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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
MOVADO GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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MOVADO GROUP, INC.
125 CHUBB AVENUE
LYNDHURST, NEW JERSEY 07071
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 19, 2001
Notice is hereby given that the Annual Meeting of Shareholders of Movado
Group, Inc. will be held on Tuesday, June 19, 2001 at 10:00 a.m., Eastern
Daylight Time, at the offices of Simpson Thacher & Bartlett, 425 Lexington
Avenue, New York, New York for the following purposes:
1. To elect seven directors to serve until the next Annual Meeting and
until their successors are elected and qualified;
2. To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending
January 31, 2002;
3. To act upon a proposal to amend the Company's 1996 Stock Incentive
Plan;
4. To approve a performance based executive bonus plan; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Holders of the Company's Common Stock and Class A Common Stock of record at
the close of business on May 11, 2001 are entitled to notice of and to vote at
the Annual Meeting of Shareholders or any postponements or adjournments
thereof.
Dated: May 25, 2001 By order of The Board of Directors
Timothy F. Michno
Secretary and General Counsel
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[MOVADO GROUP LOGO]
May 25, 2001
Dear Shareholders:
We cordially invite you to attend the 2001 Annual Meeting of the
shareholders of Movado Group, Inc. The meeting will be held on Tuesday, June
19, 2001, at 10:00 a.m., Eastern Daylight Time, at the offices of Simpson,
Thacher & Bartlett located at 425 Lexington Avenue, New York, New York. The
official Notice of Meeting, Proxy Statement and form of proxy are enclosed
with this letter. The matters listed in the Notice of Meeting are described in
the attached Proxy Statement.
We hope you will be able to attend and participate in the meeting. We
will be reporting on the Company's progress and responding to questions you
may have about the Company's business.
Whether or not you plan to attend, the vote of every shareholder is important
and your cooperation in completing, signing and returning your proxy promptly
will be appreciated.
We hope to see you at the Annual Meeting.
Sincerely,
Gedalio Grinberg
Chairman of the Board
WWHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN AND
RETURN YOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE,
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MOVADO GROUP, INC.
125 CHUBB AVENUE
LYNDHURST, NJ 07071
PROXY STATEMENT
INFORMATION CONCERNING THE SOLICITATION
This proxy statement and the accompanying proxy are being furnished to
the shareholders of Movado Group, Inc. (the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company to be used
for voting at the Annual Meeting of Shareholders (the "Annual Meeting") to be
held on Tuesday, June 19, 2001 at 10:00 a.m., Eastern Daylight Time, at the
offices of Simpson, Thacher & Bartlett, 425 Lexington Avenue, New York, New
York and at any adjournments thereof. It is expected that this proxy statement
and the form of proxy will first be sent to shareholders on or about May 29,
2001.
At the Annual Meeting, the holders of the Company's Common Stock and
Class A Common Stock (together the "Capital Stock") will be asked to consider
and vote upon the following proposals:
1. To elect seven directors to serve until the next annual meeting
and until their successors are elected and qualified;
2. To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending
January 31, 2002;
3. To act upon a proposal to amend the Company's 1996 Stock Incentive
Plan;
4. To approve a performance based executive bonus plan; and
5. To transact such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
The Board of Directors knows of no other business to be presented at
the Annual Meeting. If any other business is properly presented, the persons
named in the enclosed proxy will have the power to vote all proxies received,
and not theretofore revoked, in accordance with the recommendations of the
Board of Directors. If the enclosed proxy is properly executed, returned to
the Company in time for the Annual Meeting and not revoked, your shares will
be voted in accordance with the instructions contained thereon. Where a signed
proxy is returned, but no specific instructions are indicated, your shares
will be voted FOR the nominees for Directors identified below; FOR the
ratification of the appointment of PricewaterhouseCoopers LLP as the Company's
independent accountants for fiscal year 2002; FOR the proposal to amend the
Company's 1996 Stock Incentive Plan; and FOR the approval of a performance
based executive bonus plan.
Abstentions will be treated as present for purposes of determining a
quorum for the Annual Meeting. Proxies returned by brokers as "non-votes" will
not be treated as present for purposes of determining the presence of a
quorum.
Any shareholder who executes and returns a proxy may revoke it in
writing at any time before it is voted at the Annual Meeting by: (i) filing
with the Secretary of the Company, at the above address, written notice of
such revocation bearing a later date than the proxy or a subsequent proxy
relating to the same shares or (ii) attending the Annual Meeting and voting in
person (although attendance at the Annual Meeting will not in and of itself
constitute revocation of a proxy).
The solicitation of proxies in the enclosed form is made on behalf of
the Board of Directors. The entire cost of soliciting these proxies will be
borne by the Company. In addition to use of the mails, proxies may be
solicited personally or by telephone by officers, directors and employees of
the Company, who will receive no additional compensation for such activities.
Arrangements will be made with brokerage houses and other custodians, nominees
and fiduciaries to forward solicitation materials to the beneficial owners of
shares held of record by such persons, who will be reimbursed for their
reasonable expenses incurred in such connection.
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OUTSTANDING VOTING SECURITIES
The Board of Directors has fixed the close of business on May 11, 2001
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting (the "Record Date"). Only holders of record
of the Capital Stock at the close of business on the Record Date are entitled
to notice of and to vote at the Annual Meeting or any and all adjournments
thereof. On the Record Date there were 8,152,690 shares of Common Stock
outstanding and 3,483,276 shares of Class A Common Stock outstanding. Each
share of Common Stock is entitled to one vote, and each share of Class A
Common Stock is entitled to 10 votes. The holders of a majority in voting
power of the outstanding shares of Capital Stock entitled to vote at the
Annual Meeting, present in person or represented by proxy, constitute a quorum
at the Annual Meeting. Directors are elected by a plurality of the votes cast
at the Annual Meeting. The approval of proposals 2, 3 and 4 requires the
affirmative vote of a majority of the votes cast at the Annual Meeting.
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Class A Common Stock and the Common Stock as of
the Record Date (except as otherwise noted in footnotes 3, 5, 6, and 13) by
(i) each shareholder who is known by the Company to beneficially own in excess
of 5% of the outstanding shares of Class A Common Stock or of the outstanding
shares of Common Stock, (ii) each director, (iii) each Named Executive Officer
(as hereinafter defined) and (iv) all executive officers and directors as a
group. Unless otherwise noted, all shares are beneficially owned by the
persons indicated.
PERCENT OF OUTSTANDING
SHARES OF CAPITAL STOCK
-----------------------
SHARES OF
CLASS A SHARES OF
COMMON COMMON PERCENT OF
STOCK STOCK CLASS A TOTAL
BENEFICIALLY BENEFICIALLY COMMON COMMON VOTING
NAME OF BENEFICIAL OWNER OWNED OWNED STOCK STOCK POWER (1)
- ---------------------------------------------------------------------------------------------------------------------
Margaret Hayes Adame(2)................... - 3,875 - * *
Kenneth J. Adams (3)...................... - 9 - * *
Richard J. Cote ((4)...................... - 166,000 - 2.0% *
Dimensional Fund Advisors Inc.(5)......... - 774,612 - 9.5% 1.8%
FMR Corp. (6) - 950,500 - 11.7% 2.2%
Alexander Grinberg (7).................... 1,648,723 10,300 47.3% * 38.4%
Efraim Grinberg (8)....................... 838,566 362,405 24.1% 4.4% 20.4%
Gedalio Grinberg (9)...................... 2,199,785 61,155 63.2% * 51.3%
Alan H. Howard (2)........................ - 2,937 - * *
Timothy F. Michno (10).................... - 6,672 - * *
Donald Oresman (2)........................ 1,960 2,000 * * *
Miriam Phalen (11)........................ 1,630,362 - 46.8% - 37.9%
Leonard L. Silverstein (2)(12)............ 456,468 48,323 13.1.% * 10.7%
Thomson Horstman & Bryant, Inc.(13)....... - 801,835 - 9.8% *
All executive officers and directors as a
group (11 persons) (14)................... 3,040,311 601,821 87.3% 7.4% 72.2%
- ----------------
* DENOTES LESS THAN ONE PERCENT
The address for Messrs. Adams, Cote, A. Grinberg, G. Grinberg. E. Grinberg,
Howard, Michno, Oresman and Silverstein and Ms. Hayes-Adame and Ms. Phalen is
c/o Movado Group, Inc., 125 Chubb Avenue, Lyndhurst, New Jersey 07071.
(1) In calculating the percent of total voting power, the voting power of
shares of Common Stock (one vote per share) and Class A Common Stock
(10 votes per share) has been aggregated.
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(2) The total shares of Common Stock reported as beneficially owned by
each of Ms. Hayes Adame and Messrs. Howard, Oresman and Silverstein
includes 2,000 shares each has the right to acquire by the exercise of
options under the Company's 1996 Stock Incentive Plan.
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(3) As one of the four most highly compensated executive officers, other
than the CEO, who was serving as an executive officer during the
Company's last fiscal year ending January 31, 2001, Mr. Adams was a
"Named Executive Officer". However, Mr. Adams resigned on December 5,
2000 as Senior Vice President and Chief Financial Officer although he
remained employed by the Company through the close of business on
January 31, 2001 and, therefore, the number of shares of Common Stock
shown as owned by him is the number as of that date.
(4) The total shares of Common Stock reported as beneficially owned by Mr.
Cote includes 46,000 shares which he has the right to acquire by the
exercise of options under the Company's 1996 Stock Incentive Plan.
(5) On February 2, 2001 in a filing on Schedule 13G under the Exchange
Act, Dimensional Fund Advisors, Inc. ("DFA") reported beneficial
ownership as of December 31, 2000 of 774,612 shares of Common Stock as
to all of which it has sole voting and investment power. DFA also
reported that all of the shares of Common Stock that it beneficially
owns were acquired in the ordinary course of business and not for the
purpose or with the effect of changing or influencing control of the
Company, or in connection with any transaction having such purpose or
effect. The address of DFA is 1299 Ocean Avenue, 11th Floor, Santa
Monica, CA 90401.
(6) In a joint filing on Schedule 13G dated February 14, 2001, under the
Exchange Act, FMR Corp., together with its wholly owned subsidiary,
Fidelity Management and Research Company ("Fidelity"), and Edward C.
Johnson 3d and Abigail P. Johnson in their capacity as a controlling
group of FMR Corp., each reported beneficial ownership as of December
31, 2000 of 950,500 shares of Common Stock as to which each such
reporting person reported having sole dispositive power and no voting
power. Each such reporting person also reported that all of the
shares of Common Stock which it beneficially owns were acquired in the
ordinary course of business and not for the purpose or with the effect
of changing or influencing control of the Company, or in connection
with any transaction having such purpose or effect. The address of
each such reporting person is 82 Devonshire Street, Boston,
Massachusetts 02109.
(7) The total number of shares of Class A Common Stock beneficially owned
by Mr. Alexander Grinberg includes 1,492,048 shares owned by Grinberg
Partners L.P. of which Mr. A. Grinberg is a limited partner, and
32,578 shares owned by trusts for the benefit of Mr. A. Grinberg's
niece and nephew, of which trusts he is a co-trustee with Mr. Mark
Fishman. Mr. A. Grinberg has shared voting and investment power with
Grinberg Partners L.P., Grinberg Group Partners (the general partner
of Grinberg Partners L.P.) and Miriam Phalen over the 1,492,048 shares
owned by Grinberg Partners L.P. and shared voting and investment power
with Mr. Fishman over the 32,578 shares owned by the trusts. The
Common Stock owned by Mr. A. Grinberg represents the number of shares
he has the right to acquire by the exercise of options under the
Company's 1996 Stock Incentive Plan.
(8) The total number of shares of Class A Common Stock beneficially owned
by Mr. Efraim Grinberg includes an aggregate of 281,653 shares held by
several trusts for the benefit of Mr. E. Grinberg's siblings and
himself, of which trusts Mr. E. Grinberg is sole trustee. As sole
trustee, Mr. E. Grinberg has sole investment and voting power with
respect to the shares held by such trusts. In addition, the amount of
shares of Class A Common Stock reported for Mr. E. Grinberg includes
an aggregate of 431,468 shares of Class A Common Stock held by several
trusts for the benefit of Mr. E. Grinberg's siblings and himself, of
which trusts Mr. E. Grinberg is co-trustee with Mr. Leonard L.
Silverstein. As a co-trustee, Mr. E. Grinberg has shared investment
and voting power with Mr. Silverstein with respect to the shares of
Class A Common Stock held by such trusts. The total number of shares
of Common Stock owned by Mr. E. Grinberg includes 40,559 shares of
Common Stock held under the Company's Employee Savings and Investment
Plan ("401(k) Plan"), the trustees of which are Messrs. Gedalio
Grinberg and E. Grinberg, both of whom have shared investment and
voting power as to such shares and 14,971 shares of Common Stock held
under the Company's Stock Bonus Plan, for which Mr. E. Grinberg is a
co-trustee and as to which shares he has shared investment and voting
power. Mr. E. Grinberg disclaims beneficial ownership as to the
477,107 shares of Class A Common Stock held by the trusts for the
benefit of his siblings of which he is trustee or co-trustee; the
40,559 shares of Common Stock held under the Company's 401(k) Plan and
the 14,971 shares of Common Stock held under the Company's Stock Bonus
Plan except to the extent of his pecuniary interest in the 40,559
shares held under the Company's 401(k) Plan. The total number of
shares
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of Common Stock owned by Mr. E. Grinberg also includes 305,000 shares
of Common Stock which he has the right to acquire by the exercise of
options under the Company's 1996 Incentive Stock Plan.
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(9) The total number of shares of Class A Common Stock beneficially owned
by Mr. G. Grinberg includes 25,000 shares of Class A Common Stock
owned by The Grinberg Family Foundation, a non-profit corporation of
which Mr. G. Grinberg, Sonia Grinberg and Leonard L. Silverstein are
the directors and officers and as to which shares these three
individuals have shared investment and voting power. Also included in
the total number of shares of Class A Common Stock beneficially owned
by Mr. G. Grinberg are 1,492,048 shares owned by Grinberg Partners
L.P., a Delaware limited partnership, of which Grinberg Group
Partners, a Delaware general partnership ("GGP"), is the general
partner. As the managing partner of GGP, Mr. G. Grinberg has shared
power to direct the voting and disposition of the shares owned by
Grinberg Partners L.P. The total number of shares of Common Stock
beneficially owned by Mr. G. Grinberg includes 40,559 shares of Common
Stock held under the Company's 401(k) Plan, the trustees for which are
Messrs. G. Grinberg and E. Grinberg, both of whom have shared
investment and voting power as to such shares and 14,971 shares of
Common Stock held under the Company's Stock Bonus Plan, for which Mr.
G. Grinberg is a co-trustee and as to which shares he has shared
investment and voting power. Mr. G. Grinberg disclaims beneficial
ownership as to the 25,000 shares of Class A Common Stock owned by The
Grinberg Family Foundation; the 40,559 shares of Common Stock held
under the Company's 401(k) Plan and the 14,971 shares of Common Stock
held under the Company's Stock Bonus Plan except to the extent of his
pecuniary interest in the 40,559 shares held under the Company's
401(k) Plan.
(10) The total number of shares of Common Stock reported as beneficially
owned by Mr. Michno includes 6,663 shares which he has the right to
acquire by the exercise of options under the Company's 1996 Stock
Incentive Plan.
(11) The total number of shares of Class A Common Stock beneficially owned
by Ms. Miriam Phalen includes 1,492,048 shares owned by Grinberg
Partners L.P. of which Ms. Phalen is a limited partner, and 32,575
shares owned by trusts for the benefit of Ms. Phalen's children of
which trusts Ms. Phalen is the sole trustee. Ms. Phalen has shared
voting power with Grinberg Partners L.P., Grinberg Group Partners
(general partner of Grinberg Partners L.P.) and Alexander Grinberg
over the 1,492,048 shares owned by Grinberg Partners L.P.
(12) The total number of shares of Class A Common Stock beneficially owned
by Mr. Leonard L. Silverstein includes an aggregate of 431,468 shares
of Class A Common Stock held by several trusts for the benefit of Mr.
G. Grinberg's three children, of which trusts Mr. Silverstein is
co-trustee with Mr. E. Grinberg, with whom he has shared investment
and voting power as to the shares held by such trusts. The total
number of shares of Class A Common Stock reported for Mr. Silverstein
also includes 25,000 shares of Class A Common Stock owned by The
Grinberg Family Foundation, of which Mr. G. Grinberg, his wife and Mr.
Silverstein are the directors and officers and as to which shares
these three individuals have shared investment and voting power. The
total number of shares of Common Stock beneficially owned by Mr.
Silverstein includes 2,000 shares which he has the right to acquire by
the exercise of options under the Company's 1996 Stock Incentive Plan
and 2,000 shares owned by the Leonard and Elaine Silverstein Family
Foundation of which Mr. Silverstein and his wife are the directors and
officers and as to which shares they have shared investment and voting
power. The remaining number of shares of Common Stock beneficially
owned by Mr. Silverstein are held by a trust of which Mr. Silverstein
is trustee and as to which shares he has sole investment and voting
power. Mr. Silverstein disclaims beneficial ownership of the shares of
Class A Common Stock held by the trusts of which he is co-trustee with
E. Grinberg, by The Grinberg Family Foundation and by The Leonard and
Elaine Silverstein Family Foundation.
(13) On February 2, 2001 in a filing on Schedule 13G under the Exchange
Act, Thomson, Horstmann & Bryant, Inc. with an address at Park 80
West, Plaza One, Saddle Brook, New Jersey 07663, reported beneficial
ownership of 801,835 shares of Common Stock on December 31, 2000 as to
which it reported having sole voting power over 334,474 shares, shared
voting power over 31,225 shares, and sole dispositive power over all
such shares. The reporting person also reported that all of the shares
of Common Stock which it beneficially owns were acquired in the
ordinary course of business and not for the purpose or with the effect
of changing or influencing control of the Company, or in connection
with any transaction having such purpose or effect.
(14) Excludes double counting of shares deemed to be beneficially owned by
more than one person. Unless otherwise indicated, the individuals
named have sole investment and voting power.
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PROPOSAL 1 - ELECTION OF DIRECTORS
Directors hold office until the next annual meeting of shareholders
and until the election and qualification of their successors. The Company's
By-laws provide that the number of Directors constituting the Board may be
changed by action of the Board of Directors, so long as the number is not less
than three. The Board currently consists of seven directors. All of the
nominees are members of the present Board of Directors. If any nominee for
election to the Board of Directors of the Company should be unable to accept
nomination or election as a director, which is not expected, the proxies may
be voted with discretionary authority for a substitute or substitutes
designated by the Board of Directors or the number of Directors constituting
the Board may be reduced in accordance with the Company's By-Laws. Directors
shall be elected by the holders of a plurality of the voting power present in
person or represented by proxy and entitled to vote. Abstentions and broker
"non-votes" shall not be counted for purposes of the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF THE NOMINEES LISTED BELOW.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE NOMINEES.
PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED EXCEPT WHERE AUTHORITY HAS
BEEN WITHHELD.
The following table lists information with respect to the nominees for
election as Directors of the Company.
NAME AGE POSITION
---- --- --------
Margaret Hayes Adame 61 Director
Richard J. Cote 46 Executive Vice President and
Chief Operating Officer; Director
Efraim Grinberg 43 President and Chief Executive
Officer; Director
Gedalio Grinberg 69 Chairman of the Board of Directors
Alan H. Howard 41 Director
Donald Oresman 75 Director
Leonard L. Silverstein 79 Director
There are no family relationships between any of the Company's
directors with the exception of Efraim Grinberg, who is the son of Gedalio
Grinberg. There are no arrangements between any director and any other person
pursuant to which any of them was elected a director.
Ms. Hayes Adame was elected to the Board of Directors of the Company
on September 8, 1993. Ms. Hayes Adame is the President of the Fashion Group
International, Inc. which she joined in March 1993. From 1981 to March 1993,
Ms. Hayes Adame was a senior vice president and general merchandise manager at
Saks Fifth Avenue. She is also a member of the board of directors of
International Flavors & Fragrances, Inc.
Mr. Cote joined the Company in January 2000 as Executive Vice
President - Finance and Administration. On May 15, 2001 Mr. Cote's title was
changed to Executive Vice President - Chief Operating Officer. Prior to
joining the Company, Mr. Cote worked for Colgate-Palmolive, where, from 1998
to 2000 he was Vice President and Chief Financial Officer for U.S. operations,
and from 1993 to 1998, he was Vice President and Chief Financial Officer for
Asia/Pacific operations.
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Mr. E. Grinberg joined the Company in June 1980 and served as the
Company's Vice President of Marketing from February 1985 until July 1986, at
which time he was elected to the position of Senior Vice President of
Marketing. In 1988, Mr. E. Grinberg was elected to the Board of Directors of
the Company. From June 1990 to October 1995, Mr. E. Grinberg served as the
Company's President and Chief Operating Officer and since October 1995 served
as the Company's President. On May 15, 2001 Mr. E. Grinberg was elected to
the position of President and Chief Executive Officer. Mr. E. Grinberg also
serves on the board of directors of the American Watch Association and the
Jeweler's Security Alliance.
Mr. G. Grinberg founded the Company in 1961 and is the Chairman of the
Board of Directors. Mr. G. Grinberg served as the Company's Chief Executive
Officer until May 15, 2001.
Mr. Howard was elected to the Board of Directors of the Company in
September 1997. Mr. Howard is a Managing Director of Credit Suisse First
Boston Corporation, which he joined in 1986. Prior to 1986, Mr. Howard worked
with the James River Corporation and the Dixie Products Group of American Can
Company.
Mr. Oresman has served on the Board of Directors of the Company since
1981. He was Executive Vice President and General Counsel of Paramount
Communications, Inc., a publishing and entertainment company, from December
1983 until his retirement in March 1994. Prior to December 1983, Mr. Oresman
was engaged in the practice of law as a partner of Simpson Thacher & Bartlett
where he is now Of Counsel.
Mr. Silverstein has served on the Board of Directors of the Company
since 1975. He has been engaged in the practice of law at Silverstein and
Mullens, a division of Buchanan Ingersoll, in Washington, D.C., for over 40
years. Mr. Silverstein also serves as Vice President and Director of Tax
Management, Inc., a wholly owned subsidiary of BNA, Inc., and a director of
Chevy Chase Federal Savings Bank. He is a former Vice Chairman and currently
honorary trustee of the John F. Kennedy Center for the Performing Arts, Past
President of the Alliance Francaise of Washington, a director of the National
Symphony Orchestra Association and a trustee of the White House Historical
Association.
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND ITS COMMITTEES
The Board of Directors held six meetings during fiscal 2001. Each
director attended every meeting of the Board. The Board of Directors has two
Committees, a Compensation Committee and an Audit Committee. Each committee
is comprised solely of non-employee directors, namely, Ms. Hayes Adame and
Messrs. Howard, Oresman and Silverstein.
The Compensation Committee of the Board of Directors reviews
remuneration levels for executive officers of the Company, reviews significant
employee benefits programs and establishes and administers executive
compensation programs, including bonus plans, stock option and other
equity-based programs, deferred compensation plans and any other cash or stock
incentive programs. The Compensation Committee held one meeting in fiscal 2001
which was attended by all of the members of that committee.
The Audit Committee of the Board of Directors recommends to the Board
of Directors the independent public accountants to be selected to audit the
Company's annual financial statements and approves any special assignments
given to such accountants. The Audit Committee also reviews the planned scope
of the annual audit and the independent accountants' letter of comments and
management's responses thereto, any significant accounting changes made or
contemplated, the effectiveness and efficiency of the Company's internal
accounting staff and generally is responsible for all the matters as described
in the Audit Committee's Charter. In addition, the Audit Committee meets
periodically with the Company's Internal Audit staff with respect to internal
control issues generally. The Audit Committee held four meetings in fiscal
2001 each of which was attended by all the members of that committee.
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DIRECTOR COMPENSATION
Directors who are not employees of the Company receive a fee of $3,000
for each Board meeting attended and $1,000 for each committee meeting
attended. No executive officer of the Company receives any additional
compensation for serving the Company as a member of the Board of Directors or
any of its committees. In addition, non-employee Directors are eligible to
receive stock awards under the 1996 Stock Incentive Plan, as amended. To date,
Ms. Hayes Adame and Messrs., Howard, Oresman and Silverstein have each been
awarded options to purchase 2000 shares of the Company's Common Stock under
such amended plan, which were immediately vested upon the date of grant and
expire after five years. All options have an exercise price equal to the fair
market value of the Company's Common Stock on the date of grant.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Notwithstanding anything to the contrary set forth in any of the
Company's previous or future filings under the Securities Act of 1933 or
the Securities Exchange Act of 1934 that might incorporate this Proxy
Statement or future filings with the SEC, in whole or in part, the
following report of the Audit Committee shall not be deemed to be
incorporated by reference into any such filing and shall not otherwise be
deemed filed under such acts.
The Audit Committee consists of the following members of the Company's
Board of Directors: Margaret Hayes Adame, Alan H. Howard, Donald Oresman
and Leonard L. Silverstein. Each of the members of the Audit Committee is
independent as defined under the listing standards of the National
Association of Securities Dealers and the New York Stock Exchange. The
Audit Committee operates under a written charter adopted by the Board of
Directors which is included in this Proxy Statement as Appendix A .
The Audit Committee has reviewed and discussed the audited financial
statements of the Company for the fiscal year ended January 31, 2001 with
the Company's management. The Audit Committee has discussed with
PricewaterhouseCoopers LLP, the Company's independent public accountants,
the matters required to be discussed by Statement on Auditing Standards
No. 61 (Communications with Audit Committees).
The Audit Committee has also received the written disclosures and the
letter from PricewaterhouseCoopers LLP required by the Independence
Standards Board Standard No. 1 (Independence Discussion with Audit
Committees) and the Audit Committee has discussed the independence of
PricewaterhouseCoopers LLP with that firm.
Based on the Audit Committee's review and discussions noted above, the
Committee recommended to the Board of Directors that the Company's audited
financial statements be included in the Company's Annual Report on Form
10-K for the fiscal year ended January 31, 2001 for filing with the SEC.
Members of the Audit Committee:
Margaret Hayes Adame
Alan H. Howard
Donald Oresman
Leonard L. Silverstein
FISCAL 2001 AUDIT FIRM FEE SUMMARY
Audit Fees
The aggregate fees billed by PricewaterhouseCoopers LLP for professional
services rendered for the audit of the Company's annual financial
statements for the fiscal year ended January 31, 2001 and for the reviews
of the financial statements included in the Company's Quarterly Reports on
Form 10-Q for that fiscal year were $392,000.
Financial Information Systems Designs and Implementation Fees
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No fees were billed by PricewaterhouseCoopers LLP for professional
services rendered for information technology services relating to
financial information systems design and implementation for the fiscal
year ended January 31, 2001.
All Other Fees
The aggregate fees billed by PricewaterhouseCoopers LLP for services
rendered to the Company, other than the services describe above under
"Audit Fees" and "Financial Information Systems Design and Implementation
Fees," for the fiscal year ended January 31, 2001 were $411,000.
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14
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP to be
the Company's independent accountants for the year ending January 31, 2002,
subject to ratification of such appointment by the Company's shareholders.
PricewaterhouseCoopers LLP has served as the Company's independent accountants
since fiscal year 1977. If the appointment of PricewaterhouseCoopers LLP is
not approved by the shareholders, or PricewaterhouseCoopers LLP ceases to act
as the Company's independent accountants, or the Board of Directors removes
PricewaterhouseCoopers LLP as the Company's independent accountants, the Board
will appoint other independent accountants subject to shareholder
ratification.
Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Annual Meeting. Such representatives will have the opportunity
to make a statement if they desire to do so and will be available to respond
to appropriate questions. THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
SUCH RATIFICATION. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, the Company's executive officers
and directors, and persons who own more than 10% of a registered class of the
Company's equity securities (the "10% Stockholders"), are required to file
reports of ownership and changes of ownership with the Securities and Exchange
Commission. Executive officers, directors and 10% Stockholders of the Company
are required by law to furnish the Company with copies of all forms so filed.
Based solely on review of copies of such forms received or written
representations that no other reports were required, the Company believes
that, during the last fiscal year, its executive officers, directors and 10%
Stockholders timely complied with all such filing requirements applicable to
them with respect to their beneficial ownership of Capital Stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has an agreement with Mr. Cote that provides for the
continuation of his then applicable annual base salary paid bi-weekly for 24
months following Mr. Cote's termination of employment within two years after a
change in control (defined as the acquisition by a person or group of more
than 50% of the combined aggregate voting power represented by the Company's
then outstanding shares; or certain mergers and asset sales; or a liquidation
or dissolution), except that nothing is due if his termination is because of
his death, disability or for cause.
In connection with his resignation on December 5, 2000 as Senior Vice
President and Chief Financial Officer, Kennith J. Adams entered into an
agreement with the Company pursuant to which the Company agreed to forgive a
$120,000 loan extended to Mr. Adams on July 10, 1998 and $ 19,949 of accrued
interest thereon and agreed to make payments to Mr. Adams totaling $118,074.
The last day of Mr. Adams' employment with the Company was January 31, 2001.
In fiscal 1996, the Company entered into an agreement with a trust
which owns an insurance policy issued on the lives of the Gedalio Grinberg and
his spouse. The insurance policy provides for a death benefit of $27 million.
The trustees of the trust are the three children of Mr. G. Grinberg and his
spouse, namely, Efraim Grinberg, Alexander Grinberg, and Miriam Phalen. Under
the agreement, the trust has assigned the insurance policy to the Company as
collateral to secure repayment by the trust of interest free loans to be made
annually by the Company to the trust in amounts sufficient for the trust to
pay the premiums on the insurance policy (approximately $740,000 per annum).
Under the agreement, the trust will repay the loans from the death benefit
proceeds of the policy. At January 31, 2001 the Company had loaned the trust
$3,842,636 under this agreement.
See "Compensation Committee Interlocks and Insider Participation" for
information regarding certain business relationships between the Company and
Mr. Silverstein's law firm.
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EXECUTIVE OFFICERS
For detailed information concerning Richard Cote, Gedalio Grinberg and
Efraim Grinberg, see the listing for each under the heading "Election of
Directors" above. The names of the other executive officers of the Company
(and their respective ages as of the filing date of this report) are set forth
below together with the positions held by each during the past five years.
NAME AGE POSITION
---- --- --------
Kennith C. Johnson 48 Senior Vice President and Chief
Financial Officer
Frank V. Kimick 34 Vice President, Treasurer and
Assistant Secretary
Timothy F. Michno 44 Secretary and General Counsel
Mr. Johnson was appointed Senior Vice President and Chief Financial
Officer on December 5, 2000. Before joining the Company, Mr. Johnson was Vice
President and Chief Financial and Administrative Officer at Precise
International. Prior to that Mr. Johnson spent 14 years at C.R. Bard where he
held a number of corporate financial positions. Mr. Johnson, a certified
public accountant, also worked at Arthur Anderson LLP before joining C.R.
Bard.
Mr. Kimick joined the Company in 1996 as Assistant Treasurer and on
May 1, 2001 was promoted to Vice President - Treasurer. Mr. Kimick is
responsible for worldwide treasury operations, banking relationships and all
aspects of cash and risk management. Before joining the Company, Mr. Kimick
had been the Treasurer for Sunshine Biscuits, Inc. and held several treasury
and consulting positions at other organizations.
Mr. Michno joined the Company in April 1992 and since then has served
as its Secretary and General Counsel. He has been engaged in the practice of
law for the past 18 years, immediately prior to joining the Company and since
1986, as an associate at the New York firm of Chadbourne & Parke. From 1988 to
1991 he served as a resident outside counsel to Fortune Brands, Inc. (formerly
known as American Brands, Inc.), a consumer products company.
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PROPOSAL 3 - PROPOSAL TO APPROVE THE AMENDMENTS TO THE
MOVADO GROUP, INC. 1996 STOCK INCENTIVE PLAN
The Movado Group, Inc. 1996 Stock Incentive Plan ("Plan") was
established, effective as of September 24, 1993, as the North American Watch
Corporation 1993 Employee Stock Option Plan. The Plan was amended and restated
and renamed the Movado Group, Inc. 1996 Stock Incentive Plan, effective as of
May 17, 1996. The Plan was further amended effective March 26, 1998. The
aggregate number of shares of Common Stock ("Shares") available for issuance
under the Plan is 2,000,000. As of May 15, 2001, awards representing 1,955,118
Shares had been granted under the Plan.
On March 16, 2001 the Compensation Committee of the Board of Directors
(the "Committee") further amended the Plan in order to further encourage Plan
participants to become shareholders by adopting an option reload feature and
also adopted, subject to shareholder approval, amendment number 3 to the Plan
containing three amendments to the Plan (the "Amendments"), attached hereto as
Appendix B. The Amendments (i) increase the number of Shares available for
issuance as incentive awards ("Awards") under the Plan to 3,500,000 from
2,000,000; (ii) increase the maximum number of Shares that may be awarded to
any single participant for the term of the Plan to 1,200,000 from 625,000; and
(iii) permit non-employees who have been retained by the Company as
consultants or in some other capacity to receive Awards under the Plan. On
March 16, 2001, the Committee and Board of Directors approved Awards of stock
options for an additional 879,500 Shares, subject to shareholder approval of
the Amendments.
The Board of Directors believes that the approval of the Amendments by
the shareholders is in the best interests of the Company and its shareholders.
Approval of the Amendments requires the affirmative vote of the
holders of a majority in voting power of the outstanding chares of Capital
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting. THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ADOPTION
OF THE AMENDMENTS. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS
SHAREHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
SUMMARY OF THE PROVISIONS OF THE PLAN, AS AMENDED
The following summary of the Plan, as amended, is qualified entirely
by the specific language of the Plan. If the Amendments are approved by the
shareholders, the Amendments will become effective as of March 16, 2001.
The Plan is administered by the Committee, which consists of at least
two or more "outside directors" as defined in Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated
thereunder. To the extent necessary to comply with Rule 16b-3 promulgated
under Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), each member of the Committee must also be a "non-employee
director" within the meaning of the Exchange Act. The Committee has the
authority (i) to exercise all of the powers granted to it under the Plan, (ii)
to construe, interpret and implement the Plan and any Award Agreements
executed pursuant to the Plan, (iii) to prescribe, amend and rescind rules
relating to the Plan, (iv) to make any determination necessary or advisable in
administering the Plan, and (v) to correct any defect, supply any omission and
reconcile any inconsistency in the Plan.
The number of Shares reserved for issuance under the Plan is
3,500,000. The maximum number of Shares that may be awarded to any single
participant for the term of the Plan is 1,200,000.
Awards under the Plan may be granted to officers, directors,
executives and other key employees of the Company or its affiliates and to
consultants or other individuals who provide services to the Company or its
affiliates. Awards may be granted in the form of stock options ("Options").
Options awarded under the Plan may be either (i) incentive stock options
("ISOs") or (ii) non-qualified stock options ("NQSOs"). The Plan also permits
Awards of (i) stock appreciation rights ("SARs"), (ii) Shares, and (iii) other
Awards that are valued in whole or in part by reference to, or are otherwise
based on, the fair market value of the shares of the Company's Common Stock
("Other Stock-Based Awards"). All Awards granted under the Plan must be
evidenced by an Award Agreement.
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The Committee may also, in its discretion, grant an Award of NQSOs
with a reload feature that provides that if a participant exercises a NQSO
using shares of Common Stock in payment of the exercise price, then the
participant shall automatically be granted a new Option (a "Reload Option") to
purchase that number of Shares equal to the number used in payment of the
exercise price and the number withheld for tax in respect of the exercise. If
determined by the Committee at the time of grant of the original Option, each
Reload Option shall (i) contain additional reload options, (ii) expire on the
expiration date of the original Option with respect to which the first Reload
Option was granted, (iii) be exercisable six months from the grant date, and
(iv) require that the fair market value of the Common Stock on the date of
exercise of the Option (including any previously granted Reload Option) with
respect to which the new Reload Option will be granted is at least the greater
of (a) $5 more than the exercise price of the Option or (b) 110% of the
exercise price of the Option. In addition, Shares issued upon the exercise of
a Reload Option may not be sold, pledged, transferred or otherwise encumbered
by the optionee (except for gifts or testamentary transfers without
consideration or transfers governed by the laws of descent and distribution)
until after the expiration of two years from the date of such exercise, with
the exception of Shares issued upon the exercise of a Reload Option to the
extent necessary to allow the optionee to satisfy his or her tax liability
incurred on account of the exercise of the Reload Option after taking into
account any Shares withheld from such exercise for tax purposes.
The exercise price of an Option may not be less than the 100% of the
fair market value of the Shares on the date of grant (or 110% of fair market
value in the case of ISOs granted to employees who hold more than 10% of the
voting power of the Company's issued and outstanding Shares). An Option may
not be exercised more than 10 years from the date of grant.
A participant may exercise an Option by paying of the exercise price
(i) in cash, (ii) by certified check, (iii) by personal check, but only with
the consent of the Committee, (iv) to the extent provided with the Award
Agreement, through the delivery of, or attestation as to ownership of,
unrestricted shares of Common Stock or an equivalent number of shares of Class
A Common Stock convertible into an equivalent number of shares of Common Stock
either (a) held by the optionee for at least six months, or (b) having such
other characteristics as the Committee may prescribe, in each case having an
aggregate fair market value on the date of exercise equal to the exercise
price, (v) if authorized by the Committee, by delivery of irrevocable
instructions to a broker to deliver promptly to the Company or its designee an
amount equal to the exercise price, or (vi) by any combination of the above
methods of payment.
The Committee may grant an Award of SARs in conjunction with any Award
of Options or independent of an Option Award. SARs that are granted in
conjunction with Option Award may be granted at the time the related Option is
granted or at any time prior to the exercise or cancellation of the related
Option and the SARs shall not be deemed an independent Award for purposes of
determining the number of Shares available for grants. The exercise price of a
SAR may not be less than the fair market value of a Share on the date or grant
or, in the case of a SAR granted in conjunction with an Option, the exercise
price may not be less than the exercise price of the related Option.
Upon the exercise of a SAR, the grantee shall be entitled to receive
with respect to each Share to which such SAR relates an amount in cash and/or
Shares, as the case may be, equal to the excess of (i) the fair market value
of a Share on the date of exercise over (ii) the exercise price of the SAR.
The Plan also permits Awards of Shares and Other Stock-Based Awards.
Awards of Shares are simply grants of Shares subject to such terms and
conditions as the Committee may determine at the time of the grant. Other
Stock-Based Awards are Awards that are valued, in whole or in part, on the
fair market value of the shares of Common Stock and which are subject to any
terms and conditions that the Committee may determine at the time of the
grant. Other Stock-Based Awards may be granted in a manner that is deductible
by the Company under Section 162(m) of the Code, and such Awards may be based
upon stock price, market share, sales, earnings per share, return on equity or
costs.
Each Award will be non-transferable during the lifetime of the grantee
of an Award, provided that, in the event Section 16 of the Exchange Act ceases
to require Awards to be non-transferable, the Committee may amend the Plan to
provide for such transfers.
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Whenever Shares are to be delivered pursuant to an Award, the grantee
will be required to remit an amount sufficient to satisfy federal, state and
local income tax withholding. Whenever cash is to be received by a grantee
pursuant to an Award, the Company may, as a condition of payment, deduct the
amount necessary to satisfy all federal, state and local income tax
withholding attributable to the Award from the grantee's salary or any other
payments due the grantee by the Company. The grantee may, however, elect to
satisfy all or part of the foregoing withholding requirements by (i) delivery
of unrestricted shares of Common Stock (a) owned by the grantee for at least
six months (or such other period as the Committee may prescribe) or (b) having
such other characteristics as the Committee prescribe, but in each case, the
fair market value of the shares of Common Stock (determined as of the date of
delivery by the grantee) shall be equal to all or part of the amount to be
withheld, or (ii) if permitted by the Committee, by withholding Shares
otherwise issuable pursuant to an Award.
In the event there is a change in number of issued Shares due to a
stock dividend, subdivision, combination, or any other capital adjustment that
affects the Common Stock, the Committee may, in its discretion, adjust the
number of Shares that may be issued pursuant to Awards, provided, however,
that an ISO shall not be adjusted in a manner that would cause the ISO to fail
to meet the requirements of Section 424 of the Code.
In the event of a merger, reorganization, liquidation, sale of
substantially all of the assets of the Company or a change in control of the
Company, then the Committee may, in its discretion, notify the optionee that
his or her Options will be canceled unless they are exercised within 30 days
(or any other period as the Committee may determine) after the date of such
notification, provided the Committee accelerates the vesting date of all the
optionee's outstanding Options. The Committee may also provide that any
conditions or restrictions on any other Award issued to a participant will
lapse upon the occurrence of any of the aforementioned events.
The Plan has a term of 10 years. The Board of Directors may suspend,
amend, or terminate the Plan, in whole or in part, at any time. No amendment
may be made without the approval of the shareholders if such approval is
required by the rules under the Exchange Act, by any regulatory authority or
by any stock exchange on which the Shares are listed. Furthermore, no
amendment, suspension or termination of the Plan may, without the consent of a
grantee, impair any of the rights or obligations under any Award previously
granted to such grantee under the Plan.
As of May 15, 2001, Awards for 871,814 Shares had been granted to
executive officers and Awards for 1,083,304 Shares (all but 14,198 of which
were in the form of Options) had been granted to employees, including all
current officers who are not executive officers. The market value of each
Share as of May 15, 2001 was $18.95.
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES OF STOCK OPTIONS GRANTED UNDER THE
PLAN
The following summary is intended only as a general guide as to the
federal income tax consequences under current law with respect to the grant of
Options under the Plan and does not attempt to describe all possible federal
tax consequences of such participation. Furthermore, the tax consequences of
Options and other Awards granted under the Plan are complex and subject to
change, and a taxpayer's particular situation may be such that some variation
of the described rules is applicable.
ISOs. Options designated as ISOs are intended to fall within the
provisions of Section 422 of the Code. An optionee recognizes no taxable
income for regular income tax purposes as the result of the grant or the
exercise of an ISO, and the Company is generally not entitled to a deduction
at the time of the grant or exercise of an ISO. The difference between the
exercise price of the ISO and the fair market value, at the time of exercise,
of the shares acquired upon the exercise of an ISO may give rise to income
that is subject to the alternative minimum tax. If an optionee does not
dispose of the shares within either (i) two years following the date the ISO
was granted, or (ii) within one year following the transfer of the shares upon
exercise of the ISO, then any gain on the sale of the shares (which is the
difference between the sale price and the purchase price of the shares) will
be taxed as long-term capital gain. If an optionee within either of the above
periods disposes of the shares (a "disqualifying disposition"), the optionee
will realize ordinary income on the excess of the fair market value of the
shares on the date of exercise over the option exercise price or, if less, the
excess of the amount realized upon the disposition of the shares over the
adjusted basis of the shares. (A different rule for measuring ordinary income
may apply in the case of optionees who are subject to Section 16 of the
Exchange Act.) Any further gain or loss realized on the sale or exchange of
the shares will be taxable as long-term or short-term capital gain or loss
depending upon the holding period of the shares. The holding period commences
when the option is exercised. Any ordinary income recognized by the
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optionee upon disqualifying disposition of the shares will generally
deductible by the Company for federal income tax purposes. Certain special
rules apply if an ISO is exercised by tendering stock.
NQSOs. Options that do not qualify as ISOs are treated as NQSOs and
have no special tax status. An optionee generally recognizes no taxable income
upon the grant of a NQSO. Upon the exercise of a NQSO the optionee generally
recognizes ordinary income in an amount equal to the difference between the
exercise price of the option and the fair market value of the shares on the
date of exercise. If the optionee is an employee, or was an employee at the
time of the grant of the option, any ordinary income realized will generally
be subject to income tax withholding and employment taxes. (A different rule
for measuring ordinary income may apply in the case of optionees who are
subject to Section 16 of the Exchange Act.) Upon the sale of stock acquired by
the exercise of a NQSO, any gain or loss, based on the difference between the
sale price and the fair market value of the share on the date the NQSO is
exercised, will be taxed as short-term or long-term capital gain or loss
depending on the holding period of the shares. The holding period commences
when the option is exercised. No tax deduction is available to the Company
upon the grant of a NQSO or the sale of the stock acquired pursuant to such
grant. The Company will generally be entitled to a deduction equal to the
amount of ordinary income realized by the optionee as a result of the exercise
of a NQSO. Certain special rules apply if a NQSO is exercised by tendering
stock.
NEW PLAN BENEFITS
On March 16, 2001, the Committee and the Board of Directors granted, subject
to shareholder approval of the Amendments, Awards for an additional 879,500
Shares under the Plan. The table below sets forth the number of options
awarded to each of the following:
- -----------------------------------------------------------------------------------------
NAME AND POSITION NUMBER OF OPTIONS
- ----------------- -----------------
- -----------------------------------------------------------------------------------------
Gedalio Grinberg None
Chairman
- -----------------------------------------------------------------------------------------
Efraim Grinberg 400,000
President and Chief Executive Officer
- -----------------------------------------------------------------------------------------
Richard Cote 240,000
Executive Vice President
and Chief Operating Officer
- -----------------------------------------------------------------------------------------
Kennith C. Johnson 2,000
Senior Vice President
Chief Financial Officer
- -----------------------------------------------------------------------------------------
Timothy F. Michno 5,000
Secretary and General Counsel
- -----------------------------------------------------------------------------------------
Executive Group 647,000
- -----------------------------------------------------------------------------------------
Non-Executive Director Group 12,000
- -----------------------------------------------------------------------------------------
Non-Executive Officer Group 140,000
- -----------------------------------------------------------------------------------------
Employee Group 80,500
- -----------------------------------------------------------------------------------------
All of the Options awarded to the Named Executive Officers, if approved, will
be subject to vesting in one third increments over a three year period
beginning on the first anniversary of the date of grant and the Options will
expire on the tenth anniversary of the date of grant. The exercise price of
such Options will be $14.38, the market price on March 16, 2001, the effective
date of grant, except that of the 400,000 and 240,000 Options that would be
granted to Mr. E. Grinberg and Mr. Cote, respectively, only 25% or 100,000 and
60,000 would be exercisable by Mr. E. Grinberg and Mr. Cote, respectively, at
the market price on the grant date. The balance to be granted to them would be
exercisable at prices between 20% and 50% more than the market price on March
16, 2001, specifically, one third would be exercisable at $17.26 per share,
one third at $20.13 per share, and one third at $21.57 per share. The
Committee set the exercise prices for such options at premiums above the grant
date market price for the Shares as an added incentive to increase shareholder
value. The number of options awarded to Mr. E. Grinberg and Mr. Cote on March
16, 2001 also represents what the Committee currently estimates to be the
total that will be awarded to them for the next four years.
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EXECUTIVE COMPENSATION
The following summary compensation table sets forth the compensation
awarded to, earned by or paid to the Chief Executive Officer and each of the
four other most highly compensated executive officers of the Company who were
serving as such during and/or as of the end of the Company's last fiscal year
(collectively, the "Named Executive Officers") during fiscal 2001, 2000, and
1999 (each fiscal year ending January 31) for services rendered in all
capacities to the Company and its subsidiaries.
SUMMARY COMPENSATION TABLE (1)
Long Term Compensation
Annual Compensation Awards
-------------------------------------- --------------------------
Restricted Number of All
Other Annual Stock Securities Other
Name and Compensation Awards Underlying Compensation
Principal Position Year Salary ($) Bonus ($) ($) ($) (2) Options (#) ($)
- ------------------------- ------ ---------- ----------- ----------- ----------- ------------- -------------
Gedalio Grinberg 2001 650,000 250,000 0 1,000 0 349,762 (3)
Chairman of the Board 2000 650,000 0 0 520 0 330,538
1999 650,000 250,000 0 500 0 256,483
Efraim Grinberg 2001 640,483 400,000 0 10,638 0 95,202 (4)
President and Chief 2000 625,000 0 0 10,115 50,000 95,104
Executive Officer 1999 625,000 250,000 0 10,143 50,000 92,117
Richard Cote 2001 400,000 300,000 0 7,037 30,000 45,889 (5)
Executive Vice President 2000 7,692 0 0 337,500 200,000 0
Chief Operating Officer
Kenneth J. Adams 2001 223,600 0 0 1,835 0 272,892 (6)
Senior Vice President 2000 233,600 0 0 1,743 5,000 12,580
And Chief Financial 1999 215,000 55,000 0 28,049 5,000 11,332
Officer
Timothy F. Michno 2001 208,000 62,000 0 1,664 4,500 13,800 (7)
Secretary and 2000 203,250 0 0 1,543 3,000 11,301
General Counsel 1999 185,000 44,400 0 14,693 2,500 9,930
(1) The column designated by the United States Securities and Exchange
Commission ("Commission") for the reporting of Long Term Incentive
Plan Payouts has been deleted as no such compensation of a type
required to be reported under such column was awarded to, earned by,
or paid to any of the Named Executive Officers during the period
covered by the table.
(2) At January 31, 2001 the aggregate number of share units of restricted
stock held by each of the Named Executive Officers and the aggregate
value thereof (based on the closing price of the Company's Common
Stock as of January 31, 2001) were as follows: Mr. G. Grinberg:
65.57 share units, $1,000; Mr. E. Grinberg: 1,502.01 share units,
$20,840; Mr. Cote: 15,479.69 share units, $214,780; Mr. Adams:
1,264.52 share units, $17,545; and Mr. Michno: 738.48 share units,
$10,246. All of the share units are phantom stock units granted under
the Company's Deferred Compensation Plan for Executives ("Deferred
Compensation Plan") except for 15,000, 1,000 and 500 granted,
respectively, to Messrs. Cote, Adams, and Michno which are stock
awards granted under the Company's 1996 Stock Incentive Plan to
Messrs. Adams and Michno on March 26, 1998 and to Mr. Cote on January
17, 2000 and which vest 100% on the third
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21
anniversary of the grant date. The phantom stock units granted under
the Deferred Compensation Plan ("Stock Units") vest 20% at the end of
each calendar year beginning in the calendar year in which awarded,
except that for participants 65 years or older, vesting is 100% at the
end of the calendar year in which awarded. Mr. G. Grinberg, who is
the only Named Executive Officer 65 years or older, was awarded 65.57
Stock Units in January 2001. Mr. E. Grinberg was awarded 545.91,
515.29 and 945.94 Stock Units in calendar years 1998, 1999 and 2000
respectively, and 68.10 Stock Units in January 2001. Mr. Cote was
awarded 559.03 Stock Units in calendar year 2000 and 30.50 Stock
Units in January 2001. Mr. Adams was awarded 91.57, 88.35 and 187.05
Stock Units in calendar years 1998, 1999 and 2000 respectively, and
zero Stock Units in January 2001. Mr. Michno was awarded 77.67, 82.52
and 169.95 Stock Units in calendar years 1998, 1999 and 2000
respectively, and zero Stock Units in January 2001. No dividends
accrue in respect of the Stock Units or the Stock Awards.
(3) Includes $159,322 in total annual premiums paid in respect of certain
life insurance policies and one travel accident policy purchased for
Mr. G. Grinberg by the Company. Under his arrangement with the
Company, Mr. G. Grinberg is entitled to the cash surrender value under
these life insurance policies and his beneficiary is entitled to the
applicable benefit without, in either event, reimbursement to the
Company of any premiums paid by the Company under such policies. Also
includes a $3,400 matching contribution made by the Company in respect
of fiscal 2001 for the account of Mr. G. Grinberg pursuant to the
Company's Employee Savings and Investment Plan ("401(k) Plan"). Also
includes $119,640 accrued by the Company in respect of a Death and
Disability Benefit Plan agreement with Mr. G. Grinberg. See "Contract
with Chairman" below. Also includes a matching cash contribution of
$53,920 and a non-cash contribution of 1,025.51 Stock Units valued at
$13,480 (based on the closing prices of the Company's Common Stock on
the grant dates) made by the Company for fiscal 2001 to Mr. G.
Grinberg's account pursuant the Company's Deferred Compensation Plan.
(4) Includes a $3,400 matching contribution made by the Company in respect
of fiscal 2001 the account of Mr. E. Grinberg pursuant to the
Company's 401(k) Plan. Also includes a matching cash contribution of
$52,154 and a non-cash contribution of 991.12 Stock Units valued at
$13,038 (based on the closing prices of the Company's Common Stock on
the grant dates) for fiscal 2001 to his account under the Company's
Deferred Compensation Plan. Also includes $26,610 in total annual
premiums paid in respect of certain life insurance policies purchased
for Mr. E. Grinberg by the Company. Under his arrangement with the
Company, Mr. E. Grinberg is entitled to the cash surrender value in
respect of certain of these life insurance policies and his
beneficiary is entitled to the applicable benefit without, in either
event, reimbursement to the Company of any premiums paid by the
Company under such policies.
(5) Includes a $3,400 matching contribution made by the Company in respect
of fiscal 2001 for the account of Mr. Cote pursuant to the Company's
401(k) Plan. Also includes a matching cash contribution of $34,462 and
a non-cash contribution of 589.53 Stock Units valued at $8,027 (based
on the closing prices of the Company's Common Stock on the grant
dates) for fiscal 2001 to his account under the Company's Deferred
Compensation Plan. As Mr. Cote became an officer of the Company on
January 6, 2000 his fiscal 2000 compensation is for the period from
that date through January 31, 2000.
(6) Includes a $3,400 matching cash contribution made by the Company in
respect of fiscal 2001 for the account of Mr. Adams pursuant to the
Company's 401(k) Plan. Also includes a matching cash contribution of
$9,175 and a non-cash contribution of 187.05 Stock Units valued at
$2,294 (based on the closing prices of the Company's Common Stock on
the grant dates) made by the Company in respect of fiscal 2001 for the
account of Mr. Adams under the Company's Deferred Compensation Plan.
Mr. Adams resigned from his position as Chief Financial Officer on
December 5, 2000 but remained employed with the Company through
January 31, 2001. The amount reported under "All Other Compensations"
for him also includes $139,949 representing $120,000 of principal and
$19,949 in accrued interest under a loan extended to him by the
Company on July 10,1998 which, under the terms of Mr. Adams'
agreement, the Company agreed to forgive, as well as $118,074 payable
to him through July 2001.
(7) Includes a $3,400 matching contribution made by the Company in respect
of fiscal 2001 for the account of Mr. Michno pursuant to the Company's
401(k) Plan. Also includes a matching cash contribution of $8,320 and
a non-cash contribution of 169.95 Stock Units valued at $2,080 (based
on the closing prices of
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the Company's Common Stock on the grant dates) for fiscal 2001 to his
account under the Company's Deferred Compensation Plan.
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CONTRACT WITH CHAIRMAN
Under a Death and Disability Benefit Plan Agreement with Mr. G.
Grinberg, dated September 23, 1994, in the event of Mr. Grinberg's death or
disability while employed by the Company, the Company will pay to his spouse,
if she is then living, an annual benefit equal to $300,000 (increased each
year beginning October 1, 1995 by an amount equal to two percent of the
benefit that would have been payable in the prior year). Benefits are payable
for the lesser of 10 years or the life of Mr. Grinberg's spouse, and are
payable only from the general assets of the Company. Neither Mr. Grinberg nor
his spouse may assign the Agreement or any of the benefits payable thereunder
and none of the benefits are payable to the estates or any of the heirs of Mr.
Grinberg or his spouse.
The Agreement provides that it automatically terminates in the event
of the termination of Mr. Grinberg's employment with the Company for any
reason other than his death or disability and further provides that it is not
to be considered a contract of employment. For purposes of the Agreement
"disability" means the inability of Mr. Grinberg to perform the duties
pertaining to his job because of accident, sickness or other illness as
determined by a majority of disinterested directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was at all times during fiscal
year 2001 comprised entirely of Directors who at no time were executive
officers or employees of the Company. The Compensation Committee for fiscal
year 2001 consisted of Margaret Hayes Adame, Alan H. Howard, Donald Oresman
and Leonard L. Silverstein. Mr. Silverstein is a partner at the law firm of
Silverstein & Mullens, a division of Buchanan & Ingersoll, P.C. That firm
rendered legal services to the Company during fiscal 2001. No executive
officer of the Company has ever served as a member of the board of directors
or compensation committee of any company whose executive officers include a
member of the Board of Directors or the Compensation Committee.
FISCAL 2001 STOCK OPTION GRANTS
The following table provides certain information regarding grants of
stock options made during fiscal 2001 to the Named Executive Officers pursuant
to the Company's 1996 Stock Incentive Plan. All such options become
exercisable with respect to 20% of such options on each anniversary of the
date of grant thus becoming fully exercisable on the fifth such anniversary.
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GRANT
INDIVIDUAL GRANTS DATE VALUE (1)
---------------------------------------------------------- --------------
% OF TOTAL
NUMBER OF
NUMBER OF SECURITIES
SECURITIES UNDERLYING
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE OR GRANT DATE
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME (#) FISCAL YEAR ($/SH) DATE ($)
- ------------ ---------- --------- ---------- ---------- ----------
Gedalio Grinberg 0 0 - - 0
Efraim Grinberg 0 0 - - 0
Richard Cote 30,000 12.3 $8.50 May 17, 2010 138,600
Kenneth J. Adams 0 0 -- - 0
Timothy F. Michno 4,500 1.9 $8.50 May 17, 2010 20,790
(1) The grant date present values set forth in the foregoing table
were arrived at using the Black-Scholes option pricing model based on the
following assumptions: volatility of 48% based on weekly closing prices of the
underlying Common Stock for the period ending January 31, 2000; a risk free
rate of return equal to 6.67% based on the yield on a U.S. Government Zero
Coupon Bond with a maturity equal to the expected term of the option prior to
exercise (i.e. 7 years); a dividend yield of 0.86%; and a grant date of May
17, 2000. This schedule does not take into account provisions of the options
providing for termination of the option following termination of employment,
nontranferability or vesting over a period of five years. The dollar amounts
under this column are the result of calculations using a certain option
pricing model based on the foregoing assumptions and, therefore, are not
intended to forecast possible future appreciation, if any, of the Company's
Common Stock price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information concerning exercises of stock
options by the Named Executive Officers during the last fiscal year and the
fiscal year-end value of shares of Common Stock represented by unexercised
stock options held by each of the Named Executive Officers as of January 31,
2001.
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED VALUE FISCAL YEAR END (#) AT FISCAL YEAR END ($)
ON EXERCISE REALIZED ------------------- ----------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --- --- ----------- ------------- ----------- -------------
Gedalio Grinberg...... 0 0 0 0 0 0
Efraim Grinberg........ 0 0 247,500 115,000 970,688 130,125
Richard Cote............ 0 0 40,000 190,000 0 161,250
Kenneth J. Adams ...... 29,063 136,208 6,375 13,000 2,717 1,811
Timothy F. Michno..... 0 0 2,788 10,275 4,478 29,218
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COMPENSATION COMMITTEE REPORT
General
The Compensation Committee of the Board of Directors (the "Committee")
is comprised entirely of the four non-employee members of the Board. The
Committee is responsible for reviewing and approving the Company's
compensation policies affecting senior management, reviewing significant
employee benefit programs and reviewing and administering the Company's 1996
Stock Incentive Plan.
The compensation policies established by the Company and which were in
effect during fiscal year 2001 are designed to enable the Company to attract,
retain, motivate and appropriately reward a group of highly qualified
individuals who are expected to contribute to the Company's continued success.
The three primary components of executive compensation are salary, cash
bonuses and stock based awards, including stock grants and stock options. The
Committee reviews each component of executive compensation on an annual basis.
To assist the Committee in its evaluation and approval of the
Company's compensation policies for fiscal 2001, the Committee engaged a
nationally recognized compensation consulting firm and reviewed its report and
recommendations. That report included data relative to salary, bonus and long
term incentive award levels provided by companies in the Industry Peer Group,
described in the performance graph set forth below, as well as by other
publicly traded companies engaged in comparable businesses or that are of
comparable size. The Committee believes that the relevant market for executive
and management level talent includes not only those companies comprising its
Industry Peer Group but also other companies engaged in other business
activities in other industries.
Base Salaries
Base salary levels for members of the Company's senior management team
are reviewed by the Committee in light of the Committee's assessment of the
responsibilities relative to the position under consideration, as well as each
individual's background, training, experience and by reference to the
competitive marketplace for comparable talent. Annual increases in base salary
levels, if warranted, are reviewed with reference to the executive officer's
performance and the performance of the Company as a whole. Executive
performance is evaluated by the Committee by reference to the extent to which
specific individual and departmental goals and objectives are met. These goals
and objectives vary from department to department and, within any single
department, from individual to individual. Corporate performance is measured
by the Committee by reference to the Company's achievement of pre-tax profit
goals set at the beginning of the fiscal year.
Cash Bonuses
Cash bonuses, the second key component of executive compensation, are
intended to provide incentives to senior management in the short term to
achieve certain operating results, which are generally determined at the
beginning of the fiscal year and, typically, tied to net income results. By
thus placing a significant percentage of each executive officer's compensation
at risk, this approach creates a direct incentive for executive officers to
achieve desired performance goals. Certain mid-level managers are also
eligible to receive bonuses, which are used as an additional, incentive-based
element of compensation dependent on corporate performance and individual
merit.
Considering that substantially all the corporate operating results
that had been established as objectives at the beginning of fiscal 2001 were
achieved, the Committee authorized 100% funding of the bonus pool for the
fiscal year and the payment of individual bonus amounts in line with the
achievement of those corporate results. Individual bonus amounts were also
determined by reference to subjective criteria and the extent to which
individual performance objectives were achieved.
Equity Based Plans
Equity participation is the third key element of the Company's
executive compensation program and is afforded to executive officers and
certain employees primarily through stock options and/or other stock based
awards granted under the Company's 1996 Stock Incentive Plan (the "Incentive
Plan"). In addition to the Incentive Plan, equity participation is also
afforded to executives and certain key employees who participate in the
Company's Deferred Compensation Plan as well as to all other employees, not
eligible to participate in the Deferred Compensation Plan through the
Company's Employee Stock Bonus Plan, adopted in fiscal 1999 ("Stock Bonus
Plan").
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Options, and to a lesser extent stock awards, have been awarded under
the Incentive Plan on the basis of the position held by the grantee,
contributions already made by the person meriting recognition and, more
importantly, the Company's expectations of the contribution the person will
make over the long term to the Company's growth. All options granted under the
Incentive Plan have an exercise price equal to the market value of the stock
on the date of grant, generally vest yearly over five years and expire ten
years from the date of grant. In addition, more than 98% of all shares of
Common Stock granted under the Incentive Plan are, in each case, subject to
vesting requirements. Thus, option and stock grants are designed to retain
executive officers and enhance shareholder value by aligning the financial
interests of each executive officer or other key employee with the interests
of the Company's shareholders over the long term.
Under the Deferred Compensation Plan, participants' salary deferrals,
up to either five or ten percent of base salary, are fully matched by the
Company. Eighty percent of the match is in the form of cash and twenty percent
is in the form of rights to Common Stock representing the number of shares
(including fractional shares) of Common Stock that such twenty percent portion
of the matching contribution could purchase based on the closing price of the
Common Stock at the end of the month in which the contribution is made.
Vesting in Company matching contributions is 20% per year. Distributions are
made beginning in January following termination of the participant's
employment and are in ten annual installments unless the Company determines to
make them in a lump sum.
Under the terms of the Stock Bonus Plan, the Company determines after
the end of each fiscal year whether to contribute a discretionary amount
towards the plan and if so how much. For fiscal 2001 the Company recorded an
expense of $80,000 for this plan. Each participant vests in 100% of their
pro-rata portion (based on salary) of such contribution after five years or
upon attaining retirement age if sooner. All distributions to plan
participants are in the form of shares of Common Stock of the Company, with
cash payments for any fractional share amounts.
COMPENSATION OF CHIEF EXECUTIVE OFFICER FOR FISCAL 2001
The compensation paid to the Company's Chief Executive Officer ("CEO")
in fiscal 2001 consisted primarily of salary and bonus.
The CEO's salary for fiscal 2001 was approved by the Committee on the
basis of its subjective evaluation of the CEO's performance for the year and
the profitable performance of the Company. The performance measures used by
the Committee in making its determination were the continued growth in pre-tax
earnings and net sales and increases in operating income and gross margins.
The bonus paid to the CEO for fiscal 2001 was approved by the
Committee based upon its assessment of the CEO's individual performance in
achieving certain strategic goals, specifically, the increase in net sales of
the Company's core brands, the continued expansion of the Company's Movado
Boutiques and development of Movado product line extensions. The Committee
believes that a substantial portion of the CEO's bonus should be tied to the
financial performance of the Company. Therefore, the CEO's bonus for fiscal
2001 was approved, in addition, on the basis of the Company's attainment of
certain performance targets, specifically the achievement of earnings per
share and net sales results.
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POLICY REGARDING DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code limits the tax deduction
to $1 million for compensation paid to the CEO and the four other most highly
compensated executive officers of the Company. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements are
met. The Company's proposed 2001 Executive Performance Plan is structured such
that if such plan is approved by the Company's shareholders, annual incentive
bonuses and long-term equity-based compensation paid thereunder for the
Company's most senior executives should constitute qualifying
performance-based compensation under Section 162(m). However, neither that
plan nor any equivalent plan was in effect in respect of the year ended
January 31, 2001. In addition, the Compensation Committee recognizes that
unanticipated future events, such as a change of control of the Company or a
change in executive personnel, could result in a disallowance of compensation
deduction under Section 162(m). Moreover, the Compensation Committee may from
time to time award compensation that is non-deductible under Section 162(m)
when in the exercise of the Compensation Committee's business judgment such
award would be in the best interest of the Company.
COMPENSATION COMMITTEE
Margaret Hayes Adame
Alan H. Howard
Donald Oresman
Leonard L. Silverstein
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PROPOSAL 4 - APPROVAL AND ADOPTION OF 2001 EXECUTIVE PEFORMANCE PLAN
On March 16, 2001, the Compensation Committee of the Board of
Directors of the Company unanimously approved the adoption of the Movado Group
Executive Performance Plan (the "Executive Plan") and recommended that the
Executive Plan be submitted to the Company's shareholders for approval at the
Annual Meeting. The following summary is qualified in its entirety by
reference to the complete text of the Executive Plan, which is attached hereto
as Appendix C. Capitalized terms used but not defined herein shall have the
meanings set forth in the Executive Plan.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") generally does not allow publicly held companies to obtain tax
deductions for compensation of more than $1million paid in any year to their
chief executive officer, or any of their other four most highly compensated
executive officers ("Named Executive Officers"), unless such payments are
"performance-based" in accordance with conditions specified under Section
162(m) of the Code and the Treasury Regulations promulgated thereunder. One of
those conditions requires the Company to obtain stockholder approval of the
material terms of the performance goals set by a committee of outside
directors. The Board of Directors is recommending that the shareholders
approve the material terms of the Executive Plan as described below. Subject
to such approval, and if the applicable performance goals are satisfied, this
proposal would enable the Company to pay performance-based compensation to
Named Executive Officers of the Company and to obtain tax deductions for such
payments, without regard to the limitations of Section 162(m) of the Code.
Summary of the Executive Plan
PURPOSE
The purpose of the Executive Plan is to establish a program of
incentive compensation for the Named Executive Officers that is directly
related to the performance results of the Company. The Executive Plan provides
for annual incentives to be awarded to Named Executive Officers, as described
below.
ADMINISTRATION
The Executive Plan is administered by the Compensation Committee of
the Board of Directors (the "Committee"). The Committee is composed of two or
more members of the Board, each of whom is required to be an "outside
director" (within the meaning of Section 162(m) of the Code). The Committee
has the authority that may be necessary or helpful to enable it to discharge
its responsibilities with respect to the Executive Plan, including authority
to establish the maximum bonus award which may be earned by each Named
Executive Officer, to establish the performance goals upon which such bonus
awards shall be based, calculate and determine each Named Executive Officer's
level of attainment of such performance goals, and calculate the bonus award
for each Named Executive Officer based upon such level of attainment.
The Executive Plan will be effective as of February 1, 2001, subject
to approval of the stockholders, as requested herein. The Executive Plan will
terminate on January 31, 2007.
BONUS AWARDS AND PERFORMANCE GOALS
The Executive Plan provides that for each fiscal year (the
"Performance Period"), no bonuses shall be payable thereunder to the Named
Executive Officers unless the Company's earnings per share for the Performance
Period, calculated in accordance with generally accepted accounting principals
as consistently applied by the Company ("EPS"), equal or exceed the EPS target
(the "Performance Goal") for the Performance Period. If the Performance Goal
is met or exceeded for any Performance Period, the maximum aggregate bonus
amount payable to all of the Named Executive Officers may not exceed a total
of $5 million which also means that no individual Named Executive Officer may
receive more than that amount for any Performance Period and if that total
maximum amount were to be paid to any one such Named Executive Officer for any
Performance Period then the others could not be paid any bonus under the
Executive Plan. The Committee retains the right to reduce or eliminate
entirely any bonus payments to any or all of the Named Executive Officers. If
the minimum Performance Goal for a Performance Period is not met, no bonus
payments will be made to the Named Executive Officers under the Executive
Plan.
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If the Committee expressly permits, a recipient of a cash bonus under
the Executive Plan may elect to receive, in lieu of a portion of such bonus
that would otherwise be paid in cash, shares of Common Stock of the Company
equal to one-hundred twenty percent of the of the amount that would otherwise
be paid in cash.
AMENDMENT TO PLAN
The Committee may amend, suspend or terminate the Executive Plan at
any time; provided that no amendment may be made without the approval of the
Company's shareholders if the effect of such amendment would be to cause
outstanding or pending bonus awards that are intended to qualify for the
performance-based compensation exception to Section 162(m) of the Code to
cease to qualify for such exception.
NEW PLAN BENEFITS
Because amounts payable under the Executive Plan are based on
satisfaction of certain Performance Goals in each applicable Performance
Period, it cannot be determined at this time what amounts, if any will be
received by any of the Named Executive Officers with respect to the 2001
fiscal year under the Executive Plan.
REQUIRED VOTE
The Treasury Regulations promulgated under Section 162(m) of the Code
require the affirmative vote of a majority of the votes cast on the issue at a
Meeting to approve the Executive Plan.
Approval of the Executive Plan requires the affirmative vote of the
holders of a majority in voting power of the outstanding shares of Capital
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
APPROVAL AND ADOPTION OF THE EXECUTIVE PLAN. Proxies solicited by the Board
will be so voted unless shareholders specify in their proxies a contrary
choice.
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PERFORMANCE GRAPH
The performance graph set forth below compares the cumulative total
shareholder return of the Company's Common Stock for the last five fiscal
years through the fiscal year ended January 31, 2001 with that of the Broad
Market (CRSP Total Return Index for the NASDAQ Stock Market) and a peer group
index comprised of the following five companies: Swiss Army Brands, Inc.,
Fossil Inc., Gucci Group NV, Tiffany & Co. and Friedmans Inc. (the "peer
group"). The returns of each company in the peer group index have been
weighted according to the respective issuer's stock market capitalization.
Each graph assumes an initial investment of $100 on January 31, 1995 and the
reinvestment of dividends (where applicable).
[PERFORMANCE GRAPH]
01/1996 01/1997 01/1998 01/1999 01/2000 01/2001
------- ------- ------- ------- ------- -------
MOVADO GROUP, INC 100.0 120.8 218.6 259.5 194.6 143.3
NASDAQ STOCK MARKET (US COMPANIES) 100.0 131.1 154.7 242.1 378.3 265.0
SELF-DETERMINED PEER GROUP 100.0 145.4 106.4 172.5 304.9 287.6
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DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS
The Company's By-Laws set forth procedures requiring that any
shareholder wishing to bring business before an annual meeting of
shareholders, including the nomination of candidates to the Board of
Directors, give timely written notice to the Secretary of the Company. To be
timely such notice must be delivered personally or mailed to and received at
the Company's principal executive offices not less than 60 or more than 90
days before the annual meeting, except that, if less than 70 days notice or
prior public disclosure of the annual meeting date is given to shareholders,
notice by a shareholder is timely if received not later than the close of
business on the 10th day after the date notice of the annual meeting was
mailed or public disclosure thereof was made.
Shareholders' proposals intended to be presented at the 2002 Annual
Meeting of Shareholders must be received by the Company no later than January
25, 2002 for inclusion in the Company's proxy statement and form of proxy
relating to that meeting.
OTHER MATTERS
The Board of Directors, at the time of the preparation of this Proxy
Statement, knows of no business to come before the Annual Meeting other than
that referred to herein. If any other business should come before the Annual
Meeting, the persons named in the enclosed proxy will have discretionary
authority to vote all proxies received and not theretofore revoked in
accordance with their best judgment.
Upon the written request of any record holder or beneficial owner of
Common Stock or Class A Common Stock entitled to vote at the Annual Meeting,
the Company, without charge, will provide a copy of its Annual Report on Form
10-K for the year ended January 31, 2001, as filed with the Securities and
Exchange Commission. Requests should be directed to Frank Kimick, Treasurer,
Movado Group, Inc., 125 Chubb Avenue, Lyndhurst, New Jersey 07071.
BY ORDER OF THE BOARD OF DIRECTORS
Timothy F. Michno
Secretary and General Counsel
Lyndhurst, New Jersey
May 25, 2001
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE ANNUAL MEETING AND WISH THEIR STOCK TO BE VOTED ARE
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URGED TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
SELF-ADDRESSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
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APPENDIX A
MOVADO GROUP, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
I. PURPOSE
The Audit Committee shall provide assistance to the corporate
directors in fulfilling their responsibility to the shareholders, and
investment community relating to corporate accounting, reporting
practices of the Corporation, and the quality and integrity of the
financial reports of the Corporation. The Audit Committee's primary
duties and responsibilities are to:
- Oversee that management has maintained the reliability and
integrity of the accounting policies and financial reporting and
disclosure practices of the Corporation.
- Oversee that management has established and maintained processes to
assure that an adequate system of internal control is functioning
within the Corporation.
- Oversee that management has established and maintained processes to
assure compliance by the Corporation with all applicable laws,
regulations and corporate policy.
The Audit Committee will fulfill these responsibilities primarily by
carrying out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors,
and free from any relationship that, in the opinion of the Board,
would interfere with the exercise of his or her independent judgment
as a member of the Audit Committee. All members of the Audit Committee
shall have a working familiarity with basic finance and accounting
practices, and at least one member of the Audit Committee shall have
accounting or related financial management expertise. Audit Committee
members may enhance their familiarity with finance and accounting by
participating in educational programs conducted by the Corporation or
an outside consultant.
The members of the Audit Committee shall be elected by the Board at
the annual organizational meeting of the Board or until their
successors shall be duly elected and qualified.
Unless a Chairperson is elected by the full Board, the members of the
Audit Committee may designate a Chairperson by majority vote of the
full Audit Committee membership.
III. MEETINGS
The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate. As part of its job to foster open
communication, the Audit Committee should meet at least annually with
management, the director of the internal auditing department and the
independent accountants separately to discuss any matters that the
Audit Committee or each of these groups believes should be discussed
privately. In addition, the Audit Committee or at least its
Chairperson should meet with the independent accountants and
management quarterly to review the Corporation's financials consistent
with Section IV.3 below.
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IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
Documents/Reports Review
1. Review and reassess, at least annually, the adequacy of this Charter.
Make recommendations to the Board, as conditions dictate, to update
this Charter.
2. Review with management and the independent accountants the
Corporation's annual financial statements, including a discussion with
the independent accountants of the matters required to be discussed by
Statement of Auditing Standards No.61 ("SAS No. 61").
3. Review with management and the independent accountants the 10-Q prior
to its filing or prior to the release of earnings, including a
discussion with the independent accountants of the matters to be
discussed by SAS No. 61. At least two (2) members of the Audit
Committee may represent the entire Audit Committee for purposes of
this review.
4. Review with management and the Corporation's internal audit staff the
adequacy and effectiveness of the Corporation's internal control
practices, procedures and processes.
Independent Accountants
5. Review the performance of the independent accountants and make
recommendations to the Board regarding the appointment or termination
of the independent accountants. The Audit Committee and the Board
have the ultimate authority and responsibility to select, evaluate
and, where appropriate, replace the outside auditor. The independent
accountants are ultimately accountable to the Audit Committee and the
entire Board for such accountants' review of the financial statements
and controls of the Corporation. On an annual basis, the Audit
Committee should review and discuss with the accountants all
significant relationships the accountants have with the Corporation to
determine the accountants' independence.
6. Oversee independence of the accountant by:
- Receiving from the accountants, on a periodic basis, a formal
written statement delineating all relationships between the
accountants and the Corporation consistent with Independence
Standards Board Standard 1 ("ISB No. 1");
- Reviewing, and actively discussing with the Board, if necessary,
and the accountants, on a periodic basis, any disclosed
relationships or services between the accountants and the
Corporation or any other disclosed relationships or services that
may impact the objectivity and independence of the accountants;
and
- Recommending, if necessary, that the Board take certain action to
satisfy itself of the auditor's independence.
7. Based on the review and discussions referred to in section IV.2 and
IV.6, the Audit Committee shall determine whether to recommend to the
Board that the Corporation's audited financial statements be included
in the Corporation's Annual Report on Form 10-K for the last fiscal
year for filing with the Securities and Exchange Commission.
Financial Reporting Process
8. In conjunction with the independent accountants and the internal
auditors, review the integrity of the Corporation's financial
reporting processes, both internal and external.
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9. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principals and practices as
suggested by the independent accountants, management, or the internal
auditing department.
10. Establish regular systems of reporting to the Audit Committee by each
of management, the independent accountants and the internal auditors
regarding any significant judgments made in management's preparation
of the financial statements and any significant difficulties
encountered during the course of the review or audit, including any
restrictions on the scope of the work or access to required
information.
11. Review any significant disagreement among management and the
independent accountants or the internal auditing department in
connection with the preparation of the financial statements.
Legal Compliance/General
12. Review with the Corporation's counsel, any legal matter that could
have a significant impact on the Corporation's financial statements.
13. Report through its Chairperson to the Board following meetings of the
Audit Committee.
14. Maintain minutes or other records of meetings and activities of the
Audit Committee.
(Last revised 4/16/01)
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APPENDIX B
AMENDMENT NUMBER 3 TO
MOVADO GROUP, INC. 1996
STOCK INCENTIVE PLAN
The Board of Directors of Movado Group, Inc,, a New York corporation (the
"Company") hereby adopts this Amendment Number 3 to the Company's 1996 Stock
Incentive Plan, as previously amended, (the "Plan") effective upon approval by
the holders of a majority in voting power of the outstanding shares of common
stock and class A common stock of the Company present in person or represented
by proxy and entitled to vote at the next annual meeting of shareholders,
currently scheduled to be held June 19, 2001.
1. Section 3 of the Plan is hereby amended to read in its entirety
as follows: "3 Eligibility. Awards under the Plan may be
granted to such officers, directors and executive, managerial,
professional, or other key employees of the Company or its
Affiliates and to such non-employee individuals with whom the
Company or any of its Affiliates contracts to perform
consulting or other services as the Committee shall from time
to time in its sole discretion select".
2. In Section 4(a) of the Plan, the first sentence thereof is
deleted in its entirety and the following is substituted in
lieu thereof "Subject to Section 13 (relating to adjustments
upon changes in capitalization), the aggregate number of shares
of Stock upon which Awards may be based shall not exceed
3,500,000 shares".
3. Section 4(b) of the Plan is deleted in its entirety and the
following is substituted in lieu thereof: "Subject to Section
13 (relating to adjustments upon changes in capitalization),
the total number of shares of Stock in respect of which Awards
may be granted to any one participant under the Plan for the
term of the Plan shall not exceed 1,200,000 shares of Stock."
Upon the effectiveness of the foregoing amendments to the Plan, all references
to the Plan shall be deemed to mean the Plan as amended hereby.
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APPENDIX C
MOVADO GROUP, INC. EXECUTIVE PERFORMANCE PLAN
I. Purpose
The purpose of the Plan is to establish a program of incentive
compensation for the Company's Covered Employees that is directly related to
the performance results of the Company and such employees. The Plan provides
annual incentives, contingent upon continued employment and meeting certain
corporate goals, to certain key executives who make substantial contributions
to the Company.
II Definitions
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means either (i) the Board or (ii) a committee selected by
the Board to administer the Plan and composed of not less than two directors,
each of whom is an "outside director" (within the meaning of Section 162(m) of
the Code). If at any time such a Committee has not been so designated, the
Compensation Committee of the Board shall constitute the Committee or if there
shall be no Compensation Committee of the Board, the Board shall constitute
the Committee.
"COMPANY" means Movado Group, Inc. and each of its subsidiaries.
"CONVERTED CASH AMOUNT" shall have the meaning set forth in Article IV.
"COVERED EMPLOYEES" means the Company's Chief Executive Officer and
the other four most highly compensated executive officers of the Company whose
compensation is required to be disclosed under Item 402 of Regulation S-K
pursuant to the Securities Exchange Act of 1934, as amended, such other
officers currently being the Chairman, the Chief Operating Officer, the Chief
Financial Officer and the Secretary/General Counsel.
"DESIGNATED BENEFICIARY" means the beneficiary or beneficiaries
designated in accordance with Article XII hereof to receive the amount, if
any, payable under the Plan upon the Covered Employee's death.
"BONUS AWARDS" means the awards which are intended to qualify for the
performance-based compensation exception to Section 162(m) of the Code, as
further described in Article VI and which shall be payable under this Plan for
any Performance Period only if the Performance Criteria for such Performance
Period are met or exceeded and if and to the extent the Committee, in its
discretion, authorizes such payment to be made. Bonus Awards for all Covered
Employees may not exceed, in the aggregate, the maximum amount of five million
dollars ($5 million) in any Performance Period. Necessarily, therefore, no
individual Named Executive Officer may receive more than that amount for any
Performance Period and if the total maximum aggregate Bonus Awards amount of
$5 million were to be paid to any one such Named Executive Officer for any
Performance Period then the others could not be paid any Bonus Awards.
"PERFORMANCE CRITERIA" means the Company's targeted earnings per share
for the applicable Performance Period, calculated in accordance with generally
accepted accounting principles as consistently applied by the Company, as
established by the Committee on or before April 30 such Performance Period. If
the Committee determines that a change in the business, operations, corporate
structure or capital structure of the Company, or the manner in which it
conducts its business, or other events or circumstances render the Performance
Criteria to be unsuitable, the Committee may modify such Performance Criteria
or the related minimum acceptable level of achievement, in whole or in part,
as the Committee deems appropriate and equitable; provided, however, that no
such modification shall be made if the effect would be to cause a 162(m) Bonus
Award to fail to qualify for the performance-based compensation exception to
Section 162(m) of the Code.
"PERFORMANCE PERIOD" means each fiscal year of the Company beginning
with fiscal 2002.
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"PLAN" means the Movado Group, Inc. Executive Performance Plan.
III. Administration
Except as otherwise herein expressly provided, full power and
authority to construe, interpret, and administer the Plan shall be vested in
the Committee, including the power to amend or terminate the Plan as further
described in Article XV. The Committee may at any time adopt such rules,
regulations, policies, or practices as, in its sole discretion, it shall
determine to be necessary or appropriate for the administration of, or the
performance of its respective responsibilities under, the Plan. The Committee
may at any time amend, modify, suspend, or terminate such rules, regulations,
policies, or practices.
IV. Bonus Awards
The Committee, based upon information to be supplied by management of
the Company and, where determined as necessary by the Board, the ratification
of the Board, will establish for each Performance Period a maximum award (and,
if the Committee deems appropriate, a threshold and target award) and goals
relating to Company, subsidiary, divisional, departmental and/or functional
performance for each Covered Employee and communicate such award levels and
goals to each Covered Employee prior to or during the Performance Period for
which such award may be made. Bonus Awards will be earned by each Covered
Employee based upon the level of attainment of his or her goals during the
applicable Performance Period. In no event shall the Committee have any
discretion to increase the Bonus Awards payable to the Covered Employees but
the Committee may reduce the amount of any Bonus Award in its sole and
absolute discretion. As soon as practicable after the end of the applicable
Performance Period, the Committee shall determine the level of attainment of
the goals for each Covered Employee and the Bonus Award to be made to each
Covered Employee.
The Committee reserves the right to permit any of the Covered
Employees to elect, upon written notice of such election including notice of
the Converted Cash Amount (as defined below) sent to the Company attention VP
Human Resources, within five (5) business days after the date of notification
("Notification Date") of the amount of his or her bonus, to receive in lieu of
a percentage of such bonus that would otherwise be paid in cash (the
"Converted Cash Amount"), a number of shares of common stock of the Company
not to exceed (as near as may be without fractional shares) one hundred twenty
percent of the Converted Cash Amount based on the closing price per share of
such stock as quoted on the New York Stock Exchange (or such other exchange on
which the shares then be listed) on the Notification Date.
V. Payment of Bonus Awards
Bonus Awards earned during any Performance Period shall be paid as
soon as practicable following the end of such Performance Period and the
determination of the amount thereof shall be made by the Committee. Payment of
Bonus Awards shall be made in the form of cash or as otherwise permitted by
the Committee and elected by any Covered Employee, in shares of Common Stock
of the Company equal to the Converted Cash Amount. Bonus Award amounts earned
but not yet paid will not accrue interest.
VI. 162(m) Requirements
Each Bonus Award awarded under the Plan shall meet the criteria for
qualification as a 162(m) award and will be subject to the following
requirements, notwithstanding any other provision of the Plan to the contrary:
1. No Bonus Award may be paid unless and until the shareholders of
the Company have approved the Plan in a manner which complies with
the shareholder approval requirements of Section 162(m) of the
Code.
2. No Bonus Award may be made only by a Committee which is comprised
solely of not less than two directors, each of whom is an "outside
director" (within the meaning of Section 162(m) of the Code).
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3. The performance goals to which a 162(m) Bonus Award is subject
must be based solely on Performance Criteria. Such performance
goals, and the maximum, target and/or threshold (as applicable)
Bonus Amount payable upon attainment thereof, must be established
by the Committee within the time limits required in order for the
162(m) Bonus Award to qualify for the performance-based
compensation exception to Section 162(m) of the Code.
4. No Bonus Award may be paid until the Committee has certified the
level of attainment of the applicable Performance Criteria.
5. Bonus Awards for all Covered Employees may not exceed in the
aggregate the maximum amount of five million dollars ($5 million)
in any Performance Period.
VII. Termination of Employment
A Covered Employee shall be eligible to receive payment of his or her
Bonus Award earned during a Performance Period, so long as the Covered
Employee is employed on the last day of such Performance Period,
notwithstanding any subsequent termination of employment prior to the actual
payment of the Bonus Award. In the event of a Covered Employee's death prior
to the payment of a Bonus Award which has been earned, such payment shall be
made to the Covered Employee's Designated Beneficiary or, if there is none
living, to the estate of the Covered Employee.
VIII. Reorganization or Discontinuance
The obligations of the Company under the Plan shall be binding upon
any successor corporation or organization resulting from merger, consolidation
or other reorganization of the Company, or upon any successor corporation or
organization succeeding to substantially all of the assets and business of the
Company. The Company will make appropriate provision for the preservation of
Covered Employees' rights under the Plan in any agreement or plan which it may
enter into or adopt to effect any such merger, consolidation, reorganization
or transfer of assets.
If the business conducted by the Company shall be discontinued, any
previously earned and unpaid Bonus Awards under the Plan shall become
immediately payable to the Covered Employees then entitled thereto.
IX. Non-Alienation of Benefits
Covered Employee may not assign, sell, encumber, transfer or otherwise
dispose of any rights or interests under the Plan except by will or the laws
of descent and distribution. Any attempted disposition in contravention of the
preceding sentence shall be null and void.
X. No Claim or Right to Plan Participation
No employee or other person shall have any claim or right to be
selected as a Covered Employee under the Plan. Neither the Plan nor any action
taken pursuant to the Plan shall be construed as giving any employee any right
to be retained in the employ of the Company.
XI. Taxes
The Company shall deduct from all amounts paid under the Plan all
federal, state, local and other taxes required by law to be withheld with
respect to such payments.
XII. Designation and Change of Beneficiary
Each Covered Employee may indicate upon notice to him or her by the
Committee of his or her right to receive a Bonus Award a designation of one or
more persons as the Designated Beneficiary who shall be entitled to receive
the amount, if any, payable under the Plan upon the death of the Covered
Employee. Such designation shall be in writing to the Committee. A Covered
Employee may, from time to time, revoke or change his or her Designated
Beneficiary without the consent of any prior Designated Beneficiary by filing
a written designation with
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the Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Covered Employee's death, and in no event shall it be effective as of a date
prior to such receipt.
XIII. Payments to Persons Other Than the Covered Employee
If the Committee shall find that any person to whom any amount is
payable under the Plan is unable to care for his or her affairs because of
incapacity, illness or accident, or has died, then any payment due to such
person or his or her estate (unless a prior claim therefor has been made by a
duly appointed legal representative) may, if the Committee so directs, be paid
to his or her spouse, a child, a relative, an institution maintaining or
having custody of such person, or any other person deemed by the Committee, in
its sole discretion, to be a proper recipient on behalf of such person
otherwise entitled to payment. Any such payment shall be a complete discharge
of the liability of the Company therefor.
XIV. No Liability of Committee Members
No member of the Committee shall be personally liable by reason of any
contract or other instrument related to the Plan executed by such member or on
his or her behalf in his or her capacity as a member of the Committee, nor for
any mistake of judgment made in good faith, and the Company shall indemnify
and hold harmless each employee, officer, or director of the Company to whom
any duty or power relating to the administration or interpretation of the Plan
may be allocated or delegated, against any cost or expense (including legal
fees, disbursements and other related charges) or liability (including any sum
paid in settlement of a claim with the approval of the Board) arising out of
any act or omission to act in connection with the Plan unless arising out of
such person's own fraud or bad faith.
XV. Termination or Amendment of the Plan
The Committee may amend, suspend or terminate the Plan at any time;
provided that no amendment may be made without the approval of the Company's
shareholders if the effect of such amendment would be to cause outstanding or
pending 162(m) Bonus Awards to cease to qualify for the performance-based
compensation exception to Section 162(m) of the Code. The Plan will
automatically terminate on January 31, 2007; provided, however, that any Bonus
Awards granted prior to January 31, 2007 shall continue to be governed by the
terms of the Plan.
XVI. Unfunded Plan
Covered Employees shall have no right, title, or interest whatsoever
in or to any investments which the Company may make to aid it in meeting its
obligations under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Company and any Covered
Employee, Beneficiary, legal representative or any other person. To the extent
that any person acquires a right to receive payments from the Company under
the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder shall be
paid from the general funds of the Company and no special or separate fund
shall be established and no segregation of assets shall be made to assure
payment of such amounts except as expressly set forth in the Plan.
The Plan is not intended to be subject to the Employee Retirement
Income Security Act of 1974, as amended.
XVII. Governing Law
The terms of the Plan and all rights thereunder shall be governed by
and construed in accordance with the laws of the State of New York without
reference to principles of conflict of laws.
XVIII. Effective Date
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The effective date of the Plan is February 1, 2001.
As Adopted by the Compensation Committee of the Board of Directors of
Movado Group, Inc. at a Meeting held on March 16, 2001.
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MOVADO GROUP, INC. PROXY/VOTING INSTRUCTION CARD
_________________________________________________________________________
This proxy is solicited on behalf of the Board of Directors of MOVADO
GROUP, INC. for the Annual Meeting on June 19, 2001
The undersigned appoints Timothy F. Michno and Howard Regenbogen, and each
of them, with full power of substitution in each, the proxies of the
undersigned, to represent the undersigned and vote all shares of Movado Group,
Inc. which the undersigned may be entitled to vote at the Annual Meeting of
Shareholders to be held on June 19, 2001, and at any adjournment or postponement
thereof, as indicated on the reverse side.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder, if no direction is given, this proxy will
be voted FOR proposals 1,2,3 and 4.
MOVADO GROUP, INC.
P.O. BOX 11346
NEW YORK, N.Y. 10203-0346
(Continued, and to be signed and dated on reverse side.)
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________________________________________________________________________________
MOVADO GROUP, INC. NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD JUNE 19, 2001
125 CHUBB AVENUE
LYNDHURST, NJ 07071
Dear Shareholder:
The Annual Meeting of Shareholders of Movado Group, Inc. will be held at
10:00 a.m. on Tuesday, June 19, 2001, at the offices of Simpson, Thacher &
Bartlett, 425 Lexington Avenue, New York City, for the following purposes:
1. To elect seven directors to the Board of Directors.
2. To ratify selection of independent public accountants.
3. To amend the Company's 1996 Stock Incentive Plan.
4. To approve a performance based executive bonus plan.
Only holders of Common Stock and Class A Common Stock of Movado Group, Inc.
of record at the close of business on May 11, 2001 will be entitled to vote
at the meeting of any adjournment thereof.
To be sure that your vote is counted, we urge you to complete and sign the
proxy/voting instruction card below, detach it from this letter and return it
in the postage paid envelope enclosed in this package. The giving of such
proxy does not affect your right to vote in person if you attend the
meeting. The prompt return of your signed proxy will aid the Company in
reducing the expense of additional proxy solicitation.
BY ORDER OF THE BOARD OF DIRECTORS
May 25, 2001 TIMOTHY F. MICHNO
General Counsel and Secretary
Detach Proxy Card Here
- --------------------------------------------------------------------------------
1. Election of FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS
Directors listed below for all nominees listed below
Nominees: Gedalio Grinberg, Efraim Grinberg, Margaret Hayes-Adame, Richard
Cote, Alan H. Howard, Donald Oresman and Leonard L. Silverstein
*Exceptions__________________________________________________________________
INSTUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided.
2. To ratify and approve the Selection 3. To approve amendments to the Com-
by the Board of Directors of Price pany's 1996 Stock incentive Plan.
waterhouseCoopers LLP as independent
public accountants for the Company FOR AGAINST ABSTAIN
for the fiscal year ending January 31,
2002. In their discretion the Proxies are
authorized to vote upon such other
FOR AGAINST ABSTAIN matters as may properly come before
the meeting or any adjournment or
postponement thereof.
4. To approve the adoption of the 2001
Executive Performance Plan.
FOR AGAINST ABSTAIN Change of Address and
or comments Mark Here
The signature of this proxy should
correspond exactly with stockholder's
name as printed to the left. In the
case of joint tenancies, co-executors,
or co-trustees, both should sign.
Persons signing as Attorney, Executor,
Administrator, Trustee or Guardian
should give their full title.
Dated:________________________, 2001
____________________________________
Signature
____________________________________
Signature
Votes MUST be indicated
Please sign, Date and Return the Proxy (x) in Black or Blue ink.
Promptly Using the Enclosed Envelope.
________________________________________________________________________________
Please Detach Here
You Must Detach This Portion of the Proxy Card
Before Returning it in the Enclosed Enevlope