UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
MOVADO GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
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previously. Identify the previous filing by registration statement number,
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MOVADO GROUP, INC.
650 FROM ROAD
PARAMUS, NEW JERSEY 07652
MAY 16, 2005
Dear Fellow Shareholder:
You are cordially invited to attend the 2005 Annual Meeting of
Shareholders of Movado Group, Inc. to be held on Thursday, June 16, 2005 at
10:00 a.m., Eastern Daylight Time, at the Company's executive offices in
Paramus, New Jersey. 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 enclosed Proxy Statement.
We sincerely hope you will be able to attend the meeting. We will report
on the Company's progress and respond 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 Efraim Grinberg
CHAIRMAN OF THE BOARD OF DIRECTORS PRESIDENT AND CHIEF EXECUTIVE OFFICER
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE, SIGN AND RETURN YOUR PROXY CARD PROMPTLY IN THE
ENCLOSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
MOVADO GROUP, INC.
650 FROM ROAD
PARAMUS, NEW JERSEY 07652
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 16, 2005
Notice is hereby given that the Annual Meeting of Shareholders of Movado Group,
Inc. will be held on Thursday, June 16, 2005 at 10:00 a.m., Eastern Daylight
Time, at the Company's executive offices located at 650 From Road, Paramus, New
Jersey for the following purposes:
1. To elect eight directors to serve until the next Annual Meeting and
until their successors are elected and qualified; and
2. To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending January
31, 2006; and
3. To transact such other business as may properly come before the
meeting or any postponement or adjournment thereof.
Holders of the Company's Common Stock and Class A Common Stock of record at the
close of business on May 12, 2005 are entitled to notice of and to vote at the
Annual Meeting of Shareholders or any postponements or adjournments thereof.
Dated: May 16, 2005 By order of the Board of Directors
Timothy F. Michno
Secretary and General Counsel
MOVADO GROUP, INC.
650 FROM ROAD
PARAMUS, NJ 07652
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 Thursday, June 16, 2005 at 10:00 a.m., Eastern Daylight Time, at the
Company's executive offices located at 650 From Road, Paramus, New Jersey 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 16, 2005.
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 eight directors to serve until the next annual meeting and
until their successors are elected and qualified; and
2. To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending January
31, 2006; and
3. 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
as follows: FOR the nominees for Directors identified below; and FOR the
ratification of the appointment of PricewaterhouseCoopers LLP as the Company's
independent accountants for fiscal year 2006.
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 solicitation by mail, 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.
OUTSTANDING VOTING SECURITIES
The Board of Directors has fixed the close of business on May 12, 2005 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
April 21, 2005 there were 18,333,090 shares of Common Stock outstanding and
6,801,812 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
the proposal to ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent accountants for fiscal 2006 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
April 21, 2005 (except as otherwise noted in footnotes 3, 4, 5 and 7) 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
SHARES OF OUTSTANDING SHARES
CLASS A SHARES OF OF CAPITAL STOCK
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)....................... - 15,750 - * *
David L. Babson & Co.Inc. (3).................. - 1,979,842 - 10.8% 2.3%
Barclays Global Investors, NA (4).............. - 1,156,656 - 6.3% 1.3%
Bricoleur Capital Management LLC (5)........... - 1,152,802 - 6.2% 1.3%
Richard J. Cote (6) ........................... - 1,043,677 - 5.5% 1.2%
Dimensional Fund Advisors Inc. (7) ............ - 1,511,974 - 8.2% 1.8%
Alexander Grinberg (8)......................... 2,752,611 44,652 40.5% * 31.9%
Efraim Grinberg(9) ............................ 4,097,618 1,174,995 60.2% 6.2% 48.4%
Gedalio Grinberg (10).......................... 1,558,029 161,007 22.9% * 18.2%
Alan H. Howard (2)............................. - 13,874 - * *
Eugene J. Karpovich (11)....................... - 48,856 - * *
Nathan Leventhal .............................. - - - - -
Timothy F. Michno (12)......................... - 35,194 - * *
Donald Oresman (2)............................. 3,920 12,000 * * *
Miriam Phalen (13)............................. 2,764,917 - 40.6% - 32.0%
Leonard L. Silverstein (2) (14)................ 942,283 104,646 13.9.% * 11.0%
All executive officers and directors as a group
(12 persons) (15)............................ 5,659,567 2,488,810 83.2% 2.6% 67.3%
----------------
* DENOTES LESS THAN ONE PERCENT
The address for Messrs. Cote, A. Grinberg, G. Grinberg. E. Grinberg, Howard,
Karpovich, Leventhal, Michno, Oresman and Silverstein and Ms. Hayes Adame and
Ms. Phalen is c/o Movado Group, Inc., 650 From Road, Paramus, New Jersey 07652.
(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.
(2) The total shares of Common Stock reported as beneficially owned by each of
Ms. Hayes Adame and Messrs. Howard, Oresman and Silverstein includes
12,000 shares each has the right to acquire by the exercise of options
under the Company's 1996 Stock Incentive Plan.
2
(3) In a filing on Schedule 13G dated May 10, 2004 under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), David L. Babson & Co.
Inc. ("Babson") reported beneficial ownership as of April 30, 2004 of
989,921 shares of Common Stock (equal to 1,979,842 shares as adjusted for
the Company's 2 for 1 stock split on June 25, 2004) as to which it
reported having sole dispositive power. Babson reported having sole voting
power over 586,421 shares of Common Stock (equal to 1,172,842 split
adjusted shares) and shared voting power as to 403,500 shares (equal to
807,000 split adjusted shares). Babson 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 Babson is One
Memorial Drive, Cambridge, MA 02142.
(4) On February 13, 2005 in a filing on Schedule 13G under the Exchange Act,
Barclays Global Investors, NA ("BGI") and Barclays Global Fund Advisors
("BGF") reported beneficial ownership as of December 31, 2004,
respectively, of 978,802 and 177,854 shares of Common Stock for an
aggregate total of 1,156,656 shares. Each of BGI and BGF reported having
sole dispositive power and sole voting power over all the shares it
reported as beneficially owning. Each 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 BGI and
BGF is 45 Fremont Street, San Francisco, CA 94105.
(5) In a filing on Schedule 13G dated February 11, 2005 under the Exchange
Act, Bricoleur Capital Management LLC ("Bricoleur") reported beneficial
ownership as of December 31, 2004 of 1,152,802 shares of Common Stock, as
to which it has shared voting and shared dispositive power. Bricoleur 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 Bricoleur is 12230 El Camino Real, Suite 100, San Diego, CA
92130.
(6) The total shares of Common Stock reported as beneficially owned by Mr.
Cote includes 633,882 shares which he has the right to acquire by the
exercise of options under the Company's 1996 Stock Incentive Plan and
2,200 shares held by a trust for the benefit of his children as to which
shares Mr. Cote has shared dispositive power with his spouse who is the
trustee with sole voting power.
(7) On February 9, 2005 in a filing on Schedule 13G under the Exchange Act,
Dimensional Fund Advisors, Inc. ("DFA") reported beneficial ownership as
of December 31, 2004 of 1,511,974 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.
(8) The total number of shares of Class A Common Stock beneficially owned by
Mr. A. Grinberg includes 2,400,654 shares owned by Grinberg Partners L.P.,
a Delaware limited partnership, of which Mr. A. Grinberg is a limited
partner, and 77,146 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, a Delaware general
partnership (general partner of Grinberg Partners L.P.) and Miriam Phalen
over the 2,400,654 shares owned by Grinberg Partners L.P., and shared
voting and investment power with Mr. Fishman over the 77,146 shares owned
by the trusts. The Common Stock owned by Mr. A. Grinberg includes 36,290
shares he has the right to acquire by the exercise of options under the
Company's 1996 Stock Incentive Plan.
(9) The total number of shares of Class A Common Stock beneficially owned by
Mr. E. Grinberg includes an aggregate of 563,306 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 862,940 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.
3
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 Class A Common Stock
beneficially owned by Mr. E. Grinberg also includes 2,400,654 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. E. Grinberg has
shared power to direct the voting and disposition of the shares owned by
Grinberg Partners L.P. Also included in the total number of shares of
Class A Common Stock reported as beneficially owned by Mr. E. Grinberg are
20,000 shares owned by the Efraim Grinberg Family Foundation, a non-profit
corporation, as to which shares Mr. E. Grinberg has shared investment and
voting control together with the other member of the Board of Directors of
that non-profit corporation. The total number of shares of Common Stock
owned by Mr. E. Grinberg includes 67,709 shares of Common Stock held under
the Company's Employee Savings and Investment Plan ("401(k) Plan"), the
trustees of which are Messrs. G. Grinberg and E. Grinberg, both of whom
have shared investment and voting power as to such shares, and 71,848
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. Also included in Mr. E. Grinberg's total
number of shares of Common Stock are 2,000 shares owned by the Efraim
Grinberg Family Foundation, as to which shares Mr. E. Grinberg has shared
investment and voting control with the other member of the Board of
Directors of that non-profit corporation. The total number of shares of
Common Stock owned by Mr. E. Grinberg also includes 673,860 shares of
Common Stock which he has the right to acquire by the exercise of options
under the Company's 1996 Incentive Stock Plan. Mr. E. Grinberg disclaims
beneficial ownership as to the 954,218 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 67,709 shares of Common Stock held under the Company's
401(k) Plan and the 71,848 shares of Common Stock held under the Company's
Stock Bonus Plan, except to the extent of his pecuniary interest in the
shares held under the Company's 401(k) Plan, and all the shares held by
the Efraim Grinberg Family Foundation.
(10) The total number of shares of Class A Common Stock beneficially owned by
Mr. G. Grinberg includes: 79,343 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 38,000
shares owned by CAP I Partners L.P., a limited partnership of which CAP I
Partners LLC is the general partner. Mr. G. Grinberg, as the managing
member of CAP I Partners LLC, has the sole power to vote and dispose of
the shares owned by CAP I Partners L.P. The total number of shares of
Common Stock beneficially owned by Mr. G. Grinberg includes 67,709 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; 71,848 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; and 10,000 shares of Common Stock held by a charitable remainder
trust for which Mr. G. Grinberg is a co-trustee together with Mr. Andrew
Weiss. Mr. G. Grinberg disclaims beneficial ownership as to the shares of
Class A Common Stock owned by The Grinberg Family Foundation and by CAP I
Partners L.P. and the shares of Common Stock held under the Company's
401(k) Plan and under the Company's Stock Bonus Plan, except to the extent
of his pecuniary interest therein.
(11) The total number of shares of Common Stock reported as beneficially owned
by Mr. Karpovich includes 46,286 shares which he has the right to acquire
by the exercise of options under the Company's 1996 Stock Incentive Plan.
(12) The total number of shares of Common Stock reported as beneficially owned
by Mr. Michno includes 35,176 shares which he has the right to acquire by
the exercise of options under the Company's 1996 Stock Incentive Plan.
(13) The total number of shares of Class A Common Stock beneficially owned by
Ms. Miriam Phalen includes 2,400,654 shares owned by Grinberg Partners
L.P., a Delaware limited partnership of which Ms. Phalen is a limited
partner, and 74,172 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,
a Delaware general partnership (general partner of Grinberg Partners L.P.)
and A. Grinberg
4
over the 2,400,654 shares owned by Grinberg Partners L.P., and sole voting
and investment power over the 74,172 shares owned by the trusts.
(14) The total number of shares of Class A Common Stock beneficially owned by
Mr. Leonard L. Silverstein includes an aggregate of 862,940 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 79,343 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: 4,000 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, and 88,646 shares 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.
(15) 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.
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 eight 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 RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE ELECTION OF THE NOMINEES LISTED BELOW. 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 65 Director
Richard J. Cote 50 Executive Vice President and Chief Operating
Officer; Director
Efraim Grinberg 47 President and Chief Executive Officer; Director
Gedalio Grinberg 73 Chairman of the Board of Directors
Alan H. Howard 45 Director
Nathan Leventhal 62 Director
Donald Oresman 79 Director
Leonard L. Silverstein 83 Director
There are no family relationships between any of the Company's directors,
except for 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.
5
Ms. Hayes Adame was elected to the Board of Directors of the Company in
September 1993. Ms. Hayes Adame is the President of Fashion Group International,
Inc., a non-profit organization working with the fashion industry, 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, a major
retailer. 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. In May 2001 Mr. Cote was promoted to Executive Vice
President - Chief Operating Officer. Prior to joining the Company, Mr. Cote
worked for Colgate-Palmolive, a consumer goods company, 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.
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. In May 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 Lincoln Center for the Performing Arts, Inc., 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 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
LLC ("CSFB"), an international provider of financial services. He has been with
CSFB and its predecessor companies since 1986.
Mr. Leventhal, who was appointed to the Board in November 2003, served as
Chief of Staff to John Lindsay, Deputy Mayor to Ed Koch, and Transition Chairman
for both Mayors David Dinkins and Michael Bloomberg. He currently chairs Mayor
Bloomberg's Committee on Appointments. In the not-for-profit sector, Mr.
Leventhal served for 17 years as President of Lincoln Center for the Performing
Arts, where he is now President Emeritus and Chairman of the Avery Fisher Artist
Program. He currently serves on the boards and is chairman of the audit
committees of 16 equity and fixed income mutual funds managed by the Dreyfus
Corporation, an investment advisor. Mr. Leventhal is a former partner of the law
firm Poletti Freidin Prashker Feldman & Gartner.
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 an active honorary
trustee of the John F. Kennedy Center for the Performing Arts, Past President of
the Alliance Francaise of Washington, formerly President and currently a
director of the National Symphony Orchestra Association, Treasurer of the
Madison Council of the Library of Congress and President, French-American
Cultural Foundation.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board Meetings and Committtees
The Board of Directors has three committees: a Compensation Committee, an
Audit Committee and a Nominating/Corporate Governance Committee. The Board of
Directors held nine meetings during fiscal 2005.
6
Audit Committee
The Audit Committee of the Board of Directors is currently composed of Ms.
Hayes Adame and Messrs. Howard, Leventhal and Oresman. Mr. Oresman is the
chairman of the Audit Committee. The Board of Directors believes that each
member of the Audit Committee is an "audit committee financial expert" as
defined under the rules adopted by the SEC and, therefore, has accounting or
related financial expertise in accordance with the NYSE listing standards. The
Audit Committee held eight meetings in fiscal 2005.
The principal functions of the Audit Committee are to (i) appoint, approve
the compensation of, terminate and oversee the work of the Company's independent
auditors; (ii) approve in advance all audit and permissible non-audit services
provided to the Company by independent auditors; (iii) review, in consultation
with the Company's independent auditors, management and the Company's internal
auditors, the Company's financial reporting process, including its internal
controls; (iv) review with management and the Company's independent auditors,
the Company's annual and quarterly financial statements before the same are
publicly filed, and (v) report regularly to the Board with respect to any issues
that arise concerning, among other things, the quality or integrity of the
Company's financial statements, the performance of the internal audit function,
the Company's compliance with legal requirements and the performance and
independence of the Company's independent auditors. The Audit Committee operates
under a written charter which is available on the Company's website at
www.movadogroup.com and in print upon the written request of any shareholder.
Compensation Committee
The directors serving on the Compensation Committee of the Board of
Directors are Ms. Hayes Adame and Mesrrs. Howard, Leventhal, Oresman and
Silverstein. Mr. Howard is the chairman of the Compensation Committee. The
Compensation Committee held seven meetings in fiscal 2005. The principal
functions of the Compensation Committee are to (i) review and approve corporate
goals and objectives relevant to CEO compensation, evaluate the CEO's
performance in light of those goals and objectives and set the CEO's
compensation level based on that evaluation; (ii) review and approve
compensation levels for executive non-CEO officers and key employees of the
Company; (iii) review significant employee benefit programs and (iv) establish
and administer 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 operates
under a written charter, which is available on the Company's website at
www.movadogroup.com and in print upon the written request of any shareholder.
Nominating/ Corporate Governance Committee
The Nominating/Corporate Governance Committee, currently composed of Ms.
Hayes Adame and Mssrs. Howard, Leventhal, Oresman and Silverstein, held one
meeting in fiscal 2005. Mr. Leventhal is the chairman of the
Nominating/Corporate Governance Committee.The principal functions of the
Nominating/Corporate Governance Committee are to (i) identify individuals
qualified to become directors, consistent with criteria approved by the Board,
and recommend director candidates to the Board of Directors; (ii) develop and
recommend corporate governance principles to the Board of Directors; (iii)
oversee the adoption of a code of ethics for directors, officers and employees
of the Company and assure that procedures are in place for disclosure of any
waivers of that code for directors or executive officers; and (iv) oversee the
evaluation of the Board. The Nominating/Corporate Governance Committee operates
under a written charter. Copies of the Nominating/Corporate Governance Committee
charter, the Company's Corporate Governance Guidelines and its Code of Business
Conduct and Ethics are available on the Company's website at www.movadogroup.com
and in print upon the written request of any shareholder.
In considering possible candidates for director, the Nominating/Corporate
Governance Committee will take into account all appropriate qualifications,
qualities and skills in the context of the current make-up of the Board and will
consider the entirety of each candidate's credentials. In addition, the
Nominating/Corporate Governance Committee will evaluate each nominee according
to the following criteria: personal character, accomplishments, integrity, and
reputation in the business community; knowledge of the industry in which the
Company does business; sound business judgment; leadership ability and capacity
for strategic thinking; experience working constructively with others;
sufficient time to devote to Board matters; diversity of viewpoints and
backgrounds and the absence of any conflict of interest that might interfere
with performance as a director.
Shareholders may recommend director candidates for consideration by the
Nominating/Corporate Governance Committee. To have a candidate considered by the
Nominating/Corporate Governance Committee, a
7
shareholder must submit the recommendation in writing and must include the
following information:
- The name of the shareholder and evidence of the person's ownership of
Company stock, including the number and class of shares owned and the
length of time of ownership; and
- The name of the candidate, the candidate's resume or a listing of his or
her qualifications to be a director of the Company and the person's
consent to be named as a director if nominated by the Board of Directors.
Each such recommendation must be sent to the Secretary of the Company at
Movado Group, Inc., 650 From Road, Paramus, New Jersey 07652 and must be
received by the Secretary not less than 120 days prior to the anniversary date
of the Company's most recent annual meeting of shareholders. The
Nominating/Corporate Governance Committee will evaluate shareholder recommended
director candidates in the same manner as it evaluates director candidates
identified by other means.
Executive Sessions of Non-Management Directors
The non-management directors hold regular executive sessions without
management, and at least once each quarter. The chairman of the
Nominating/Corporate Governance Committee acts as the presiding director of
these executive sessions.
Communications with the Board of Directors
Shareholders may communicate directly with the full Board of Directors,
the Audit Committee of the Board of Directors or any individual director by
sending such communication in writing to the attention of the General Counsel of
the Company, 650 From Road, Paramus, NJ 07652. Such communications should
indicate to whom they are intended to be directed. All communications received
that relate to accounting, internal accounting controls or auditing matters will
be referred to the chairman of the Audit Committee unless the communication is
otherwise addressed. Parties may communicate anonymously and/or confidentially
if they desire. All communications received will be forwarded to the appropriate
director or directors.
Director Attendance at Annual Meeting
The Company encourages all of the directors to attend each annual meeting
of shareholders. To that end, and to the extent reasonably practicable, the
Company regularly schedules a meeting of the Board of Directors on the same day
as the Annual Meeting of Shareholders. All but one member of the Board of
Directors attended the 2004 Annual Meeting of Shareholders.
Director Independence
The listing standards of the New York Stock Exchange ("NYSE") require that
a majority of the Board of Directors be independent. No director qualifies as
independent unless the Board of Directors affirmatively determines that the
director has no material relationship with the Company (directly or as a
partner, shareholder or officer of an organization that has a relationship with
the Company). The Board of Directors broadly considers all relevant facts and
circumstances relative to independence and considers the issue not merely from
the standpoint of the director, but also from the viewpoint of persons or
organizations with which the director has an affiliation. Material relationships
can include commercial, industrial, banking, consulting, legal, accounting,
charitable and familial relationships (among others). In accordance with the
NYSE listing standards the Board has adopted categorical standards of director
independence that provide that none of the following relationships will be
considered a material relationship that would impair a director's independence:
- A director who is a director, an executive officer or an employee, or
whose immediate family member is a director, an executive officer or an
employee, of a company that makes payments to, or receives payments from,
the Company for goods or services in an amount which, in any single fiscal
year, is less than the greater of $1,000,000 and 2% of such other
company's consolidated gross revenues; or
- A director who serves, or whose immediate family member serves, as an
executive, officer, director, trustee or employee of a charitable
organization and the Company's discretionary charitable contributions to
the organization are less than the greater of $1,000,000 and 2% of that
organization's consolidated gross revenues.
8
The Board of Directors has determined that all of the non-management members of
the Board of Directors, representing a majority of the entire Board, are
independent under the NYSE listing standards and satisfy the Company's
categorical standards set forth above.
In addition, in accordance with the NYSE listing standards, the Board of
Directors has determined that the Compensation Committee and
Nominating/Corporate Governance Committee are composed entirely of independent
directors. The Board of Directors has also determined that each member of the
Audit Committee is independent under the applicable rules of the SEC.
DIRECTOR COMPENSATION
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 fiscal 2005, directors who were not employees of the Company
received an annual fee of $30,000. In addition, non-employee directors are
eligible to receive stock awards under the 1996 Stock Incentive Plan, as
amended. In 2001 and 2002 Ms. Hayes Adame and Messrs. Howard, Oresman and
Silverstein each were awarded options to purchase 12,000 shares of the Company's
Common Stock under that plan, all of which options vest in one-third increments
on each of the first three anniversaries following the grant date, expire after
10 years and have an exercise price equal to or greater than the fair market
value of the Company's Common Stock on the date of grant.
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
------------------- --- -------------------------------------------------
Eugene J. Karpovich 58 Senior Vice President and Chief Financial Officer
Frank V. Kimick 38 Vice President, Treasurer and Assistant Secretary
Timothy F. Michno 48 Secretary and General Counsel
Mr. Karpovich came to the Company in 1998 as CFO for the Movado brand.
From 2000 to 2001 he was Vice President, Financial Planning for the Company. He
was promoted to Senior Vice President and Chief Financial Officer in October
2001. Before joining the Company, Mr. Karpovich had been the CFO of the watch
company Wittnauer International, Inc., a subsidiary of Westinghouse Electric
Corporation, Inc., where he was employed for 23 years.
Mr. Kimick began with the Company in 1996 as Assistant Treasurer and in
May 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., a food company, 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
since 1983. Immediately prior to joining the Company and since 1986, he was 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.
9
EXECUTIVE COMPENSATION
The following 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 as of the
end of the Company's last fiscal year (collectively, the "Named Executive
Officers") during fiscal 2005, 2004 and 2003 (each fiscal year ending January
31) for services rendered in all capacities to the Company and its subsidiaries.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
--------------------------------------- ------------------------------------
Other Restricted Number of
Annual Stock Securities All Other
Name and Compensation Awards Underlying Compensation
Principal Position Year Salary($) Bonus($) ($) ($)(1) Options (#) ($)
---------------------------------------------- ---- --------- -------- ------------ ---------- ---------- ------------
Efraim Grinberg, 2005 850,000 605,000 - 13,600 177,541 119.554(2)
President and Chief Executive Officer 2004 834,232 650,000 - 13,179 511,552 117,050
2003 778,847 200,000 - 11,077 0 108,386
Gedalio Grinberg , 2005 650,000 150,000 - 0 0 425,775(3)
Chairman of the Board 2004 650,000 195,000 - 0 0 414,934
2003 675,000 150,000 - 0 0 438,580
Richard Cote, Executive 2005 495,866 356,000 - 307,400 105,051 52,775(4)
Vice President, Chief Operating Officer 2004 463,173 375,000 - 7,300 354,206 49,025
2003 415,385 200,000 - 5,908 0 43,400
Eugene J. Karpovich 2005 230,842 116,000 - 61,742 20,913 14,913(5)
Senior Vice President, Chief Financial Officer 2004 221,058 100,000 - 71,750 1,312 14,337
2003 207,693 65,000 - 1,354 30,000 13,400
Timothy F. Michno 2005 245,865 75,000 - 37,890 20,000 15,587(6)
Secretary and General Counsel 2004 223,423 81,000 - 25,780 0 14,525
2003 221,385 45,000 - 1,720 10,000 14,150
-------------------------
(1) At January 31, 2005 the aggregate number of shares 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, 2005) were as follows: Mr. G. Grinberg: none; Mr. E. Grinberg:
2,574.51 shares, $46,933; Mr. Cote: 21,483.62 shares, $393,646; Mr.
Karpovich: 11,346.00 shares, $206,838; and Mr. Michno: 4,335.53 shares,
$79,037. All of such shares held by Mr. E. Grinberg are phantom stock
units ("Stock Units") granted under the Company's Deferred Compensation
Plan for Executives ("Deferred Compensation Plan"). The 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. E. Grinberg was
awarded 1,512.08, 1,394.60 and 1,181.37 Stock Units in calendar years
2002, 2003 and 2004 respectively. Mr. Cote was awarded 806.44, 818.76 and
592.37 Stock Units in calendar years 2002, 2003 and 2004 respectively. Mr.
Karpovich was awarded 200.24, 196.78 and 135.72 Stock Units in calendar
years 2002, 2003 and 2004 respectively. Mr. Michno was awarded 212.30,
187.44 and 137.59 Stock Units in calendar years 2002, 2003 and 2004
respectively. No dividends accrue in respect of the Stock Units. In
addition, the shares of restricted stock held by Messrs. Cote, Karpovich
and Michno include the following shares of Common Stock granted under the
Company's 1996 Stock Incentive Plan: for Mr. Cote, 20,000 shares vesting
April 8, 2007; for Mr. Karpovich, 7,000 and 4,000 shares vesting,
respectively, April 28, 2006 and April 8, 2007; and Mr. Michno, 2,400 and
1,580 shares vesting, respectively, April 28, 2006 and April 8, 2007.
10
(2) Includes a $3,400 matching contribution made by the Company in respect of
fiscal 2005 for the account of Mr. E. Grinberg pursuant to the Company's
Employee Savings and Investment Plan ("401(k) Plan"). Also includes a
matching cash contribution of $68,000 and a non-cash contribution of
1181.37 Stock Units valued at $17,000 (based on the closing prices of the
Company's Common Stock on the grant dates) for fiscal 2005 to his account
under the Company's Deferred Compensation Plan. Also includes $31,154 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.
(3) Includes $207,375 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 2005 for
the account of Mr. G. Grinberg pursuant to the Company's 401(k) Plan. Also
includes $150,000 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 $52,000 and
a non-cash contribution of 767.87 Stock Units valued at $13,000 (based on
the closing prices of the Company's Common Stock on the grant dates) made
by the Company for fiscal 2005 to Mr. G. Grinberg's account pursuant to
the Company's Deferred Compensation Plan.
(4) Includes a $3,400 matching contribution made by the Company in respect of
fiscal 2005 for the account of Mr. Cote pursuant to the Company's 401(k)
Plan. Also includes a matching cash contribution of $39,500 and a non-cash
contribution of 592.37 Stock Units valued at $9,875 (based on the closing
prices of the Company's Common Stock on the grant dates) for fiscal 2005
to his account under the Company's Deferred Compensation Plan.
(5) Includes a $3,400 matching cash contribution made by the Company in
respect of fiscal 2005 for the account of Mr. Karpovich pursuant to the
Company's 401(k) Plan. Also includes a matching cash contribution of
$9,210 and a non-cash contribution of 135.72 Stock Units valued at $2,303
(based on the closing prices of the Company's Common Stock on the grant
dates) for fiscal 2005 to his account under the Company's Deferred
Compensation Plan.
(6) Includes a $3,400 matching contribution made by the Company in respect of
fiscal 2005 for the account of Mr. Michno pursuant to the Company's 401(k)
Plan. Also includes a matching cash contribution of $9,750 and a non-cash
contribution of 137.69 Stock Units valued at $2,437 (based on the closing
prices of the Company's Common Stock on the grant dates) for fiscal 2005
to his account under the Company's Deferred Compensation Plan.
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 August 2004, the Company entered into employment agreements with Mr.
Karpovich, Mr. Kimick and Mr. Michno providing that, although each employee is
employed at will, the relevant employee will be entitled to receive severance
payments upon termination of his employment by the Company without Cause (as
defined in the relevant employment agreement). The severance payments will be
paid over the 12-month period after termination in bi-weekly installments equal
to the employee's base salary, and the employee will also be entitled to
post-termination medical benefits under COBRA.
11
Under a Death and Disability Benefit Plan Agreement with Mr. G. Grinberg,
dated September 23, 1994, in the event of Mr. G. 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, as of fiscal 2005, to $365,700 (increased
October 1 each year 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. G. Grinberg's spouse, and are payable only from the
general assets of the Company. Neither Mr. G. 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. G. Grinberg or his spouse.
The Agreement provides that it automatically terminates in the event of the
termination of Mr. G. 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. G. Grinberg to perform the duties pertaining to his
job because of accident, sickness or other illness as determined by a majority
of disinterested directors.
In fiscal 1996, the Company entered into an agreement with a trust which,
at that time, owned an insurance policy issued on the lives of 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 assigned the insurance policy to the Company as
collateral to secure repayment by the trust of interest free loans made by the
Company to the trust in amounts equal to the premiums on the insurance policy
(approximately $740,000 per annum). The agreement required the trust to repay
the loans from the death benefit proceeds of the policy. At January 31, 2003 the
Company had loaned the trust $5,186,860 under this agreement. On April 4, 2003,
the agreement was amended and restated to transfer the policy (which at that
time had a cash surrender value of $4,595,591) from the trust to the Company in
partial repayment of the then outstanding loan balance which, as of that date,
was reduced to $591,269. If the policy is terminated prior to the death of the
insureds, the trust must repay the Company the amount of the accumulated
premiums which the Company would also recover from the death benefit in the
event it is paid.
Mr. Alex Grinberg, a beneficial owner of more than five percent of the
Company's Class A Common Stock and the brother of Efraim Grinberg, is the
President of the Company's Concord brand in the United States and earned
$329,842 in salary and annual bonus in fiscal 2005. In addition, as a
participant in the Company's Stock Incentive Plan, Mr. Alex Grinberg received an
award of 3,000 shares of Common Stock last year, subject to the same terms and
conditions applicable to similar awards made to the other participants in that
plan, including a three year vesting requirement.
Mr. David Phalen is the spouse of Miriam Phalen, a beneficial owner of
more than five percent of the Company's Class A Common Stock, and the
brother-in-law of Efraim Grinberg. Mr. Phalen is the President of Retail
Operations of Movado Retail Group, Inc. and earned $437,923 in salary and annual
bonus in fiscal 2005. In addition, as a participant in the Company's Stock
Incentive Plan, Mr. Phalen received an award of 3,200 shares of Common Stock
last year, subject to the same terms and conditions applicable to similar awards
made to the other participants in that plan, including a three year vesting
requirement.
See "Compensation Committee Interlocks and Insider Participation" for
information regarding certain business relationships between the Company and Mr.
Silverstein's law firm.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was at all times during fiscal year
2005 comprised entirely of independent Directors who at no time were executive
officers or employees of the Company. The Compensation Committee for fiscal year
2005 was comprised of Margaret Hayes Adame, Alan H. Howard, Donald Oresman,
Leonard L. Silverstein and Nathan Leventhal. 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 2005. 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.
12
FISCAL 2005 STOCK OPTION GRANTS
The following table provides certain information regarding grants of stock
options made during fiscal 2005 to the Named Executive Officers pursuant to the
Company's 1996 Stock Incentive Plan. The only new discretionary option grants
made in fiscal 2005 to any of the Named Executive Officers was an option for
15,000 shares made to Mr. Karpovich and an option for 20,000 shares to Mr.
Michno. All of the other options granted to the Named Executive Officers in
fiscal 2005, including all of the options granted to Mr. E. Grinberg and Mr.
Cote were reload options, the issuance of which resulted from rights that were
granted to the option holders as part of their initial option grants made in
prior years. Under the reload program, option holders may use Company Common
Stock or Class A Common Stock they have owned for at least six months to pay the
exercise price of their options and have shares withheld for the payment of
income taxes due on the exercise. They then receive a new reload option to make
up for the shares they used or had withheld. The reload option does not "vest"
(i.e., become exercisable) for six months and expires on the expiration date of
the initial grant. The Company no longer grants reload options, except to the
extent required by the terms of previously granted options, and most of the
previously granted reload rights have been terminated, including all of those
previously granted to the Named Executive Officers.
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 ($)
---------------- ---------- ------------ ----------- --------------- -------------
Efraim Grinberg 177,541 22.58 18.47 March 16, 2011 1,154,017
Richard Cote 105,051 13.36 18.47 March 16, 2011 683,245
Eugene Karpovich 1,974 2.66 14.36 March 16, 2011 10,651
3,939 18.47 March 16, 2011 26,225
15,000 14.05 August 27, 2014 97,695
Timothy F. Michno 20,000 2.54 14.05 August 27, 2014 130,260
(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 was assumed to be 47.96% and 46.96% based on the weekly
closing prices of the underlying Common Stock for the periods ending October 31,
2004 and January 31, 2005, respectively. The risk free rate of return for each
option was determined based on the yield on the grant date on a U.S. Government
Zero Coupon Bond with a maturity equal to the expected term of the option prior
to exercise. Exercise was assumed to occur after 3.21 and 3.99 years,
respectively, for the options granted with exercise prices of $18.47 and $14.36
and after 7.0 years for the options granted with exercise price of $14.05.
Dividend yields of 1.11%, 1.14% and 0.87% were assumed to be constant over the
life of the options granted in March 2004 and in August 2004 and January 2005,
respectively. Option grant dates were (grant date/exercise price): January 3 and
4, 2005/$18.47; August 27, 2004/$14.05 and March 25, 2004/$14.36. This schedule
does not take into account provisions of the options providing for termination
of the option following termination of employment or nontransferability. The
dollar amounts under this column are the result of calculations using a certain
option pricing model based on the foregoing assumptions and, therefore, are not
intended to forecast possible future appreciation, if any, of the Company's
Common Stock price.
13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information concerning exercises of stock
options by the Named Executive Officers during the last fiscal year and the
fiscal year-end value of shares of Common Stock represented by unexercised stock
options held by each of the Named Executive Officers as of January 31, 2005.
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED VALUE FISCAL YEAR END (#) AT FISCAL YEAR END ($)
ON EXERCISE REALIZED ------------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------------------- ----------- -------- ----------- ------------- ----------- -------------
Gedalio Grinberg.......... 0 0 0 0 0 0
Efraim Grinberg........... 266,664 481,308 673,860 177,542 3,064,612 0
Richard Cote.............. 160,000 488,800 621,882 117,051 4,225,566 167,760
Eugene J. Karpovich ...... 9,220 89,147 45,286 19,939 325,358 76,680
Timothy F. Michno......... 0 0 36,576 21,800 316,365 108,764
EQUITY COMPENSATION PLAN INFORMATION
The table below sets forth information with respect to shares of Common
Stock that may be issued under the Company's equity compensation plans as of
January 31, 2005.
Number of securities
Remaining Available For
Number of Securities to be Weighted-Average Future Issuance Under
Issued Upon Exercise Of Exercise Price of Equity Compensation
Outstanding Options, Warrants Outstanding Options, Plans (Excluding securities
Plan category and Rights Warrants and Rights Reflected in Column (a))
------------------------------ ----------------------------- -------------------- ---------------------------
(a) (b) (c)
Equity compensation plans
approved by security
holders (1) ............... 3,699,204 (2) $11.66 (3) 1,413,858 (4)
Equity compensation plans
not approved by
security holders (5)....... 73,041 Not applicable 107,550
--------- -------------- ---------
Total ........................ 3,772,245 $11.66 1,521,408
--------------------
(1) Includes the 1996 Stock Incentive Plan and the Deferred Compensation Plan.
(2) Includes 3,619,734 options outstanding under 1996 Stock Incentive Plan and
79,470 phantom stock units issuable as 79,470 shares of Common Stock under
the Deferred Compensation Plan.
(3) Weighted average exercise price of options outstanding under the 1996
Stock Incentive Plan.
(4) Includes 1,393,328 shares available for issuance under the 1996 Stock
Incentive Plan as options and other share based awards, and 20,530 shares
available for issuance under the Deferred Compensation Plan.
(5) Includes the Stock Bonus Plan described in Note 12 to the Company's
consolidated financial statements included in the Company's Form 10-K
filed for the year ended January 31, 2005.
14
COMPENSATION COMMITTEE REPORT
General
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for reviewing and approving annually corporate objectives relative
to the compensation of the Chief Executive Officer ("CEO"), evaluating the
performance of the CEO against those objectives and determining the CEO's
compensation based on that evaluation. In addition, the Committee also reviews
and approves the structure for and levels of compensation for the Company's
other executive officers and management, reviews significant employee benefit
programs and reviews and administers the Company's 1996 Stock Incentive Plan.
The Committee is comprised of Ms. Margaret Hayes Adame, Mr. Nathan Leventhal,
Mr. Donald Oresman, Mr. Leonard L. Silverstein and Mr. Alan H. Howard, all of
whom are independent directors.
The compensation policies established by the Company and which were in
effect during fiscal year 2005 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 base pay, cash
bonuses and stock based awards, primarily stock grants. The Committee reviews
each component of executive compensation on an annual basis with reference to
the competitive marketplace for skilled professionals, both at peer group
companies and other organizations, inside as well as outside the watch and
jewelry industry, and considering corporate, business unit and individual
performance. To assist the Committee with such review in respect of fiscal 2005,
the Committee retained a nationally recognized compensation consulting firm.
Base Salaries
Base salary levels for senior management of the Company 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 individual's performance, the performance of his
or her business unit and the performance of the Company as a whole. Individual
performance is evaluated 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 financial performance targets set at the
beginning of the fiscal year.
In fiscal 2005, the Committee approved management's recommendation to
enter into retention agreements with certain executive officers and senior
managers providing for severance payments that generally range from the
equivalent of six to twelve months of base salary, payable only when employment
is terminated without cause. Those agreements, which also contain non-compete
and non-solicitation covenants on the part of the employee, also included
limited equity grants in the form of stock options fully vesting after five
years.
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 by management in consultation with the Board and the Committee.
Concurrently with approving the annual operating objectives, the Committee
establishes target bonuses for the coming fiscal year as a percentage of the
base salary of each executive officer. In fiscal 2005, the target bonus for each
of the CEO and the Chief Operating Officer was set at 75% of their respective
base salaries and bonus targets ranged from 25% to 50 % of base salary for the
other executive officers. Actual incentive compensation awards may be either
more or less than targeted amounts depending on actual results compared with
corporate, group and individual performance measures. 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.
Based on the Company's overall performance in fiscal 2005 and its
achieving substantially all of its key operating results, the Committee
authorized 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.
15
Equity Based Plans
Stock ownership is the third key element of the Company's executive
compensation program and is afforded to all employees through a number of
various equity plans. Executive officers and senior and mid-level management
employees generally receive an annual long term equity grant in the form of
stock based awards granted under the Company's 1996 Stock Incentive Plan (the
"Incentive Plan"). To a lesser extent, stock options are generally awarded under
the Incentive Plan for certain newly hired employees and in connection with some
promotions. 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").
Stock awards and options have been awarded under the Incentive Plan on the
basis of the position held by the grantee, contributions made by the person for
the given fiscal year as well as expectations of future contributions . Both
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. All options granted under the Incentive Plan have an exercise price
equal to or greater than the market value of the stock on the date of grant,
generally vest in equal annual increments over three or five years and expire
ten years from the date of grant. Some previously granted options also contained
a reload feature under which option holders can use Company Common Stock (or
Class A Common Stock) they have owned for at least six months to pay the
exercise price of their options, have shares withheld for the payment of income
taxes due on exercise and receive a new reload option to make up for the shares
used or withheld. The Committee no longer grants any options with reload rights
and most reload rights previously granted have been terminated, including all
those granted to the CEO and the other executive officers. In fiscal 2005, the
Committee again made performance awards under the Incentive Plan in the form of
stock awards and generally limited option grants to newly hired key employees
and in connection with the retention agreements discussed above. All stock
awards of Common Stock granted under the Incentive Plan in fiscal 2005 are
subject to a three year vesting requirement.
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 calendar quarter 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, depending on financial performance and subject to
Compensation Committee and Board approval, whether to make a contribution of
shares to the plan from its treasury shares, up to an amount equivalent in value
to up to 1% of the total base salaries of all participants in the plan. For
fiscal 2005 the Company contributed 15,954 shares to the plan representing one
percent (1.0%) of total base salaries of all plan participants. 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
The compensation paid to the Company's Chief Executive Officer ("CEO") in
fiscal 2005 consisted primarily of salary and bonus. No new discretionary stock
options or other stock awards under the Incentive Plan were granted to the CEO
last year and his base salary, which was approved by the Committee at the
beginning of the year, remained flat in fiscal 2005 compared with the prior
year. Under the terms of the Company's 2001 Executive Performance Plan (see
below), the bonus paid to the CEO for fiscal 2005 was approved by the Committee
on the basis of the Company achieving the performance criteria for fiscal 2005
as set forth in that plan and as previously approved by the Committee, namely
achieving the targeted earnings per share for that performance period. The
Committee retains the discretion to reduce or eliminate payments under the
Executive Performance Plan for
16
results relative to an executive's individual performance. With reference to the
CEO's performance in fiscal 2005, the Committee determined that he met or
exceeded substantially all the performance goals established at the beginning of
the year, including the successful integration of the Ebel business into the
Company and the repositioning of the Ebel brand in the luxury watch category, as
well as financial results that included at least $30 million of positive cash
flow and assuring the Company's compliance with section 404 of the
Sarbanes-Oxley Act.
During the first quarter of fiscal 2006, as part of the Committee's evaluation
of Mr. Grinberg's performance last year and in consultation with its independent
compensation consultant, it granted Mr. Grinberg an option under the Incentive
Plan to purchase 100,000 shares of the Company's Common Stock. The option vests
over three years and expires 10 years from the grant date. Since the exercise
price of the option is at market value on the grant date, its value is tied
directly to increases in the price of the Company's Common Stock and is thus
linked to the Company's long term performance.
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 2001 Executive Performance Plan which was adopted in fiscal
2002 is structured such that 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, 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
Alan H. Howard (chairman)
Margaret Hayes Adame
Nathan Leventhal
Donald Oresman
Leonard L. Silverstein
17
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, 2005 with that of the Broad Market
(CRSP Total Return Index for the NYSE Stock Market) and a peer group index
comprised of the following two companies: Fossil Inc. and Tiffany & Co. (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 30, 2000 and the
reinvestment of dividends (where applicable).
[PERFORMANCE GRAPH]
LEGEND
Symbol CRSP TOTAL RETURNS INDEX FOR: 01/2000 01/2001 01/2002 01/2003 01/2004 01/2005
------ ---------------------------------- ------- ------- ------- ------- ------- -------
___ - Movado Group, Inc. 100.0 73.7 94.6 98.7 154.7 199.8
--- - NYSE Stock Market (US Companies) 100.0 110.4 99.3 80.5 107.7 117.2
--- - Self-Determined Peer Group 100.0 101.3 99.6 71.6 120.5 111.0
Companies in the Self - Determined Peer Group
FOSSIL INC TIFFANY & CO NEW
18
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 Exchange Act
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 has reviewed and discussed with the Company's
management and with PricewaterhouseCoopers LLP management's assessment of the
effectiveness of the Company's internal control over financial reporting, the
evaluation by PricewaterhouseCoopers LLP of the Company's internal control over
financial reporting and the audited financial statements of the Company for the
fiscal year ended January 31, 2005. The Audit Committee has discussed with
PricewaterhouseCoopers LLP the matters required to be discussed by Statement on
Auditing Standards No. 61, as amended (Communications with Audit Committees) by
the Auditing Standards Board of the American Institute of Certified Public
Accountants.
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, 2005 for filing with the Securities and
Exchange Commission.
The Committee and the Board also have recommended, subject to shareholder
approval, the selection of PricewaterhouseCoopers LLP as the Company's
independent auditors for fiscal 2006.
Members of the Audit Committee:
Donald Oresman (chairman) Alan H. Howard
Margaret Hayes Adame Nathan Leventhal
FISCAL 2005 AND 2004 AUDIT FIRM FEE SUMMARY
The following table presents the aggregate fees billed for professional
services rendered by the Company's independent auditors, PricewaterhouseCoopers
LLP, in the "audit fees", "audit - related fees", "tax fees", and "all other
fees" categories, in each case as such terms are defined by the SEC, for the
fiscal years ended January 31, 2005 and 2004.
YEAR AUDIT ($) AUDIT RELATED ($) TAX ($) ALL OTHERS ($) TOTALS ($)
---- --------- ----------------- ------- -------------- ----------
2004 515,000 1,053,000 94,000 1,400 1,663,400
2005 1,410,913 294,730 354,349 1,500 2,061,491
Audit fees include fees for audit or review services in accordance with
generally accepted auditing standards and fees for services that generally only
the Company's auditors provide, such as statutory audits and review of documents
filed with the SEC. The increase in audit fees for fiscal 2005 was primarily
related to services in connection with section 404 of the Sarbanes-Oxley Act of
2002.
Audit related fees include fees for assurance and related services that
are traditionally performed by the Company's auditors. The services include
audits of employee benefit plans, consultation in connection with financial and
accounting standards, and, for fiscal 2004, due diligence performed in
connection with the Ebel acquisition.
Tax fees include fees for services that are performed by professional tax
staff other than in connection with the audit. The services include tax
compliance, tax advice and tax planning services which, in fiscal 2005, included
such services primarily related to the Ebel acquisition.
All other fees are subscription fees for the use of the independent
auditors' database of authoritative literature and accounting and financial
guidance.
The Audit Committee reviews and approves all audit and non-audit services
to be rendered in every instance by the Company's independent auditors before
such auditors are engaged to render any such services. Therefore the Audit
Committee has not adopted a pre-approval policy with respect to such services.
19
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee,
has appointed PricewaterhouseCoopers LLP to be the Company's independent
accountants for the year ending January 31, 2006, 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 and is
considered by the Audit Committee and the Board to be well qualified.
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.
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 2006 Annual
Meeting of Shareholders must be received by the Company no later than January
21, 2006 for inclusion in the Company's proxy statement and form of proxy
relating to that meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's executive officers, directors, and persons who own more
than 10% of a registered class of the Company's equity securities (the "10%
Stockholders") to file reports of ownership and changes of ownership with the
Securities and Exchange Commission. As a practical matter, the Company assists
its directors, officers and certain 10% Stockholders by completing and filing
Section 16 reports on their behalf. The Company's 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,
except that a Form 3 ("Initial Statement of Beneficial Ownership") for Michael
Hand, the Company's Controller, was inadvertently filed two days late. In
addition, due to administrative errors, one Form 4 reporting three transactions
and another Form 4 reporting two transactions the following day by Alexander
Grinberg, a 10% Stockholder, were filed one and two days late, respectively; and
a stock award granted to Richard Cote under the Company's Stock Incentive Plan
in April 2004 was untimely reported that same month.
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, 2005, as filed with the Securities and Exchange
Commission. Requests should be directed to Suzanne Michalek, Director Corporate
Communications, Movado Group, Inc., 650 From Road, Paramus, New Jersey 07652.
May 16, 2005
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 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.
20
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 16, 2005
The undersigned appoints Timothy F. Michno and Frank Kimick, 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 16, 2005, 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 1and 2.
MOVADO GROUP, INC.
P.O. BOX 11346
NEW YORK, N.Y. 10203-0346
(Continued, and to be signed and dated on reverse side.)
MOVADO GROUP INC. NOTICE OF ANNUAL MEETING OF
650 FROM ROAD, PARAMUS, NJ 07652 SHAREHOLDERS TO BE HELD JUNE 16, 2005
Dear Shareholder:
The Annual Meeting of Shareholders of Movado Group, Inc. will be held at
10:00 a.m. on Thursday, June 16, 2005, at the Company's executive offices,
650 From Road, Paramus, NJ, for the following purposes:
1. To elect eight directors to the Board of Directors.
2. To ratify selection of independent public accountants.
Only holders of Common Stock and Class A Common Stock of Movado Group,
Inc. of record at the close of business on May 12, 2005 will be entitled
to vote at the meeting or 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 16, 2005 TIMOTHY F. MICHNO
General Counsel and Secretary
[ ] - DETACH PROXY CARD HERE -
PLEASE SIGN, DATE AND RETURN
THE PROXY PROMPTLY USING THE [X]
ENCLOSED ENVELOPE. VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK.
1. Election of Directors
FOR an nominees [ ] WITHHOLD AUTHORITY to vote [ ] *EXCEPTIONS [ ] To change your address, please mark this box. [ ]
listed below for all nominees listed below
Nominees: Gedalio Grinberg, Efraim Grinberg, Margaret Hayes-Adame, If you plan to attend the meeting, please mark [ ]
Richard Cote, Alan H. Howard, Nathan Leventhal, Donald Oresman this box.
and Leonard L. Silverstein
*Exceptions ____________________________________________________________________
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE
"EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED.
FOR AGAINST ABSTAIN
2. To ratify and approve the selection by the Audit Committee of the Board of [ ] [ ] [ ]
Directors of PricewaterhouseCoopers LLP as independent public accountants
for the Company for the fiscal year ending January 31, 2006.
In their discretion the Proxies are authorized to vote upon such other matters
as may properly come before the meeting or any adjournment or postponement
thereof.
SCANLINE
The signature on 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.
___________________________________ _________________________
Date Share Owner sign here Co-Owner sign here
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