kellie Gwinn	 
	 	 	Title: 	Vice President	 
	 

4exv10w37

Execution Copy

Exhibit 10.37

THE TALBOTS, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Amended and Restated Effective January 1, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 
	 	 	 	PAGE
	 
	ARTICLE I

	TITLE AND DEFINITIONS

	 	 	1	 
	ARTICLE II

	PARTICIPATION

	 	 	4	 
	ARTICLE III

	BENEFITS

	 	 	5	 
	ARTICLE IV

	 VESTING

	 	 	6	 
	ARTICLE V

	 DISTRIBUTIONS

	 	 	6	 
	ARTICLE VI

	PAYEE DESIGNATIONS AND LIMITATIONS

	 	 	8	 
	ARTICLE VII

	 ADMINISTRATION

	 	 	9	 
	ARTICLE VIII

	MISCELLANEOUS

	 	 	11	 

 

 

THE TALBOTS, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Amended and Restated Effective January 1, 2009

     The Talbots, Inc. (the “Company”) hereby amends and restates The Talbots, Inc. Supplemental
Executive Retirement Plan (the “SERP”) effective as of January 1, 2009. The SERP was last amended
and restated effective January 1, 1993.

     The Company maintains The Talbots, Inc. Pension Plan (the “Pension Plan”) which is intended to
meet the requirements of a “qualified plan” under the Code. The Code places limitations on the
maximum amount of an employee’s compensation that may be taken into account for determining
benefits, and the amount of benefits, payable under the Pension Plan. The Company established the
SERP to provide for the benefits that cannot be paid under the Pension Plan as a result of such
limitations.

     The Company maintains the SERP for a select group of the Employer’s key management employees
and highly compensated employees. The SERP is intended to, and shall be interpreted to, comply in
all respects with Section 409A of the Code (“Section 409A”) and those provisions of ERISA
applicable to an unfunded plan maintained primarily to provide deferred compensation benefits for a
select group of management or highly compensated employees.

ARTICLE I

TITLE AND DEFINITIONS

     1.1 “Actuarial Equivalent” shall mean the interest rates and the mortality tables used to
determine benefits under the Pension Plan.

     1.2 “Administrator” shall mean the person or persons appointed by the Committee to perform
such plan administrative duties as are delegated by the Committee.

     1.3 “Beneficiary” shall mean the person designated by the Participant as such pursuant to
Section 6.1 of the SERP.

     1.4 “Beneficiary Designation” shall mean the forms (including electronic forms) by which an
Eligible Employee designates his Beneficiaries.

     1.5 “Board” shall mean the Board of Directors of the Company.

     1.6 “Change in Control” shall be deemed to have occurred upon the occurrence on the following
events:

	 	(a)	 	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 Exchange Act, or persons acting in
concert (which for purposes of the SERP shall include two 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

1

 

	 	 	 	13(d)(3) and 14(d)(2) of the Exchange Act), other than the Company or any of its
subsidiaries, or 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 (25%) 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 shareholder 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
	 
	 	(b)	 	Individuals, who, as of January 1, 2009, 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 January 1, 2009, whose election,
or nomination for election by the Company’s shareholders, 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 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
(10%) 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.

     1.7 “Code” shall mean the Internal Revenue Code of 1986, as amended. Any reference to the
Code shall include the regulations issued thereunder.

     1.8 “Committee” shall mean The Talbots, Inc. Pension Committee appointed by the Board to
administer the SERP in accordance with Article VII of the SERP.

     1.9 “Company” shall mean The Talbots, Inc.

     1.10 “Compensation” for purposes of determining benefits under the SERP shall have the same
meaning as such term has under the Pension Plan plus a Participant’s deferrals to the Deferred
Compensation Plan. For purposes of determining benefits under the SERP, under no circumstances
shall severance pay be taken into account.

     1.11 “Deferred Compensation Plan” shall mean The Talbots, Inc. Deferred Compensation Plan.

     1.12 “Disabled” shall mean that a Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment that can

2

 

be expected to result in death or can be expected to last for a continuous period of not less
than 12 months.

     1.13 “Distribution Election” shall mean the forms (including electronic forms) by which an
Eligible Employee makes his election with respect to the form of payment of his benefit.

     1.14 “Effective Date” of the SERP shall mean June 27, 1988. The Effective Date of this
amendment and restatement is January 1, 2009.

     1.15 “Eligible Employee” shall mean an Employee of the Employer who is a participant in the
Pension Plan and:

	 	(a)	 	Who (i) is at director level or above, but below Vice President level, (ii)
elects to defer a portion of his compensation to the Deferred Compensation Plan, and
(iii) is designated by the head of Human Resources of the Company to be eligible to
participate in the SERP; or
	 
	 	(b)	 	Who (i) is a Vice President or Above, (ii) whose benefit under the Pension Plan
is limited by the application of Section 401(a)(17) of the Code, and (iii) is
designated by the head of Human Resources of the Company to be eligible to participate
in the SERP.

     1.16 “Employer” shall mean the Company and any member of its controlled group as listed in
Appendix A.

     1.17 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended. Any
reference to ERISA shall include the regulations issued thereunder.

     1.18 “Participant” shall mean any Eligible Employee who becomes a Participant in the SERP in
accordance with Article II of the SERP. For purposes of clarification, an Eligible Employee shall
continue to be a Participant in the SERP until his benefit is entirely paid or the SERP is
terminated, if earlier.

     1.19 “Payment Date” shall mean the date by which a lump sum payment shall be made or the date
by which annuity payments shall commence. Unless otherwise specified, the Payment Date shall be
the later of (a) the first day of the seventh month following a Participant’s Separation from
Service, or (b) the first day of the month following the Participant’s attainment of age 55 after
Separation from Service. Subsequent annuity payments shall be made on the first day of each
subsequent month.

     1.20 “Pension Plan” shall mean The Talbots, Inc. Pension Plan.

     1.21 “Plan Year” shall mean the calendar year.

     1.22 “Retirement” shall be deemed to occur upon the Participant’s Separation from Service,
other than as a result of death, on or after the Participant’s attainment of age 55 and completion
of 10 or more Years of Service.

3

 

     1.23 “Separation from Service” shall occur when the Eligible Employee dies, retires, or
otherwise has a Termination from Employment with the Employer.

     1.24 “SERP” shall mean The Talbots, Inc. Supplemental Executive Retirement Plan.

     1.25 “Spouse” shall mean a person of the opposite sex who is the Participant’s husband or
wife.

     1.26 “Termination from Employment” shall occur on the date that the Participant ceases to be
employed by the Employer for any reason other than Retirement, Disability, death or an authorized
leave of absence. Whether a Termination of Employment has occurred shall be based on the facts and
circumstances and determined in accordance with Section 409A.

     1.27 “Vice President and Above” shall mean an Eligible Employee who has the position of Vice
President or above.

     1.28 “Years of Service” shall mean each Plan Year in which the Eligible Employee completes
1,000 hours of service. Service with the Employer prior to an Eligible Employee becoming
Participant in the SERP shall be taken into account for purposes of determining Years of Service.
An Eligible Employee’s service with the Employer during periods in which he is not otherwise an
Eligible Employee and service with The J. Jill Group, Inc. and J. Jill, LLC (and their successor
entities) shall be taken into account under this Section 1.28 of the SERP. An Eligible Employee’s
Years of Service shall include additional service specifically granted for purposes of the SERP
under a written individual agreement entered into between the Employer and the Eligible Employee.

ARTICLE II

PARTICIPATION

     2.1 General Rule. An Eligible Employee shall become a Participant in the SERP on the
first day of the Plan Year in which his benefit under the Pension Plan is limited as described in
Article III of the SERP. For the avoidance of any doubt, the Eligible Employee is not eligible to
participate in the SERP until the Head of Human Resources of the Company designates the Eligible
Employee.

     2.2 Rehires. This Section 2.2 of the SERP shall apply only to Eligible Employees who
are rehired by the Employer and eligible to participate in the Pension Plan on their rehire date.

	 	(a)	 	In the case of an Eligible Employee who is rehired by the Employer during the
same Plan Year in which he Separated from Service, such Eligible Employee shall
immediately become a Participant in the SERP and his prior Distribution Election and
Beneficiary Designation, if any, shall immediately become effective.
	 
	 	(b)	 	In the event that an Eligible Employee is rehired by the Employer after his
benefit under the SERP has been fully paid, such Eligible Employee’s future accruals
will be distributed pursuant to Article V of the SERP.

4

 

	 	(c)	 	If an Eligible Employee is rehired after the last day of the Plan Year in which
he Separated from Service, his previous Distribution Election and Beneficiary
Designation, if any, shall apply to his benefit determined as of the date he previously
Separated from Service, and his future accruals will be distributed pursuant to Article
V of the SERP.
	 
	 	(d)	 	In all other cases, the Eligible Employee shall be eligible to participate in
the SERP on the first day of the Plan Year following the Plan Year in which he is
rehired.

     Notwithstanding the foregoing, in the event that an employee is not eligible to participate in
the Pension Plan on his rehire date, he shall not be eligible to participate in the SERP upon being
rehired by an Employer.

ARTICLE III

BENEFITS 

     3.1 Benefit for Eligible Employees who are Director level or above, but below Vice
President level. A Participant who has satisfied the vesting requirements of Article IV of the
SERP and is at a Director level or above, but below the level of Vice President, shall be entitled
to a benefit under the SERP in accordance with this Section 3.1 of the SERP. The amount of a
Participant’s benefit shall be equal (a) minus (b) as follows:

	 	(a)	 	The Participant’s benefit under the Pension Plan, expressed as a straight life
annuity which would have been payable to the Participant under the Pension Plan absent
the exclusion of deferrals to the Deferred Compensation Plan from compensation (as
defined under the Pension Plan); minus
	 
	 	(b)	 	The Participant’s actual benefit under the Pension Plan, expressed as a
straight life annuity.

     For purposes of determining benefits under this Section 3.1 of the SERP, only Compensation up
to the limit under Section 401(a)(17) of the Code will be taken into account.

     3.2 Benefit for Eligible Employees Who are Vice President Level and Above. A
Participant who has satisfied the vesting requirements of Article IV of the SERP and is at a level
of Vice President or above shall be entitled to a benefit under the SERP in accordance with this
Section 3.2 of the SERP. The amount of a Participant’s benefit shall equal (a) minus (b) as
follows:

	 	(a)	 	The Participant’s benefit under the Pension Plan, expressed as a straight life
annuity which would have been payable to the Participant under the Pension Plan absent
the application of Section 401(a)(17) of the Code, including deferrals to the Deferred
Compensation Plan; minus
	 
	 	(b)	 	The Participant’s actual benefit under the Pension Plan, expressed as a
straight life annuity.

5

 

     3.3 Individual Written Agreements. Notwithstanding anything in the SERP to the
contrary, the calculation of a Participant’s benefit under the SERP shall take into account, and be
subject to, the terms and conditions of any individual written agreement entered into between the
Company and the Participant that expressly provides benefits under the SERP in addition to the
benefits provided pursuant the terms and conditions of this plan document.

ARTICLE IV

VESTING

     The Participant shall be fully vested in his benefit under the SERP upon completion of five
(5) Years of Service. Notwithstanding anything in the SERP to the contrary, an Eligible Employee
shall become vested in his benefit under the SERP in accordance with the terms and conditions
provisions of any individual written agreement entered into between the Company and the Eligible
Employee that expressly provides for earlier vesting of his benefit under the SERP.

ARTICLE V

DISTRIBUTIONS

     5.1 Form of Distribution of a Participants’ Benefits. Upon a Participant’s Separation
from Service, he shall be eligible for a benefit under the SERP, provided that he has satisfied the
vesting requirement provided pursuant to Article IV of the SERP.

	 	(a)	 	A Participant’s benefit shall be paid in the form of a single life annuity
unless the Participant, prior to the Payment Date, elects an optional form of payment
by completing a Distribution Election and Beneficiary Designation Form, provided that
as of the Payment Date, the newly elected annuity form is actuarially equivalent to the
single life annuity.
	 
	 	 	 	In lieu of a single life annuity, a Participant can elect to have his benefit paid
in one of the optional forms of payment:

	 	(i)	 	Joint and 50% survivor annuity;
	 
	 	(ii)	 	Joint and 75% survivor annuity;
	 
	 	(iii)	 	Joint and 100% survivor annuity; and
	 
	 	(iv)	 	Ten-year certain and continuous annuity.

	 	(b)	 	Payment of the Participant’s benefit shall commence on the Payment Date, but in
no event later than the later of (i) December 31 of the calendar year which includes
the Payment Date, or (ii) the fifteenth day of the third calendar month following the
Payment Date.
	 
	 	(c)	 	Notwithstanding anything in the SERP to the contrary, participants who as of
December 31, 2008 (i) have Separated from Service, (ii) have attained age 55, and (iii)
have not commenced payment of their benefits, shall make Distribution

6

 

	 	 	 	Elections as to the form of payment of their benefits no later than December 31,
2008. Payments shall commence on the first business day of March 2009, but in no
event later than the last business day of June 2009.

	 	(d)	 	Notwithstanding anything in the SERP to the contrary, the payment of benefits
of participants who as of December 31, 2008 (i) have Separated from Service, (ii) have
not attained age 55, and (iii) have not commenced payment of their benefits, shall
commence on the first business day of month following the date that the Participant
attains age 55, but in no event later than the later of (i) December 31 of the calendar
year which includes the Participant’s 55th birthday, or (ii) the fifteenth
day of the third calendar month following the Participant’s 55th birthday.
	 
	 	(e)	 	The amount of a Participant’s payments under an annuity form, or the amount of
a Participant’s lump sum payment, shall be determined in accordance with the actuarial
assumptions used to determine the amount of payments under the annuity forms and the
lump sum payment under the Pension Plan. The early commencement actuarial reduction
factors set forth under the Pension Plan shall apply if payments commence before the
Participant attains age 65.

     5.2 Transitional Relief. If as of December 31, 2008, a Participant is receiving
monthly annuity payments and the Actuarial Equivalent of the remaining payments is not more than
$15,500, such Participant shall be permitted to make an irrevocable election to have the lump sum
present value of his remaining monthly payments paid to him a lump sum. The Participant must make
an election pursuant to this Section 5.2 of the SERP on or before December 31, 2008. If a
Participant makes such an election, the lump sum payment shall be made on the first business day of
March 2009, but in no event later than the last business day of June 2009.

     5.3 Small Benefit Exception. If on the Participant’s Payment Date, the lump sum
present value of his benefit under the SERP is less than the amount specified in Section 402(g) of
the Code, payment of his benefit shall be paid in a lump sum on his Payment Date, but in no event
later than the later of (i) December 31 of the calendar year which includes the Payment Date, or
(ii) the fifteenth day of the third calendar month following the Payment Date. For purpose of this
Section 5.3 of the SERP, all other non-qualified deferred compensation plans of the Employer shall
be aggregated with the SERP to the extent required by Section 409A.

     5.4 Death Benefits.

	 	(a)	 	Prior to Commencement of Benefits. In the event that a married
Participant dies who (i) has an accrued benefit under the SERP, (ii) has attained age
55 and completed ten (10) Years of Service prior to the date of his death, and (iii)
has not commenced payment of his benefit, his Spouse shall be eligible for a
pre-retirement survivor annuity. The amount of the pre-retirement survivor annuity
shall be equal to 50% of the amount which would have been payable to the Participant if
he had retired on the date of his death and had elected a joint and 50% survivor
annuity.

7

 

	 	 	 	In the event that a married Participant dies who (i) has an accrued benefit under
the SERP, (ii) has not attained age 55 and/or completed ten (10) Years of Service
prior to the date of his death, and (iii) has not commenced payment of his benefit,
his Spouse shall be eligible for a pre-retirement survivor annuity. The amount of
the pre-retirement survivor annuity shall be equal to 50% of the amount which would
have been payable to the Participant if he had (1) terminated employment on the date
of his death (or on his actual termination date, if earlier), (2) survived to his
age 55, and (3) elected a joint and 50% survivor annuity payable at age 55.
	 
	 	 	 	The pre-retirement survivor annuity shall commence to the Participant’s surviving
Spouse on the later of (i) the first business day of the month following the date of
the Participant’s death; or (ii) the first business day of month following the date
on which the Participant would have attained age 55. In no event shall payment
commence later than the later of (1) December 31 of the calendar year which includes
the later of (i) or (ii) above, or (2) the fifteenth day of the third calendar month
following the date which is the later of (i) or (ii) above.
	 
	 	 	 	The early commencement actuarial reduction factors set forth under the Pension Plan
shall apply if payments commence before the Participant attained or would have
attained age 65 if he had lived.
	 
	 	(b)	 	After Commencement of Benefits. In the event that the Participant dies
after commencing payment of his benefit under the SERP, the Participant’s Beneficiary
shall be entitled to survivor benefits if survivor benefits are available under the
form of payment elected by the Participant. Survivor benefits, if any, shall commence
to the Participant’s Beneficiary on the first business day of the month following the
month in which the Participant died.

ARTICLE VI

PAYEE DESIGNATIONS AND LIMITATIONS

     6.1 Beneficiaries. If a Participant elects to have his benefit paid in the form of a
joint and survivor annuity or a ten-year certain and continuous annuity, he shall designate any
person as Beneficiary to whom the survivor benefits under such payment form shall be paid upon his
death. The Participant shall make this designation on the Beneficiary Designation in the manner
prescribed by the Administrator. A Participant may change his Beneficiary at any time prior to
commencing payment of his benefit.

     6.2 Payments to Minors. In the event any amount is payable under the SERP to a minor,
payment shall not be made to the minor, but instead be paid (a) to that person’s living parent(s)
to act as custodian, (b) if that person’s parents are then divorced, and one parent is the sole
custodial parent, to such custodial parent, to act as custodian, or (c) if no parent of that person
is then living, to a custodian selected by the Administrator to hold the funds for the minor under
the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor
resides. If no parent is living and the Administrators decides not to select another custodian to
hold the funds for the minor, then payment shall be made to the duly appointed and currently acting
guardian of the estate for the minor or, if no guardian of the estate for the minor

8

 

is duly appointed and currently acting within sixty (60) days after the date the amount
becomes payable, payment shall be deposited with the court having jurisdiction over the estate of
the minor.

     6.3 Payments on Behalf of Persons Under Incapacity. In the event that any amount
becomes payable under the SERP to a person who, in the sole judgment of the Administrator, is
considered by reason of physical or mental condition to be unable to give a valid receipt
therefore, the Administrator may direct that such payment be made to any person found by the
Administrator, in its sole judgment, to have assumed the care of such person. Any payment made
pursuant to such determination shall constitute a full release and discharge of any and all
liability of the Administrator and the Employer under the SERP.

     6.4 Inability to Locate Payee. In the event that the Administrator is unable to
locate a Participant or Beneficiary within two years following the scheduled Payment Date, the
amount of the Participant’s benefit shall be forfeited. If, after such forfeiture, the Participant
or Beneficiary later claims such benefit, such benefit shall be reinstated without interest or
earnings.

ARTICLE VII

ADMINISTRATION

     7.1 Committee. The SERP shall be administered by a Committee appointed by the Board,
which shall have the exclusive right and full discretion:

	 	(a)	 	To appoint an Administrator;
	 
	 	(b)	 	To appoint agents to act on its behalf;
	 
	 	(c)	 	To interpret the SERP;
	 
	 	(d)	 	To decide any and all matters arising hereunder (including the right to remedy
possible ambiguities, inconsistencies, or admissions);
	 
	 	(e)	 	To make, amend and rescind such rules as it deems necessary for the proper
administration of the SERP; and
	 
	 	(f)	 	To make all other determinations and resolve all questions of fact necessary or
advisable for the administration of the SERP, including determinations regarding
eligibility for benefits payable under the SERP.

     All interpretations of the Committee with respect to any matter hereunder shall be final,
conclusive and binding on all persons affected thereby in good faith. A decision by one member of
the Committee shall not be final, conclusive and binding unless a majority of the Committee
ratifies such decision. No member of the Committee or agent thereof shall be liable for any
determination, decision, or action made in good faith with respect to the SERP. The Employer will
indemnify and hold harmless the members of the Committee and its agents from and against any and
all liabilities, costs, and expenses incurred by such persons as a result of any act, or omission,
in connection with the performance of such persons’ duties, responsibilities, and

9

 

obligations under the SERP, other than such liabilities, costs, and expenses as may result
from the bad faith, willful misconduct, or criminal acts of such persons.

     7.2 Claims Procedure. Any Participant, former Participant or Beneficiary, or their
authorized representative, (the “Claimant”) may file a written claim with the Administrator setting
forth the nature of the benefit claimed, the amount thereof, and the basis for claiming entitlement
to such benefit. The Administrator shall determine the validity of the claim and communicate a
decision to the Claimant promptly and, in any event, not later than ninety (90) days after the date
of the claim. If additional time is needed for the Administrator to decide the claim, including
requesting information from the Claimant, the Administrator shall be afforded an additional ninety
(90) days provided that the Claimant is notified of the extension within the first ninety (90) day
period. Every claim for benefits which is denied shall be denied by written notice setting forth
in a manner calculated to be understood by the Claimant the following information:

	 	(a)	 	Specific reason or reasons for the denial;
	 
	 	(b)	 	Specific reference to any provisions of the SERP on which the denial is based;
	 
	 	(c)	 	Description of any additional material or information that is necessary to
perfect the claim; and
	 
	 	(d)	 	An explanation of the SERP’s appeal procedures and the right to bring a civil
action under Section 502(a) of ERISA following a denial of an appeal.

     7.3 Review Procedures. Within sixty (60) days after the receipt of a denial on a
claim, a Claimant may file a written request for review of such denial. Such review shall be
undertaken by the Committee and shall be a full and fair review. The Claimant shall have the right
to review all pertinent documents. The Committee shall issue a decision not later than sixty (60)
days after receipt of a request for review from a Claimant unless special circumstances, such as
the need to hold a hearing, require a longer period of time, in which case a decision shall be
rendered as soon as possible but not later than one hundred twenty (120) days after receipt of the
Claimant’s request for review. The decision on review shall be in writing and shall include the
following information:

	 	(a)	 	Specific reason or reasons for the denial;
	 
	 	(b)	 	Specific reference to any provisions of the SERP on which the denial is based;
	 
	 	(c)	 	A statement that the Claimant is entitled to receive, upon request and without
charge, reasonable access to, and copies of, all documents, records and other
information in the SERP’s files which is relevant to the Claimant’s claim; and
	 
	 	(d)	 	A statement that the Claimant has the right to bring a civil action under
Section 502(a) of ERISA following a denial of an appeal.

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ARTICLE VIII

MISCELLANEOUS

     8.1 Amendment or Termination of SERP. The Board of Directors of the Company (or a
committee of the Board authorized to amend and terminate the SERP) may, at any time, direct the
Committee to amend or terminate the SERP, except that no such amendment or termination may reduce a
Participant’s accrued benefit. If the SERP is terminated, no further benefits shall accrue and all
accrued benefits shall be fully vested and shall be paid in accordance with the provisions of the
SERP and Participants’ Distribution Elections, if any. Following a Change in Control, no provision
of the SERP may be changed, amended, modified, deleted, waived or discharged unless such provision
is specifically approved in writing by each Participant then covered by the SERP.

     8.2 Unsecured General Creditor. The benefits paid under the SERP shall be paid from
the general funds of the Employer to the extent not paid from a trust, and the Participant and any
Beneficiary or their heirs or successors shall be no more than unsecured general creditors of the
Employer with no special or prior right to any assets of the Company for payment of any obligations
hereunder. It is the intention of the Company that the SERP be unfunded for purposes of ERISA and
the Code.

     8.3 Trust. The Employer shall be responsible for the payment of all benefits under the
SERP. At its discretion, the Employer may establish one or more grantor trusts for the purpose of
providing for payment of benefits under the SERP. Such trusts shall be irrevocable, but the assets
thereof shall be subject to the claims of the Employer’s creditors. Benefits paid to the
Participant from any such trust shall be considered paid by the Employer for purposes of meeting
the obligations of the Employer under the SERP.

     8.4 Restriction Against Assignment. The Employer shall pay all amounts payable
hereunder only to the person or persons designated by the SERP and not to any other person or
entity. No part of a Participant’s benefit shall be liable for the debts, contracts, or
engagements of any Participant, Beneficiary, or their successors in interest, nor shall a
Participant’s benefit be subject to execution by levy, attachment, or garnishment or by any other
legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate,
sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any
manner whatsoever. No part of a Participant’s benefit shall be subject to any right of offset
against or reduction for any amount payable by the Participant or Beneficiary, whether to the
Employer or any other party, under any arrangement other than under the terms of the SERP.

     8.5 Withholding. The Participant shall make appropriate arrangements with the Employer
for satisfaction of any federal, state or local income tax withholding requirements, Social
Security and other employee tax or other requirements applicable to the granting, crediting,
vesting or payment of benefits under the SERP. There shall be deducted from each payment made
under the SERP or any other compensation payable to the Participant (or Beneficiary) all taxes
which are required to be withheld by the Employer in respect to such payment or the SERP. The
Employer shall have the right to reduce any payment (or other compensation) by the amount of cash
sufficient to provide the amount of said taxes.

11

 

     8.6 Receipt or Release. Any payment made in good faith to a Participant or the
Participant’s Beneficiary shall, to the extent thereof, be in full satisfaction of all claims
against the Committee, its members and the Employer. The Committee may require such Participant or
Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such
effect.

     8.7 Errors in Distributions. In the event of an error in a distribution, the over or
under payment shall be corrected by payment to or collection from the Participant consistent with
any correction procedures established under Section 409A, as soon as possible after the discovery
of such error. In the event of an overpayment, the Employer may, at its discretion, offset other
amounts payable to the Participant from the Employer (including but not limited to salary, bonuses,
expense reimbursements, severance benefits or other employee compensation benefit arrangements, as
allowed by law and subject to compliance with Section 409A) to recoup the amount of such
overpayment.

     8.8 Employment Not Guaranteed. Nothing contained in the SERP nor any action taken
hereunder shall be construed as a contract of employment or as giving any Participant any right to
continue the provision of services in any capacity whatsoever to the Employer.

     8.9 Successors of the Company. The rights and obligations of the Employer under the
SERP shall inure to the benefit of, and shall be binding upon, the successors and assigns of the
Company.

     8.10 Notice. Any notice or filing required or permitted to be given to the Employer
or the Participant under this Agreement shall be sufficient if in writing and hand-delivered, or
sent by registered or certified mail, in the case of the Employer, to the principal office of the
Employer, directed to the attention of the Committee, and in the case of the Participant, to the
last known address of the Participant indicated on the employment records of the Employer. Such
notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the
date shown on the postmark on the receipt for registration or certification. Notices to the
Employer may be permitted by electronic communication according to specifications established by
the Committee.

     8.11 Headings. Headings and subheadings in the SERP are inserted for convenience of
reference only and are not to be considered in the construction of the provisions hereof.

     8.12 Gender, Singular and Plural. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may
require. As the context may require, the singular may be read as the plural and the plural as the
singular.

     8.13 Governing Law. The SERP is intended to be an unfunded plan maintained primarily
to provide deferred compensation benefits for a select group of “management or highly compensated
employees” within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be exempt from
Parts 2, 3 and 4 of Title I of ERISA. In the event any provision of, or legal issue relating to,
the SERP is not fully preempted by federal law, such issue or provision

12

 

shall be governed by the laws of The Commonwealth of Massachusetts without reference to
conflicts in law principles.

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APPENDIX A

Participating Employers

	 	•	 	The Talbots Group, Limited Partnership
	 
	 	•	 	The Talbots, Inc.
	 
	 	•	 	The Talbots Import, LLC
	 
	 	•	 	The Talbots Classics National Bank
	 
	 	•	 	The Talbots Classics Finance Company
	 
	 	•	 	J. Jill, LLC

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