Exhibit 10.4

 

SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS

 

This Separation Agreement and General Release of all Claims (hereinafter
“Agreement”), dated as of January 30, 2008, is made and entered into between
GUESS?, INC., a Delaware corporation (hereinafter “GUESS”), and Stephen Pearson
(hereinafter “EMPLOYEE”), and is made in light of the following:

 

EMPLOYEE is employed by GUESS as the Executive Vice President/Chief Supply Chain
Officer. EMPLOYEE’s employment with GUESS shall terminate on February 4, 2008
(the “Termination Date”). The parties hereto desire to resolve all pending
issues and/or claims between them, regarding the employment of EMPLOYEE, the
performance of EMPLOYEE’s duties as an employee of GUESS, and the termination of
EMPLOYEE’s employment with GUESS.

 

The parties hereto acknowledge that each has denied, and continues to deny, any
claims existing or asserted by the other, but that GUESS and EMPLOYEE, desire to
bring matters relating to EMPLOYEE’s employment with GUESS to a conclusion.
Therefore, the parties make this Agreement, and expressly recognize that the
making of this Agreement does not in any way constitute an admission of
wrongdoing or liability on the part of either party.

 

1.                                       EMPLOYEE represents and warrants that
EMPLOYEE (a) has not filed any complaints, lawsuits, charges and/or other claims
against GUESS, or any of the Releasees identified in Paragraph 4 below, with any
court or government agency or entity based upon or arising out of or in any way
related to EMPLOYEE’s employment, the termination of EMPLOYEE’s employment, or
any acts or events which occurred prior to EMPLOYEE’s execution of this
Agreement; (b) has not assigned any such action, cause of action, claim,
judgment, obligation, damage or liability or authorized any other person or
entity to assert such on EMPLOYEE’s behalf; and (c) has not at any time
sustained physical or mental injury arising out of EMPLOYEE’s employment, or the
termination thereof, with GUESS through the date of execution of this Agreement.

 

2.                                       In consideration of covenants
undertaken and releases given herein by EMPLOYEE, GUESS agrees to: (a) pay
EMPLOYEE the sum of Four Hundred Sixty Five Thousand Dollars ($465,000), less
all legally required withholdings for taxes and other related obligations, which
sum represents a twelve (12) month severance to be paid in equal installments on
regularly scheduled paydays commencing within two weeks after receipt by GUESS
of this Agreement executed by EMPLOYEE, subject to the terms set forth in this
paragraph 2; and (b) cost share COBRA premiums for medical and dental benefits
for EMPLOYEE and maintain EMPLOYEE’s participation in Exec-U-Care, both in the
same amount and on the same terms and conditions as existed on EMPLOYEE’s
Termination Date from February 4, 2008 through January 31, 2009; however, should
EMPLOYEE find and begin employment, or enter into a consulting or other
compensatory arrangement prior to February 4, 2009, at a salary equal to or
greater than EMPLOYEE’s salary at GUESS as of February 4, 2008, payments under
this paragraph 2 shall be discontinued. If EMPLOYEE accepts and begins
employment or enters a consulting or other compensatory arrangement prior to
January 23, 2009, at a salary lower than the above referenced GUESS salary,
GUESS will reimburse the difference in compensation from the date of such
employment.

 

EMPLOYEE acknowledges that GUESS is not obligated to provide certain of the
above-referenced consideration to EMPLOYEE under its normal policies and
procedures. EMPLOYEE also acknowledges that no other monetary payments shall be
made to EMPLOYEE in return for entering into this Agreement and no other monies
are owed to EMPLOYEE by GUESS or by any of the Releasees identified in
Paragraph 4 below.

 

3.                                       In consideration of the covenants
undertaken herein by GUESS, EMPLOYEE agrees: (a) to continue to comply with
Sections 7(b) through (e) of the Employment Agreement by and between GUESS and
the EMPLOYEE, dated January 31, 2006 (the “Employment Agreement”), concerning
non-solicitation of GUESS customers, suppliers and employees through February 4,
2009; (b) to continue to comply with the terms of GUESS’s Confidentiality
Agreement which is attached hereto as Exhibit A and made a part hereof
(“Confidentiality Agreement”); (c) that GUESS may enforce the confidentiality
provisions of the Confidentiality Agreement in connection with EMPLOYEE’s
conduct as if EMPLOYEE were still an employee of GUESS, to the extent permitted
by law; (d) to return any and all GUESS property to GUESS forthwith; and
(e) that EMPLOYEE will remain available for questions concerning EMPLOYEE’s
position if requested by GUESS. EMPLOYEE agrees that the provisions of this
paragraph are necessary and reasonable.

 

EMPLOYEE agrees to notify GUESS’s Legal Department in the event that EMPLOYEE is
contacted by anyone in connection with either GUESS or any officers, directors
or employees of GUESS. In particular, EMPLOYEE acknowledges and agrees that
EMPLOYEE is obligated to cooperate with GUESS and its counsel, in connection
with any subpoenas, process, or any actual or potential litigation matters
related in any way to GUESS or any officers, directors, or employees of GUESS.
EMPLOYEE further acknowledges and agrees that any breach of this provision will
require the return of any severance amount paid by GUESS under this Agreement.

 

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4.                                       In consideration of the covenants
undertaken herein by GUESS, EMPLOYEE also hereby covenants not to sue and fully
releases and discharges GUESS, all of its divisions, and all of its parent,
successor, subsidiary and affiliated companies and entities, and each of their
respective divisions, officers, directors, shareholders, partners, limited
partners, agents, employees, representatives, independent contractors, payroll
companies, attorneys, insurers, licensees and assigns, past and present (all of
which and whom are collectively referred to as “Releasees”), with respect to and
from, any and all claims, demands, rights, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, debts, costs,
expenses, attorneys’ fees, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected, and whether or not concealed or hidden, which
EMPLOYEE now owns or holds, or has at anytime heretofore owned or held, or may
in the future hold against said Releasees, or any of them, arising out of,
grounded upon, or in any way connected with EMPLOYEE’s employment relationship
with GUESS, the separation from that employment, or any other transactions,
occurrences, acts or omissions or any loss, damages or injury whatsoever, known
or unknown, suspected or unsuspected, resulting from any act or omission by or
on the part of the Releasees, or any of them, committed or omitted prior to the
date of this Agreement (“Claim or Claims”). EMPLOYEE’s release of any such Claim
or Claims includes, but is not limited to, any action arising out of any
foreign, federal, state or local constitution, statute, ordinance, regulation,
or common law, including, but not limited to, any Claims arising under the Age
Discrimination In Employment Act; Title VII of the Civil Rights Act of 1964; the
Equal Pay Act; the American with Disabilities Act; the Family and Medical Leave
Act; the Employee Retirement Income Security Act; the Worker Adjustment and
Retraining Notification Act; the California Fair Employment and Housing Act; all
provisions of the California Labor Code; all provisions of the California
Government Code; NLRB charges or Claims of discrimination based on “union”
status; the Orders of the California Industrial Welfare Commission regulating
wages, hours and working conditions; any other foreign, federal, state or local
laws, prohibiting employment discrimination or otherwise regulating employment,
including but not limited to, any Claim or Claims for discrimination, failure to
prevent discrimination, failure to prevent retaliation, harassment, failure to
prevent harassment, assault, battery, misrepresentation, fraud, deceit, invasion
of privacy, breach of contract, breach of collective bargaining agreement,
breach of quasi-contract, breach of implied contract, an accounting, wrongful or
constructive discharge, breach of the covenant of good faith and fair dealing,
libel, slander, negligent or intentional infliction of emotional distress,
violation of public policy, negligent supervision, negligent retention,
negligence, or interference with business opportunity or with contracts; and any
Claim or Claims for vacation pay, severance pay, bonus or similar benefit, sick
leave, pension, retirement, retirement bonus, holiday pay, life insurance,
health or medical insurance, reimbursement of health or medical costs; provided,
however, that this release shall not affect any rights EMPLOYEE has been granted
pursuant to this Agreement or under any option agreement or restricted stock
agreement with respect to awards scheduled to vest thereunder prior to the
Termination Date.

 

5.                                       EMPLOYEE expressly acknowledges and
agrees that this Agreement includes a waiver and release of all claims which
EMPLOYEE has or may have under the Age Discrimination in Employment Act of 1967,
as amended, 29 U.S.C., §621, et seq. (“ADEA”). The following terms and
conditions apply to and are part of the waiver and release of ADEA claims under
this Agreement.

 

The waiver and release of claims under the ADEA contained in this Agreement does
not cover rights or claims that may arise after the date on which EMPLOYEE signs
this Agreement. EMPLOYEE has been advised to consult a lawyer before signing
this Agreement. EMPLOYEE is granted twenty-one (21) days after EMPLOYEE is
presented with this Agreement to decide whether or not to sign this Agreement.
EMPLOYEE will have the right to revoke the waiver and release of claims under
the ADEA within seven (7) days of signing this Agreement, and this Agreement
shall not become effective or enforceable until this revocation period has
expired. EMPLOYEE hereby acknowledges and agrees that EMPLOYEE is knowingly and
voluntarily waiving and releasing EMPLOYEE’s rights and claims only in exchange
for consideration (something of value) in addition to anything of value to which
EMPLOYEE is already entitled.

 

6.                                       EMPLOYEE understands, acknowledges and
agrees that the California Civil Code section 1542 states as follows:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

 

EMPLOYEE hereby expressly waives the benefit of the foregoing statute.

 

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7.                                       Should any part, term or provision of
this Agreement, with the exception of the releases embodied in Paragraphs 4, 5
and 6, be declared or determined by any Court or other tribunal of appropriate
jurisdiction to be invalid or unenforceable such term or provision shall be
deemed stricken and severed from this Agreement and any and all other terms of
the Agreement shall remain in full force and effect to the fullest extent
permitted by law. The releases embodied in Paragraph 4, 5 and 6 are the essence
of this Agreement and should any of these paragraphs be deemed invalid or
unenforceable, this Agreement may be declared null and void and any
consideration received under this Agreement shall be returned to GUESS.

 

8.                                       The parties hereto acknowledge and
agree that this Agreement constitutes and contains the entire agreement and
understanding concerning the subject matter between the parties and supersedes
and replaces all prior negotiations and proposed agreements, whether written or
oral, other than the Confidentiality Agreement and Sections 7(b) through (e) of
the Employment Agreement. Each of the parties warrants that no other party or
any agent or attorney or any other party has made any promise, representation or
warranty whatsoever not contained herein to induce each party to execute this
Agreement and the other documents referred to herein. Each of the parties
represents that they have not executed this Agreement or the other documents
referred to herein in reliance on any promise, representation or warranty not
contained herein.

 

9.                                       The parties hereto acknowledge and
agree that the language of this Agreement shall be construed as a whole
according to its fair meaning and not strictly for or against any of the
parties.

 

10.                                 This Agreement shall, in all respects, be
interpreted, construed and governed by and under the domestic laws of the State
of California. Any judicial proceeding brought to interpret or enforce this
Agreement shall be brought in the County of Los Angeles, State of California.

 

11.                                 Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration in
Los Angeles, California, in accordance with the Rules Resolution of Employment
Disputes of the American Arbitration Association then in effect.

 

12.                                 Should any action be brought to enforce any
of the terms or conditions of this Agreement, the prevailing party shall be
entitled to recover all costs and expenses incurred in the prosecution or
defense of this action, including attorneys’ fees.

 

13.                                 EMPLOYEE acknowledges that EMPLOYEE has
carefully read and fully understands this Agreement, and that EMPLOYEE has had
the opportunity to ask GUESS about any questions, concerns or issues in
connection with this Agreement, or its terms. EMPLOYEE further acknowledges that
EMPLOYEE has had the opportunity, and taken it to the extent EMPLOYEE deemed
appropriate and necessary, to consult legal counsel of EMPLOYEE’s choice, in
connection with this Agreement and consents to all of the terms and provisions
contained herein knowingly, voluntarily and without any reservation whatsoever.

 

14.                                 Either facsimile or original signatures
shall be binding. EMPLOYEE’s signature is binding when received by GUESS.

 

EMPLOYEE

GUESS?, INC.

/s/ STEPHEN PEARSON

 

By:

/s/ CARLOS ALBERINI

 

 

 

Stephen Pearson

 

 

 

 

 

Dated: January 31, 2008

 

Dated: January 31, 2008

 

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EXHIBIT A

 

Confidentiality Agreement

 

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GUESS?, INC.

 

CONFIDENTIALITY AGREEMENT

 

This Agreement is between GUESS?, INC. (“GUESS?”), a Delaware corporation, and
the employee (“Associate”) who has signed below.

 

BACKGROUND

 

·                  GUESS? is a clothing manufacturer and designer.  In the
course of developing its business and goodwill, GUESS? has developed and
continues to develop techniques and other information that it uses in the
manufacturing, styling, pricing and selling of its apparel products.  This
information, and all other information concerning the operation of GUESS?
business is and always has been kept confidential by GUESS? and is and always
has been a trade secret of GUESS?.  By this Agreement, GUESS? desires to
maintain and preserve the confidentiality of its trade secrets and other
confidential information regarding its business from any unauthorized
disclosures (hereinafter-CONFIDENTIAL INFORMATION).

 

·                  Associate is to be employed by GUESS?.  The purpose of
Associate’s relationship with GUESS? is to perform personal services to GUESS?. 
In order to enable Associate to perform such services, GUESS? may disclose or
authorize the disclosure of trade secrets and other confidential information to
Associate and the Associate may develop additional trade secrets and
confidential information during employment by GUESS? which shall become part of
this CONFIDENTIAL INFORMATION.

 

AGREEMENT

 

Therefore, in consideration of GUESS? employment or continuing employment of
Associate and the wages or salary paid to Associate, it is agreed:

 

1.               This agreement is in effect during period of employment or
continuing employment of Associate by GUESS?, INC.

2.               During employment, Associate may receive, develop, otherwise
acquire, have access to or become acquainted with CONFIDENTIAL INFORMATION
relating to the business of GUESS?.  Associate understands that the term
CONFIDENTIAL INFORMATION shall include, but not be limited to, all drawings,
designs, patterns, devices, methods, techniques, compilations, processes,
product specifications, future plans, discounts, manufacturing costs, financial
information, cost and suppliers; costs of materials; the prices GUESS? obtains
or has obtained, or at which it sells or has sold its apparel products,
manufacturing and sales costs; written business records, documents
specifications, plans and compilations of information, reports, correspondence,
sales records, account lists, budgets, indexes, invoices, telephone records, or
any other material relating in any manner whatsoever to the customer, sales
representatives or employees (including the salaries of employees other than
Associate and their abilities) of GUESS?. If it is determined that any of the
information identified above is, in whole or in part, not entitled to protection
as a trade secret, it shall be confidential information this is protected by
this Agreement.

a.               Associate agrees that all CONFIDENTIAL INFORMATION, or any
copy, extract or summary, whether originated or prepared by Associate or by or
for GUESS? is and shall remain the exclusive property of GUESS?.

3.               Associate shall not disclose to others, either directly or
indirectly, or take or use for Associate’s own purposes or the purposes of
others, the CONFIDENTIAL INFORMATION of GUESS?.  Associate shall not disclose
the name of any employee, customer, sales representative or independent
contractor of GUESS? to any third party, unless the disclosure occurs during
Associate’s employment with GUESS? and is reasonably required by Associate’s
position with GUESS?.  These restrictions shall apply to (1) trade secrets or
confidential information conceived by or belonging to third parties which are in
GUESS?’ possession, and (2) trade secrets or confidential information conceived,
originated, discovered or developed by Associate within the scope of Associate’s
employment.

4.               Any invention, improvement, development, copyrightable matter,
design, idea or suggestion conceived, made, devised or developed by Associate,
solely or jointly with others:

a.               During regular working hours or with the use of GUESS?
equipment, supplies, facilities, CONFIDENTIAL INFORMATION or trade secrets.

b.              During the term of Associate’s employment whether during regular
working hours or not, which relate to business of GUESS?; or

c.               during the term of Associate’s employment and after which
embodies, uses or is the result of any CONFIDENTIAL INFORMATION of GUESS? which
Associate has knowledge of, shall be disclosed to GUESS? by Associate and become
the sole property of GUESS?.

5.               As to each invention, improvement, development, copyrightable
matter, design, idea, suggestion or other matter described above, Associate
unqualifiedly assigns to GUESS? all rights, including foreign patent and
priority rights, which Associate has.  Associate agrees that, upon request by
GUESS?, Associate shall promptly execute all instruments and documents requested
by GUESS?, including but not limited to applications for Letters Patent and
assignment of the rights thereto.  This Agreement does not apply to any
invention, which qualifies fully under the provisions of Section 2870 of the
California Labor Code.

6.               Upon the termination of Associate’s employment, or whenever
required by GUESS?, Associate shall immediately deliver to GUESS? all property
and materials in Associate’s possession or under Associate’s control belonging
to GUESS?, including, but not limited to, all physical embodiments of
CONFIDENTIAL INFORMATION.

7.               Associate shall obtain prior written permission pursuant to
GUESS? policies and procedures to publish or cause to be published any article,
book, textbook, play, tape recordings or any other form of communication
concerning GUESS? or the business of GUESS?, GUESS? may grant or withhold this
permission in its sole subjective discretion.

8.               Throughout the duration of Associate’s employment with GUESS?,
or any time thereafter, EMPLOYEE shall not disrupt, damage, impair or interfere
with the business of GUESS? in any manner, including, and without limitation,
for a period of twenty four (24) months after the termination of Associate’s
employment with GUESS?, by directly or indirectly soliciting, encouraging or
inducing an employee to leave the employ of GUESS?, or by inducing an employee,
a consultant, a sales representative or another independent contractor to end
that person’s relationship with GUESS?, by raiding GUESS?’ employees or sales
representatives, or otherwise soliciting, disrupting or interfering with its
relationship with customers, agents, representatives or vendors, or otherwise. 
Associate is not, however, restricted from being employed by or engaged in any
type of business following the termination of Associate’s employment
relationship with GUESS?.

9.               Associate shall not do anything, which conflicts with the
interest of GUESS? during the term of Associate’s employment.  Associate shall
avoid conflicts of interest and shall refer questions about potential conflicts
to Associate’s supervisor.

 

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a.               Associate, during the term of employment, shall not perform any
services or accept any employment with any organization, which does business
with GUESS? or is a competitor of GUESS?.  This prohibition includes acting as
an advisor or consultant, unless that activity is required as part of the
Associate’s work for GUESS?.

b.              Associate must immediately disclose in writing to the Human
Resources Department any financial interest Associate or Associate’s immediate
family has, during the term of employment, in any firm, which does business with
GUESS? or which competes with GUESS?.

c.               Associate and Associate’s immediate family are not to, during
the term of employment, accept gifts from any person of firm doing business with
GUESS?.  The meaning of gifts for purposes of this Agreement includes the
acceptance of lavish entertainment and free travel and lodging.

d.              Associate, during the term of employment, shall not give, offer
or promise anything of value to any representative of a company with which
GUESS? does business.

10.         Associate and GUESS? agree that the CONFIDENTIAL INFORMATION of
GUESS?, is of a special, unique unusual, extraordinary, and intellectual
character, which gives it a particular value, the loss of which would cause
irreparable damage and cannot be reasonably compensated in damages.  If
Associate breaches or attempts to breach any of the provisions of this
agreement, GUESS? shall be entitled to injunctive and other equitable relief to
prevent a breach of this Agreement, or any of the provisions thereof.

11.         The employment relationship between GUESS? and Associate is at the
Mutual consent of Associate and GUESS? and is not for a fixed term. 
Accordingly, either Associate or GUESS? can end the employment relationship at
will, at any time, with or without cause or advance notice.  No one in the
company has the right to alter the nature of the employment relationship without
a written agreement.  There are not any express or implied agreements that
affect or impair the ability of Associate or GUESS? to terminate the employment
relationship at will.

12.         Nothing in this Agreement shall limit Associate’s right to discuss
the amount of Associate’s own wages with others or to restrict Associate’s
disclosure or use of any information that GUESS? is not legally capable of
protecting under this Agreement.

13.         The provisions of this Agreement are severable, and if any one or
more are determined to be unenforceable by a court of law, in whole or in part,
the remaining provisions shall still be binding and enforceable.  Moreover, if
any court determines that any of the provisions, or any part thereof, are
unenforceable because of the duration or geographic scope of such provision, as
the case may be, and, it is reduced form, such provision shall then be
enforceable.

14.         The failure of a party to insist upon strict adherence to any term
of this Agreement, or to object to any failure to comply with any provision of
this Agreement, shall not (a) be a waiver of that term or provision, (b) prevent
that party from enforcing that term or provision, or (c) prevent that party from
enforcing that term of provision by any claim of delay.

 

This agreement replaces all previous agreements, whether written or oral,
relating to the above subject matter, and cannot be changed orally.  By signing
below the Associate acknowledges that he or she has read it, understands it, and
agrees to each of its provisions.

 

 

/s/ Stephen L. Pearson

 

Associate Signature

 

 

 

Stephen L. Pearson

 

Print Name

 

 

 

1-31-06

 

Date

 

 

Confidentiality Agreement

 

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