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Delaware
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95-3679695
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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1444 South Alameda Street
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Los Angeles, California
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90021
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
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GUESS?, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
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|||||||
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Apr 29,
2017 |
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Jan 28,
2017 |
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(unaudited)
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||||
ASSETS
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|
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Current assets:
|
|
|
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Cash and cash equivalents
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$
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316,395
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$
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396,129
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Accounts receivable, net
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193,643
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|
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225,537
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Inventories
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402,673
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367,381
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Other current assets
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66,695
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54,965
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Total current assets
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979,406
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1,044,012
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Property and equipment, net
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245,131
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243,005
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Goodwill
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34,560
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34,100
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Other intangible assets, net
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6,269
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6,504
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Deferred tax assets
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82,593
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82,793
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Restricted cash
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1,529
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1,521
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Other assets
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122,636
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122,550
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$
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1,472,124
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$
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1,534,485
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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|
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Current liabilities:
|
|
|
|
|
|
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Current portion of borrowings
|
$
|
571
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|
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$
|
566
|
|
Accounts payable
|
207,215
|
|
|
209,616
|
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Accrued expenses
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116,780
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|
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135,271
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Total current liabilities
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324,566
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345,453
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Long-term debt
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23,322
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23,482
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Deferred rent and lease incentives
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79,973
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80,209
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Other long-term liabilities
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99,351
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99,895
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527,212
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549,039
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Redeemable noncontrolling interests
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5,585
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|
4,452
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|
||||
Commitments and contingencies (Note 12)
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|
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Stockholders’ equity:
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Preferred stock, $.01 par value. Authorized 10,000,000 shares; no shares issued and outstanding
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—
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—
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Common stock, $.01 par value. Authorized 150,000,000 shares; issued
141,166,919
and 140,509,974 shares, outstanding
83,255,709 and 84,069,492 shares, as of April 29, 2017 and January 28, 2017, respectively
|
833
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|
841
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Paid-in capital
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484,506
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480,435
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Retained earnings
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1,174,495
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1,215,079
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Accumulated other comprehensive
loss
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(150,292
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)
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(161,389
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)
|
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Treasury stock,
57,911,210 and 56,440,482 shares as of April 29, 2017 and January 28, 2017, respectively
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(583,426
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)
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(565,744
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)
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Guess?, Inc. stockholders’ equity
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926,116
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969,222
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|
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Nonredeemable noncontrolling interests
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13,211
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11,772
|
|
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Total stockholders’ equity
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939,327
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|
980,994
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$
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1,472,124
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$
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1,534,485
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GUESS?, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
|
|||||||
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Three Months Ended
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||||||
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Apr 29,
2017 |
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Apr 30,
2016 |
||||
Net loss
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$
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(21,227
|
)
|
|
$
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(25,154
|
)
|
Other comprehensive income (loss) (“OCI”):
|
|
|
|
||||
Foreign currency translation adjustment
|
|
|
|
||||
Gains arising during the period
|
12,835
|
|
|
43,152
|
|
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Derivative financial instruments designated as cash flow hedges
|
|
|
|
||||
Gains (losses) arising during the period
|
446
|
|
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(12,243
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)
|
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Less income tax effect
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(322
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)
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2,363
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|
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Reclassification to net loss for gains
realized
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(661
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)
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(1,416
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)
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Less income tax effect
|
85
|
|
|
271
|
|
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Marketable securities
|
|
|
|
||||
Gains arising during the period
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—
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|
1
|
|
||
Defined benefit plans
|
|
|
|
||||
Foreign currency and other adjustments
|
(14
|
)
|
|
(164
|
)
|
||
Less income tax effect
|
1
|
|
|
15
|
|
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Net actuarial loss amortization
|
117
|
|
|
86
|
|
||
Prior service credit
amortization
|
(7
|
)
|
|
(7
|
)
|
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Less income tax effect
|
(21
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)
|
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(19
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)
|
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Total comprehensive income (loss)
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(8,768
|
)
|
|
6,885
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Less comprehensive income attributable to noncontrolling interests:
|
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Net earnings
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66
|
|
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24
|
|
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Foreign currency translation adjustment
|
1,362
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|
521
|
|
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Amounts attributable to noncontrolling interests
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1,428
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|
545
|
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Comprehensive income (loss) attributable to Guess?, Inc.
|
$
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(10,196
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)
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$
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6,340
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GUESS?, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
|||||||
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Three Months Ended
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||||||
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Apr 29,
2017 |
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Apr 30,
2016 |
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Cash flows from operating activities:
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|
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Net loss
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$
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(21,227
|
)
|
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$
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(25,154
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)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
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|
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Depreciation and amortization of property and equipment
|
14,586
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16,215
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Amortization of intangible assets
|
425
|
|
|
465
|
|
||
Share-based compensation expense
|
3,963
|
|
|
4,232
|
|
||
Unrealized forward contract losses
|
360
|
|
|
4,708
|
|
||
Net
loss
on disposition of property and equipment
|
3,458
|
|
|
178
|
|
||
Other items, net
|
(453
|
)
|
|
(935
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
32,480
|
|
|
44,957
|
|
||
Inventories
|
(32,906
|
)
|
|
(33,973
|
)
|
||
Prepaid expenses and other assets
|
(9,428
|
)
|
|
(10,410
|
)
|
||
Accounts payable and accrued expenses
|
(18,855
|
)
|
|
(29,112
|
)
|
||
Deferred rent and lease incentives
|
24
|
|
|
161
|
|
||
Other long-term liabilities
|
(2,374
|
)
|
|
(2,043
|
)
|
||
Net cash used in operating activities
|
(29,947
|
)
|
|
(30,711
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property and equipment
|
(18,846
|
)
|
|
(17,841
|
)
|
||
Proceeds from sale of long-term assets
|
—
|
|
|
7,500
|
|
||
Changes in other assets
|
(703
|
)
|
|
—
|
|
||
Acquisition of businesses, net of cash acquired
|
(175
|
)
|
|
(55
|
)
|
||
Net cash settlement of forward contracts
|
490
|
|
|
310
|
|
||
Net cash used in investing activities
|
(19,234
|
)
|
|
(10,086
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Payment of debt issuance costs
|
—
|
|
|
(111
|
)
|
||
Proceeds from borrowings
|
—
|
|
|
21,500
|
|
||
Repayment of borrowings and capital lease obligations
|
(143
|
)
|
|
(472
|
)
|
||
Dividends paid
|
(18,946
|
)
|
|
(19,256
|
)
|
||
Noncontrolling interest capital contribution
|
962
|
|
|
1,876
|
|
||
Issuance of common stock, net of tax withholdings on vesting of stock awards
|
(6
|
)
|
|
262
|
|
||
Purchase of treasury stock
|
(17,827
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
(35,960
|
)
|
|
3,799
|
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
5,415
|
|
|
19,032
|
|
||
Net change in cash, cash equivalents and restricted cash
|
(79,726
|
)
|
|
(17,966
|
)
|
||
Cash, cash equivalents and restricted cash at the beginning of the year
|
397,650
|
|
|
445,999
|
|
||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
317,924
|
|
|
$
|
428,033
|
|
|
|
|
|
||||
Supplemental cash flow data:
|
|
|
|
|
|
||
Interest paid
|
$
|
270
|
|
|
$
|
310
|
|
Income taxes paid
|
$
|
3,729
|
|
|
$
|
5,335
|
|
(1)
|
Basis of Presentation
|
(2)
|
Loss Per Share
|
(1)
|
For the
three months ended April 29, 2017
and
April 30, 2016
, there were
37,251
and
249,003
potentially dilutive shares, respectively, that were not included in the computation of diluted weighted average common shares and common equivalent shares outstanding because their effect would have been antidilutive given the Company’s net loss during each of the respective periods.
|
(3)
|
Stockholders’ Equity and Redeemable Noncontrolling Interests
|
|
Shares
|
|
Stockholders’ Equity
|
|
|
||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
Guess?, Inc.
Stockholders’
Equity
|
|
Nonredeemable
Noncontrolling
Interests
|
|
Total
|
|
Redeemable
Noncontrolling
Interests
|
||||||||||
Balance at January 30, 2016
|
83,833,937
|
|
|
56,195,000
|
|
|
$
|
1,018,475
|
|
|
$
|
12,818
|
|
|
$
|
1,031,293
|
|
|
$
|
5,252
|
|
Net earnings
|
—
|
|
|
—
|
|
|
22,761
|
|
|
2,637
|
|
|
25,398
|
|
|
—
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
(575
|
)
|
|
(2,057
|
)
|
|
(2,632
|
)
|
|
818
|
|
||||
Loss on derivative financial instruments designated as cash flow hedges, net of income tax of $864
|
—
|
|
|
—
|
|
|
(1,852
|
)
|
|
—
|
|
|
(1,852
|
)
|
|
—
|
|
||||
Other-than-temporary-impairment and unrealized loss on marketable securities, net of income tax of ($6)
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
Actuarial valuation loss and related amortization, prior service credit amortization and foreign currency and other adjustments on defined benefit plans, net of income tax of $21
|
—
|
|
|
—
|
|
|
(923
|
)
|
|
—
|
|
|
(923
|
)
|
|
—
|
|
||||
Issuance of common stock under stock compensation plans, net of tax effect
|
481,037
|
|
|
—
|
|
|
(3,813
|
)
|
|
—
|
|
|
(3,813
|
)
|
|
—
|
|
||||
Issuance of stock under Employee Stock Purchase Plan
|
44,486
|
|
|
(44,486
|
)
|
|
558
|
|
|
—
|
|
|
558
|
|
|
—
|
|
||||
Share-based compensation
|
—
|
|
|
—
|
|
|
16,908
|
|
|
—
|
|
|
16,908
|
|
|
—
|
|
||||
Dividends
|
—
|
|
|
—
|
|
|
(76,997
|
)
|
|
—
|
|
|
(76,997
|
)
|
|
—
|
|
||||
Share repurchases
|
(289,968
|
)
|
|
289,968
|
|
|
(3,532
|
)
|
|
—
|
|
|
(3,532
|
)
|
|
—
|
|
||||
Purchase of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(1,133
|
)
|
|
1,133
|
|
|
—
|
|
|
(4,445
|
)
|
||||
Noncontrolling interest capital contribution
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,157
|
|
||||
Noncontrolling interest capital distribution
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,759
|
)
|
|
(2,759
|
)
|
|
—
|
|
||||
Redeemable noncontrolling interest redemption value adjustment
|
—
|
|
|
—
|
|
|
(670
|
)
|
|
—
|
|
|
(670
|
)
|
|
670
|
|
||||
Balance at January 28, 2017
|
84,069,492
|
|
|
56,440,482
|
|
|
$
|
969,222
|
|
|
$
|
11,772
|
|
|
$
|
980,994
|
|
|
$
|
4,452
|
|
Net earnings (loss)
|
—
|
|
|
—
|
|
|
(21,293
|
)
|
|
66
|
|
|
(21,227
|
)
|
|
—
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
11,473
|
|
|
1,362
|
|
|
12,835
|
|
|
182
|
|
||||
Loss on derivative financial instruments designated as cash flow hedges, net of income tax of ($237)
|
—
|
|
|
—
|
|
|
(452
|
)
|
|
—
|
|
|
(452
|
)
|
|
—
|
|
||||
Actuarial valuation and prior service credit amortization and foreign currency and other adjustments on defined benefit plans, net of income tax of ($20)
|
—
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
76
|
|
|
—
|
|
||||
Issuance of common stock under stock compensation plans, net of tax effect
|
656,945
|
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
||||
Issuance of stock under Employee Stock Purchase Plan
|
14,467
|
|
|
(14,467
|
)
|
|
133
|
|
|
—
|
|
|
133
|
|
|
—
|
|
||||
Share-based compensation
|
—
|
|
|
—
|
|
|
3,963
|
|
|
—
|
|
|
3,963
|
|
|
—
|
|
||||
Dividends
|
—
|
|
|
—
|
|
|
(19,041
|
)
|
|
—
|
|
|
(19,041
|
)
|
|
—
|
|
||||
Share repurchases
|
(1,485,195
|
)
|
|
1,485,195
|
|
|
(17,827
|
)
|
|
—
|
|
|
(17,827
|
)
|
|
—
|
|
||||
Noncontrolling interest capital contribution
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
951
|
|
||||
Balance at April 29, 2017
|
83,255,709
|
|
|
57,911,210
|
|
|
$
|
926,116
|
|
|
$
|
13,211
|
|
|
$
|
939,327
|
|
|
$
|
5,585
|
|
|
Three Months Ended Apr 29, 2017
|
||||||||||||||
|
Foreign Currency Translation Adjustment
|
|
Derivative Financial Instruments Designated as Cash Flow Hedges
|
|
Defined Benefit Plans
|
|
Total
|
||||||||
Balance at January 28, 2017
|
$
|
(158,227
|
)
|
|
$
|
5,400
|
|
|
$
|
(8,562
|
)
|
|
$
|
(161,389
|
)
|
Gains (losses) arising during the period
|
11,473
|
|
|
124
|
|
|
(13
|
)
|
|
11,584
|
|
||||
Reclassification to net loss for (gains) losses realized
|
—
|
|
|
(576
|
)
|
|
89
|
|
|
(487
|
)
|
||||
Net other comprehensive income (loss)
|
11,473
|
|
|
(452
|
)
|
|
76
|
|
|
11,097
|
|
||||
Balance at April 29, 2017
|
$
|
(146,754
|
)
|
|
$
|
4,948
|
|
|
$
|
(8,486
|
)
|
|
$
|
(150,292
|
)
|
|
Three Months Ended Apr 30, 2016
|
||||||||||||||||||
|
Foreign Currency Translation Adjustment
|
|
Derivative Financial Instruments Designated as Cash Flow Hedges
|
|
Marketable Securities
|
|
Defined Benefit Plans
|
|
Total
|
||||||||||
Balance at January 30, 2016
|
$
|
(157,652
|
)
|
|
$
|
7,252
|
|
|
$
|
(15
|
)
|
|
$
|
(7,639
|
)
|
|
$
|
(158,054
|
)
|
Gains (losses) arising during the period
|
42,631
|
|
|
(9,880
|
)
|
|
1
|
|
|
(149
|
)
|
|
32,603
|
|
|||||
Reclassification to net loss for (gains) losses realized
|
—
|
|
|
(1,145
|
)
|
|
—
|
|
|
60
|
|
|
(1,085
|
)
|
|||||
Net other comprehensive income (loss)
|
42,631
|
|
|
(11,025
|
)
|
|
1
|
|
|
(89
|
)
|
|
31,518
|
|
|||||
Balance at April 30, 2016
|
$
|
(115,021
|
)
|
|
$
|
(3,773
|
)
|
|
$
|
(14
|
)
|
|
$
|
(7,728
|
)
|
|
$
|
(126,536
|
)
|
|
Three Months Ended
|
|
Location of
(Gain) Loss
Reclassified from
Accumulated OCI
into Loss
|
||||||
|
Apr 29, 2017
|
|
Apr 30, 2016
|
|
|||||
Derivative financial instruments designated as cash flow hedges:
|
|
|
|
|
|
||||
Foreign exchange currency contracts
|
$
|
(618
|
)
|
|
$
|
(1,435
|
)
|
|
Cost of product sales
|
Foreign exchange currency contracts
|
(79
|
)
|
|
(32
|
)
|
|
Other income/expense
|
||
Interest rate swap
|
36
|
|
|
51
|
|
|
Interest expense
|
||
Less income tax effect
|
85
|
|
|
271
|
|
|
Income tax benefit
|
||
|
(576
|
)
|
|
(1,145
|
)
|
|
|
||
Defined benefit plans:
|
|
|
|
|
|
||||
Actuarial loss amortization
|
117
|
|
|
86
|
|
|
(1)
|
||
Prior service credit amortization
|
(7
|
)
|
|
(7
|
)
|
|
(1)
|
||
Less income tax effect
|
(21
|
)
|
|
(19
|
)
|
|
Income tax benefit
|
||
|
89
|
|
|
60
|
|
|
|
||
Total reclassifications during the period
|
$
|
(487
|
)
|
|
$
|
(1,085
|
)
|
|
|
(1)
|
These accumulated other comprehensive income (loss) components are included in the computation of net periodic defined benefit pension cost. Refer to Note 13 for further information.
|
(4)
|
Accounts Receivable
|
|
Apr 29, 2017
|
|
Jan 28, 2017
|
||||
Trade
|
$
|
198,494
|
|
|
$
|
234,690
|
|
Royalty
|
17,081
|
|
|
19,881
|
|
||
Other
|
9,413
|
|
|
5,888
|
|
||
|
224,988
|
|
|
260,459
|
|
||
Less allowances
|
31,345
|
|
|
34,922
|
|
||
|
$
|
193,643
|
|
|
$
|
225,537
|
|
(5)
|
Inventories
|
|
Apr 29, 2017
|
|
Jan 28, 2017
|
||||
Raw materials
|
$
|
663
|
|
|
$
|
799
|
|
Work in progress
|
340
|
|
|
78
|
|
||
Finished goods
|
401,670
|
|
|
366,504
|
|
||
|
$
|
402,673
|
|
|
$
|
367,381
|
|
(6)
|
Restructuring Charges
|
|
Total
|
||
Balance at January 30, 2016
|
$
|
—
|
|
Charges to operations
|
6,083
|
|
|
Cash payments
|
(6,003
|
)
|
|
Foreign currency and other adjustments
|
100
|
|
|
Balance at January 28, 2017
|
$
|
180
|
|
Cash payments
|
(124
|
)
|
|
Balance at April 29, 2017
|
$
|
56
|
|
(7)
|
Income Taxes
|
(8)
|
Segment Information
|
|
Three Months Ended
|
||||||
|
Apr 29, 2017
|
|
Apr 30, 2016
|
||||
Net revenue:
|
|
|
|
||||
Americas Retail
|
$
|
173,694
|
|
|
$
|
204,161
|
|
Europe (1)
|
165,388
|
|
|
134,142
|
|
||
Asia (1)
|
63,381
|
|
|
54,228
|
|
||
Americas Wholesale (1)
|
35,857
|
|
|
33,937
|
|
||
Licensing
|
20,261
|
|
|
22,347
|
|
||
Total net revenue
|
$
|
458,581
|
|
|
$
|
448,815
|
|
Earnings (loss) from operations:
|
|
|
|
||||
Americas Retail (2)
|
$
|
(26,766
|
)
|
|
$
|
(12,601
|
)
|
Europe (1) (2)
|
(3,095
|
)
|
|
(14,555
|
)
|
||
Asia (1) (2)
|
(838
|
)
|
|
(549
|
)
|
||
Americas Wholesale (1)
|
6,645
|
|
|
5,961
|
|
||
Licensing
|
17,331
|
|
|
20,415
|
|
||
|
(6,723
|
)
|
|
(1,329
|
)
|
||
Corporate Overhead
|
(18,796
|
)
|
|
(21,566
|
)
|
||
Restructuring Charges
|
—
|
|
|
(6,083
|
)
|
||
Total loss from operations
|
$
|
(25,519
|
)
|
|
$
|
(28,978
|
)
|
(1)
|
During the first quarter of fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. Accordingly, segment results for Europe, Asia and Americas Wholesale have been adjusted for the first quarter of fiscal 2017 to conform to the current year presentation.
|
(2)
|
During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. During the
three months ended April 29, 2017
, the Company recorded asset impairment charges related to its Americas Retail and Asia segments of
$2.1 million
and
$0.6 million
, respectively. Asset impairment charges related to its Europe segment were minimal during the
three months ended April 29, 2017
. During the
three months ended April 30, 2016
, the Company recorded asset impairment charges related to its Europe segment of
$0.1 million
. Asset impairment charges related to its Asia segment were minimal during the
three months ended April 30, 2016
.
|
(9)
|
Borrowings and Capital Lease Obligations
|
|
Apr 29, 2017
|
|
Jan 28, 2017
|
||||
Mortgage debt, maturing monthly through January 2026
|
$
|
20,749
|
|
|
$
|
20,889
|
|
Other
|
3,144
|
|
|
3,159
|
|
||
|
23,893
|
|
|
24,048
|
|
||
Less current installments
|
571
|
|
|
566
|
|
||
Long-term debt
|
$
|
23,322
|
|
|
$
|
23,482
|
|
(10)
|
Share-Based Compensation
|
|
Three Months Ended
|
||||||
|
Apr 29, 2017
|
|
Apr 30, 2016
|
||||
Stock options
|
$
|
609
|
|
|
$
|
512
|
|
Stock awards/units
|
3,318
|
|
|
3,678
|
|
||
Employee Stock Purchase Plan
|
36
|
|
|
42
|
|
||
Total share-based compensation expense
|
$
|
3,963
|
|
|
$
|
4,232
|
|
|
Number of
Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Nonvested at January 28, 2017
|
787,849
|
|
|
$
|
19.17
|
|
Granted
|
808,022
|
|
|
11.16
|
|
|
Vested
|
(130,740
|
)
|
|
20.83
|
|
|
Forfeited
|
(6,757
|
)
|
|
18.35
|
|
|
Nonvested at April 29, 2017
|
1,458,374
|
|
|
$
|
14.59
|
|
|
Number of
Units
|
|
Weighted
Average Grant Date Fair Value |
|||
Nonvested at January 28, 2017
|
323,825
|
|
|
$
|
16.63
|
|
Granted
|
248,020
|
|
|
10.62
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Nonvested at April 29, 2017
|
571,845
|
|
|
$
|
14.02
|
|
(11)
|
Related Party Transactions
|
(12)
|
Commitments and Contingencies
|
(13)
|
Defined Benefit Plans
|
|
Three Months Ended April 29, 2017
|
||||||||||
|
SERP
|
|
Swiss Pension Plan
|
|
Total
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
491
|
|
|
$
|
491
|
|
Interest cost
|
461
|
|
|
22
|
|
|
483
|
|
|||
Expected return on plan assets
|
—
|
|
|
(49
|
)
|
|
(49
|
)
|
|||
Net amortization of unrecognized prior service credit
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||
Net amortization of actuarial losses
|
38
|
|
|
79
|
|
|
117
|
|
|||
Net periodic defined benefit pension cost
|
$
|
499
|
|
|
$
|
536
|
|
|
$
|
1,035
|
|
|
Three Months Ended April 30, 2016
|
||||||||||
|
SERP
|
|
Swiss Pension Plan
|
|
Total
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
379
|
|
|
$
|
379
|
|
Interest cost
|
460
|
|
|
22
|
|
|
482
|
|
|||
Expected return on plan assets
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
|||
Net amortization of unrecognized prior service credit
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||
Net amortization of actuarial losses
|
39
|
|
|
47
|
|
|
86
|
|
|||
Net periodic defined benefit pension cost
|
$
|
499
|
|
|
$
|
395
|
|
|
$
|
894
|
|
(14)
|
Fair Value Measurements
|
|
|
Fair Value Measurements at Apr 29, 2017
|
|
Fair Value Measurements at Jan 28, 2017
|
||||||||||||||||||||||||||||
Recurring Fair Value Measures
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange currency contracts
|
|
$
|
—
|
|
|
$
|
8,585
|
|
|
$
|
—
|
|
|
$
|
8,585
|
|
|
$
|
—
|
|
|
$
|
9,868
|
|
|
$
|
—
|
|
|
$
|
9,868
|
|
Interest rate swap
|
|
—
|
|
|
713
|
|
|
—
|
|
|
713
|
|
|
—
|
|
|
876
|
|
|
—
|
|
|
876
|
|
||||||||
Total
|
|
$
|
—
|
|
|
$
|
9,298
|
|
|
$
|
—
|
|
|
$
|
9,298
|
|
|
$
|
—
|
|
|
$
|
10,744
|
|
|
$
|
—
|
|
|
$
|
10,744
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign exchange currency contracts
|
|
$
|
—
|
|
|
$
|
596
|
|
|
$
|
—
|
|
|
$
|
596
|
|
|
$
|
—
|
|
|
$
|
1,424
|
|
|
$
|
—
|
|
|
$
|
1,424
|
|
Deferred compensation obligations
|
|
—
|
|
|
11,777
|
|
|
—
|
|
|
11,777
|
|
|
—
|
|
|
11,184
|
|
|
—
|
|
|
11,184
|
|
||||||||
Total
|
|
$
|
—
|
|
|
$
|
12,373
|
|
|
$
|
—
|
|
|
$
|
12,373
|
|
|
$
|
—
|
|
|
$
|
12,608
|
|
|
$
|
—
|
|
|
$
|
12,608
|
|
(15)
|
Derivative Financial Instruments
|
|
|
Derivative
Balance Sheet
Location
|
|
Fair Value at
Apr 29, 2017 |
|
Fair Value at
Jan 28, 2017 |
||||
ASSETS:
|
|
|
|
|
|
|
|
|
||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||
Cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign exchange currency contracts
|
|
Other current assets/
Other assets
|
|
$
|
5,641
|
|
|
$
|
6,072
|
|
Interest rate swap
|
|
Other assets
|
|
713
|
|
|
876
|
|
||
Total derivatives designated as hedging instruments
|
|
|
|
6,354
|
|
|
6,948
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|||
Foreign exchange currency contracts
|
|
Other current assets/
Other assets
|
|
2,944
|
|
|
3,796
|
|
||
Total
|
|
|
|
$
|
9,298
|
|
|
$
|
10,744
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||
Cash flow hedges:
|
|
|
|
|
|
|
||||
Foreign exchange currency contracts
|
|
Accrued expenses/
Other long-term liabilities
|
|
$
|
372
|
|
|
$
|
1,250
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||
Foreign exchange currency contracts
|
|
Accrued expenses
|
|
224
|
|
|
174
|
|
||
Total
|
|
|
|
$
|
596
|
|
|
$
|
1,424
|
|
|
Gain (Loss)
Recognized in
OCI
|
|
Location of
Gain (Loss)
Reclassified from
Accumulated OCI
into Loss (1)
|
|
Gain (Loss)
Reclassified from
Accumulated OCI into
Loss
|
||||||||||||
|
Three Months Ended
|
|
|
Three Months Ended
|
|||||||||||||
|
Apr 29, 2017
|
|
Apr 30, 2016
|
|
|
Apr 29, 2017
|
|
Apr 30, 2016
|
|||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange currency contracts
|
$
|
857
|
|
|
$
|
(11,412
|
)
|
|
Cost of product sales
|
|
$
|
618
|
|
|
$
|
1,435
|
|
Foreign exchange currency contracts
|
$
|
(211
|
)
|
|
$
|
(699
|
)
|
|
Other income/expense
|
|
$
|
79
|
|
|
$
|
32
|
|
Interest rate swap
|
$
|
(200
|
)
|
|
$
|
(132
|
)
|
|
Interest expense
|
|
$
|
(36
|
)
|
|
$
|
(51
|
)
|
(1)
|
The Company recognized gains of
$0.6 million
and
$0.5 million
resulting from the ineffective portion related to foreign exchange currency contracts in interest income during the
three months ended April 29, 2017
and
April 30, 2016
, respectively. There was
no
ineffectiveness recognized related to the interest rate swap during the
three months ended April 29, 2017
and
April 30, 2016
.
|
|
Three Months Ended
|
||||||
|
Apr 29, 2017
|
|
Apr 30, 2016
|
||||
Beginning balance gain
|
$
|
5,400
|
|
|
$
|
7,252
|
|
Net gains (losses) from changes in cash flow hedges
|
124
|
|
|
(9,880
|
)
|
||
Net
gains reclassified to loss
|
(576
|
)
|
|
(1,145
|
)
|
||
Ending balance gain (loss)
|
$
|
4,948
|
|
|
$
|
(3,773
|
)
|
|
|
Location of
Gain (Loss)
Recognized in
Loss
|
|
Gain (Loss)
Recognized in Loss
|
||||||
|
|
|
Three Months Ended
|
|||||||
|
|
|
Apr 29, 2017
|
|
Apr 30, 2016
|
|||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign exchange currency contracts
|
|
Other income/expense
|
|
$
|
(793
|
)
|
|
$
|
(6,029
|
)
|
Interest rate swap
|
|
Other income/expense
|
|
$
|
—
|
|
|
$
|
38
|
|
(16)
|
Subsequent Events
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Total net revenue
in
creased
2.2%
to $
458.6 million
for the quarter ended
April 29, 2017
, compared to $
448.8 million
in the same prior-year period.
In constant currency, net revenue
increase
d by
4.0%
.
|
•
|
Gross margin (gross profit as a percentage of total net revenue)
de
creased
30
basis points to
31.5%
for the quarter ended
April 29, 2017
, from
31.8%
in the same prior-year period.
|
•
|
Selling, general and administrative (“SG&A”) expenses as a percentage of total net revenue (“SG&A rate”)
de
creased
40
basis points to
36.5%
for the quarter ended
April 29, 2017
, from
36.9%
in the same prior-year period. SG&A expenses
in
creased
1.1%
to $
167.4 million
for the quarter ended
April 29, 2017
, compared to $
165.5 million
in the same prior-year period.
|
•
|
During the quarter ended
April 29, 2017
, the Company recognized asset impairment charges of
$2.8 million
, compared to
$0.2 million
in the same prior-year period.
|
•
|
The Company incurred $6.1 million in restructuring charges during the quarter ended April 30, 2016.
|
•
|
Operating margin
in
creased
90
basis points to negative
5.6%
for the quarter ended
April 29, 2017
, compared to negative
6.5%
in the same prior-year period.
Higher asset impairment charges recorded during the quarter ended
April 29, 2017
unfavorably impacted operating margin by
60
basis points compared to the same prior-year period. Restructuring charges incurred during the prior year negatively impacted operating margin by
140
basis points during the quarter ended
April 30, 2016
.
Excluding the impact of these items, operating margin
in
creased by
10
basis points compared to the same prior-year period.
Loss from operations improved
11.9%
to
$25.5 million
for the quarter ended
April 29, 2017
, compared to $
29.0 million
in the same prior-year period.
|
•
|
Other
income
, net (including interest income and expense) totaled
$2.9 million
for the quarter ended
April 29, 2017
, compared to other
expense
, net of
$1.0 million
in the same prior-year period.
|
•
|
The effective income tax rate
de
creased by
980
basis points to
6.2%
for the quarter ended
April 29, 2017
, from
16.0%
in the same prior-year period.
|
•
|
The Company had
$316.4 million
in cash and cash equivalents and
$1.5 million
in restricted cash as of
April 29, 2017
, compared to $
427.5 million
in cash and cash equivalents and $0.5 million in restricted cash at
April 30, 2016
.
|
◦
|
The Company invested
$17.8 million
to repurchase
1,485,195
of its common shares during the quarter ended
April 29, 2017
.
|
•
|
Accounts receivable, which
consists of trade receivables relating primarily to the Company’s wholesale business in Europe and, to a lesser extent, to its wholesale businesses in Asia and the Americas, royalty receivables relating to its licensing operations, credit card and retail concession receivables related to its retail businesses and certain other receivables
,
in
creased by
$15.9 million
, or
9.0%
, to
$193.6 million
as of
April 29, 2017
, compared to $
177.7 million
at
April 30, 2016
.
On a constant currency basis, accounts receivable increased by $23.4 million, or 13.2%, when compared to
April 30, 2016
.
|
•
|
Inventory
in
creased by
$44.5 million
, or
12.4%
, to
$402.7 million
as of
April 29, 2017
, compared to $
358.2 million
at
April 30, 2016
. On a constant currency basis, inventory
increased
by
$57.8 million
, or
16.1%
, compared to the same prior-year period.
|
Region
|
|
Total Stores
|
|
Directly
Operated Stores
|
|
Licensee Stores
|
|||
United States
|
|
332
|
|
|
330
|
|
|
2
|
|
Canada
|
|
108
|
|
|
108
|
|
|
—
|
|
Central and South America
|
|
94
|
|
|
51
|
|
|
43
|
|
Total Americas
|
|
534
|
|
|
489
|
|
|
45
|
|
Europe and the Middle East
|
|
647
|
|
|
354
|
|
|
293
|
|
Asia
|
|
489
|
|
|
106
|
|
|
383
|
|
Total
|
|
1,670
|
|
|
949
|
|
|
721
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
Apr 29, 2017
|
|
Apr 30, 2016
|
|
Change
|
|
% Change
|
|||||||
Net revenue:
|
|
|
|
|
|
|
|
|||||||
Americas Retail
|
$
|
173,694
|
|
|
$
|
204,161
|
|
|
$
|
(30,467
|
)
|
|
(14.9
|
%)
|
Europe (1)
|
165,388
|
|
|
134,142
|
|
|
31,246
|
|
|
23.3
|
|
|||
Asia (1)
|
63,381
|
|
|
54,228
|
|
|
9,153
|
|
|
16.9
|
|
|||
Americas Wholesale (1)
|
35,857
|
|
|
33,937
|
|
|
1,920
|
|
|
5.7
|
|
|||
Licensing
|
20,261
|
|
|
22,347
|
|
|
(2,086
|
)
|
|
(9.3
|
)
|
|||
Total net revenue
|
$
|
458,581
|
|
|
$
|
448,815
|
|
|
$
|
9,766
|
|
|
2.2
|
%
|
Earnings (loss) from operations:
|
|
|
|
|
|
|
|
|||||||
Americas Retail (2)
|
$
|
(26,766
|
)
|
|
$
|
(12,601
|
)
|
|
$
|
(14,165
|
)
|
|
(112.4
|
%)
|
Europe (1) (2)
|
(3,095
|
)
|
|
(14,555
|
)
|
|
11,460
|
|
|
78.7
|
|
|||
Asia (1) (2)
|
(838
|
)
|
|
(549
|
)
|
|
(289
|
)
|
|
(52.6
|
)
|
|||
Americas Wholesale (1)
|
6,645
|
|
|
5,961
|
|
|
684
|
|
|
11.5
|
|
|||
Licensing
|
17,331
|
|
|
20,415
|
|
|
(3,084
|
)
|
|
(15.1
|
)
|
|||
|
(6,723
|
)
|
|
(1,329
|
)
|
|
(5,394
|
)
|
|
(405.9
|
)
|
|||
Corporate Overhead
|
(18,796
|
)
|
|
(21,566
|
)
|
|
2,770
|
|
|
(12.8
|
)
|
|||
Restructuring Charges
|
—
|
|
|
(6,083
|
)
|
|
6,083
|
|
|
|
||||
Total loss from operations
|
$
|
(25,519
|
)
|
|
$
|
(28,978
|
)
|
|
$
|
3,459
|
|
|
11.9
|
%
|
Operating margins:
|
|
|
|
|
|
|
|
|||||||
Americas Retail (2)
|
(15.4
|
%)
|
|
(6.2
|
%)
|
|
|
|
|
|||||
Europe (1) (2)
|
(1.9
|
%)
|
|
(10.9
|
%)
|
|
|
|
|
|||||
Asia (1) (2)
|
(1.3
|
%)
|
|
(1.0
|
%)
|
|
|
|
|
|||||
Americas Wholesale (1)
|
18.5
|
%
|
|
17.6
|
%
|
|
|
|
|
|||||
Licensing
|
85.5
|
%
|
|
91.4
|
%
|
|
|
|
|
|||||
Total Company
|
(5.6
|
%)
|
|
(6.5
|
%)
|
|
|
|
|
(1)
|
During the first quarter of fiscal 2018, net revenue and related costs and expenses for certain globally serviced customers were reclassified into the segment primarily responsible for the relationship. Accordingly, segment results for Europe, Asia and Americas Wholesale have been adjusted for the first quarter of fiscal 2017 to conform to the current year presentation.
|
(2)
|
During each of the periods presented, the Company recognized asset impairment charges for certain retail locations resulting from under-performance and expected store closures. During the
three months ended April 29, 2017
, the Company recorded asset impairment charges related to its Americas Retail and Asia segments of
$2.1 million
and
$0.6 million
, respectively. Asset impairment charges related to its Europe segment were minimal during the
three months ended April 29, 2017
. During the
three months ended April 30, 2016
, the Company recorded asset impairment charges related to its Europe segment of
$0.1 million
. Asset impairment charges related to its Asia segment were minimal during the
three months ended April 30, 2016
.
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
ITEM 1.
|
Legal Proceedings.
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Period
|
Total
Number
of Shares
Purchased
|
|
Average
Price
Paid
per Share
|
|
Total Number of
Shares
Purchased as Part of
Publicly
Announced
Plans or Programs
|
|
Maximum Number
(or Approximate
Dollar Value)
of Shares That May
Yet Be Purchased
Under the Plans
or Programs
|
||||||
January 29, 2017 to February 25, 2017
|
|
|
|
|
|
|
|
||||||
Repurchase program (1)
|
47,194
|
|
|
$
|
12.14
|
|
|
47,194
|
|
|
$
|
447,685,936
|
|
Employee transactions (2)
|
289
|
|
|
$
|
12.75
|
|
|
—
|
|
|
|
||
February 26, 2017 to April 1, 2017
|
|
|
|
|
|
|
|
||||||
Repurchase program (1)
|
1,438,001
|
|
|
$
|
11.97
|
|
|
1,438,001
|
|
|
$
|
430,468,702
|
|
Employee transactions (2)
|
11,061
|
|
|
$
|
11.22
|
|
|
—
|
|
|
|
||
April 2, 2017 to April 29, 2017
|
|
|
|
|
|
|
|
||||||
Repurchase program (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
430,468,702
|
|
|
Employee transactions (2)
|
1,417
|
|
|
$
|
11.07
|
|
|
—
|
|
|
|
||
Total
|
|
|
|
|
|
|
|
||||||
Repurchase program (1)
|
1,485,195
|
|
|
$
|
11.98
|
|
|
1,485,195
|
|
|
|
||
Employee transactions (2)
|
12,767
|
|
|
$
|
11.24
|
|
|
—
|
|
|
|
(1)
|
On June 26, 2012, the Company’s Board of Directors authorized a program to repurchase, from time-to-time and as market and business conditions warrant, up to $
500 million
of the Company’s common stock. Repurchases under the program may be made on the open market or in privately negotiated transactions, pursuant to Rule 10b5-1 trading plans or other available means. There is no minimum or maximum number of shares to be repurchased under the program, which may be discontinued at any time, without prior notice.
|
(2)
|
Consists of shares surrendered to, or withheld by, the Company in satisfaction of employee tax withholding obligations that occur upon vesting of restricted stock awards/units granted under the Company’s 2004 Equity Incentive Plan, as amended.
|
ITEM 6.
|
Exhibits.
|
Exhibit
Number
|
|
Description
|
3.1
.
|
|
|
3.2
.
|
|
|
4.1
.
|
|
|
*
10.1
.
|
|
|
*
10.2
.
|
|
|
*
10.3
.
|
|
|
*†
10.4
.
|
|
|
*†
10.5
.
|
|
|
*†
10.6
.
|
|
|
*†
10.7
.
|
|
|
†
31.1
.
|
|
|
†
31.2
.
|
|
|
†
32.1
.
|
|
|
†
32.2
.
|
|
|
†101.INS
|
|
XBRL Instance Document
|
†101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
†101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
†101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
†101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
†101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Management Contract or Compensatory Plan
|
†
|
Filed herewith
|
|
|
Guess?, Inc.
|
|
|
|
|
|
Date:
|
June 2, 2017
|
By:
|
/s/ VICTOR HERRERO
|
|
|
|
Victor Herrero
|
|
|
|
Chief Executive Officer
|
|
|
|
|
Date:
|
June 2, 2017
|
By:
|
/s/ SANDEEP REDDY
|
|
|
|
Sandeep Reddy
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
1.
|
Definitions; Incorporation of Plan Terms
. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan, except where a capitalized term is defined in the Executive Employment Agreement between the Company and the Grantee, entered into
[
For Paul Marciano, insert:
January 26, 2016, as amended;
For Victor Herrero, insert:
July 7, 2015, as amended
]
(the “
Employment Agreement
”), and this Agreement indicates the definition used in the Employment Agreement shall apply for purposes of this Agreement as well. This 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. Except as specifically provided in this Agreement, in the event of any conflict or inconsistency between the Plan and this Agreement, the Plan shall govern.
|
2.
|
Grant of Restricted Stock Units
. The Company hereby grants to the Grantee as of the Date of Grant (set forth above) a right to receive [________] shares of the Company’s common stock subject to the terms, conditions, and restrictions set forth herein (the “
Restricted Stock Units
”). As used herein, the term “Restricted Stock Unit” shall mean a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Company’s common stock, par value $0.01 per share (the “
Common Stock
”) solely for purposes of the Plan and this Agreement. The Restricted Stock Units shall be used solely as a device for the determination of the number of shares of Common Stock to eventually be delivered to the Grantee if such Restricted Stock Units vest pursuant to this Agreement. The Restricted Stock Units shall not be treated as property or as a trust fund of any kind. The Grantee shall have no rights as a stockholder of the Company, no dividend rights (except as expressly provided in Section 4 with respect to Dividend Equivalent Rights) and no voting rights with respect to the Restricted Stock Units and any shares of Common Stock underlying or issuable in respect of such Restricted Stock Units (“
Award Shares
”) until such shares of Common Stock are actually issued to and held of record by the Grantee. This Award, together with the other equity awards granted by the Company to the Grantee on or about the date
|
3.
|
Vesting
.
|
A.
|
Subject to the performance condition set forth in Section 3(B) below and except as otherwise expressly provided in Sections 7 and 8 herein, this Award shall vest as to (i) one-third of the Restricted Stock Units on January 30, 2018 (the “
First Tranche
”),
(ii) one-third of the Restricted Stock Units on January 30, 2019 (the “
Second Tranche
”), and (iii) one-third of the Restricted Stock Units on January 30, 2020 (the “
Third Tranche
”); provided that Grantee has been continuously in Service with the Company from the Date of Grant through each applicable vesting date. Except as specifically provided herein, employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting. As used herein, the term “Service” means employment by the Company or service to the Company as a member of the Board.
|
B.
|
No portion of this Award shall vest notwithstanding satisfaction of the continued Service requirement for vesting described in Section 3(A) above unless the Committee certifies, following the end of the Company’s 2018 fiscal year, that the Company achieved Licensing Segment Earnings from Operations (as defined below) for the Company’s 2018 fiscal year (the “
Performance Period
”) equal to or above the level established by the Committee with respect to the Award in connection with the grant of the Award; provided, however, that if either a Change in Control (as defined in the Employment Agreement) or the death or Disability (as defined in the Employment Agreement) of the Grantee occurs before the last day of the Performance Period, the performance requirement of this Section 3(B) shall be deemed met as of the date of such event. If such performance requirement is not met (and no such Change in Control, death or Disability (as defined in the Employment Agreement) occurs before the last day of the Performance Period), this Award and the Restricted Stock Units subject hereto shall terminate and be cancelled as of the last day of the Performance Period.
|
C.
|
For purposes of this Award, “
Licensing Segment Earnings from Operations
” means: the Company’s earnings from operations derived from the Company’s Licensing Segment for the Performance Period as calculated in accordance with generally accepted accounting principles (“
GAAP
”), but adjusted (without duplication and to the extent that the particular item would have otherwise impacted Earnings from Operations for such period) to exclude the financial statement impact of the following items: (i) any positive or negative charges or accruals incurred for the Performance Period for litigation matters, but only where such charges or accruals for any particular matter exceed $500,000 for the Performance Period, (ii) restructuring charges incurred for the Performance Period, including employee severance related costs, store closure related costs and other real estate exit related costs, (iii) any store impairment charges; (iv) new
|
B.
|
No portion of this Award shall vest notwithstanding satisfaction of the continued Service requirement for vesting described in Section 3(A) above unless the Committee certifies, following the end of the Company’s 2018 fiscal year, that the Company achieved Total Revenues Excluding Net Royalties (as defined below) for the Company’s 2018 fiscal year (the “
Performance Period
”) equal to or above the level established by the Committee with respect to the Award in connection with the grant of the Award; provided, however, that if either a Change in Control (as defined in the Employment Agreement) or the death or Disability (as defined in the Employment Agreement) of the Grantee occurs before the last day of the Performance Period, the performance requirement of this Section 3(B) shall be deemed met as of the date of such event. If such performance requirement is not met (and no such Change in Control, death or Disability (as defined in the Employment Agreement) occurs before the last day of the Performance Period), this Award and the Restricted Stock Units subject hereto shall terminate and be cancelled as of the last day of the Performance Period.
|
C.
|
For purposes of this Award, “Total Revenues Excluding Net Royalties” means: the Company’s total revenues, excluding net royalties, for the Performance Period as calculated in accordance with generally accepted accounting principles (“
GAAP
”), but adjusted to (i) exclude the financial statement impact of any new changes in accounting standards announced during the Performance Period that are required to be applied during the Performance Period in accordance with GAAP and (ii) eliminate the impact of currency fluctuations as and to the extent provided by the constant currency methodology approved by the Committee in connection with the grant of this Award.
]
|
4.
|
Dividend Equivalents
. If a cash dividend is paid with respect to the Common Stock while any Restricted Stock Units subject to the Award are outstanding, the Grantee shall be credited with an amount in cash equal to the dividends the Grantee would have received if he had been the owner of the shares of Common Stock subject to such outstanding Restricted Stock Units; provided, however, that no amount shall be credited with respect to shares that have been delivered to the Grantee as of the applicable dividend record date. Any amounts credited under this Section 4 (“
Dividend Equivalents
”) shall be subject to the same terms and conditions as the Restricted Stock Units to which they relate and shall vest and be paid (or, if applicable, be forfeited) at the same time as the Restricted Stock Units to which they relate.
|
5.
|
Delivery of Shares
. Except as otherwise provided in Section 8 below with respect to a Change in Control, the Company shall deliver or cause to be delivered to the Grantee the number of Award Shares subject to the First Tranche that vest pursuant to the terms hereof within ten days following certification by the Committee of the satisfaction of the performance criteria set forth in Section 3(B) (and in no event later than 74 days following the end of the Performance Period), the number of Award Shares subject to the Second Tranche that vest pursuant to the terms hereof on (or within three business days following) January 30, 2019 and the number of Award Shares subject to the Third Tranche that vest pursuant to the terms hereof on (or within three business days following) January 30, 2020. Any Dividend Equivalents described in Section 4 above related to such Award Shares shall be paid in cash at the same time as the delivery of the Award Shares under this Section 5. Notwithstanding the foregoing: (a) in the event of the Grantee’s death or Disability (as such term is defined for purposes of Section 409A of the Code), then such shares shall be settled as soon as administratively practicable after (and in all events within 90 days after) such event; and (b) in the event of the Grantee’s “separation from service” (as such term is defined for purposes of Code Section 409A) upon or within two years following a Section 409A Change in Control (as such term is defined in Section 8(A)), then such shares shall be settled as soon as administratively possible after (and in all events within ten days after) such event (subject to Section 10(C)).
|
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 of Restricted Stock Units and the number and kind of securities subject to the Award.
|
7.
|
Effect of Certain Cessations of Service
. The continued Service vesting requirement set forth under Section 3(A) of this Award shall be deemed to be satisfied, and any then-outstanding Restricted Stock Units shall be deemed vested (subject to Section 3(B) of this Award), in the event that (a) the Grantee’s employment is terminated by the Company without “Cause” (as defined in the Employment Agreement), (b) the Grantee’s employment is terminated by the Grantee for “Good Reason” (as defined in the Employment Agreement) or (c) in the event of the Grantee’s Disability (as defined in the Employment Agreement) or death
while in Service. For purposes of clarity, any Restricted Stock Units that vest pursuant to the preceding sentence shall still be paid at the applicable time set forth in Section 5. If the Grantee’s Service terminates for any other reason, this Award and the Restricted Stock Units subject hereto, to the extent outstanding and unvested as of the date of such termination of Service, shall terminate and be cancelled as of the date of such termination of Service. Sections 14(a) and 14(b) of the Plan shall not apply to the Award.
|
8.
|
Change in Control
. Notwithstanding anything to the contrary in Section 3, Section 5 or Section 7 of this Agreement or any provision of the Plan, the following provisions shall apply upon a Change in Control (as defined in the Employment Agreement):
|
A.
|
If a Change in Control occurs and the then-outstanding and unvested portion of this Award is
not
continued following such event or assumed or converted into restricted stock units of any successor entity to the Company or a parent thereof (the “
Successor Entity
”), the continued Service vesting requirement set forth
|
B.
|
If the then-outstanding and unvested portion of this Award is continued following such event or is assumed or converted into restricted stock units of any Successor Entity, the continued Service requirement set forth in Section 3(A) above (and the accelerated vesting provisions set forth in Section 7 above) shall continue to apply following such Change in Control, and any portion of the Award that vests pursuant to such provisions shall be settled as provided in Section 5 of this Agreement.
|
9.
|
Restrictions on Transfer
. The Grantee may not sell, assign, transfer, pledge, encumber or otherwise alienate, hypothecate or dispose of this Award or the Grantee’s right hereunder to receive Award Shares, except as otherwise provided in the Committee’s sole discretion consistent with the Plan and applicable securities laws.
|
10.
|
Taxes
.
|
A.
|
The settlement of this Award is conditioned on the Grantee making arrangements reasonably satisfactory to the Company for the withholding of all applicable federal, state, local or foreign taxes as may be required under applicable law.
|
B.
|
It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) (“
Code Section 409A
”) so as not to subject the Grantee to payment of any additional tax, penalty or interest imposed under Code Section 409A. The provisions of this Agreement shall be construed and interpreted to avoid the imputation of any such additional
|
C.
|
If the Grantee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Grantee’s “separation from service” (as such term is defined for purposes of Code Section 409A), the Grantee shall not be entitled to any payment or benefit pursuant to this Award until the earlier of (i) the date which is six (6) months after the Grantee’s separation from service for any reason other than death, or (ii) the date of the Grantee’s death. The provisions of this Section 10(C) shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Code Section 409A. Any amounts otherwise payable to the Grantee upon or in the six (6) month period following the Grantee’s separation from service that are not so paid by reason of this Section 10(C) shall be paid (without interest, except as otherwise provided for in Section 8(A)) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after the Grantee’s separation from service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of the Grantee’s death). For avoidance of doubt, Dividend Equivalents under Section 4 shall continue to be credited during the period of such six-month delay until the vested Restricted Stock Units are actually settled.
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D.
|
It is intended that this Award qualify as “performance-based compensation” for purposes of Section 162(m) of the Code and the provisions of this Agreement shall be construed and interpreted consistent with that intent.
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11.
|
Compliance
. The Grantee hereby agrees to cooperate with the Company, regardless of Grantee’s employment status with the Company, to the extent necessary for the Company to comply with applicable state and federal laws and regulations relating to the Restricted Stock Units.
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12.
|
Notices
. Any notice required or permitted under this Agreement shall be deemed given when personally delivered, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Grantee either at the address on record with the Company or such other address as may be designated by Grantee in writing to the Company; or to the Company, Attention: Stock Plan Administration, 1444 South Alameda Street, Los Angeles, California 90021, or such other address as the Company may designate in writing to the Grantee.
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13.
|
Failure to Enforce Not a Waiver
. The failure of the Company or the Grantee to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.
|
14.
|
Governing Law
. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to Delaware or other laws that might cause other law to govern under applicable principles of conflicts of law. For purposes of litigating any dispute that arises under this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted in the courts of Los Angeles County, or the federal courts for the United States
|
15.
|
Electronic Delivery
. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Units awarded under the Plan or future restricted stock or restricted stock units that may be awarded under the Plan by electronic means or request Grantee’s consent to participate in the Plan by electronic means. Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
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16.
|
Severability
. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
17.
|
Amendments
. This Agreement may be amended or modified at any time by an instrument in writing signed by both parties.
|
18.
|
Agreement Not a Contract of Employment
. Neither the grant of the Restricted Stock Units, this Agreement nor any other action taken in connection herewith shall constitute or be evidence of any agreement or understanding, express or implied, that the Grantee is an employee of the Company or any subsidiary of the Company.
|
19.
|
Committee’s Powers
. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Restricted Stock Units.
|
20.
|
Termination of this Agreement
. Upon termination of this Agreement, all rights of the Grantee hereunder shall cease.
|
21.
|
Clawback Policy
. This Award is subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Award or any shares of Common Stock or other cash or property received with respect to the Award (including any value received from a disposition of the shares acquired in respect of the Award).
|
|
|
GUESS?, INC.
,
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a Delaware corporation
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By:
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Print Name:
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Jason T. Miller
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Its:
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Secretary
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GRANTEE
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Signature
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Print Name
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Employee ID
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o
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I
AM NOT MARRIED.
|
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||||
o
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I
AM MARRIED AND HAVE INFORMED MY SPOUSE OF THIS EQUITY GRANT.
(P
lease have your spouse sign the Consent of Spouse section below.
)
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GRANTEE
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Signature
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Print Name
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Signature of Spouse
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Print Name
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1.
|
Definitions; Incorporation of Plan Terms
. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan, except where a capitalized term is defined in the Executive Employment Agreement between the Company and the Grantee, entered into
[
For Paul Marciano, insert:
January 26, 2016, as amended;
For Victor Herrero, insert:
July 7, 2015, as amended
]
(the “
Employment Agreement
”), and this Agreement indicates the definition used in the Employment Agreement shall apply for purposes of this Agreement as well. This 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. Except as specifically provided in this Agreement, in the event of any conflict or inconsistency between the Plan and this Agreement, the Plan shall govern.
|
2.
|
Grant of Restricted Stock Units
. The Company hereby grants to the Grantee as of the Date of Grant (set forth above) a right to receive a “target” of [________] shares of the Company’s common stock subject to the terms, conditions, and restrictions set forth herein (the “
Restricted Stock Units
,” and such target number of Restricted Stock Units, the “
Target Number of Restricted Stock Units
”). As used herein, the term “Restricted Stock Unit” shall mean a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Company’s common stock, par value $0.01 per share (the “
Common Stock
”), solely for purposes of the Plan and this Agreement. The Restricted Stock Units shall be used solely as a device for the determination of the number of shares of Common Stock to eventually be delivered to the Grantee if such Restricted Stock Units vest pursuant to this Agreement. The Restricted Stock Units shall not be treated as property or as a trust fund of any kind. The Grantee shall have no rights as a stockholder of the Company, no dividend rights (except as expressly provided in Section 4 with respect to Dividend Equivalent rights) and no voting rights with respect to the Restricted Stock Units and any shares of Common Stock underlying or issuable in respect of such Restricted Stock Units (“
Award
|
3.
|
Vesting
.
|
A.
|
Subject to Section 3(B) below and except as otherwise expressly provided in Sections 7 and 8 herein, this Award shall vest and become nonforfeitable on the last day of the Performance Period (as defined below) (the “
Vesting Date
”); provided that the Grantee has been continuously in Service with the Company from the Date of Grant through the Vesting Date. Except as specifically provided herein, Service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting. The number of Restricted Stock Units subject to this Award that vest will be equal to the Target Number of Restricted Stock Units multiplied by a “
Vesting Percentage
” determined based on the Company’s TSR Percentile (as defined below) for the Performance Period in accordance with the following table:
|
TSR Percentile for the
Performance Period
|
|
Vesting Percentage
|
Below 25th TSR Percentile
|
|
0%
|
25th TSR Percentile
|
|
25%
|
50th TSR Percentile
|
|
100%
|
75th TSR Percentile and Above
|
|
150%
|
B.
|
Notwithstanding anything to the contrary in this Agreement, the number of Restricted Stock Units subject to this Award that become Vested Restricted Stock Units shall not exceed the number of Restricted Stock Units determined by
|
C.
|
For purposes of this Award, the following definitions shall apply:
|
i.
|
“
Performance Period
” means the period consisting of the Company’s 2018, 2019 and 2020 fiscal years.
|
ii.
|
“
TSR Percentile
” means the percentile ranking of the Company’s TSR among the TSRs for the Company Peer Group members for the Performance Period.
|
iii.
|
“
TSR
” means total shareholder return and shall be determined with respect to the Company and any other Company Peer Group member by dividing: (a) the sum of (1) the difference obtained by subtracting the applicable Beginning Price from the applicable Ending Price plus (2) all dividends and other distributions as to which the ex-dividend date occurs during the Performance Period (for purposes of clarity, without duplicating any dividends and other distributions as to which the ex-dividend date occurs during the period of twenty (20) consecutive trading days ending on the last trading day of the Performance Period that are taken into account in the determination of Ending Price) by (b) the Beginning Price. Any non-cash distributions shall be ascribed such dollar value as may be determined by or at the direction of the Committee. For the purpose of determining TSR, the value of dividends and other distributions shall be determined by treating them as reinvested in additional shares of stock at the closing market price on the corresponding ex-dividend date.
|
iv.
|
“
Beginning Price
” means, with respect to the Company and any other Company Peer Group member, the average of the closing market prices of such company’s common stock on the principal exchange on which such stock is traded for the twenty (20) consecutive trading days ending with the last day before the beginning of the Performance Period. For the purpose of determining Beginning Price, the value of dividends and other distributions shall be determined by treating them as reinvested in additional shares of stock at the closing market price on the corresponding ex-dividend date.
|
v.
|
“
Ending Price
” means, with respect to the Company and any other Company Peer Group member, the average of the closing market prices of such company’s common stock on the principal exchange on which such stock is traded for the twenty (20) consecutive trading days ending on the last trading day of the Performance Period. For the purpose of determining Ending Price, the value of dividends and other distributions shall be determined by treating them as reinvested in additional shares of stock at the closing market price on the corresponding ex-dividend date.
|
vi.
|
“
Company Peer Group
” means the Company and each of the following companies:
|
4.
|
Dividend Equivalents
. If a cash dividend is paid with respect to the Common Stock during the Performance Period and while any Restricted Stock Units subject to this Award are outstanding, the Grantee shall be credited with an amount in cash equal to the dividends the Grantee would have received if he had been the owner of the shares of Common Stock subject to the outstanding Target Number of Restricted Stock Units; provided, however, that no amount shall be credited with respect to shares that have been delivered to the Grantee as of the applicable dividend record date. Any amounts credited under this Section 4 (“
Dividend Equivalents
”) shall be subject to the same terms and conditions as the Restricted Stock Units to which they relate (including, without limitation, application of the applicable Vesting Percentage) and shall vest and be paid (or, if applicable, be forfeited) at the same time as the Restricted Stock Units to which they relate.
|
5.
|
Delivery of Shares
. Except as otherwise provided in Section 8 below with respect to a Change in Control, the Company shall deliver or cause to be delivered to the Grantee the number of Award Shares subject to any Restricted Stock Units that vest pursuant to the terms hereof as soon as administratively practicable after (and in no event later than 74 days following) the Vesting Date. Any Dividend Equivalents described in Section 4 above related to such Award Shares shall be paid in cash at the same time as the delivery of the Award Shares under this Section 5. Notwithstanding the foregoing: (a) in the event of the Grantee’s death or Disability (as such term is defined for purposes of Section 409A of the Code), then such shares shall be settled as soon as administratively practicable after (and in all events within 90 days after) such event; and (b) in the event of the Grantee’s “separation from service” (as such term is defined for purposes of Code Section 409A) upon or within two years following a Section 409A Change in Control (as such term is defined in Section 8(A)), then such shares shall be settled as soon as administratively possible after (and in all events within ten days after) such event (subject to Section 10(C)).
|
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 of Restricted Stock Units and the number and kind of securities subject to this Award.
|
7.
|
Effect of Certain Cessations of Service
.
|
A.
|
If, at any time prior to the Vesting Date, the Grantee’s employment is terminated by the Company without “Cause” (as defined in the Employment Agreement) or by the Grantee for “Good Reason” (as defined in the Employment Agreement)
and
a Change in Control has not previously occurred, the following shall apply with respect to this Award: (i) the Target Number of Restricted Stock Units shall be pro-rated by multiplying the Target Number of Restricted Stock Units by a fraction, the numerator of which is the number of days of the Grantee’s employment between the first day of the Performance Period and the date of such termination of the Grantee’s employment, and the denominator of which is the total number of days in the Performance Period, and (ii) such pro-rated number of Target Number of Restricted Stock Units shall remain outstanding and eligible to vest on the Vesting Date based on the Vesting Percentage determined under Section 3(A) as though the Grantee’s employment had not been terminated. This
|
B.
|
If, at any time prior to the Vesting Date, the Grantee’s death or “Disability” (as such term is defined in the Employment Agreement) occurs while the Grantee is in Service with the Company
and
a Change in Control has not previously occurred, this Award will vest as of the date of such event with respect to the Target Number of Restricted Stock Units.
|
C.
|
If the Grantee’s Service terminates for any other reason, this Award and the Restricted Stock Units subject hereto, to the extent outstanding and unvested as of the date of such termination of Service, shall terminate and be cancelled as of the date of such termination of Service. Sections 14(a) and 14(b) of the Plan shall not apply to this Award.
|
D.
|
For purposes of clarity, any Restricted Stock Units that vest pursuant to this Section 7 (and any Dividend Equivalents related thereto) shall still be paid at the applicable time set forth in Section 5.
|
8.
|
Change in Control
. Notwithstanding anything to the contrary in Section 3, Section 5 or Section 7 of this Agreement or any provision of the Plan, the following provisions shall apply upon a Change in Control (as defined in the Employment Agreement):
|
A.
|
If a Change in Control occurs and this Award (to the extent outstanding) is
not
continued following such event or assumed or converted into restricted stock units of any successor entity to the Company or a parent thereof (the “
Successor Entity
”), this Award will vest as of the date of such Change in Control with respect to a number of Restricted Stock Units determined as follows:
|
i.
|
If the Change in Control occurs during the Company’s 2018 fiscal year, this Award shall be become vested as to the Target Number of Restricted Stock Units.
|
ii.
|
If the Change in Control occurs during the Company’s 2019 fiscal year or 2020 fiscal year, the number of Restricted Stock Units subject to this Award that vest in accordance with this Section 8(A)(ii) shall be determined as though the Performance Period ended as of the date of the Change in Control, and the Vesting Percentage under Section 3(A) shall be determined based on actual TSR performance for such shortened performance period.
|
B.
|
If this Award (to the extent then outstanding) is continued following a Change in Control or is assumed or converted into restricted stock units of any Successor Entity, the number of Restricted Stock Units subject to this Award shall be adjusted as provided in the next sentence, and such adjusted number of Restricted Stock Units shall remain eligible to vest on the Vesting Date in accordance with this Section 8(B). In such circumstances, the number of Restricted Stock Units subject to this Award shall be adjusted in connection with the Change in Control as follows:
|
i.
|
If the Change in Control occurs during the Company’s 2018 fiscal year, the number of Restricted Stock Units subject to this Award that shall remain eligible to vest in accordance with this Section 8(B) shall be equal to the Target Number of Restricted Stock Units.
|
ii.
|
If the Change in Control occurs during the Company’s 2019 fiscal year or 2020 fiscal year, the number of Restricted Stock Units subject to this Award that shall remain eligible to vest in accordance with this Section 8(B) shall be determined as though the Performance Period ended as of the date of the Change in Control, and the Vesting Percentage under Section 3(A) shall be determined based on actual TSR performance for such shortened performance period.
|
i.
|
If the Change in Control occurs after the end of the Performance Period, an additional number of Restricted Stock Units subject to this Award shall vest, with the number of Restricted Stock Units vesting equal to the number necessary to cause the total number of Restricted Stock Units subject to this Award that vest (including Restricted Stock Units subject to this Award that previously vested) equal to the number of Restricted Stock Units subject to this Award that would have vested had the pro-ration provision of Section 7(A) not applied.
|
ii.
|
If the Change in Control occurs on or before the last day of the Performance Period, the Award shall be treated as provided in Section 8(A) as though it was not continued following such event or assumed or converted into restricted stock units of any Successor Entity and the pro-ration provision of Section 7(A) shall not apply.
|
9.
|
Restrictions on Transfer
. The Grantee may not sell, assign, transfer, pledge, encumber or otherwise alienate, hypothecate or dispose of this Award or the Grantee’s right hereunder to receive Award Shares, except as otherwise provided in the Committee’s sole discretion consistent with the Plan and applicable securities laws.
|
10.
|
Taxes
.
|
A.
|
The settlement of this Award is conditioned on the Grantee making arrangements reasonably satisfactory to the Company for the withholding of all applicable federal, state, local or foreign taxes as may be required under applicable law.
|
B.
|
It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) (“
Code Section 409A
”) so as not to subject the Grantee to payment of any additional tax, penalty or interest imposed under Code Section 409A. The provisions of this Agreement shall be construed and interpreted to avoid the imputation of any such additional tax, penalty or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Grantee.
|
C.
|
If the Grantee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Grantee’s “separation from service” (as such term is defined for purposes of Code Section 409A), the Grantee shall not be entitled to any payment or benefit pursuant to this Award until the earlier of (i) the date which is six (6) months after the Grantee’s separation from service for any reason other than death, or (ii) the date of the Grantee’s death. The provisions of this Section 10(C) shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Code Section 409A. Any amounts otherwise payable to the Grantee upon or in the six (6) month period following the Grantee’s separation from service that are not so paid by reason of this Section 10(C) shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after the Grantee’s separation from service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of the Grantee’s death).
|
D.
|
It is intended that this Award qualify as “performance-based compensation” for purposes of Section 162(m) of the Code and the provisions of this Agreement shall be construed and interpreted consistent with that intent.
|
11.
|
Compliance
. The Grantee hereby agrees to cooperate with the Company, regardless of Grantee’s employment status with the Company, to the extent necessary for the Company to comply with applicable state and federal laws and regulations relating to the Restricted Stock Units.
|
12.
|
Notices
. Any notice required or permitted under this Agreement shall be deemed given when personally delivered, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Grantee either at the address on record with the Company or such other address as may be designated by Grantee in writing to the Company; or to the Company, Attention: Stock Plan Administration, 1444 South Alameda Street, Los Angeles, California 90021, or such other address as the Company may designate in writing to the Grantee.
|
13.
|
Failure to Enforce Not a Waiver
. The failure of the Company or the Grantee to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.
|
14.
|
Governing Law
. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to Delaware or other laws that might cause other law to govern under applicable principles of conflicts of law. For purposes of litigating any dispute that arises under this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted in the courts of Los Angeles County, or the federal courts for the United States for the
Central District of California, and no other courts, where this Agreement is made and/or to be performed.
|
15.
|
Electronic Delivery
. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Units awarded under the Plan or future restricted stock or restricted stock units that may be awarded under the Plan by electronic means or request Grantee’s consent to participate in the Plan by electronic means.
|
16.
|
Severability
. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
17.
|
Amendments
. This Agreement may be amended or modified at any time by an instrument in writing signed by both parties.
|
18.
|
Agreement Not a Contract of Employment
. Neither the grant of the Restricted Stock Units, this Agreement nor any other action taken in connection herewith shall constitute or be evidence of any agreement or understanding, express or implied, that the Grantee is an employee of the Company or any subsidiary of the Company.
|
19.
|
Committee’s Powers
. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Restricted Stock Units.
|
20.
|
Termination of this Agreement
. Upon termination of this Agreement, all rights of the Grantee hereunder shall cease.
|
21.
|
Clawback Policy
. This Award is subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of this Award or any shares of Common Stock or other cash or property received with respect to this Award (including any value received from a disposition of the shares acquired in respect of this Award).
|
|
|
GUESS?, INC.
,
|
||
|
|
a Delaware corporation
|
||
|
|
|
|
|
|
|
By:
|
|
|
|
|
Print Name:
|
Jason T. Miller
|
|
|
|
Its:
|
Secretary
|
|
|
|
|
|
|
|
|
GRANTEE
|
||
|
|
|
||
|
|
Signature
|
||
|
|
|
||
|
|
Print Name
|
||
|
|
|
||
|
|
Employee ID
|
||
|
|
|
|
|
|
|
|
|
|
o
|
I
AM NOT MARRIED.
|
|||
|
||||
o
|
I
AM MARRIED AND HAVE INFORMED MY SPOUSE OF THIS EQUITY GRANT.
(P
lease have your spouse sign the Consent of Spouse section below.
)
|
|||
|
||||
|
|
|
|
|
|
GRANTEE
|
||
|
|
|
||
|
|
Signature
|
||
|
|
|
||
|
|
Print Name
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Signature of Spouse
|
||
|
|
|
||
|
|
Print Name
|
||
|
|
|
|
|
|
|
|
|
|
1.
|
Definitions; Incorporation of Plan Terms
. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan, except where a capitalized term is defined in the Executive Employment Agreement between the Company and the Grantee, entered into
[
For Paul Marciano, insert:
January 26, 2016, as amended;
For Victor Herrero, insert:
July 7, 2015, as amended
]
(the “
Employment Agreement
”), and this Agreement indicates the definition used in the Employment Agreement shall apply for purposes of this Agreement as well. This 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. Except as specifically provided in this Agreement, in the event of any conflict or inconsistency between the Plan and this Agreement, the Plan shall govern.
|
2.
|
Grant of Restricted Stock Units
. The Company hereby grants to the Grantee as of the Date of Grant (set forth above) a right to receive a “target” of [________] shares of the Company’s common stock subject to the terms, conditions, and restrictions set forth herein (the “
Restricted Stock Units
,” and such target number of Restricted Stock Units, the “
Target Number of Restricted Stock Units
”). As used herein, the term “Restricted Stock Unit” shall mean a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Company’s common stock, par value $0.01 per share (the “
Common Stock
”), solely for purposes of the Plan and this Agreement. The Restricted Stock Units shall be used solely as a device for the determination of the number of shares of Common Stock to eventually be delivered to the Grantee if such Restricted Stock Units vest pursuant to this Agreement. The Restricted Stock Units shall not be treated as property or as a trust fund of any kind. The Grantee shall have no rights as a stockholder of the Company, no dividend rights (except as expressly provided in Section 4 with respect to Dividend Equivalent rights) and no voting rights with respect to the Restricted Stock Units and any shares of
|
3.
|
Vesting
. Except as otherwise expressly provided in Sections 7 and 8 herein, this Award shall vest and become nonforfeitable on the last day of the Performance Period (as defined in
Exhibit A
hereto) (the “
Vesting Date
”); provided that the Grantee has been continuously in Service with the Company from the Date of Grant through the Vesting Date. Except as specifically provided herein, Service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting. The number of Restricted Stock Units subject to this Award that vest will be determined based on the Vesting Percentage (as such term is defined in
Exhibit A
hereto and as calculated in accordance with
Exhibit A
based on the Company’s performance during the Performance Period).
|
4.
|
Dividend Equivalents
. If a cash dividend is paid with respect to the Common Stock after the Date of Grant and before the end of the Performance Period and while any Restricted Stock Units subject to this Award are outstanding, the Grantee shall be credited with an amount in cash equal to the dividends the Grantee would have received if he had been the owner of the shares of Common Stock subject to the outstanding Target Number of Restricted Stock Units; provided, however, that no amount shall be credited with respect to shares that have been delivered to the Grantee as of the applicable dividend record date. Any amounts credited under this Section 4 (“
Dividend Equivalents
”) shall be subject to the same terms and conditions as the Restricted Stock Units to which they relate (including, without limitation, application of the applicable Vesting Percentage) and shall vest and be paid (or, if applicable, be forfeited) at the same time as the Restricted Stock Units to which they relate.
|
5.
|
Delivery of Shares
. Except as otherwise provided in Section 8 below with respect to a Change in Control, the Company shall deliver or cause to be delivered to the Grantee the number of Award Shares subject to any Restricted Stock Units that vest pursuant to the terms hereof as soon as administratively practicable after (and in no event later than 74 days following) the Vesting Date. Any Dividend Equivalents described in Section 4 above related to such Award Shares shall be paid in cash at the same time as the delivery of the Award Shares under this Section 5. Notwithstanding the foregoing: (a) in the
|
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 of Restricted Stock Units and the number and kind of securities subject to this Award.
|
7.
|
Effect of Certain Cessations of Service
.
|
A.
|
If, at any time prior to the Vesting Date, the Grantee’s employment is terminated by the Company without “Cause” (as defined in the Employment Agreement) or by the Grantee for “Good Reason” (as defined in the Employment Agreement)
and
a Change in Control has not previously occurred, the following shall apply with respect to this Award: (i) the Target Number of Restricted Stock Units shall be pro-rated by multiplying the Target Number of Restricted Stock Units by a fraction, the numerator of which is the number of days of the Grantee’s employment between the first day of the Company’s fiscal year 2018 and the date of such termination of the Grantee’s employment, and the denominator of which is the total number of days in the period beginning with the first day of the Company’s fiscal year 2018 and ending with the last day of the Company’s fiscal year 2020, and (ii) such pro-rated number of Target Number of Restricted Stock Units shall remain outstanding and eligible to vest on the Vesting Date based on the Vesting Percentage determined under
Exhibit A
as though the Grantee’s employment had not been terminated. This Section 7(A) is subject to Section 8(C) should a Change in Control occur within twelve (12) months after such a termination of the Grantee’s employment with the Company. If a Change in Control occurs before the end of the Performance Period but more than twelve (12) months after such a termination of the Grantee’s employment with the Company, Section 8(A) shall apply to the Award and the pro-rata vesting provision of this Section 7(A) shall be given effect in calculating the number of Restricted Stock Units that vest.
|
B.
|
If, at any time prior to the Vesting Date, the Grantee’s death or “Disability” (as such term is defined in the Employment Agreement) occurs while the Grantee is in Service with the Company
and
a Change in Control has not previously occurred, this Award will vest as of the date of such event with respect to the Target Number of Restricted Stock Units.
|
C.
|
If the Grantee’s Service terminates for any other reason, this Award and the Restricted Stock Units subject hereto, to the extent outstanding and unvested as of the date of such termination of Service, shall terminate and be cancelled as of the
|
D.
|
For purposes of clarity, any Restricted Stock Units that vest pursuant to this Section 7 (and any Dividend Equivalents related thereto) shall still be paid at the applicable time set forth in Section 5.
|
8.
|
Change in Control
. Notwithstanding anything to the contrary in Section 3, Section 5 or Section 7 of this Agreement or any provision of the Plan, the following provisions shall apply upon a Change in Control (as defined in the Employment Agreement):
|
A.
|
If a Change in Control occurs and this Award (to the extent outstanding) is
not
continued following such event or assumed or converted into restricted stock units of any successor entity to the Company or a parent thereof (the “
Successor Entity
”), this Award will vest as of the date of such Change in Control with respect to the Target Number of Restricted Stock Units.
|
B.
|
If this Award (to the extent then outstanding) is continued following a Change in Control or is assumed or converted into restricted stock units of any Successor Entity, the performance-based vesting conditions of Section 3 shall no longer apply to this Award, and the Target Number of Restricted Stock Units subject to this Award shall remain eligible to vest on the original Vesting Date (without such date being modified due to the occurrence of the Change in Control), subject to the Grantee remaining continuously in Service with the Company following such Change in Control through the Vesting Date (subject to the accelerated
|
i.
|
If the Change in Control occurs after the end of the Performance Period, an additional number of Restricted Stock Units subject to this Award shall vest, with the number of Restricted Stock Units vesting equal to the number necessary to cause the total number of Restricted Stock Units subject to this Award that vest (including Restricted Stock Units subject to this Award that previously vested) equal to the number of Restricted Stock Units subject to this Award that would have vested had the pro-ration provision of Section 7(A) not applied.
|
ii.
|
If the Change in Control occurs on or before the last day of the Performance Period, the Award shall be treated as provided in Section 8(A) as though it was not continued following such event or assumed or converted into restricted stock units of any Successor Entity and the pro-ration provision of Section 7(A) shall not apply.
|
9.
|
Restrictions on Transfer
. The Grantee may not sell, assign, transfer, pledge, encumber or otherwise alienate, hypothecate or dispose of this Award or the Grantee’s right hereunder to receive Award Shares, except as otherwise provided in the Committee’s sole discretion consistent with the Plan and applicable securities laws.
|
10.
|
Taxes
.
|
A.
|
The settlement of this Award is conditioned on the Grantee making arrangements reasonably satisfactory to the Company for the withholding of all applicable federal, state, local or foreign taxes as may be required under applicable law.
|
B.
|
It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) (“
Code Section 409A
”) so as not to subject the Grantee to payment of any additional tax, penalty or interest imposed under Code Section 409A. The provisions of this Agreement shall be construed and interpreted to avoid the imputation of any such additional tax, penalty or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Grantee.
|
C.
|
If the Grantee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Grantee’s “separation from service” (as such term is defined for purposes of Code Section 409A), the Grantee shall not be entitled to any payment or benefit pursuant to this Award until the earlier of (i) the date which is six (6) months after the Grantee’s separation from service for any reason other than death, or (ii) the date of the Grantee’s death. The provisions of this Section 10(C) shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Code Section 409A. Any amounts otherwise payable to the Grantee upon or in the six (6) month period following the Grantee’s separation from service that are not so paid by reason of this Section 10(C) shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after the Grantee’s separation from service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of the Grantee’s death).
|
D.
|
It is intended that this Award qualify as “performance-based compensation” for purposes of Section 162(m) of the Code and the provisions of this Agreement shall be construed and interpreted consistent with that intent.
|
11.
|
Compliance
. The Grantee hereby agrees to cooperate with the Company, regardless of Grantee’s employment status with the Company, to the extent necessary for the Company to comply with applicable state and federal laws and regulations relating to the Restricted Stock Units.
|
12.
|
Notices
. Any notice required or permitted under this Agreement shall be deemed given when personally delivered, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Grantee either at the address on record with the Company or such other address as may be designated by Grantee in writing to the Company; or to the Company, Attention: Stock Plan Administration, 1444 South Alameda Street, Los Angeles, California 90021, or such other address as the Company may designate in writing to the Grantee.
|
13.
|
Failure to Enforce Not a Waiver
. The failure of the Company or the Grantee to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.
|
14.
|
Governing Law
. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to Delaware or other laws that might cause other law to govern under applicable principles of conflicts of law. For purposes of litigating any dispute that arises under this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted in the courts of Los Angeles County, or the federal courts for the United States for the
Central District of California, and no other courts, where this Agreement is made and/or to be performed.
|
15.
|
Electronic Delivery
. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Units awarded under the Plan or future restricted stock or restricted stock units that may be awarded under the Plan by electronic means or request Grantee’s consent to participate in the Plan by electronic means.
|
16.
|
Severability
. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
17.
|
Amendments
. This Agreement may be amended or modified at any time by an instrument in writing signed by both parties.
|
18.
|
Agreement Not a Contract of Employment
. Neither the grant of the Restricted Stock Units, this Agreement nor any other action taken in connection herewith shall constitute or be evidence of any agreement or understanding, express or implied, that the Grantee is an employee of the Company or any subsidiary of the Company.
|
19.
|
Committee’s Powers
. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Restricted Stock Units.
|
20.
|
Termination of this Agreement
. Upon termination of this Agreement, all rights of the Grantee hereunder shall cease.
|
21.
|
Clawback Policy
. This Award is subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of this Award or any shares of Common Stock or other cash or property received with respect to this Award (including any value received from a disposition of the shares acquired in respect of this Award).
|
|
|
GUESS?, INC.
,
|
||
|
|
a Delaware corporation
|
||
|
|
|
|
|
|
|
By:
|
|
|
|
|
Print Name:
|
Jason T. Miller
|
|
|
|
Its:
|
Secretary
|
|
|
|
|
|
|
|
|
GRANTEE
|
||
|
|
|
||
|
|
Signature
|
||
|
|
|
||
|
|
Print Name
|
||
|
|
|
||
|
|
Employee ID
|
||
|
|
|
|
|
|
|
|
|
|
o
|
I
AM NOT MARRIED.
|
|||
|
||||
o
|
I
AM MARRIED AND HAVE INFORMED MY SPOUSE OF THIS EQUITY GRANT.
(P
lease have your spouse sign the Consent of Spouse section below.
)
|
|||
|
||||
|
|
|
|
|
|
GRANTEE
|
||
|
|
|
||
|
|
Signature
|
||
|
|
|
||
|
|
Print Name
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Signature of Spouse
|
||
|
|
|
||
|
|
Print Name
|
||
|
|
|
|
|
|
|
|
|
|
Company Revenue for
the Performance Period
(in millions)
|
|
Company Earnings from
Operations for the
Performance Period
(in millions)
|
|
Vesting
Percentage
|
Below Threshold
|
|
Below Threshold
|
|
0%
|
Threshold
|
|
Threshold
|
|
50%
|
Target
|
|
Target
|
|
100%
|
Stretch and Above
|
|
Stretch
and Above
|
|
200%
|
•
|
“
GAAP
” means U.S. generally accepted accounting principles.
|
•
|
“
Earnings from Operations
” means the Company’s worldwide earnings from operations for the Performance Period, as determined by the Company in accordance with GAAP and reflected in its reporting of financial results.
|
•
|
“
Performance Metric
” means Revenue or Earnings from Operations, as applicable.
|
•
|
“
Revenue
” means the Company’s worldwide revenue (excluding revenue for the Company’s Americas Retail Segment) for the Performance Period, as determined by the Company in accordance with GAAP and reflected in its reporting of financial results.
|
(a)
|
increased or decreased to eliminate the financial statement impact of any charges or accruals during the Performance Period for litigation matters, but only where such charges or accruals for any particular matter exceed $500,000 for the Performance Period;
|
(b)
|
increased or decreased to eliminate the financial statement impact of restructuring charges incurred during the Performance Period, including employee severance related costs, store closure related costs and other real estate closure related costs;
|
(c)
|
increased or decreased to eliminate the financial statement impact of any store impairment charges;
|
(d)
|
increased or decreased to eliminate the financial statement impact of (i) any new changes in accounting standards announced between the first day of the Company’s fiscal year 2018 and the end of the Performance Period and (ii) the new comprehensive standards for revenue recognition (Topic 606: Revenue from Contracts with Customers) and Leases (Topic: 842) first issued by the Financial Accounting Standards Board in 2014 and 2016, respectively, in each case including any additional clarifications or guidance issued with respect thereto; and in the case of each of (i) and (ii) that are required or permitted to be applied before the end of the Performance Period in accordance with GAAP;
|
(e)
|
increased or decreased to eliminate the financial statement impact of costs associated with acquisitions and costs incurred in connection with potential acquisitions that are required to be expensed under GAAP during the Performance Period;
|
(f)
|
increased or decreased to eliminate the financial statement impact of gains or losses on dispositions of investments accounted for under the equity method of accounting in accordance with GAAP and costs associated with such transactions, in each case during the Performance Period;
|
(g)
|
increased or decreased to eliminate the impact of currency fluctuations as and to the extent provided by the constant currency methodology approved by the Committee in connection with the grant of the Award; and
|
(h)
|
increased or decreased to eliminate the financial statement impact of corresponding income tax expenses and/or benefits for the Performance Period associated with items (a) through (g) herein.
|
1.
|
Definitions; Incorporation of Plan Terms
. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. This 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. Except as specifically provided in this Agreement, in the event of any conflict or inconsistency between the Plan and this Agreement, the Plan shall govern.
|
2.
|
Grant of Restricted Stock Units
. The Company hereby grants to the Grantee as of the Date of Grant (set forth above) a right to receive a “target” of [________] shares of the Company’s common stock subject to the terms, conditions, and restrictions set forth herein (the “
Restricted Stock Units
,” and such target number of Restricted Stock Units, the “
Target Number of Restricted Stock Units
”). As used herein, the term “Restricted Stock Unit” shall mean a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Company’s common stock, par value $0.01 per share (the “
Common Stock
”), solely for purposes of the Plan and this Agreement. The Restricted Stock Units shall be used solely as a device for the determination of the number of shares of Common Stock to eventually be delivered to the Grantee if such Restricted Stock Units vest pursuant to this Agreement. The Restricted Stock Units shall not be treated as property or as a trust fund of any kind. The Grantee shall have no rights as a stockholder of the Company, no dividend rights (except as expressly provided in Section 4 with respect to Dividend Equivalent rights) and no voting rights with respect to the Restricted Stock Units and any shares of Common Stock underlying or issuable in respect of such Restricted Stock Units (“
Award Shares
”) until such shares of Common Stock are actually issued to and held of record by the Grantee. This Award, together with the other equity awards granted by the Company to the Grantee on or about the date hereof, is in complete satisfaction of the Grantee’s
|
3.
|
Vesting
. Except as otherwise expressly provided in Sections 7 and 8 herein, this Award shall vest and become nonforfeitable on the last day of the Performance Period (as defined in
Exhibit A
hereto) (the “
Vesting Date
”); provided that the Grantee has been continuously in Service with the Company from the Date of Grant through the Vesting Date. Except as specifically provided herein, Service for only a portion of the vesting period, even if a substantial portion, will not entitle the Grantee to any proportionate vesting. The number of Restricted Stock Units subject to this Award that vest will be determined based on the Vesting Percentage (as such term is defined in
Exhibit A
hereto and as calculated in accordance with
Exhibit A
based on the Company’s performance during the Performance Period).
|
4.
|
Dividend Equivalents
. If a cash dividend is paid with respect to the Common Stock after the Date of Grant and before the end of the Performance Period and while any Restricted Stock Units subject to this Award are outstanding, the Grantee shall be credited with an amount in cash equal to the dividends the Grantee would have received if he had been the owner of the shares of Common Stock subject to the outstanding Target Number of Restricted Stock Units; provided, however, that no amount shall be credited with respect to shares that have been delivered to the Grantee as of the applicable dividend record date. Any amounts credited under this Section 4 (“
Dividend Equivalents
”) shall be subject to the same terms and conditions as the Restricted Stock Units to which they relate (including, without limitation, application of the applicable Vesting Percentage) and shall vest and be paid (or, if applicable, be forfeited) at the same time as the Restricted Stock Units to which they relate.
|
5.
|
Delivery of Shares
. Except as otherwise provided in Section 8 below with respect to a Change in Control, the Company shall deliver or cause to be delivered to the Grantee the number of Award Shares subject to any Restricted Stock Units that vest pursuant to the terms hereof as soon as administratively practicable after (and in no event later than 74 days following) the Vesting Date. Any Dividend Equivalents described in Section 4 above related to such Award Shares shall be paid in cash at the same time as the delivery of the Award Shares under this Section 5. Notwithstanding the foregoing: (a) in the event of the Grantee’s death or Disability (as such term is defined for purposes of Section 409A of the Code), then such shares shall be settled as soon as administratively practicable after (and in all events within 90 days after) such event; and (b) in the event of the Grantee’s “separation from service” (as such term is defined for purposes of Code
|
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 of Restricted Stock Units and the number and kind of securities subject to this Award.
|
7.
|
Effect of Certain Cessations of Service
.
|
A.
|
If, at any time prior to the Vesting Date, the Grantee’s death or Disability (as such term is defined in the Plan) occurs while the Grantee is in Service with the Company
and
a Change in Control has not previously occurred, this Award will vest as of the date of such event with respect to the Target Number of Restricted Stock Units.
|
B.
|
If the Grantee’s Service terminates for any other reason, this Award and the Restricted Stock Units subject hereto, to the extent outstanding and unvested as of the date of such termination of Service, shall terminate and be cancelled as of the date of such termination of Service. Sections 14(a) and 14(b) of the Plan shall not apply to this Award.
|
C.
|
For purposes of clarity, any Restricted Stock Units that vest pursuant to this Section 7 (and any Dividend Equivalents related thereto) shall still be paid at the applicable time set forth in Section 5.
|
8.
|
Change in Control
. Notwithstanding anything to the contrary in Section 3, Section 5 or Section 7 of this Agreement or any provision of the Plan, the following provisions shall apply upon a Change in Control (as defined in the Plan):
|
A.
|
If a Change in Control occurs and this Award (to the extent outstanding) is
not
continued following such event or assumed or converted into restricted stock units of any successor entity to the Company or a parent thereof (the “
Successor Entity
”), this Award will vest as of the date of such Change in Control with respect to the Target Number of Restricted Stock Units.
|
B.
|
If this Award (to the extent then outstanding) is continued following a Change in Control or is assumed or converted into restricted stock units of any Successor Entity, the performance-based vesting conditions of Section 3 shall no longer apply to this Award, and the Target Number of Restricted Stock Units subject to this Award shall remain eligible to vest on the original Vesting Date (without such date being modified due to the occurrence of the Change in Control), subject to the Grantee remaining continuously in Service with the Company following such Change in Control through the Vesting Date; provided, however, that if a termination of the Grantee’s Service described in Section 7(A) above occurs after such Change in Control and prior to the Vesting Date, this Award will vest as of the date of such termination of the Grantee’s Service with respect to the Target Number of Restricted Stock Units. Any Restricted Stock Units (and any related Dividend Equivalents) that vest pursuant to this Section 8(B) shall be paid at the time(s) otherwise provided in Section 5.
|
9.
|
Restrictions on Transfer
. The Grantee may not sell, assign, transfer, pledge, encumber or otherwise alienate, hypothecate or dispose of this Award or the Grantee’s right hereunder to receive Award Shares, except as otherwise provided in the Committee’s sole discretion consistent with the Plan and applicable securities laws.
|
10.
|
Taxes
.
|
A.
|
The settlement of this Award is conditioned on the Grantee making arrangements reasonably satisfactory to the Company for the withholding of all applicable federal, state, local or foreign taxes as may be required under applicable law.
|
B.
|
It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) (“
Code Section 409A
”) so as not to subject the Grantee to payment of any additional tax, penalty or interest imposed under Code Section 409A. The provisions of this Agreement shall be construed and interpreted to avoid the imputation of any such additional tax, penalty or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Grantee.
|
C.
|
If the Grantee is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Grantee’s “separation from
|
D.
|
It is intended that this Award qualify as “performance-based compensation” for purposes of Section 162(m) of the Code and the provisions of this Agreement shall be construed and interpreted consistent with that intent.
|
11.
|
Compliance
. The Grantee hereby agrees to cooperate with the Company, regardless of Grantee’s employment status with the Company, to the extent necessary for the Company to comply with applicable state and federal laws and regulations relating to the Restricted Stock Units.
|
12.
|
Notices
. Any notice required or permitted under this Agreement shall be deemed given when personally delivered, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Grantee either at the address on record with the Company or such other address as may be designated by Grantee in writing to the Company; or to the Company, Attention: Stock Plan Administration, 1444 South Alameda Street, Los Angeles, California 90021, or such other address as the Company may designate in writing to the Grantee.
|
13.
|
Failure to Enforce Not a Waiver
. The failure of the Company or the Grantee to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.
|
14.
|
Governing Law
. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to Delaware or other laws that might cause other law to govern under applicable principles of conflicts of law. For purposes of litigating any dispute that arises under this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted in the courts of Los Angeles County, or the federal courts for the United States for the
Central District of California, and no other courts, where this Agreement is made and/or to be performed.
|
15.
|
Electronic Delivery
. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Units awarded under the Plan or future restricted stock or restricted stock units that may be awarded under the Plan by electronic means or request Grantee’s consent to participate in the Plan by electronic means. Grantee hereby consents to receive such documents by electronic delivery and agrees to
|
16.
|
Severability
. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
17.
|
Amendments
. This Agreement may be amended or modified at any time by an instrument in writing signed by both parties.
|
18.
|
Agreement Not a Contract of Employment
. Neither the grant of the Restricted Stock Units, this Agreement nor any other action taken in connection herewith shall constitute or be evidence of any agreement or understanding, express or implied, that the Grantee is an employee of the Company or any subsidiary of the Company.
|
19.
|
Committee’s Powers
. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of the Plan or resolutions adopted in furtherance of the Plan, including, without limitation, the right to make certain determinations and elections with respect to the Restricted Stock Units.
|
20.
|
Termination of this Agreement
. Upon termination of this Agreement, all rights of the Grantee hereunder shall cease.
|
21.
|
Clawback Policy
. This Award is subject to the terms of the Company’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of this Award or any shares of Common Stock or other cash or property received with respect to this Award (including any value received from a disposition of the shares acquired in respect of this Award).
|
|
|
GUESS?, INC.
,
|
||
|
|
a Delaware corporation
|
||
|
|
|
|
|
|
|
By:
|
|
|
|
|
Print Name:
|
Jason T. Miller
|
|
|
|
Its:
|
Secretary
|
|
|
|
|
|
|
|
|
GRANTEE
|
||
|
|
|
||
|
|
Signature
|
||
|
|
|
||
|
|
Print Name
|
||
|
|
|
||
|
|
Employee ID
|
||
|
|
|
|
|
|
|
|
|
|
o
|
I
AM NOT MARRIED.
|
|||
|
||||
o
|
I
AM MARRIED AND HAVE INFORMED MY SPOUSE OF THIS EQUITY GRANT.
(P
lease have your spouse sign the Consent of Spouse section below.
)
|
|||
|
||||
|
|
|
|
|
|
GRANTEE
|
||
|
|
|
||
|
|
Signature
|
||
|
|
|
||
|
|
Print Name
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Signature of Spouse
|
||
|
|
|
||
|
|
Print Name
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Company Revenue for
the Performance Period
(in millions)
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Company Earnings from
Operations for the
Performance Period
(in millions)
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Vesting
Percentage
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Below Threshold
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Below Threshold
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0%
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Threshold
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Threshold
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50%
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Target
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Target
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100%
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Stretch and Above
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Stretch
and Above
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200%
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•
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“
GAAP
” means U.S. generally accepted accounting principles.
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•
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“
Earnings from Operations
” means the Company’s worldwide earnings from operations for the Performance Period, as determined by the Company in accordance with GAAP and reflected in its reporting of financial results.
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•
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“
Performance Metric
” means Revenue or Earnings from Operations, as applicable.
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“
Revenue
” means the Company’s worldwide revenue (excluding revenue for the Company’s Americas Retail Segment) for the Performance Period, as determined by the Company in accordance with GAAP and reflected in its reporting of financial results.
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(a)
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increased or decreased to eliminate the financial statement impact of any charges or accruals during the Performance Period for litigation matters, but only where such charges or accruals for any particular matter exceed $500,000 for the Performance Period;
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(b)
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increased or decreased to eliminate the financial statement impact of restructuring charges incurred during the Performance Period, including employee severance related costs, store closure related costs and other real estate closure related costs;
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(c)
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increased or decreased to eliminate the financial statement impact of any store impairment charges;
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(d)
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increased or decreased to eliminate the financial statement impact of (i) any new changes in accounting standards announced between the first day of the Company’s fiscal year 2018 and the end of the Performance Period and (ii) the new comprehensive standards for revenue recognition (Topic 606: Revenue from Contracts with Customers) and Leases (Topic: 842) first issued by the Financial Accounting Standards Board in 2014 and 2016, respectively, in each case including any additional clarifications or guidance issued with respect thereto; and in the case of each of (i) and (ii) that are required or permitted to be applied before the end of the Performance Period in accordance with GAAP;
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(e)
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increased or decreased to eliminate the financial statement impact of costs associated with acquisitions and costs incurred in connection with potential acquisitions that are required to be expensed under GAAP during the Performance Period;
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(f)
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increased or decreased to eliminate the financial statement impact of gains or losses on dispositions of investments accounted for under the equity method of accounting in accordance with GAAP and costs associated with such transactions, in each case during the Performance Period;
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(g)
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increased or decreased to eliminate the impact of currency fluctuations as and to the extent provided by the constant currency methodology approved by the Committee in connection with the grant of the Award; and
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(h)
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increased or decreased to eliminate the financial statement impact of corresponding income tax expenses and/or benefits for the Performance Period associated with items (a) through (g) herein.
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1.
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I have reviewed this quarterly report on Form 10-Q of Guess?, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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June 2, 2017
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By:
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/s/ VICTOR HERRERO
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Victor Herrero
Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Guess?, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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June 2, 2017
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By:
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/s/ SANDEEP REDDY
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Sandeep Reddy
Chief Financial Officer
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•
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the Quarterly Report on Form 10-Q of the Company for the period ended
April 29, 2017
, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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•
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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June 2, 2017
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By:
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/s/ VICTOR HERRERO
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Victor Herrero
Chief Executive Officer
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•
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the Quarterly Report on Form 10-Q of the Company for the period ended
April 29, 2017
, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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•
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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June 2, 2017
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By:
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/s/ SANDEEP REDDY
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Sandeep Reddy
Chief Financial Officer
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