Exhibit
10.1


 


FIRST
AMENDMENT TO EMPLOYMENT AGREEMENT


 


THIS FIRST AMENDMENT to EMPLOYMENT AGREEMENT dated as of June 16, 2003
by and between Carlos Alberini (the “Executive”) and GUESS?, Inc., a Delaware
corporation (the “Company”) (the “Amendment”) amends that
certain EMPLOYMENT AGREEMENT dated November 8, 2000  by and between the Executive and the Company (the “Agreement”).  Capitalized terms used but not otherwise
defined in this Amendment shall have the respective meanings ascribed to them
in the Agreement.


 


WHEREAS, the Company and the Executive entered into the Agreement for
the Executive’s services; and


 


WHEREAS, the Company and the Executive desire to amend the Agreement on
the terms and conditions set forth herein;


 


NOW, THEREFORE, in consideration of the covenants and agreements
contained in this Amendment, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the execution of
this Amendment, the parties agree as follows:


 


1.               Section 2 of the Agreement  (Term) is hereby amended and replaced with
the following:


 


“The term (the “Term”) of this Agreement shall commence on
the Effective Date and shall continue through December 31, 2003.  There shall be no automatic annual renewals
of this Agreement and no Nonrenewal Notice shall be required under the
Agreement.  Thereafter, this Agreement
shall renew for additional one (1) month renewal terms, following the Term,
unless the Executive or the Company gives written notice to the other party at
least seven (7) days prior to the end of the Term or the then current renewal
term, as the case may be, that the party elects to terminate this Agreement as
of the end of the Term or the then current renewal term.  Each such renewal term shall be upon the
same terms and conditions as are contained in this Agreement unless the parties
otherwise agree in writing.  All
provisions of this Agreement regarding termination and severance (whether
before or after December 31, 2003) are set forth in Sections 6 and 7 hereof.”


 


2.               Section 5 of the Agreement
(Compensation) is hereby amended with the following:


 


a.               Section 5(a) of the Agreement (Base
Salary) is hereby amended by inserting the following after the first sentence:


 


“Effective June 16, 2003, the Company shall adjust the Executive’s Base
Salary to $400,000 per year, payable in accordance with the Company’s policies
relating to salaried employees.”


 


b.              Section 5(d)(iii) of the Agreement
(Additional Option Grants) is hereby amended by inserting the following
sentence at the end of the paragraph:


 

















 


“Subject to approval of the Compensation Committee at the next
Compensation Committee meeting on July 29, 2003, the Executive shall receive an
Additional Option Grant of 100,000 shares, which shall vest and become
exercisable over a four (4) year period, provided in each case that the
Executive has been continuously employed with the Company from the Effective
Date through the applicable vesting date.”


 


3.               Section 6 of the Agreement (Termination)
is hereby amended in its entirety and replaced with the following:


 


“Section 6.                                      TERMINATION.


 


(a)                                  DATE OF
TERMINATION.  “Date of Termination” shall
mean:


 


(i)                                     if the Executive’s
employment is terminated because of death, the date of the Executive’s death,


 


(ii)                                  if the Executive’s
employment is terminated by the Company because of Disability, ten (10) days
following the date on which a notice of termination is given,


 


(iii)                               if the Executive’s
employment is terminated for any other reason, the date of such termination
which shall be specified in a written letter pursuant to Section 2 hereof, or


 


(iv)                              if the Executive’s
employment is terminated by the Executive due to failure by the Company to
substantially comply with Section 5(a) or 5(c) hereof, without the Executive’s
written consent, and such failure has not been cured within thirty (30) days
after written notice of such noncompliance has been given by the Executive to
the Company, the date after the cure period expires.


 


(b)                                 ACCRUED AND UNPAID
BENEFITS.  Following the termination
of the Executive’s employment with the Company for any reason, the Executive
shall receive:


 


(i)                                     any earned, but
unpaid, Base Salary,


 


(ii)                                  any earned, but
unpaid, Guaranteed Bonus or Target Bonus for any Fiscal Year prior to the
Fiscal Year in which the Date of Termination occurs,


 


(iii)                               the cash equivalent of
any accrued, but unused, vacation, subject to the terms of the Company’s
applicable vacation accrual policies,


 


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(iv)                              any accrued employee
benefits, subject to the terms of the applicable employee benefit plans, and


 


(v)                                 all additional amounts
that the Executive is entitled to receive pursuant to this Section 6 or Section
7 hereof.


 


(c)                                  DEATH.  In the event that the Executive’s employment
hereunder is terminated by reason of the Executive’s death, the Company shall
pay the amounts described in Section 6(b) above and all benefits payable to the
Executive, if any, under the terms of the Company’s compensation and benefit
plans, programs or arrangements.


 


(d)                                 DISABILITY.


 


(i)                                     “Disability”
shall have the same meaning assigned to the same or a similar term pursuant to
any long-term disability plan or policy of the Company in effect as of the Date
of Termination.  If no such plan or
policy is then in effect, “Disability” shall mean that as a result of the
Executive’s incapacity due to physical or mental illness, the Executive shall
have been absent from the full-time performance of his duties with the Company
for a period of six (6) consecutive months or for any two hundred and ten (210)
days within any period of twelve (12) consecutive months and that, in either
case, the Executive shall not have returned to the full-time performance of his
duties within thirty (30) days following the Company’s delivery of a notice of
termination.


 


(ii)                                  The Executive’s
employment under this Agreement may be terminated by the Company or the
Executive for Disability, subject to applicable law.


 


(iii)                               During any period prior
to such termination during which the Executive is absent from the full-time
performance of his duties with the Company due to Disability, the Company shall
continue to pay the Executive his Base Salary at the rate in effect at the
commencement of such period of Disability, and the vesting of the Initial
Option, Restricted Stock and other stock awards, if any, shall continue.


 


(iv)                              Upon termination of the
Executive’s employment for Disability, the Company shall pay all benefits
payable to the Executive, if any, under the terms of the Company’s compensation
and benefit plans, programs or arrangements.


 


(e)                                  TERMINATION FOR
CAUSE.  The Company may terminate
the Executive’s employment under this Agreement for Cause (as defined below) at
any time.


 


(i)                                     As used herein,
termination for “Cause” shall mean the occurrence of any of the following, as
determined by a two-thirds majority of the


 


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members of the Board (excluding the Executive from such vote and the
denominator):


 


(A)                              the willful failure,
neglect or refusal by the Executive to perform his duties hereunder or to
follow the instructions of the Board;


 


(B)                                any willful or grossly
negligent act, or commission of a felony or misdemeanor, by the Executive that
a two-thirds majority of the members of the Board (excluding the Executive from
such vote and the denominator) determines may have the effect of materially
injuring (monetarily or otherwise) the business or reputation of the Company or
its subsidiaries or their affiliates or any division thereof;


 


(C)                                the conviction of the
Executive of (or the pleading by the Executive of guilty or nolo  contendre
to) any misdemeanor involving fraud or embezzlement or any felony;


 


(D)                               any misappropriation or
embezzlement of the property of the Company or its subsidiaries or their
affiliates (whether or not a misdemeanor or felony); and


 


(E)                                 a material breach by
the Executive of any covenant in this Agreement.


 


(ii)                                  In the event of
termination for Cause, this Agreement shall terminate without further
obligation by the Company, except (A) for payment of the amounts described in
Section 6(b) above, and (B) as otherwise may be provided under the terms of any
equity incentive award outstanding on the Date of Termination.


 


(f)                                    TERMINATION BY
THE EXECUTIVE.


 


The Executive may terminate his employment
hereunder voluntarily at any time.  If
the Executive terminates his employment, there shall be no severance benefits
payable under the Agreement.”


 


4.               Section 7 of the
Agreement (Severance) is hereby deleted in its entirety and replaced with the
following:


 


“Section 7.                                      SEVERANCE


 


(a)                                  TERMINATION.  If the Company terminates the Executive’s
employment with the Company at any time for any reason other than (i) the
Executive’s death or Disability or (ii) for Cause, the Executive shall enter
into a


 


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consulting arrangement with the Company pursuant to which the Executive
shall provide consulting services to the Company for up to forty (40) hours per
month for a period of twelve (12) months commencing on the Date of Termination
(the “Consulting Period”).  If the Date
of Termination occurs prior to December 31, 2003, the period of time from the
Date of Termination through December 31, 2003 shall be added to the Consulting
Period.  During the Consulting Period, the
Executive shall be entitled to the following:


 


(i)                                     the
Company shall pay to the Executive on an annualized basis the Executive’s Base
Salary then in effect, payable in accordance with the Company’s policies
relating to salaried employees;


 


(ii)                                  any
portion of any Restricted Stock that has not vested on the Date of Termination
shall vest on such date;


 


(iii)                               any
portion of the Initial Option that is not vested on the Date of Termination
shall vest and be exercisable during the Consulting Period at the rate of 8,433
shares per month commencing with the month following the vesting date of the
Initial Option pursuant to section 5(e)(ii) hereof that immediately preceded
the Date of Termination and continuing through the month in which the
Consulting Period ends as if the Executive remained in active employment with
the Company during the Consulting Period(1); and


 


(iv)                              any
portion of the Initial Option that is vested on the Date of Termination shall
be exercisable during the Consulting Period and up to sixty (60) days after the
month in which the Consulting Period ends as if the Executive remained in
active employment with the Company during the Consulting Period; and


 


(v)                                 any
portion of the Additional Option Grant that is not vested on the Date of
Termination shall vest and be exercisable during the Consulting Period at the
rate of 2,083 shares per month commencing with the month following the vesting
date of the Additional Option Grant pursuant to section 5(d)(iii) hereof that
immediately preceded


 












(1) This provision is intended
to work as follows:


 


	
  Date of Termination

  	
   

  	
  Last
  Vesting Date

  	
   

  	
  Total
  Months to Vest

  	
   

  	
  Total
  Shares Vested

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11/15/03

  	
   

  	
  12/31/02

  	
   

  	
  12 + 12
  months

  	
   

  	
  24 x 8,334 =
  200,016

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  05/30/04

  	
   

  	
  12/31/03

  	
   

  	
  5 + 12
  months

  	
   

  	
  17 x 8,334 =
  141,678

  



 


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the Date of Termination and continuing through the month in which the
Consulting Period ends as if the Executive remained in active employment with
the Company during the Consulting Period; and


 


(vi)                              any
portion of the Additional Option Grant that is vested on the Date of
Termination shall be exercisable during the Consulting Period and up to sixty
(60) days after the month in which the Consulting Period ends as if the
Executive remained in active employment with the Company during the Consulting
Period.


 


(b)                                 MITIGATION.  As a condition to receiving any payments or
benefits pursuant to Section 7(a) hereof, the Executive agrees to mitigate the
amount of any payment or benefit provided for pursuant to such Section 7(a),
including, without limitation, by seeking comparable employment, and any
amounts or benefits earned by the Executive from any employment or any
consulting arrangement during the Consulting Period may be deducted from the
payments or benefits described in Section 7(a) hereof.


 


(c)                                    RELEASE OF
EMPLOYMENT CLAIMS.  The Executive
agrees, as a condition to receipt of the payments and benefits provided for in
this Section 7, that he will execute a release agreement, in a form
satisfactory to the Company, releasing any and all claims arising out of the
Executive’s employment (other than enforcement of this Agreement and the
Executive’s rights under any of the Company’s incentive compensation and
employee benefit plans and programs to which he is entitled under this
Agreement).”


 


5.               Section 8(b) of the
Agreement (Non-Competition) is hereby amended by deleting the phrase “and
during the Consulting Period, if any,”.


 


6.               Section 10 of the
Agreement (Relocation Expenses) is hereby deleted in its entirety and replaced
with the following:


 


“The Executive and the Company agree that the Company has paid in full
all relocation benefits.  In addition,
the Executive and the Company agree that the Executive repaid the Relocation
Loan in full in May, 2003 and that there are no further benefits to which the
Executive is entitled under the Relocation Loan.  Schedule 1 is hereby deleted from the Agreement in its entirety.”


 


7.               Section 13(b) of the Agreement (Notices)
is hereby amended and replaced with the following:


 


	
  “(b)

  	
  If to the Executive:

  
	
   

  	
   

  
	
   

  	
  Carlos Alberini

  
	
   

  	
  515 N. Beverly Drive

  
	
   

  	
  Beverly Hills, CA 90210”

  



 


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8.               Except as expressly modified by this
Amendment, the Agreement shall continue to be and remain in full force and
effect in accordance with its terms. 
Any existing and future reference to the Agreement and any document or
instrument delivered in connection with the Agreement shall be deemed to be a
reference to the Agreement as modified by this Amendment.  To the extent that anything in this
Amendment is inconsistent with anything in the Agreement, this Amendment shall
control.


 


9.               This Amendment shall be governed by and
construed according to the laws of the State of California.


 


10.         Each party acknowledges that it has had the
opportunity to be represented by counsel in connection with this
Amendment.  Any rule of law or any legal
decision that would require interpretation of any claimed ambiguities in this
Amendment against the party that drafted it has no application and is expressly
waived.


 


 


IN WITNESS
WHEREOF, the Company has caused this Amendment to be executed by its duly
authorized officer and the Executive has hereunto signed this Amendment on the
date first above written.


 


 


	
   

  	
  GUESS?, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Maurice Marciano

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Co-Chairman and Co-Chief Executive

  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CARLOS ALBERINI

  
	
   

  
	
   

  
	
   

  	
  /s/ Carlos Alberini

  



 


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