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.


 

















 


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.


 

















 


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

  
				



 

















 


EXHIBIT A


 


Confidentiality Agreement


 

















 




	
  

  	
  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.


 

















 


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