UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
x
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2011.
¨
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
to
.
Commission file number 1-12552
A.
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Full title of the plan and the address of the plan, if different from that of the issuer named below:
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THE TALBOTS, INC. RETIREMENT SAVINGS VOLUNTARY PLAN
B.
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Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
|
The Talbots, Inc.
One Talbots Drive
Hingham, Massachusetts 02043
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
TABLE OF CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Administrator of and Participants in
The Talbots, Inc. Retirement Savings Voluntary Plan:
We have audited the accompanying statements of net assets available for benefits of The Talbots, Inc. Retirement Savings Voluntary Plan (the Plan) as of December 31, 2011 and 2010 and the
related statement of changes in net assets available for benefits for the year ended December 31, 2011. These financial statements are the responsibility of the Plans management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Plans internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of
the Plan as of December 31, 2011 and 2010, and the changes in net assets available for benefits for the year ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets
(held at end of year) as of December 31, 2011 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labors Rules
and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This schedule is the responsibility of the Plans management. Such schedule has been subjected to the auditing procedures applied in our
audit of the basic 2011 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
June 28, 2012
- 1 -
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2011 AND 2010
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2011
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2010
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ASSETS:
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Participant-directed investments at fair value
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$
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123,656,522
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$
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141,334,849
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Receivables:
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Notes receivable from participants
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2,504,024
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2,708,092
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Accrued investment income
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169,970
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Contributions receivable
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91,384
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Total receivables
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2,504,024
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2,969,446
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Total assets
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126,160,546
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144,304,295
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LIABILITIES:
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Payable to broker for investments purchased
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7,695
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2,897
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Accrued administrative expenses
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46,298
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7,003
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Excess contributions payable
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151,899
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217,092
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Total liabilities
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205,892
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226,992
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NET ASSETS REFLECTING ALL INVESTMENTS AT FAIR VALUE
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125,954,654
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144,077,303
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Adjustment from fair value to contract value for fully benefit-responsive stable value fund
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(304,682
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)
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(54,297
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)
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NET ASSETS AVAILABLE FOR BENEFITS
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$
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125,649,972
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$
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144,023,006
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See notes to financial statements.
- 2 -
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2011
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CONTRIBUTIONS:
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Employer
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$
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1,420,065
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Participant
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7,778,484
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Rollover
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470,739
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Total contributions
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9,669,288
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INVESTMENT ACTIVITY:
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Net depreciation in fair value of investments
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(10,588,617
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)
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Dividend and interest income
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1,113,246
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Total investment activity
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(9,475,371
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)
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INTEREST EARNED ON NOTES RECEIVABLE FROM PARTICIPANTS
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121,453
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DEDUCTIONS:
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Benefit paid to participants
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(18,542,816
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)
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Administrative expenses
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(145,588
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)
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Total deductions
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(18,688,404
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)
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NET DECREASE
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(18,373,034
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)
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NET ASSETS AVAILABLE FOR BENEFITS:
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Beginning of year
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144,023,006
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End of year
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$
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125,649,972
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See notes to financial statements.
- 3 -
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2011 AND 2010, AND FOR THE YEAR ENDED DECEMBER 31, 2011
1.
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DESCRIPTION OF THE PLAN
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The following description of The Talbots, Inc. Retirement Savings Voluntary Plan (the Plan) is for general information
purposes only. Participants should refer to the Plan document for more complete information.
General Information and Plan
Merger
The Plan is a defined contribution 401(k) plan established by The Talbots, Inc. (the Company or Plan Sponsor) on January 1, 1989, amended and restated effective as of January 1, 1997, and
subsequently amended and restated effective as of January 1, 2009 for the employees of the Company. Wells Fargo Institutional Retirement and Trust (Wells Fargo) was the trustee and recordkeeper of the Plan for 2011 and 2010. The
Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Effective
December 1, 2010, the J. Jill Group 401(k) Plan (Jill Plan) was merged into the Plan resulting in net assets of $7,629,736 being transferred into the Plan in 2010 and participants in the Jill Plan becoming participants in the Plan.
The Jill Plan was a defined contribution 401(k) plan that was originally established by The J. Jill Group, Inc. effective January 1, 1994. On July 2, 2009, the Company sold certain assets of its J. Jill business to Jill Acquisition LLC
(the Purchaser), an affiliate of Golden Gate Capital, a San Francisco-based private equity investment firm (the Transaction). The assets and liabilities of the Jill Plan were not sold to the Purchaser, and the Company
continued to manage the Jill Plan after the Transaction.
Eligibility
All employees of the Company are eligible
to participate in the Plan on their date of hire provided they are at least 18 years of age. Leased employees, temporary employees and seasonal employees are not eligible to participate in the Plan.
Participant Contributions
Participants may contribute in whole percentages up to 60% of their eligible compensation, as
defined, subject to Internal Revenue Code (the Code) limitations. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans (rollover
contributions). Participants who are ages 50 and older are permitted to make additional catch-up contributions. Participants may also make contributions from after-tax dollars by entering into a compensation reduction authorization agreement
provided the combination of both pre-tax and after-tax contributions does not exceed 60% of their compensation.
Employer
Contributions
Participants are eligible to receive matching contributions following the completion of one year of service, at the Companys discretion. After-tax and catch-up contributions are not subject to matching contribution.
The Companys matching contribution for each payroll period for the year ended December 31, 2011 was 50% of the participant contribution up to 3% of the participants eligible compensation.
Participant Accounts
Individual accounts are maintained for each Plan participant. Each participants account is
credited with the participants contributions, rollover contributions and any Company discretionary matching contributions and is adjusted for gains and losses based on the investment performance of a participants account, less any
withdrawals and distributions. The participant is entitled to a benefit equal to his or her vested account balance.
- 4 -
Vesting
All participant contributions are 100% vested immediately. Company
matching contributions vest 20% after each year of service according to a five-year vesting schedule.
Forfeitures
Forfeitures generated from unvested Company matching contributions are first applied to restore previously forfeited accounts where the participant is re-employed within a certain period after termination, second applied against
administrative expenses, and third to reduce Company matching contributions. At December 31, 2011 and 2010, forfeited non-vested accounts totaled $46,097 and $55,414, respectively. During the year ended December 31, 2011, forfeitures of
$87,604 were used to pay administrative expenses. The Company did not use forfeitures to reduce the amount of its contributions in 2011.
Investment Options and Investments
Participants direct the investment of their contributions and Company matching contributions into various investment options offered by the Plan.
Participants may change their investment options at any time. As of December 31, 2011, the Plan offered more than twenty diversified investments in registered investment companies, one common/collective trust stable value fund, a pooled
commingled fund (the PIMCO Total Return Fund), and a Company common stock fund as investment options for participants.
Benefit Arrangements
Prior to termination from employment, a participant may elect to (i) withdraw his or her rollover
contributions at any time, (ii) withdraw after-tax contributions at any time, (iii) withdraw his or her vested account balance upon attainment of age 59-1/2, or (iv) request a hardship withdrawal. With regard to hardship withdrawals,
upon approval by the Plan Administrator, participants may withdraw from their participant pretax contributions (after first exhausting all other assets reasonably available) in order to satisfy certain immediate and heavy financial needs. There is
no minimum dollar amount for a hardship withdrawal, and the number of hardship withdrawals allowed per year is unlimited. Participant deferrals are suspended for a period of six months after obtaining a hardship withdrawal.
The Plan also provides that a participant may elect to receive his or her vested account balance following termination of employment.
Distributions will be made in a lump sum or a partial distribution of the participants vested account balance, provided that no payment may be made without the participants consent if such payment would be in excess of certain amounts
designated in the Plan document. If a participants vested account balance is $5,000 or more, he or she can elect to have a portion of the distribution come from the Company common stock fund distributed in the form of whole shares of Company
common stock provided that the participant holds 50 or more shares (or the cash equivalent thereof) as a part of their account.
Notes Receivable from Participants
Participants may borrow from their accounts up to 50% of the vested value of their
accounts. The minimum loan amount is $500 and the maximum loan amount is $50,000. A participant may only have one outstanding loan at a time. Loan terms range from one to five years or up to ten years for the purpose of purchasing a primary
residence and are secured by the balance in the participants account. Interest rates are charged at current market rates. As of December 31, 2011, interest rates on outstanding loans ranged from 4.0% to 9.5%. Principal and interest is
paid ratably through payroll deductions. As of December 31, 2011, remaining terms on such outstanding loans ranged from approximately six days to nine years.
2.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Basis of Accounting
The financial statements of the Plan are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
- 5 -
Use of Estimates
The preparation of financial statements in conformity with
GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures made in the financial statements and accompanying notes. Accordingly, actual results may differ from those estimates.
Risks and Uncertainties
The Plan invests in various securities including registered investment companies, common/collective
trusts and corporate stocks. Investment securities, in general, are exposed to various risks, such as interest rate risk, credit risk, and overall market volatility. Due to the level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants account balances and the amounts reported in the financial statements and
accompanying notes.
Investment Valuation and Income Recognition
The Plans investments are stated at fair
value. Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Shares of registered investment companies
are valued at quoted market prices, which represent the net asset values (NAV) of shares in these funds held by the Plan at year-end. The Companys common stock in the common stock fund is valued at the closing market price reported
on the New York Stock Exchange on the last business day of the Plan year. Investments in the pooled commingled fund and stable value fund are stated at their respective NAV or its equivalent, as a practical expedient for fair value. The stable value
fund is then adjusted to contract value as described below. Contract value of the stable value fund is principal plus accrued interest.
In accordance with GAAP, the stable value fund is included at fair value in participant-directed investments in the statements of net assets available for benefits, and an additional line item is
presented representing the adjustment from fair value to contract value. The statement of changes in net assets available for benefits is presented on a contract value basis.
Purchases and sales of securities are recorded on the trade-date basis. Interest income is recorded as earned on the accrual basis. Dividend income is recorded on the ex-dividend date.
Certain expenses incurred in administering the Plan, including those necessary for the administration of the trust, are paid out of the
principal or income of the trust unless paid by the Company at its sole discretion. Management fees and expenses charged to the Plan for investments in the registered investment companies and common/collective trusts are deducted from income earned
by these investments on a daily basis and are not separately reflected in the accompanying financial statements. Consequently, management fees and expenses are reflected as a reduction of investment return for such investments.
Notes Receivable from Participants
Notes receivable from participants are measured at their unpaid principal balance
plus any accrued but unpaid interest. Delinquent participant loans are recorded as distributions based on the terms of the Plan document.
Contributions
Participants contributions are recorded as of the last day of a payroll period. Rollover contributions are recorded when submitted to the recordkeeper. Company
matching contributions are recorded as of the last day of a payroll period.
Benefit Payments
Benefit payments to
participants are recorded upon distribution. There were no participants who had elected to withdraw from the Plan but had not yet been paid at December 31, 2011 and 2010.
- 6 -
Excess Contributions Payable
The Plan is required to return contributions
received during the Plan year in excess of the IRC limits.
Recent Accounting Pronouncements
ASU No. 2010-06,
Fair Value Measurements and Disclosures
In January 2010, the Financial
Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-06,
Fair Value Measurements and Disclosures
, which amends Accounting Standards Codification (ASC) 820,
Fair Value
Measurement
, adding new disclosure requirements for fair value measurements classified as Levels 1 and 2, separate disclosures of purchases, sales, issuances, and settlements relating to Level 3 measurements and clarification of existing fair
value disclosures. ASU No. 2010-06 was effective for periods beginning after December 15, 2009, except for the requirement to provide Level 3 activity of purchases, sales, issuances, and settlements on a gross basis, which became effective
for fiscal years beginning after December 15, 2010. The Plan prospectively adopted this guidance in 2010, except for the Level 3 reconciliation disclosures, which the Plan adopted effective January 1, 2011. The adoption of the provisions
of ASU 2010-06 did not materially affect the Plans financial statements.
ASU No. 2011-04
,
Amendments to
Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs
In May 2011, the FASB issued ASU No. 2011-04,
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S.
GAAP and IFRSs.
ASU 2011-04 amends ASC 820,
Fair Value Measurement
, by expanding existing disclosure requirements for fair value measurements and modifying certain definitions in the guidance, which may change how the fair value
measurement guidance of ASC 820 is applied. ASU 2011-04 will be effective for the Plan for fiscal years beginning after December 15, 2011 and must be applied prospectively. The Plan is evaluating the impact that this ASU may have on its
financial statements, if any.
3.
|
FAIR VALUE MEASUREMENTS
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The Plan classifies fair value-based measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value.
This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
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Level 1 quoted market prices in active markets for identical assets or liabilities;
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Level 2 observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or
other inputs that are observable or can be corroborated by observable market data; and
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Level 3 unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or
liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
|
Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth by level within the fair value hierarchy a
summary of the Plans investments measured at fair value on a recurring basis at December 31, 2011 and 2010 and include the major categorization for debt and equity securities on the basis of the nature and risk of the investments.
- 7 -
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Investment Assets at Fair Value as of December 31, 2011
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Level 1
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Level 2
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Level 3
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Total
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Registered investment companies:
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Equity funds
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$
|
48,014,575
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$
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$
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$
|
48,014,575
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International equity funds
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12,423,598
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|
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12,423,598
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Balanced funds
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|
27,311,348
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|
|
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27,311,348
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Total registered investment companies
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87,749,521
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Common stock - The Talbots, Inc.*
|
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|
1,879,551
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|
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|
1,879,551
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|
Pooled commingled fund
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14,183,897
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14,183,897
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Common/collective trust - stable value fund
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|
19,843,553
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|
|
|
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|
19,843,553
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|
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Total investment assets at fair value
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$
|
89,629,072
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|
|
$
|
34,027,450
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$
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|
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$
|
123,656,522
|
|
|
|
|
|
|
|
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|
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Investment Assets at Fair Value as of December 31, 2010
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Level 1
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Level 2
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Level 3
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Total
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Registered investment companies:
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Equity funds
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$
|
59,254,688
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$
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$
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|
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$
|
59,254,688
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|
International equity funds
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|
|
21,919,590
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|
|
|
|
|
|
|
|
|
|
|
21,919,590
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|
Balanced funds
|
|
|
20,235,556
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|
|
|
|
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|
|
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20,235,556
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Other
|
|
|
641,295
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|
|
|
|
|
|
|
|
|
|
|
641,295
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total registered investment companies
|
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|
|
|
|
|
|
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102,051,129
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|
Common stock - The Talbots, Inc.*
|
|
|
4,882,685
|
|
|
|
|
|
|
|
|
|
|
|
4,882,685
|
|
Pooled commingled fund
|
|
|
|
|
|
|
14,240,947
|
|
|
|
|
|
|
|
14,240,947
|
|
Common/collective trust - stable value fund
|
|
|
|
|
|
|
20,160,088
|
|
|
|
|
|
|
|
20,160,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment assets at fair value
|
|
$
|
106,933,814
|
|
|
$
|
34,401,035
|
|
|
$
|
|
|
|
$
|
141,334,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Represents a party-in-interest to the Plan
|
Transfers in and/or out of Level 3 occur at December 31. There were no Level 1, 2, or 3 transfers for the year ended December 31, 2011. Plan management transferred its investment for the stable
value fund to a Level 2 investment classification as of December 31, 2010 based on the availability of an audited net asset value and the ability to redeem from the stable value fund in the near term as required under ASC 820. The following
table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level 3) for the year ended December 31, 2010.
- 8 -
|
|
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|
Change in Fair Value of
Plans Level 3 Assets
|
|
|
|
Common/Collective Trust
|
|
|
|
2010
|
|
Beginning balance
|
|
$
|
21,339,677
|
|
Purchases, sales, issuances, transfers and settlements, net
|
|
|
(21,623,452
|
)
|
Realized gains, net
|
|
|
20,541
|
|
Unrealized gains, net
|
|
|
263,234
|
|
|
|
|
|
|
Ending balance
|
|
$
|
|
|
|
|
|
|
|
The following tables set forth summaries of the Plans investments with a reported NAV.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Estimated Using Net Asset Value per Share
|
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Redemption
|
|
|
|
|
|
Unfunded
|
|
|
Redemption
|
|
Redemption
|
|
Notice
|
Investment
|
|
Fair Value *
|
|
|
Commitment
|
|
|
Frequency
|
|
Restrictions
|
|
Period
|
|
|
|
|
|
|
Ameriprise INVT Trust (RVST) (a)
|
|
$
|
19,843,553
|
|
|
$
|
|
|
|
Daily
|
|
None
|
|
None
|
PIMCO Total Return Fund (b)
|
|
|
14,183,897
|
|
|
|
|
|
|
Immediate
|
|
None
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
34,027,450
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Estimated Using Net Asset Value per Share
|
|
|
December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Redemption
|
|
|
|
|
|
Unfunded
|
|
|
Redemption
|
|
Redemption
|
|
Notice
|
Investment
|
|
Fair Value *
|
|
|
Commitment
|
|
|
Frequency
|
|
Restrictions
|
|
Period
|
|
|
|
|
|
|
RVST Income Fund II (a)
|
|
$
|
20,160,088
|
|
|
$
|
|
|
|
Daily
|
|
None
|
|
None
|
PIMCO Total Return Fund (b)
|
|
|
14,240,947
|
|
|
|
|
|
|
Immediate
|
|
None
|
|
None
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
34,401,035
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
The fair values of the investments have been estimated using the NAV of the investment.
|
(a)
|
The Ameriprise Investment Trust (previously RVST Income Fund II) is a stable value fund comprised of shares in the RiverSource Trust Collective Investment Funds for
Employee Benefit Trusts Income Fund I (Fund I). Fund I seeks to invest in fixed interest insurance investment contracts, money market funds, corporate and government bonds, mortgage-backed securities, bond funds and other fixed income
securities. The Plan invests in investment contracts through the Ameriprise Investment Trust, a common/collective trust.
|
(b)
|
The PIMCO Total Return Fund seeks to invest in debt securities to provide a total return consistent with the preservation of capital.
|
- 9 -
The valuation methods applied, as described in Note 2,
Summary of Significant Accounting
Policies
, may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market
participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement as of the reporting date.
The
following investments at fair value represented five percent or more of the Plans net assets available for benefits as of December 31, 2011 and December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
American Balanced Fund
|
|
$
|
18,196,976
|
|
|
$
|
18,804,914
|
|
Davis New York Venture Fund (Class A)
|
|
|
7,200,420
|
|
|
|
8,522,096
|
|
Fidelity Spartan U.S. Equity Index Fund
|
|
|
23,725,343
|
|
|
|
25,476,829
|
|
Fidelity Value Fund
|
|
|
6,476,719
|
|
|
|
8,625,778
|
|
Janus Overseas Fund
|
|
|
9,732,649
|
|
|
|
18,402,379
|
|
PIMCO Total Return Fund *
|
|
|
14,183,897
|
|
|
|
14,240,947
|
|
Ameriprise INVT Trust (RVST Income Fund II)
|
|
|
19,843,553
|
|
|
|
20,160,088
|
|
During
2011 the Plans investments (including gains and losses on investments bought and sold, as well as held during the year) (depreciated) appreciated in value as follows:
|
|
|
|
|
Registered investment companies:
|
|
|
|
|
Equity funds
|
|
$
|
(2,027,006
|
)
|
International equity funds
|
|
|
(5,834,802
|
)
|
Balanced funds
|
|
|
(102,586
|
)
|
|
|
|
|
|
Total registered investment companies
|
|
|
(7,964,394
|
)
|
Pooled commingled fund
|
|
|
529,206
|
|
Common stock - The Talbots, Inc. *
|
|
|
(3,436,268
|
)
|
Common/collective trust - stable value fund
|
|
|
282,839
|
|
|
|
|
|
|
|
|
Net depreciation in fair value of investments
|
|
$
|
(10,588,617
|
)
|
|
|
|
|
|
*
|
Represents a party-in-interest to the Plan
|
5.
|
EXEMPT PARTY-IN-INTEREST TRANSACTIONS
|
Notes receivable from participants, investments in Company common stock, and investments managed by the Plans trustee are considered to be party-in-interest transactions. As of December 31,
2011 and 2010, the Plan held 706,598 and 573,085 shares, respectively, of common stock of the Company, with a fair value of $1,879,551 and $4,882,685, respectively. Participants direct their investment allocation and may elect to invest up to 50% of
their contributions in Company common stock. In February 2009, the Companys Board of Directors approved an indefinite suspension of cash dividends paid with respect to common stock of the Company. Accordingly, no dividend income was recorded
during the year ended December 31, 2011.
- 10 -
Certain Plan investments are shares of registered investment companies managed by the
Plans trustee, Wells Fargo. As of December 31, 2011 and 2010, the Plan held 64,352 and 137,285 of such shares, respectively, with a fair value of $64,352 and $137,285, respectively. Fees paid by the Plan for management services were
included as a reduction of the return earned for each fund. Fees paid by the Plan to Wells Fargo for recordkeeping services were $26,922 for the year ended December 31, 2011.
Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions set forth in ERISA. In the event that the Plan is terminated, participants would become 100% vested in their accounts.
7.
|
FEDERAL INCOME TAX STATUS
|
The Internal Revenue Service (IRS) has determined and informed the Company by a letter dated August 26, 2010, that the
Plan and related trust were designed in accordance with the applicable regulations of the Code. The Plan has been amended since receiving the determination letter; however, the Company and Plan management believe that the Plan is currently designed
and operated in compliance with the applicable requirements of the Code, and the Plan and related trust continue to be tax-exempt. Therefore, no provision for income tax has been included in the Plans financial statements.
GAAP requires Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken
an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan and has concluded that, as of December 31, 2011, there are no
uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the Plan financial statements. The Plan is subject to routine audits by taxing jurisdictions. The Plan administrator
believes that all Plan years remain open and subject to audit.
8.
|
EXCESS CONTRIBUTIONS PAYABLE
|
The amount contributed to the Plan from highly compensated employees in excess of the IRS-approved limit was $151,899 and $217,092 in 2011 and 2010, respectively. This amount is reflected as excess
contributions payable in the accompanying statements of net assets available for benefits. All such amounts were refunded to the participants within the time allowed by the IRS.
The
Ameriprise INVT Trust (previously, RVST Income Fund II) stable value fund (the Fund) is a collective trust fund sponsored by the RiverSource Trust. The beneficial interest of each participant is represented by units. The net asset
value of the Fund is determined daily. Units can be issued and redeemed on any business day at the daily unit value. All earnings and gains and losses of the Fund are reflected in the computation of the daily unit value and are realized by the
participant upon withdrawal from the Fund. No distributions of income and gains and losses are made to participants.
Participants ordinarily may direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value
represents contributions made to the Fund, plus earnings, less participant
- 11 -
withdrawals and administrative expenses. The Fund imposes certain restrictions on the Plan, and the Fund itself may be subject to circumstances that impact its ability to transact at contract
value, as described in the following paragraphs. Plan management believes that the occurrence of events that would cause the Fund to transact at less than contract value is not probable.
Limitations on the Ability of the Fund to Transact at Contract Value:
Restrictions on the Plan
Participant-initiated transactions are those transactions allowed by the Plan, including
withdrawals for benefits, loans, or transfers to noncompeting funds within a plan, but excluding withdrawals that are deemed to be caused by the actions of the Plan Sponsor. The following employer-initiated events may limit the ability of the Fund
to transact at contract value:
|
|
|
A failure of the Plan or its trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA
|
|
|
|
Any communication given to Plan participants designed to influence a participant not to invest in the Fund or to transfer assets out of the Fund
|
|
|
|
Any transfer of assets from the Fund directly into a competing investment option
|
|
|
|
The establishment of a defined contribution plan that competes with the Plan for employee contributions
|
|
|
|
Complete or partial termination of the Plan or its merger with another plan
|
Events That Impact the Fund
Certain events may limit the ability of the Fund to transact at contract value with the
contract issuers for participant benefit payments or investment transfers (up to one year may be taken to honor a request for withdrawal from the Fund originating from a plan sponsor). Although such an event is not probable, an example may be a
request by Ameriprise Trust Company, the trustee and recordkeeper for the Fund, to terminate or partially terminate the contract at market value.
The merger with the Jill Plan, described in Note 1,
Description of the Plan
, had no impact on the stable value fund.
10.
|
RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
|
The following is a reconciliation of net assets available for benefits and assets per the financial statements at December 31, 2011 and 2010 to Form 5500:
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
Net assets available for benefits per the financial statements
|
|
$
|
125,649,972
|
|
|
$
|
144,023,006
|
|
Cumulative deemed loans (principal) on the Form 5500
|
|
|
(21,142
|
)
|
|
|
(35,871
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per the Form 5500
|
|
$
|
125,628,830
|
|
|
$
|
143,987,135
|
|
|
|
|
|
|
|
|
|
|
- 12 -
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
Participant directed investments - at fair value per the financial statements
|
|
$
|
123,656,522
|
|
|
$
|
141,334,849
|
|
Adjustment from fair value to contract value
|
|
|
(304,682
|
)
|
|
|
(54,297
|
)
|
Notes receivable from participants
|
|
|
2,504,024
|
|
|
|
2,708,092
|
|
Cumulative deemed loans (principal) on the Form 5500
|
|
|
(21,142
|
)
|
|
|
(35,871
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets per the Form 5500
|
|
$
|
125,834,722
|
|
|
$
|
143,952,773
|
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of the Plans net decrease in net assets available for benefits
per the financial statements to net loss as reported in Form 5500 for the year ended December 31, 2011:
|
|
|
|
|
Net decrease in net assets available for benefits per the financial statements
|
|
$
|
(18,373,034
|
)
|
Loans shown as deemed loans on the Form 5500
|
|
|
14,729
|
|
|
|
|
|
|
|
|
Net loss per Form 5500
|
|
$
|
(18,358,305
|
)
|
|
|
|
|
|
On
May 30, 2012, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with TLB Holdings LLC, a Delaware limited liability company (the Parent), and TLB Merger Sub Inc., a Delaware corporation and
wholly-owned subsidiary of the Parent (the Sub), which are both affiliates of Sycamore Partners Management LLC (Sycamore). Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, the Sub
commenced a tender offer on June 15, 2012 (the Offer), to purchase all of the outstanding shares of the Companys common stock at a price of $2.75 per share, without interest, net to the seller thereof in cash, on the terms and
subject to the conditions set forth in the Merger Agreement. Upon the completion of the Offer, if successful and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, the Sub will merge with and into The
Talbots, Inc. (the Merger), with The Talbots, Inc. surviving the Merger as a wholly-owned subsidiary of the Parent. The Merger Agreement also provides that the Merger may be consummated regardless of whether the Offer is completed; but
if the Offer is not completed, the Merger will only be able to be consummated after the stockholders of the Company have adopted the Merger Agreement at a meeting of stockholders and subject to the satisfaction or waiver of other conditions to the
consummation of the Merger as set forth in the Merger Agreement. In the Merger, each outstanding share of the Companys common stock, other than shares of the Companys common stock owned by the Parent or the Sub, owned by the Company as
treasury stock or owned by stockholders who have validly exercised their appraisal rights under Delaware law, will be converted automatically into a right to receive $2.75 in cash, without interest.
Consummation of the Merger is subject to the satisfaction or waiver of a number of conditions, including, among other things, satisfaction
of minimum tender conditions; the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
- 13 -
amended; non-disapproval of the Office of the Comptroller of the Currency under the Change in Bank Control Act of the acquisition of control of Talbots Classics National Bank by the Parent and
its affiliates, as applicable; receipt of a letter from the Pension Benefit Guaranty Corporation stating that it has concluded its investigation of the transaction; a minimum level of borrowing availability being maintained under the Companys
existing revolving credit facility as determined pursuant to the Merger Agreement and related agreements; and the Parents receipt of proceeds of, or appropriate confirmation of, applicable debt financings either directly or indirectly through
the Sub or the Company, among other closing conditions. The Merger Agreement also contains customary representations, warranties and covenants of the parties and, pending the consummation of the Merger, subjects the Company to significant
limitations and restrictions on the ordinary conduct of its business without the consent of Sycamore.
The proposed Merger is
not expected to materially impact the Plans financial statements except that, upon any successful completion of the Merger; there will no longer be a public trading market for the Companys common stock, and the Companys common
stock will no longer be available as an investment option for Plan participants.
For further information on the Merger, the
Merger Agreement and related agreements, please refer to the Companys Current Report on Form 8-K filed with the United States Securities & Exchange Commission on June 1, 2012 and the Merger Agreement filed as an exhibit thereto.
The foregoing description of the Merger does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Merger Agreement and related agreements. The Merger Agreement contains representations and warranties
the Company, Parent and Sub made to each other as of specific dates. The assertions embodied in those representations and warranties were made solely for purposes of the contract among the Company, Parent and Sub and may be subject to important
qualifications and limitations agreed to by the Company, Parent and Sub in connection with the negotiated terms. Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may be subject to a
contractual standard of materiality different from those generally applicable to shareholders or may have been used for purposes of allocating risk among the Company, Parent and Sub rather than establishing matters as facts.
******
- 14 -
SUPPLEMENTAL SCHEDULE
- 15 -
THE TALBOTS, INC.
RETIREMENT SAVINGS VOLUNTARY PLAN
EIN # 41-1111318
Plan No. 002
Form 5500, Schedule
H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)
As of December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Description of investment including
|
|
|
|
|
|
|
|
(b) Identity of issue, borrower,
|
|
maturity date, rate of interest,
|
|
(d) Cost
|
|
(e) Current
|
|
(a)
|
|
lessor, or similar party
|
|
collateral, par, or maturity value
|
|
**
|
|
value
|
|
|
|
|
|
|
|
|
Alger Small Mid-cap Growth Fund I
|
|
Registered Investment Company
|
|
|
|
$
|
1,344,858
|
|
|
|
American Balanced Fund
|
|
Registered Investment Company
|
|
|
|
|
18,196,976
|
|
|
|
American EuroPacific Growth Fund
|
|
Registered Investment Company
|
|
|
|
|
887,626
|
|
|
|
Brandywine Blue Fund Inc.
|
|
Registered Investment Company
|
|
|
|
|
1,527,416
|
|
|
|
Columbia Smallcap Value I Fund
|
|
Registered Investment Company
|
|
|
|
|
2,004,061
|
|
|
|
Davis New York Venture Fund (Class A)
|
|
Registered Investment Company
|
|
|
|
|
7,200,420
|
|
|
|
Fidelity Equity-Income Fund
|
|
Registered Investment Company
|
|
|
|
|
745,419
|
|
|
|
Fidelity Freedom 2000
|
|
Registered Investment Company
|
|
|
|
|
160,857
|
|
|
|
Fidelity Freedom 2005
|
|
Registered Investment Company
|
|
|
|
|
32,979
|
|
|
|
Fidelity Freedom 2010
|
|
Registered Investment Company
|
|
|
|
|
458,370
|
|
|
|
Fidelity Freedom 2015
|
|
Registered Investment Company
|
|
|
|
|
866,650
|
|
|
|
Fidelity Freedom 2020
|
|
Registered Investment Company
|
|
|
|
|
2,625,080
|
|
|
|
Fidelity Freedom 2025
|
|
Registered Investment Company
|
|
|
|
|
761,360
|
|
|
|
Fidelity Freedom 2030
|
|
Registered Investment Company
|
|
|
|
|
1,839,417
|
|
|
|
Fidelity Freedom 2035
|
|
Registered Investment Company
|
|
|
|
|
748,883
|
|
|
|
Fidelity Freedom 2040
|
|
Registered Investment Company
|
|
|
|
|
810,906
|
|
|
|
Fidelity Freedom 2045
|
|
Registered Investment Company
|
|
|
|
|
573,940
|
|
|
|
Fidelity Freedom 2050
|
|
Registered Investment Company
|
|
|
|
|
483,573
|
|
|
|
Fidelity Freedom Income Fund
|
|
Registered Investment Company
|
|
|
|
|
268,910
|
|
|
|
Fidelity Growth Company Fund
|
|
Registered Investment Company
|
|
|
|
|
2,529,440
|
|
|
|
Fidelity Spartan U.S. Equity Index Fund
|
|
Registered Investment Company
|
|
|
|
|
23,725,343
|
|
|
|
Fidelity Value Fund
|
|
Registered Investment Company
|
|
|
|
|
6,476,719
|
|
|
|
Janus Overseas Fund
|
|
Registered Investment Company
|
|
|
|
|
9,732,649
|
|
|
|
Lazard Emerging Markets Fund
|
|
Registered Investment Company
|
|
|
|
|
1,803,323
|
|
|
|
Royce Low-Priced Stock Fund
|
|
Registered Investment Company
|
|
|
|
|
1,879,994
|
|
*
|
|
WF Adv Heritage MM Fund
|
|
Registered Investment Company
|
|
|
|
|
64,352
|
|
****
|
|
PIMCO Total Return Fund (Admin)
|
|
Pooled Commingled Fund
|
|
|
|
|
|
|
|
|
PIMCO Total Return Fund
|
|
Registered Investment Company
|
|
|
|
|
14,183,897
|
|
|
|
Ameriprise INVT Trust
|
|
Common/Collective Trust - Stable Value Fund
|
|
|
19,843,553
|
|
*
|
|
The Talbots, Inc.
|
|
Common Stock
|
|
|
|
|
1,879,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENTS AT FAIR VALUE
|
|
|
|
|
123,656,522
|
|
|
|
Adjustment from fair value to contract value for fully benefit-responsive stable value fund
|
|
|
(304,682
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTMENTS ADJUSTED TO CONTRACT VALUE
|
|
|
|
|
123,351,840
|
|
* ***
|
|
Participant loans maturing through 2021 at interest rates of 4.0% - 9.5%
|
|
|
|
|
2,482,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS PER FORM 5500
|
|
|
|
|
|
$
|
125,834,722
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
A party-in-interest as defined by ERISA
|
**
|
Cost information is not required for participant-directed investments and therefore is not included.
|
***
|
Net of $21,142 of cumulative deemed loan distributions
|
****
|
Fund is not a direct filing entity; therefore the underlying investment has been included.
|
- 16 -
Exhibit Index
|
|
|
Exhibit 23.1
|
|
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
- 17 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on their
behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
|
THE TALBOTS, INC. RETIREMENT
SAVINGS VOLUNTARY PLAN
|
|
|
|
Date: June 28, 2012
|
|
By:
|
|
/s/ Kyle Polischuk
|
|
|
|
|
Kyle Polischuk
|
|
|
|
|
Vice President, Human Resources
|
|
|
|
|
|
By:
|
|
/s/ Michael Scarpa
|
|
|
|
|
Michael Scarpa
|
|
|
|
|
Chief Operating Officer, Chief Financial Officer, and Treasurer
|
- 18 -
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