Document:

Exhibit 10.67

 

Guess?, Inc.

Supplemental Executive
Retirement Plan

Plan Document

 

 

 

Effective January 1, 2006

 

 

TABLE OF CONTENTS

 

	
  Purpose

  	
   

  
	
   

  	
   

  
	
  ARTICLE 1 Definitions

  	
   

  
	
   

  	
   

  
	
  ARTICLE 2 Eligibility

  	
   

  
	
   

  	
   

  
	
  2.1

  	
  Selection by Committee

  	
   

  
	
  2.2

  	
  Enrollment Requirements

  	
   

  
	
  2.3

  	
  Commencement of Participation

  	
   

  
	
   

  	
   

  
	
  ARTICLE 3 Benefits

  	
   

  
	
   

  	
   

  
	
  3.1

  	
  Retirement Benefit

  	
   

  
	
  3.2

  	
  Termination Benefit

  	
   

  
	
  3.3

  	
  Disability Benefit

  	
   

  
	
  3.4

  	
  Change in Control Benefit

  	
   

  
	
  3.5

  	
  Death Prior to the Commencement of Benefits

  	
   

  
	
  3.6

  	
  Death After the Commencement of Benefits

  	
   

  
	
  3.7

  	
  Limitation on Benefits

  	
   

  
	
  3.8

  	
  Withholding and Payroll Taxes

  	
   

  
	
   

  	
   

  
	
  ARTICLE 4 Forms of Benefit
  Payment

  	
   

  
	
   

  	
   

  
	
  4.1

  	
  Normal Form of
  Benefits

  	
   

  
	
  4.2

  	
  Optional Form of Benefits

  	
   

  
	
  4.3

  	
  Changes to Form of SERP Benefit

  	
   

  
	
   

  	
   

  
	
  ARTICLE 5 Forfeiture

  	
   

  
	
   

  	
   

  
	
  5.1

  	
  Forfeiture

  	
   

  
	
   

  	
   

  
	
  ARTICLE 6 Termination
  of Plan Participation, Amendment or Modification of the Plan

  	
   

  
	
   

  	
   

  
	
  6.1

  	
  Termination of Plan Participation

  	
   

  
	
  6.2

  	
  Amendment

  	
   

  
	
  6.3

  	
  Effect of Payment

  	
   

  
	
   

  	
   

  
	
  ARTICLE 7 Other
  Benefits and Agreements

  	
   

  
	
   

  	
   

  
	
  7.1

  	
  Coordination with Other Benefits

  	
   

  
	
   

  	
   

  
	
  ARTICLE 8 Administration
  of the Plan

  	
   

  
	
   

  	
   

  
	
  8.1

  	
  Committee Duties

  	
   

  
				

 

i

 

	
  8.2

  	
  Agents

  	
   

  
	
  8.3

  	
  Binding Effect of Decisions

  	
   

  
	
  8.4

  	
  Indemnity of Plan Administrator

  	
   

  
	
  8.5

  	
  Company Information

  	
   

  
	
   

  	
   

  
	
  ARTICLE 9 Claims Procedures

  	
   

  
	
   

  	
   

  
	
  9.1

  	
  Presentation of Claim

  	
   

  
	
  9.2

  	
  Notification of Decision

  	
   

  
	
  9.3

  	
  Review of a Denied Claim

  	
   

  
	
  9.4

  	
  Decision on Review

  	
   

  
	
  9.5

  	
  Legal Action

  	
   

  
	
   

  	
   

  
	
  ARTICLE 10 Beneficiary
  Designation

  	
   

  
	
   

  	
   

  
	
  10.1

  	
  Beneficiary

  	
   

  
	
  10.2

  	
  Beneficiary Designation; Change; Spousal Consent

  	
   

  
	
  10.3

  	
  Acknowledgement

  	
   

  
	
  10.4

  	
  No Beneficiary Designation

  	
   

  
	
  10.5

  	
  Doubt as to Beneficiary

  	
   

  
	
  10.6

  	
  Discharge of Obligations

  	
   

  
	
   

  	
   

  
	
  ARTICLE 11 Trust

  	
   

  
	
   

  	
   

  
	
  11.1

  	
  Establishment of the Trust

  	
   

  
	
  11.2

  	
  Interrelationship of the Plan and the Trust

  	
   

  
	
  11.3

  	
  Distributions From the Trust

  	
   

  
	
   

  	
   

  
	
  ARTICLE 12 Miscellaneous

  	
   

  
	
   

  	
   

  
	
  12.1

  	
  Status of the Plan

  	
   

  
	
  12.2

  	
  Unsecured General Creditor

  	
   

  
	
  12.3

  	
  Employer’s Liability

  	
   

  
	
  12.4

  	
  Nonassignability

  	
   

  
	
  12.5

  	
  Not a Contract of Employment

  	
   

  
	
  12.6

  	
  Furnishing Information

  	
   

  
	
  12.7

  	
  Terms

  	
   

  
	
  12.8

  	
  Captions

  	
   

  
	
  12.9

  	
  Governing Law

  	
   

  
	
  12.10

  	
  Notice

  	
   

  
	
  12.11 

  	
  Successors

  	
   

  
	
  12.12 

  	
  Spouse’s Interest

  	
   

  

 

ii

 

	
  12.13

  	
  Validity

  	
   

  
	
  12.14

  	
  Incompetent

  	
   

  
	
  12.15

  	
  Court Order

  	
   

  
	
  12.16

  	
  Insurance

  	
   

  
	
  12.17

  	
  Legal Fees To Enforce Rights After Change in Control

  	
   

  

 

iii

 

GUESS?, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

Effective
January 1, 2006

 

Purpose

 

The
purpose of this Plan is to provide specified benefits to a select group of
management or highly compensated Employees who contribute materially to the
continued growth, development and future business success of Guess?, Inc.,
a Delaware corporation, and its subsidiaries, if any, that sponsor this
Plan.  This Plan shall be unfunded for
tax purposes and for purposes of Title I of ERISA.

 

ARTICLE 1

Definitions

 

For
purposes hereof, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following indicated meanings:

 

1.1           “Actuarial Equivalent” shall mean a benefit or
benefits, or a payment or payments, which are of equal value to the benefits
for which they are to be substituted. 
Equivalence of value is determined from actuarial calculations based on
certain actuarial assumptions as to mortality and interest, applied with
respect to the particular form or forms of payment under this Plan.  For purposes of this Plan, the following
shall be used in any actuarial calculations: 
(a) the 1983 GAM rate tables for males and females, and (b) an annual rate
equal to 6%.  For purposes of this Plan,
the standard form of benefit shall be a Life Annuity as set forth in Article 4.

 

1.2           “Average Compensation” shall mean the highest average of a
Participant’s Compensation for any two (2) full calendar years of
employment with the Employer (or, if a Participant has been employed for less
than two (2) full calendar years, the actual number of the Participant’s
full calendar years of employment with the Employer) out of the last three (3) full
calendar years of employment immediately prior to the Participant’s
Determination Date.

 

1.3           “Beneficiary” or “Beneficiaries” shall mean one or
more persons, trusts, estates or other entities designated in accordance with Article 10
that is entitled to receive benefits under this Plan upon the death of a
Participant.

 

1.4           “Beneficiary Designation Form” shall mean the form
established from time to time by the Committee that a Participant completes,
signs and returns to the Committee to designate one or more Beneficiaries.

 

1

 

1.5           “Benefit
Percentage” shall be used to determine a Participant’s SERP Benefit and shall
be calculated on the basis of the Participant’s Years of Service as of the
Determination Date, in accordance with the following schedule:

 

	
  Years of Service

  	
   

  	
  Benefit Percentage

  
	
  1

  	
   

  	
  2.50%

  
	
  2

  	
   

  	
  5.00%

  
	
  3

  	
   

  	
  7.50%

  
	
  4

  	
   

  	
  10.00%

  
	
  5

  	
   

  	
  12.50%

  
	
  6

  	
   

  	
  15.00%

  
	
  7

  	
   

  	
  17.50%

  
	
  8

  	
   

  	
  20.00%

  
	
  9

  	
   

  	
  22.50%

  
	
  10

  	
   

  	
  25.00%

  
	
  11

  	
   

  	
  27.50%

  
	
  12

  	
   

  	
  30.00%

  
	
  13

  	
   

  	
  32.50%

  
	
  14

  	
   

  	
  35.00%

  
	
  15

  	
   

  	
  37.50%

  
	
  16

  	
   

  	
  40.00%

  
	
  17

  	
   

  	
  42.50%

  
	
  18

  	
   

  	
  45.00%

  
	
  19

  	
   

  	
  47.50%

  
	
  20

  	
   

  	
  50.00%

  
	
  21

  	
   

  	
  52.50%

  
	
  22

  	
   

  	
  55.00%

  
	
  23

  	
   

  	
  57.50%

  
	
  24 or more

  	
   

  	
  60.00%

  

 

The
maximum Benefit Percentage used for purposes of determining a Participant’s
SERP Benefit shall be fifty percent (50%); provided, however, that the maximum
Benefit Percentage used for purposes of determining the SERP Benefit for each
of Maurice Marciano and Paul Marciano shall be sixty percent (60%).

 

1.6           “Board” shall mean the board of directors of the
Company.

 

1.7           “Change in Control” shall mean a change in the
ownership or effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of
the Code and related Treasury guidance.

 

1.8           “Change in Control Benefit” shall mean the benefit
set forth in Section 3.4.

 

1.9           “Claimant” shall have the meaning set forth in Section 9.1.

 

2

 

1.10         “Code” shall
mean the Internal Revenue Code of 1986, as it may be amended from time to time.

 

1.11         “Committee” shall mean the committee described in Article 8.

 

1.12         “Company” shall mean Guess?, Inc., a Delaware
corporation, and any successor to all or substantially all of the Company’s
assets or business.

 

1.13         “Compensation” shall mean the annual base salary and
bonus paid to a Participant pursuant to the Guess?, Inc. Annual Incentive
Bonus Plan and/or such other bonus or incentive arrangement designated by the
Committee, and such other cash-based compensation specifically designated as
Compensation hereunder by the Committee.  Except for any such cash-based compensation
specifically designated by the Committee as Compensation, Compensation shall
not include commissions, overtime, fringe benefits, stock options and other
equity-based awards, relocation expenses, non-monetary awards, director fees
and other fees, airplane benefits and automobile and other allowances (whether
or not such allowances are included in the Participant’s gross income).  Annual base salary and bonus amounts shall be
calculated before reduction for compensation deferred pursuant to all
qualified, non-qualified and Code Section 125 plans of the Employer;
provided, however, that all such amounts will be included in compensation only
to the extent that had there been no such plan, the amount would have been
payable in cash to the Participant.

 

1.14         “Death
Benefit” shall mean the benefits due, if any, to a Participant’s Beneficiary
pursuant to Article 3 upon the Participant’s death.

 

1.15         “Determination Date” shall mean, for purposes of
calculating the SERP Benefit, the first to occur of a Participant’s Retirement,
Termination of Employment, death, Disability, or separation from service from
all Employers for any reason within the twelve-month period immediately
following a Change in Control, as applicable.

 

1.16         “Disability” or “Disabled” shall mean that a
Participant is (a) unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, or (b) by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than
twelve (12) months, receiving income replacement benefits for a period of not
less than three (3) months under an accident or health plan covering
employees of the Participant’s Employer.

 

1.17         “Disability Benefit” shall mean the benefit set
forth in Section 3.3.

 

1.18         “Election Form” shall mean the form established from
time to time by the Committee that a Participant completes, signs and returns
to the Committee to make an election under the Plan.

 

1.19         “Employee” shall mean a person who is an employee of
any Employer.

 

1.20         “Employer(s)” shall mean the Company and/or any of
its subsidiaries (now in existence or hereafter formed or acquired) that have
been selected by the Board to participate in the Plan and have adopted the Plan
as a sponsor.

 

3

 

1.21         “ERISA” shall mean the Employee Retirement Income
Security Act of 1974, as it may be amended from time to time.

 

1.22         “Estimated
Social Security Benefit” shall mean the maximum monthly benefit available as of
the Participant’s Social Security “normal retirement age” under the Federal
Social Security Act, based on all assumptions selected by the Committee, in its
sole discretion.  In the event the
Participant’s Determination Date is a date other than his or her Social
Security “normal retirement age”, the Committee shall adjust the
above-described calculation in the manner it deems appropriate, in its sole
discretion, whether or not a monthly benefit is payable to the Participant by
the Social Security Administration on such Determination Date.  The Committee shall, in all events, apply all
assumptions made pursuant to this Section 1.22 consistently to similarly
situated Participants in the Plan.

 

For purposes of determining
a Participant’s Estimated Social Security Benefit, Social Security “normal
retirement age” shall have the same meaning as such term is defined in the Federal
Social Security Act, as amended.

 

1.23         “Fifteen Year Term Certain Life Annuity” shall mean
a benefit that is payable monthly in the form of an annuity for the life of the
Participant or fifteen (15) years, whichever is longer, and that is equal to
the Participant’s SERP Benefit.

 

1.24         “Joint and 50% Survivor Annuity” shall mean a
benefit that is payable monthly in the form of an annuity for the life of the
Participant with a 50% survivor annuity for the life of such Participant’s
Beneficiary, and that is equal to the Participant’s SERP Benefit.

 

1.25         “Life Annuity” shall mean a benefit that is payable
monthly in the form of an annuity for the life of the Participant and that is
equal to the Participant’s SERP Benefit.

 

1.26         “Participant” shall mean any Employee, (i) who
is selected to participate in the Plan, (ii) who submits an executed Plan
Agreement, Election Form and Beneficiary Designation Form, which are
accepted by the Committee, and (iii) whose Plan Agreement has not
terminated.

 

1.27         “Plan” shall mean the Guess?, Inc. Supplemental
Executive Retirement Plan, which shall be evidenced by this instrument and by
each Plan Agreement, as amended from time to time.

 

1.28         “Plan Agreement” shall mean a written agreement, as
may be amended from time to time, which is entered into by and between the
Employer and a Participant.  Each Plan
Agreement executed by a Participant shall provide for the entire benefit to
which such Participant is entitled under the Plan; should there be more than
one Plan Agreement, the Plan Agreement bearing the latest date of acceptance by
the Employer shall supercede all previous Plan Agreements in their entirety and
shall govern such entitlement.  The terms
of any Plan Agreement may be different for any Participant, and any Plan
Agreement may provide additional benefits not set forth in the Plan or limit
the benefits otherwise provided under the Plan; provided, however, that any
such additional benefits or benefit limitations must be agreed upon by both the
Employer and the Participant.

 

1.29         “Plan Year” shall mean a period beginning on January 1
of each calendar year and continuing through December 31 of such calendar
year.

 

1.30         “Retirement” or “Retires” shall mean a Participant’s
separation from service with all Employers as an Employee for any reason other
than an authorized leave of absence, death or Disability, as

 

4

 

determined in accordance with Code Section 409A and related Treasury
guidance, on or after the date on which the Participant has attained age
sixty-five (65).

 

1.31         “Retirement Benefit”
shall mean the benefit set forth in Section 3.1.

 

1.32         “SERP Benefit” shall mean
a monthly amount, payable to a Participant in the form provided in Article 4
and commencing in accordance with the provisions of Article 3.  Notwithstanding the actual commencement date
of the SERP Benefit, the monthly amount shall be fixed and determined and shall
be computed based on the Participant’s Determination Date as follows:

 

(a)       the Participant’s Average Compensation, divided by
twelve (12);

 

(b)       the amount determined in (a) above multiplied
by the Participant’s Benefit Percentage;

 

(c)       the amount determined in (b) above less
the Participant’s Estimated Social Security Benefit;

 

(d)       the amount determined in (c) above multiplied
by the Participant’s Vesting Percentage.

 

1.33         “Ten Year Term Certain Life Annuity” shall mean a
benefit that is payable monthly in the form of an annuity for the life of the
Participant or ten (10) years, whichever is longer, and that is equal to
the Participant’s SERP Benefit.

 

1.34         “Termination
Benefit” shall mean the benefit set forth in Section 3.2.

 

1.35         “Termination
of Employment” or “Terminates Employment” or “Terminated” shall mean a
Participant’s separation from service with all Employers as an Employee,
voluntarily or involuntarily, for any reason other than Retirement, Disability,
death or an authorized leave of absence, as determined in accordance with Code Section 409A
and related Treasury guidance.

 

1.36         “Trust”
shall mean one or more trusts established by the Company in accordance with Article 11.

 

1.37         “Years of
Plan Participation” shall mean the total number of full Plan Years a
Participant has been a Participant in the Plan prior to the Participant’s
Determination Date.  Any partial year shall not be counted.

 

1.38         “Years of
Service” shall mean the total number of full years in which a Participant has
been employed by one or more Employers prior to the Participant’s Determination
Date.  For purposes of this definition, a
year of employment shall be a 365 day period (or 366 day period in the case of
a leap year) that, for the first year of employment, commences on the Employee’s
date of hiring and that, for any subsequent year, commences on an anniversary
of that hiring date.  The Committee shall
make a determination as to whether any partial year of employment shall be
counted as a Year of Service.  The
maximum number of Years of Service that may be used for purposes of determining
a Participant’s Benefit Percentage under this Plan shall be twenty (20) years;
provided, however, that the maximum number of Years of Service that may be used
for purposes of determining the Benefit Percentage for each of Maurice Marciano
and Paul Marciano under this Plan shall be twenty four (24) years.

 

5

 

1.39         “Vesting Percentage” shall be used to determine a
Participant’s SERP Benefit.  A
Participant’s Vesting Percentage shall be determined in accordance with the schedule set
forth in his or her Plan Agreement or any other agreement entered into between
the Participant and his or her Employer. 
If not addressed in such agreements, a Participant’s Vesting Percentage
shall be based on the Participant’s Years of Plan Participation as of the
Determination Date, in accordance with the following schedule:

 

	
  Years of Plan Participation

  	
   

  	
  Vesting Percentage

  
	
  1-5

  	
   

  	
  0%

  
	
  6

  	
   

  	
  20%

  
	
  7

  	
   

  	
  40%

  
	
  8

  	
   

  	
  60%

  
	
  9

  	
   

  	
  80%

  
	
  10 or more

  	
   

  	
  100%

  

 

Notwithstanding
the foregoing, upon death, Disability or a Change in Control, the Participant
shall become fully vested and the Vesting Percentage shall be one hundred
percent (100%); provided, however, the vesting schedule described above
shall not be accelerated upon a Change in Control to the extent that the
Committee determines that such acceleration would cause the deduction
limitations of Section 280G of the Code to apply (unless such Participant
is entitled to a “gross-up” payment to eliminate the effect of the excise tax
under Section 4999 of the Code pursuant to his or her employment agreement
or other agreement entered into between such Participant and the Employer).  In the event of such a determination, the
Participant may request independent verification of the Committee’s
calculations with respect to the application of Code Section 280G.  In such case, the Committee must provide to
the Participant within ninety (90) days of such a request an opinion from a
nationally recognized accounting firm selected by the Participant (the “Accounting
Firm”).  The opinion shall state the
Accounting Firm’s opinion that any limitation in the vested percentage
hereunder is necessary to avoid the limits of Section 280G and contain
supporting calculations.  The cost of
such opinion shall be paid for by the Company.

 

ARTICLE 2 

Eligibility

 

2.1           Selection
by Committee.  Participation in the Plan shall be limited to
a select group of management and highly compensated Employees of an Employer,
as determined by the Committee in its sole discretion.

 

2.2           Enrollment
Requirements.  As a condition to participation, a
Participant shall complete, execute and return to the Committee a Plan Agreement
and a Beneficiary Designation Form, all within the time period specified by the
Committee.  In addition, the Committee
shall establish from time to time such other enrollment requirements as it
determines in its sole discretion are necessary.

 

6

 

2.3           Commencement
of Participation.  Provided that a Participant has met all
enrollment requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within the
specified time period, he or she shall commence participation in the Plan on
the date specified by the Committee.  If
a Participant fails to meet any such requirements within the period required,
in accordance with Section 2.2, he shall not be eligible to participate in
the Plan until the completion of those requirements.

 

ARTICLE 3

Benefits

 

3.1           Retirement
Benefit.  Subject to Section 3.4, a Participant who
Retires shall receive, as his Retirement Benefit, a SERP Benefit in the form
set forth in Article 4.  Retirement Benefit
payments shall commence within sixty (60) days immediately following the last day of the six-month period
immediately following the date on which the Participant Retires.

 

3.2           Termination
Benefit.  Subject to Section 3.4, a Participant who
experiences a Termination of Employment shall receive as his Termination
Benefit, a SERP Benefit in the form set forth in Article 4.  Termination Benefit payments shall commence
within sixty (60) days immediately following the last day of the six-month
period immediately following the date on which the Participant attains age sixty-five
(65).

 

3.3           Disability
Benefit.  If a Participant experiences a Disability
during his employment and prior to such Participant’s attainment of age
sixty-five (65), he shall receive, as his Disability Benefit, a SERP Benefit in
the form of a lump sum that is the Actuarial Equivalent of the Participant’s
SERP Benefit had such SERP Benefit been payable in the form of a Life Annuity
commencing at age sixty-five (65).  If a
Participant experiences a Disability during his employment and on or after such
Participant’s attainment of age sixty-five (65), he shall receive, as his
Disability Benefit, a SERP Benefit in the form set forth in Article 4.  Disability Benefit payments shall commence within
sixty (60) days following the date on which the Participant experiences a
Disability.

 

3.4           Change
in Control Benefit.  If
a Participant experiences a separation from service with all Employers as an
Employee for any reason within the twelve-month period immediately following a Change
in Control, the Participant shall receive as his Change in Control Benefit, a
SERP Benefit in the form of a lump sum that is the Actuarial Equivalent of the
Participant’s SERP Benefit had such benefit been payable in the form set forth
in Article 4.  The Change in Control
Benefit payment shall be made within sixty (60) days immediately following the last day of the six-month period
immediately following the date on which the Participant experiences such a separation from service.

 

3.5           Death Prior to the Commencement of Benefits.  If a Participant who is
entitled to a benefit pursuant to this Plan should die prior to the date on
which his benefit payment is scheduled to commence, the form in which the Participant
elected to receive such benefit shall determine the amount, if any, payable to
such Participant’s Beneficiary as a Death Benefit.  The Death Benefit, if any, shall be a SERP
Benefit in the form of a lump sum that is the Actuarial Equivalent of the

 

7

 

Participant’s
SERP Benefit.  Payment of the Death
Benefit, if any, will be made to the Beneficiary no later than sixty (60) days
after the date of the Participant’s death.

 

3.6           Death
After the Commencement of Benefits.  If a Participant dies after his benefits have
commenced, the form in which such Participant’s benefits have been paid shall
determine the amount, if any, and the form of the Death Benefit payable to such
Participant’s Beneficiary.

 

3.7           Limitation on Benefits. 
Notwithstanding the foregoing provisions of this Article 3, in no
event shall a Participant or his Beneficiary receive more than one form of
benefit under this Article 3.

 

3.8           Withholding and Payroll Taxes.  The Employer shall withhold from any and all
benefits made under this Article 3, or from cash compensation if
withholding is required prior to payment of benefits, all federal, state, local
or foreign income, employment and other taxes required to be withheld by the
Employer in connection with the benefits hereunder, in amounts to be determined
in the sole discretion of the Employer.

 

ARTICLE 4

Forms of Benefit Payment

 

4.1           Normal Form of
Benefits.  Except as provided in Article 3, a
Participant who is entitled to receive a SERP Benefit pursuant to this Plan
shall receive such benefit in the form of a Life Annuity unless an optional
form of benefit payment is elected by a Participant in accordance with Section 4.2.

 

4.2           Optional
Form of Benefits.  A Participant may elect, in connection with
his commencement of participation in the Plan, to receive his SERP Benefit  in a form other than a Life Annuity by
electing to receive such benefit in the form of a (i) Ten Year Term
Certain Life Annuity, (ii) Fifteen Year Term Certain Life Annuity, or (iii) Joint
and 50% Survivor Annuity; provided, however, that the Participant’s SERP
Benefit will be increased or decreased, as applicable, to be a benefit that is
the Actuarial Equivalent of a Life Annuity, and which reflects the actual form
of benefit payment elected by the Participant pursuant to this Section 4.2.  If a Participant does not make any election in
connection with his commencement of participation in the Plan with respect to
the form of the benefit in accordance with this Section 4.2, then such
Participant shall be deemed to have elected to receive such benefit as a Life
Annuity in accordance with Section 4.1.

 

4.3           Changes
to Form of SERP Benefit.  A Participant may change the form of his SERP
Benefit from a Life Annuity to an allowable form provided in Section 4.2
by submitting an Election Form to the Committee in accordance with the
following criteria:

 

(i)            The election shall
have no effect until at least twelve (12) months after the date on which the
election is made; and

 

(ii)           The first benefit payment
(excluding payments made upon the Participant’s death or Disability) shall be
delayed at least five (5) years from the date on which such payment would
otherwise have been made.

 

8

 

Notwithstanding
the foregoing, the Committee shall interpret all provisions relating to a
Participant’s election to change the form of his SERP Benefit under this Section 4.3
in a manner that is consistent with Code Section 409A and related Treasury
guidance.

 

The Election Form most
recently accepted by the Committee shall govern the payout of the SERP Benefit.

 

ARTICLE 5

Forfeiture

 

5.1           Forfeiture.  Notwithstanding
any provision of this Plan to the contrary, the right of a Participant and his
Beneficiaries to be eligible to receive or to continue to receive benefits
hereunder is expressly conditioned upon the Participant not violating any noncompete
provisions contained in the Participant’s Plan Agreement.  If the Committee determines that a Participant
has violated the terms of this Section 5.1, the Participant and his or her
Beneficiaries shall forfeit any benefits not yet received under this Plan and
shall be required to repay to the Employer any benefits already received from
the Plan.

 

ARTICLE 6

Termination of Plan Participation, Amendment or Modification of the Plan

 

6.1           Termination
of Plan Participation.  Although each Employer anticipates that it
will continue the Plan for an indefinite period of time, there is no guarantee
that any Employer will continue the Plan or will not terminate the Plan at any
time in the future.  Accordingly, each
Employer reserves the right to terminate the participation in the Plan as to some
or all of the Participants at any time. 
Following the termination of participation in the Plan, (i) each
affected Participant’s SERP Benefit shall stop accruing (except for necessary
actuarial adjustments), and (ii) each Participant’s SERP Benefit (determined
without regard to any increases in Compensation, Years of Service or Years of
Plan Participation after the termination of the participation in the Plan) shall
commence no sooner than the date on which the Participant or his Beneficiary becomes
eligible to receive such benefit in accordance with Articles 3 and 4 of the Plan.

 

Notwithstanding the foregoing, to the extent
permissible under Code Section 409A and related Treasury guidance,
following a Change in Control each Employer may, in its discretion, terminate the
participation in the Plan with respect to all Participants and distribute benefits
to the Participants in the form of a lump sum that is the Actuarial Equivalent
of each Participant’s SERP Benefit, determined as of the date of the
termination of participation in the Plan (without regard to any increases in
Compensation, Years of Service or Years of Plan Participation after such date),
provided that the distribution of the Participants’ benefits are made no later
than six (6) months after the Change in Control.

 

The termination of participation in the Plan
accordance with this Section 6.1 shall not adversely affect any
Participant or Beneficiary who has become entitled to the payment of any
benefits under the Plan as of the date of such termination of participation.

 

9

 

6.2           Amendment.

 

(a)           The Board may, at any time, amend or modify the Plan in whole
or in part.  Notwithstanding the
foregoing, (i) no amendment or modification shall be effective to reduce
any benefits a Participant has become entitled to as of the date the amendment
or modification is made, and (ii) no amendment or modification of this Section 6.2
shall be effective.

 

(b)           If a Participant’s Plan Agreement contains benefits
or limitations that are not in this Plan document, the Board may amend or
terminate such provisions with the written consent of the Participant.

 

(c)           Notwithstanding any provision of the Plan to the
contrary, in the event that the Committee or the Board determines that any
provision of the Plan or any Plan Agreement may cause amounts deferred under
the Plan to become immediately taxable to any Participant under Code Section 409A
and related Treasury guidance, the Board may (i) adopt such amendments to
the Plan, Plan Agreement and appropriate policies and procedures, including
amendments and policies with retroactive effect, that are determined to be necessary
or appropriate to preserve the intended tax treatment of the Plan benefits
provided by the Plan and/or (ii) take such other actions that are determined
to be necessary or appropriate to comply with the requirements of Code Section 409A
and related Treasury guidance.

 

6.3           Effect
of Payment.  Absent the earlier termination, modification
or amendment of the Plan, the full payment of the applicable benefit as
provided under Articles 3 and 4 of the Plan shall completely discharge all
obligations to a Participant and his Beneficiaries under this Plan and the
Participant’s Plan Agreement shall terminate.

 

ARTICLE 7

Other Benefits and Agreements

 

7.1           Coordination
with Other Benefits.  The benefits
provided for a Participant and such Participant’s Beneficiaries under this Plan
are in addition to any other benefits available to the Participant under any
other plan or program for employees of the Participant’s Employer.  The Plan shall supplement and shall not supersede,
modify or amend any other such plan or program except as may otherwise be
expressly provided.

 

ARTICLE 8

Administration of the Plan

 

8.1           Committee
Duties.  This Plan shall be administered by a
Committee, which shall consist of the Compensation Committee of the Board.  Members of the Committee may not be
Participants under this Plan. The Committee shall also have the discretion and
authority to (a) make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Plan and (b) decide or resolve
any and all questions including interpretations of this Plan, and find facts
necessary to make such determinations as may arise in connection with the
Plan.  When making a

 

10

 

determination or calculation, the Committee shall be entitled to rely on
information furnished by the Participant, the Employer or appropriate experts,
including agents and actuarial experts. 
The Committee may, in its sole discretion and from time to time,
delegate any administrative or ministerial duties related to the Plan to any
officers or staff of the Company.

 

8.2           Agents.  In the
administration of this Plan, the Committee may, from time to time, employ
agents and delegate to them such administrative duties as it sees fit
(including acting through a duly appointed representative) and may from time to
time consult with counsel who may but need not be counsel to the Company.

 

8.3           Binding
Effect of Decisions.  The decision or
action of the Committee with respect to any question arising out of or in
connection with the administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the Plan.

 

8.4           Indemnity
of Committee.  All Employers shall
indemnify and hold harmless the members of the Committee and any Employee to
whom duties of the Committee may be delegated in accordance with Section 8.1,
from any and all claims, losses, damages, expenses or liabilities arising from
any action or failure to act with respect to this Plan, except in the case of
willful misconduct by any such member of the Committee or any such Employee who
seeks indemnification hereunder.

 

8.5           Company
Information.  To enable the
Committee to perform its functions, the Company and each Employer shall supply
full and timely information to the Committee on all matters relating to the
compensation of its Participants, the date and circumstances of the Retirement,
Disability, death or Termination of Employment of its Participants, and such
other pertinent information as the Committee may reasonably require.

 

ARTICLE 9

Claims Procedures

 

9.1           Presentation of Claim.  Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a “Claimant”)
may deliver to the Committee a written claim for a determination with respect
to the amounts distributable to such Claimant from the Plan.  If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within sixty
(60) days after such notice was received by the Claimant.  All other claims must be made within
180 days of the date on which the event that caused the claim to arise
occurred.  The claim must state with
particularity the determination desired by the Claimant.

 

9.2           Notification of Decision.  The Committee shall consider a Claimant’s
claim within a reasonable time, but no later than ninety (90) days after
receiving the claim.  If the Committee
determines that special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished to the
Claimant prior to the termination of the initial ninety (90) day period.  In no event shall such extension exceed a
period of ninety (90) days from the end of the initial period.  The extension notice shall indicate the
special circumstances requiring an

 

11

 

extension of time
and the date by which the Committee expects to render the benefit
determination.  The Committee shall
notify the Claimant in writing:

 

(a)           that the Claimant’s
requested determination has been made, and that the claim has been allowed in
full; or

 

(b)           that the Committee has
reached a conclusion contrary, in whole or in part, to the Claimant’s requested
determination, in which case such notice must set forth in a manner calculated
to be understood by the Claimant:

 

(i)            the specific reason(s)
for the denial of the claim, or any part of it;

 

(ii)           specific reference(s)
to pertinent provisions of the Plan upon which such denial was based;

 

(iii)          a description of any
additional material or information necessary for the Claimant to perfect the
claim, and an explanation of why such material or information is necessary;

 

(iv)          an explanation of the
claim review procedure set forth in Section 9.3 below; and

 

(v)           a statement of the
Claimant’s right to bring a civil action under ERISA Section 502(a) following
an adverse benefit determination on review.

 

9.3           Review of a Denied Claim.  On or before sixty (60) days after
receiving a notice from the Committee that a claim has been denied, in whole or
in part, a Claimant (or the Claimant’s duly authorized representative) may file
with the Committee a written request for a review of the denial of the
claim.  The Claimant (or the Claimant’s
duly authorized representative):

 

(a)           may, upon request and
free of charge, have reasonable access to, and copies of, all documents,
records and other information relevant to the claim for benefits;

 

(b)           may submit written
comments or other documents; and/or

 

(c)           may request a hearing,
which the Committee, in its sole discretion, may grant.

 

9.4           Decision on Review.  The Committee shall render its decision on
review promptly, and no later than sixty (60) days after the Committee
receives the Claimant’s written request for a review of the denial of the
claim.  If the Committee determines that
special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial sixty (60) day period. In no event shall such
extension exceed a period of sixty (60) days from the end of the initial
period.  The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which
the Committee expects to render the benefit determination.  In rendering its decision, the Committee
shall take into account all comments, documents, records and other information
submitted by the Claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.  The decision must be
written in a manner calculated to be understood by the Claimant, and it must
contain:

 

(a)           specific reasons for
the decision;

 

(b)           specific reference(s)
to the pertinent Plan provisions upon which the decision was based;

 

12

 

(c)                                a
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the
Claimant’s claim for benefits; and

 

(d)           a statement of the
Claimant’s right to bring a civil action under ERISA Section 502(a).

 

9.5           Legal Action.  A Claimant’s compliance with the foregoing
provisions of this Article 9 is a mandatory prerequisite to a Claimant’s
right to commence any legal action with respect to any claim for benefits under
this Plan.

 

ARTICLE 10

Beneficiary Designation

 

10.1         Beneficiary.  Each
Participant shall have the right, at any time, to designate his
Beneficiary(ies) (both primary as well as contingent) to receive any Death
Benefits payable under the Plan to a beneficiary upon the death of the
Participant.  The Beneficiary(ies)
designated under this Plan may be the same as or different from the
Beneficiary(ies) designated under any other plan of an Employer in which the
Participant participates.

 

10.2         Beneficiary
Designation; Change; Spousal Consent.  A Participant shall designate his
Beneficiary(ies) by completing and signing the Beneficiary Designation Form,
and returning it to the Committee or its designated agent.  A Participant shall have the right to change
a Beneficiary by completing, signing and otherwise complying with the terms of
the Beneficiary Designation Form and the Committee’s rules and
procedures, as in effect from time to time. 
If the Participant names someone other than his spouse as a Beneficiary,
the Committee may, in its sole discretion, determine that spousal consent is
required to be provided in a form designated by the Committee, executed by such
Participant’s spouse and returned to the Committee.  Upon the acceptance by the Committee of a new
Beneficiary Designation Form, all Beneficiary designations previously filed
shall be cancelled.  The Committee shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Committee prior to his death.

 

10.3         Acknowledgment.  No
designation or change in designation of a Beneficiary shall be effective until
received and acknowledged in writing by the Committee or its designated agent.

 

10.4         No
Beneficiary Designation.  If a Participant fails to designate a
Beneficiary as provided in Sections 10.1, 10.2, and 10.3 above, or if all
designated Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant’s benefits, then the Participant’s designated
Beneficiary shall be deemed to be his surviving spouse. If the Participant has
no surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the
Participant’s estate.

 

10.5         Doubt
as to Beneficiary.  If the Committee has any doubt as to the
proper Beneficiary(ies) to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, to cause the
Participant’s Employer to withhold such payments until this matter is resolved
to the Committee’s satisfaction.

 

10.6         Discharge
of Obligations.  The payment of benefits under the Plan to a
Participant’s Beneficiary(ies) shall fully and completely discharge all
Employers and the Committee from all

 

13

 

further obligations under this Plan with respect to the Participant, and
that Participant’s Plan Agreement shall terminate upon such full payment of
benefits.

 

ARTICLE 11

Trust

 

11.1         Establishment
of the Trust.  In order to
provide assets from which to fulfill the obligations of the Participants and
their Beneficiaries under the Plan, the Company may establish a Trust by a
trust agreement with a third party, the trustee, to which each Employer may, in
its discretion, contribute cash or other property to the Trust in order to
provide for the benefits payments under the Plan.

 

11.2         Interrelationship
of the Plan and the Trust.  The
provisions of the Plan and the Plan Agreement shall govern the rights of the
Participants to receive distributions pursuant to the Plan.  The provisions of the Trust, if any, shall
govern the rights of the Employers, the Participants and the creditors of the
Employers to the assets transferred to the Trust.  Each Employer shall at all times remain
liable to carry out its obligations under the Plan.

 

11.3         Distributions
From the Trust.  Each
Employer’s obligations under the Plan may be satisfied with Trust assets
distributed pursuant to the terms of the Trust, if any, and any such
distribution shall reduce the Employer’s obligations under this Plan.

 

ARTICLE 12

Miscellaneous

 

12.1         Status of the Plan.  The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a), and is intended to be
“unfunded and maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1).  The Plan shall be
administered and interpreted (i) to the extent possible in a manner
consistent with the intent described in the preceding sentence, and (ii) in
accordance with Code Section 409A and other applicable tax law, including
but not limited to Treasury Regulations promulgated pursuant to Code Section 409A.

 

12.2         Unsecured General Creditor.  Participants and their Beneficiaries, heirs,
successors and assigns shall have no legal or equitable rights, interests or
claims in any property or assets of an Employer.  For purposes of the payment of benefits under
this Plan, any and all of an Employer’s assets shall be, and remain, the
general, unpledged unrestricted assets of the Employer.  An Employer’s obligation under the Plan shall
be merely that of an unfunded and unsecured promise to pay money in the future.

 

12.3         Employer’s Liability.  An Employer’s liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as entered
into between the Employer and a Participant. 
An Employer shall have no obligation to the Participant under the Plan
except as expressly provided in the Plan and his Plan Agreement.

 

14

 

12.4         Nonassignability.  Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in
advance of actual receipt, the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are, expressly declared to be,
unassignable and non-transferable.  No
part of the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any other
person, be transferable by operation of law in the event of a Participant’s or
any other person’s bankruptcy or insolvency or be transferable to a spouse as a
result of a property settlement or otherwise.

 

12.5         Not a Contract of Employment.  The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between any Employer and
the Participant.  Such employment is
hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without cause, and
with or without notice, unless expressly provided in a written employment
agreement.  Nothing in this Plan shall be
deemed to give a Participant the right to be retained in the service of any
Employer or to interfere with the right of any Employer to discipline or
discharge a Participant at any time.

 

12.6         Furnishing Information.  A Participant or his Beneficiary will
cooperate with the Committee by furnishing any and all information requested by
the Committee and take such other actions as may be requested in order to
facilitate the administration of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as
the Committee may deem necessary.

 

12.7         Terms.  Whenever any words are used herein in the
masculine, they shall be construed as though they were in the feminine in all
cases where they would so apply; and wherever any words are used herein in the
singular or in the plural, they shall be construed as though they were used in
the plural or the singular, as applicable, in all cases where they would so
apply.

 

12.8         Captions.  The captions of the articles, sections and
paragraphs of this Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.

 

12.9         Governing Law.  Subject to ERISA, the provisions of this Plan
shall be construed and interpreted according to the internal laws of the State
of Delaware without regard to its conflict of laws principles.

 

12.10       Notice.  Any notice or filing required or permitted to
be given to the Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below: 

 

	
  Guess?, Inc.

  
	
  Director
  of Human Resources

  
	
  1444
  South Alameda Street

  
	
  Los
  Angeles, CA 90021

  

 

Such
notice shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration
or certification.

 

15

 

Any
notice or filing required or permitted to be given to a Participant under this
Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to
the last known address of the Participant.

 

12.11       Successors.  The
provisions of this Plan shall bind and inure to the benefit of each Participant’s
Employer and its successors and assigns and such Participant and the
Participant’s designated Beneficiaries.

 

12.12       Spouse’s Interest.  The interest
in the benefits hereunder of a spouse of a Participant who has predeceased the
Participant shall automatically pass to the Participant and shall not be
transferable by such spouse in any manner, including but not limited to such
spouse’s will, nor shall such interest pass under the laws of intestate
succession.

 

12.13       Validity.  In case any provision of this Plan shall be
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal and invalid provision had never been inserted
herein.

 

12.14       Incompetent.  If the
Committee determines in its discretion that a benefit under this Plan is to be
paid to a minor, a person declared incompetent or to a person incapable of
handling the disposition of that person’s property, the Committee may direct
payment of such benefit to the guardian, legal representative or person having
the care and custody of such minor, incompetent or incapable person.  The Committee may require proof of minority,
incompetency, incapacity or guardianship, as it may deem appropriate, prior to
distribution of the benefit.  Any payment
of a benefit shall be a payment for the account of the Participant and the
Participant’s Beneficiary, as applicable, and shall be a complete discharge of
any liability under the Plan for such payment amount.

 

12.15       Court Order.  The
Committee is authorized to comply with any court order in any action in which
the Plan or Committee has been named as a party, including any action involving
a determination of the rights or interests in a Participant’s benefits under
the Plan.  Notwithstanding the foregoing,
the Committee shall interpret this provision in a manner that is consistent
with applicable tax law, including but not limited to guidance issued after the
effective date of this Plan.

 

12.16       Insurance.  The
Employers, on their own behalf or, if applicable, on behalf of the trustee of
the Trust, and, in their sole discretion, may apply for and procure insurance
on the life of a Participant, in such amounts and in such forms as the Employer
or trustee of the Trust may elect.  The
Employers or the trustee of the Trust, as applicable, shall be the sole owner
and beneficiary of any such insurance. 
The Participant shall have no interest whatsoever in any such policy or
policies, and at the request of the Employers shall submit to medical
examinations and supply such information and execute such documents as may be
required by the insurance company or companies to whom the Employers have
applied for insurance.

 

12.17       Legal Fees To Enforce Rights After Change in
Control.  The Company and
each Employer is aware that upon the occurrence of a Change in Control, the
Board or the board of directors of a Participant’s Employer (which might then
be composed of new members) or a shareholder of the Company or the Participant’s
Employer, or of any successor corporation might then cause or attempt to cause
the Company, the Participant’s Employer or such successor to refuse to comply

 

16

 

with its
obligations under the Plan and might cause or attempt to cause the Company or
the Participant’s Employer to institute, or may institute, litigation seeking
to deny Participants the benefits intended under the Plan.  In these circumstances, the purpose of the
Plan could be frustrated.  Accordingly,
if, following a Change in Control, (i) a Participant or Beneficiary
institutes any litigation or other legal action which seeks to recover benefits
under the Plan or which otherwise asserts that the Committee, the Company, the
Employer or any successor entity to the Company or the Employer has failed to
comply with any of its obligations under this Plan or any agreement thereunder
with respect to such Participant or Beneficiary, or if the Committee, the
Company, the Employer or any other person takes any action to declare this Plan
void or unenforceable or institutes any litigation or other legal action
designed to deny, diminish or to recover from any Participant or Beneficiary
the benefits intended to be provided under the Plan, and (ii) the
Participant or Beneficiary retains counsel in connection with such litigation
or legal action, then, if the final decision of a court of competent jurisdiction
determines that the Participant or Beneficiary has prevailed with respect to
all or part of such litigation or legal action the Company and such Employer
(who shall be jointly and severally liable) shall be required to pay the
reasonable attorneys fees and expenses of the Participant or Beneficiary in
connection with the initiation or defense of such litigation or legal action
with respect to such matters, whether by or against the Committee, the Company,
the Employer or any director, officer, shareholder or other person affiliated
with the Company, the Employer or any successor thereto in any jurisdiction.

 

 

IN
WITNESS WHEREOF, this Plan document is adopted as of October 31, 2005.

 

	
   

  	
  “Company”

  
	
   

  	
   

  
	
   

  	
  Guess?, Inc., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Carlos Alberini

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  Carlos Alberini

  
	
   

  	
  Title:  President and Chief
  Operating Officer

  

 

17Exhibit 10.68

 

GUESS?,
INC.

 

WRITTEN
DESCRIPTION OF PERFORMANCE-BASED BONUS CRITERIA

FOR PAUL MARCIANO

 

On September 27, 2005, the following cash
bonus awards were authorized by the Compensation Committee of the Board of
Directors of Guess?, Inc. (the “Company”) to be paid to Paul Marciano,
Co-Chairman of the Board and Co-Chief Executive Officer of the Company, under
the Company’s 2004 Equity Incentive Plan (the “Incentive Plan”) if the
specified levels of earnings from operations for the Company’s licensing
segment with respect to the fourth quarter of 2005 and the 2006, 2007 and 2008
calendar years are achieved:

 

	
  Performance Period

  	
   

  	
  Incentive
  Compensation Award

  
	
  Fourth
  Quarter 2005

  	
   

  	
  $3.0
  million (payable only upon certification of achievement of performance
  standard for fourth quarter 2005)

  
	
   

  	
   

  	
   

  
	
  2006
  Calendar Year

  	
   

  	
  $1.3
  million (payable only upon certification of achievement of performance
  standard for 2006 calendar year)

  
	
   

  	
   

  	
   

  
	
  2007
  Calendar Year

  	
   

  	
  $1.5
  million (payable only upon certification of achievement of performance
  standard for 2007 calendar year)

  
	
   

  	
   

  	
   

  
	
  2008
  Calendar Year

  	
   

  	
  $3.5
  million (payable only upon certification of (i) achievement of performance
  standard for 2008 calendar year and (ii) receipt by the Company of the $35.0
  million payment due in January 2012 pursuant to the license agreement with
  the Company’s watch licensee)

  

 

All such potential awards are intended to
qualify as performance-based compensation within the meaning of Internal
Revenue Code Section 162(m).  Such
potential awards are in addition to any other performance-based awards for
which Paul Marciano is eligible under the Incentive Plan, the Company’s Annual
Incentive Bonus Plan or otherwise.

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