<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
THE TALBOTS INC.
(Name of Registrant as Specified In Its Charter)
THE TALBOTS INC.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[TALBOTS LOGO]
April 17, 1997
ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1997
Dear Shareholder:
It is a pleasure for us to extend to you a cordial invitation to attend the
1997 Annual Meeting of Shareholders of The Talbots, Inc. to be held at 10:00
a.m. on May 22, 1997 at The First National Bank of Boston, first floor
auditorium, 100 Federal Street, Boston, Massachusetts. The Notice of the Annual
Meeting, Proxy Statement and form of proxy are enclosed with this letter.
Your vote at the Annual Meeting is important to Talbots and we ask you to
complete, sign and return the enclosed proxy. Please mark the appropriate box on
the proxy card if you plan to attend.
We look forward to seeing you at the Annual Meeting.
Sincerely,
/s/ ARNOLD B. ZETCHER
ARNOLD B. ZETCHER
President and Chief
Executive Officer
<PAGE> 3
THE TALBOTS, INC.
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1997
------------------------
To Talbots Shareholders:
The Annual Meeting of Shareholders of The Talbots, Inc., a Delaware
corporation, will be held at The First National Bank of Boston, 100 Federal
Street, Boston, Massachusetts, on Thursday, May 22, 1997, at 10:00 a.m. (the
"Annual Meeting"), for the following purposes:
1. To elect eight directors for the ensuing year.
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the 1997 fiscal year.
3. To act upon such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
Shareholders of record at the close of business on April 3, 1997 are
entitled to notice of and to vote at the Annual Meeting or at any postponement
or adjournment thereof.
By order of the Board of Directors,
RICHARD T. O'CONNELL, JR.
Secretary
April 17, 1997
YOUR VOTE IS IMPORTANT. TO ASSURE YOUR REPRESENTATION AT THE ANNUAL
MEETING, PLEASE COMPLETE THE ENCLOSED PROXY AND RETURN IT PROMPTLY, WHETHER OR
NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
<PAGE> 4
THE TALBOTS, INC.
175 BEAL STREET
HINGHAM, MASSACHUSETTS 02043
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1997
PROXY STATEMENT
This Proxy Statement is being furnished to the shareholders of The Talbots,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders of the Company to be held on Thursday, May 22,
1997, at 10:00 a.m., at The First National Bank of Boston, 100 Federal Street,
Boston, Massachusetts and at any and all postponements or adjournments thereof
(the "Annual Meeting"). At the Annual Meeting, shareholders of the Company are
being asked to consider and vote on (1) the election of eight directors, and (2)
the ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the 1997 fiscal year.
This Proxy Statement, Notice of the Annual Meeting and accompanying proxy
are first being mailed to shareholders on or about April 23, 1997.
GENERAL
The holders of shares of common stock of the Company of record at the close
of business on April 3, 1997 are entitled to vote such shares at the Annual
Meeting. On April 3, 1997, there were outstanding 32,917,757 shares of common
stock. The presence in person or by proxy of the holders of a majority of the
shares outstanding on the record date is necessary to constitute a quorum for
the transaction of business.
Each shareholder is entitled to one vote, in person or by proxy, for each
share of common stock held as of the record date on each matter to be voted on
at the Annual Meeting. Directors are elected by the affirmative vote of a
plurality of the votes cast at the Annual Meeting.
Abstentions and broker non-votes will be included in determining the number
of shares present or represented at the Annual Meeting for purposes of
determining whether a quorum exists. In determining whether a proposal submitted
to shareholders has received the requisite votes for approval, abstentions would
be counted and would have the same effect as a vote against the proposal, and
broker non-votes would not be counted and would have no effect on the outcome of
that vote. However, neither abstentions nor broker non-votes are counted as
votes cast in connection with determining the plurality required to elect
directors and have no effect on the outcome of that vote.
Shares of common stock represented by a proxy received in time for the
Annual Meeting and properly executed will be voted as specified in the proxy,
unless the proxy has previously been revoked. Unless contrary instructions are
given in the proxy, it will be voted by the persons designated in the proxy for
the election of the Board of Directors' nominees for director for the ensuing
year, for ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the 1997 fiscal year and, with respect to any
other matters properly submitted to shareholders at the Annual Meeting, as
recommended by the Board of Directors or, if no such recommendation is given, in
their discretion.
A proxy may be revoked by filing with the Secretary of the Company, prior
to the exercise of the proxy, either a written revocation of that proxy or a new
proxy bearing a later date. A proxy may also be revoked by
1
<PAGE> 5
filing a written notice of revocation with the Secretary of the Company at the
meeting prior to voting the proxy. Attendance at the Annual Meeting will not in
itself constitute revocation of a proxy.
This proxy solicitation is being made by the Company and the expense of
preparing, printing and mailing this Proxy Statement and proxy is being paid by
the Company. In addition to use of the mails, proxies may be solicited
personally or by telephone by regular employees of the Company without
additional compensation. The Company will reimburse banks, brokers and other
custodians, nominees and fiduciaries for their costs in sending proxy materials
to the beneficial owners of common stock.
More than a majority of the outstanding shares of common stock of the
Company is owned by JUSCO (U.S.A.), Inc., a Delaware corporation ("JUSCO USA"),
which is a wholly owned subsidiary of JUSCO Co., Ltd., a Japanese retail
conglomerate ("JUSCO"). JUSCO USA has advised the Company that it intends to
vote all such shares for the election of the nominees for director named in this
Proxy Statement and for ratification of the appointment of Deloitte & Touche LLP
as the Company's independent auditors for the 1997 fiscal year, thereby assuring
election of such nominees for director and the ratification of the appointment
of the independent auditors, without the affirmative vote of any other shares of
common stock.
ITEM 1
ELECTION OF DIRECTORS
General. Directors will hold office until the next Annual Meeting and
until their successors are chosen and qualified, or until their earlier
resignation or removal. The Company has inquired of each nominee and determined
that each will serve if elected. In the event that any of the nominees should
become unavailable for election, the persons named in the accompanying proxy
intend to vote for such other person, if any, as the Board of Directors may
designate as a substitute nominee.
All nominees are current directors of the Company. Set forth below is a
brief description of the background of each nominee for director. The Board of
Directors recommends that shareholders vote "FOR" such nominees for director.
TAKUYA OKADA Director since 1988
Mr. Takuya Okada, age 71, has been Chairman of the Board of Directors of
the Company since 1988 and the President and a Director of JUSCO USA since 1988.
Mr. Okada has served as a Representative Director and Chairman of the Board of
Directors and Chief Executive Officer of JUSCO, the Japanese parent corporation
of JUSCO USA, since 1984, and as a Managing Director of JUSCO (Europe) B.V.
since 1988. Mr. Okada is also a member of the Board of Directors of various
other affiliates of JUSCO. Mr. Takuya Okada is the father of Mr. Motoya Okada, a
Director of the Company.
ARNOLD B. ZETCHER Director since 1988
Mr. Zetcher, age 56, joined the Company as President in 1987. He has been
President, Chief Executive Officer and a Director of the Company since 1988. Mr.
Zetcher was Chairman and Chief Executive Officer of John Breuner Company, a home
furnishings division of BATUS in San Francisco, California, and prior to that,
Chairman and Chief Executive Officer of Kohl's Food Stores, another BATUS
division, in Wisconsin and Illinois. Mr. Zetcher also served as Chairman and
Chief Executive Officer of Bonwit Teller in New York and served in various
capacities during his 10 years with Federated Department Stores.
2
<PAGE> 6
EIJI AKIYAMA Director since 1993
Mr. Akiyama, age 64, was elected a Director of the Company in November
1993. Mr. Akiyama has served as a Director of JUSCO USA since 1989. Mr. Akiyama
served as a Director and Executive Vice President of JUSCO from 1989, when he
joined JUSCO, to May 1995, when Mr. Akiyama became Executive Vice Chairman of
JUSCO. Prior to 1989, Mr. Akiyama worked for The Dai-Ichi Kangyo Bank, Limited,
where he was a Director from 1985 to 1988, and a Managing Director from 1988 to
1989.
CLARK J. HINKLEY Director since 1988
Mr. Hinkley, age 55, has been Executive Vice President and a Director since
1988 and Executive Vice President and Chief Operating Officer since 1993. He
joined the Company in 1987 as Vice President, General Merchandise Manager. From
1984 until 1987, he was Vice President, General Merchandise Manager, Women's
Apparel at Dayton Hudson Department Store in Minneapolis, Minnesota. From 1979
to 1984, he was Vice President, General Merchandise Manager, Women's Apparel and
Accessories at J.L. Hudson in Detroit, Michigan and served in various other
capacities at J.L. Hudson between 1963 and 1979.
MASAHARU ISOGAI Director since 1993
Mr. Isogai, age 57, was elected a Director of the Company in November 1993.
Mr. Isogai, who currently serves as a Senior Advisor to the Company and to JUSCO
USA, served as Executive Vice President and General Manager of JUSCO USA from
1989 to 1996 and as a Director of JUSCO from 1992 to 1996. Since 1994, Mr.
Isogai has served as Chairman of the Board of Revman Industries Inc., a home
furnishings company which is a subsidiary of JUSCO USA. From 1988 to 1989, he
was the Chief Representative of JUSCO in the United States.
ELIZABETH T. KENNAN Director since 1993
Ms. Kennan, age 59, was elected a Director of the Company in November 1993.
Ms. Kennan served as President of Mount Holyoke College from 1978 to 1995, at
which time she became President Emeritus, and served as President of Five
Colleges Incorporated from 1985 to 1994. Ms. Kennan also serves as a Director of
The Putnam Funds, Kentucky Home Mutual Life Insurance Company, Kentucky Home
Life Insurance Company, NYNEX Corporation and Northeast Utilities. Ms. Kennan is
Chairperson of the Company's Audit Committee and a member of the Company's
Compensation Committee.
MOTOYA OKADA Director since 1993
Mr. Motoya Okada, age 45, was elected a Director of the Company in November
1993. Mr. Okada has served as a Director of JUSCO USA since 1992. Since May
1995, Mr. Okada has served as Senior Managing Director of JUSCO. Mr. Okada
served as Managing Director of JUSCO from 1992 to May 1995 and a Director of
JUSCO from 1990 to 1992. Mr. Okada has been President of Talbots Japan Co.,
Ltd., a subsidiary of JUSCO, since 1990. Mr. Motoya Okada is the son of Mr.
Takuya Okada, the Chairman of the Board of Directors of the Company.
MARK H. WILLES Director since 1988
Mr. Willes, age 55, has been a Director of the Company since 1988. Since
June 1995, Mr. Willes has served as President and Chief Executive Officer and a
Director of The Times Mirror Company, and effective January 1996 was
additionally elected Chairman of the Board of The Times Mirror Company. From
1992 to June 1995, Mr. Willes was Vice Chairman of General Mills, Inc. Mr.
Willes served as President of General Mills from 1985 to 1992, and as Executive
Vice President and Chief Financial Officer of General Mills from 1980 to 1985.
Mr. Willes also serves as a Director of Black & Decker Corporation and Ryder
System, Inc. Mr.
3
<PAGE> 7
Willes is Chairperson of the Company's Compensation Committee and a member of
the Company's Audit Committee.
Director Compensation; Attendance; Committees. The Chairman of the Board
of Directors receives an annual retainer of $50,000 plus expenses and each other
director who is not a part of the Company's management or otherwise compensated
as a consultant or advisor to the Company receives an annual retainer of $23,000
plus expenses. Committee chairpersons receive an additional annual retainer of
$5,000. Pursuant to the 1995 Directors Stock Option Plan, each director who is
not an employee of the Company is entitled to receive annually upon election or
reelection to the Board of Directors an option to purchase between 3,000 and
5,000 shares of the Company's common stock at an exercise price equal to the
fair market value of the common stock as of the date of grant.
The Board of Directors held four meetings in fiscal 1996. The Audit
Committee and the Compensation Committee each held two meetings in fiscal 1996.
There is no standing nominating committee. No director attended fewer than 75%
of the meetings of the Board of Directors and of the Committees of which he or
she was a member. Mr. Willes and Ms. Kennan are the current members of both the
Audit Committee and the Compensation Committee.
Audit Committee. The Audit Committee functions as a communication point
among non-Audit Committee directors, the independent auditors, the internal
audit personnel and the Company's management as their respective duties relate
to financial accounting, reporting and internal controls. The Audit Committee
assists the Board of Directors in fulfilling its responsibilities with respect
to accounting policies, internal controls, financial and operating controls,
standards of corporate conduct and performance, and reporting practices of the
Company and the sufficiency of auditing. Ms. Kennan is Chairperson of the Audit
Committee.
Compensation Committee. The principal responsibilities of the Compensation
Committee include determination and administration of compensation for the
senior officers of the Company including salary and incentive based plans,
determination of awards under and administration of the Company's 1993 Executive
Stock Based Incentive Plan, and ongoing review, in consultation with Company
executive management, the Board of Directors, and outside compensation
consultants as necessary, of the policies relating to compensation of the
Company's senior officers, with the goal of encouraging superior Company
performance. Mr. Willes is Chairperson of the Compensation Committee.
4
<PAGE> 8
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth information on
compensation earned in fiscal years 1996, 1995 and 1994 by the Company's Chief
Executive Officer and the four other most highly compensated executive officers
of the Company (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------
AWARDS(1)
-------------
ANNUAL COMPENSATION NUMBER OF
--------------------------------- SECURITIES ALL OTHER
FISCAL UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS# ($)(2)
------------------------------------ ------ --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Arnold B. Zetcher, President and 1996 697,500 461,100 100,000 41,487
Chief Executive Officer 1995 637,500 540,000 100,000 38,685
1994 637,500 502,000 100,000 67,835
Clark J. Hinkley, Executive Vice 1996 445,000 165,900 50,000 24,032
President and Chief Operating 1995 419,650 208,000 50,000 24,726
Officer 1994 381,500 257,500 50,000 39,752
Edward L. Larsen, Senior Vice 1996 265,848 97,600 23,000 15,905
President, Finance, Treasurer and 1995 250,800 115,462 23,000 15,809
Chief Financial Officer 1994 234,360 127,433 23,000 18,974
Stuart M. Stolper, Senior Vice 1996 254,824 93,600 23,000 16,461
President, Human Resources 1995 240,400 110,674 23,000 15,340
1994 224,640 122,148 23,000 21,532
Richard T. O'Connell, Jr., Senior 1996 217,210 79,800 23,000 4,500
Vice President, Legal and Real 1995 203,000 93,456 23,000 4,500
Estate, and Secretary 1994 187,920 102,182 23,000 18,864
</TABLE>
- ---------------
(1) In addition to the above listed options, restricted stock awards were made
on November 18, 1993, the date of the Company's Initial Public Offering
("IPO"). Restricted stock awards vest in thirds in years three, four and
five on the anniversary of the grant date. Holders of restricted stock are
entitled to receive all declared dividends. The number and value of the
restricted stock holdings at the end of fiscal 1996 for each of the Named
Executive Officers is: Mr. Zetcher, 30,300 shares, $855,672; Mr. Hinkley,
13,727 shares, $387,650; Mr. Larsen, 6,760 shares, $190,902; Mr. Stolper,
6,760 shares, $190,902; and Mr. O'Connell, 6,760 shares, $190,902. These
values are calculated by multiplying the total number of restricted shares
by the closing price of the Company's common stock on the last trading day
of fiscal 1996, $28.25, net of consideration of $0.01 per share paid by each
Named Executive Officer.
(2) The amounts shown for each employee represent Company contributions to the
Retirement Savings Voluntary Plan and the Supplemental Savings Plan.
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<PAGE> 9
Option/SAR Grants in Last Fiscal Year. The table below shows information
regarding grants of stock options made to the Named Executive Officers during
fiscal 1996, all of which were made under the Company's 1993 Executive Stock
Based Incentive Plan. The amounts shown for each of the Named Executive Officers
as potential realizable values are based on arbitrarily assumed annualized rates
of stock price appreciation of five percent and ten percent over the full ten
year term of the options, which would result in common stock prices of
approximately $46.42 and $73.92, respectively. These potential realizable values
are based solely on arbitrarily assumed rates of appreciation specified in
applicable regulations promulgated by the Securities and Exchange Commission
(the "SEC"). Actual gains, if any, on option exercises and common stock holdings
are dependent on the future performance of the Company's common stock and
overall stock market conditions. There can be no assurance that the potential
realizable values shown in this table will be achieved. No stock appreciation
rights ("SARs") have been granted or are outstanding.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS/SARS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM($)(2)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH)(2) DATE 5% 10%
- ----------------------- ------------ ------------ ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Arnold B. Zetcher 100,000 20.7 28.50 11/1/06 1,792,350 4,542,166
Clark J. Hinkley 50,000 10.3 28.50 11/1/06 896,175 2,271,083
Edward L. Larsen 23,000 4.8 28.50 11/1/06 412,240 1,044,698
Stuart M. Stolper 23,000 4.8 28.50 11/1/06 412,240 1,044,698
Richard T. O'Connell, Jr. 23,000 4.8 28.50 11/1/06 412,240 1,044,698
</TABLE>
- ---------------
(1) Options become exercisable in one-third increments on November 1, 1997,
November 1, 1998 and November 1, 1999.
(2) Options were granted on November 1, 1996. The exercise price of the options
was determined based on the closing price of the Company's common stock of
$28.50 per share on the grant date as reported by the New York Stock
Exchange.
Option Exercises And Year-End Option Holdings. The following table shows
information regarding option exercises during fiscal 1996 as well as fiscal 1996
year-end option holdings for each of the Named Executive Officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES VALUE UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON REALIZED OPTIONS/SARS AT FY-END(#) OPTIONS/SARS AT FY-END($)(1)
NAME EXERCISE(#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------------- ----------- -------- ------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Arnold B. Zetcher -- -- 235,897/200,001 1,189,108/0
Clark J. Hinkley -- -- 111,557/100,001 538,633/0
Edward L. Larsen -- -- 53,323/46,001 265,335/0
Stuart M. Stolper -- -- 53,323/46,001 265,335/0
Richard T. O'Connell, Jr. -- -- 53,323/46,001 265,335/0
</TABLE>
- ---------------
(1) The value of unexercised, in-the-money options at fiscal year end is the
difference between the exercise price and the fair market value of the
underlying stock on the last trading day of the fiscal year 1996. The fair
market value of the Company's common stock on the last trading day of fiscal
year 1996 was $28.25 per share. The values in the column "Value of
Unexercised In-the-Money Options/SARs at Fiscal Year-
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<PAGE> 10
End" have not been and may never be realized and actual gains, if any, on
exercise will depend upon the value of the underlying common stock on the
date of exercise.
Retirement Benefits. The Company has a tax-qualified defined benefit plan
for salaried employees which provides pensions payable at retirement to each
eligible employee. The Company also has a supplemental retirement plan for
certain of its salaried employees which provides generally for the payment of
supplemental benefits equal to that portion of pension benefits earned under the
terms of the pension plan for salaried employees in excess of certain statutory
limits. The amount of an employee's benefits depends on factors including
average final compensation and years of credited service up to thirty years.
Benefits vest after five years of service. The following table sets forth the
aggregate estimated annual retirement benefits as of February 1, 1997 provided
under the two plans.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
------------------------------------------------------------------------------------------------------------------
REMUNERATION 5 10 15 20 25 30 35
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 125,000 9,380 18,759 28,139 37,518 46,898 56,277 56,277
150,000 11,380 22,759 34,139 45,518 56,898 68,277 68,277
175,000 13,380 26,759 40,139 53,518 66,898 80,277 80,277
200,000 15,380 30,759 46,139 61,518 76,898 92,277 92,277
225,000 17,380 34,759 52,139 69,518 86,898 104,277 104,277
250,000 19,380 38,759 58,139 77,518 98,898 116,277 116,277
300,000 23,380 46,759 70,139 93,518 116,898 140,277 140,277
350,000 27,380 54,759 82,139 109,518 136,898 164,277 164,277
400,000 31,380 62,759 94,139 125,518 156,898 188,277 188,277
450,000 35,380 70,759 106,139 141,518 176,898 212,277 212,277
500,000 39,380 78,759 118,139 157,518 196,898 236,277 236,277
550,000 43,380 86,759 130,139 173,518 216,898 260,277 260,277
600,000 47,380 94,759 142,139 189,518 236,896 284,277 284,277
650,000 51,380 102,759 154,139 205,518 256,898 308,277 308,277
700,000 55,380 110,759 166,139 221,518 276,898 332,277 332,277
750,000 59,380 118,759 178,139 237,518 296,898 356,277 356,277
800,000 63,380 126,759 190,139 253,518 316,898 380,277 380,277
850,000 67,380 134,759 202,139 269,518 336,898 404,277 404,277
900,000 71,380 142,759 214,139 285,518 356,898 428,277 428,277
950,000 75,380 150,759 226,139 301,518 376,898 452,277 452,277
1,000,000 79,380 158,759 238,139 317,518 396,898 476,277 476,277
1,050,000 83,380 166,759 250,139 333,518 416,898 500,277 500,277
1,100,000 87,380 174,759 262,139 349,518 436,898 524,277 524,277
1,150,000 91,380 182,759 274,139 365,518 456,898 548,277 548,277
1,200,000 95,380 190,759 286,139 381,518 476,898 572,277 572,277
1,250,000 99,380 198,759 298,139 397,518 496,898 596,277 596,277
</TABLE>
The years of credited service under the two plans at February 1, 1997 for
Messrs. Zetcher, Hinkley, Larsen, Stolper and O'Connell were 9, 9, 6, 19 and 10,
respectively. Covered compensation under the pension plan and the supplemental
retirement plan at February 1, 1997 for Messrs. Zetcher, Hinkley, Larsen,
Stolper and O'Connell was $1,082,456, $612,685, $364,265, $337,773, and
$265,231, respectively. Covered compensation under the two plans includes salary
and bonus and any amounts deferred under any formal plan of deferred
compensation sponsored by the Company but excludes other forms of compensation
included in the
7
<PAGE> 11
Summary Compensation Table. Benefits set forth in the Pension Plan Table are
computed on the basis of a straight life annuity, payable at age 65, and are
subject to deduction for any benefits paid or payable from a predecessor pension
plan but are not subject to deduction for social security.
Employment Agreements and Change in Control Agreements. The Company has
employment agreements with each of Mr. Zetcher and Mr. Hinkley (the
"Executives") which continue until the end of fiscal 1999. At the beginning of
fiscal 2000 and at the beginning of the fiscal year each three years thereafter,
each agreement will automatically be extended for three additional years unless
at least six months prior to such date either party gives notice that such
agreement will not be extended. The Executive may not directly or indirectly
engage in or carry on any business in competition with the principal business of
the Company for a period of two years after the termination of his employment
with the Company if such termination was made by such Executive without good
reason or by the Company for cause.
Mr. Zetcher's agreement provides for his employment as President and Chief
Executive Officer of the Company at a base salary, to be reviewed annually, of
not less than his 1993 base salary. Mr. Hinkley's agreement provides for his
employment as Executive Vice President of the Company at a base salary, to be
reviewed annually, of not less than his 1993 base salary. Each Executive is also
eligible to receive a cash bonus each year pursuant to the Company's Management
Incentive Plan ("MIP") and is entitled to certain insurance, retirement and
other benefits and to reimbursement of certain expenses.
If the employment of an Executive is terminated by the Company without
cause or by the Executive for good reason, the Executive will be entitled to a
separation allowance in a single lump payment equal to twice the sum of (i) his
annual base salary at the rate in effect at the time his employment was
terminated and (ii) the annual bonus paid or payable to him for the year
immediately prior to the year in which his employment was terminated. In
addition, each Executive would be entitled to benefits under the executive
medical, dental and life insurance plans of the Company for up to two years
subsequent to termination. Each Executive would also have the right to exercise
his unexercised vested stock options for a period of not less than three years
from termination.
In the event there is a "change in control" of the Company, and, within 24
months thereafter, an Executive's employment is terminated either by the Company
without cause or by the Executive for good reason, the Executive will be
entitled to payment of an amount equal to (i) two times in the case of Mr.
Zetcher, and one and one-half times in the case of Mr. Hinkley, the sum of such
Executive's annual base salary (equal to the greater of the rate in effect on
his termination date or 180 days prior thereto) and the maximum bonus payable to
him under the MIP in effect as of the last full fiscal year prior to his
termination date, (ii) the maximum bonus payable to such Executive under the MIP
for the year in which such Executive's employment was terminated, pro rated for
the portion of the year in which such Executive was employed, and (iii) three
times the present value of such Executive's accrued benefits under the Company's
supplemental retirement plan as of the date of termination. Any grant of
restricted stock made to such Executive under the Executive Stock Plan will also
provide for acceleration of vesting upon such Executive's termination of
employment within 24 months after a change in control. Each Executive would also
be entitled to certain insurance and other benefits after termination for up to
two years in the case of Mr. Zetcher and eighteen months in the case of Mr.
Hinkley.
The Company has also entered into a change in control agreement with each
of Messrs. Larsen, Stolper and O'Connell and certain other officers. Under each
agreement, if the Company terminates such officer's employment without cause
within twelve months following a "change in control", the Company will pay to
such officer an amount equal to the sum of (i) such officer's annual base salary
at the rate in effect on the date of termination and (ii) an amount calculated
in accordance with a formula which takes into account such officer's annual base
salary, the job level and performance of such officer, and the financial
performance of the
8
<PAGE> 12
Company. In addition, each officer would be entitled to certain insurance and
other benefits for up to one year after termination.
Report on Compensation of Executive Officers
Compensation matters for the Company's executive officers for fiscal 1996
were reviewed and approved by the Compensation Committee of the Board of
Directors.
The overall objective of the Company's executive compensation program is to
attract and retain the highest quality executives to manage and lead the
Company, and to provide annual and long term incentives to management, based on
both Company performance and individual performance, in order to build and
sustain value for shareholders.
The Company's compensation program for its executive officers consists of
three basic components: base salary, annual incentive compensation, and stock
based compensation.
In order to assess the general competitiveness of its overall pay structure
for senior management, at regular intervals the Company obtains published
surveys of compensation practices of the retail industry from independent
compensation consultants and trade group publications. From this published data
the Company compares positions of a similar size, scope and complexity. The
companies included in such published surveys of the general retail industry
include both apparel and nonapparel companies (the "retail survey group"), and
are a broader range and not necessarily the same retail companies as included in
the Peer Group index of selected retail apparel companies set forth in the
Performance Graph below.
Base Salary. Base salary ranges for fiscal 1996 for the Company's
executive officers including the Chief Executive Officer were targeted to be
approximately at or near the 50th percentile range of base pay of the retail
survey group for positions of similar size, scope and complexity.
Base pay for fiscal 1996 for the Company's executive officers other than
the Chief Executive Officer was initially established by the Chief Executive
Officer, subject to review and ratification by the Compensation Committee, based
on his evaluation and assessment of each individual's level of responsibility
and performance over the previous year. The Chief Executive Officer's base pay
for fiscal 1996 was established by the Compensation Committee by reference to
general economic and industry conditions, relative Company performance and his
individual 1996 performance in leading the Company as assessed and evaluated by
the Compensation Committee. All of these factors were equally weighted, except
for general economic conditions which had a lesser weighting. The evaluation and
assessment of the Chief Executive Officer's individual 1996 performance, which
by its nature was subjective, took into account the Company's 1996 earnings and
financial results, the Company's ongoing geographical expansion of stores and
selling space, the continuing development of new business concepts, and the
performance of the Company's catalog operations.
Management Incentive Plan. The Company believes that a substantial
percentage of each executive officer's compensation should be tied directly to
the financial performance of the Company as well as the executive's individual
performance. Annual incentive compensation for fiscal 1996 for executive
officers including the Chief Executive Officer was determined pursuant to the
Company's MIP. Cash incentive awards under the MIP are made annually to those
management employees who are in certain established position levels within the
Company including all executive officers.
Awards granted pursuant to the MIP are based on the following factors: a
Company financial performance rating and an individual performance rating. For
fiscal 1996 the Company performance rating was based on the Company's earnings
per share in relation to a preestablished earnings per share target. The
individual performance rating was based on a subjective evaluation and
assessment of each individual's performance during the year measured against his
or her responsibilities for the year.
9
<PAGE> 13
For fiscal 1996, Company performance ratings against the preestablished
earnings goal ranged from zero to 1.8 and individual performance ratings ranged
from zero to 1.5. These ratings were combined with the participant's target
incentive participation rate (which is a percentage of base salary based on
position level and for fiscal 1996 ranged from 20% for certain officers up to
45% for the Chief Executive Officer position). The weights assigned were 50% for
Company performance ratings and 50% for individual performance ratings.
For fiscal 1996 MIP awards, the Company's performance rating against the
earnings per share goal, which was internally established for MIP purposes, was
1.13. The Chief Executive Officer made recommendations to the Compensation
Committee on the individual performance ratings for all executive officers other
than himself. The Compensation Committee then reviewed and finally approved the
fiscal 1996 individual performance ratings for all executive officers including
the Chief Executive Officer. Individual performance ratings for the executive
officers named in the Summary Compensation Table averaged 1.26 for fiscal 1996.
Stock Based Compensation. The Board of Directors and the Compensation
Committee are each of the view that stock ownership or its equivalent by
management serves to align the interests of management with the Company's
shareholders.
Stock options are granted at fair market value at the time of grant and are
intended to align executive compensation opportunities with shareholder returns.
Stock options are intended to provide long term compensation, and future grants
of options or other awards will be periodically reviewed and determined by the
Compensation Committee of the Board. Stock options granted during fiscal 1996
were made at levels determined by the Compensation Committee to be at or near
the median for annual stock grants of a group of certain retail companies
considered by the Compensation Committee and its outside compensation
consultant.
Compliance with Internal Revenue Code Section 162(m). Section 162(m) of
the Internal Revenue Code, enacted in 1993, generally disallows a deduction to
publicly traded companies to the extent of excess compensation over $1 million
paid to the chief executive officer or to any of the four other most highly
compensated executive officers. Qualifying performance based compensation will
not be subject to the deduction limit if certain requirements are met. The
Company does not believe that Section 162(m) deduction limits for fiscal 1997
will be material in terms of net financial effect or number of persons covered
and therefore the Company does not intend to restructure fiscal 1997
compensation arrangements. The Company and the Compensation Committee will
continue to monitor this matter.
Compensation Committee
of the Board of Directors:
Mark H. Willes, Chairperson
Elizabeth T. Kennan
10
<PAGE> 14
Performance Graph
The following graph compares the percentage change in the cumulative total
shareholders' return on the Company's common stock on a year end basis, using
the last day of trading prior to the Company's fiscal year end, from November
19, 1993, the first trading day of the Company's common stock, to February 1,
1997 with the cumulative total return on the Standard & Poor's 500 Stock Index
and the Dow Jones Retailers-All Specialty Index for the same period. In
accordance with the rules of the SEC, the returns are indexed to a value of $100
at November 19, 1993 and assume that all dividends were reinvested.
COMPARISON OF YEAR END CUMULATIVE TOTAL RETURN OF TALBOTS,
S&P 500 INDEX, AND DOW JONES RETAILERS-ALL SPECIALTY INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD DOW JONES RETAILERS -
(FISCAL YEAR COVERED) THE TALBOTS, INC. STANDARD & POOR'S 500 ALL SPECIALTY
<S> <C> <C> <C>
11/19/93 100 100 100
1/28/94 107 104 95
1/27/95 137 105 100
2/2/96 126 145 105
1/31/97 128 183 125
</TABLE>
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee of the Board of Directors is comprised of two outside
independent directors, Mark H. Willes and Elizabeth T. Kennan.
Mr. Isogai, a director of the Company, is Chairman of the Board of
Directors of Revman Industries Inc., a subsidiary of JUSCO USA. Mr. Zetcher,
President, Chief Executive Officer and a director of the Company, is also a
director of Revman Industries Inc. The Company has a consulting contract with
Mr. Isogai under which he provides advice with respect to strategic planning and
other related issues concerning the Company and maintains on behalf of the
Company a working relationship with banks and other financial institutions, in
particular Japanese banks. The Company compensates Mr. Isogai with an annual fee
of $250,000 plus
11
<PAGE> 15
expenses for his services, which fee is subject to annual adjustment. The
contract may be terminated by either party upon prior written notice at any time
following the fifth anniversary of the contract.
Certain Transactions With Related Parties. In connection with the
Company's IPO in 1993, the Company, through its wholly owned subsidiary The
Classics Chicago, Inc. ("Classics Chicago"), purchased the Talbots trade name
and certain other trademarks (the "Trademarks") in the "Territory" (being all
countries of the world other than Australia, New Zealand, Japan, China and
certain other Asian countries) from JUSCO (Europe) B.V. ("JUSCO (Europe)"), a
subsidiary of JUSCO. Under the trademark purchase agreement and a license
agreement with Classics Chicago, the Company also obtained the non-exclusive
right to manufacture products bearing the Trademarks outside the Territory for
export to the Territory and, for a royalty equal to 1% of net catalog sales
outside the Territory, to distribute catalogs bearing the Trademarks and to make
catalog sales to customers of the Company outside the Territory. Such catalog
license may be terminated by JUSCO (Europe) at any time with four months prior
written notice. Talbots Japan Co., Ltd. ("Talbots Japan"), a subsidiary of
JUSCO, is the non-exclusive licensee of the Trademarks within Japan and other
countries outside the Territory. Under the trademark purchase agreement, JUSCO
(Europe) retains the right in its discretion to disapprove the assignment by
Classics Chicago of any rights in the Trademarks in the Territory to any party.
Such retained right may be purchased by Classics Chicago at its option should
JUSCO (Europe) attempt to sell or otherwise transfer such retained right to a
third party or should JUSCO (Europe) and its affiliates cease to own a majority
of the Company's voting stock. The purchase price to Classics Chicago of such
retained right will be the lesser of the fair market value of such retained
right on the date of exercise of the option and $2.0 million. Classics Chicago
licenses the right to use the Trademarks to the Company and its other
subsidiaries.
The Company has a services agreement with Talbots Japan under which the
Company renders services, primarily in the merchandising and import operation
areas, as requested by Talbots Japan on a cost reimbursement basis. At February
1, 1997, the amount due from Talbots Japan under this services agreement was
approximately $486,636. In addition, at February 1, 1997, approximately
$4,122,245 was due to the Company from Talbots Japan for merchandise purchases
in the ordinary course. The Company also realizes certain net expenses from time
to time in the ordinary course of its merchandising and sales relationship with
Talbots Japan which are not material in amount. During 1996, the Company also
made its merchandising and store management information systems available to
Talbots Japan. The Company charges back to Talbots Japan all one time and
ongoing costs related to this project. At February 1, 1997, the amount due from
Talbots Japan under this agreement was $344,984.
In February 1995, the Company implemented a stock repurchase program (the
"Repurchase Program") for the purchase of up to one million shares of the
Company's common stock over a two year period. In October 1995 the Company
completed the Repurchase Program and in November 1995, the Company extended the
Repurchase Program for the purchase of up to an additional $40 million of its
common stock over a period of up to an additional two years. Under the
Repurchase Program, the Company repurchases shares in the open market and
purchases a proportionate number of shares from JUSCO USA so as to maintain the
same percentage stock ownership of the Company between JUSCO USA and the public
shareholders. The price of the common stock purchased from JUSCO USA is equal to
the weighted average price of the common stock paid to the public shareholders.
JUSCO USA, the Company and its domestic subsidiaries entered into a tax
allocation agreement at the time of the Company's 1993 IPO to provide for the
allocation of (1) consolidated federal income tax liability and any similar
state or local taxes and (2) all other taxes. Under the agreement, JUSCO USA,
the Company and its domestic subsidiaries would generally share the consolidated
federal income tax liability and liability for similar state and local taxes in
accordance with their election for earnings and profits purposes. In addition,
the tax allocation agreement provides that JUSCO USA, the Company and its
domestic subsidiaries would be
12
<PAGE> 16
separately responsible for taxes other than consolidated federal income taxes
and any similar state and local taxes allocable to it. However, the allocation
would only be applicable as to any year in which JUSCO USA owned at least 80% of
the common stock of the Company and since the date of the 1993 IPO, JUSCO USA
has owned significantly less than 80% of the Company's common stock. See
"Beneficial Ownership of Common Stock."
Concurrently with the Company's 1993 IPO, JUSCO USA entered into a
shareholder's agreement with the Company pursuant to which the Company agreed,
subject to certain limitations, to provide JUSCO USA with one demand
registration right per year, upon exercise of which the Company would be
obligated to register under the Securities Act of 1933, as amended (the
"Securities Act") and applicable state securities law, at the expense of JUSCO
USA, some or all of the Company's common stock beneficially owned by JUSCO USA.
The agreement also provides that if the Company proposes to register shares of
common stock under the Securities Act for its own account, then JUSCO USA has a
right to request that the Company register JUSCO USA's shares of Company common
stock. JUSCO USA will bear the incremental cost of registering its shares in any
such offering. If JUSCO USA's shares of the Company's common stock are not
included in two registrations of shares of common stock by the Company for the
Company's own account due to the judgment of the managing underwriter to exclude
JUSCO USA's shares, the Company will file an additional registration statement
to register JUSCO USA's shares, and expenses incurred in connection with such
additional registration will be paid by the Company. The Company and JUSCO USA
will indemnify each other against certain liabilities under the Securities Act
of 1933 in connection with any such registration statements.
BENEFICIAL OWNERSHIP OF COMMON STOCK
Certain Beneficial Owners. The following table sets forth certain
information as to beneficial ownership of each person known to the Company to
own beneficially more than 5% of the outstanding common stock of the Company as
of March 1, 1997. Such beneficial owner has sole voting and investment power as
to such shares.
<TABLE>
<CAPTION>
BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- ---------------------- ---------------- ----------------
<S> <C> <C>
JUSCO (U.S.A.), Inc. 20,862,599 63.4%
520 Madison Ave.
New York, NY 10022
</TABLE>
Stock Ownership of Directors and Executive Officers. The following table
sets forth certain information as to beneficial ownership of the outstanding
common stock of the Company, as of March 1, 1997, by each director and nominee
of the Company, each of the executive officers listed in the Summary
Compensation Table, and all executive officers and directors of the Company as a
group. Except as otherwise indicated, all persons listed below have sole voting
and investment power with respect to such shares. No director, nominee or
executive officer beneficially owns more than one percent of the total
outstanding common stock, and all directors and executive officers as a group
own approximately 3.7 percent of the total outstanding common stock.
<TABLE>
<CAPTION>
NO. OF SHARES
OF COMMON
NAME OF BENEFICIAL OWNER STOCK(1)(2)
- ------------------------------- -------------
<S> <C>
T. Okada....................... 21,666
A.B. Zetcher................... 300,976
E. Akiyama..................... 3,000
M. Isogai...................... 6,000
</TABLE>
<TABLE>
<CAPTION>
NO. OF SHARES
OF COMMON
NAME OF BENEFICIAL OWNER STOCK(1)(2)
- ------------------------------- -------------
<S> <C>
E.T. Kennan.................... 1,683
M. Okada....................... 3,000
M.H. Willes(3)................. 6,433
C.J. Hinkley................... 140,465
</TABLE>
13
<PAGE> 17
<TABLE>
<CAPTION>
NO. OF SHARES
OF COMMON
NAME OF BENEFICIAL OWNER STOCK(1)(2)
- ------------------------------- -------------
<S> <C>
E.L. Larsen.................... 88,391
R.T. O'Connell, Jr............. 68,130
S.M. Stolper................... 69,028
</TABLE>
<TABLE>
<CAPTION>
NO. OF SHARES
OF COMMON
NAME OF BENEFICIAL OWNER STOCK(1)(2)
- ------------------------------- -------------
<S> <C>
All executive officers and
directors as a group (4)..... 1,208,782
</TABLE>
- ---------------
(1) The shares listed include shares of restricted stock granted, and subject to
forfeiture, under the Company's 1993 Executive Stock Based Incentive Plan,
as follows: Mr. Zetcher, 30,300; Mr. Hinkley, 13,727; Mr. Larsen, 6,760, Mr.
Stolper, 6,760; Mr. O'Connell, 6,760; and all executive officers as a group,
108,973. The listed shares also include shares subject to currently
exercisable stock options as follows: Mr. T. Okada, 1,666; Mr. Zetcher,
235,897; Mr. Akiyama, 1,000; Mr. Isogai 1,000; Ms. Kennan, 1,333; Mr. M.
Okada, 1,000; Mr. Willes, 1,333; Mr. Hinkley, 111,557; Mr. Larsen, 53,323;
Mr. Stolper, 53,323; Mr. O'Connell, 53,323; and all executive officers and
directors as a group 893,838.
(2) Messrs. T. Okada, E. Akiyama, M. Okada and M. Isogai are directors of the
Company and are each directors or officers or both of JUSCO and JUSCO USA.
Each disclaims beneficial ownership of the common stock of the Company owned
by JUSCO USA and such shares are not included in their individual share
ownership.
(3) Includes 100 shares held by the son of Mr. Willes, as to which shares Mr.
Willes disclaims beneficial ownership.
(4) Includes 5,080 shares held by immediate family members or family trusts, as
to which shares beneficial ownership is disclaimed.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file reports regarding ownership of the
Company's common stock with the SEC, and to furnish the Company with copies of
all such filings. Based on a review of these filings, the Company believes that
all filings were timely made.
ITEM 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP as the Company's
independent auditors to make an examination of the accounts of the Company for
the 1997 fiscal year. Deloitte & Touche LLP has served as the Company's
independent auditors since 1988. Representatives of Deloitte & Touche LLP are
expected to be present at the Annual Meeting and will be available to respond to
appropriate questions and to make such statements as they may desire.
SHAREHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
Any proposal of a shareholder intended to be presented at the Company's
1998 Annual Meeting of Shareholders must be received by the Secretary of the
Company, for inclusion in the Company's proxy statement, notice of meeting and
proxy relating to the 1998 Annual Meeting, not later than December 24, 1997.
14
<PAGE> 18
The Company's Bylaws establish an advance written notice procedure for
shareholders seeking to nominate candidates for election as directors at any
annual meeting of shareholders, or to bring business before an annual meeting of
shareholders of the Company. The Bylaws provide that only persons who are
nominated by, or at the direction of, the Board, or by a shareholder who has
given timely written notice to the Secretary of the Company prior to the meeting
at which directors are to be elected, will be eligible for election as directors
of the Company. The Bylaws also provide that at any meeting of shareholders only
such business may be conducted as has been brought before the meeting by, or at
the direction of, the Board or, in the case of an annual meeting of
shareholders, by a shareholder who has given timely written notice to the
Secretary of the Corporation of such shareholder's intention to bring such
business before such meeting. Under the Bylaws, for any such shareholder notice
to be timely, such notice must be received by the Corporation in writing not
less than 60 days nor more than 90 days prior to the meeting, or in the event
that less than 70 days' notice or prior public disclosure of the date of the
annual meeting is given or made to shareholders, to be timely, notice by the
shareholder must be received not later than the close of business on the 10th
day following the day on which such notice of the date of the meeting or such
public disclosure was made. Under the Bylaws, a shareholder's notice must also
contain certain information specified in the Bylaws.
SHAREHOLDERS, UPON WRITTEN REQUEST TO THE INVESTOR RELATIONS DEPARTMENT OF
THE COMPANY, 175 BEAL STREET, HINGHAM, MASSACHUSETTS 02043, MAY RECEIVE, WITHOUT
CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, REQUIRED TO BE FILED
WITH THE SEC FOR THE 1996 FISCAL YEAR.
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of no business
that will be presented for consideration at the Annual Meeting other than the
items referred to above. Proxies in the enclosed form will be voted in respect
of any other business that is properly brought before the Annual Meeting as
recommended by the Board of Directors or, if no such recommendation is given, in
the discretion of the proxy holders.
THE TALBOTS, INC.
Hingham, Massachusetts
April 17, 1997
15
<PAGE> 19
1247-PS-97
<PAGE> 20
DETACH HERE
THE TALBOTS, INC. ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1997
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF THE TALBOTS, INC.
R
The undersigned hereby appoints Edward L. Larsen, Stuart M. Stolper,
O and Richard T. O'Connell, Jr., and each or any of them, with power of
substitution, proxies for the undersigned and authorizes each of them to
X represent and vote, as designated, all of the shares of stock of The
Talbots, Inc. (the "Company") which the undersigned may be entitled to vote
Y at the Annual Meeting of Shareholders of the Company to be held at The
First National Bank of Boston, 100 Federal Street, Boston, Massachusetts on
May 22, 1997, and at any adjournments or postponements of such meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO CONTRARY DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2. PLEASE VOTE PROMPTLY.
------------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
------------
<PAGE> 21
TALBOTS THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
Regardless of whether you plan to attend the Annual Meeting of Shareholders,
please ensure that your shares are represented at the meeting by promptly
returning your proxy in the enclosed envelope.
COMPANY HIGHLIGHTS DURING FISCAL 1996
- - Net sales increased 4% over fiscal 1995 to reach $1,018.8 million,
surpassing $1 billion for the first time.
- - Earnings per share were $1.92 for fiscal 1996, an increase of 5% over
fiscal 1995.
- - During the fiscal year, the Company opened 75 new stores.
- - In May 1996, the Company's Board of Directors approved an increase in the
quarterly cash dividend to $0.09 per share from $0.07 per share.
DETACH HERE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
[X] Please mark
votes as in
this example.
1. ELECTION OF DIRECTORS FOR AGAINST ABSTAIN
To elect the following Nominees as Directors: 2. SELECTION OF AUDITORS [ ] [ ] [ ]
Takuya Okada, Arnold B. Zetcher, Eiji Akiyama, Proposal to ratify the
Clark J. Hinkley, Masaharu Isogai, appointment of Deloitte
Elizabeth T. Kennan, Motoya Okada, and & Touche LLP as auditors
Mark H. Willes. for the 1997 fiscal year.
FOR WITHHELD
[ ] [ ]
[ ]
-----------------------------------------
for all nominees except as noted above
MARK HERE MARK HERE
FOR ADDRESS [ ] IF YOU PLAN [ ]
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
(Please sign exactly as your name or names appear hereon. When
signing as attorney, executor, administrator, trustee or guardian,
please give your full title as such. If a corporation, please sign
in full corporate name by president or other authorized officer. If
a partnership, please sign in partnership name by authorized person.)
Signature: Date: Signature: Date:
-------------------------------- --------------------
</TABLE>
