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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): June 6, 2006
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 May 31, 2006, the Compensation Committee of the Board of
Directors (the "Committee") of Movado Group, Inc. (the "Company") adopted the
Movado Group, Inc. Executive Long Term Incentive Plan (the "LTIP") pursuant to
Section 9 of the Movado Group, Inc. 1996 Stock Incentive Plan (as amended and
restated, the "Plan"). Key employees of the Company selected by the Committee
are eligible to participate in the LTIP.
The LTIP provides for the award of "Performance Share Units" (as
defined in the Plan) during the three years ending January 31, 2009 (the "Award
Period"). Performance Share Units are equivalent, one for one, to shares of
"Stock" (as defined in the Plan) that vest based on the Company's achievement
of its "operating margin" (as defined in the LTIP) for fiscal year 2009 (the
"Performance Goal"). Each participant's target award is expressed as a number
of Performance Share Units. The actual number of shares of Stock earned by a
participant is based on the Company's actual performance at the end of the
Award Period relative to the Performance Goal and can range from 0% to 150% of
the target award.
Depending on the extent to which the Performance Goal is achieved,
up to 50% of the shares of Stock equal to the target Award will be distributed
within 75 days after the completion of the Award Period and the remainder of
the earned shares will be distributed on the second anniversary of the
completion of the Award Period. Participants must be employed at the completion
of the Award Period to receive the shares. The amount deferred to the second
anniversary is subject to forfeiture only in the event of the participant's
voluntary resignation or termination of the participant's employment for
"Cause" (as defined in the LTIP). A pro-rata payout will be made for
"retirement" (as defined in the LTIP), permanent disability (as determined by
the Committee) or death occurring during the Award Period based on actual
performance at the end of the Award Period.
Each Performance Share Unit will be credited with "Dividend
Equivalents" (as defined in the Plan) equal to the dividends paid on one share
of Stock during the Award Period and the subsequent two-year mandatory deferral
period. Dividend Equivalents will be in the form of "Phantom Stock Units" (as
defined in the Plan) and will be distributed as an equal number of shares of
Stock at the same time as the distribution of earned shares.
Upon the occurrence of a "Change in Control" (as defined in the
Plan), the Performance Share Units awarded will be converted on a one-for-one
basis to time-based Phantom Stock Units without pro-ration, which will vest at
the end of the Award Period. Upon vesting, one share of Stock will be
distributed for each Phantom Share Unit not previously forfeited. If the Change
in Control occurs during the first 12 months of the Award Period, the shares
will be converted at 50% of the target Award. If the Change in Control occurs
during the second 12 months of the Award Period, the shares will be converted
at 100% of the target Award. If the Change in Control occurs during the final
12 months of the Award Period, the shares will be converted at 150% of the
target Award. If a participant's employment is terminated within 24 months
after the Change in Control, the unvested Phantom Stock Units will become
immediately vested.
A copy of the LTIP is filed as Exhibit 10.1 to this Form 8-K and
incorporated herein by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
10.1 Movado Group, Inc. Executive Long Term Incentive Plan*
10.2 Movado Group, Inc. Executive Long Term Incentive Plan
Form of Award Agreement*
* Constitutes a compensatory plan or arrangement.
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: June 6, 2006
MOVADO GROUP, INC.
By: /s/ Frank V. Kimick
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Name: Frank V. Kimick
Title: Vice President and Treasurer