**Exhibit 10.6**

** **

**GUESS?, INC.**

**ANNUAL INCENTIVE BONUS PLAN**

**(ASAMENDED AND RESTATED JANUARY 18, 2007)**

Section 1.   Purposes

The purposes ofthe Guess?, Inc. Annual Incentive Bonus Plan (the “Plan”) are (i) to providegreater motivation for selected key employees of Guess?, Inc., a Delawarecorporation (the “Company”), and its Subsidiaries (as defined in Section 3(c)below) to attain and maintain the highest standards of performance, (ii) toattract and retain executives of outstanding competence, and (iii) to directthe energies of executives toward the achievement of specific business goalsestablished for the Company and its Subsidiaries.

The Plan isdesigned to qualify compensation paid under the Plan to Covered Employees (asdefined in Section 3(a) below) as “performance-based compensation” as that termis defined in Section 162(m) of the Internal Revenue Code of 1986, as amended,and the regulations promulgated thereunder (“Section 162(m)”).

Section 2.   Administration and Interpretation

(a)   The Plan shall be administered by theCompensation Committee (the “Committee”) of the Board of Directors of theCompany (the “Board”), which shall consist of not less than two members of theBoard who qualify as “outside directors” as defined under Section 162(m). The Committeemay designate all or any portion of its power and authority under this Plan toany sub-committee of the Committee or to any executive officer or executiveofficers of the Company (each an “Authorized Committee Designee”); providedthat no such designation shall be permitted or effective with respect to anyaward to, or any other matter concerning, any Covered Employee. An AuthorizedCommittee Designee, to the extent provided by the Committee, shall have and mayexercise all the power and authority of the Committee hereto, subject to thelimitations set forth in the immediately preceding sentence.

(b)   The Committee is authorized to interpret thePlan and may from time to time adopt such rules and regulations for carryingout the Plan as it may deem necessary or advisable. Decisions of the Committeeshall be final, conclusive and binding upon all parties, including, withoutlimitation, the Company and the key employees who participate in the Plan.

(c)   The Plan shall be administered to complywith Section 162(m) and, if any provisions of the Plan cause any award to aCovered Employee to not qualify as performance-based compensation under Section162(m), that provision shall be stricken from this Plan, but the otherprovisions of the Plan shall remain in effect. Any action striking any portionof the Plan shall modify the stricken terms as narrowly as possible to give asmuch effect as possible to the intentions of the parties under the Plan.

  

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Section 3.   Participation

(a)   Participation in the Plan during any fiscal yearshall be limited to (i) any person serving as Chief Executive Officer of theCompany and each other executive officer of the Company that the Committeedetermines, in its discretion, is or may be a “covered employee” of the Companywithin the meaning of Section 162(m) (“Covered Employees”) and (ii) those keyemployees of the Company and its Subsidiaries, other than the CoveredEmployees, who, in the sole opinion of the Committee, are in a position to havea significant impact on the performance of the Company and who are selected bythe Committee (“Key Employees” and together with the Covered Employees, “Participants”);provided that participation by an employee of a Subsidiary shall be subject toapproval of the Plan by such Subsidiary’s Board of Directors, which approvalshall constitute the Subsidiary’s agreement to pay, at the direction of theCommittee, awards directly to its employees or to reimburse the Company for thecost of such participation in accordance with rules adopted by the Committee.

(b)   Unless otherwise determined by the Committeein its sole and absolute discretion, or as provided in a Participant’semployment agreement, if a Participant ceases to be employed by the Companyand/or its Subsidiaries prior to the end of a fiscal year for any reason otherthan disability (as determined by the Company), retirement at or after age 55,or death, his or her participation in the Plan for such year will terminateforthwith and he or she will not be entitled to any award for such year. If,prior to the end of a fiscal year, a Participant’s employment ceases because ofdisability (as determined by the Company), retirement at or after age 55, ordeath, or if the effective date of participation by a Participant for any yearshall be after the first day of such fiscal year, the Participant shall beentitled to receive only that proportion of the amount, if any, that he or sheotherwise would have received under the Plan for the full fiscal year which thenumber of days of his or her participation in the Plan during such fiscal yearbears to the total number of days in such fiscal year; provided, however, thatif the effective date of participation by a Covered Employee for any fiscal yearshall be after the first day of the fiscal year, then the Committee mustestablish the Performance Goals (as defined in Section 4(d) below) for suchCovered Employee while the performance relating to such Performance Goalsremain substantially uncertain within the meaning of Section 162(m) and in no eventafter 25% of the fiscal year has elapsed.

(c)   The term “Subsidiary” shall mean anycorporation at least 50% of whose issued and outstanding voting stock is owned,directly or indirectly by the Company.

Section 4.   Determination of Incentive Awards

Within the timeperiod prescribed by Section 162(m) for each fiscal year, the Committee mayauthorize awards to Participants pursuant to either or both of the followingmethods in clauses (a) and (b) below:

(a)   For each fiscal year, the Committee shall:(i) determine the Participants who are to be eligible to receiveperformance-based awards under the Plan during such year, (ii) notify each suchParticipant in writing concerning his or her selection for participation in thePlan for such year, (iii) select the Performance Criteria applicable to suchyear for each such Participant and 

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(iv) establish, in termsof an objective formula or standard for each Participant, the Performance Goaland the amount of each award which may be earned for such year if suchPerformance Goal is achieved.

(b)   The Committee may in its sole and absolutediscretion provide for discretionary bonuses for any of the Key Employees.

(c)   The term “Performance Criteria” means thecriteria that the Committee selects for purposes of establishing thePerformance Goal or Performance Goals for a Participant. The PerformanceCriteria that will be used to establish Performance Goals are limited to thefollowing: net earnings, operating earnings or income, earnings per share, cashflow, absolute and/or relative return on equity or assets, pre-tax profits,earnings growth, revenue growth, share price growth, shareholder returns, grossor net profit margin, comparison to peer companies, or any combination of theforegoing, any of which may be measured either in absolute terms, or ascompared to any incremental increase, or as compared to the results of a peergroup.

(d)   The term “Performance Goals” means the goalsestablished in writing by the Committee for the fiscal year based upon the PerformanceCriteria. The Performance Goal may be expressed in terms of overall Companyperformance or the performance of an operating unit, business unit, segment,subsidiary or other division or any portion or combination thereof of theCompany.

(e)   Actual financial performance shall bemeasured by reference to the Company’s financial records and the consolidatedfinancial statements of the Company. In determining performance, the Committeein its sole and absolute discretion shall, in the case of awards to CoveredEmployees, and may, in the case of awards to Key Employees, direct thatadjustments to the Performance Goals or actual financial performance asreported be made to reflect extraordinary organizational, operational or otherchanges that have occurred during such fiscal year, such as (withoutlimitation) acquisitions, dispositions, expansions, contractions, materialnon-recurring items of income or loss or events that might create unwarrantedhardships or windfalls to Participants, in each case, with respect to CoveredEmployees, only to the extent consistent with the requirements of Section162(m) to qualify such awards as performance-based compensation.Notwithstanding the foregoing, the Committee may, by express provision withrespect to a specific award provide at the time the performance goals areestablished that one or more of the adjustments in the foregoing sentence willnot be made with respect to the award or establish such other events orcircumstances, consistent with Section 162(m), with respect to which theCommittee will make appropriate adjustment to the award. The Committee isauthorized at any time during or after the fiscal year to increase (except withrespect to awards payable to Covered Employees), reduce or eliminate the amountof an award payable to any Participant for any reason. The Committee may alsoprovide that the Chief Executive Officer or Chairman of the Board shall havethe discretion to increase or decrease the award otherwise payable to any KeyEmployee based upon their individual performance during the fiscal year.

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Section 5.   Awards

(a)   No later than 90 days after the last day ofeach fiscal year, the Committee shall determine awards to Participants for suchfiscal year by comparing actual financial performance to the Performance Goals,Performance Criteria and amounts of awards adopted by the Committee for suchyear and the Committee shall, with respect to Covered Employees, certify, byresolution or other appropriate action in writing, that the amount of the awardhas been accurately determined in accordance with the terms, conditions andlimits of the Plan and that the Performance Goals and any other material termsestablished by the Committee or set forth in this Plan were in fact satisfied.If the Committee has not adopted specified goals for the fiscal year, theCommittee shall meet no later than 90 days after the last day of such fiscal yearto determine if discretionary bonuses shall be awarded to Key Employees. Eachaward under the Plan shall be paid in cash promptly after the amount of theaward has been determined and, with respect to awards to Covered Employees, theCommittee has certified that the relevant performance goals have been achieved;provided, that in all events, each award shall be paid no later than the 15th day of the third month following the Company’sfirst taxable year in which such award is no longer subject to a substantialrisk of forfeiture.

(b)   No award under this Plan shall be consideredas compensation in calculating any insurance, profit-sharing, retirement, orother benefit for which the recipient is eligible unless any such insurance,profit-sharing, retirement or other benefit is granted under a plan whichexpressly provided that incentive compensation shall be considered as compensationunder such plan.

(c)   There is no requirement that the maximumamount available for awards in any fiscal year be awarded, nor that an awardwill be granted to any particular Participant for any fiscal year. Any portionof any amount available for making awards for any fiscal year which shall nothave been awarded, shall not carry over or increase the maximum amount ofawards payable in any subsequent year.

(d)   Notwithstanding any provision in the Plan tothe contrary, the maximum award payable to any Participant under the Plan forany calendar year shall be $3.2 million.

(e)   In the exercise of its discretion, theCommittee may allow a Participant to elect to defer the receipt of all or anyportion of an award under the Plan. Any such deferral shall be made pursuant tothe terms and conditions set forth in any deferred compensation plan orarrangement adopted by the Company. In the case of any deferred payment of anaward to a Covered Employee after the attainment of the applicable Performance Goal,any amount in excess of the amount otherwise payable shall be based on eitherMoody’s Average Corporate Bond Yield (or such other rate of interest that isdeemed to constitute a “reasonable rate of interest” for purposes of Section162(m)) over the deferral period or the return over the deferral period of oneor more predetermined actual investments such that the amount payable at thelater date will be based upon actual returns, including any decrease orincrease in the value of the investment(s).

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Section 6.   Deathof Participant

If a Participant diesbefore or after termination of employment, any unpaid installments of an awardshall be paid to his or her legal representatives, either in the installmentsas originally provided or otherwise as the Committee may determine in eachindividual case, or, where the Committee has authorized the designation ofbeneficiaries, to such beneficiaries as may have been designated by theParticipant.

Section 7.   Non-Assignability and Contingent Natureof Rights

No Participant, noperson claiming through him or her, nor any other person shall have any rightor interest in the Plan or its continuance, or in the payment of any awardunder the Plan, unless and until all the provisions of the Plan, the rulesadopted thereunder, and restrictions and limitations on the award itself havebeen fully complied with. No rights under the Plan, contingent or otherwise,shall be transferable, assignable or subject to any pledge or encumbrance ofany nature.

Section 8.   Source of Payments

The Company shallnot have any obligation to establish any separate fund or trust or othersegregation of assets to provide for payments under the Plan. To the extent anyperson acquires any rights to receive payments hereunder from the Company, suchrights shall be no greater than those of an unsecured creditor.

Section 9.   Tax Withholding

The Company or aSubsidiary thereof, as appropriate, shall have the right to deduct from allpayments made under the Plan to a Participant or to a Participant’s beneficiaryor beneficiaries any Federal, state or local taxes required by law to bewithheld with respect to such payments.

Section 10.   Duration, Termination and Amendment

Subject toapproval by the Company’s stockholders at the 2005 annual meeting of Companystockholders, the Plan shall be effective for the fiscal year of the Companycommencing January 1, 2005 and shall continue in effect until the fifthanniversary of the date of such stockholder approval, unless earlier terminatedas described below. Upon such approval of the Plan by the Company’sstockholders at the 2005 annual meeting of Company stockholders, all awardsapproved or granted under the Plan on or after January 1, 2005 shall be fullyeffective.

The Committee mayat any time terminate or from time to time modify or suspend, in whole or inpart, and if suspended, may reinstate, any or all of the provisions of the Planin such respects as the Committee may deem advisable; provided that no suchtermination or modification shall impair any rights which have accrued underthe Plan; and provided further, that the Committee may not without stockholderapproval adopt any amendment that would require the vote of stockholderspursuant to Section 162(m).

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Section 11.   No Restriction on Right to Effect Changes

The Plan shall notaffect in any way the right or power of the Company or its stockholders to makeor authorize any sale of all or any portion of the assets of the Company or anySubsidiary, any merger or consolidation of the Company or any Subsidiary, areorganization, dissolution or liquidation of the Company or any Subsidiary, orany other event or series of events, whether of a similar character orotherwise.

Section 12.   Headings

The headings ofsections herein are included solely for convenience of reference and shall notaffect the meaning of any of the provisions of the Plan.

Section 13.   Governing Law

This Plan shall begoverned by and construed in accordance with the laws of the State ofCalifornia.

Section 14.   No Contract of Employment or Right toAwards

Nothing containedherein shall be construed as a contract of employment between the Company andany Participant, or as giving a right to any person to be granted awards underthe Plan or to continue in the employment of the Company or any of itsSubsidiaries, or as limiting the right of the Company or any of itsSubsidiaries to discharge any Participant at any time, with or without cause.

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