Exhibit 10.18
RESTRICTED STOCK AGREEMENT
This RESTRICTED
STOCK AGREEMENT (the “ Agreement ”), dated
as of January 1, 2007 (the “ Date of Grant
”), is entered into by and between GUESS?, INC., a Delaware
corporation (the “ Company ”), and Paul
Marciano (the “ Grantee ”).
RECITALS
WHEREAS , the
Company maintains the Guess?, Inc. 2004 Equity Incentive Plan (the
“ Plan ”).
WHEREAS , the
Compensation Committee of the Company’s Board of Directors
(the “ Committee ”) has determined to grant a
restricted stock award (the “ Award ”) to the
Grantee under the Plan in order to increase Grantee’s
participation in the success of the Company and as an inducement to
enter into the Executive Employment Agreement dated as of January
1, 2007 by and between the Company and the Grantee (the “
Employment Agreement ”);
NOW, THEREFORE ,
the parties hereto agree as follows:
1.
Definitions; Incorporation of Plan Terms . Capitalized
terms used herein without definition shall have the meanings
assigned to them in the Plan. The Award and all rights of the
Grantee under this Agreement are subject to, and the Grantee agrees
to be bound by, all of the terms and conditions of the Plan,
incorporated herein by this reference. In the event of any
conflict or inconsistency between the Plan and this Award
Agreement, the Plan shall govern.
2.
Grant of Restricted Stock . The Grantee shall be
entitled to purchase 500,000 restricted shares of the
Company’s common stock, par value $0.01 per share (the
“ Common Stock ”), pursuant to the terms and
conditions of this Agreement (the “ Restricted Stock
”).
3.
Purchase Price . The Grantee shall pay to the Company,
in cash, an aggregate purchase price of $ 5,000 (the “
Purchase Price ”), which amount is equal to the
aggregate amount of the par value of the Restricted Stock.
Such payment of the Purchase Price shall be made to the Company
within 15 days after the date hereof.
4.
Restricted Period . Subject to Section 7 below, the
Award shall vest and restrictions shall lapse as follows (the
period from the date hereof through each applicable vesting date,
the “ Restricted Period ”):
A.
If in any whole fiscal year of the Company (“ Fiscal
Year ”) commencing on or after January 1, 2007 and during
the Employment Term (as defined in the Employment Agreement), the
Company shall record earnings per share (“ Earnings per
Share ”) growth of greater than the Applicable Annual
Target (as defined below) 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
Grantee 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 (as
defined in Employment Agreement) 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 (as defined below) 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.
B.
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.
5.
Rights of a Stockholder . From and after the Date of
Grant and for so long as the Restricted Stock is held by or for the
benefit of the Grantee, the Grantee shall have all the rights of a
stockholder of the Company with respect to the Restricted Stock,
including but not limited to the right to receive dividends, if
applicable, and the right to vote such shares.
6.
Adjustments Upon Specified Events . Upon the
occurrence of certain events relating to the Company’s Common
Stock contemplated by Section 16(b) of the Plan, the Committee will
make adjustments, if appropriate, in the number and kind of
securities subject to the Award. If any adjustment is made
under Section 16(b) of the Plan, the restrictions applicable to the
shares of Restricted Stock shall continue in effect with respect to
any consideration or other securities (the “ Restricted
Property ” and, for the purposes of this Award Agreement,
“Restricted Stock” shall include “Restricted
Property,” unless the context otherwise requires) received in
respect of such Restricted Stock. Such Restricted Property
shall vest at such times in such proportion as the shares of
Restricted Stock to which the Restricted Property is
attributable. To the extent that the Restricted Property
includes any cash (other than regular cash dividends provided for
in Section 5 hereof), such cash shall be invested, pursuant to
policies established by the
2
Committee, in interest
bearing, FDIC-insured (subject to applicable insurance limits)
deposits of a depository institution selected by the Committee, the
earnings on which shall be added to and become a part of the
Restricted Property.
7.
Effect of Cessation of Employment .
A.
The shares of the Restricted Stock not yet vested or forfeited
shall become 100% vested in the event that the Grantee dies or
becomes Disabled (as defined in Section 7(a) of the Employment
Agreement) or there is a Change in Control (as defined below), 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 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 (as defined below) of such Common Stock or Combined
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