SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) April 28, 1999
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THE TALBOTS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-12552 41-1111318
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
175 Beal Street, Hingham, Massachusetts 02043
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (781) 749-7600
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Inapplicable
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(Former Name or Former Address, if Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
Employment Agreement.
The Talbots, Inc. (the "Company") and H. James Metscher entered into an
Employment Agreement dated as of November 23, 1998 ("the Employment Agreement").
The Employment Agreement was executed by the parties in April 1999.
Agreement and Release.
The Company and Mark Shulman entered into an Agreement and Release
dated as of December 21, 1998 (the "Agreement and Release") in connection with
Mr. Shulman's separation from employment with the Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit 99.1 Employment Agreement, dated as of November 23,
1998 between The Talbots, Inc. and H. James Metscher.
Exhibit 99.2 Agreement and Release, dated as of December 21,
1998 between The Talbots, Inc. and Mark Shulman.
Exhibit 99.3 Letter Agreement, dated June 1, 1998, concerning
credit facilities, between Talbots and BankBoston,
N.A.
Exhibit 99.4 Letter Agreement, dated August 11, 1998,
concerning credit facilities, between HSBC Corporate
Building, Marine Midland Bank and Talbots.
Exhibit 99.5 Extensions from Bank of Tokoyo-Mitsubishi, The
Sakura Bank, Limited, The Dai-Ichi Kangyo Bank,
Limited, and The Norinchukin Bank, New York Branch.
Exhibit 99.6 Amended and Restated 1993 Executive Stock Based
Incentive Plan.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE TALBOTS, INC.
EDWARD L. LARSEN
Dated: April 28, 1999 By: _______________________________
Edward L. Larsen
Senior Vice President, Finance,
Chief Financial Officer and Treasurer
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EXHIBIT INDEX
Exhibit 99.1 Employment Agreement, dated as of November 23,
1998 between The Talbots, Inc. and H. James Metscher.
Exhibit 99.2 Agreement and Release, dated as of December 21,
1998 between The Talbots, Inc. and Mark Shulman.
Exhibit 99.3 Letter Agreement, dated June 1, 1998, concerning
credit facilities, between Talbots and BankBoston,
N.A.
Exhibit 99.4 Letter Agreement, dated August 11, 1998,
concerning credit facilities, between HSBC Corporate
Building, Marine Midland Bank and Talbots.
Exhibit 99.5 Extensions from Bank of Tokoyo-Mitsubishi, The
Sakura Bank, Limited, The Dai-Ichi Kangyo Bank,
Limited, and The Norinchukin Bank New York Branch.
Exhibit 99.6 Amended and Restated 1993 Executive Stock Based
Incentive Plan.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of November
23, 1998, between H. JAMES METSCHER (the "Executive") and THE TALBOTS, INC., a
Delaware corporation (the "Company").
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed by the Company on the terms, provisions and
conditions hereinafter provided;
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and undertakings herein set forth, the
parties hereto agree as follows:
1. Engagement. The Company hereby agrees to employ the Executive, and the
Executive hereby accepts such employment, as Executive Vice President and
Chief Merchandising Officer of the Company, on the terms and conditions set
forth herein, unless and until such employment hereunder shall have been
terminated as provided in this Agreement.
2. Title and Duties. During his employment by the Company, the Executive shall
render his services as Executive Vice President and Chief Merchandising
Officer of the Company, shall perform duties consistent with his title as
the President of the Company shall reasonably request, shall serve as a
director on the Board of Directors of the Company (the "Board"), so long as
the Executive is duly elected by the stockholders of the Company, and shall
devote his full business time and best efforts to his duties hereunder and
the business and affairs of the Company (except during vacation periods and
reasonable periods of illness or other incapacity); provided, however, that
the Executive may from time to time engage in such other pursuits,
including, without limitation personal legal and personal financial affairs
as shall not interfere with the proper performance of his duties and
obligations hereunder. The Executive also agrees that upon termination of
his employment hereunder for any reason, he shall resign immediately from
the Board.
3. Compensation. As compensation for his services to the Company hereunder,
the Company shall pay to the Executive the following:
(A) Base Salary and Signing Bonus
(i) The Executive shall receive base salary
at the rate of not less than $450,000.00 per annum (the "Base Salary
Rate"), payable in substantially equal installments, in accordance with the
normal payroll practices of the Company.
(ii) The Board, or a duly appointed
committee thereof, shall consider, on an annual basis, the nature, extent
and advisability, if any, of an increase in the Executive's annual base
salary; provided, however, that in no event shall the Executive's base
salary during the term hereof be less than the Base Salary Rate.
(iii) The Executive acknowledges that, on
November 23, 1998 the Company paid him a signing bonus of $50,000.
(B) Annual Incentive Bonus. The Executive shall be eligible to
receive an annual incentive bonus pursuant to the Company's Management
Incentive Program, as same may be amended or superseded from time to time
(the Management Incentive Program, as same may be amended or superseded
from time to time, is hereinafter referred to as the "MIP").
Notwithstanding the foregoing, for the Company's Fiscal Year 1999, the
Company shall pay the Executive a minimum guaranteed bonus of $150,000,
which shall be payable on or before March 31, 2000. The Company and the
Executive agree that the Executive's right to receive the guaranteed bonus
provided for in this paragraph is contingent only upon his employment not
having been terminated prior to the closing date of the Company's Fiscal
Year 1999 because of his resignation, unless such resignation is with Good
Reason (as that term is defined in paragraph 6(H) below), or under
paragraphs 6(C) or 6(D) below.
(C) Executive Stock Based Incentive Plan.
(i) General. The Executive shall be eligible
to receive such incentive compensation as may be awarded from time to time
pursuant to the Company's Executive Stock Based Incentive Plan as same may
be amended or superseded from time to time (the Executive Stock Based
Incentive Plan, as same may be amended or superseded from time to time, is
hereinafter referred to as the "Plan"). All awards to the Executive
(including those under subparagraph 3(C)(ii) below) shall be subject to the
terms of the Plan. The Company agrees that (i) the terms of any grant of
stock options the Compensation Committee of the Board (the "Committee")
makes to the Executive under the Plan shall provide that upon the
termination of the Executive's employment hereunder pursuant to paragraph
6(F) hereof, the Executive's right to exercise any then unexercised, vested
stock options shall be a period of not less than three (3) years from the
date of such termination, and (ii) the terms of any grant of restricted
stock the Committee makes to the Executive under the Plan shall provide for
the acceleration of such stock's vesting requirements upon the termination
of the Executive's employment hereunder pursuant to paragraph 6(H) hereof.
(ii) Current Restricted Stock and Stock
Option Awards. Upon commencement of the Executive's employment hereunder,
the Company shall make the following awards to the Executive pursuant to
the Plan: (a) 15,000 shares of Common Stock of the Company, $0.01 par value
per share, at a purchase price to the Executive of $0.01 per share (the
"Restricted Shares"), which shares shall be non-transferable until they are
fully vested on the dates set forth below and in accordance with the terms
of the Restricted Stock Agreement to be executed by the Company and the
Executive, and shall be subject to a repurchase option held by the Company
and exercisable in certain events specified in the Restricted Stock
Agreement; and (b) options to purchase 25,000 shares of Common Stock of the
Company, $0.01 par value per share, pursuant to and subject to the terms
and conditions of a Nonqualified Stock Option Agreement to be executed by
the Company and the Executive, with an exercise price equal to the closing
price of the Company's common stock on the New York Stock Exchange on
November 23, 1998 (the "Options"). The Restricted Shares shall vest as
follows: (i) 5,000 shares on November 23, 2001; (ii) 5,000 shares on
November 23, 2002; and (iii) 5,000 shares on November 23, 2003. The
Executive's entitlement to exercise the Options shall vest as follows: (i)
33 1/3% of the total shares subject to the option on November 23, 1999;
(ii) 33 1/3% of the total shares subject to the option on November 23,
2000; and (iii) 33 1/3% of the total shares subject to the option on
November 23, 2001.
(D) Deferred Compensation. The Executive shall be eligible to
participate in any deferred compensation program of the Company as may be
in effect from time to time.
4. Benefits. Subject to the provisions of this Agreement, the Company shall
provide the following benefits to the Executive for services rendered
during the term of his employment hereunder:
(A) Insurance and Retirement Benefits. The Executive
shall be entitled to such insurance benefits of the Company as may be in
effect from time to time and generally available to employees at the senior
executive level, including, but not limited to, disability insurance and
business travel accident insurance. The Executive shall also be entitled to
participate in benefit programs provided by the Company, including, but not
limited to, the retirement program, the supplemental retirement program,
the R.S.V.P. 401-K Savings Program and the supplemental R.S.V.P. 401-K
Savings Program. In addition, nothing herein shall preclude the Executive
from receiving any additional compensation in the form of salary, bonuses
or otherwise or from participating in any future benefit plan for employees
of the Company, in each case as and to the extent approved and determined
by the Board.
(B) Other Insurance and Welfare Benefits. The
Executive shall also be entitled to participate in the following benefits
programs: (i) the Company's medical insurance program; (ii) the Company's
dental insurance program; and (iii) the Company's Paid Life Insurance
Program (the "Program"), pursuant to which the Company shall pay all
premiums on behalf of the Executive for a term life insurance policy on the
life of the Executive with coverage in an amount equal to the lesser of (X)
the Executive's annual base salary for one (1) year or (Y) the maximum
amount of coverage that the Company is able to provide a participant under
the Program, at the rate then in effect during the coverage of such policy.
The Company hereby represents to the Executive that the current maximum
amount of coverage under the Program is $750,000.
(C) Automobile Program. The Executive shall be
entitled to participate in the Company's Executive Automobile Program,
pursuant to which the Company, at the Executive's election, shall either:
(i) provide the Executive with an automobile (which automobile shall be
replaced every (2) years) for his use with a value, when new, of up to
$33,000 and shall reimburse the Executive for all costs and expenses
associated with such automobile (including, but not limited to, automobile
insurance, repairs, and gas), or (ii) provide the Executive with a monthly
automobile allowance, which allowance shall be based upon the annualized
imputed value of the automobile to which the Executive is entitled under
such program. The value of the automobile to which the Executive is
entitled shall be subject to an annual review and may be increased at the
discretion of the Board, in accordance with the terms of the Company's
Executive Automobile Program; provided, however, the Executive shall be
entitled to receive any benefit to which participants in the Company's
Executive Automobile Program may from time to time hereafter generally
become entitled thereunder that is broader or greater than the benefits to
which participants are currently generally entitled (e.g., an
across-the-board increase in the value of automobiles received under such
Program).
(D) Financial Counseling Program. The Executive shall
be entitled to participate in the Company's Key Management Financial
Counseling Program. The Executive's initial annual allowance shall be
$2,500 per calendar year, which allowance shall be subject to periodic
review by the Board and may be increased at the discretion of the Board, in
accordance with the terms of the Key Management Financial Counseling
Program.
(E) Vacation. The Executive shall be entitled to an
aggregate of not less than four (4) weeks of paid vacation in each full
calendar-year during the Executive's employment hereunder.
(F) Employee Discount. The Executive shall be entitled
to receive the benefit of any Company Discount which may be in effect from
time to time and is generally available to the employees of the Company.
The Company Discount is currently 40%.
(G) Relocation. The Executive shall be entitled to
reimbursement for reasonable expenses attributable to the relocation of the
Executive's principal residence from Fairfield, Connecticut to the Boston,
Massachusetts metropolitan area (1) including temporary living (for the
Executive until July 31, 1999 and for the Executive and his immediate
family from August 1, 1999 through December 31, 1999), house hunting trips
for the Executive and his immediate family, a full household goods move,
broker's fee up to 7% on the sale of the Executive's current residence,
closing costs on the purchase of the Executive's new residence in
Massachusetts up to a maximum of two (2) percent, and legal and other fees
associated with closing; and (2) excluding taxes and insurance. The
Executive agrees that if after his receipt of any payments or benefits
under the Relocation Policy and within the initial two (2) years of the
term hereof, he shall resign his employment without Good Reason (as such
term is defined in paragraph 6(H) below) or his employment shall be
terminated under paragraph 6(D)(ii) through (ix) below, the Executive
shall, within 30 days of his resignation or termination, repay the Company
an amount which shall be determined by multiplying the amount of such
payments and benefits by a fraction, the numerator of which shall be 730
less the number of days between the commencement of the Executive's
employment and the date his employment shall terminate and the denominator
of which shall be 730.
5. Expenses. The Executive is authorized to incur and the Company shall either
pay directly or reimburse the Executive for ordinary and reasonable
expenses in connection with the performance of his duties hereunder,
including, without limitation, expenses for (A) transportation, (B)
business meals, (C) travel and lodging, and (D) similar items. The
Executive agrees to comply with the Company's policies with respect to
record keeping in connection with such expenses.
6. Termination of Employment. The following provisions set forth the terms and
conditions pursuant to which the employment of the Executive hereunder may
be terminated:
(A) The employment of the Executive hereunder may be
terminated by the Company or the Executive at any time, subject to the
Company's providing all of the compensation and benefits herein specified
in accordance with the terms hereof.
(B) The employment of the Executive hereunder may be
terminated by the Company or the Executive on or after the normal
retirement date of the Executive under the Company's Pension Plan and
Supplemental Retirement Plan or any successor or substitute plan.
(C) The employment of the Executive hereunder shall be
terminated upon the death of the Executive.
(D) The employment of the Executive hereunder may be
terminated by the Company in the event of the occurrence of any of the
following conditions or events:
(i) the failure of the Executive
substantially to perform his duties hereunder as a result of physical
incapacity for a continuous period of at least six (6) months after he has
become eligible for the Company's long-term disability benefits (any
dispute as to the Executive's incapacitation shall be resolved by an
independent physician, reasonably acceptable to the Executive and the
Board, whose determination shall be final and binding upon both the
Executive and the Company);
(ii) continual failure of the Executive
substantially to perform his material duties hereunder, other than as a
result of incapacity due to physical or mental illness, which failure
continues uncured for fifteen (15) days after a written demand for
substantial performance is delivered to the Executive by the President and
Chief Executive Officer which states the dates and instances of prior
non-performance by the Executive;
(iii) habitual drunkenness in circumstances
that are either during working hours or reflect negatively on the business
or reputation of the Company;
(iv) the unlawful use or possession of
controlled substances;
(v) the commission by the Executive of
misconduct in the discharge of his duties. For purposes of this section,
"misconduct" is intended to mean "doing something bad, and not merely doing
the job badly." By way of illustration, "misconduct" is not intended to
include where the Company has a bad financial year, or the Executive makes
business judgments in good faith that turn out to be erroneous , such as
ordering a line of clothing that turns out to be unsuccessful;
(vi) the conviction of the Executive of a
felony;
(vii) dishonesty in material respects in
matters relating to the Company;
(viii) continuous conflicts of interest
after notice in writing to the Executive from the Board, which notice
states the dates and instances of prior conflicts of interest by the
Executive; or (ix) any other material breach of this Agreement by the
Executive.
Upon or after the date of occurrence of any of the events or conditions
described above, the Company may deliver written notice to the Executive of
its election to terminate his employment hereunder.
(E) In the event that the Executive's employment
hereunder is terminated pursuant to paragraphs (B), (C) or (D) above or by
the Executive without Good Reason (as such term is defined in paragraph (H)
below), the Company shall be under no further obligation to the Executive
pursuant to the terms of this Agreement except to pay the Executive, within
ten (10) business days of the effective date of such termination (or, in
the event of a termination pursuant to paragraph (C) above, to pay the
Executive's estate or legal representative, as soon as reasonably
practicable after the Executive's death) (i) salary for services rendered
up to and including the date of termination, (ii) reimbursement for
expenses incurred by the Executive pursuant to paragraph 5 hereof up to and
including the date on which his employment is terminated, and (iii) any and
all compensation to which the Executive may be entitled as of the date of
termination pursuant to the Plan or any other compensation or benefit plan
to the extent permitted by such plans.
(F) In the event that the Executive's employment
hereunder is terminated and such termination is not a result of an event or
condition referred to in paragraph (E) above, the following shall occur:
(i) the Company shall pay to the Executive, within ten (10) business days
of the effective date of such termination (a) salary for services rendered
up to and including the date of termination, (b) reimbursement for expenses
incurred by the Executive pursuant to paragraph 5 hereof up to and
including the date on which his employment is terminated, and (c) any and
all compensation to which the Executive may be entitled as of the date of
termination pursuant to the Plan or any other compensation or benefit plan
to the extent permitted by such plans; and (ii) the Company shall pay to
the Executive, in a single lump payment within thirty (30) days from the
effective date of such termination, a separation allowance equal to the
product of two (2) multiplied by the sum of:
(x) the Executive's annual base salary, at the rate
in effect at the time of such termination, and
(y) the annual bonus paid or payable to the
Executive pursuant to paragraph 3(B) hereof for
the last full fiscal year of the Company
immediately prior to the effective date of such
termination.
The Company's obligation to pay the separation allowance referred to in
this subparagraph shall be contingent upon the Executive having delivered
to the Company a fully executed release (that is not subject to revocation)
of claims against the Company, its parents, subsidiaries, affiliates,
employees, agents and representatives satisfactory in form and content to
the Company's counsel.
(G) In the event that the Executive's employment
hereunder is terminated and such termination is not a result of an event or
condition referred to in paragraph (E) above, the Executive also shall
continue to participate, on the same terms and conditions as in effect
immediately prior to such termination, in the disability insurance benefit
program provided to the Executive pursuant to paragraph 4(A) hereof and the
medical insurance program, the dental insurance program and the Company's
Paid Life Insurance Program provided to the Executive pursuant to paragraph
4(B) hereof from the time of such termination until the earlier of (i) the
end of the two (2) year period beginning from the effective date of the
termination of the Executive's employment hereunder (the "Two-Year
Post-Termination Period") or (ii) such time as the Executive is eligible to
be covered by a comparable program of a subsequent employer. The Executive
agrees to notify the Company promptly if and when he begins employment with
another employer and if and when he becomes eligible to participate in any
pension or other benefit plans, programs or arrangements of another
employer. The Company's obligation to provide the benefits referred to in
this subparagraph shall be contingent upon the Executive having delivered
to the Company a fully executed release (that is not subject to revocation)
of claims against the Company, its parents, subsidiaries, affiliates,
employees, agents and representatives satisfactory in form and content to
the Company's counsel.
(H) In the event that there is a Change in Control (as
hereinafter defined), and, within twenty-four (24) months after the
occurrence of such Change in Control, the Executive's employment hereunder
is terminated either (i) by the Company, and such termination is not a
result of an event or condition referred to in paragraph (E) above, or (ii)
by the Executive for Good Reason (as hereinafter defined), provided that
the Executive shall provide thirty (30) days written notice of such
termination, then the following shall occur:
(a) the Company shall pay to the Executive on the
effective date of such termination
(I) salary for services rendered up to and including
the date of
termination, (II) reimbursement for expenses incurred by the Executive
pursuant to paragraph 5 hereof up to and including the date on which his
employment is terminated, and (III) from the Benefits Trust (as such term
is defined in paragraph 6(I)(a) hereof) and other sources, as applicable,
any and all compensation to which the Executive may be entitled as of the
date of termination pursuant to the Plan or any other compensation or
benefit plan to the extent permitted by such plans; and
(b) the Company shall pay to the Executive from
the Severance Trust (as such term is defined in paragraph 6(I)(b) hereof)
and other sources if the monies paid into the Severance Trust at the time
of the Change in Control pursuant to paragraph 6(I)(b) hereof are not
sufficient, within thirty (30) days from the effective date of such
termination,
(I) an amount equal to the product of two (2)
multiplied by the sum of:
(x) the Executive's annual base salary, at a rate
(the "Severance Rate") equal to the greater of
(A) the annual rate in effect on the date
one hundred eighty (180) days prior to
such termination or
(B) the annual rate in effect at the time
of such termination, and
(y) the maximum bonus payable to the Executive
(assuming application of the maximum rates and
ratings thereunder) under the MIP in effect as
of the last full fiscal year of the Company
immediately prior to the effective date of such
termination;
(II) an amount equal to the maximum bonus payable to
the Executive (assuming application of the maximum rates and ratings
thereunder) under the MIP for the year in which the Executive's employment
was terminated, pro rated for that portion of the year in which the
Executive was employed;
(III) an amount equal to three (3) times the present
value (as calculated by the independent certified public accountant then
employed by the Company) of the Executive's accrued benefits under the
Company's supplemental retirement plan as of the date on which his
employment is terminated; and
(c) the Executive shall continue to
participate in the Company's benefit programs pursuant to paragraph 6(G)
hereof; provided, however, the Executive's participation in such benefit
programs shall not end on the earlier of the Two-Year Post-Termination
Period or such time as the Executive is eligible to be covered by a
comparable program of a subsequent employer, but rather, the Executive
shall participate in such benefit programs from the effective date of the
termination of his employment under this paragraph 6(H) until the earlier
of (i) the end of the twenty-four (24) month period beginning from the date
of such termination (the "Twenty-Four Month Post-Termination Period") or
(ii) such time as the Executive is eligible to be covered by a comparable
program of a subsequent employer; and
(d) the Executive shall also continue to
participate, on the same terms and conditions as in effect immediately
prior to his termination under this paragraph 6(H), in the Company's
Executive Automobile Program provided to the Executive pursuant to
paragraph 4(C) hereof from the time of such termination until the earlier
of (i) the end of the Twenty-Four Month Post-Termination Period or (ii)
such time as the Executive is eligible to be covered by a comparable
program of a subsequent employer. The Company's obligation to make the
payment described in subparagraph (H)(b) and provide the benefits referred
to in subparagraph (H)(c) and (d) shall be contingent upon the Executive
having delivered to the Company a fully executed release (that is not
subject to revocation) of claims against the Company, its parents,
subsidiaries, affiliates, employees, agents and representatives
satisfactory in form and content to the Company's counsel. As used in this
Agreement, the term "Change in Control" shall mean: (i) 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 Securities Exchange Act of
1934, as amended (the "Exchange Act"), or persons "acting in concert"
(which for purposes of this Agreement shall include two (2) 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 13(d)(3) and 14(d)(2) of the Exchange Act), other than
the Company or any of its subsidiaries, or JUSCO, (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 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 stockholder 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 (ii) individuals, who, as of the date hereof (the
"Effective Date"), 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 the Effective Date, whose
election, or nomination for election by the Company's stockholders, 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 (as such terms are used in Rule
14a-11 of Regulation 14A under the Exchange Act) 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 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.
As used in this Agreement, the term "Good Reason" shall mean the
occurrence of any of the following events, other than as a result of the
occurrence of any other events or conditions described in paragraph 6(D)
hereof: (i) the deprivation of, or the reduction in, or the assignment of
duties to the Executive which would be inconsistent with, the Executive's
position and responsibilities as indicated in paragraph 2 hereof, or (ii) a
relocation of the Company's principal executive offices following the date
of the Change in Control to a location greater than forty (40) miles from
the location of such offices prior to the Change in Control, or (iii) a
reduction by the Company in the Executive's annual base salary as in effect
on the date of the Change in Control, or (iv) any failure by the Company to
continue in effect any compensation or benefit plan or arrangement
(including, without limitation, any such plan or arrangement described
herein or any alternative plan providing a comparable level of benefits) in
which the Executive is participating at the time of the Change of Control,
or the taking of any action by the Company which would adversely affect the
Executive's participation in or materially reduce his benefits under any
such plan or arrangement, or (v) the placement of the Executive in the
employment of an Affiliate, or (vi) any breach by the Company of any
provision of this Agreement. As used in this paragraph, the term
"Affiliate" shall mean any other person or entity controlling, controlled
by or under common control with, the Company.
(I) The Company, on the date of the Change in Control,
shall cause the following to occur:
(a) the Company shall pay into The Talbots,
Inc. Supplemental Benefits Trust (the "Benefits Trust") all monies to which
the Executive is entitled under the Plan, any deferred compensation program
of the Company, the supplemental R.S.V.P. 401-K Savings Program, and the
Company's retirement program (to the extent such monies under such
retirement program are not qualified benefits) and supplemental retirement
program;
(b) the Company shall pay into The Talbots,
Inc. Severance Trust (the "Severance Trust"), (I) an amount equal to the
Company's good faith estimate of the amount which would be payable to the
Executive under paragraphs 6(H)(b)(I) and 6(H)(b)(II) hereof in the event
of a termination of the Executive's employment as described in paragraph
6(H) hereof and assuming the Executive would be employed for a period of
six (6) months during the year in which the Executive's employment is
terminated, (II) an amount equal to the Company's good faith estimate of
the amount which would be payable to the Executive under paragraph 6(H)(c)
hereof in the event of a termination of the Executive's employment as
described in paragraph 6(H) hereof, and (III) an amount equal to three (3)
times the present value (as calculated by the independent certified public
accountant then employed by the Company) of the Executive's accrued
benefits under the Company's supplemental retirement plan as of the date of
the Change in Control. In the event that the Executive's employment
hereunder is not terminated for 24 months after the Change in Control
pursuant to paragraph 6(H) hereof, such monies paid into the Severance
Trust on the date of the Change in Control shall revert to the Company.
(J) The date of termination of the Executive's
employment for purposes of paragraphs (F), (G) and (H)(i) above shall be
the date specified in a written notice of termination to the Executive,
provided that the Company shall provide at least thirty (30) days written
notice of such termination.
(K) The Company shall pay all legal fees and expenses
that the Executive may incur in any contest of the validity, enforceability
or interpretation of, or determinations under, paragraphs 6(H) or 6(I)
hereof, regardless of whether the Executive prevails in any such contest.
(L) In the event of the termination or expiration of
this Agreement for any reason, the Company shall remain forever obligated
to effectuate, directly or indirectly through its transfer agent, transfers
or sales of shares of the Company's Common Stock, or exercises of options
to purchase such shares, to which the Executive is entitled pursuant and
subject to the terms of this Agreement.
7. Indemnification. (A) The Company shall indemnify, defend and hold the
Executive harmless, to the maximum extent permitted by law, against all
judgments, fines, amounts paid in settlement and all reasonable expenses,
including attorneys' fees incurred by the Executive, in connection with the
defense of, or as a result of any action or proceeding (or any appeal from
any action or proceeding) in which the Executive is made or is threatened
to be made a party by reason of the fact that the Executive is or was an
officer or director of the Company, regardless of whether such action or
proceeding is one brought by or in the right of the Company, to procure a
judgment in its favor (or other than by or in the right of the Company).
Each of the parties hereto shall give prompt notice to the other of any
action or proceeding from which the Company is obligated to indemnify,
defend and hold harmless the Executive of which it or he (as the case may
be) gains knowledge.
(B) The Company hereby represents and warrants that
the Executive shall be covered and insured up to the maximum limits
provided by all insurance which the Company maintains to indemnify its
directors and officers (and to indemnify the Company for any obligations
which it incurs as a result of its undertaking to indemnify its officers
and directors).
8. Arbitration. Any dispute, controversy or claim between the parties hereto
arising out of or relating to this Agreement either during or after the
term thereof, shall be settled by arbitration conducted in the Commonwealth
of Massachusetts, in accordance with the Commercial Rules of the American
Arbitration Association then in force. The decision of the arbitrator or
arbitrators conducting any such arbitration proceedings shall be in
writing, shall set forth the basis therefor and such arbitrator's or
arbitrators' decision or award shall be final and binding upon the parties
hereto. The parties hereto shall abide by all awards rendered in such
arbitration proceedings, and all such awards may be enforced and executed
upon in any court having jurisdiction over the party against whom or which
enforcement of such award is sought.
9. Enforceability. It is the intention of the parties that the provisions of
this Agreement shall be enforced to the fullest extent permissible under
the laws and public policies of each state and jurisdiction in which such
enforcement is sought, but that the unenforceability (or the modification
to conform with such laws or public policies) of any provisions hereof,
shall not render unenforceable or impair the remainder of this Agreement.
Accordingly, if any provision of this Agreement shall be determined to be
invalid or unenforceable, either in whole or in part, this Agreement shall
be deemed amended to delete or modify, as necessary, the offending
provisions and to alter the balance of this Agreement in order to render
the same valid and enforceable to the fullest extent permissible.
10. Assignment. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder. This Agreement and all of
the provisions hereof shall be binding upon, and inure to the benefit of,
the parties hereto, and their successors (including successors by merger,
consolidation or similar transactions), permitted assigns, executors,
administrators, personal representatives, heirs and distributees.
11. Non-Disclosure. The Executive shall not, at any time during or following
the period of employment, disclose, use, transfer or sell, except in the
course of such employment, any confidential information or proprietary data
of the Company and its subsidiaries so long as such information or data
remains confidential and has not been disclosed or is not otherwise in the
public domain, except as required by law or pursuant to legal process or in
connection with an administrative proceeding before a governmental agency.
The Company and the Executive agree that the Executive's obligations under
this paragraph shall not apply if (1) any disclosure by the Executive is
made with the express written permission of the Company; and/or (2) if the
Executive can show by documentary evidence that he had knowledge of the
confidential information, or it was in his possession, prior to disclosure
by the Company, or that it was lawfully received by the Executive from a
third party who is not or was not bound, at the time the information was
conveyed, by any confidential relationship or obligation to the Company.
12. Non-Competition Agreement. In the event the Executive terminates his
employment hereunder without "Good Reason" as that term is defined in
paragraph 6(H) hereof, or the Company terminates the Executive's employment
pursuant to an event or condition described in paragraph 6(B) or 6(D)
hereof, the Executive will not for a period of two years thereafter engage
in or carry on, directly or indirectly, either for himself or as a member
of a partnership, or as a stockholder, investor (except that ownership of
5% or less of any class of debt or equity securities which are publicly
traded shall not be a violation of this paragraph 12), officer or director
of a corporation or as an employee, agent, associate or consultant of any
person, partnership, or corporation, or any business in competition with
the principal businesses carried on by the Company and its subsidiaries and
affiliates in any jurisdiction in which the Company or its subsidiaries or
affiliates actively conduct business; provided, however, that if the
Company elects to enforce the provisions of this paragraph and the
Executive's employment shall have been terminated either by the Executive
without "Good Reason" or by the Company pursuant to paragraph 6(D) hereof,
the Company shall pay to the Executive (in accordance with its then current
payroll practices) at the rate of his base salary as of the date of his
termination. If the Company, at its sole option, decides not to continue
the Executive's base salary at any time during the two year period, this
non-competition provision shall not thereafter be enforceable. Nothing in
this paragraph 12 or in this Agreement shall be deemed to require the
Company to continue to pay the Executive any portion of his base salary in
the event the Executive terminates his employment without Good Reason or
the Company terminates the Executive's employment pursuant to an event or
condition described in paragraph 6(D) hereof.
13. Taxes.
(A) All payments to be made to and on behalf of the
Executive under this Agreement will be subject to required withholding of
federal, state and local income and employment taxes, and to related
reporting requirements.
(B) Notwithstanding any other provision of this
Agreement, if any of the payments provided for in this Agreement, together
with any other payments which the Executive has the right to receive from
the Company or any corporation which is a member of an "affiliated group"
(as defined in Section 1504(a) of the Internal Revenue Code of 1986, as
amended (the "Code") without regard to Section 1504(b) of the Code) of
which the Company is a member, would constitute a "parachute payment" (as
defined in Section 280G(b)(2) of the Code), payments pursuant to this
Agreement shall be reduced to the largest amount as will result in no
portion of such payments being subject to the excise tax imposed by Section
4999 of the Code.
14. Term. This Agreement shall commence as of November 23, 1998 and shall
continue in effect until the last day of the Company's fiscal year that
ends in January 2002; provided, however, that commencing at the beginning
of the Company's fiscal year immediately thereafter and at the beginning of
the Company's fiscal year each three years thereafter, the term of this
Agreement shall automatically be extended for three additional years unless
at least 6 months prior to such date, the Company or the Executive shall
have given notice to the other party that this Agreement shall not be
extended. It is acknowledged and agreed by the parties hereto that if this
Agreement is terminated or not extended by the Company pursuant to this
paragraph 14 and not as a result of an event or condition referred to in
paragraph 6(E) hereof, the provisions of paragraphs 6(F) and 6(G) hereof
shall apply.
15. Survival. Anything in paragraph 6 hereof to the contrary notwithstanding,
the provisions of paragraphs 7 through 17 shall survive the expiration or
termination hereof, regardless of the reasons therefor.
16. No Conflict. The Executive and the Company each hereby represents and
warrants to the other that the execution, delivery and performance of this
Agreement by him or it (as the case may be) shall not violate any agreement
or other obligation of any kind, written or oral, to which he or it (as the
case may be) is subject.
17. Miscellaneous.
(A) Notices. All notices hereunder shall be given in
writing, clearly marked "Personal and Confidential," by personal delivery
(which shall include delivery by overnight couriers such as Federal
Express), or prepaid registered or certified mail, return receipt
requested, to the addresses of the proper parties as set forth below:
TO THE EXECUTIVE:
H. JAMES METSCHER
c/o The Talbots, Inc.
175 Beal Street
Hingham, MA 02043
TO THE COMPANY:
The Talbots, Inc.
175 Beal Street
Hingham, Massachusetts 02043
Attn: President and Chief Executive Officer
Any notice given as aforesaid shall be deemed received upon actual
delivery. Any party hereto (or any person designated to receive a copy of
any notice) may change his or its (as the case may be) designated address
by notice served as herein set forth upon the other party designated to
receive notice.
(B) Law Governing. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of
Massachusetts applicable to contracts made and to be wholly performed in
that state without regard to its conflicts of laws provisions.
(C) Headings. The paragraph headings contained in this
Agreement are for convenience of reference only and are not intended to
determine, limit or describe the scope or intent of any provision of this
Agreement.
(D) Number and Gender. Whenever in this Agreement the
singular is used, it shall include the plural if the context so requires,
and whenever the masculine gender is used in this Agreement, it shall be
construed as if the masculine, feminine or neuter gender, respectively, has
been used where the context so dictates, with the rest of the sentence
being construed as if the grammatical and terminological changes thereby
rendered necessary have been made.
(E) Entire Agreement. This Agreement contains the
entire understanding between and among the parties with respect to the
subject matter hereof and supersedes any prior or contemporaneous
understandings and agreements, written or oral, between and among them
respecting such subject matter.
(F) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but both of which
taken together shall constitute one instrument.
(G) Amendments. This Agreement may not be amended
except by a writing executed by the party against whom or which such
amendment is to be enforced.
(H) Expenses. All reasonable legal fees and expenses
incurred by the Executive in negotiating and entering into this Agreement
will be paid by the Company. In the event a dispute arises regarding the
validity, interpretation or enforcement of this Agreement or the right of
the Executive to receive or retain any benefit or payment contemplated
hereby, all legal fees and expenses incurred by the Executive in seeking to
obtain, enforce or retain any right, benefit or payment provided for in
this Agreement or in otherwise pursuing or settling any claim hereunder
will be paid by the Company, to the extent permitted by applicable law;
provided, however, that, except in the event of a dispute following a
Change in Control as set forth in paragraph 6(K) hereof, if the Executive
does not prevail at least in whole or in part in any proceeding brought by
the Executive to enforce a provision of this Agreement, the Executive shall
be responsible for the legal fees and expenses incurred by him in
connection with such proceeding. All such fees and expenses will be paid by
the Company within 30 days after the Company's receipt of the invoices
therefor.
(I) Termination Without Cause. For purposes of the
Plan, "termination without cause" hereunder shall mean termination of the
Executive's employment hereunder as result of an event or condition that is
not referred to in paragraph 6(E) hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
H. JAMES METSCHER THE TALBOTS, INC.
/s/ H. James Metscher By: /s/ Arnold B. Zetcher
- ------------------------- ------------------------------
H. James Metscher Name:
Title:
WITHOUT PREJUDICE-FOR SETTLEMENT PURPOSES ONLY
PRIVILEGED PURSUANT TO FRE 408
AND ANY APPLICABLE STATE COUNTERPART
AGREEMENT AND RELEASE
AGREEMENT AND RELEASE (collectively, this "Agreement"), dated
as of December 21, 1998, between MARK SHULMAN (the "Executive") and THE TALBOTS,
INC., a Delaware corporation (the "Company").
W I T N E S S E T H
WHEREAS, the Executive and the Company heretofore have entered
into an Employment Agreement dated as of October 27, 1997 (the "Employment
Agreement"); and
WHEREAS, the Executive and the Company are parties to a
Nonqualified Stock Option Agreement dated October 27, 1997, a Nonqualified Stock
Option Agreement dated February 10, 1998, a Restricted Stock Agreement dated
October 27, 1997, a Restricted Stock Agreement dated May 5, 1998, and an Escrow
Agreement dated February 1, 1999 (the "Escrow Agreement"); and
WHEREAS, the Executive's employment with the Company has ended
pursuant to paragraph 6(F) of the Employment Agreement, and the parties desire
to memorialize the resolution of that employment.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and understandings set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
1. The Employment Agreement and Resignation from Board of
Directors. The Executive and the Company agree that the Employment Agreement
shall be terminated as of the date referred to above and, except as provided in
paragraph 15 thereof, shall have no further force or effect. The Executive
hereby confirms that his term as a member of the Company's Board of Directors
shall have ended as of the date hereof.
2. Separation Payment, Benefits, and 1993 Executive Stock
Based Incentive Plan.
(A) Separation Payment. Provided the Executive does not exercise his right to
revoke this Agreement as set forth in paragraph 10(P) hereof, and subject to the
Executive's compliance with the terms of this Agreement, the Company shall pay
to the Executive, in a lump sum, the gross amount of $1,400,000, less applicable
federal, state and local tax withholdings. Such payment shall be made within ten
(10) days after the expiration of the revocation period. (B) Benefits. The
Executive shall continue to receive, on the same terms and conditions as in
effect immediately prior to the date hereof, the long-term disability insurance
benefit provided to the Executive pursuant to paragraph 4(A) of the Employment
Agreement and the medical insurance, dental insurance and the Company's Paid
Life Insurance benefits provided to the Executive pursuant to paragraph 4(B) of
the Employment Agreement from as of the date hereof until the earlier of: (1)
December 21, 2000; or (2) such time as the Executive is eligible to be covered
by a comparable program of a subsequent employer. The Executive agrees to
cooperate with the Company and its designated representatives by providing
whatever information is necessary for the Company to purchase insurance policies
with respect to such benefits. The Executive also agrees to notify the Company
promptly if and when he begins employment with another employer and if and when
he becomes eligible to participate in any benefit plans, programs or
arrangements of another employer. Upon termination of group health benefits
under this paragraph, the Executive shall be entitled to continue such benefits
pursuant to applicable law. (C) 1993 Executive Stock Based Incentive Plan. The
Executive agrees that he shall no longer be eligible to receive any additional
awards pursuant to the Company's Executive Stock Based Incentive Plan (the
"Plan"). Except as provided below, the Executive also agrees that (1) the
Executive shall not vest in the restricted stock awarded to the Executive
pursuant to the Employment Agreement and the Restricted Stock Agreements between
the Executive and the Company dated October 27, 1997 and May 5, 1998
respectively, that shall not have vested on or before December 21, 1998; and (2)
the Executive shall not vest in the stock options awarded to the Executive
pursuant to the Employment Agreement and the Nonqualified Stock Option Agreement
between the Executive and the Company dated October 27, 1997 that shall not have
vested on or before December 21, 1998. The Company agrees that, upon the
expiration of the revocation period described in paragraph 10(P) hereof, the
Executive shall vest in the 50,000 nonqualified stock options that were awarded
to him pursuant to the Nonqualified Stock Option Agreement between the Executive
and the Company dated February 10, 1998. The Executive agrees that the
Executive's right to exercise any stock options heretofore awarded to him by the
Company (1) which shall have vested on or before December 21, 1998; and (2)
which shall vest pursuant to this Agreement shall expire on December 20, 2001.
The Executive agrees that (1) the Company shall be deemed to have exercised its
repurchase option with respect to the 6,000 shares of Restricted Stock which are
the subject of the Escrow Agreement and shall pay the Executive the sum of $60
for such shares; (2) the Escrow Agreement is superseded by this Agreement and
shall not have any further effect; and (3) the Company shall be deemed to have
exercised its repurchase option with respect to the 28,000 shares of Restricted
Stock which are the subject of the Restricted Stock Agreement dated May 5, 1998
referred to above, and shall pay the Executive the sum of $280 for such shares.
3. Taxes and Benefits Withholdings. Federal, state and local
tax withholdings will be made from the payments and benefits provided for in
this Agreement as may be required by law and/or in accordance with the Company's
benefit plans. The Executive shall be solely responsible for the federal, state
and local and other taxes normally paid by employees relating to these payments
and benefits.
4. Release. In consideration of the payments and benefits
provided for in this Agreement (which the Executive acknowledges contains
elements that he would not be entitled to unless he executes this Agreement and
does not thereafter revoke his signature), the Executive agrees on his own
behalf and on behalf of his heirs, successors, agents, executors, administrators
and assigns (collectively, the "Releasors") to release the Company and its
present and former parent(s), subsidiaries, affiliates, divisions, branches,
agencies and other offices and its and their respective present and former
successors, assigns, officers, agents, representatives, affiliates, attorneys,
fiduciaries, administrators, directors, stockholders and employees
(collectively, the "Releasees") from any and all liability to the Releasors
arising from any and all acts including, but not limited to, those arising out
of the Executive's employment relationship with the Releasees or under any
contract, tort, federal, state or local fair employment practice or civil rights
law including, but not limited to, Title VII of the Civil Rights Act of 1964,
the Age Discrimination in Employment Act of 1967, the Older Workers Benefit
Protection Act of 1990, the Civil Rights Act of 1991, the Americans with
Disabilities Act of 1990, the Civil Rights Act of 1866, 42 U.S.C. ss. 1981, the
Employee Retirement Income Security Act of 1974, the Family and Medical Leave
Act of 1993, the Massachusetts Fair Employment Practices Act or any claim for
physical or emotional distress or injuries, or any other duty or obligation of
any kind or description up until the date of the Executive's execution of this
Agreement. This release shall apply to all known, unknown, unsuspected and
unanticipated claims, liens, injuries and damages, including, but not limited
to, claims of employment discrimination or claims sounding in tort or contract.
This release shall not apply to any claims the Executive may have relating to
the Company's performance of its obligations under this Agreement.
5. Arbitration. Any dispute, controversy or claim between the
parties hereto arising out of or relating to this Agreement either during or
after the term thereof, shall be settled by arbitration conducted in the
Commonwealth of Massachusetts, in accordance with the Commercial Rules of the
American Arbitration Association then in force. The decision of the arbitrator
or arbitrators conducting any such arbitration proceedings shall be in writing,
shall set forth the basis therefor and such arbitrator's or arbitrators'
decision or award shall be final and binding upon the parties hereto. The
parties hereto shall abide by all awards rendered in such arbitration
proceedings, and all such awards may be enforced and executed upon in any court
having jurisdiction over the party against whom or which enforcement of such
award is sought.
6. Enforceability and Severability. It is the intention of the
parties that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies of each state and
jurisdiction in which such enforcement is sought, but that the unenforceability
(or the modification to conform with such laws or public policies) of any
provisions hereof, shall not render unenforceable or impair the remainder of
this Agreement. Accordingly, if any provision of this Agreement shall be
determined to be invalid or unenforceable, either in whole or in part, this
Agreement shall be deemed amended to delete or modify, as necessary, the
offending provisions and to alter the balance of this Agreement in order to
render the same valid and enforceable to the fullest extent permissible.
However, the illegality or unenforceability of any such provision shall have no
effect on, and shall not impair the enforceability of the release language set
forth in paragraph 4, provided that, if a court of competent jurisdiction in an
action or proceeding to which the Executive is a party determines that the
release language set forth in paragraph 4 is unenforceable in any respect, the
Executive shall be required to pay to the Company the value of all amounts paid
and benefits provided to him by the Company under this Agreement, net of taxes
paid and not recoverable.
7. Assignment and Binding Effect. This Agreement is personal
in nature and neither of the parties hereto shall, without the consent of the
other, assign or transfer this Agreement or any rights or obligations hereunder.
This Agreement and all of the provisions hereof shall be binding upon, and inure
to the benefit of, the parties hereto, and their successors (including
successors by merger, consolidation or similar transactions), permitted assigns,
executors, administrators, personal representatives, heirs and distributees.
8. Trade Secrets. The Executive shall not disclose, use,
transfer or sell any confidential information or proprietary data of the
Releasees so long as such information or data remains confidential and has not
been disclosed or is not otherwise in the public domain, except as required by
law or pursuant to legal process or in connection with an administrative
proceeding before a governmental agency.
9. No Conflict. The Executive and the Company each hereby
represents and warrants to the other that the execution, delivery and
performance of this Agreement by him or it (as the case may be) shall not
violate any agreement or other obligation of any kind, written or oral, to which
he or it (as the case may be) is subject.
10. Miscellaneous.
(A) Notices. All notices hereunder shall be given in writing by personal
delivery (which shall include delivery by overnight couriers such as Federal
Express), telex, telecopy or prepaid registered or certified mail, return
receipt requested, to the addresses of the proper parties as set forth below:
TO THE EXECUTIVE:
MARK SHULMAN
9 Sanderson Lane
Weston, MA 02193
TO THE COMPANY:
The Talbots, Inc.
175 Beal Street
Hingham, Massachusetts 02043
Attn: Senior Vice-President/Human Resources
Any notice given as aforesaid shall be deemed received upon actual delivery. Any
party hereto (or any person designated to receive a copy of any notice) may
change his or its (as the case may be) designated address by notice served as
herein set forth upon the other party designated to receive notice. (B) Law
Governing. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts applicable to contracts made and
to be wholly performed in that state without regard to its conflicts of laws
provisions. (C) Headings. The paragraph headings contained in this Agreement are
for convenience of reference only and are not intended to determine, limit or
describe the scope or intent of any provision of this Agreement. (D) Number and
Gender. Whenever in this Agreement the singular is used, it shall include the
plural if the context so requires, and whenever the masculine gender is used in
this Agreement, it shall be construed as if the masculine, feminine or neuter
gender, respectively, has been used where the context so dictates, with the rest
of the sentence being construed as if the grammatical and terminological changes
thereby rendered necessary have been made. (E) Entire Agreement. Except as
provided for in paragraph 1 hereof, this Agreement contains the entire
understanding between and among the parties, and supersedes any and all prior or
contemporaneous understandings and agreements, written or oral, including, but
not limited to, the Employment Agreement, the Escrow Agreement, a Restricted
Stock Agreement dated October 27, 1997, a Restricted Stock Agreement dated May
5, 1998, a Nonqualified Stock Option Agreement dated October 27, 1997, and a
Nonqualified Stock Option Agreement dated February 10, 1998, provided, however,
that paragraphs 2, 4 and 9 through 13 of the October 27, 1997 Nonqualified Stock
Option Agreement and paragraphs 3, 5 and 10 through 15 of the February 10, 1998
Nonqualified Stock Option Agreement shall remain in full force and effect. In
the event of any conflict between the terms of the nonqualified stock option
agreements referred to above and this Agreement, this Agreement shall control.
(F) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original but both of which taken together shall constitute
one instrument. (G)
<PAGE>
Amendments. This Agreement may not be amended except by a
writing executed by the party against whom or which such amendment is to be
enforced. (H) Waiver. The failure of the Executive or the Company to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver thereof or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
(I) Non-Disparagement. The Executive agrees not to make, or cause to be made,
any written or oral statements about the Releasees that may disparage, criticize
or in any way injure the Releasees. The Executive acknowledges his understanding
that it is the Company's general policy to respond to inquiries concerning the
Company's former employees by confirming only their dates of employment and
positions held. The Executive has requested that the Company's President and
Senior Vice-President/Human Resources provide additional information about the
Executive and his employment with the Company to prospective employers of the
Executive and to executive search firms (collectively, "Prospective Employers"),
and the Company has agreed to accommodate the Executive's request. The Executive
agrees that he shall not have and shall not assert any claim against the
Releasees as a result of (1) the Company's furnishing any such information;
and/or (2) a Prospective Employer's failure to hire or taking other adverse
action with respect to the Executive after receiving such information. (J)
Covenant Not to Sue. The Executive represents and agrees that: (a) he has not
filed any lawsuits against the Releasees in any court whatsoever; (b) he has not
filed or caused to be filed any charges or complaints against the Releasees with
any municipal, state or federal agency charged with the enforcement of any law;
(c) he has not filed or caused to be filed any proceeding with any self-
regulatory organization; and (d) pursuant to and as part of the Executive's
release of the Releasees herein, to the fullest extent permitted by law, the
Executive shall not sue or file a charge, complaint, grievance or demand for
arbitration in any forum or assist or otherwise participate in any claim,
arbitration, suit, action, investigation or other proceeding of any kind that
relates to any matter that involves the Releasees (i) except as provided below,
that occurred up to and including the date of the Executive's execution of this
Agreement; and (ii) with respect to the information to be provided by the
Company pursuant to paragraph 10(I) above, that occurs at any time whether
before or after the Executive's execution of this Agreement, the Executive
expressly acknowledging that if not for the Executive's covenant hereunder, the
Company would not agree to provide such information. The Executive further
agrees that he will pay all costs and expenses incurred by the Releasees in
defending against any such suit, charge or complaint initiated by the Executive
including attorney's fees, and the Executive expressly waives any claim to any
form of monetary or other damages, or any other form of recovery or relief in
connection with any such action, or in connection with any action brought by a
third party. Without limiting the foregoing waiver and release, the Executive
further affirms that as of the date of this Agreement, he has no intention to
bring any action or make any claim against the Releasees. (K) Legal Process and
Litigation. The Executive agrees that, in the event that he is served with legal
process or other request purporting to require him to testify, plead, respond or
defend and/or produce documents at a legal proceeding, threatened proceeding,
investigation or inquiry involving the Releasees, he will: (1) refuse to provide
testimony or documents absent a subpoena, court order or similar process from a
regulatory agency; (2) within three (3) business days or as soon thereafter as
practical, provide oral notification to the Company's Senior
Vice-President/Human Resources of his receipt of such process or request to
testify or produce documents; and (3) provide to the Company's Senior
Vice-President/Human Resources by overnight delivery service a copy of all legal
papers and documents served upon him. The Executive further agrees that in the
event he is served with such process, he will meet and confer with the Company's
designee(s) in advance of giving such testimony or information. The Executive
also agrees to cooperate fully with the Releasees in connection with any
existing or future litigation against the Releasees, whether administrative,
civil or criminal in nature, in which and to the extent the Releasees deem the
Executive's cooperation necessary. The Company agrees to reimburse the Executive
for the Executive's reasonable out-of-pocket expenses (including, without
limitation, attorney's fees) incurred in connection with the performance of the
Executive's obligations under this paragraph 10(K). The Company represents that,
as of the date hereof, it is not aware of any matter that would be subject to
the indemnification provisions set forth in paragraph 7 of the Employment
Agreement if that matter were to become a "proceeding." (L) Confidentiality. The
Executive agrees that to the maximum extent permitted by law, neither he nor
anyone acting on his behalf will discuss or disclose the terms, contents or
execution of this Agreement or the facts and circumstances underlying it, except
in the following circumstances: (1) to his immediate family provided the
person(s) to whom the information is to be disclosed are informed of this
paragraph and agree to be bound by it; (2) to the extent necessary (a) to his
accountant or bona fide tax advisors provided such persons agree in writing to
be bound by this paragraph, (b) to taxing authorities, if requested by such
authorities and so long as they are advised in writing of the confidential
nature of the Agreement, or (c) to his legal counsel; (3) pursuant to subpoena
or court order after notice as provided in paragraph 10(K) above; or (4) in a
legal proceeding concerning the enforcement or interpretation of the provisions
of this Agreement. The Company agrees that, upon the Executive's written
request, it shall provide to the Executive a letter confirming that the
Executive is not restricted by a non-competition agreement with the Company. (M)
No Violations of Law. This Agreement may not be cited as, and does not
constitute an admission by the Releasees of any violation of any federal, state
or local law or any duty whatsoever, whether based in statute, common law, or
otherwise, and the Releasees expressly deny that any such violation has occurred
as to the Executive or any other person. (N) Breach by the Executive. The
Executive acknowledges and agrees that if he breaches any of his promises in
this Agreement, for example, by filing or prosecuting a lawsuit or charge based
on claims that he has released, or if any representation made by him in this
Agreement was false when made, or if he breaches any of the provisions contained
in paragraphs 8, 9, 10(I), 10(J), 10(K) or 10(L) of this Agreement, such conduct
would cause great damage and injury to the Releasees and that such provisions
provide a material element of the Company's consideration for and inducement to
enter into this Agreement. Accordingly, it is expressly understood and agreed
that if there is a breach by the Executive (1) the Company may cease provision
of any payments and benefits not already provided hereunder; (2) the Executive
must immediately repay to the Company the value of all payments and benefits
previously received by him under this Agreement as liquidated damages, it being
agreed that the Releasees' monetary damages in the event of such breach would be
difficult to calculate and that this amount represents a fair approximation of
such damages; and (3) if the Executive breaches paragraph 10(J) of this
Agreement, his repayment to the Company of the payments and benefits referred to
in item "(2)" above shall be a condition precedent to his right to maintain any
suit, charge, complaint, grievance or demand for arbitration against Releasees.
The parties further agree that the Releasees may, in addition to these
liquidated damages and in addition to pursuing any other remedies that they may
have in law or in equity, obtain an injunction against the Executive from any
court having jurisdiction over this matter, restraining any further violations
of this Agreement. (O) Agreement Not Admissible. The terms of this Agreement,
including all facts, circumstances, statements and documents relating thereto,
shall not be admissible or submitted as evidence in any litigation in any forum
for any purpose, other than to secure enforcement of the terms and conditions of
this Agreement. (P) Right to Counsel and Effective Date. The Executive hereby
acknowledges that he has up to twenty-one (21) days from the date he receives
this Agreement within which to consider its terms, and that he has been advised
that during such period he should consult an attorney regarding its terms. The
Executive further acknowledges that his signature below indicates that he is
entering into this Agreement freely, knowingly and voluntarily with a full
understanding of its terms. Further, the terms of this Agreement shall not
become effective or enforceable until seven (7) days following the date of its
execution by the Executive, during which time he may revoke the Agreement by so
notifying the Company in writing.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
Read carefully. This Agreement has important legal consequences.
MARK SHULMAN THE TALBOTS, INC.
/s/ Mark Shulman By: /s/ Arnold B. Zetcher
- ------------------- -------------------------
Mark Shulman Name: Arnold B. Zetcher
Title:
3/24/99 4/5/99
Date Date
[BANK BOSTON LETTERHEAD]
June 1, 1998
The Talbots, Inc.
175 Beal Street
Hingham, MA 02043
Attention: Mr. Edward L. Larsen
Senior Vice President, Finance
Chief Financial Officer and Treasurer
Dear Ed:
This letter will serve to confirm that Bank Boston, N.A. (the
"Bank") holds available for The Talbots, Inc. (the "Company") uncommitted,
discretionary credit facilities as follows:
(a) an aggregate $70,000,000.00 line of credit for the
issuance of documentary letters of credit to support the importation of goods
into the United States from Hong Kong and other Asian countries, and the
issuance of one-year standby letters of credit;
(b) an aggregate $5,000,000 money market line of credit for
discretionary advances; and
(c) a $10,000,000 foreign exchange line for spot and 12-month
forward contracts.
All such facilities shall expire on May 31, 1999 and
documentary letters of credit will be payable at sight and shall be priced as
follows based on the location of the issuance:
Boston Hong Kong
Issuing Fee: U.S. $25* Waived
Negotiation Fee: The greater of 1/8% or U.S. $70 Waived
Amendment Fee: U.S. $25* Waived
*Plus Cable Fee
Each documentary letter of credit issued under this facility
will be governed additionally by a continuing Commercial Letter of Credit
Agreement, and a Master Trade Key Agreement between the Company and the Bank,
and such other documentation that the Bank may require from time to time.
The standby letter of credit issued under this facility will
be governed by our existing Standby Letter of Credit Agreement and such other
documentation that the Bank may require from time to time.
Each money market advance under this facility will be at fixed
rates quoted by BankBoston, N.A., with maturities of up to 180 days and no loan
shall have an interest period that extends beyond the expiration of this line of
credit. Each loan must be at least $1,000,000.00 and aggregate loans under this
arrangement may not exceed $5,000,000.00. This arrangement is not a commitment
to lend, and from time to time the Bank may not quote rates on some or all
maturities.
We agree that upon your advice by telephone from time to time
to our Money Market Desk at (617) 434-7725 that you wish to borrow money under
this facility and our agreement to lend, we will forthwith lend you such amount
at the quoted rate of interest by crediting such amount to your demand deposit
account with us, or, upon your instructions, by wiring such amount to such other
account as you may direct. Borrowings will be evidenced by a Promissory Note in
the form attached hereto. Each borrowing and the corresponding information (see
attached note schedule) will be recorded the day of the telephone call. Our
advices of credit and debit will be additional evidence of borrowings. You
authorize us to keep the official record of all borrowings under this "money
marker" lending arrangement in the format described above, and you agree that
this record shall be prima facie evidence of the amount of the borrowings under
this facility.
No voluntary prepayment of money market loans will be
permitted. If any money market loans are paid on a date other than the last day
of the applicable interest period (whether by reason of voluntary prepayment,
acceleration or otherwise), the Company shall compensate the Bank for any
funding losses and other costs (including lost profits) incurred as a result of
such prepayment.
<PAGE>
This letter and the Promissory Note evidence your promise to
pay all such borrowings with interest on their respective maturity dates. This
"money market" lending arrangement remains in force until May 31, 1999.
If the foregoing satisfactorily sets forth the terms and
conditions of our lines of credit, please execute and return this letter. We are
pleased to provide these lines and look forward to the ongoing development of
our relationship.
Sincerely,
BankBoston, N.A.
/s/ Nancy E. Fuller
By:--------------------------------
Nancy E. Fuller, Director
Retail & Apparel Division
Accepted:
The Talbots, Inc.
/s/ Edward L. Larsen
By:---------------------------------
Senior Vice President, Finance
Chief Financial Officer and Treasurer
Date: June 15, 1998
[MARINE MIDLAND BANK]
11 August 1998
Mr. Sandy Katz
Talbots
175 Beal Street
Hingham
MA 02043
Dear Mr. Katz:
BANKING FACILITIES
We are pleased to inform you that HSBC Corporate Banking,
Marine Midland Bank is willing to make available to your company an uncommitted
Credit Facility ("Facility") totaling USD30,000,000. It is understood that this
Facility is not committed and availability shall remain subject to our sole
discretion and our overriding right of repayment on demand. These facilities are
a continuation of facilities provided by The Hongkong and Shanghai Banking
Corporation Ltd. as evidenced by our Banking Facilities letter dated 2 June
1997.
Either of us may terminate this Facility with respect to
future advances at any time upon written notice to the other party. In the event
of termination by either party, your company's obligations under this Facility
and associated documentation, shall remain in force until all credit extended to
you under this Facility, together with all accrued interest and any other sums,
have been paid in full.
This Facility is made available on the following basis:
BORR0WER The Talbots, Inc.
LENDER Marine Midland Bank ("Bank").
FACILITY USD30,0000000
AMOUNT
PURPOSE For the issuance of commercial
letters of credit ("L/Cs") at sight,
or for commercial letters of credit
with usance periods of up to six
months, with validity periods up to
one year to finance the import of
general merchandise.
TENOR Facility is uncommitted and is
therefore available at Bank's
discretion.
TERMINATION Bank to advise Borrower in writing.
REPAYMENT Borrower will cover L/C issuing Bank
the following US business day after
receiving demand (clean drawings or
drawings with accepted
discrepancies)
PRICING Issuance - Nil
Amendments - Nil
Payment of documents presented via
HSBC Branches - Nil Payment of
documents present via third party
banks - 0.125% (minimum $65.00)
Usance - 0.50% per annum
COLLATERAL Unsecured
REPORTING
REQUIREMENT 10Q and 10K within 90 days of period end.
FINANCIAL
COVENANTS Nil
Unless these facilities are terminated, we will fully review
the credit basis for these uncommitted facilities at least annually upon
submission of your annual audited and quarterly financial statements within 90
days of your fiscal year end. This facility will automatically expire as of 30
June 1999 unless renewed or extended by us in writing.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE THE FINAL AND
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE BORROWER AND THE LENDER RELATING
TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Please arrange for authorized signatories of your company, in
accordance with the terms of the mandate given to the Lender, to sign and return
to us the duplicate copy of this letter to signify your acceptance of the terms
and conditions under which these uncommitted Facilities are granted.
The offering of these uncommitted Facilities is subject to
execution of documentation acceptable to the Lender and will expire at 5:00 p.m.
on 21 August 1998 unless we have received a fully executed copy of this letter
from your company by such time.
In closing, we are pleased to be of service to your fine
company.
Yours sincerely,
/s/ Adriana Collins
------------------
Adriana D. Collins
Vice President
Corporate Banking
ACCEPTED AND AGREED TO:
The Talbot's, Inc.
By: /s/ Edward L. Larsen
Authorized Signature
Name: Edward L. Larsen
Title: Senior Vice President, Finance and Chief Financial Officer
Date: August 14,1998
By: /s/ Sandy F. Katz
Authorized Signature
Name: Sandy F. Katz
Title: Vice President, Audit and Control
Date: August 14, 1998
<PAGE>
2 June 1997
Mr. Sandy Katz
Talbots
175 Beal Street
Hingham
MA 02043
Dear Mr. Katz:
BANKING FACILITIES
We are pleased to inform you that The Hongkong and Shanghai
Banking Corporation Limited is willing to make available to your company an
uncommitted Credit Facility ("Facility") totaling USD30,000,000. It is
understood that this Facility is not committed and availability shall remain
subject to our sole discretion and our overriding right of repayment on demand.
Either of us may terminate this Facility with respect to
future advances at any time upon written notice to the other party. In the event
of termination by either party, your company's obligations under this Facility
and associated documentation, shall remain in force until all credit extended to
you under this Facility, together with all accrued interest and any other sums,
have been paid in full.
This Facility is made available on the following basis:
BORR0WER The Talbots, Inc.
LENDER The Hongkong and Shanghai Banking
Corporation Limited ("Bank").
FACILITY USD30,000,000
AMOUNT
PURPOSE For the issuance of commercial
letters of credit ("L/Cs") at sight,
or for commercial letters of credit
with usance periods of up to six
months, with validity periods up to
one year to finance the import of
general merchandise.
TENOR Facility is uncommitted and is
therefore available at Bank's
discretion.
TERMINATION Bank to advise Borrower in writing.
REPAYMENT Borrower will cover L/C issuing Bank
the following US business day after
receiving demand (clean drawings or
drawings with accepted
discrepancies)
PRICING Issuance - Nil
Amendments - Nil
Payment of documents presented via
HSBC Branches - Nil Payment of
documents present via third party
banks - 0.125% (minimum $65.00)
Usance - 0.50% per annum
COLLATERAL Unsecured
REPORTING
REQUIREMENT 10Q and 10K within 90 days of period end.
FINANCIAL
COVENANTS -Nil
Unless these facilities are terminated, we will fully review
the credit basis for these uncommitted facilities at least annually upon
submission of your annual audited financial statements within 90 days of your
fiscal year end. This facility will automatically expire as of 30 June 1998
unless renewed or extended by us in writing.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE THE FINAL AND
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE BORROWER AND THE LENDER RELATING
TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Please arrange for authorized signatories of your company, in
accordance with the terms of the mandate given to the Lender, to sign and return
to us the duplicate copy of this letter to signify your acceptance of the terms
and conditions under which these uncommitted Facilities are granted.
The offering of these uncommitted Facilities is subject to
execution of documentation acceptable to the Lender and will expire at 5:00 p.m.
on 30 June 1997 unless we have received a fully executed copy of this letter
from your company by such time.
In closing, we are pleased to be of service to your fine
company.
Yours sincerely,
/s/ J.L. Peanick /s/Anastasia Micklettwaite
- --------------------- --------------------------
J.L. Peanick Anastasia Micklettwaite
Senior Vice President Assistant Vice President
Trade Services Trade Services
ACCEPTED AND AGREED TO:
The Talbot's, Inc.
By:/s/ Edward L. Larsen
Authorized Signature
Name:
Title:
Date:
By: /s/ Sandy F. Katz
Authorized Signature
Name:
Title:
Date:
[BANK OF TOKYO-MITSUBISHI]
April 16, 1999
ACCEPTANCE OF EXTENSION
To: The Talbots, Inc.
Re: Credit Agreement dated as of April 17, 1998 between The Talbots, Inc. as
borrower and The Bank of Tokyo-Mitsubishi, Ltd. New York Branch as Lender
(the "Agreement")
Dear Sirs:
Pursuant to Section 1(h) of the Agreement we hereby accept
your request for one year extension of the Credit Facility Termination Date (as
defined in the Agreement) so that the Credit Facility Termination Date would
expire on April 17, 2001.
Very Truly yours,
THE BANK OF TOKYO-MITSUBISHI, LTD.
The New York Branch
/s/ Takaharu Saegusa
Takaharu Saegusa
Deputy General Manager
cc: Mr. N. Kaida
JUSCO (U.S.A), Inc.
<PAGE>
[BANK OF TOKYO-MITSUBISHI]
January 29, 1999
ACCEPTANCE OF EXTENSION
To: The Talbots, Inc.
Re: Revolving Credit Agreement dated as of January 25,
1994, First Amendment, dated November 21, 1995, and
Second Amendment dated April 18, 1996, between The
Talbots, Inc., as borrower and Bank of
Tokyo-Mitsubishi Trust Company as Lender (the
"Agreement")
Dear Sirs:
Pursuant to Section 14(j)(ii) of this Agreement we hereby
accept your request for one year extension of the Revolving Credit Period (as
defined in the Agreement) so that the Revolving Credit Period would expire on
January 29, 2001.
Very Truly yours,
THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY
/s/ Osamu Miki
Osamu Miki
Authorized Signer
cc: Mr. N. Kaida
JUSCO (U.S.A), Inc.
<PAGE>
[THE SAKURA BANK, LIMITED, New York Branch]
January 28, 1999
Mr. Edward L. Larsen
Senior Vice President
THE TALBOTS, INC.
175 Beal Street
Hingham, MA 02043
Re: Revolving Credit Agreement dated as of January 25, 1994, and as amended on
November 21, 1995 and on April 18, 1996, among The Talbots, Inc. as
borrower, and The Sakura Bank, Limited, (the "Agreement")
Pursuant to Section 14(j), we hereby inform you that we
extended the Revolving Credit Facility (as defined in the Agreement), which will
expire on January 28, 2000 so that it would expire on February 10, 2000.
Very Truly yours,
THE SAKURA BANK, LIMITED
New York Branch
/s/ Yoichi Sawabe
Yoichi Sawabe
Vice President
cc: Mr. Natsuki Kaida
Vice President & Treasurer
JUSCO (U.S.A), Inc.
<PAGE>
[THE DAI-ICHI KANGYO BANK, LTD.]
January 28, 1999
The Talbots, Inc.
175 Beal Street
Hingham, MA 02043
CONFIRMATION OF EXTENSION
Re: Revolving credit agreement dated as of January 25,
1994, First Amendment dated November 21, 1995, Second
Amendment dated April 18, 1996 and Third Amendment
dated April 17, 1998 between the Talbots, Inc., as
borrower, and The Dai-Ichi Kangyo Bank, Limited (the
"Agreement")
Dear Sirs:
We are pleased to confirm with you the one year extension of
the Revolving Credit according to Section 14 (j)(ii) of the Agreement. The new
expiry dated January 28, 2001.
Very truly yours,
THE DAI-ICHI KANGYO BANK, LIMITED
New York Branch
/s/ Takashi Horie
Takashi Horie
Vice President & Department Head
<PAGE>
FOURTH AMENDMENT AGREEMENT
THIS FOURTH AMENDMENT AGREEMENT (this "Amendment") is made as
of April 16, 1999 between The Talbots, Inc. (the "Borrower") and The Norinchukin
Bank, New York Branch (the "Bank").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to the Revolving
Credit Agreement, dated as of January 25, 1994, as amended by the First
Amendment, dated as of November 21, 1995, the Second Amendment, dated as of
April 18, 1996, and the Third Amendment, dated as of April 17, 1998 (as so
amended, the "Revolving Credit Agreement"); Capitalized terms which are used
herein but not otherwise defined shall have the respective meanings ascribed
thereto in the Revolving Credit Agreement); and
WHEREAS, the parties hereto desire to make certain amendments
to the Revolving Credit Agreement as hereinafter set forth;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Amendments to the Revolving Credit Agreement. The Bank and
the Borrower hereby agree to amend the Revolving Credit Agreement as follows:
(a) The definition of "LIBOR Reference Bank" contained in
Section 1 of the Revolving Credit Agreement is hereby amended by deleting the
reference to "The Bank of Tolyo, Ltd." And inserting in lieu thereof a reference
to "The Norinchukin Bank".
(b) Section 5(a) of the Revolving Credit Agreement is hereby
amended by deleting the reference to "one-half of one percent (0.5%)" and
inserting in lieu thereof a reference to "sixty-five one hundredths of one
percent (0.65%).
2. Revolving Credit Period. The parties hereto agree that the
current Revolving Credit Period shall mean a period to and including April 17,
2001.
3. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
4. Expenses. The Borrower agrees to pay all reasonable
out-of-pocket expenses incurred by the Bank in connection with the preparation
of this Assignment or with any amendments, modifications or waivers of the
provisions hereof or o f the Revolving Credit Agreement or incurred by the Bank
in connection with the enforcement or protection of its rights in connection
with any pending or threatened action, proceeding or investigation relating to
the foregoing, including but not limited to, the reasonable fees and
disbursements of counsel for the bank.
5. Further Assurance. Each parties hereto shall promptly
execute and deliver all such other agreements, certificates, instruments or
documents and do and perform or cause to be done and performed all such further
acts and things as may be reasonable requested by the other party in order to
carry out the intent and purposes of this Amendment.
6. Full Force and Effect; Ratification. (a) All references to
the Revolving Credit Agreement shall be deemed to refer to the Revolving Credit
Agreement as amended by this Amendment, and the term "this Agreement" and the
words "hereof", "herein", "hereunder" and words of similar import, as used in
the Revolving Credit Agreement, shall mean the Revolving Credit Agreement as
amended hereby.
(b) Except as expressly set forth herein this Amendment shall
not constitute an amendment, waiver or consent with respect to any provision of
the Revolving Credit Agreement, and the Revolving Credit Agreement, as amended
hereby, remain in full force and effect and is hereby ratified, approved and
confirmed in all respects.
7. Counterparts. This Amendment may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
(signatures on next page)
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed by the authorized officers.
THE TALBOTS, INC.
/s/ Edward L. Larsen
By---------------------
Name:
Title:
THE NORINCHUKIN BANK
NEW YORK BRANCH
/s/ Kohei Hara
By-----------------------
Name: Kohei Hara
Title: Joint General Manager
The Talbots, Inc.
Amended and Restated 1993 Executive Stock Based Incentive Plan
1. Purpose. The purpose of the Amended and Restated 1993
Executive Stock Based Incentive Plan (the "Plan") is to advance the interests of
The Talbots, Inc. (the "Company") and its shareholders by providing incentives
to certain key employees of the Company and its affiliates and to certain other
key individuals who perform services for these entities, including those who
contribute significantly to the strategic and long-term performance objectives
and growth of the Company and its affiliates.
2. Administration. The Plan shall be administered solely by
the Compensation Committee (the "Committee") of the Board of Directors (the
"Board") of the Company, as such Committee is from time to time constituted, or
any successor committee the Board may designate to administer the Plan; provided
that if at any time Rule 16b-3 or any successor rule ("Rule" 16b-311) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), so permits
without adversely affecting the ability of the Plan to comply with the
conditions for exemption from Section 16 of the Exchange Act (or any successor
provision) provided by Rule 16b-3, the Committee may delegate the administration
of the Plan in whole or in part, on such terms and conditions, and to such
person or persons as it may determine in its discretion, as it relates to
persons not subject to Section 16 of the Exchange Act (or any successor
provision). The membership of the Committee or such successor committee shall be
constituted so as to comply at all times with the applicable requirements of
Rule 16b-3.
The Committee has all the powers vested in it by the terms of
the Plan set forth herein, such powers to include exclusive authority (except as
may be delegated as permitted herein) to select the key employees and other key
individuals to be granted awards under the Plan ("Awards"), to determine the
type, size and terms of the Award to be made to each individual selected, to
modify the terms of any Award that has been granted, to determine the time when
Awards will be granted, to establish performance objectives, to make any
adjustments necessary or desirable as a result of the granting of Awards to
eligible individuals located outside the United States and to prescribe the form
of the instruments embodying Awards made under the Plan. The Committee is
authorized to interpret the Plan and the Awards granted under the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan
(including, but not limited to, vesting requirements, if any), and to make any
other determinations which it deems necessary or desirable for the
administration of the Plan. The Committee (or its delegate as permitted herein)
may correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any Award in the manner and to the extent the Committee deems
necessary or desirable to carry it into effect. Any decision of the Committee
(or its delegate as permitted herein) in the interpretation and administration
of the Plan, as described herein, shall be within its sole and absolute
discretion and shall be final, conclusive and binding on all parties concerned.
The Committee may act only by a majority of its members in office, except that
the members thereof may authorize any one or more of their members or any
officer of the Company to execute and deliver documents or to take any other
ministerial action on behalf of the Committee with respect to Awards made or to
be made to Plan participants. No member of the Committee and no officer of the
Company shall be liable for anything done or omitted to be done by him, by any
other member of the Committee or by any officer of the Company in connection
with the performance of duties under the Plan, except for his own willful
misconduct or as expressly provided by statute. Determinations to be made by the
Committee under the Plan may be made by its delegates.
3. Participation. (a) Affiliates. If an Affiliate (as
hereinafter defined) of the Company wishes to participate in the Plan and its
participation shall have been approved by the Board upon the recommendation of
the Committee, the board of directors or other governing body of the Affiliate
shall adopt a resolution in form and substance satisfactory to the Committee
authorizing participation by the Affiliate in the Plan with respect to its key
employees or other key individuals performing services for it. As used herein,
the term "Affiliate" means any entity in which the Company has a substantial
direct or indirect equity interest, as determined by the Committee in its
discretion.
An Affiliate participating in the Plan may cease to be a
participating company at any time by action of the Board or by action of the
board of directors or other governing body of such Affiliate, which latter
action shall be effective not earlier than the date of delivery to the Secretary
of the Company of a certified copy of a resolution of the Affiliate's board of
directors or other governing body taking such action. If the participation in
the Plan of an Affiliate shall terminate, such termination shall not relieve it
of any obligations therefor incurred by it under the Plan, except as may be
approved by the Committee.
(b) Participants. Consistent with the purpose of the
Plan, the Committee shall have exclusive power (except as may be delegated as
permitted herein) to select the key employees and other key individuals
performing the services for the Company and its Affiliates who may participate
in the Plan and be granted Awards under the Plan. Eligible individuals may be
selected individually or by groups or categories, as determined by the Committee
in its discretion. No non-employee director of the Company or any of its
Affiliates shall be eligible to receive an Award under the Plan.
4. Awards under the Plan. (a) Types of Awards. Awards under
the Plan may include, but need not be limited to, one or more of the following
types, either alone or in any combination thereof: (i) "Stock Options," (ii)
"Stock Appreciation Rights," (iii) "Restricted Stock," (iv) "Performance Grants"
and (v) any other type of Award deemed by the Committee in its discretion to be
consistent with the purposes of the Plan (including, but not limited to, Awards
of or options or similar rights granted with respect to unbundled stock units or
components thereof, and Awards to be made to participants who are foreign
nationals or are employed or performing services outside the United States.)
Stock Options, which include "Nonqualified Stock Options" and "Incentive Stock
Options" or combinations thereof, are rights to purchase common shares of the
Company having a par value of $0.01 per share and stock of any other class into
which such shares may thereafter be changed (the "Common Shares"). Nonqualified
Stock Options and Incentive Stock options are subject to the terms, conditions
and restrictions specified in Paragraph 5. Stock Appreciation Rights are rights
to receive (without payment to the Company) cash, Common Shares, other Company
securities (which may include, but need not be limited to, unbundled stock units
or components thereof, debentures, preferred stock, warrants, securities
convertible into Common Shares or other property, and other types of securities
including, but not limited to, those of the Company or an Affiliate, or any
combination thereof ("Other Company Securities")) or property, or other forms of
payment, or any combination thereof, as determined by the Committee, based on
the increase in the value of the number of Common Shares specified in the Stock
Appreciation Right. Stock Appreciation Rights are subject to the terms,
conditions and restrictions specified in Paragraph 6. Shares of Restricted Stock
are Common Shares which are issued subject to certain restrictions pursuant to
Paragraph 7. Performance Grants are contingent awards subject to the terms,
conditions and restrictions described in Paragraph 8, pursuant to which the
participant may become entitled to receive cash, Common Shares, Other Company
Securities or property, or other forms of payment, or any combination thereof,
as determined by the Committee.
(b) Maximum Number of Shares that Shall be Issued.
There shall be issued under the Plan (as Restricted Stock, in payment of
Performance Grants, pursuant to the exercise of Stock Options or Stock
Appreciation Rights, or in payment of or pursuant to the exercise of such other
Awards as the Committee, in its discretion, may determine) an aggregate of not
more than 5,960,000 Common Shares and Other Company Securities, subject to
adjustment as provided in Paragraph 15 hereof. For purposes of this Paragraph
4(b), Other Company Securities shall be counted against the maximum number of
Common Shares as required by Rule 16b-3. Common Shares and, to the extent they
constitute equity securities, Other Company Securities issued pursuant to the
Plan may be either authorized but unissued shares, treasury shares, reacquired
shares or any combination thereof. Unless prohibited by Rule 16b-3, any Common
Shares or Other Company Securities subject to repurchase or forfeiture rights
that are reacquired by the Company pursuant to such rights or any Common Shares
or Other Company Securities previously counted against the maximum number of
shares set forth above in respect of any Award that is canceled, terminated or
expires unexercised in whole or in part will be available for issuance under new
Awards. In addition, to the extent prohibited by Rule 16b-3, any Common Shares
or Other Company Securities withheld by or tendered to the Company in connection
with the payment of the exercise price of an Award or the satisfaction of the
tax withholding obligations upon the exercise or vesting of an Award will be
available for issuance under new Awards.
(c) Rights with respect to Common Shares and Other
Securities.
(i) Unless otherwise determined by the Committee in
its discretion, a participant to whom an Award of Restricted
Stock has been made (and any person succeeding to such a
participant's rights pursuant to the Plan) shall have, after
issuance of a certificate for the number of Common Shares
awarded and prior to the expiration of the Restricted Period
or the earlier repurchase of such Common Shares as herein
provided, ownership of such Common Shares, including the right
to vote the same and to receive dividends or other
distributions made or paid with respect to such Common Shares
(provided that such Common Shares, and any new, additional or
different shares, or Other Company Securities or property, or
other forms of consideration which the participant may be
entitled to receive with respect to such Common Shares as a
result of a stock split, stock dividend or any other change in
the corporation or capital structure of the Company, shall be
subject to the restrictions hereinafter described as
determined by the Committee in its discretion), subject,
however, to the options, restrictions and limitations imposed
thereon pursuant to the Plan. Notwithstanding the foregoing, a
participant with whom an Award agreement is made to issue
Common Shares in the future, shall have no rights as a
shareholder with respect to Common Shares related to such
agreement until issuance of a certificate to him.
(ii) Unless otherwise determined by the Committee in
its discretion, a participant to whom a grant of Stock
options, Stock Appreciation Rights, Performance Grants or any
other Award is made (and any person succeeding to such a
participant's rights pursuant to the Plan) shall have no
rights as a shareholder with respect to any Common Shares or
as a holder with respect to other securities, if any, issuable
pursuant to any such Award until the date of the issuance of a
stock certificate to him for such Common Shares or other
instrument of ownership, if any. Except as provided in
Paragraph 15, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or
extraordinary, and whether in cash, securities, other property
or other forms of consideration, or any combination thereof)
for which the record date is prior to the date such stock
certificate or other instrument of ownership, if any, is
issued.
5. Stock Options. The Committee may grant Stock Options either
alone, or in conjunction with Stock Appreciation Rights, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter; provided
that an Incentive Stock Option may be granted only to an eligible employee of
the Company or its parent or subsidiary corporation. Each Stock Option (referred
to herein as an "Option") granted under the Plan shall be evidenced by an
instrument in such form as the Committee shall prescribe from time to time in
accordance with the Plan and shall comply with the following terms and
conditions, and with such other terms and conditions, including, but not limited
to, restrictions upon the Option or the Common Shares issuable upon exercise
thereof, as the Committee, in its discretion, shall establish:
(a) The option price may be equal to or greater than the fair
market value of the Common Shares subject to such option at the time the Option
is granted, as determined by the Committee; provided, however, that in the case
of an Incentive Stock option granted to such an employee who owns stock
representing more than ten percent of the voting power of all classes of stock
of the Company or of its parent or subsidiary (a "Ten Percent Employee"), such
option price shall not be less than 110% of such fair market value at the time
the Option is granted; but in no event will such option price be less than the
par value of such Common Shares.
(b) The Committee shall determine the number of Common Shares
to be subject to each Option. The number of Common Shares subject to an
outstanding Option may be reduced on a share-for-share or other appropriate
basis, as determined by the Committee, to the extent that Common Shares under
such Option are used to calculate the cash, Common Shares, Other Company
Securities or property, or other forms of payment, or any combination thereof,
received pursuant to exercise of a Stock Appreciation Right attached to such
option, or to the extent that any other Award granted in conjunction with such
option is paid.
(c) The Option may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution, and shall be exercisable during the grantee's lifetime
only by him. Unless the Committee determines otherwise, the Option shall not be
exercisable for at least twelve months after the date of grant, unless the
grantee ceases employment or performance of service before the expiration of
such twelve-month period by reason of his disability as defined in Paragraph 12
or his death.
(d) The Option shall not be exercisable:
(i) in the case of any Incentive Stock Option granted
to a Ten Percent Employee, after the expiration of five years
from the date it is granted, and, in the case of any other
option, after the expiration of ten years from the date it is
granted. Any Option may be exercised during such period only
at such time or times and in such installments as the
Committee may establish;
(ii) unless payment in full is made for the shares
being acquired thereunder at the time of exercise; such
payment shall be made in such form (including, but not limited
to, cash, Common Shares, or any combination thereof) as the
Committee may determine in its discretion; and
(iii) unless the person exercising the Option has
been, at all times during the period beginning with the date
of the grant of the option and ending no later than the date
which is three months prior to the date of such exercise,
employed by or otherwise performing services for the Company
or an Affiliate, or a corporation, or a parent or subsidiary
of a corporation, substituting or assuming the option in a
transaction to which Section 425(a) of the Internal Revenue
Code of 1986, as amended, or any successor statutory provision
thereto (the "Code"), is applicable, except that
(A) in the case of any Nonqualified Stock Option, if
such person shall cease to be employed by or otherwise
performing services for the Company or an Affiliate solely by
reason of a period of Related Employment as defined in
Paragraph 14, he may, during such period of Related
Employment, exercise the Nonqualified Stock Option as if he
continued such employment or performance of service; or
(B) if such person shall cease such employment or
performance of services by reason of his disability as defined
in Paragraph 12 or early, normal or deferred retirement under
a qualified retirement program of the Company or an Affiliate
(or such other plan or arrangement as may be approved by the
Committee, in its discretion, for this purpose) while holding
an option which has not expired and has not been fully
exercised, such person, at any time within three years (or
such other period determined by the Committee) after the date
he ceased such employment or performance of services (but in
no event after the option has expired), may exercise the
Option with respect to any shares as to which he could have
exercised the Option on the date he ceased such employment or
performance of services, or with respect to such greater
number of shares as determined by the Committee; or
(C) if any person to whom an Option has been granted
shall die holding an option which has not expired and has not
been fully exercised, his executors, administrators, heirs or
distributees, as the case may be, may, at any time within one
year (or such other period determined by the Committee) after
the date of death (but in no event after the option has
expired), exercise the option with respect to any shares as to
which the decedent could have exercised the option at the time
of his death, or with respect to such greater number of shares
as determined by the Committee.
(D) in the case of any Nonqualified Stock Option, if
such person shall cease such employment or performance of
services by reason of his "termination without cause" (as such
term is defined in the employment agreement then in effect
between the Company and such person, or if there exists no
such employment agreement or no such defined term in any such
employment agreement, then as determined by the Committee in
its discretion) by the Company or an Affiliate while holding
an Option which has not expired and has not been fully
exercised, such person, at any time within three years (or
such other shorter period as may be determined by the
Committee in its discretion or as may be expressly set forth
in any such employment agreement) after the date he ceased
such employment or performance of services (but in no event
after the Option has expired), may exercise the Option with
respect to any share as to which he could have exercised the
Option on the date he ceased such employment or performance of
services, or with respect to such greater number of shares as
determined by the Committee.
(e) In the case of an Incentive Stock Option, the amount of
aggregate fair market value of Common Shares (determined at the time of grant of
the option pursuant to subparagraph 5 (a) of the Plan) with respect to which
incentive stock options are exercisable for the first time by an employee during
any calendar year (under all such plans of his employer corporation and its
parent and subsidiary corporations) shall not exceed an amount to be determined
by the Committee.
(f) It is the intent of the Company that the Nonqualified
Stock Options granted under the Plan not be classified as Incentive Stock
Options, that the Incentive Stock Options granted under the Plan be consistent
with and contain or be deemed to contain all provisions required under Section
422 and the other appropriate provisions of the Code and any implementing
regulations (and any successor provisions thereof), and that any ambiguities in
construction shall be interpreted in order to effectuate such intent.
6. Stock Appreciation Rights. The Committee may grant Stock
Appreciation Rights either alone, or in conjunction with Stock Options,
Performance Grants or other Awards, either at the time of grant or by amendment
thereafter. Each Award of Stock Appreciation Rights granted under the Plan shall
be evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions, including, but
not limited to, restrictions upon the Award of Stock Appreciation Rights or the
Common Shares issuable upon exercise thereof, as the Committee, in its
discretion, shall establish:
(a) The Committee shall determine the number of Common Shares
to be subject to each Award of Stock Appreciation Rights. The number of Common
Shares subject to an outstanding Award of Stock Appreciation Rights may be
reduced on a share for-share or other appropriate basis, as determined by the
Committee, to the extent that Common Shares under such Award of Stock
Appreciation Rights are used to calculate the cash, Common Shares, Other Company
Securities or property, or other forms of payment, or any combination thereof
received pursuant to exercise of an option attached to such Award of Stock
Appreciation Rights, or to the extent that any other Award granted in
conjunction with such Award of Stock Appreciation Rights is paid.
(b) The Award of Stock Appreciation Rights may not be sold,
assigned, transferred, pledged, hypothecated or otherwise disposed of, except by
will or the laws of descent and distribution, and shall be exercisable during
the grantees' lifetime only by him. Unless the Committee determines otherwise,
the Award of Stock Appreciation Rights shall not be exercisable for at least
twelve months after the date of grant, unless the grantee ceases employment or
performance of services before the expiration of such twelve-month period by
reason of his disability as defined in Paragraph 12 or his death.
(c) The Award of Stock Appreciation Rights shall not be
exercisable:
(i) in the case of any Award of Stock Appreciation
Rights that are attached to an Incentive Stock option granted
to a Ten Percent Employee, after the expiration of five years
from the date it is granted, and, in the case of any other
Award of Stock Appreciation Rights, after the expiration of
ten years from the date it is granted. Any Award of Stock
Appreciation Rights may be exercised during such period only
at such time or times and in such installments as the
Committee may establish;
(ii) unless the option or other Award to which the
Award of Stock Appreciation Rights is attached is at the time
exercisable; and
(iii) unless the person exercising the Award of Stock
Appreciation Rights has been at all times during the period
beginning with the date of the grant thereof and ending no
later than the date which is three months prior to the date of
such exercise, employed by or otherwise performing services
for the Company or an Affiliate, except that
(A) in the case of any Award of Stock
Appreciation Rights (other than those attached to an Incentive
Stock Option), if such person shall cease to be employed by or
otherwise performing services for the Company or an Affiliate
solely by reason of a period of Related Employment as defined
in Paragraph 14, he may, during such period of Related
Employment, exercise the Award of Stock Appreciation Rights as
if he continued such employment or performance of services; or
(B) if such person shall cease such
employment or performance of services by reason of his
disability as defined in Paragraph 12 or early, normal or
deferred retirement under a qualified retirement program of
the Company or an Affiliate (or such other plan or arrangement
as may be approved by the Committee, in its discretion, for
this purpose) while holding an Award of Stock Appreciation
Rights which has not expired and has not been fully exercised,
such person may, at any time within three years (or such other
period determined by the Committee) after the date he ceased
such employment or performance of services (but in no event
after the Award of Stock Appreciation Rights has expired),
exercise the Award of Stock Appreciation Rights with respect
to any shares as to which he could have exercised the Award of
Stock Appreciation Rights on the date he ceased such
employment or performance of services, or with respect to such
greater number of shares as determined by the Committee; or
(C) if any person to whom an Award of Stock
Appreciation Rights has been granted shall die holding an
Award of Stock Appreciation Rights which has not expired and
has not been fully exercised, his executors, administrators,
heirs or distributees, as the case may be, may, at any time
within one year (or such other period determined by the
Committee) after the date of death (but in no event after the
Award of Stock Appreciation Rights has expired), exercise the
Award of Stock Appreciation Rights with respect to any shares
as to which the decedent could have exercised the Award of
Stock Appreciation Rights at the time of his death, or with
respect to such greater number of shares as determined by the
Committee.
(D) in the case of any Award of Stock
Appreciation Rights (other than those attached to an Incentive
Stock Option), if such person shall cease such employment or
performance of services by reason of his "termination without
cause" (as such term is defined in the employment agreement
then in effect between the Company and such person, or if
there exists no such employment agreement or no such defined
term in any such employment agreement, then as determined by
the Committee in its discretion) by the Company or an
Affiliate while holding an Award of Stock Appreciation Rights
which has not expired and has not been fully exercised, such
person, at any time within three years (or such other shorter
period as may be determined by the Committee in its discretion
or as may be expressly set forth in any such employment
agreement) after the date he ceased such employment or
performance of services (but in no event after the Award of
Stock Appreciation Rights has expired), may exercise the Award
of Stock Appreciation Rights with respect to any share as to
which he could have exercised the Award of Stock Appreciation
Rights on the date he ceased such employment or performance of
services, or with respect to such greater number of shares as
determined by the Committee.
(d) An Award of Stock Appreciation Rights shall entitle the
holder (or any person entitled to act under the provisions of subparagraph 6 (c)
(iii) (C) hereof) to exercise such Award or to surrender unexercised the Option
(or other Award) to which the Stock Appreciation Right is attached (or any
portion of such option or other Award) to the Company and to receive from the
Company in exchange therefor, without payment to the Company, that number of
Common Shares that have an aggregate, value equal to (or, in the discretion of
the Committee, less than) the excess of the fair market value of one share, at
the time of such exercise, over the exercise price (or option price, as the case
may be) per share, times the number of shares subject to the Award or the Option
(or other Award), or portion thereof, which is so exercised or surrendered, as
the case may be. The Committee shall be entitled in its discretion to elect to
settle the obligation arising out of the exercise of a Stock Appreciation Right
by the payment of cash or Other Company Securities or property, or other forms
of payment, or any combination thereof, as determined by the Committee, equal to
the aggregate value of the Common Shares it would otherwise be obligated to
deliver. Any such election by the Committee shall be made as soon as practicable
after the receipt by the Committee of written notice of the exercise of the
Stock Appreciation Right. The value of a Common Share, Other Company Securities
or property, or other forms of payment determined by the Committee for this
purpose shall be the fair market value thereof on the last business day next
preceding the date of the election to exercise the Stock Appreciation Right,
unless the Committee, in its discretion, determines otherwise.
(e) A Stock Appreciation Right may provide that it shall be
deemed to have been exercised at the close of business on the business day
preceding the expiration date of the Stock Appreciation Right or of the released
option (or other Award), or such other date as specified by the Committee, if at
such time such Stock Appreciation Right has a positive value. Such deemed
exercise shall be settled or paid in the same manner as a regular exercise
thereof as provided in subparagraph 6 (d) hereof.
(f) No fractional shares may be delivered under this Paragraph
6, but in lieu thereof a cash or other adjustment shall be made as determined by
the Committee in its discretion.
7. Restricted Stock. Each Award of Restricted Stock under the
Plan shall be evidenced by an instrument in such form as the committee shall
prescribe from time to time in accordance with the Plan and shall comply with
the following terms and conditions, and with such other terms and conditions as
the Committee, in its discretion, shall establish:
(a) The Committee shall determine the number of Common Shares
to be issued to a participant pursuant to the Award, and the extent, if any, to
which they shall be issued in exchange for cash, other consideration, or both.
(b) Common Shares issued to a participant in accordance with
the Award may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, except by will or the laws of descent and distribution,
or as otherwise determined by the Committee, for such period as the Committee
shall determine, from the date on which the Award is granted (the "Restricted
Period"). The Company will have the option to repurchase the shares subject to
the Award at such price as the Committee shall have fixed, in its discretion,
when the Award was made or amended thereafter, which option will be exercisable
(i) if the participant's continuous employment or performance of services for
the Company and its Affiliates shall terminate for any reason, except solely by
reason of a period of Related Employment as defined in Paragraph 14, or except
as otherwise provided in subparagraph 7(c), prior to the expiration of the
Restricted Period, (ii) if, on or prior to the expiration of the Restricted
Period or the earlier lapse of such repurchase option, the participant has not
paid to the Company an amount equal to any federal, state, local or foreign
income or other taxes which the Company determines is required to be withheld in
respect of such shares, or (iii) under such other circumstances as determined by
the Committee in its discretion. Such repurchase option shall be exercisable on
such terms, in such manner and during such period as shall be determined by the
Committee when the Award is made or as amended thereafter. Each certificate for
Common Shares issued pursuant to a Restricted Stock Award shall bear an
appropriate legend referring to the foregoing repurchase option and other
restrictions and to the fact that the shares are partly paid, shall be deposited
by the Award Holder with the Company, together with a stock power endorsed in
blank, or shall be evidenced in such other manner permitted by applicable law as
determined by the Committee in its discretion. Any attempt to dispose of any
such Common Shares in contravention of the foregoing repurchase option shall be
null and void and without effect. If Common Shares issued pursuant to a
Restricted Stock Award shall be repurchased pursuant to the repurchase option
described above, the participant, or in the event of his death, his personal
representative, shall forthwith deliver to the Secretary of the Company the
certificates for the Common Shares awarded to the participant, accompanied by
such instrument of transfer, if any, as may reasonably be required by the
Secretary of the Company. If the repurchase option described above is not
exercised by the Company, such option and the restrictions imposed pursuant to
the first sentence of this subparagraph 7(b) shall terminate and be of no
further force and effect.
(c) If a participant who has been in continuous employment or
performance of services for the Company or an Affiliate since the date on which
a Restricted Stock Award was granted to him shall, while in such employment or
performance of services, die, or terminate such employment or performance of
services by reason of disability as defined in Paragraph 12 or by reason of
early, normal or deferred retirement under a qualified retirement program of the
Company or an Affiliate (or such other plan or arrangement as may be approved by
the Committee in its discretion, for this purpose) and any of such events shall
occur after the date on which the Award was granted to him and prior to the end
of the Restricted Period of such Award, the Committee may determine to cancel
the repurchase option (and any and all other restrictions) on any or all of the
Common Shares subject to such Award; and the repurchase option shall become
exercisable at such time as to the remaining shares, if any.
8. Performance Grants. The Award of a Performance Grant
("Performance Grant") to a participant will entitle him to receive a specified
amount determined by the Committee ("Actual Value"), if the terms and conditions
specified herein and in the Awards are satisfied. Each Award of a Performance
Grant shall be subject to the following terms and conditions, and to such other
terms and conditions, including but not limited to, restrictions upon any cash,
Common Shares, Other Company Securities or property, or other forms of payment,
or any combination thereof, issued in respect of the Performance Grant, as the
Committee, in its discretion, shall establish, and shall be embodied in an
instrument in such form and substance as is determined by the Committee.
(a) The Committee shall determine the value or range of values
of a Performance Grant to be awarded to each participant selected for an Award
and whether or not such a Performance Grant is granted in conjunction with an
Award of Options, Stock Appreciation Rights, Restricted Stock or other Award, or
any combination thereof, under the Plan (which may include, but need not be
limited to, deferred Awards) concurrently or subsequently granted to the
participant (the "Associated Award"). As determined by the Committee, the
maximum value of each Performance Grant (the "Maximum Value") shall be: (i) an
amount fixed by the Committee at the time the Award is made or amended
thereafter, (ii) an amount which varies from time to time based in whole or in
part on the then current value of a Common Share, Other Company Securities or
property, or any combination thereof, or (iii) an amount that is determinable
from criteria specified by the Committee. Performance Grants may be issued in
different classes or series having different names, terms and conditions. In the
case of a Performance Grant awarded in conjunction with an Associated Award, the
Performance Grant may be reduced on an appropriate basis to the extent that the
Associated Award has been exercised, paid to or otherwise received by the
participant, as determined by the Committee.
(b) The award period ("Award Period") in respect of any
Performance Grant shall be a period determined by the Committee. At the time
each Award is made, the Committee shall establish performance objectives to be
attained with the Award Period as the means of determining the Actual Value of
such a Performance Grant. The performance objectives shall be based on such
measure or measures of performance, which may include, but need not be limited
to, the performance of the participant, the Company, one or more of its
subsidiaries or one or more of their divisions or units, or any combination of
the foregoing, as the Committee shall determine, and may be applied on an
absolute basis or be relative to industry or other indices, or any combination
thereof. The Actual Value of a Performance Grant shall be equal to its Maximum
value only if the performance objectives are attained in full, but the Committee
shall specify the manner in which the Actual Value of Performance Grants shall
be determined if the performance objectives are met in part. Such performance
measures, the Actual Value or the Maximum Value, or any combination thereof, may
be adjusted in any manner by the Committee in its discretion at any time and
from time to time during or as soon as practicable after the Award Period, if it
determines that such performance measures, the Actual Value or the Maximum
Value, or any combination thereof, are not appropriate under the circumstances.
(c) The rights of a participant in Performance Grants awarded
to him shall be provisional and may be canceled or paid in whole or in part, all
as determined by the Committee, if the participant's continuous employment or
performance of services for the Company and its Affiliates shall terminate for
any reason prior to the end of the Award Period, except solely by reason of a
period of Related Employment as defined in Paragraph 14.
(d) The Committee shall determine whether the conditions of
subparagraph 8(b) or 8(c) hereof have been met and, if so, shall ascertain the
Actual Value of the Performance Grants. If the Performance Grants have no Actual
Value, the Award and such Performance Grants shall be deemed to have been
canceled and the Associated Award, if any, may be canceled or permitted to
continue in effect in accordance with its terms, if the Performance Grants have
an Actual Value and:
(i) were not awarded in conjunction with an
Associated Award, the Committee shall cause an amount equal to
the Actual Value of the Performance Grants earned by the
participant to be paid to him or his beneficiary as provided
below; or
(ii) were awarded in conjunction with an Associated
Award, the Committee shall determine, in accordance with
criteria specified by the Committee (A) to cancel the
Performance Grants, in which event no amount in respect
thereof shall be paid to the participant or his beneficiary,
and the Associated Award may be permitted to continue in
effect in accordance with its terms, (B) to pay the Actual
Value of the Performance Grants to the participant or his
beneficiary as provided below, in which event the Associated
Award may be canceled or (C) to pay to the participant or his
beneficiary as provided below, the Actual Value of only a
portion of the Performance Grants, in which event all or a
portion of the Associated Award may be permitted to continue
in effect in accordance with its terms or be canceled, as
determined by the Committee.
Such determinations by the Committee shall be made as promptly as practicable
following the end of the Award Period or upon the earlier termination of
employment or performance of services, or at such other time or times as the
Committee shall determine, and shall be made pursuant to criteria specified by
the Committee.
Payment of any amount in respect of the Performance Grants
which the Committee determines to pay as provided above shall be made by the
Company as promptly as practicable after the end of the Award Period or at such
other time or times as the Committee shall determine, and may be made in cash,
Common Shares, Other Company Securities or property, or other forms of payment,
or any combination thereof or in such other manner, as determined by the
Committee in its discretion. Notwithstanding anything in this Paragraph 8 to the
contrary, the Committee may, in its discretion, determine and pay out the Actual
Value of the Performance Grants at any time during the Award Period.
9. Deferral of Compensation. The Committee shall determine
whether or not an Award shall be made in conjunction with deferral of the
participant's salary, bonus or other compensation, or any combination thereof,
and whether or not such deferred amounts may be:
(i) forfeited to the Company or to other
participants, or any combination thereof, under certain
circumstances (which may include, but need not be limited to,
certain types of termination of employment or performance of
services for the Company and its Affiliates),
(ii) subject to increase or decrease in value based
upon the attainment of or failure to attain, respectively,
certain performance measures and/or
(iii) credited with income equivalents (which may
include, but need not be limited to, interest, dividends or
other rates of return) until the date or dates of payment of
the Award, if any.
10. Deferred Payment of Awards. The Committee may specify that
the payment of all or any portion of cash, Common Shares, Other Company
Securities or property, or any other form of payment, or any combination
thereof, under an Award shall be deferred until a later date. Deferrals shall be
for such periods or until the occurrence of such events, and upon such terms, as
the Committee shall determine in its discretion. Deferred payments of Awards may
be made by undertaking to make payment in the future based upon the performance
of certain investment equivalents (which may include, but need not be limited
to, government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but need
not be limited to, interest, dividends or other rates of return, or any
combination thereof) as may accrue thereon until the date or dates of payment,
such investment equivalents and such additional amounts of income equivalents to
be determined by the Committee in its discretion.
11. Amendment of Awards Under the Plan. The terms of any
outstanding Award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (including
but not limited to, acceleration of the date of exercise of any Award and/or
payments thereunder); provided that no such amendment shall adversely affect in
a material manner any right of a participant under the Award without his written
consent unless the Committee determines in its discretion that there have
occurred or are about to occur significant changes in the participant's
position, duties or responsibilities, or significant changes in economic,
legislative, regulatory, tax, accounting or cost/benefit conditions which are
determined by the Committee in its discretion to have or to be expected to have
a substantial effect on the performance of the company, or any subsidiary,
affiliate, division or department thereof, on the Plan or on any Award under the
Plan.
12. Disability. For the purposes of this Plan, a participant
shall be deemed to have terminated his employment or performance of services for
the Company and its affiliates by reason of disability, if the Committee shall
determine that the physical or mental condition of the participant by reason of
which such employment or performance of services terminated was such at that
time as would entitle him to payment of monthly disability benefits under the
Long Term Disability Benefit Plan in effect as of the date of adoption of this
Plan, or, if the participant is not eligible for both benefits under such plan,
under any similar disability plan of the Company or an Affiliate in which he is
a participant. If the participant is not eligible for benefits under any
disability plan of the Company or an Affiliate in which he is a participant, he
shall be deemed to have terminated such employment or performance of services by
reason of disability if the Committee shall determine that his physical or
mental condition would entitle him to benefits under the Company's Long Term
Disability Benefit Plan if he were eligible therefor.
13. Termination of a Participant. For all purposes under the
Plan, the Committee shall determine whether a participant has terminated
employment by or the performance of services for the Company and its Affiliates;
provided, however, that transfers between the Company and an Affiliate or
between Affiliates, and approved leaves of absence shall not be deemed such a
termination.
14. Related Employment. For the purposes of this Plan, Related
Employment shall mean the employment or performance of services by an individual
for an employer that is neither the Company nor an Affiliate, provided that (i)
such employment or performance of services is undertaken by the individual at
the request of the Company or an Affiliate, (ii) immediately prior to an
undertaking of such employment or performance of services, the individual was
employed by or performing services for the Company or an Affiliate or was
engaged in Related Employment as herein defined and (iii) such employment or
performance of services is in the best interests of the Company and is
recognized by the Committee, in its discretion, as Related Employment for
purposes of this Paragraph 14. The death or disability of an individual during a
period of Related Employment as herein defined shall be treated, for purposes of
this Plan as if the death or onset of disability has occurred while the
individual was employed by or performing services for the Company or an
Affiliate.
15. Dilution and Other Adjustments; Change in Control.
(a) In the event of any change in the outstanding Common
Shares of the Company by reason of any stock split, stock dividend, split-up,
split-off, spin-off, recapitalization, merger, consolidation, rights offering,
reorganization, combination or exchange of shares, a sale by the Company of all
or part of its assets, any distribution to shareholders other than a normal cash
dividend, or other extraordinary or unusual event, if the Committee shall
determine, in its discretion, that such change equitably requires the adjustment
in the terms of any Award or the number of Common Shares available for Awards,
such adjustment may be made by the Committee and shall be final, conclusive and
binding for all purposes of the Plan.
(b) With respect to Restricted Stock Awards, restrictions on
said Restricted Stock Awards shall lapse upon a Change in Control Event. With
respect to Stock Options and Stock Appreciation Rights, said Stock Options and
Stock Appreciation Rights shall become immediately exercisable and fully vested
upon a Change in Control Event. With respect to Performance Grants, upon a
Change in Control Event, payment shall be made with respect to a Performance
Grant based on the assumption that the performance achievement specified in the
Award would have been attained by the end of the performance cycle. With respect
to all other Awards, the effect of a Change in Control Event thereon shall be as
determined from time to time by the Committee. For purposes of this Plan, a
"Change in Control Event" shall mean: (i) 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 this Plan 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 13 (d) (3) and 14
(d) (2) of the Exchange Act), other than the Company or any of its subsidiaries,
or JUSCO (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 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 stockholder 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 (ii) individuals, who, as of 1993, 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
November 18, 1993, whose election, or nomination for election by the Company's
stockholders, 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 (as such terms are used in Rule 14a-11
of Regulation 14A under the Exchange Act) 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 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.
16. Designation of Beneficiary by Participant. A participant
may name a beneficiary to receive any payment in which he may be entitled in
respect of any Award under the Plan in the event of his death, on a written form
to be provided by and filed with the Committee, and in a manner determined by
the Committee in its discretion. The Committee reserves the right to review and
approve beneficiary designations. A participant may change his beneficiary from
time to time in the same manner, unless such participant has made an irrevocable
designation. Any designation of beneficiary under the Plan (to the extent it is
valid and enforceable under the applicable law) shall be controlling over any
other disposition, testamentary or otherwise, as determined by the Committee in
its discretion. If no designated beneficiary survives the participant and is
living on the date on which any amount becomes payable to such participant's
beneficiary, such payment will be made to the legal representative of the
participant's estate, and the term "beneficiary" as used in the Plan shall be
deemed to include such person or persons. If there is any question as to the
legal right of any beneficiary to receive a distribution under the Plan, the
Committee in its discretion may determine that the amount in question be paid to
the legal representatives of the estate of the participant, in which event the
Company, the Board and the Committee and the members thereof will have no
further liability to anyone with respect to such amount.
17. Financial Assistance. If the Committee determines that
such action is advisable, the Company may assist any person to whom an Award has
been granted in obtaining financing from the Company under The Talbots Inc.
Stock Purchase Assistance Plan (or other program of the Company or one of its
Affiliates approved pursuant to applicable law), or from a bank or other third
party, on such terms as are determined by the Committee, and in such amount as
is required to accomplish the purposes of the Plan, including, but not limited
to, to permit the exercise of an Award, the participation therein, and/or the
payment of any taxes in respect thereof. Such assistance may take any form that
the Committee deems appropriate, including, but not limited to, a direct loan
from the Company or an Affiliate, a guarantee of the obligation by the Company
or an Affiliate, or the maintenance by the Company or an Affiliate of deposits
with such bank or third party.
18. Miscellaneous Provisions.
(a) No employee or other person shall have any claim or right
to be granted an Award under the Plan. Determinations made by the committee
under the Plan need not be uniform and may be made selectively among eligible
individuals under the Plan, whether or not such eligible individuals are
similarly situated. Neither the Plan nor any action taken hereunder shall be
construed as giving any employee or other person any right to continue to be
employed or perform services for the Company or any Affiliate, and the right to
terminate the employment of or performance of service by any participant at any
time and for any reason is specifically reserved.
(b) No participant or other person shall have any right with
respect to the Plan, the Common Shares reserved for issuance under the Plan or
in any Award, contingent or otherwise, until written evidence of the Award shall
have been delivered to the recipient and all the terms, conditions and
provisions of the Plan and the Award applicable to such recipient (and each
person claiming under or through him) have been met.
(c) Except as may be approved by the Committee where such
approval shall not adversely affect compliance of the Plan with Rule 16b-3 under
the Exchange Act, a participant's rights and interest under the Plan may not be
assigned or transferred, hypothecated or encumbered in whole or in part either
directly or by operation of law or otherwise (except in the event of a
participant's death) including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner, provided,
however, that any option or similar right (including, but not limited to, a
Stock Appreciation Right) offered pursuant to the Plan shall not be transferable
other than by will or the laws of descent and distribution and shall be
exercisable during the participant's lifetime only by him.
(d) No Common Shares, Other Company Securities or property,
other securities or property, or other forms of payment shall be issued
hereunder with respect to any Award unless counsel for the Company shall be
satisfied that such issuance will be in compliance with applicable federal,
state, local and foreign legal, securities exchange and other applicable
requirements.
(e) It is the intent of the Company that the Plan comply in
all respects with Rule 16b-3 under the Exchange Act, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to give effect to
such intention and that if any provision of the Plan is found not to be in
compliance with Rule 16b-3, such provision shall be deemed null and void to the
extent required to permit the Plan to comply with Rule 16b-3.
(f) The Company and its Affiliates shall have the right to
deduct from any payment made under the Plan any federal, state, local or foreign
income or other taxes required by law to be withheld with respect to such
payment. It shall be a condition to the obligation of the Company to issue
Common Shares, Other Company Securities or property, other securities or
property, or other forms of payment, or any combination thereof, upon exercise,
settlement or payment of any Award under the Plan, that the participant (or any
beneficiary or person entitled to act) pay to the Company, upon its demand, such
amount as may be requested by the Company for the purpose of satisfying any
liability to withhold federal, state, local or foreign income or other taxes. If
the amount requested is not paid, the Company may refuse to issue Common Shares,
Other Company Securities or property, other securities or property, or other
forms of payment, or any combination thereof. Notwithstanding anything in the
Plan to the contrary, the Committee may, in its discretion, permit an eligible
participant (or any beneficiary or person entitled to act) to elect to pay a
portion or all of the amount requested by the Company for such taxes with
respect to such Award, at such time and in such manner as the Committee shall
deem to be appropriate (including, but not limited to, by authorizing the
Company to withhold, or agreeing to surrender to the Company on or about the
date such tax liability is determinable, Common Shares, Other Company Securities
or property, other securities or property, or other forms of payment that would
otherwise be distributed, or have been distributed, as the case may be, pursuant
to such Award to such person, having a fair market value equal to the amount of
such taxes).
(g) The expenses of the Plan shall be borne by the Company.
However, if an Award is made to an individual employed by or performing services
for an Affiliate,
(i) if such Award results in payment of cash to the
participant, such Affiliate shall pay to the Company an amount
equal to such cash payment; and
(ii) if the Award results in the issuance by the
Company to the participant of Common Shares, Other Company
Securities or property, other securities or property, or other
forms of payment, or any combination thereof, such Affiliate
shall pay to the Company an amount equal to the fair market
value thereof, as determined by the Committee, on the date
such shares, Other Company Securities or property, other
securities or property, or other forms of payment, or any
combination thereof, are issued (or, in the case of the
issuance of Restricted Stock or of Common Shares, Other
company Securities or property, or other securities or
property, or other forms of payment subject to transfer and
forfeiture conditions, equal to the fair market value thereof
on the date on which they are no longer subject to applicable
restrictions), minus the amount, if any, received by the
Company in respect of the purchase of such Common Shares,
Other Company Securities or property, other securities or
property or other forms of payment, or any combination
thereof.
(h) The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any segregation of
assets to assure the payment of any Award under the Plan, and the rights to the
payment of Awards shall be no greater than the rights of the Company's general
creditors.
(i) By accepting any Award or other benefit under the Plan,
each Participant and each person claiming under or through him shall be
conclusively deemed to have indicated his acceptance and ratification of, and
consent to, any action taken under the Plan by the Company, the Board or the
Committee or its delegates.
(j) Fair market value in relation to Common Shares, Other
Company Securities or property, other securities or property or other forms of
payment of Awards under the Plan, or any combination thereof as of any specific
time shall mean such value as determined by the Committee in accordance with
applicable law.
(k) The masculine pronoun includes the feminine and the
singular includes the plural wherever appropriate.
(l) The appropriate officers of the Company shall cause to be
filed any reports, returns or other information regarding Awards hereunder or
any Common Shares issued pursuant hereto as may be required by Section 13 or
15(d) of the Exchange Act (or any successor provision) or any other applicable
statute, rule or regulation.
(m) The validity, construction, interpretation, administration
and effect of the Plan, and of its rules and regulations, and rights relating to
the Plan and to Awards granted under the Plan, shall be governed by the
substantive laws, but not the choice of law rules, of the Commonwealth of
Massachusetts.
19. Plan Amendment or Suspension. The Plan may be amended or
suspended in whole or in part at any time and from time to time by the Board,
but no amendment shall be effective unless and until the same is approved by
shareholders of the Company where the failure to obtain such approval would
adversely affect the compliance of the Plan with Rule 16b-3 under the Exchange
Act and with other applicable law. No amendment of the Plan shall adversely
affect in a material manner any right of any participant with respect to any
Award theretofore granted without such participant's written consent, except as
permitted under Paragraph 11.
20. Plan Termination. This Plan shall terminate upon the
earlier of the following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating
the Plan; or
(b) ten years from the date the Plan is initially approved and
adopted by the shareholders of the Company in accordance with Paragraph 22
hereof; provided, however, that the Board may, prior to the expiration of such
ten-year period, extend the term of the Plan for an additional period of up to
five years for the grant of Awards other than Incentive Stock Options. No
termination of the Plan shall materially alter or impair any of the rights or
obligations of any person, without his consent, under any Award theretofore
granted under the Plan, except that subsequent to termination of the Plan, the
Committee may make amendments permitted under Paragraph 11.
21. Registration Rights. The Company covenants and agrees as
follows:
(a) Definitions. For purposes of this Paragraph 21:
(i) the term "register," "registered," and
"registration" refer to a registration effected by preparing
and filing a registration statement or similar document in
compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of
such registration statement or document;
(ii) the term "Registrable Securities" means any
Common Shares issuable pursuant to the grant of Restricted
Stock or pursuant to the exercise of Stock Options.
(iii) the term "Form S-8" means such form under the
Act as in effect on the date hereof or any successor
registration statement form under the Act subsequently adopted
by the Securities and Exchange Commission (the "SEC") which
permits inclusion or incorporation of substantial information
by reference or other documents filed by the Company with the
SEC to the same extent as Form S-8 on the date hereof.
(b) Form S-8 Registration. The Company shall use its best
efforts to effect as soon as practicable the registration on Form S-8 of all
Common Shares issuable pursuant to awards of Restricted Stock or pursuant to
exercise of Stock options granted hereunder in connection with such
registration, the Company shall, as expeditiously as reasonably practicable:
(i) Prepare and file with the SEC within 180 days of
the Company's initial public offering, a Form S-8 registration
statement with respect to the Registrable Securities, and use
its best efforts to cause such registration statement to
become effective and to keep such registration statement
effective until the resale restrictions under the Form S-8
registration statement for all shares of Restricted Stock
granted hereunder are no longer in effect and the earlier to
occur of (A) the issuance of all shares authorized for
issuance hereunder, or (B) the exercise in full of all Stock
Options awarded hereunder which shall have been outstanding on
the date this Plan shall terminate, or (C) the expiration of
the unexercised portion of all Stock Options awarded hereunder
which shall have been outstanding on the date this Plan shall
terminate.
(ii) Prepare and file with the SEC such amendments
and supplements and appendices to such registration statement
and to amend and supplement the prospectus used in connection
with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the grant of
the issuance of the Registrable Securities covered by such
registration statement.
(iii) Prepare and file with the New York Stock
Exchange, Inc. (the "Exchange") an additional listing
application for the listing, upon official notice of issuance,
of such Registrable Securities for trading on the Exchange and
use its best efforts to cause such additional listing
application to be approved by the Exchange.
(c) Expenses. All expenses incurred in connection with the
registration, filings and listing application described in clause (b) of this
Paragraph 21 shall be borne by the Company, including (without limitation) all
registration and filing fees, printers, and accounting fees, and fees and
disbursements for counsel for the Company.
22. Shareholder Adoption. The Plan shall be submitted to the
shareholders of the Company for their approval and adoption at a meeting to be
held on or before May 30, 1993 or at any adjournment thereof. The Plan shall not
be effective and no Award shall be made hereunder unless and until the Plan has
been so approved and adopted. The shareholders shall be deemed to have approved
and adopted the Plan only if it is approved and adopted at a meeting of the
shareholders duly held by vote taken, or approved and adopted by written consent
of shareholders, in each case in the manner required by the laws of the State of
Delaware.
