Exhibit 10.8


 


EXECUTIVE
EMPLOYMENT AGREEMENT


This EXECUTIVE
EMPLOYMENT AGREEMENT (the “Agreement”),
made as of January 1, 2007 (the “Effective
Date”), between Guess?, Inc., a Delaware corporation (the “Company”), and Maurice Marciano (the “Executive”).


W  I  T  N  E  S  S  E  T  H:


WHEREAS, the
Executive is a co-founder of the Company and is acting as its Co-Chairman and Co-Chief
Executive Officer.


WHEREAS,  the Executive
has heretofore been employed by the Company pursuant to an employment agreement
made effective as of August 13, 1996 (the “Prior Agreement”).


WHEREAS, the Company recognizes that the Executive’s
talents and abilities are unique and have been integral to the success of the
Company.


WHEREAS, the Executive wishes to focus his time and
energy on developing the Company’s strategy as its Chairman of the Board, and
is willing to commit himself to serve the Company, on the terms and conditions
herein provided.


WHEREAS, the Company wishes to retain the services of
the Executive and anticipates that the Executive’s contribution to the growth
and success of the Company will continue to be substantial.


WHEREAS, the Company and the
Executive wish to amend and restate the Prior Agreement as evidenced by this
Agreement effective as of the date hereof in order to provide for the
modification of certain provisions of the Prior Agreement.


NOW THEREFORE, in
consideration of the foregoing, of the mutual promises contained herein and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:


1.            POSITION/DUTIES.


(a)           During the Employment Term (as
defined in Section 2 below), the Executive shall serve as the Company’s
Chairman of the Board of Directors.  In this capacity, the Executive shall
be responsible to identify and develop key strategic initiatives with the
Company’s Chief Executive Officer and to fulfill such other duties and
responsibilities as the Board of Directors of the Company (the “Board”) shall reasonably designate
that are consistent with the Executive’s position as Chairman.  The Executive shall report exclusively to the
Board.  The Executive shall have
authority as is appropriate to carry out his duties and responsibilities as set
forth in this Agreement.


(b)           During the Employment Term (as
defined below), the Executive shall use the Executive’s best reasonable efforts
to perform faithfully and efficiently the duties and responsibilities assigned
to the Executive hereunder and shall devote such portion of the Executive’s business
time (excluding periods of vacation and other approved leaves of absence)













as is reasonably necessary to such performance of the
Executive’s duties with the Company.  Subject
to Board approval, Executive may serve on the board of directors or advisory
boards of other for profit companies provided that such service does not create
a potential business conflict or the appearance thereof.  Nothing in this Agreement shall prevent
Executive from managing his family’s personal investments so long as such activities
do not materially interfere with the performance of the Executive’s duties
hereunder or create a potential business conflict or the appearance thereof.


(c)           During the Employment Term, the Board
shall nominate the Executive for re-election as a member of the Board at the
expiration of the Executive’s then-current term.


(d)           The Company shall not relocate the
Executive’s principal place of business outside of the Los Angeles metropolitan
area without the Executive’s written consent.


(e)           The Executive shall be provided with
appropriate office and secretarial facilities in each of the Company’s
principal executive offices and any other location that the Executive
reasonably deems necessary to have an office and support services in order for
the Executive to perform his duties to the Company.


2.            EMPLOYMENT TERM.  The Executive’s term of employment under this
Agreement (such term of employment, as it may be extended or terminated, is
herein referred to as the “Employment
Term”) shall be for a term commencing on the Effective Date and, unless
terminated earlier as provided in Section 7 hereof, ending on the last day of the fifth whole Fiscal Year
of the Company commencing on or after the Effective Date (the “Original Employment Term”), provided
that the Employment Term shall be automatically extended, subject to earlier
termination as provided in Section 7 hereof, for successive additional one (1) Fiscal
Year periods (the “Additional Terms”),
unless, on or before 90 days prior to the expiration of the Original Employment
Term or of any Additional Term, the Company or the Executive has notified the
other in writing that the Employment Term shall terminate at the end of the
then-current term.


3.            BASE SALARY.  The Company agrees to pay the Executive a
base salary (the “Base Salary”)
at an annual rate of not less than One Million Dollars ($1,000,000), payable in
accordance with the regular payroll practices of the Company, but not less
frequently than monthly.  The Executive’s
Base Salary shall be subject to annual review by the Board (or a committee
thereof) after 2007 and may be increased, but not decreased, from time to time
by the Board; provided, however, that if the Executive notifies the Board that
he wishes to reduce substantially his duties hereunder, the Board may adjust
his Base Salary and other compensation hereunder accordingly.  No increase to Base Salary shall be used to
offset or otherwise reduce any obligations of the Company to the Executive
hereunder or otherwise.  The base salary
as determined herein from time to time shall constitute “Base Salary” for
purposes of this Agreement.


4.            ANNUAL INCENTIVE BONUS AND
OTHER BONUSES.  During the
Employment Term, the Executive shall be eligible to participate in the Company’s
annual bonus and other incentive compensation plans and programs for the
Company’s senior executives at a level commensurate with the Executive’s
position.  For each whole fiscal year (“Fiscal
Year”) that begins on or after January 1, 2007 and ends not later than the
expiration of the Employment 



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Term, the Executive shall
be eligible to earn an annual cash bonus (the “Bonus”) under the Company’s
Annual Incentive Bonus Plan, as amended from time to time (the “Bonus Plan”),
and, if appropriate, the Company’s 2004 Equity Incentive Plan, as amended from
time to time (the “Equity Plan”), based upon the achievement by the Company and
its subsidiaries of performance goals under the Bonus Plan and under the Equity
Plan for each such Fiscal Year established by the Compensation Committee of the
Board of Directors (the “Compensation Committee”).  The Compensation Committee shall establish
objective criteria to be used to determine the extent to which such performance
goals have been satisfied. The range of the Bonus opportunity for each Fiscal
Year will be as determined by the Compensation Committee based upon the extent
to which such performance goals are achieved, provided that the annual target
Bonus opportunity shall be at least 140% of the Executive’s Base Salary (for
each such year, the “Target Bonus”), the threshold Bonus for a Fiscal Year
shall be one-half the Target Bonus for such year and the maximum Bonus payable
pursuant to this Section 4 for any Fiscal Year shall not exceed the amount that
is 225% of the Executive’s Base Salary for such year.  The Bonus, if any, payable to the Executive
in respect of any Fiscal Year will be paid at the same time that bonuses are
paid to other executives of the Company, but in any event within seventy-five
days after the conclusion of such Fiscal Year. 
After the expiration of the Bonus Plan and the Equity Plan, Executive’s
right to receive future Bonus opportunities under such plan is subject to
approval by the stockholders of the Company of a similar successor plan under
which such opportunity may be granted. 
The Compensation Committee may, in its sole discretion, award additional
bonuses to Executive.


5.            EQUITY BASED INCENTIVE
AWARDS.


(a)           PERFORMANCE SHARE AWARDS.  The Company shall grant the Executive under
the Equity Plan at the completion of each whole Fiscal Year commencing on and
after January 1, 2007 and during the Employment Term shares of the Company’s
common stock (“Performance Shares”) based upon the achievement by the Company
and its subsidiaries of performance goals under the Equity Plan for each such Fiscal
Year established by the Compensation Committee. 
The Compensation Committee shall establish objective criteria to be used
to determine the extent to which such performance goals have been satisfied.  Performance Shares will be granted for each whole
Fiscal Year during the Employment Term at “target” and “stretch” levels of 110%
(i.e., $1,100,000 for 2007) and 240% (i.e., $2,400,000 for 2007) of the
Executive’s Base Salary for such Fiscal Year. 
Performance Shares granted in any particular Fiscal Year will be subject
to the standard vesting schedule established by the Compensation Committee for
Performance Share grants in that year (the current vesting schedule is a 4-year
vesting schedule).  After the expiration
of the Equity Plan, Executive’s right to receive future grants of Performance
Shares is subject to approval by the stockholders of the Company of a similar
successor plan under which such awards may be granted.


(b)           STOCK OPTION AWARDS.  The Company shall grant the Executive under
the Equity Plan at the completion of each whole Fiscal Year commencing on or
after January 1, 2007 and during the Employment Term stock options to purchase
the Company’s common stock at an exercise price of not less than the fair
market value of such stock on the grant date (“Stock Options”) based upon the
achievement by the Company and its subsidiaries of performance goals under the
Equity Plan for each such Fiscal Year established by the Compensation Committee.  The Compensation Committee shall establish
objective criteria to be 



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used to determine the extent to which such performance
goals have been satisfied.  Stock Options
for each whole Fiscal Year during the Employment Term will be granted at a grant-date
Black-Scholes value of 110% of the Executive’s Base Salary for such Fiscal Year
(i.e., $1,100,000 for 2007).  Stock
Options granted in any particular Fiscal Year will be subject to the standard
vesting schedule established by the Compensation Committee for Stock Option
grants in that year (the current vesting schedule is a 4-year vesting
schedule).  After the expiration of the
Equity Plan, Executive’s right to receive future grants of Stock Options is
subject to approval by the stockholders of the Company of a similar successor
plan under which such awards may be granted.


(c)           DISCRETIONARY
GRANTS.  In addition to the Performance
Share and Stock Option Awards under Section 5(a) and (b) above, at the sole
discretion of the Board or the Committee, the Executive shall be eligible to
participate throughout the Employment Term in such long-term incentive plans
and programs as may be in effect from time to time in accordance with the
Company’s compensation practices and the terms and provisions of any such plans
or programs.


6.            EMPLOYEE BENEFITS.


(a)           BENEFIT
PLANS.  The Executive shall be
entitled to participate in all employee benefit plans of the Company including,
but not limited to, equity, pension, thrift, Section 401(k), profit sharing,
medical coverage, education, or other retirement (including without limitation supplemental
executive retirement plans) or welfare benefits that the Company has adopted or
may adopt, maintain or contribute to for the benefit of its senior executives
at a level commensurate with the Executive’s position subject to satisfying the
applicable eligibility requirements.  The
Executive shall at all times during the Employment Term be entitled to
participate in the Guess?, Inc. Supplemental Executive Retirement Plan, as in
effect on January 1, 2006, and any deferred compensation plan which may be
maintained by the Company from time to time.


(b)           VACATION.  The Executive shall be entitled to accrue annual
paid vacation in accordance with the Company’s policy applicable to senior
executives, but in no event less than twenty business days per calendar year
(as prorated for partial years), which vacation may be taken at such times as
the Executive elects with due regard to the needs of the Company.  Executive shall not be permitted to accrue
more than a total of twenty five (25) vacation days at any time.  Once Executive reaches the maximum accrual,
Executive shall not accrue any additional vacation days until a portion of
Executive’s accrued vacation time is used.


(c)           AUTOMOBILE.  The Company shall continue to provide the
Executive with an automobile during the Employment Term in a manner consistent
with its past practice.


(d)           PERQUISITES.  The Company shall provide to the Executive,
at the Company’s cost, all perquisites which other senior executives of the
Company are generally entitled to receive in accordance with Company policy as
set by the Board from time to time.


(e)           LIFETIME RETIREE MEDICAL
BENEFIT.   The Company shall provide the Executive and his eligible family members
with Post-Retirement Health Benefits at



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its expense commencing upon
expiration of the Employment Term for any reason other than a termination for
Cause, in which case the Company shall have no obligation to provide
Post-Retirement Health Benefits.  The term “Post-Retirement Health Benefits”
means the following:


(i)            health benefits (including medical,
prescription, dental and vision coverage, if and to the extent applicable) for
the remainder of the Executive’s life under the plans provided to the Company’s
executive officers and their eligible family members, as in effect from time to
time; provided that the Post-Retirement Health Benefits may be made
secondary to any other benefits to which the Executive may be entitled under
another employer-provided plan or a governmental plan such as Medicare; or


(ii)           if the Company is unable, at any
point, to provide such coverage under any such plans, the Company will pay the
Executive a lump-sum cash payment that will equal the present value of the cost
of such coverage based on the actuarial equivalent assumptions set forth in the
Guess?, Inc. Supplemental Executive Retirement Plan and a reasonable forecast
of increases in the cost of such coverage for that portion of the period following
the expiration of the Employment Term for which such coverage could not be
provided (in either case, such benefits are referred to as the “Post-Retirement
Health Benefits”).


(f)            BUSINESS
AND ENTERTAINMENT EXPENSES. 
Upon presentation of appropriate documentation, the Executive shall be
reimbursed in accordance with the Company’s expense reimbursement policy for
all reasonable and necessary business and entertainment expenses incurred in
connection with the performance of the Executive’s duties hereunder.


(g)           CHANGE IN CONTROL.  In the event there is a Change in Control,
the Company shall establish a “rabbi trust” for the benefit of the Executive
and fund it with cash or cash equivalents sufficient to fully pay when due and
payable all payments that potentially would be required to be made under
Section 8(d) hereof if the Executive were to be terminated without cause.  For this purpose, the term “Change in Control”
is used as defined in the Equity Plan except that in no event shall a “Change
in Control” be triggered pursuant to clause (A) of such term as so defined
unless the Acquiring Person becomes the Beneficial Owner of twenty percent
(20%) or more of the then outstanding shares of Common Stock or the Combined
Voting Power of the Company (except pursuant to an offer for all outstanding
shares of Common Stock at a price and upon such terms and conditions as a
majority of the Continuing Directors determine to be in the best interests of
the Company and its shareholders (other than an Acquiring Person on whose
behalf the offer is being made)) in one or more bona fide transactions and such
level of ownership of such Common Stock or Combined Voting Power, as
applicable, exceeds the aggregate level of ownership of the Marcianos of such
Common Stock or Combined Voting Power, respectively.  For purposes of the preceding sentence, “Marcianos”
means Maurice Marciano, Paul Marciano, and any trust established in whole or in
part for the benefit of one or more of them or their family members, or any
other entity controlled by one or more of them, and any other capitalized term
used in such sentence is used as defined in the Equity Plan if not otherwise
defined in this Agreement.



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7.            TERMINATION.  The Executive’s employment and the Employment
Term shall terminate on the first of the following to occur:


(a)           DISABILITY.  Upon written notice by the Company to the
Executive of termination due to Disability, while the Executive remains
Disabled.  For purposes of this
Agreement, “Disabled” and “Disability”
shall (i) have the meaning defined under the Company’s then-current long-term
disability insurance plan, policy, program or contract as entitles the
Executive to payment of disability benefits thereunder, or (ii) if there shall
be no such plan, policy, program or contract, mean permanent and total
disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended (the “Code”).


(b)           DEATH.  Automatically on the date of death of the
Executive.


(c)           CAUSE.  Immediately upon written notice by the
Company to the Executive of a termination for Cause.  “Cause”
shall mean (i) Executive’s conviction or plea of nolo contendere to a felony or
any crime involving moral turpitude; (ii) a willful act of theft, embezzlement
or misappropriation from the Company; or (iii) a determination by the Board
that Executive has willfully and continuously failed to perform substantially
the Executive’s duties (other than any such failure resulting from the
Executive’s Disability or incapacity due to bodily injury or physical or mental
illness), after (A) a written demand for substantial performance is delivered
to the Executive by the Board which specifically identifies the manner in which
the Board believes that the Executive has not substantially performed the
Executive’s duties and provides the Executive with the opportunity to correct
such failure if, and only if, such failure is capable of cure; and (B) the Executive’s
failure to correct such failure which is capable of cure within 30 days of
receipt of the demand for performance.  For
the avoidance of doubt, the parties expressly agree that only Cause pursuant to
Section 7(c)(iii) shall be deemed capable of cure.  Notwithstanding the foregoing, “Cause” shall
not include any act or omission that the Executive believes in good faith to
have been in or not opposed to the interest of the Company (without intent of
Executive to gain therefrom, directly or indirectly, a profit to which he was
not legally entitled).  The Company may
only terminate the Executive’s employment for Cause if (A) a determination that
Cause exists is made and approved by three fourths of the independent directors
of the Company’s Board, (B) for a termination for Cause under Section
7(c)(iii), the Executive is given at least five (5) days’ written notice of the
Board meeting called to make such determination, and (C) for a termination for
Cause under Section 7(c)(iii), the Executive and his legal counsel are given
the opportunity to address such meeting. 
In the event that the Board has so determined in good faith that Cause
exists, the Board shall have no obligation to terminate the Executive’s
employment if the Board determines in its sole discretion that such a decision
not to terminate the Executive’s employment is in the best interest of the
Company.


(d)           WITHOUT
CAUSE.  Upon written notice by
the Company to the Executive of an involuntary termination without Cause and
other than due to death or Disability prior to age sixty-five.


(e)           GOOD
REASON.  Upon written notice
by the Executive to the Company of termination for Good Reason unless the
reasons for any proposed termination for Good Reason are remedied in all material
respects by the Company within thirty (30) days following written notification
by the Executive to the Company.  “Good Reason” means the occurrence of 



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any one or more of the following events prior to age
sixty-five unless Executive specifically agrees in writing that such event
shall not be Good Reason:


(i)            Any material breach of this
Agreement by the Company, including:


(A)          the failure of the Company to pay the
compensation and benefits set forth in Sections 3 through 6 of this Agreement;


(B)           any material adverse change in the
Executive’s status, position or responsibilities as Chairman of the Board of
the Company;


(C)           any failure to nominate or elect
Executive as Chairman of the Board or as member of the Board;


(D)          causing or requiring the Executive to
report to anyone other than the Board or


(E)           assignment of duties materially
inconsistent with his position and duties described in this Agreement,


(ii)           the failure of the Company to assign
this Agreement to a successor to all or substantially all of the business or
assets of the Company or failure of such a successor to the Company to
explicitly assume and agree to be bound by this Agreement,


(iii)          requiring the Executive to be
principally based at any office or location outside of the Los Angeles metropolitan
area;


(iv)          purported termination of the Executive’s
employment for “Cause” in a bad faith violation of the substantive and
procedural requirements of Section 7(c), or


(v)           a termination of employment by the
Executive for any reason or no reason during the 30-day period commencing 6
months after a Change of Control.


(f)            RETIREMENT. 
Upon thirty (30) days’ prior written notice by the Executive to the
Company of the Executive’s termination of employment without Good Reason (which
the Company may, in its sole discretion, make effective earlier than any notice
date).


8.            CONSEQUENCES OF
TERMINATION.  Any termination
payments made and benefits provided under this Agreement to the Executive shall
be in lieu of any termination or severance payments or benefits for which the
Executive may be eligible under any of the plans, policies or programs of the
Company or its affiliates.  Except to the
extent otherwise provided in this Agreement, all benefits and awards under the
Company’s compensation and benefit programs shall be subject to the terms and
conditions of the plan or arrangement under which such benefits accrue, are
granted or are awarded.  The following
amounts and benefits shall be due to the Executive:



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(a)           DISABILITY.  Upon such termination, the Company shall pay
or provide the Executive (i) any unpaid Base Salary through the date of
termination and any accrued vacation in accordance with Company policy; (ii)
any unpaid Bonus earned with respect to any Fiscal Year ending on or preceding
the date of termination; (iii) reimbursement for any unreimbursed business expenses
incurred through the date of termination; and (iv) all other payments, benefits
or perquisites to which the Executive may be entitled under the terms of any
applicable compensation arrangement or benefit, equity or perquisite plan or
program or grant or this Agreement (including any related gross-up) (collectively,
“Accrued Amounts”).  The Executive will also be paid a pro-rata
portion of the Executive’s Annual Bonus for the performance year in which the
Executive’s termination occurs, payable at the time that annual Bonuses are
paid to other senior executives (determined by multiplying the amount the
Executive would have received based upon target performance had employment
continued through the end of the performance year by a fraction, the numerator
of which is the number of days during the performance year of termination that
the Executive is employed by the Company and the denominator of which is 365).


(b)           DEATH.  In the event the Employment Term ends on
account of the Executive’s death, the Executive’s estate (or to the extent a
beneficiary has been designated in accordance with a program, the beneficiary
under such program) shall be entitled to any Accrued Amounts.  The Executive’s estate (or beneficiary) will
also be paid a pro-rata portion of the Executive’s Bonus for the performance
year in which the Executive’s termination occurs, payable at the time that annual
Bonuses are paid to other senior executives (determined by multiplying the
amount the Executive would have received based upon target performance had
employment continued through the end of the performance year by a fraction, the
numerator of which is the number of days during the performance year of
termination that the Executive is employed by the Company and the denominator
of which is 365).


(c)           TERMINATION
FOR CAUSE.  If the Executive’s
employment should be terminated by the Company for Cause or by the Executive
without Good Reason, the Company shall pay to the Executive any Accrued
Amounts.


(d)           TERMINATION
WITHOUT CAUSE OR FOR GOOD REASON. 
If the Executive’s employment by the Company is terminated by the
Company other than for Cause (other than a termination due to Disability or
death) or by the Executive for Good Reason, the Company shall pay or provide
the Executive with


(i)            the Accrued Amounts;


(ii)           a pro-rata portion of the Executive’s
Bonus for the performance year in which the Executive’s termination occurs,
payable at the time that annual Bonuses are paid to other senior executives, determined
by multiplying the amount the Executive would have received based upon actual
performance had employment continued through the end of the performance year
(but in no event less than the amount for target performance), by a fraction,
the numerator of which is the number of days during the performance year of
termination that the Executive is employed by the Company and the denominator
of which is 365;



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(iii)          an amount equal to the product of (A)
the sum of (1) the Executive’s Base Salary and (2) the then Target Bonus
multiplied by (B) three, payable in a single lump-sum, with such payment being
made on the earliest payroll date that does not result in adverse tax
consequences to the Executive under Section 409A of the Code; and


(iv)          two years of additional service credit
and age for benefit accrual, early retirement reduction and vesting purposes
under the Guess?, Inc. Supplemental Executive Retirement Plan.


In addition, the Company, at its election, shall have the option in its
full and absolute discretion to enter into a two-year consulting agreement with
the Executive providing for continuation of 50% of Base Pay annually in
substantially the same form as set forth in Appendix A below.  Notwithstanding anything to the contrary contained
herein, the Company shall have no obligation to provide any of the monetary
payments and/or benefits provided for in this Section 8(d) (other than Accrued
Amounts) unless and until Executive executes an effective general release of
all claims in favor of the Company in a form acceptable to the Company (the “Release”).  For the avoidance of doubt, Executive’s
execution of the Release is a condition precedent to any obligation of the
Company to provide the monetary payments and/or benefits provided for in this
Section 8(d) (other than Accrued Amounts).


(e)           NON-RENEWAL.  A notice of non-renewal of this Agreement by
the Company that would result in expiration of the Employment Term prior to the
Executive’s sixty-fifth birthday shall be treated as a termination of the
Executive’s employment by the Company without “Cause” for the purposes of this
Agreement.


(f)            RETIREMENT.  If the Executive retires under Section 7(f)
of this Agreement, the Company shall pay to the Executive:


(i)            any Accrued Amounts;


(ii)           a pro-rata portion of the Executive’s
Bonus for the performance year in which the Executive’s termination occurs,
payable at the time that annual Bonuses are paid to other senior executives
(determined by multiplying the amount the Executive would have received based
upon target performance had employment continued through the end of the
performance year by a fraction, the numerator of which is the number of days
during the performance year of termination that the Executive is employed by
the Company and the denominator of which is 365); and


(iii)          the Executive shall be considered to
have “retired” for purposes of any plans, programs, agreements or arrangements
with the Company or its affiliates.


In addition, the Company shall enter into a two-year consulting agreement
with the Executive providing for continuation of 50% of Base Pay annually in
substantially the same form as set forth in Appendix A below.


9.            SECTION 4999 EXCISE
TAX.  If any payments, rights or benefits
(whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement of 



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Executive with the
Company or any person affiliated with the Company) (the “Payments”) received or
to be received by Executive will be subject to the tax (the “Excise Tax”)
imposed by Section 4999 of the Code (or any similar tax that may hereafter be
imposed), then the Company shall pay to Executive an amount in addition to the
Payments (the “Gross-Up Payment”) as calculated below.  The Gross Up Payment shall be in an amount
such that, after deduction of any Excise Tax on the Payments and any federal,
state and local income and employment tax and Excise Tax on the Gross Up
Payment, but before deduction for any federal, state or local income and
employment tax on the Payments, the net amount retained by the Executive shall
be equal to the Payments.  The process
for calculating the Excise Tax, determining the amount of any Gross-Up Payment
and other procedures relating to this Section are set forth in Appendix B attached
hereto.  For purposes of making the determinations
and calculations required herein, the Accounting Firm (as defined in Appendix B)
may rely on reasonable, good faith interpretations concerning the application
of Section 280G and 4999 of the Code, provided that the Accounting Firm shall
make such determinations and calculations on the basis of “substantial
authority” (within the meaning of Section 6662 of the Code) and shall provide
opinions to that effect to both the Company and Executive.


10.          CONFIDENTIALITY.  The Executive agrees that the Executive shall
not, directly or indirectly, use, make available, sell, disclose or otherwise
communicate to any person, other than in the course of the Executive’s
employment and for the benefit of the Company, either during the period of the
Executive’s employment or at any time thereafter, any nonpublic, proprietary or
confidential information, knowledge or data relating to the Company, any of its
subsidiaries, affiliated companies or businesses, which shall have been
obtained by the Executive during the Executive’s employment by the
Company.  The foregoing shall not apply
to information that (i) was known to the public prior to its disclosure to the
Executive; (ii) becomes known to the public subsequent to disclosure to the Executive
through no wrongful act of the Executive or any representative of the
Executive; or (iii) the Executive is required to disclose by applicable law,
regulation or legal process (provided that the Executive provides the Company
with prior notice of the contemplated disclosure and reasonably cooperates with
the Company at its expense in seeking a protective order or other appropriate
protection of such information). 
Notwithstanding clauses (i) and (ii) of the preceding sentence, the
Executive’s obligation to maintain such disclosed information in confidence
shall not terminate where only portions of the information are in the public
domain.


11.          ATTORNEY’S
FEES.  To the extent permitted by law, all
reasonable costs and expenses incurred by the Executive in evaluating and negotiating
the terms and conditions of this Agreement shall be promptly paid on behalf of,
or reimbursed, to the Executive by the Company. 
If the Executive incurs legal or other fees and expense in a good faith
non-frivolous effort to secure or preserve or establish entitlement to
compensation and benefits under this Agreement, the Company shall, to the
extent permitted by law and regardless of the outcome of such effort, reimburse
Executive monthly for such fees and expenses.


12.          NO ASSIGNMENT.


(a)           This Agreement is personal to each of
the parties hereto.  Except as provided
in Section 12(b) below, no party may assign or delegate any rights or
obligations hereunder without first obtaining the written consent of the other
party hereto.



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(b)           The Company may assign this Agreement
to any successor to all or substantially all of the business and/or assets of
the Company provided the Company shall require such successor to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place and shall deliver a copy of such assignment to the Executive.


13.          NOTICE.  For the purpose of this Agreement, notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given (a) on the date of delivery if
delivered by hand, (b) on the date of transmission, if delivered by confirmed
facsimile, (c) on the first business day following the date of deposit if delivered
by guaranteed overnight delivery service, or (d) on the fourth business day
following the date delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:


If to the Executive:


At the address (or to the
facsimile number) shown

on the records of the Company


If to the Company:


Guess?, Inc.

1444 South Alameda Street

Los Angeles, California 90021

Attention:  General Counsel

Facsimile No.:  (213) 765-0911


or
to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.


14.          SECTION HEADINGS;
INCONSISTENCY.  The section
headings used in this Agreement are included solely for convenience and shall
not affect, or be used in connection with, the interpretation of this
Agreement.  In the event of any
inconsistency between this Agreement and any other agreement (including but not
limited to any option, stock, long-term incentive or other equity award
agreement), plan, program, policy or practice (collectively, “Other Provision”) of the Company the
terms of this Agreement shall control over such Other Provision to the extent
that the terms of this Agreement are more beneficial to the Executive.


15.          SEVERABILITY.  The provisions of this Agreement shall be
deemed severable and the invalidity of unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.


16.          COUNTERPARTS.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instruments.  One or more counterparts of this Agreement
may be delivered by facsimile, with the intention that delivery by such means
shall have the same effect as delivery of an original counterpart thereof.



 11
 









17.          DISPUTE RESOLUTION.  In the event of any controversy, dispute or
claim between the parties under, arising out of or related to this Agreement
(including but not limited to, claims relating to breach, termination of this
Agreement, or the performance of a party under this Agreement) whether based on
contract, tort, statute or other legal theory (collectively referred to
hereinafter as “Disputes”), the parties shall follow the dispute resolution
procedures set forth below.  Any Dispute
shall be settled exclusively by arbitration, conducted before a single
arbitrator in Los Angeles, California, administered by the American Arbitration
Association (“AAA”) in
accordance with its Commercial Arbitration Rules then in effect.  The parties agree to (i) appoint an
arbitrator who is knowledgeable in employment and human resource matters and,
to the extent possible, the industry in which the Company operates, and
instruct the arbitrator to follow substantive rules of law; (ii) require the
testimony to be transcribed; and (iii) require the award to be accompanied by
findings of act and a statement of reasons for the decision.  The arbitrator shall have the authority to
permit discovery, to the extent deemed appropriate by the arbitrator, upon
request of a party.  The arbitrator shall
have no power or authority to add to or detract from the written agreement of
the parties.  If the parties cannot agree
upon an arbitrator within ten (10) days after demand by either of them, either
or both parties may request the American Arbitration Association name a panel
of five (5) arbitrators.  The Company
shall strike the names of two (2) off this list, the Executive shall also
strike two (2) names, and the remaining name shall be the arbitrator.  The parties shall stipulate that arbitration
shall be completed within ninety (90) days. 
The decision of the arbitrator will be final and binding upon the
parties hereto.  Judgment may be entered
on the arbitrator’s award in any court having jurisdiction.  The Company shall bear the costs of the
arbitrator and any related forum fee.


18.          INDEMNIFICATION.  The Company hereby agrees to indemnify the
Executive and hold the Executive harmless to the fullest extent permitted by
applicable law and under the by-laws of the Company against and in respect to
any and all actions, suits, proceedings, claims, demands, judgments, costs,
expenses (including reasonable attorneys’ fees), losses, and damages resulting
from the Executive’s performance of his duties and obligations with the Company.  This provision is in addition to any other
rights of indemnification the Executive may have.


19.           LIABILITY INSURANCE.  The Company shall cover the Executive under
directors and officers liability insurance both during and, while potential
liability exists, after the term of this Agreement in the same amount and to
the same extent as the Company covers its other officers and directors.


20.          MISCELLANEOUS.  No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer or director
as may be designated by the Board.  No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.  This Agreement together with all
exhibits hereto sets forth the entire agreement of the parties hereto in
respect of the subject matter contained herein. 
No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not expressly set forth in this Agreement. 
The validity, interpretation, construction and performance of this
Agreement shall be governed by the 



 12
 









laws of the State of California without regard to its
conflicts of law principles. 
Notwithstanding the foregoing, the Company’s rights pursuant to any
confidentiality, proprietary information, assignment of inventions or similar
agreement shall survive and continue in effect.


21.          PAYMENT
OF COMPENSATION.  Notwithstanding
anything in this Agreement or elsewhere to the contrary:


(a)           If payment or provision of any amount
or other benefit that is “deferred compensation” subject to Section 409A of the
Code at the time otherwise specified in this Agreement or elsewhere would
subject such amount or benefit to additional tax pursuant to Section
409A(a)(1)(B) of the Code, and if payment or provision thereof at a later date
would avoid any such additional tax, then the payment or provision thereof
shall be postponed to the earliest date on which such amount or benefit can be
paid or provided without incurring any such additional tax.  In the event that deferred payment is
required in order to comply with Section 409A, such payment shall be accumulated
and paid in a single lump sum on such earliest date together with interest for
the period of delay, compounded annually, equal to the prime rate (as published
in The Wall Street Journal), and in effect as of the date the payment should
otherwise have been provided.


(b)           If any payment or benefit permitted
or required under this Agreement, or otherwise, is reasonably determined by
either party to be subject for any reason to a material risk of additional tax
pursuant to Section 409A(a)(1)(B) of the Code, including when final regulations
and issued thereunder, then the parties shall promptly agree in good faith on
appropriate provisions to avoid such risk without materially changing the
economic value of this Agreement to either party.


22.          FULL SETTLEMENT.  Except as set forth in this Agreement, the
Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including without limitation, set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others, except to the extent any amounts are due the Company or
its subsidiaries or affiliates pursuant to a judgment against the Executive.  In no event shall the Executive be obliged to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
nor shall the amount of any payment hereunder be reduced by any compensation
earned by the Executive as a result of employment by another employer, except
as set forth in this Agreement.


23.          REPRESENTATIONS.  Except as otherwise disclosed to the Company
in writing, the Executive represents and warrants to the Company that the
Executive has the legal right to enter into this Agreement and to perform all
of the obligations on the Executive’s part to be performed hereunder in
accordance with its terms and that the Executive is not a party to any
agreement or understanding, written or oral, which could prevent the Executive
from entering into this Agreement or performing all of the Executive’s
obligations hereunder.


24.          WITHHOLDING.  The Company may withhold from any and all
amounts payable under this Agreement such federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.



 13
 









25.          NON-EXCLUSIVITY
OF RIGHTS.  Nothing in this
Agreement shall prevent or limit the Executive’s continuing or future
participation in any benefit, bonus, incentive or other plan or program
provided by the Company and for which the Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as the Executive may have
under any restricted stock unit or other agreement with the Company or any of
its affiliated companies.  Except as
otherwise provided herein, amounts and benefits which are vested benefits or
which the Executive is otherwise entitled to receive under any plan, program,
agreement or arrangement of the Company at or subsequent to the date of
termination shall be payable in accordance with such plan or program.


26.          SURVIVAL.  The respective obligations of, and benefits
afforded to, the Company and Executive that by their express terms or clear
intent survive termination of Executive’s employment with the Company,
including, without limitation, the provisions of Sections 8, 9, 10, 11, 12, 17,
18, 19, 21, 22 and 24 of this Agreement, will survive termination of Executive’s
employment with the Company, and will remain in full force and effect according
to their terms.


27.          AGREEMENT
OF THE PARTIES.  The language
used in this Agreement will be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction will
be applied against any party hereto. 
Neither Executive nor the Company shall be entitled to any presumption
in connection with any determination made hereunder in connection with any
arbitration, judicial or administrative proceeding relating to or arising under
this Agreement.


IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written
above.


	
  

  	
  GUESS?, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carlos
  Alberini

  
	
   

  	
  Name:

  	
  Carlos Alberini

  
	
   

  	
  Its:

  	
  President and
  COO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MAURICE MARCIANO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Maurice Marciano

  
					



 



 14
 









APPENDIX A


CONSULTING AGREEMENT


CONSULTING AGREEMENT dated this   th day of             
20    by and between Guess?,
Inc. (the “Company”) and Maurice Marciano (“Marciano”).


WITNESSETH:


WHEREAS, Marciano serves as an executive Chairman of
the Company’s Board of Directors (the “Board”);


WHEREAS, Marciano desires to retire from his position
as such an executive Chairman (the effective date of such retirement is
referred to as the “Retirement Date”) and to provide consulting services to the
Company as the Board may reasonably consider appropriate; and


WHEREAS, the parties desire to set forth their
respective rights and obligations regarding Marciano’s consulting arrangement.


NOW, THEREFORE, in consideration of the covenants set
forth herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties, intending to be legally
bound, agree as follows:


1.            Consulting
Period.  The Company agrees to retain
Marciano as a consultant to provide the services described in Section 3 below
from the Retirement Date until the second anniversary of the Retirement Date
(the “Consulting Period”), as provided in this Consulting Agreement.


2.            Consulting
Services.  Marciano shall provide
such consulting services to the Company as reasonably requested by the Board
from time to time.  These services may
include but are not limited to actively participating in major marketing or
sales initiatives, performing any transition and integration services related
to the Company’s business and cooperating with the Company regarding any
litigation initiated involving matters of which Marciano has particular
knowledge.  Marciano agrees to be
available up to seven days per month during the Consulting Period to perform
the Consulting Services.  The Consulting
Services will be performed at such times as are reasonably requested by the
Company after reasonable consultation with Marciano.  Marciano shall provide these services in Los
Angeles, California, provided that Marciano shall be required to travel for
business and client meetings as reasonably requested by the Company.


3.            Fees.  As compensation for the Consulting Services,
the Company shall pay Marciano fifty percent of Marciano’s Base Salary as of
the Retirement Date per annum during the Consulting Period.  Fees shall be paid monthly in arrears by the
15th day of the following month.  Should
Marciano die or become
disabled during the Consulting Period, the Company shall make a lump sum cash
payment to Marciano (or, in the event of his death, to his estate) of an amount
equal to the remaining payments owed through the end of the Consulting Period.



 15
 









Marciano shall not be
entitled to participate, and shall not participate in any employee
benefit plan providing benefits to Company employees, whether presently in
force or adopted subsequent to this Consulting Agreement, with respect to his
Consulting Services.  Notwithstanding the
foregoing, Marciano shall retain all compensation and benefits that continue
past his Retirement Date pursuant to the terms of his Employment Agreement with
the Company dated January 1, 2007 or otherwise. 
All reasonable and necessary business expenses incurred by Marciano in
the performance of the Consulting Services shall be promptly reimbursed by the
Company in accordance with the Company’s standard expense reimbursement
policies applicable to independent contractors.


4.            Status.  Marciano acknowledges and agrees that his
status at all times during the Consulting Period shall be that of an
independent contractor.  Marciano hereby
waives any rights to be treated as an employee or deemed employee of the
Company or any of its affiliates for any purpose following his termination of
employment at the Retirement Date except as provided under his Employment
Agreement.  The parties hereby
acknowledge and agree that the compensation provided for in Section 4 shall
represent fees for Consulting Services provided by Marciano as an independent
contractor, and shall be paid without any deductions or withholdings for taxes.


5.            Retained Property. 
During the Consulting Period, Marciano shall retain all property of the
Company in his possession, including, but not limited to, credit cards,
security key cards, telephone cards, car service cards, computer software or
hardware, Company identification cards, Company records and copies of records,
correspondence and copies of correspondence and other books or manuals issued
by the Company.


6.            Assignability.  Marciano may not assign or transfer this
Consulting Agreement or any of Marciano’s rights, duties or obligations
hereunder.  The Company may assign this
Consulting Agreement to any person or entity acquiring all or substantially all
of the assets (by merger or otherwise) of the Company so long as such person,
entity or affiliate assumes the Company’s obligations hereunder.


7.            Entire
Agreement.  This Consulting Agreement
constitutes the full and complete understanding and agreement of the parties
hereto with respect to engaging Marciano as a consultant to the Company.  This Consulting Agreement may not be changed
or amended orally, but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification or discharge is
sought.


8.            Divisibility. 
If any one or more of the provisions of this Consulting Agreement or any
application thereof shall be invalid, illegal or unenforceable in any respect,
the validity, legality or enforceability of the remaining provisions and other
application thereof shall not in any way be affected or impaired.


9.            Applicable
Law.  This Consulting Agreement shall be governed
by, and the rights and obligations of the parties determined in accordance
with, the laws of the State of California as in effect for contracts made and
to be performed in the State of California.



 16
 









10.          Survival.  All of the Company’s obligations hereunder
shall survive the termination of this Consulting Agreement.


11.          Counterparts.  This Consulting Agreement may be executed in counterparts, each of
which shall be deemed an original, all of which shall together constitute one
and the same Consulting Agreement.


IN WITNESS WHEREOF, the undersigned have duly executed
this Consulting Agreement as of the day and year first above written.


	
   

  	
   

  
	
   

  	
  MAURICE MARCIANO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  



 



 17
 









APPENDIX
B


TAX GROSS-UP PAYMENT RULES AND
PROCEDURES


1.            Subject
to Paragraph 3 below, all determinations required to be made under Section 9 of
this Agreement, including whether a Gross-Up Payment is required and the amount
of such Gross-Up Payment, shall be made by an accounting firm (the “Accounting
Firm”) selected in accordance with Paragraph 2 below.  The Accounting Firm shall provide detailed
supporting calculations both to the Company and Executive within 15 business
days of the event that results in the potential for an excise tax liability for
the Executive, which could include but is not limited to a Change in Control
and the subsequent vesting of any cash payments or awards, or the Executive’s
termination of employment, or such earlier time as is required by the
Company.  The initial Gross-Up Payment,
if any, as determined pursuant to this Paragraph 1, shall be paid on the
Executive’s behalf to the applicable taxing authorities within five (5) days of
the receipt of the Accounting Firm’s determination.  If the Accounting Firm determines that no
Excise Tax is payable to the Executive, it shall furnish the Executive with a
written report indicating that he has substantial authority not to report any
Excise Tax on his federal income tax return. 
Any determination by the Accounting Firm shall be binding upon the Company
and Executive.  As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be made
hereunder.  In the event that the Company
exhausts its remedies pursuant to Paragraph 3 below and Executive thereafter is
required to make a payment or additional payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment, increased by all applicable interest and penalties
associated with the Underpayment, shall be promptly paid by the Company to or
for the benefit of Executive.  For
purposes of determining the amount of the Gross-Up Payment, Executive shall be
deemed to pay federal income tax at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes on earned income at the highest marginal rate of
taxation in the state and locality of Executive’s residence on the Effective
Date of Termination, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes.


2.            The
Accounting Firm shall be a public accounting firm proposed by the Company and
agreed upon by the Executive.  If
Executive and the Company cannot agree on the firm to serve as the Accounting
Firm within ten (10) days after the date on which the Company proposed to
Executive a public accounting firm to serve as Auditor, then Executive and the
Company shall each select one accounting firm and those two firms shall jointly
select the accounting firm to serve as the Accounting Firm within ten (10) days
after being requested by the Company and Executive to make such selection.  The Company shall pay the Auditor’s fee.


3.            Executive
shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the
Gross-Up Payment.  Such notification
shall be given as soon as practicable but no later than fifteen (15) business
days after Executive knows of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be
paid.  Executive shall not pay 



 18
 









such claim prior to the expiration of the period
ending on the date that any payment of taxes with respect to such claim is due
or the thirty day period following the date on which Executive gives such
notice to the Company, whichever period is shorter.  If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall (i) give the Company any information reasonably requested by
the Company relating to such claim, (ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest
such claim, and (iv)  permit the Company
to participate in any proceedings relating to such claim; provided, however,
that the Company shall bear and pay directly all costs and expenses (including
attorneys fees and any additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive harmless,
on an after-tax basis, for any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses.  Without
limitation of the foregoing provisions of this Paragraph 3, the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect to such claim and
may, at its sole option, either direct Executive to pay the tax claimed and sue
for a refund or contest the claim in any permissible manner, and Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to Executive, on an interest-free basis and
shall indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax and income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. 
Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other authority.


4.            If,
after the receipt by Executive of an amount advanced by the Company pursuant to
Paragraph 3 above, Executive becomes entitled to receive any refund with
respect to such claim, Executive shall (subject to the Company’s complying with
the requirements of Paragraph 3), promptly pay to the Company the amount of
such refund (together with any interest paid or credited thereon after taxes
applicable thereto).



 19