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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): NOVEMBER 21, 2005
MOVADO GROUP, INC.
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(Exact Name of Registrant as Specified in Charter)
NEW YORK
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(State or Other Jurisdiction of Incorporation)
1-16497 13-2595932
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(Commission File Number) (IRS Employer Identification Number)
650 FROM ROAD
PARAMUS, NEW JERSEY 07652
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (201) 267-8000
NOT APPLICABLE
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On November 21, 2005, Movado Group, Inc. ("MGI") and Swissam Products Limited,
a wholly-owned subsidiary of Movado (together with MGI, "MOVADO") entered
into a License Agreement with L.C. Licensing, Inc. ("L.C. LICENSING"), with an
effective date of November 18, 2005.
GRANT OF LICENSE, TERM AND TERMINATION
Movado received an exclusive license to use the trademarks "JUICY COUTURE" and
"COUTURE COUTURE LOS ANGELES", in connection with the manufacture, advertising,
merchandising, promotion, sale and distribution of timepieces and components
thereof (the "LICENSED MERCHANDISE"). Movado will initially sell only women's
Licensed Merchandise, but on 30 days notice from L.C. Licensing, Movado may be
required to submit a business plan for men's Licensed Merchandise, and men's
Licensed Merchandise will be covered by the License Agreement. In addition,
Movado has a right of first negotiation with respect to children's Licensed
Merchandise. All merchandise concepts and product designs for Licensed
Merchandise are subject to approval by L.C. Licensing. During the term of the
License Agreement, Movado is not permitted to manufacture, advertise,
merchandise, promote, sell or distribute the watches of 12 competitors without
the prior approval of L.C. Licensing.
The term of the license is November 18, 2005 through December 31, 2011, with a
four-year renewal period at the option of Movado, provided that certain sales
thresholds are met. The License Agreement is subject to termination for industry
standard causes, as well as:
o upon discontinuation of sales of Licensed Merchandise by Movado or
cessation of other operations such that Licensed Merchandise exceeds
more than 20% of Movado's business;
o upon a change of control of Movado;
o if Movado fails to spend the annual minimum amounts on advertising
and marketing or fails to meet minimum sales for two consecutive
years;
o if Movado fails to begin sales of Licensed Merchandise by the
required date; or
o if Movado sells more than a specified amount off-price Licensed
Merchandise.
Movado is required to hire a brand president, a director of sales, a vice
president of product development and a director of marketing to work exclusively
in connection with the Licensed Merchandise.
DISTRIBUTION CHANNELS
The Licensed Merchandise will be sold by Movado and L.C. Licensing-approved
distributors (a) for resale to consumers through L.C. Licensing-approved
retailers, department stores, top specialty stores outlet stores, duty-free
shops and clearance channels and (b) to certain corporate accounts for use as
premium and incentive awards, with L.C. Licensing approval.
TERRITORY
The License Agreement is worldwide in scope, but L.C. Licensing must approve
sales in certain countries based on its determination that sales would not
infringe third party rights and the commencement by L.C. Licensing or its
affiliates of product sales in the particular country.
MARKETING, ADVERTISING AND PROMOTION
Movado is responsible for annually developing a marketing program including
anticipated sales volume, accounts, product positioning, advertising and
promotional support is required to spend a specified percentage of net sales of
Licensed Merchandise, with an annual minimum amount, on national advertising,
marketing and cooperative advertising. L.C. Licensing is responsible for
creating, conducting and placing brand advertising, marketing and promotion,
towards which Movado will pay to L.C. Licensing a certain percentage of annual
net sales of Licensed Merchandise, with a minimum required payment.
ROYALTIES
Movado is required to make quarterly royalty payments, based on a specified
percentage of all net sales of Licensed Merchandise actually made by the Company
(excluding sales to L.C. Licensing or its affiliates) based on targeted levels
of net sales of Licensed Merchandise, subject to annual guaranteed minimum
advances against royalties, paid quarterly.
SIGN ON FEE
In connection with the execution of the License Agreement, Movado paid an
$80,000 sign on fee to L.C. Licensing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report on Form 8-K to be signed on its
behalf by the undersigned, hereunto duly authorized.
Dated: November 28, 2005
MOVADO GROUP, INC.
By: /s/ Timothy F. Michno
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Name: Timothy F. Michno
Title: General Counsel