Exhibit 10.1


 


AMENDED
AND RESTATED MOSSIMO GIANNULLI BONUS PLAN


 


1.                 PURPOSE OF
THE PLAN


 


The
Mossimo Giannulli Bonus Plan (the “Plan”) is designed to provide Mossimo
Giannulli (“Executive”) with bonus compensation for the accomplishment of
specific preestablished financial performance objectives (the “Performance
Objectives”) by the Company, based on objective business criteria that enhance
value for the Company’s stockholders. Such bonus compensation is intended to be
“qualified performance-based compensation” within the meaning of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the “Code”), and the
regulations promulgated thereunder.


 


2.                 EFFECTIVE
DATE, TERM AND CONTRACT YEAR


 


The
Plan shall be effective as of February 1, 2002 and shall remain in effect
until January 31, 2007, or until such earlier time as it shall be
terminated by the Board of Directors of the Company (the “Board”) in accordance
with Section 9.


 


The
Plan year (the “Contract Year”) shall commence on each February 1 and end on
January 31 of the following year, during the term of the Plan.


 


3.                 ELIGIBILITY


 


Executive
shall be eligible to participate in the Plan during such time as Executive is
employed by the Company, unless otherwise determined by the Committee. No other
person shall be eligible to participate in the Plan.


 


4.                 BUSINESS
CRITERIA AND BONUS FORMULA


 


At
the discretion of the Compensation Committee (the “Committee”) of the Board of
Directors, Executive shall be eligible to earn an annual bonus (the “Annual
Bonus”) based on the achievement of the Performance Objectives by the Company,
as determined by the Committee of the Board. The Performance Objectives shall
be based on any of the following objective business criteria, either alone or
in any combination, and measured either on an absolute basis, on a relative
basis against one or more pre-established targets, peer group performance, or
past Company performance, as the Committee, in its sole discretion, determines:


 


•       revenue,


 


•       cash flow,


 


•       return on equity,


 


•       total stockholder return,


 


•       return on capital,


 


•       return on assets or net assets,


 


•       income or net income,


 


•       operating income or net operating income,


 


•       operating profit or net operating profit,


 


•       operating margin,


 


•       market share,


 


•       earnings per share, or


 


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•       royalties earned by, or paid to, the
Company pursuant to one or more license agreements entered into by the Company,


 


Any
such Performance Objectives shall apply in determining Executive’s Annual
Bonus, or in determining any designated portion or portions of the Annual
Bonus, as the Committee, in its sole discretion, determines.


 


The
Annual Bonus payable may be an amount up to and not in excess of nineteen and
thirty-three hundredths percent (19.33%) of the excess (if any) of:  (i) the royalties paid to the Company
under Section 5.1 of the Target Agreement for the contract year (as
defined in the Target Agreement), less (ii) $5,293,750.


 


5.                 PERFORMANCE
OBJECTIVES


 


By
no later than the latest time permitted by Section 162(m) of the
Code, and the regulations promulgated thereunder (generally, for performance
periods of one year or more, no later than 90 days after the commencement of
the performance period) and while the achievement of the Performance Objectives
remains substantially uncertain within the meaning of Section 162(m) of
the Code, and the regulations promulgated thereunder, the Committee shall
establish, in writing, the specific Performance Objectives which must be
achieved in order for the Annual Bonus (or designated portion thereof) to be
earned and the objective bonus formula for computing the Annual Bonus (or
designated portion thereof) if such Performance Objectives are achieved. The
Performance Objectives established in writing by the Committee shall apply to a
Contract Year, as determined by the Committee.


 


Performance
Objectives for computing the Annual Bonus with respect to each Contract Year
shall be set forth on an exhibit to the Plan which shall be incorporated into
and made a part of the Plan. The Committee shall determine whether the
Performance Objectives for a Contract Year are achieved, and, if so, the
Committee shall certify in writing, prior to the payment of any Annual Bonus
(or designated portion thereof) for such Contract Year, that such Performance
Objectives were satisfied. No Annual Bonus (or designated portion thereof) for
such Contract Year shall be paid to Executive unless and until the Committee
makes a certification in writing with respect to the achievement of the
Performance Objectives for such Contract Year as required by Section 162(m) of
the Code, and the regulations promulgated thereunder.


 


Once
the Committee has established, in writing, the Performance Objectives which
must be achieved in order for the Annual Bonus (or designated portion thereof)
to be earned and the objective bonus formula for computing the Annual Bonus (or
designated portion thereof), with respect to a Contract Year, the Committee
shall not have the authority to modify such Performance Objectives or objective
bonus formula for computing the Annual Bonus with respect to such Contract
Year. However, pursuant to Section 9, for each Contract Year commencing on
or after February 1, 2004, the Committee may reserve the authority to
terminate Executive’s right to an Annual Bonus with respect, to such Contract
Year at any time on or prior to the first day of such Contract Year.


 


6.                 SPECIAL
AWARDS AND OTHER PLAN


 


Nothing
contained in the Plan shall prohibit the Company from granting awards or
authorizing other compensation to Executive under any other plan or authority
or limit the authority of the Company to establish other special awards or
incentive compensation plans providing for the payment of incentive
compensation to Executive.


 


7.                 CHANGE IN
EMPLOYMENT STATUS


 


If
Executive’s employment with the Company is terminated for any reason other than
death or disability prior to the end of a Contract Year, Executive’s rights to
an Annual Bonus under the Plan with respect to such Contract Year and subsequent
Contract Years shall terminate. The Committee shall determine whether all or a
portion of Executive’s Annual Bonus under the Plan for the Contract Year in
which his death or disability occurs shall be paid if Executive’s employment
has been terminated by reason of death or disability.


 


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8.                 METHOD OF
PAYMENT


 


Annual
bonuses shall be paid to Executive in cash within 60 days following the end of
the Contract Year with respect to which such Annual Bonus is earned.


 


9.                 ADMINISTRATION,
TERMINATION AND INTERPRETATION


 


The
Plan is administered by the Committee. The Committee shall consist solely of
two (2) or more directors who are considered “outside directors” for
purposes of Section 162(m) of the Code, and the regulations
promulgated thereunder.


 


Subject
to Section 162(m) of the Code, the regulations promulgated
thereunder, and Section 5 of the Plan, the Committee shall have full power
to construe and interpret the Plan, establish and amend rules and
regulations for its administration, and perform all other acts relating to the
Plan, including the delegation of administrative responsibilities, that it
believes reasonable and proper and in conformity with the purposes of the Plan.


 


For
each Contract Year commencing on or after February 1, 2004, the Committee
may reserve the authority to terminate the Executive’s right to an Annual Bonus
with respect to such Contract Year at any time on or prior to the first day of
such Contract Year.


 


Any
decision made, or action taken, by the Committee arising out of or in
connection with the interpretation and/or administration of the Plan shall be
final, conclusive and binding on all persons affected thereby.


 


The
Board shall have the right to amend the Plan from time to time or to terminate
the Plan; provided, however, no such action shall adversely affect any Annual
Bonus with respect to which the Performance Objectives have been established in
writing by the Committee in accordance with Section 5.


 


10.          STOCKHOLDER
APPROVAL


 


This
Plan shall be approved by the stockholders if, in a separate vote, a majority
of the votes cast on the issue by the stockholders of the Company (including
abstentions to the extent abstentions are counted as voting under applicable
state law) are cast in favor of approval. The material terms of the Plan,
including the Performance Objectives shall be disclosed to the stockholders of
the Company, in accordance with section 162(m) of the Code, and the
regulations promulgated thereunder. No Annual Bonus shall be payable under the
Plan with respect to any Contract Year prior to the approval of the Plan (and
the Performance Objectives by the stockholders of the Company). In the event
that this Plan is not so approved by the stockholders at the Annual Meeting, no
Annual Bonus shall be payable under the Plan and the Plan shall terminate and
shall be null and void in its entirety.


 


11.          MISCELLANEOUS


 


The
Company shall deduct all federal, state and local taxes required by law or
Company policy from any Annual Bonus paid to Executive hereunder.


 


In
no event shall the Company be obligated to pay to Executive an Annual Bonus for
any Contract Year by reason of the Company’s payment of an Annual Bonus to
Executive in any other Contract Year.


 


The
Plan shall be unfunded. Amounts payable under the Plan are not and will not be
transferred into a trust or otherwise set aside. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Annual Bonus under the Plan.


 


It
is the intent of the Company that the Plan and the Annual Bonus paid hereunder
shall satisfy and shall be interpreted in a manner that satisfies any
applicable requirements as qualified performance-based compensation within the
meaning of Section 162(m) of the Code, and the regulations
promulgated thereunder. Any provision, application or interpretation of the
Plan that is inconsistent with this intent to


 


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satisfy the standards in
Section 162(m) of the Code, and the regulations promulgated
thereunder, shall be disregarded.


 


Any
provision of the Plan that is prohibited or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of the Plan.


 


The
Plan and the rights and obligations of the parties to the Plan shall be
governed by, and construed and interpreted in accordance with, the law of the
State of California (without regard to principles of conflicts of law).


 


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* *


 


I
hereby certify that the foregoing Plan was approved by the stockholders of
Mossimo, Inc, on                 ,
2005.


 


Executed
on this        day of                 ,
2005.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  



 


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