UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
____________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
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Date
of Report (Date of earliest event
reported)
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February
25, 2010
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THE
TALBOTS, INC.
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(Exact
Name of Registrant as Specified in
Charter)
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Delaware
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1-12552
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41-1111318
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(State
or other jurisdiction
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(Commission
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(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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One
Talbots Drive, Hingham, Massachusetts
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02043
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area
code
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(781)
749-7600
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
x
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
INFORMATION
TO BE INCLUDED IN THE REPORT
Section
5 – Corporate Governance and Management
Item
5.02
Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
(e) As
previously reported in the joint Information Statement/Proxy/Prospectus included
in the Registration Statement on Form S-4, declared effective on January 26,
2010 and as thereafter amended and supplemented, and in the Prospectus/Offer to
Exchange included in the Registration Statement on Form S-4, filed with the SEC
on March 1, 2010, following entry into the Agreement and Plan of Merger dated as
of December 8, 2009, by and among The Talbots, Inc. (“Talbots” or the
“Company”), BPW Acquistion Corp., a Delaware corporation (“BPW”), and a
wholly-owned Talbots subsidiary, as amended effective February 16, 2010, Talbots
management and BPW began discussions concerning possible 2009 annual incentive
and retention arrangements for management. Based on these discussions
and the agreement of BPW, Talbots management proposed, and on February 25, 2010
at its regularly-scheduled meeting the Compensation Committee of the Talbots
Board of Directors (the “Committee”) approved, a 2009 annual incentive and
retention program for certain employees including executive
officers.
A portion
of the 2009 annual incentive awards is to be made contingent on the completion
of the merger (the “financing incentive award”), and a portion of the 2009
annual incentive awards is based on Talbots having achieved improved 2009
operating financial results (the “operating performance incentive
award”).
The
aggregate payments to Talbots executive officers under the financing incentive
award portion of the 2009 annual incentive award is
$5,000,000 including $1,500,000 to our Chief Executive Officer,
$1,250,000 to our Chief Operating Officer/Chief Financial Officer, $1,000,000 to
our Executive Vice President/Chief Legal and Real Estate Officer, and $250,000
to each of the other executive officers. One-third of the financing incentive
award payable to each individual would be awarded in cash and two-thirds of the
financing incentive award is to be awarded in the form of special restricted
stock units. Under such arrangements Talbots would (1) pay the cash portion at
the closing of the merger, subject to continued employment through the closing
of the merger, except that in the event of certain specified liquidity
constraints Talbots may choose to delay payment for an additional three months
beyond the closing, and (2) grant the special restricted stock unit awards (the
“special RSUs”), to these employees at the closing of the merger. The special
RSUs would vest on the first anniversary of the closing of the merger, subject
to the employee’s continued employment through that date. The special RSUs would
also vest upon a termination of employment prior to the first anniversary of the
closing of the merger under circumstances qualifying the applicable employee for
severance or in the event of the employee’s death or disability or in the event
of the occurrence of a change in control following the consummation of the BPW
merger, but would otherwise be forfeited upon a termination of employment prior
to the first anniversary of closing of the merger.
The
operating performance incentive award portion of the 2009 incentive program was
approved by the Committee as a result of the Company’s improved operating
performance for 2009, but payment is subject to the completion of the merger. An
incentive pool of $4,000,000 is to be allocated as follows: (i) 50% of the total
pool is payable to those management-level employees eligible under Talbots’
annual incentive program and (ii) 50% of the total pool is payable to all other
Talbots associates. Of this amount, $240,000 would be payable to our Chief
Executive Officer, $130,000 would be payable to our Chief Creative Officer,
$75,000 would be payable to our Executive Vice President/Chief Legal and Real
Estate Officer, and between $60,000 and $90,000 would be payable to each of the
other executive officers, other than our Chief Operating Officer/Chief Financial
Officer who is entitled to receive a fixed annual incentive payment payable
outside of the 2009 annual incentive program pursuant to the terms of his
employment agreement.
On February 25, 2010, the Committee
also approved a 2010 annual incentive compensation program for Company
management, including each of our executive officers. Any awards
earned under the 2010 incentive plan will be based on achievement against
objective performance goals which are consistent with those set forth in our
shareholder-approved 2003 Executive Stock Based Incentive Plan, as
amended.
Section
8 – Other Events
Item
8.01 – Other Events.
The
information set forth above under Item 5.02 is incorporated by reference into
this Item 8.01.
Cautionary
Statement and Certain Risk Factors to Consider
In addition to the information set
forth in this Form 8-K, you should carefully consider the risk factors and risks
and uncertainties included in each of Talbots and BPW’s Annual Report on Form
10-K and Quarterly Reports on Form 10-Q, as well as in this Form 8-K
below.
This Form 8-K contains forward-looking
information. These statements may be identified by such forward-looking
terminology as “expect,” “achieve,” “plan,” “look,” “believe,” “anticipate,”
“outlook,” “will,” “would,” “should,” “potential,” or similar statements or
variations of such terms. All of the information concerning Talbots or BPW’s
outlook, future liquidity, future financial performance and results, future
credit facilities and availability, future cash flows and cash needs, and other
future financial performance or financial position, as well as assumptions
underlying such information, constitute forward-looking information. Forward
looking statements are based on a series of expectations, assumptions, estimates
and projections about BPW and/or Talbots, are not guarantees of future results
or performance, and involve substantial risks and uncertainty, including
assumptions and projections concerning liquidity, internal plans, regular-price
and markdown selling, operating cash flows, and credit availability for all
forward periods. Business and forward-looking statements involve substantial
known and unknown risks and uncertainties, including the following risks and
uncertainties:
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Talbots and BPW’s ability to
satisfy the conditions to consummation of the contemplated
transactions;
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BPW’s and Talbots ability to
obtain the necessary participation of BPW warrant holders in the exchange
of BPW warrants for Talbots stock or
warrants;
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Talbots ability to satisfy the
conditions to the $200 million credit commitment provided by GE or,
failing that, to obtain sufficient alternative financing on a timely
basis;
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the availability of proceeds
of the BPW trust account following any exercise by stockholders of their
conversion rights and the incurrence of transaction
expenses;
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the continuing material impact
of the deterioration in the U.S. economic environment over the past two
years on Talbots business, continuing operations, liquidity, financing
plans, and financial results, including substantial negative impact on
consumer discretionary spending and consumer confidence, substantial loss
of household wealth and savings, the disruption and significant tightening
in the U.S. credit and lending markets, and potential long-term
unemployment levels;
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Talbots level of indebtedness
and its ability to refinance or otherwise address its short-term debt
maturities, including all Aeon short-term indebtedness due April 16, 2010,
on the terms or in amounts needed to satisfy maturities and to address its
longer-term liquidity and cash needs, as well as its working capital,
strategic initiatives and other cash
requirements;
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any lack of sufficiency of
available cash flows and other internal cash resources to satisfy all
future operating needs and other Talbots cash
requirements;
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satisfaction of all borrowing
conditions under all Aeon credit facilities including no events of
default, accuracy of all representations and warranties, solvency
conditions, absence of material adverse effect or change, and all other
borrowing conditions;
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risk of any default under
Talbots Aeon credit
facilities;
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Talbots ability to achieve its
2009 financial plan for operating results, working capital, liquidity and
cash flows;
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risks associated with Talbots
appointment of and transition to a new exclusive global merchandise buying
agent and that the anticipated benefits and cost savings from this
arrangement may not be realized or may take longer to realize than
expected, and risk that upon any cessation of the relationship for any
reason Talbots would be able to successfully transition to an internal or
other external sourcing
function;
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Talbots’ ability to continue
to purchase merchandise on open account purchase terms at existing or
future expected levels and with extended payment of accounts payable and
risk that suppliers could require earlier or immediate payment or other
security due to any payment concern or
timing;
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risks and uncertainties in
connection with any need to source merchandise from alternate
vendors;
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any disruption in Talbots’
supply of merchandise;
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Talbots ability to
successfully execute, fund, and achieve supply chain initiatives,
anticipated lower inventory levels, cost reductions, and other
initiatives;
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the risk that anticipated
benefits from the sale of the J. Jill brand business may not be realized
or may take longer to realize than expected and the risk that estimated or
anticipated costs, charges and liabilities to settle and complete the
transition and exit from and disposal of the J. Jill brand business,
including both retained obligations and contingent risk for assigned
obligations, may materially differ from or be materially greater than
anticipated;
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Talbots ability to accurately
estimate and forecast future regular-price and markdown selling, operating
cash flows and other future financial results and financial
position;
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the success and customer
acceptance of Talbots merchandise
offerings;
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future store closings and
success of and necessary funding for closing underperforming
stores;
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risk of impairment of goodwill
and other intangible and long-lived assets;
and
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the risk of continued
compliance with NYSE continued listing
conditions.
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All of the forward-looking
statements are as of the date of this Form 8-K only. In each case, actual
results may differ materially from such forward-looking information. Neither
Talbots nor BPW can give any assurance that such expectations or forward-looking
statements will prove to be correct. An occurrence of or any material adverse
change in one or more of the risk factors or risks and uncertainties referred to
in this Form 8-K or included in Talbots and/or BPW’s periodic reports filed with
the Securities and Exchange Commission could materially and adversely affect
Talbots and/or BPW’s continuing operations and Talbots and/or BPW’s future
financial results, cash flows, prospects, and liquidity. Except as required by
law, neither Talbots nor BPW undertakes or plans to update or revise any such
forward-looking statements to reflect actual results, changes in plans,
assumptions, estimates or projections, or other circumstances affecting such
forward-looking statements occurring after the date of this Form 8-K, even if
such results, changes or circumstances make it clear that any forward-looking
information will not be realized. Any public statements or disclosures by
Talbots and BPW following this Form 8-K which modify or impact any of the
forward-looking statements contained in this Form 8-K will be deemed to modify
or supersede such statements in this Form 8-K.
Important Additional Information and
Where to Find It
This
communication does not constitute an offer to sell or the solicitation of an
offer to buy any securities. Talbots has filed with the SEC, and the
SEC has declared effective, a Registration Statement on Form S-4 containing a
Prospectus/Proxy Statement/Information Statement regarding the proposed merger
transaction between Talbots and BPW. The final Prospectus/Proxy
Statement/Information Statement and a supplement thereto regarding the proposed
merger transaction have been mailed to stockholders of Talbots and
BPW. In connection with the exchange offer, Talbots also has filed
with the SEC a Registration Statement on Form S-4, a tender offer statement and
other related documentation.
Investors and security
holders are urged to read the final Prospectus/Proxy Statement/Information
Statement, the supplement, the tender offer statement, any amendments or
supplements thereto and any other relevant documents filed with the SEC when
available carefully because they contain important
information.
Investors and security holders will be able to
obtain free copies of the Registration Statement, the final Prospectus/Proxy
Statement/Information Statement, the supplement, the tender offer
statement,
any
amendments or supplements thereto and other documents filed with the SEC by
Talbots and BPW through the web site maintained by the SEC at
www.sec.gov
. In
addition, investors and security holders will be able to obtain free copies of
the Registration Statement, the final Prospectus/Proxy Statement/Information
Statement, the supplement, the tender offer statement and any amendments or
supplements thereto and other related documents filed by Talbots with the SEC
when they become available from Talbots by requesting them in writing at
Investor Relations Department, One Talbots Drive, Hingham, MA 02043, or by
telephone at (781) 741-4500. The documents filed by BPW may also be
obtained by requesting them in writing to BPW at BPW Acquisition Corp., Arjay
(Richard) Jensen, SVP at BPW Acquisition Corp., 767 Fifth Avenue, 5th Floor, NY,
NY 10153, or by telephone at (212) 287-3310.
*****************************************************************************************************************
SIGNATURES
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.
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THE TALBOTS, INC.
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Dated:
March 3, 2010
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By:
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/s/
Richard T. O’Connell,
Jr.
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Name:
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Richard
T. O’Connell, Jr.
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Title:
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Executive Vice President,
Real
Estate,
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Legal,
Store Planning & Design and
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Construction,
and Secretary
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