Document:

Exhibit 10.10

 

GUESS?,
INC.

 

2002 EMPLOYEE
STOCK PURCHASE PLAN

 

(Amended and Restated Effective March 4, 2009)

 

1.             Purpose.  The Company maintains the Guess?, Inc.
2002 Employee Stock Purchase Plan, which was approved by the Company’s
stockholders on May 13, 2002, amended as of December 17, 2007 and
amended and restated effective as of March 4, 2009.  The purpose of the Plan is to provide
employees of the Company with an opportunity to purchase Common Stock of the
Corporation through accumulated payroll deductions.  It is the intention of the Company to have
the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of
the Internal Revenue Code of 1986, as amended. 
The provisions of the Plan, accordingly, shall be construed so as to
extend and limit participation in a manner consistent with the requirements of
that section of the Code.

 

2.             Definitions.

 

(a)           “Board” shall mean the Board
of Directors of the Corporation.

 

(b)           “Code” shall mean the Internal
Revenue Code of 1986, as amended.

 

(c)           “Commission” shall mean the
Securities and Exchange Commission.

 

(d)           “Committee” shall mean the
Committee appointed by the Board to administer the Plan pursuant to Section 14.

 

(e)           “Common Stock” shall mean the
Common Stock of the Corporation.

 

(f)            “Company” shall mean the
Corporation and any of its Designated Subsidiaries.

 

(g)           “Compensation” shall have the
same meaning as given under the Guess?, Inc. 401(k) Plan and Trust or
such other definition as may be determined by the Committee, provided, however,
that amounts deferred by eligible employees pursuant to the terms of the Guess?, Inc.
Nonqualified Deferred Compensation Plan shall also be included as “Compensation”
for all purposes hereunder.

 

(h)           “Corporation” shall mean
Guess?, Inc., a Delaware corporation

 

(i)            “Designated Subsidiary” shall
mean any Subsidiary which has been designated by the Board from time to time in
its sole discretion as eligible to participate in the Plan.

 

(j)            “Employee” shall mean any
individual who is an Employee of the Company for tax purposes and whose
customary employment with the Company is at least twenty (20) hours per week
and more than five (5) months in any calendar year.  For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the individual is on
sick leave or other leave of absence approved by the Company.  Where the period of leave exceeds ninety (90)
days and the individual’s right to reemployment is not guaranteed either by
statute or by contract, the employment relationship shall be deemed to have
terminated on the ninety-first (91st) day of such leave.

 

 

(k)           “Enrollment Date” shall mean
the first day of each Offering Period.

 

(l)            “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

 

(m)          “Exercise Date” shall mean the
last day of each Offering Period.

 

(n)           “Fair Market Value” shall
mean, on any given date, the value of Common Stock determined as follows:

 

(i)            if the Common Stock is listed or
admitted to trade on a national securities exchange, the closing price of the
shares of Common Stock on the Composite Tape, as published in the Western
Edition of The Wall Street Journal, of the principal national securities
exchange on which the Common Stock is so listed or admitted to trade, on such
date;

 

(ii)           if the Common Stock is not listed or
admitted to trade on a national securities exchange, the last price for the
Common Stock on such date, as furnished by the National Association of
Securities Dealers, Inc. (“NASD”) through the NASDAQ National Market
Reporting System or a similar organization if the NASD is no longer reporting
such information;

 

(iii)          if the Common Stock is not listed or
admitted to trade on a national securities exchange and is not reported on the
National Market Reporting System, the mean between the bid and asked price for
the Common Stock on such date, as furnished by the NASD or a similar
organization; or

 

(iv)          if the Common Stock is not listed or
admitted to trade on a national securities exchange, is not reported on the
National Market Reporting System and if bid and asked prices for the stock are
not furnished by the NASD or a similar organization, the value as established
by the Board at such time for purposes of this Plan.

 

(o)           “Offering Period” shall mean a
period of approximately three (3) months, commencing on the last Monday of
the second fiscal month of each fiscal quarter of the Company and terminating
on the penultimate Friday of the second fiscal month of each immediately
following fiscal quarter of the Company. 
The duration of Offering Periods may be changed pursuant to Section 4
of this Plan.

 

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(p)           “Plan” shall mean this 2002
Employee Stock Purchase Plan.

 

(q)           “Purchase Price” shall mean an
amount equal to eighty-five percent (85%) of the Fair Market Value of a share
of Common Stock on the Enrollment Date or on the Exercise Date, whichever is
lower.

 

(r)            “Reserves” shall mean the
number of shares of Common Stock covered by each option under the Plan which
have not yet been exercised and the number of shares of Common Stock which have
been authorized for issuance under the Plan but not yet placed under option.

 

(s)           “Rule 16b-3”
means Rule 16b-3 as promulgated by the Commission under Section 16 of
the Exchange Act, as amended from time to time.

 

(t)            “Subsidiary” shall mean a
corporation, domestic or foreign, of which not less than fifty percent (50%) of
the voting shares are held by the Corporation or a Subsidiary, whether or not
such corporation now exists or is hereafter organized or acquired by the
Corporation or a Subsidiary.

 

(u)           “Trading Day” shall mean a day
on which national stock exchanges and the Nasdaq System are open for trading.

 

3.             Eligibility.

 

(a)           Any Employee who shall be employed by
the Company on a given Enrollment Date shall be eligible to participate in the
Plan for the corresponding Offering Period.

 

(b)           Any provisions of the Plan to the
contrary notwithstanding, no Employee shall be granted an option under the Plan
(i) to the extent that, immediately after the grant, such Employee (or any
other person whose stock would be attributed to such Employee pursuant to Section 424(d) of
the Code) would own capital stock of the Company and/or hold outstanding
options (granted under this Plan or otherwise) to purchase such stock
possessing five percent (5%) or more of the total combined voting power or
value of all classes of the capital stock of the Company or of any parent
corporation (if any) or any Subsidiary, or (ii) to the extent that his or
her rights to purchase stock under all employee stock purchase plans of the
Company and its parent corporation (if any) and its Subsidiaries qualified
under Section 423 of the Code accrues at a rate which exceeds Twenty-Five
Thousand Dollars ($25,000.00) worth of stock (determined at the Fair Market
Value of the shares at the time such option is granted) for each calendar year
in which such option is outstanding at any time.

 

4.             Offering
Periods.  The Plan shall be
implemented by consecutive Offering Periods with a new Offering Period
commencing on the last Monday of the second fiscal month of each fiscal quarter
of the Company and terminating on the penultimate Friday of the second fiscal
month of each immediately following fiscal quarter of the Company, or on such
other date as the Board shall determine, and continuing thereafter until
terminated in accordance with Section 20 hereof.  The Board shall have the power to change the
duration of the Offering Periods (not to exceed 27 months), including the
commencement dates thereof, with respect to future offerings without
stockholder approval if such change is announced at least five (5) days
prior to the beginning of the first Offering Period to be affected thereunder.

 

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5.             Participation.

 

(a)           An eligible Employee may become a
participant in the Plan by completing a subscription agreement authorizing
payroll deductions in the form of Exhibit A to this Plan.  Such subscription agreement must be filed
with the Company at least five (5) business days prior to the applicable
Enrollment Date (or such other date as the Committee may designate).

 

(b)           Payroll deductions for a participant
shall commence on the first payroll following the Enrollment Date and shall end
on the last payroll in the Offering Period to which such authorization is
applicable, unless sooner terminated by the participant as provided in Section 10
hereof.

 

(c)           For purposes of this Plan, if a
Designated Subsidiary ceases to be a Subsidiary, each person employed by that
Subsidiary will be deemed to have terminated employment for purposes of this
Plan and will no longer be an Employee unless the person continues as an
Employee in respect of another Company entity.

 

6.             Payroll
Deductions.

 

(a)           At the time a participant files his
or her subscription agreement, he or she shall elect to have payroll deductions
made on each pay day during the Offering Period in an amount not less than one
percent (1%) and not in excess of fifteen percent (15%) of the Employee’s
Compensation during the Offering Period.

 

(b)           Subject to Section 6(a), all
payroll deductions made for a participant shall be credited to his or her
account under the Plan and shall be withheld in whole percentages.  A participant may not make any additional
payments into such account.

 

(c)           A participant may discontinue his or
her participation in the Plan as provided in Section 10 hereof.  A participant’s subscription agreement shall
remain in effect for successive Offering Periods unless terminated as provided
in Section 10 hereof or by filing a new subscription agreement with the
Company at least five (5) business days prior to the Enrollment Date of
the immediately following Offering Period (or such other date as the Committee
may designate).

 

(d)           Notwithstanding the foregoing, to the
extent necessary to comply with Section 7 hereof or Section 423(b)(8) of
the Code and Section 3(b) hereof, a participant’s payroll deductions
may be decreased to zero percent (0%) at any time during an Offering
Period.  Payroll deductions shall recommence
at the rate provided in such participant’s subscription agreement at the
beginning of the first Offering Period which is scheduled to end in the
following calendar year, unless terminated by the participant as provided in Section 10
hereof.

 

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(e)           At the time the option is exercised,
in whole or in part, or at the time some or all of the Company’s Common Stock
issued under the Plan is disposed of, the participant must make adequate
provision for the Company’s federal, state, or other tax withholding
obligations, if any, which arise upon the exercise of the option or the
disposition of the Common Stock.  At any
time, the Company may, but shall not be obligated to, withhold from the
participant’s compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Employee.  Notwithstanding anything herein to the
contrary, with respect to any withholding obligation that may arise upon the
exercise of an option, the Company may, but shall not be obligated to, deduct
from a participant’s account balance as of an Exercise Date, before the
exercise of the participant’s option is given effect, the amount which the
Company reasonably determines to be required to withhold with respect to such
exercise.  In such event, the maximum
number of whole shares subject to the option (subject to the other limits set
forth in the Plan) shall be purchased at the Purchase Price with the balance of
the participant’s account (after reduction for the tax withholding amount).

 

7.             Grant
of Option.  On the Enrollment Date of
each Offering Period, each eligible Employee participating in such Offering
Period shall be granted an option to purchase on the Exercise Date of such
Offering Period (at the applicable Purchase Price) up to a number of shares of
the Company’s Common Stock determined by dividing such Employee’s payroll
deductions accumulated prior to such Exercise Date and retained in the
Participant’s account as of the Exercise Date by the applicable Purchase Price;
provided that, in no event, shall an Employee be permitted to purchase during
each Offering Period more than 200,000 shares (subject to any adjustment
pursuant to Section 19), and provided further that such purchase shall be
subject to the limitations set forth in Section 3(b) and 13
hereof.  Exercise of the option shall
occur as provided in Section 8 hereof, unless the participant has
withdrawn pursuant to Section 10 hereof. 
The Option shall expire on the last day of the Offering Period.

 

8.             Exercise
of Option.  Unless a participant
withdraws from the Plan as provided in Section 10 hereof, his or her
option for the purchase of shares shall be exercised automatically on the
Exercise Date, and the maximum number of full shares subject to the option
shall be purchased for such participant at the applicable Purchase Price with
the accumulated payroll deductions in his or her account.  No fractional shares shall be purchased; any
payroll deductions accumulated in a participant’s account which are not
sufficient to purchase a full share shall be retained in the participant’s
account for the subsequent Offering Period, subject to earlier withdrawal by
the participant as provided in Section 10 hereof.  Any other monies left over in a participant’s
account after the Exercise Date shall be returned to the participant unless the
participant requests such funds to be rolled over to the next offering
period.  During a participant’s lifetime,
a participant’s option to purchase shares hereunder is exercisable only by him
or her.

 

9.             Delivery.  As promptly as practicable after each
Exercise Date on which a purchase of shares occurs, the Company shall, in its
discretion, either: (a) arrange the delivery to the participant or to a
record keeping service of a certificate, as appropriate, or (b) issue
shares in book entry form to the participant or his or her designated broker,
registered in the name of such participant or broker, in each case,
representing the shares purchased upon exercise of his or her option.

 

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10.           Withdrawal.

 

(a)           A participant may withdraw all but
not less than all the payroll deductions credited to his or her account during
an Offering Period and not yet used to exercise his or her option under the
Plan at any time by giving written notice to the Company in the form of Exhibit B
to this Plan.  A withdrawal election
pursuant to this Section 10(a) with respect to an Offering Period
shall be effective if it is received by the Company no later than two (2) business
days prior to the Exercise Date of that Offering Period.  All of the participant’s payroll deductions
credited to his or her account shall be paid to such participant promptly after
receipt of notice of withdrawal and such participant’s option for the Offering
Period shall be automatically terminated, and no further payroll deductions for
the purchase of shares shall be made for such Offering Period.  If a participant withdraws from an Offering
Period, payroll deductions shall not resume at the beginning of the succeeding
Offering Period unless the participant delivers to the Company a new
subscription agreement.  A participant
may also withdraw from participation in a succeeding Offering Period by giving
written notice to the Company in the form of Exhibit B, provided
that the notice of withdrawal is received by the Company no later than one (1) business
day prior to the Enrollment Date of the succeeding Offering Period (or such
other date as the Committee may designate).

 

(b)           A participant’s withdrawal from an
Offering Period shall not have any effect upon his or her eligibility to
participate in any similar plan which may hereafter be adopted by the Company
or in succeeding Offering Periods which commence after the termination of the
Offering Period from which the participant withdraws.

 

11.           Termination
of Employment.  Upon a participant’s
ceasing to be an Employee for any reason, he or she shall be deemed to have
elected to exercise his or her option at the next Exercise Date unless the
participant gives notice to the Company at least two (2) business days
prior to the applicable Exercise Date (or such other date as the Committee may
designate) in the form of Exhibit C to this Plan.  Upon the participant’s timely filing of such
notice, the participant shall be withdrawn from the Plan and the payroll
deductions credited to such participant’s account during the Offering Period
but not yet used to exercise the option shall be returned to such participant
or, in the case of his or her death, to the person or persons entitled thereto
under Section 15 hereof, and such participant’s option shall be
automatically terminated.  The preceding
sentence notwithstanding, a participant who receives payment in lieu of notice
of termination of employment shall be treated as continuing to be an Employee
for the participant’s customary number of hours per week of employment during
the period in which the participant is subject to such payment in lieu of
notice.

 

12.           Interest.  No interest shall accrue on the payroll
deductions of a participant in the Plan.

 

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13.           Stock.

 

(a)           The maximum number of shares of the
Common Stock which shall be made available for sale under the Plan shall be
four million (4,000,000) shares(1), subject to adjustment upon changes in
capitalization of the Company as provided in Section 19 hereof.  If, on a given Exercise Date, the number of
shares with respect to which options are to be exercised exceeds the number of
shares then available under the Plan, the Company shall make a pro rata
allocation of the shares remaining available for purchase in as uniform a
manner as shall be practicable and as it shall determine to be equitable.

 

(b)           The participant shall have no
interest or voting right in shares covered by his option until such option has
been exercised.

 

(c)           Shares to be delivered to a
participant under the Plan shall be registered in the name of the participant
(or the participant and his or her spouse) or his or her designated broker.

 

14.                                 Administration.

 

(a)           The
Board shall appoint the Committee, which shall be composed of not less than two
members of the Board.  Each member of the
Committee, in respect of any transaction at a time when an affected participant
may be subject to Section 16 of the Exchange Act, shall be a “non-employee
director” within the meaning of Rule 16b-3.  The Board may, at any time, increase or
decrease the number of members of the Committee, may remove from membership on
the Committee all or any portion of its members, and may appoint such person or
persons as it desires to fill any vacancy existing on the Committee, whether
caused by removal, resignation, or otherwise. 
The Board may also, at any time, assume or change the administration of
this Plan.

 

(b)           The
Committee shall supervise and administer this Plan and shall have full power
and discretion to adopt, amend and rescind any rules deemed desirable and
appropriate for the administration of this Plan and not inconsistent with the
terms of this Plan, and to make all other determinations necessary or advisable
for the administration of this Plan.  The
Committee shall act by majority vote or by unanimous written consent.  No member of the Committee shall be entitled
to act on or decide any matter relating solely to himself or herself or solely
to any of his or her rights or benefits under this Plan.  The Committee shall have full power and
discretionary authority to construe and interpret the terms and conditions of
this Plan, which construction or interpretation shall be final and binding on
all parties including the Company, participants and beneficiaries.  The Committee may delegate ministerial
non-discretionary functions to third parties, including individuals who are
officers or employees of the Company.

 

(1) The maximum number of shares available under this Plan
consists of the 2,000,000 shares of Common Stock that were initially approved
for issuance under the Plan upon its original adoption by the Board on January 4,
2002 plus an additional 2,000,000 shares of Common Stock as were necessary to
reflect the Company’s two-for-one stock split effected in the form of a 100%
stock dividend as approved by the Board on February 12, 2007 and
distributed March 12, 2007.

 

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(c)           Subject only to compliance with the
express provisions hereof, the Board and Committee may act in their absolute
discretion in matters within their authority related to this Plan.  Any action taken by, or inaction of, the
Company, any Designated Subsidiary, the Board or the Committee relating or pursuant
to this Plan shall be within the absolute discretion of that entity or body and
will be conclusive and binding upon all persons.  In making any determination or in taking or
not taking any action under this Plan, the Board or Committee, as the case may
be, may obtain and may rely on the advice of experts, including professional
advisors to the Company.  No member of
the Board or Committee, or officer or agent of the Company, will be liable for
any action, omission or decision under the Plan taken, made or omitted in good
faith.

 

15.           Designation
of Beneficiary.

 

(a)           A participant may file a written
designation of a beneficiary who is to receive any shares and cash, if any,
from the participant’s account under the Plan in the event of such participant’s
death subsequent to an Exercise Date on which the option is exercised but prior
to delivery to such participant of such shares and cash.  In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant’s
account under the Plan in the event of such participant’s death prior to
exercise of the option.  If a participant
is married and the designated beneficiary is not the spouse, spousal consent
shall be required for such designation to be effective.

 

(b)           Such designation of beneficiary may
be changed by the participant at any time by written notice.  In the event of the death of a participant
and in the absence of a beneficiary validly designated under the Plan who is
living at the time of such participant’s death, the Company shall deliver such
shares and/or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in it discretion, may deliver such
shares and/or cash to the spouse or to any one or more dependents or relatives
of the participant, if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.

 

16.           Transfer
Restrictions.

 

(a)           Neither payroll deductions credited
to a participant’s account nor any rights with regard to the exercise of an
option or to receive shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 15 hereof) by the
participant.  Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds
from an Offering Period in accordance with Section 10 hereof.

 

(b)           Unless the Board or the Committee
determines otherwise prior to the start of any Offering Period, the shares of
Common Stock purchased by a participant on each Exercise Date that occurs after
April 1, 2009 must be held and not sold by the participant for a minimum
period of six (6) months following the applicable Exercise Date.  Accordingly, the participant shall not sell,
make any short sale of, loan, hypothecate, assign, transfer, pledge, grant any
option for the purchase of, or otherwise dispose or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to
any shares purchased by the participant under the Plan until those shares have
been held for at least a six (6) month period measured from the applicable
Exercise Date.  (By way of example,
shares purchased on an Exercise Date of June 26 may not be sold or otherwise
transferred by the participant until at least December 26 of the same
year.)  This transfer restriction shall
hereafter be referred to as the “Holding Period Requirement.”  Notwithstanding the foregoing, the Board or
Committee may at any time elect to reduce or waive the Holding Period
Requirement.

 

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(c)           A participant shall have, with
respect to purchased shares that are subject to the Holding Period Requirement,
all of the rights of a shareholder of the Corporation, including the right to
vote the shares and the right to receive any cash or other dividends with
respect to the shares.  Any new,
substituted or additional securities which are, by reason of any stock split,
stock dividend, recapitalization, combination or reclassification of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation’s receipt of consideration, distributed with
respect to any purchased shares shall be subject to the same Holding Period
Requirement, if any, applicable to those shares.

 

(d)           In order to enforce the Holding
Period Requirement, the Corporation may impose stop-transfer instructions or
take such other actions it deems necessary or advisable with respect to the
purchased shares until the end of the applicable six (6) month period.

 

(e)           Upon a participant’s ceasing to be an
Employee for any reason, any shares held by such participant that are then
subject to a Holding Period Requirement or that are thereafter purchased
pursuant to Section 11 hereof, shall no longer be subject to the Holding
Period Requirement.

 

17.           Use
of Funds.  All payroll deductions
received or held by the Company under the Plan may be used by the Company for
any corporate purpose, and the Company shall not be obligated to segregate such
payroll deductions.

 

18.           Reports.  Individual accounts shall be maintained for
each participant in the Plan.  Statements
of account shall be given to participating Employees as soon as
administratively practicable following each Exercise Date, which statements
shall set forth the amounts of payroll deductions, the Purchase Price, the
number of shares purchased and the remaining cash balance, if any.

 

19.                                 Adjustments
Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale.

 

(a)           Changes in Capitalization.  Subject to any required action by the
stockholders of the Company, the Reserves, the maximum number of shares each
participant may purchase per Offering Period (pursuant to Section 7), as
well as the price per share and the number of shares of Common Stock covered by
each option under the Plan which has not yet been exercised shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of Company shall not be deemed to have been “effected
without receipt of consideration.”  Such
adjustments shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. 
Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

 

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(b)           Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Offering Period then in progress shall be
shortened by setting a new Exercise Date (the “New Exercise Date”), and shall
terminate immediately prior to the consummation of such proposed dissolution or
liquidation, unless provided otherwise by the Board.  The new Board shall notify each participant
in writing, at least ten (10) business days prior to the New Exercise
Date, that the Exercise Date for the participant’s option has been changed to
the New Exercise Date and that that participant’s option shall be exercised
automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10
hereof.

 

(c)           Merger or Asset Sale.  In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or
an equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. 
In the event that the successor corporation refuses to assume or
substitute for the option, the Offering Period then in progress shall be
shortened by setting a New Exercise Date and shall end on the New Exercise
Date.  The New Exercise Date shall be
before the date of the Company’s proposed sale or merger.  The Board shall notify each participant in
writing, at least ten (10) business days prior to the New Exercise Date,
that the Exercise Date for the participant’s option has been changed to the New
Exercise Date and that the participant’s option shall be exercised
automatically on the New Exercise Date, unless prior to such date the participant
has withdrawn from the Offering Period as provided in Section 10 hereof.

 

20.           Amendment
or Termination.

 

(a)           The Board may at any time and for any
reason terminate, suspend or amend the Plan. 
Except as provided in Section 19 hereof, no such termination can
affect options previously granted, provided that an Offering Period may be
terminated by the Board of Directors on any Exercise Date if the Board
determines that the termination of the Plan is in the best interests of the
Company and its stockholders.  Except as
provided in Section 19 hereof, no amendment may make any change in any
option theretofore granted which adversely affects the rights of any
participant.  To the extent necessary to
comply with Section 423 of the Code (or any successor rule or
provision or any other applicable law, regulation or stock exchange rule), the
Company shall obtain stockholder approval in such a manner and to such a degree
as required.

 

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(b)           Without stockholder consent and
without regard to whether any participant rights may be considered to have been
“adversely affected,” the Board (or its committee) shall be entitled to change
the Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company’s processing of properly completed withholding
elections, establish reasonable waiting and adjustment period and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld
from the participant’s Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.

 

21.           Notices.  All notices or other communications by a
participant to the Company under or in connection with the Plan shall be deemed
to have been duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the receipt
thereof.

 

22.           Conditions
Upon Issuance of Shares.  Shares
shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of
any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

 

As a condition to the
exercise of an option, the Company may require the person exercising such
option to represent and warrant at the time of any such exercise that the
shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.

 

23.           Term
of Plan.

 

(a)           The Plan shall become effective upon
its adoption by the Board.  No new
Offering Periods shall commence on after the day before the tenth (10th) anniversary of the effective
date of the Plan and the Plan shall terminate as of the Exercise Date on or
immediately following such date unless sooner terminated under Section 20
hereof.

 

(b)           Notwithstanding anything else
contained herein to the contrary, the effectiveness of the Plan is subject to
the approval of this Plan by the stockholders of the Company within twelve (12)
months after the effective date of the Plan.

 

11

 

24.           Employees’
Rights.

 

(a)           Nothing in this Plan (or in any other
documents related to this Plan) will confer upon any Employee or participant
any right to continue in the employ or other service of the Company, constitute
any contract or agreement of employment or other service or effect an employee’s
status as an employee at will, nor shall interfere in any way with the right of
the Company to change such person’s compensation or other benefits or to terminate
his or her employment or other service with or without cause.  Nothing contained in this Section 24(a),
however, is intended to adversely affect any express independent right of any
such person under a separate employment or service contract other than a
subscription agreement.

 

(b)           No participant or other person will
have any right, title or interest in any fund or in any specific asset
(including shares) of the Company by reason of any option hereunder.  Neither the provisions of this Plan (or of
any related documents), nor the creation or adoption of this Plan, nor any
action taken pursuant to the provisions of this Plan will create, or be
construed to create, a trust of any kind or a fiduciary relationship between
the Company and any participant or other person.  To the extent that a participant or other
person acquires a right to receive payment pursuant to this Plan, such right
will be no greater than the right of any unsecured general creditor of the Corporation.  No special or separate reserve, fund or
deposit will be made to assure any such payment.

 

(c)           A participant will not be entitled to
any privilege of stock ownership as to any shares not actually delivered to the
participant pursuant to Section 9. 
No adjustment will be made for dividends or other rights as a
stockholder for which a record date is prior to such date of delivery.

 

25.           Miscellaneous.

 

(a)           This Plan, the options, and related
documents shall be governed by, and construed in accordance with, the laws of
the State of Delaware.  If any provision
shall be held by a court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions of this Plan shall continue in effect.

 

(b)           Captions and headings are given to
the sections of this Plan solely as a convenience to facilitate reference.  Such captions and headings shall not be
deemed in any way material or relevant to the construction of interpretation of
this Plan or any provision hereof.

 

(c)           The adoption of this Plan shall not
affect any other Company compensation or incentive plans in effect.  Nothing in this Plan will limit or be deemed
to limit the authority of the Board or Committee (i) to establish any
other forms of incentives or compensation for employees of the Company (with or
without reference to the Common Stock), or (ii) to grant or assume options
(outside the scope of and in addition to those contemplated by this Plan) in
connection with any proper corporate purpose; to the extent consistent with any
other plan or authority.

 

(d)           Benefits received by a participant
under an option granted pursuant to this Plan shall not be deemed a part of the
participant’s compensation for purposes of the determination of benefits under
any other employee welfare or benefit plans or arrangements, if any, provided
by the Company, except where the Committee or the Board expressly otherwise
provides or authorizes in writing.

 

12

 

26.           Notice
of Sale.  Any person who has acquired
shares under this Plan shall give prompt written notice to the Company of the
sale or other transfer of the shares if such sale or transfer occurs (i) within
the two (2) year period after the Enrollment Date (date the option is
granted) of the Offering Period with respect to which such shares were acquired
or (ii) within the twelve (12) month period after the Exercise Date of the
Offering Period with respect to with such shares were acquired.

 

******

 

Adoption

Adopted by the Board of
Directors on January 4, 2002

Approved by the
stockholders on May 13, 2002

First Amendment Approved
by the Board of Directors on December 17, 2002

Amended and Restated by
the Board of Directors Effective March 4, 2009

 

13Exhibit
10.11

 

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
(the “Agreement”), made as of December 18,
2008, 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 the Company and the Executive are parties to
that certain Executive Employment Agreement dated as of January 1, 2007
(the “Prior Agreement”).

 

WHEREAS, the Company and the
Executive wish to amend and restate the Prior Agreement upon the terms set
forth in this Agreement to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A”) effective as of the date
hereof.

 

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 is willing to commit himself to
serve the Company on the terms and conditions herein provided.

 

WHEREAS, the Company wishes to continue 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.

 

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, the 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 the
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 January 1,
2007 (the effective date of the Prior Agreement, referred to herein as the “Effective
Date”) and, unless terminated earlier as provided in Section 7 hereof,
ending on the last day of the fifth (5th) 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 ninety (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 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
(75) days after the conclusion of such Fiscal Year.  After the expiration of the Bonus Plan and
the Equity Plan, the 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 the Executive.

 

2

 

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, the
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 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, the 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.

 

3

 

(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.  The Executive shall not be permitted to
accrue more than a total of twenty five (25) vacation days at any time.  Once the Executive reaches the maximum
accrual, the Executive shall not accrue any additional vacation days until a
portion of the 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.

 

4

 

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

 

(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.  Notwithstanding the foregoing, in no event
shall the Company establish or fund any such rabbi trust in a manner or on
terms that would result in the imposition of any tax, penalty or interest under
Section 409A(b)(1) of the Code and in no event shall the Company be
obligated to, nor shall it, fund any such rabbi trust “in connection with a
change in the employer’s financial health” within the meaning of Section 409A(b)(2) of
the Code.  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.

 

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”).

 

5

 

(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) the 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 the 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 the 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 (65).

 

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

 

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

 

6

 

(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 the 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:

 

(a)           DISABILITY.  Upon such termination, the Company shall pay
or provide the Executive with the Accrued Amounts (defined in Section 8(g) below).  The Executive will also be paid a pro-rata
portion of the Executive’s Bonus for the performance year in which the
Executive’s termination occurs, which shall be paid at the time that annual
Bonuses are paid to other senior executives, but in any event within
seventy-five (75) days after the conclusion of the Fiscal Year to which such
Bonus relates (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).

 

7

 

(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, which shall be paid at the
time that annual Bonuses are paid to other senior executives, but in any event
within seventy-five (75) days after the conclusion of the Fiscal Year to which
such Bonus relates (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, which shall be paid at the time that annual
Bonuses are paid to other senior executives, but in any event within
seventy-five (75) days after the conclusion of the Fiscal Year to which such
Bonus relates (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, as to any performance year that begins on or
prior to January 1, 2009, in no event less than the amount for target
performance for that 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);

 

(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
(3), payable in a single lump sum; 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.

 

Subject to Section 21(a), the payment provided
for in this Section 8(d)(iii) (to the extent provided therein) shall
be paid to the Executive in the month immediately following the month in which
the Executive’s termination of employment occurs, provided that the date of the
Executive’s termination of employment occurs on the same date as the Executive’s
“separation from service” (within the meaning of Section 409A and after
giving effect to the presumptions set forth in Treasury Regulations Section 1.409A-1(h)(1)(ii))
from the Company and its subsidiaries, otherwise such amount shall be paid to
the Executive in the month immediately following the month in which the
Executive incurs such a “separation from service.”  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 the Executive executes an effective
general release of all claims in favor of the Company in a form acceptable to
the Company (the “Release”) and delivers such executed Release to the Company
within twenty-one (21) days following the date of his “separation from service.”  For the avoidance of doubt, the 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).

 

8

 

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 in substantially the same form and on
substantially the same conditions as set forth in Appendix A below, with the
consulting period (if any) to commence on the first day following the date of
the Executive’s termination of employment.

 

(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 (65th) 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, which shall be paid at the time that annual
Bonuses are paid to other senior executives, but in any event within
seventy-five (75) days after the conclusion of the Fiscal Year to which such
Bonus relates (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 in substantially the same form and on
substantially the same conditions as set forth in Appendix A below, with the
consulting period to commence on the first day following the date of the
Executive’s termination of employment.

 

9

 

(g)           DEFINITION OF ACCRUED
AMOUNTS.  As used in this
Agreement, “Accrued Amounts” shall mean:

 

(i)            any
unpaid Base Salary through the date of the Executive’s termination and any
accrued vacation in accordance with Company policy, which shall be paid not
later than the next regularly scheduled payroll date following the date of
termination;

 

(ii)           any
unpaid Bonus earned with respect to any Fiscal Year ending on or preceding the
date of the Executive’s termination, which shall be paid at the time that
annual Bonuses for such Fiscal Year are paid to other senior executives, but in
any event within seventy-five (75) days after the conclusion of the Fiscal Year
to which such Bonus relates;

 

(iii)          reimbursement
due to the Executive pursuant to the terms of Section 6(f) for any
unreimbursed business expenses incurred through the date of termination, which
shall be paid as soon as practicable but in all events no later than thirty
(30) days following the date of termination or, if later, promptly following
the Executive’s request for reimbursement of such expenses and upon
presentation of appropriate documentation in accordance with the Company’s
expense reimbursement policy subject to the time limitations of Section 21(c);
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), which in each case shall be paid in accordance with the terms and
conditions of the applicable arrangement, plan, program, grant or agreement.

 

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 the Executive with the
Company or any person affiliated with the Company) (the “Payments”) received or
to be received by the
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 the 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 the Executive.

 

10

 

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 the 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.

 

(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:

 

11

 

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.

 

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 fact 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.

 

12

 

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 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.           SECTION 409A.  Notwithstanding anything in this
Agreement or elsewhere to the contrary:

 

(a)           If the Executive is a “specified
employee” as determined pursuant to Section 409A as of the date of the
Executive’s “separation from service” (within the meaning of Section 409A)
and if any payment or benefit provided for in this Agreement or otherwise both (x) constitutes
a “deferral of compensation” within the meaning of Section 409A and (y) cannot
be paid or provided in the manner otherwise provided without subjecting the
Executive to additional tax, interest or penalties under Section 409A,
then any such payment or benefit shall be delayed until the earlier of (i) the
date which is six (6) months after his “separation from service” for any
reason other than death, or (ii) the date of the Executive’s death.  The provisions of this paragraph shall only
apply if, and to the extent, required to avoid the imputation of any tax,
penalty or interest pursuant to Section 409A of the Code.  Any
payment or benefit otherwise payable or to be provided to the Executive upon or
in the six (6) month period following the Executive’s “separation from
service” that is not so paid or provided by reason of this Section 21(a) shall
be accumulated and paid or provided to the Executive in a single lump sum, as
soon as practicable (and in all events within 15 days) after the date that is
six (6) months after the Executive’s “separation from service” (or, if
earlier, as soon as practicable, and in all events within 15 days, after the
date of the Executive’s death) 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 or benefit should otherwise
have been provided.

 

13

 

(b)           It is intended that any amounts
payable under this Agreement and the Company’s and the Executive’s exercise of authority
or discretion hereunder shall comply with and avoid the imputation of any tax,
penalty or interest under Section 409A. 
This Agreement shall be construed and interpreted consistent with that
intent.

 

(c)           Any reimbursement payment due to the
Executive under Section 6(e) (only to the extent that such benefits
are taxable to the Executive), Section 6(f), and Section 11 (only to
the extent that legal fees incurred under Section 11 are not reimbursed in
connection with a bona fide legal claim exempt under Section 409A pursuant
to Treasury Regulations Section 1.409A-1(b)(11)) shall be paid to the
Executive on or before the last day of the Executive’s taxable year following
the taxable year in which the related expense was incurred.  Any reimbursement payment due to the
Executive pursuant to such provisions and the provision of any taxable benefits
to the Executive under Sections 6(d), 6(e), 6(f), and Section 11 are not
subject to liquidation or exchange for another benefit and the amount of such
expenses eligible for reimbursement or such benefits that the Executive
receives in one taxable year shall not affect the expenses eligible for
reimbursement or the amount of such benefits that the Executive receives in any
other taxable year.

 

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.

 

14

 

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.

 

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 the Executive that by their express terms or clear
intent survive termination of the 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 the
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 the 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

  
				

 

15

 

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 (2nd) 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; provided that
Marciano and the Company agree that in no event will the Company require, nor
will Marciano perform, a level of services during the Consulting Period that
would result in Marciano not having had a “separation from service” (within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”))
from the Company and its subsidiaries as of the date his employment by the
Company terminated.  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 (50%) 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” (within the meaning of
Marciano’s employment agreement with the Company immediately prior to
employment termination) 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, with such payment to be made as soon as
practicable (but in all events within thirty (30) days) following the date of
Marciano’s death or the date Marciano becomes “disabled.”  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 Amended and Restated
Employment Agreement with the Company dated December 18, 2008 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.

 

16

 

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.

 

17

 

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.

 

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.

 

12.           Section 409A.  It is intended that any amounts payable under
this Agreement and the Company’s and Marciano’s exercise of authority or
discretion hereunder shall comply with and avoid the imputation of any tax,
penalty or interest under Section 409A. 
This Agreement shall be construed and interpreted consistent with that
intent.

 

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:

  	
   

  

 

 

18

 

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 the Executive within fifteen
(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 the 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
the 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 the Executive.  For purposes of determining the amount of the
Gross-Up Payment, the 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 the 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 the 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 the Executive a public
accounting firm to serve as Auditor, then the 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 the Executive to make such selection.  The Company shall pay the Auditor’s fee.

 

19

 

3.             The 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
the 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.  The Executive shall not pay 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 (30) day period following the
date on which the Executive gives such notice to the Company, whichever period
is shorter.  If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the 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 the 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 the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the 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 the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the 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
the 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
the 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 the Executive of an amount advanced by the Company pursuant to Paragraph 3
above, the Executive becomes entitled to receive any refund with respect to
such claim, the 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).

 

5.             Notwithstanding
anything to the contrary in this Appendix B, any payment under this Appendix B
shall be paid to the Executive promptly but in no event later than the last day
of the end of the Executive’s taxable year following the taxable year in which
the Executive (or the Company) pays or remits the related taxes.

 

20

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