AMERICAN APPAREL, INC
EXHIBIT 10.1 -- FIRST AMENDMENT
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<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>american_ex10-1.htm
<DESCRIPTION>EXHIBIT 10.1 -- FIRST AMENDMENT
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif">FIRST
AMENDMENT TO THE</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif">2007
PERFORMANCE EQUITY PLAN</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; COLOR: #000000">American Apparel, Inc.</font><font style="DISPLAY: inline; COLOR: #000000">, a Delaware corporation (the
&#8220;Company&#8221;), hereby amends the </font><font style="DISPLAY: inline; COLOR: #000000">2007 Performance Equity Plan</font><font style="DISPLAY: inline; COLOR: #000000"> (the &#8220;Plan&#8221;)</font><font style="DISPLAY: inline; COLOR: #000000"> with this First Amendment to the Plan
(this &#8220;Amendment&#8221;)</font><font style="DISPLAY: inline; COLOR: #000000">,
effective</font><font style="DISPLAY: inline; COLOR: #000000"> October
27</font><font style="DISPLAY: inline; COLOR: #000000">, 200</font><font style="DISPLAY: inline; COLOR: #000000">8</font><font style="DISPLAY: inline; COLOR: #000000">, with reference to the
following:</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; COLOR: #000000">WHEREAS, the Company maintains the Plan
for the benefit of its </font><font style="DISPLAY: inline; COLOR: #000000">employees, officers, directors and
consultants</font><font style="DISPLAY: inline; COLOR: #000000">; </font><font style="DISPLAY: inline; COLOR: #000000">and</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; COLOR: #000000">WHEREAS, the Board of Directors
</font><font style="DISPLAY: inline; COLOR: #000000">(the &#8220;Board&#8221;) </font><font style="DISPLAY: inline; COLOR: #000000">of the Company desires to amend the Plan
to </font><font style="DISPLAY: inline; COLOR: #000000">require the approval of
stockholders of the Company prior to any reduction of the exercise price of an
outstanding Stock Option or Stock Appreciation Right.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>NOW THEREFORE, the Plan is hereby
amended as follows:</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 75pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; COLOR: #000000">1.</font>&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Definitions</font>.
Capitalized terms used herein without definition shall have the respective
meanings assigned to such terms in the Plan.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 75pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; COLOR: #000000">2.</font>&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 5 (Stock
Options)</font>.&#160;&#160;Section 5.2(j) of the Plan is hereby deleted in its
entirety.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 75pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; COLOR: #000000">3.</font>&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Section 2.2 (</font><font style="DISPLAY: inline; TEXT-DECORATION: underline">Powers of
Committee)</font>.&#160;&#160;Section 2.2(g) is hereby amended in its entirety
to read as follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 75pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif">&#8220;to
substitute (i) new Stock Options for previously granted Stock Options, which
previously granted Stock Options have higher option exercise prices and/or
contain other less favorable terms, and (ii) new awards of any other type for
previously granted awards of the same type, which previously granted awards are
upon less favorable terms; provided, however, that such authority may not be
exercised without the approval of the Company's shareholders;&#8221;</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 75pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; COLOR: #000000">4.</font>&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Effect on the
Plan</font>.&#160;&#160;On and after the date hereof, each reference in the Plan
to &#8220;the Plan&#8221;, &#8220;this Plan&#8221;, &#8220;herein&#8221;, &#8220;hereof&#8221;, &#8220;hereunder&#8221; or words of similar
import shall mean and be a reference to the Plan as amended
hereby.&#160;&#160;Except as specifically amended by this Amendment, all terms
and conditions of the Plan are unamended and shall remain in full force and
effect, and the Plan, as amended by this Amendment, is hereby ratified and
confirmed in all respects, subject to approval of this Amendment by the
Board.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 75pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font style="DISPLAY: inline; COLOR: #000000">5.</font>&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Headings</font>.&#160;&#160;Headings
to sections herein are inserted for convenience of reference only and shall not
be deemed to be a part of or to affect the meaning or interpretation of this
Amendment.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, serif"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>IN WITNESS HEREOF, the Company has
executed this Amendment to the Plan effective as of the date written
above.</font></div>
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                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman, serif">AMERICAN
      APPAREL, INC.</font></div>
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                      <td align="left" valign="bottom" width="18%" style="BORDER-BOTTOM: black 1px solid">/s/ Dov Charney</td>
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                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman, serif">Name:
      Dov Charney</font></div>
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                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman, serif">Title:&#160;&#160;&#160;
      Chairman</font></div>
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