AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

(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 (5 th ) 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.  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 200% 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 300% 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.  In addition to the Bonus, the Executive shall retain the special bonus opportunity (the “Licensing Bonus”) awarded by the Compensation Committee to the Executive on September 27, 2005, as modified by an action by written consent of the Compensation Committee dated as of November 1, 2005, with respect to the performance of the Company’s licensing segment.  The Compensation Committee may, in its sole discretion, award additional bonuses to the Executive.

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5.                                       EQUITY BASED INCENTIVE AWARDS .

(a)                                 EMPLOYMENT INDUCEMENT AWARD.  The Company shall grant the Executive under the Equity Plan as of January 1, 2007 a Restricted Stock Award (“Restricted Stock”) equal to 500,000 shares of the Company’s common stock subject to the following terms and conditions:

(i)                                      If in any whole Fiscal Year commencing on or after January 1, 2007 and during the Employment Term, the Company shall record earnings per share (“Earnings per Share”) growth of greater than the Applicable Annual Target as compared to the immediately preceding Fiscal Year, then 20% of the Restricted Stock shall become vested as of the first business day following the issuance of the Company’s financial statement for such year, provided the Executive is then employed by the Company.  If the Earnings per Share growth requirement is not met for any such year, all of the shares of the Restricted Stock eligible for vesting for that year shall vest on the first business day following the issuance of the Company’s financial statement for any subsequent Fiscal Year during the Original Employment Term if the cumulative compound average Earnings per Share growth after the 2006 Fiscal Year through such subsequent Fiscal Year is more than the Applicable Cumulative Target for such subsequent Fiscal Year.  The “Applicable Annual Target” for each of the first, second and third whole Fiscal Years that commences on or after January 1, 2007 is a growth in Earnings per Share of 15% or more as compared to the immediately preceding Fiscal Year.  The “Applicable Cumulative Target” for each of the first, second and third whole Fiscal Years that commences on or after January 1, 2007 is a 15% rate of cumulative compound average Earnings per Share growth.  The “Applicable Annual Target” and the “Applicable Cumulative Target” for each of the fourth and fifth whole Fiscal Years that commences on or after January 1, 2007 will be a rate of Earnings per Share growth and cumulative compound average Earnings per Share growth, respectively, determined by the Compensation Committee of the Board in its sole discretion not later than the end of the first quarter of such Fiscal Year.

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(ii)                                   For purposes of this Agreement, Earnings per Share shall be equal to the basic earnings per share calculated in accordance with accounting principles generally accepted in the United States and as reported in the Company’s financial statements as filed with the Securities and Exchange Commission, except that certain adjustments may be made for certain non-recurring or unusual non-cash items recognized in accordance with accounting principles generally accepted in the United States including, but not limited to, any write-offs of unamortized deferred financing costs and any asset impairment write-downs, which the Committee determines in its sole discretion to exclude for purposes of this Agreement.

(iii)                              The Executive shall have the right to vote the shares of the Restricted Stock, and shall have dividend rights as to such shares, before any forfeiture of the shares of the Restricted Stock and while such shares are restricted.  The number of shares credited to the Executive shall be subject to adjustment in accordance with the provisions of the Equity Plan (for example, in connection with the payment of a stock dividend by the Company).

(iv)                               The shares of the Restricted Stock not yet vested or forfeited shall become 100% vested in the event that the Executive dies or becomes Disabled (within the meaning of Section 7(a)) or there is a Change in Control, in each case while employed by the Company or an affiliate during the Employment Term.  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.  If the Executive terminates his employment with the Company for “Good Reason” (as defined in Section 7(e) of this Agreement), or is terminated by the Company without “Cause” (as defined in Section 7(c) of this Agreement) or for Disability, the shares of the Restricted Stock not yet vested or forfeited shall become 100% vested.

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(v)                                  In all events other than those previously addressed in Section 5(a)(iv), if the Executive ceases to be an employee of the Company or an affiliate, the Executive shall be vested only as to that percentage of shares of the Restricted Stock which are vested at the time of the termination of his employment and the Executive shall forfeit the right to the shares of the Restricted Stock which are not yet vested on the termination date.  Further, any Restricted Stock which is unvested at the conclusion of the Original Employment Term shall be forfeited and terminate.  Unvested shares of the Restricted Stock that are forfeited shall be immediately transferred to the Company without any payment by the Company, and the Company shall have the full right to cancel any evidence of the Executive’s ownership of such forfeited shares.

(vi)                               The Restricted Stock Award shall be granted pursuant to and, to the extent not contrary to the terms of this Agreement, shall be subject to all of the terms and conditions imposed upon such awards granted under the Equity Plan.

(b)                                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 55% (i.e., $550,000 for 2007) and 82.5% (i.e., $825,000 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.

(c)                                 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 55% of the Executive’s Base Salary for such Fiscal Year (i.e., $550,000 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.

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(d)                                DISCRETIONARY GRANTS .  In addition to the Employment Inducement, Performance Share and Stock Option Awards under Section 5(a), (b) and (c) 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 positions 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.

(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.

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(f)                                   LIFE INSURANCE BENEFIT .  The Company will purchase, and will pay the premiums for, life insurance coverage on the Executive’s life with the Executive (or his assignee) as the owner of the policy and with the right to designate the beneficiary of the death benefit.  The premiums paid on the policy shall be imputed as income to the Executive.  Such insurance coverage shall be structured to comply with the requirements of the Sarbanes-Oxley Act and similar legal requirements.  The Executive’s rights pursuant to this Section 6(f) shall be fully vested and non-forfeitable at all times.  The Company shall be obligated in all events to pay all scheduled premium payments unless the Executive dies prior to the end of the last scheduled premium payment.  The Executive’s rights to the policy and any premium payments by the Company shall not be subject to attachment, garnishment, alienation or other similar action by any person to the maximum extent permitted by law.  The Compensation Committee and the Executive will negotiate the other terms and conditions of such insurance coverage in good faith.

(g)                                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.

(h)                                CHANGE IN CONTROL .  In the event there is a “Change in Control” (as such term is defined for purposes of Section 5(a)(iv)), 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 heath” within the meaning of Section 409A(b)(2) of the Code.

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”).

(b)                                  DEATH .  Automatically on the date of death of the Executive.

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(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:

(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 Chief Executive Officer of the Company;

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(C)                                 any failure to nominate or elect the Executive as Chief Executive Officer of the Company 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 ea