Exhibit 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 (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; 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.
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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.
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(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.
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(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”).
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(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:
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(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).
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(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
