EXHIBIT 10.3

EXECUTION COPY

OMNIBUS AMENDMENT TO

NOTE PURCHASE AND

PRIVATE SHELF AGREEMENTS

THIS OMNIBUS AMENDMENT (this “Amendment”) TO EACH OF THAT CERTAIN Note Purchase and Private Shelf Agreement, dated as of March 21, 2001 (as amended by that certain Amendment, dated as of March 21, 2004, and as the same may be further amended, supplemented or otherwise modified from time to time, the “2001 Note Agree­ment”), between The Prudential Insurance Company of America (“Prudential”), Movado Group, Inc., a New York corporation (the “Company”), and the other Purchasers (as defined in the 2001 Note Agreement, the “2001 Purchasers”) party thereto AND THAT CERTAIN Note Purchase and Private Shelf Agreement, dated as of November 30, 1998 (as the same may be amended, supplemented or otherwise modified from time to time, the “1998 Note Agree­ment”; each of the 1998 Note Agreement and the 2001 Note Agreement a “Note Agreement” and, collectively, the “Note Agreements”; capitalized terms used herein but not otherwise defined herein shall have the meanings set forth in the respective Note Agreement) between Prudential, the Company and the other Purchasers (as defined in the 1998 Note Agreement, the “1998 Purchasers” and, collectively with the 2001 Purchasers, the “Purchasers”) party thereto IS ENTERED INTO as of June 5, 2008, by the Purchasers and the Company.

WHEREAS, the Company and the Purchasers party thereto have executed and delivered the respective Note Agreements;

 

WHEREAS, Movado Retail Group, Inc., a New Jersey corporation and successor by merger with SwissAm, Inc. (“MRG”), and Movado LLC, a Delaware limited liability company (“Movado LLC”, and together, with MRG, the “Guarantors”), have each guaranteed the obligations of the Company under the respective Note Agreements; and

 

WHEREAS, the Company has requested the amendment of certain provisions of each Note Agreement, and the respective Purchasers have indicated their willingness to agree to such amendments subject to certain limitations and conditions, as provided for herein;

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements contained herein, and other good and valuable consideration, the parties hereto agree as follows:

1. Amendments to 2001 Note Agreement.                                                                                     The 2001 Purchasers and the Company hereby agree as follows:

(a) The 2001 Note Agreement is hereby amended by amending and restating Paragraph 2A(1) in its entirety as follows:

“2A(1). Facility.  Prudential is willing to consider, in its sole discretion and within limits which may be authorized for purchase by Prudential and Prudential Affiliates from time to time, the purchase of Shelf Notes pursuant to this Agreement.  The willingness of Prudential to consider such purchase of Shelf Notes is herein called the “Facility”.  At any time, $70,000,000.00, minus the aggregate principal amount of Shelf Notes purchased and sold pursuant to this Agreement prior to such time, minus the aggregate principal amount of Accepted Notes (as hereinafter defined) which have not yet been purchased and sold hereunder prior to such time, is herein called the “Available facility Amount” at such time.  NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.  NOTWITHSTANDING THE WILLINGNESS OF THE COMPANY TO CONSIDER SALES OF SHELF NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT THE COMPANY SHALL NOT BE OBLIGATED TO MAKE OFFERS TO SELL SHELF NOTES, OR TO REQUEST RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC SALES OF SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY THE COMPANY.”

(b) The 2001 Note Agreement is hereby amended by deleting the text in clause (i) of Paragraph 2A(2) and replacing it with the following text in its entirety:  “June 5, 2011”.

(c) The 2001 Note Agreement is hereby amended by amending and restating Paragraph 5K(2) in its entirety as follows:

“5K(2).  The Company covenants that if at any time after the date of this Agreement any Domestic Subsidiary guarantees or provides collateral in any manner for any Indebtedness of the Company under the Credit Agreement, it will simultaneously cause such Domestic Subsidiary to guarantee or provide such collateral for the notes equally and ratably with all indebtedness guaranteed or secured by such Domestic Subsidiary for so long as such Indebtedness is guaranteed and pursuant to a guarantee substantially in the form of Exhibit D hereto, together with an opinion of counsel substantially in the form of paragraphs 1, 3 and 4 of Exhibit E-1 hereto.  Upon the execution and delivery of such guarantee, such Domestic Subsidiary shall become a Subsidiary Guarantor.”

(d) The 2001 Note Agreement is hereby amended by amending and restating Paragraph 6A in its entirety as follows:

“6A           Intentionally Omitted.”

(e) The 2001 Note Agreement is hereby amended by amending and restating Paragraph 6C in its entirety as follows:

“6C           Maintenance of Average Debt Coverage Ratio.  The Company shall not permit, as of the last day of any fiscal quarter of the Company, the Average Debt Coverage Ratio for the period of four consecutive fiscal quarters ending on such day to be greater than 3.25 to 1.0.”

(f) The 2001 Note Agreement is hereby amended by amending and restating Paragraph 6D in its entirety as follows:

“6D           Limitations on Priority Debt.  The Company covenants that it will not permit, at any time, Priority Debt to exceed 20% of Consolidated Total Capitalization.”

(g) The 2001 Note Agreement is hereby amended by amending the flush language at the end of Paragraph 6E to read in its entirety as follows:

“provided, that at the time of such merger, consolidation, sale, transfer or disposition and after giving effect thereto there shall exist no Default or Event of Default; and provided, further, that in the case of the transactions described in clause (iv) above, (a) if such continuing, surviving or acquiring corporation is a corporation organized under the laws of Canada, the United Kingdom, Switzerland or any local governmental authority of any of the aforesaid jurisdictions, provision satisfactory to the Required Holders shall be made in respect of any tax issues arising out of such transaction and (b) the Company shall have delivered to the holders of the Notes an opinion of counsel satisfactory to the Required Holders and an Officer’s Certificate each to the effect that the foregoing provisions have been complied with.”

(h)  The 2001 Note Agreement is hereby amended by amending Paragraph 6K to delete the phrase “and the Company could not incur an additional $1 of Funded Debt pursuant to the provisions of paragraph 6C(iv)”.

(i) The 2001 Note Agreement is hereby amended by amending Paragraph 6L to replace “2.50” with “3.50”.

(j) The 2001 Note Agreement is hereby amended by amending Paragraph 7A by amending and restating clause (xvi) thereof in its entirety as follows:

“(xvi) if at any time the capital stock of the Company owned by the Grinberg Group represents less than 25% of the voting power of (x) all outstanding capital stock of the Company and (y) all outstanding securities and rights that are then convertible into or exchangeable for capital stock of the Company or upon the exercise of which capital stock of the Company will be issued in respect of such securities or rights;”

(k) The 2001 Note Agreement is hereby amended by amending Paragraph 10B by adding the following definitions in their appropriate alphabetical order:

““Average Debt Coverage Ratio” means the ratio of (i) the sum of indebtedness for borrowed money, indebtedness for the deferred purchase price of property or services (excluding trade payables in the ordinary course of business; and excluding wages or other compensation payable to employees of the Company or any of its Restricted Subsidiaries in the ordinary course of business), obligations arising under acceptance facilities, and obligations as lessee under Capital Leases (in all cases) of the Company and its Restricted Subsidiaries on a consolidated basis as of the last day of each fiscal quarter for four consecutive fiscal quarters, divided by four, to (ii) consolidated earnings before interest expense, taxes, depreciation and amortization of the Company and its Restricted Subsidiaries on a consolidated basis for such period of four consecutive fiscal quarters.  For purposes of this definition only, if such clause (ii) is less than one dollar, it shall be deemed to be one dollar.”

““Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.”

““Grinberg Group” means the group consisting of Gedalio Grinberg, his spouse, each of their estates and their issue; and Efraim Grinberg, his spouse, each of their estates and their issue; and every Person (other than an individual) Controlled by any of the foregoing.”

““Lender” and “Lenders” shall have the meaning specified in the Credit Agreement.”

(l) The 2001 Note Agreement is hereby amended by amending Paragraph 10B by deleting the definitions of “Clean Down Period” and “Excess Current Debt” and by replacing the definitions of “Credit Agreement” and “Unrestricted Subsidiary” in their respective entireties as follows:

““Credit Agreement” shall mean the Credit Agreement dated as of December 15, 2005, by and among the Company, Movado Watch Company SA and MGI Luxury Group S.A., the Lenders party thereto and JP Morgan Chase Bank, N.A., as Administrative Agent for said Lenders, and any amendment, modification or supplement thereto, or replacement or refinancing thereof.”

““Unrestricted Subsidiary” shall mean any Foreign Subsidiary not identified on Schedule 8A and any other Foreign Subsidiary until designated as a Restricted Subsidiary in accordance with the provision of paragraph 6K, provided, however, that any Subsidiary designated as an Unrestricted Subsidiary must also be designated as such under the Company’s Credit Agreement.”

(m) The 2001 Note Agreement is hereby amended by replacing the “Authorized Officers for Prudential” contained in the Information Schedule in its entirety as follows:

Paul Meiring, Managing Director                                                                     (212) 626-2060

Paul Price, Managing Director                                                                           (973) 802-9819

Yvonne Guajardo, Vice President                                                                      (212) 626-2050

Engin Okaya, Vice President                                                                              (212) 626-2042

Address for above:

Prudential Capital Group

1114 Avenue of the Americas

New York, New York  10021

Fax: 212-626-2077”

2. Amendments to 1998 Note Agreement.                                                                                     The 1998 Purchasers and the Company hereby agree as follows:

(a) The 1998 Note Agreement is hereby amended by amending and restating Paragraph 5K(2) in its entirety as follows:

“5K(2).  The Company covenants that if at any time after the date of this Agreement any Domestic Subsidiary guarantees or provides collateral in any manner for any Indebtedness of the Company under the Credit Agreement, it will simultaneously cause such Domestic Subsidiary to guarantee or provide such collateral for the notes equally and ratably with all indebtedness guaranteed or secured by such Domestic Subsidiary for so long as such Indebtedness is guaranteed and pursuant to a guarantee substantially in the form of Exhibit D hereto, together with an opinion of counsel substantially in the form of paragraphs 1, 3 and 4 of Exhibit E-1 hereto.  Upon the execution and delivery of such guarantee, such Domestic Subsidiary shall become a Subsidiary Guarantor.”

(b) The 1998 Note Agreement is hereby amended by amending and restating Paragraph 6A in its entirety as follows:

“6A           Intentionally Omitted.”

(c) The 1998 Note Agreement is hereby amended by amending and restating Paragraph 6C in its entirety as follows:

“6C           Maintenance of Average Debt Coverage Ratio.  The Company shall not permit, as of the last day of any fiscal quarter of the Company, the Average Debt Coverage Ratio for the period of four consecutive fiscal quarters ending on such day to be greater than 3.25 to 1.0.”

(d) The 1998 Note Agreement is hereby amended by amending the flush language at the end of Paragraph 6E to read in its entirety as follows:

“provided, that at the time of such merger, consolidation, sale, transfer or disposition and after giving effect thereto there shall exist no Default or Event of Default; and provided, further, that in the case of the transactions described in clause (iv) above, (a) if such continuing, surviving or acquiring corporation is a corporation organized under the laws of Canada, the United Kingdom, Switzerland or any local governmental authority of any of the aforesaid jurisdictions, provision satisfactory to the Required Holders shall be made in respect of any tax issues arising out of such transaction and (b) the Company shall have delivered to the holders of the Notes an opinion of counsel satisfactory to the Required Holders and an Officer’s Certificate each to the effect that the foregoing provisions have been complied with.”

(e)  The 1998 Note Agreement is hereby amended by amending Paragraph 6K to delete the phrase “and the Company could not incur an additional $1 of Funded Debt pursuant to the provisions of paragraph 6C(iv)”.

(f) The 1998 Note Agreement is hereby amended by adding a new Paragraph 6L that reads in its entirety as follows:

“6L           Interest Coverage Ratio.                                                      The Company will not permit the Interest Coverage Ratio as of the last day of any fiscal quarter or the end of any fiscal year to be less than 3.5 to 1.00.”

(g) The 1998 Note Agreement is hereby amended by amending Paragraph 7A by (i) adding the word “or” at the end of clause (xv) thereof and (ii) adding a new clause (xvi) thereof in its entirety as follows:

“(xvi) if at any time the capital stock of the Company owned by the Grinberg Group represents less than 25% of the voting power of (x) all outstanding capital stock of the Company and (y) all outstanding securities and rights that are then convertible into or exchangeable for capital stock of the Company or upon the exercise of which capital stock of the Company will be issued in respect of such securities or rights;”

(h) The 1998 Note Agreement is hereby amended by amending Paragraph 10B by adding the following definitions in their appropriate alphabetical order:

““Average Debt Coverage Ratio” means the ratio of (i) the sum of indebtedness for borrowed money, indebtedness for the deferred purchase price of property or services (excluding trade payables in the ordinary course of business; and excluding wages or other compensation payable to employees of the Company or any of its Restricted Subsidiaries in the ordinary course of business), obligations arising under acceptance facilities, and obligations as lessee under Capital Leases (in all cases) of the Company and its Restricted Subsidiaries on a consolidated basis as of the last day of each fiscal quarter for four consecutive fiscal quarters, divided by four, to (ii) consolidated earnings before interest expense, taxes, depreciation and amortization of the Company and its Restricted Subsidiaries on a consolidated basis for such period of four consecutive fiscal quarters.  For purposes of this definition only, if such clause (ii) is less than one dollar, it shall be deemed to be one dollar.”

““Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.”

““Grinberg Group” means the group consisting of Gedalio Grinberg, his spouse, each of their estates and their issue; and Efraim Grinberg, his spouse, each of their estates and their issue; and every Person (other than an individual) Controlled by any of the foregoing.”

““Lender” and “Lenders” shall have the meaning specified in the Credit Agreement.”

(i) The 1998 Note Agreement is hereby amended by amending Paragraph 10B by deleting the definitions of “Clean Down Period” and “Excess Current Debt” and by replacing the definitions of “Credit Agreement” and “Unrestricted Subsidiary” in their respective entireties as follows:

““Credit Agreement” shall mean the Credit Agreement dated as of December 15, 2005, by and among the Company, Movado Watch Company SA and MGI Luxury Group S.A., the Lenders party thereto and JP Morgan Chase Bank, N.A., as Administrative Agent for said Lenders, and any amendment, modification or supplement thereto, or replacement or refinancing thereof.”

““Unrestricted Subsidiary” shall mean any Foreign Subsidiary not identified on Schedule 8A and any other Foreign Subsidiary until designated as a Restricted Subsidiary in accordance with the provision of paragraph 6K, provided, however, that any Subsidiary designated as an Unrestricted Subsidiary must also be designated as such under the Company’s Credit Agreement.”

3. Representations and Warranties of the Company.   The Company hereby:

(a) Repeats (and confirms as true and correct) as of the date hereof, for the Purchasers’ benefit, each of the representations and warranties set forth in Paragraphs 8A, 8C, 8E, 8G, 8H, 8I, 8J, 8K, 8L, 8M, 8N, 8O, 8P, 8Q, 8R, 8S and 8T of each Note Agreement, and further agrees that by this reference such representations and warranties are hereby incorporated herein (as though set forth herein) in their entirety;

(b) Further represents and warrants as of the date hereof that:

(i)           no Default or Event of Default has occurred and is continuing;

(ii)           the Company and the Guarantors have the corporate or equivalent power to execute and deliver this Amendment, and to perform the provisions hereof, and this Amendment has been duly authorized by all necessary corporate or equivalent action on the part of each such Person;

(iii)           this Amendment has been duly executed and delivered by the Company and the Guarantors and constitutes such Person’s legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be limited (x) by general principles of equity and conflicts of laws or (y) by bankruptcy, reorganization, insolvency, moratorium or other laws of general application relating to or affecting the enforcement, of creditors' rights;

(iv)           no consent, approval, authorization or order of, or filing, registration or qualification with, any court or administrative or governmental body or third party is required in connection with the execution, delivery or performance by such Person of this Amendment;

(v)           the Company has furnished Prudential with the audited consolidated and consolidating balance sheets of the Company and its Subsidiaries at January 31, 2006, January 31, 2007 and January 31, 2008 and the related consolidated and consolidating statements of income and cash flows and changes in shareholders’ equity for each of the years in the three-year period ended January 31, 2008, all reported on by PriceWaterhouseCoopers LLP.  All of such financial statements (including any related schedules and/or notes) are true and correct in all material respects (subject, as to interim statements, to changes resulting from audits and year-end adjustments) and fairly present the consolidated financial position and the consolidated results of the operations and consolidated cash flows of the corporations described therein at the dates and for the periods shown, all in conformity with generally accepted accounting principles applied on a consistent basis (except as otherwise stated therein or in the notes thereto stated) throughout the periods involved. None of the Company and its Subsidiaries has any contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments which are substantial and material in amount in relation to the consolidated financial condition of the Company, except as referred to or reflected or provided for in the financial statements. Since January 31, 2008, (i) there has been no change in the assets, liabilities or condition (financial or otherwise) of the Company or any of its Subsidiaries, other than changes which have not been, either in any case or in the aggregate, materially adverse to the Company and its Subsidiaries taken as a whole and (ii) neither the business, operations, affairs nor any of the properties or assets of the Company or any of its Subsidiaries have been affected by any occurrence or development (whether or not insured against) which has been, either in any case or in the aggregate, materially adverse to the Company and its Subsidiaries taken as a whole.

(vi)           Schedule 8A to this Amendment sets forth a complete and correct list as to each of the Company’s Subsidiaries as of the date hereof.

(vii)

except as described therein, Schedule 8D to this Amendment sets forth a complete and correct list of all outstanding Debt of the Company and its Subsidiaries as of January 31, 2008.  There exists no default or temporary waiver or default under the provisions of any instrument evidence such Debt or of any agreement relating thereto;

(viii)                      (A) the Company and each of its Subsidiaries has (to the extent material to the Company and its Subsidiaries taken as a whole) good and indefeasible title to its respective real properties (other than properties which it leases) and good title to all of its other respective properties and assets, including the properties and assets reflected in the balance sheet as at January 31, 2008 (other than properties and assets disposed of in the ordinary course of business), subject to no Lien of any kind except Liens permitted by Paragraph 6B of the Note Agreements, and (B) all leases necessary in any material respect for the conduct of the respective businesses of the Company and its Subsidiaries are valid and subsisting and are in full force and effect;

(ix)           neither the Company nor any of its Subsidiaries (A) is listed on the Specially Designated Nationals and Blocked Persons List (the “SDN List”) maintained by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”), or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Order (such other lists are referred to herein, collectively, as the “Other Lists”; the SDN List and the Other Lists are referred to herein, collectively, as the “Lists”), (B) has  been determined by competent authority to be subject to the prohibitions contained in Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the rules and regulations of OFAC or in any enabling legislation or other Executive Orders in respect thereof, (C) is owned or controlled by, or acts for or on behalf of, any person on the Lists or any other person who has been determined by competent authority to be subject to the prohibitions contained in Executive Order No. 13224 (Sept. 23, 2001) or similar prohibitions contained in the rules and regulations of OFAC or any enabling legislation or other Executive Orders in respect thereof, and (D) is failing to comply in any material way with the requirements of Executive Order No. 13224 (Sept. 23, 2001) and other similar requirements contained in the rules and regulations of OFAC and in any enabling legislation or other Executive Orders in respect thereof; and

(x)           neither the Company nor any Guarantor has any defenses, offsets or counterclaims against any of their obligations under or in respect of either Note Agreement or any Subsidiary Guarantee in respect thereof.

4. Acknowledgement and Consent of Guarantors.  Each Guarantor hereby acknowledges that it has reviewed the terms and provisions of the Note Agreements, the Notes with respect thereto, each Subsidiary Guarantee and this Amendment and consents to the amendments to each Note Agreement effected pursuant to this Amendment.  Each Guarantor confirms that its Subsidiary Guarantee will continue to guarantee to the fullest extent possible the payment and performance of all guaranteed Obligations (as defined in each Subsidiary Guarantee).  Each Guarantor acknowledges and agrees that (a) its Subsidiary Guarantee shall continue in full force and effect and that its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment, and (b) (i) notwithstanding the conditions to effectiveness hereof, such Guarantor is not required by the terms of either Note Agreement, the Notes thereunder or the Subsidiary Guarantee in respect thereof to consent to the amendments to the Note Agreements effected pursuant to this Amendment, and (ii) nothing in either Note Agreement, the Notes thereunder or the Subsidiary Guarantee in respect thereof shall be deemed to require the consent of any such Guarantor to any future amendments to such Note Agreement.

5. Effectiveness of Amendment.   This Amendment shall become effective upon the date each of the following conditions thereto is satisfied:

(a)           receipt by the Purchasers of counterparts of this Amendment, executed and delivered by each of the parties hereto,

(b)	receipt by the Purchasers of:

(i)           Certified copies of the resolutions of the Board of Directors of the Company and each Guarantor, authorizing the execution and delivery of this Amendment, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Amendment;

(ii)

a certificate dated the date hereof of the Secretary or an Assistant Secretary and one other officer of the Company (together with such evidence thereof as may be reasonably requested by the Purchasers) certifying that (A) the certificate of such Person previously delivered pursuant to Paragraph 3A(iii)(a) of the respective Note Agreement continues to be true, current and correct and (B) the Certificate of Incorporation and By-laws of such Person previously delivered pursuant to Paragraph 3A(iv)(a) of the Note Agreements continue to be in full force and effect and have not been modified or amended in any respect (in each case, except as specifically set forth therein, which modifications or amendments shall be in form and substance acceptable to the Purchasers);

(iii) a corporate good standing certificate for the Company from the Secretary of State of New York dated of a recent date;

(iv)           favorable opinion of Timothy F. Michno, Esq., General Counsel of the Company, dated the date hereof, satisfactory to the Purchasers and in form and substance substantially identical to Exhibit E-1 to the Note Agreements. The Company hereby directs such counsel to deliver such opinion(s) and agrees that each Purchaser receiving such an opinion will and is hereby authorized to rely on such opinion; and

(v)           such additional documents or certificates with respect to legal matters or corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by the Purchasers.

(c)           the representations and warranties contained in Section 2 above shall be true on and as of the date hereof, and there shall exist on the date hereof no Event of Default or Default;

(d)           the Company shall have paid Prudential Investment Management, Inc. (and Prudential Investment Management, Inc. shall have received) on the date hereof a facility fee in the amount of $50,000;

(e)           all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in substance and form to the Purchasers, the Purchasers shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request;

(f)           the execution and delivery of this Amendment shall (i) not violate any applicable law or governmental regulation (including, without limitation, Section 5 of the Securities Act or Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (ii) shall not subject any Purchaser to any tax, penalty, liability or other onerous condition under or pursuant to any applicable law or governmental regulation;

(g)           counsel for the Purchasers shall be satisfied as to all legal matters relating to this Amendment, and the Purchasers shall have received from such counsel favorable opinions as to such legal matters as they may request; and

(h)           the Company shall have made all requests, filings and registrations with, and obtained all consents and approvals from, the relevant national, state, local or foreign jurisdiction(s), or any administrative, legal or regulatory body or agency thereof, that are necessary in connection with this Amendment and any and all other documents relating hereto, and the transactions contemplated hereby.

6. Miscellaneous.

(a)           This Amendment may be executed in any number of counterparts and by any combination of the parties hereto in separate counterparts, each of which counterparts shall be an original and all of which taken together shall constitute one and the same agreement.

(b)           This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

[Signature page follows.]

 

 

---

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their respective officers thereunto duly authorized as of the date first above written.

MOVADO GROUP, INC.

By: /s/ John C. Burns

Name: John C. Burns

Title: VP/Treasurer

1998 Purchaser:

THE PRUDENTIAL INSURANCE COMPANY  OF AMERICA

By: /s/ Yvonne Guajardo

Vice President

2001 Purchasers:

THE PRUDENTIAL INSURANCE COMPANY  OF AMERICA

By:  /s/ Yvonne Guajardo

Vice President

PRUCO LIFE INSURANCE COMPANY

By:  /s/ Yvonne Guajardo

Assistant Vice President

PRUDENTIAL RETIREMENT INSURANCE  AND ANNUITY COMPANY

By:

Prudential Investment Management, Inc., as investment manager

By: /s/ Yvonne Guajardo

Vice President

RELIASTAR LIFE INSURANCE COMPANY

By:

Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By:

Prudential Private Placement Investors, Inc. (as its General Partner)

By:  /s/ Yvonne Guajardo

Vice President

 

 

---

 

CONSENT AND ACKNOWLEDGEMENT OF GUARANTORS

MOVADO RETAIL GROUP, INC., (as successor by merger with SwissAm, Inc.)

By:________________________________

Name:______________________________

Title:_______________________________

MOVADO LLC

By:_________________________________

Name:_______________________________

Title:________________________________

 

 

---

 

                                                                                                                                EXHIBIT 10.4

 

AMENDMENT NUMBER 1

 

TO THE

 

APRIL 8, 2004 AMENDMENT AND RESTATEMENT

 

OF THE

 

MOVADO GROUP, INC.

 

1996 STOCK INCENTIVE PLAN

 

 

WHEREAS, Movado Group, Inc. (the “Company”) maintains the Movado Group, Inc. 1996 Stock Incentive Plan (the “Plan”);

 

WHEREAS, Section 16 of the Plan provides that the Company’s board of directors (the “Board”) may amend the Plan at any time, subject to certain limitations on such right as set forth in said Section 16, which limitations are not applicable to the terms hereof;

 

WHEREAS, the Board now desires to amend the Plan in certain respects, effective January 1, 2008, to bring its terms into compliance with the applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended;

 

NOW THEREFORE, the Board hereby amends the Plan as follows, effective January 1, 2008:

 

FIRST:                      The percentage “20%” in Section 2(e)(i) of the Plan is hereby revised to “30%”.

 

SECOND:                                Section 2(e)(ii) of the Plan is hereby amended to read in its entirety as follows:

 

“(ii) individuals who, on the date hereof, constitute the Board (the “Incumbent Directors”) cease for any reason during any 12-month period to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;”

 

THIRD:                      Section 2(e)(iii) of the Plan is hereby amended to read in its entirety as follows:

 

“(iii) irrevocable termination and liquidation of the Plan within 12 months of the dissolution of the Company taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A);”

 

FOURTH:                                Section 2(ee) of the Plan is hereby amended to read in its entirety as follows:

 

“(ee) ‘Stock’ means the Common Stock or such other authorized shares of stock of the Company as the Committee may from time to time authorize for use under the Plan, provided that such shares of stock constitute ‘service recipient stock’ for purposes of Section 409A of the Code.”

 

 

---

 

 

FIFTH:                      The last sentence of Section 9(d) of the Plan is hereby amended to read in its entirety as follows:

 

“Payments of Performance Share Unit Awards shall be made as soon as practicable after the completion of an Award Period; provided, however, that in all cases, all such payments shall be made on or before the fifteenth day of the third month following the end of the Participant’s tax year or the Company’s tax year, whichever is later, in which the Participant’s right to the payment is no longer subject to a ‘substantial risk of forfeiture’ for purposes of Section 409A of the Code.”

 

SIXTH:                      The Plan is hereby amended by the addition thereto of a new Section 17, to read in its entirety as follows:

 

“17.                      Section 409A

 

Notwithstanding any other provision of the Plan, neither the Board nor the Committee shall have the authority to issue an Award under the Plan with terms and/or conditions which would cause such Award to constitute non-qualified "deferred compensation" under Section 409A of the Code.  Accordingly, by way of example but not limitation, no Option shall be granted under the Plan with a per share Option Price which is less than the Fair Market Value of a share of Stock on the Date of Grant of the Option.  Notwithstanding anything herein to the contrary, no Award agreement used under the Plan, including a Stock Option Agreement, shall provide for any deferral feature with respect to an Award which constitutes a deferral of compensation under Section 409A of the Code.  The Plan and all Award agreements used under the Plan, including all Stock Option Agreements, are intended to comply with the requirements of Section 409A of the Code (so as to be exempt therefrom), and shall be so interpreted and construed.”

 

SEVENTH:                                Except to the extent hereinabove provided, the Plan shall remain in full force and effect.

 

 

 

 

---

 

                                                                                                                                EXHIBIT 10.5

 

 

MOVADO GROUP, INC.

 

AMENDED AND RESTATED

 

DEFERRED COMPENSATION PLAN FOR EXECUTIVES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective June 1, 1995

 

Amended and Restated Effective January 1, 1998

 

Amended and Restated Effective January 1, 2002

 

Amended and Restated Effective January 1, 2008

NY717357.3 212281-10001

 

 

---

 

 

MOVADO GROUP, INC.

 

AMENDED AND RESTATED

 

DEFERRED COMPENSATION PLAN FOR EXECUTIVES

 

Table of Contents

 

Page

 

ARTICLE I

 

 

Definitions

 

1.1

Account

1

1.2

Administrator

1

1.3

Affiliate

1

1.4

Base Salary

1

1.5

Base Salary Deferrals

1

1.6

Bonus

1

1.7

Bonus Deferrals

1

1.8

Change in Control

2

1.9

Class Year Account

3

1.10

Code

3

1.11

Company

3

1.12

Company Stock

3

1.13

Compensation

3

1.14

Compensation Deferral Election

3

1.15

Compensation Deferrals

3

1.16

Effective Date

4

1.17

Eligible Employee

4

1.18

Employee

4

1.19

Employers

4

1.20

Employer Contribution

4

1.21

ERISA

4

1.22

Fair Market Value

4

1.23

Group I Employee

5

1.24

Group II Employee

5

1.25

Matching Contribution

5

1.26

Participant

5

1.27

Plan

5

1.28

Plan Year

5

1.29

Total and Permanent Disability

5

1.30

Trust

5

1.31

Trustee

5

1.32

Unforeseeable Emergency

5

1.33

Year of Service

6

 

 

i

---

ARTICLE II

 

 

Participation

 

2.1

Eligibility for Participation

6

2.2

Commencement of Participation

6

2.3

Benefits

6

 

ARTICLE III

 

 

Contributions

 

3.1

Compensation Deferrals

7

3.2

Matching Contributions

8

3.3

Company Stock

8

3.4

Employer Contributions

9

3.5

Time of Contributions

9

3.6

Form of Contributions

9

 

ARTICLE IV

 

 

Vesting

 

4.1

Vesting

10

 

ARTICLE V

 

 

Accounts

 

5.1

Accounts

11

5.2

Investments, Gains and Losses

11

5.3

Forfeitures

12

 

ARTICLE VI

 

 

Distributions

 

6.1

Payment

12

6.2

Commencement of Payment

13

 

ARTICLE VII

 

 

Beneficiaries

 

7.1

Beneficiaries

14

7.2

Lost Beneficiary

15

 

ARTICLE VIII

 

 

Funding

 

8.1

Prohibition Against Funding

15

8.2

Deposits in Trust

16

8.3

Withholding of Employee Contributions

16

 

 

ii

---

 

ARTICLE IX

 

 

Claims Procedure

 

9.1

General

16

9.2

Claim Review

16

9.3

Right of Appeal

17

9.4

Review of Appeal

17

9.5

Designation

17

 

ARTICLE X

 

 

Administration of the Plan

 

10.1

Committee as Administrator

17

10.2

Actions Taken by the Committee

17

10.3

Bond and Compensation

18

10.4

Duties of the Committee

18

10.5

Employers to Furnish Information

19

10.6

Expenses

19

10.7

Indemnification

19

 

ARTICLE XI

 

 

General Provisions

 

11.1

No Assignment

19

11.2

No Employment Rights

20

11.3

Incompetence

20

11.4

Identity

20

11.5

Amendment and Termination

20

11.6

Employer Determinations

21

11.7

Construction

21

11.8

Governing Law

21

11.9

Severability

21

11.10

Headings

21

11.11

Terms

21

11.12

Top Hat Plan

21

11.13

Section 409A

21

 

ARTICLE XII

 

 

Adoption

 

12.1

Execution

22

NY717357.3 212281-10001

 

iii

---

 

 

MOVADO GROUP, INC.

 

AMENDED AND RESTATED

 

DEFERRED COMPENSATION PLAN FOR EXECUTIVES

 

Movado Group, Inc., a New York corporationand Movado Retail Group, Inc. a New Jersey corporation, hereby adopt this Amended and Restated Movado Group, Inc. Deferred Compensation Plan for Executives.

 

ARTICLE I

 

 

Definitions

 

 

1.1 Account.  The bookkeeping account established for each Participant as provided in Section 5.1 hereof.

 

1.2 Administrator.  The committee appointed pursuant to ARTICLE X.

 

1.3 Affiliate.  Any entity (i) that directly or indirectly is controlled by, controls or is under common control with the Company, or (ii) in which the Company has a significant equity interest, in either case as determined by the Board.

 

1.4 Base Salary. The basic salary payable to a Participant by the Employers attributable to services performed in a Plan Year.  Base Salary shall only include regularly scheduled salary payable throughout the year, as determined by the Employers.

 

1.5 Base Salary Deferrals.  The portion of Base Salary that a Participant elects to defer under the Plan as part of a Compensation Deferral Election.

 

1.6 Bonus.  The annual incentive bonus, if any, payable by the Employers to a Participant who is not classified by the Employer as a sales executive, upon the satisfaction of certain specified performance goals.

 

1.7 Bonus Deferrals.  The portion of Bonus that a Participant who is not classified by the Employer as a sales executive elects to defer under the Plan as part of a Compensation Deferral Election.

 

---

 

1.8 Change in Control.  The occurrence of:

 

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more (on a fully diluted basis) of (A) the then outstanding shares of common stock of the Company, taking into account as outstanding for this purpose such common stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such common stock (the "Outstanding Company Common Stock") and (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of the Plan, the following acquisitions shall not constitute a Change in Control: (I) any acquisition by the Company or any Affiliate, (II) any acquisition by any employee benefit plan sponsored or maintained by the Company or any Affiliate, (III) any acquisition by a "Permitted Transferee," as defined in the Company’s Certificate of Incorporation, (IV) any acquisition which complies with clauses (A), (B) and (C) of clause (v) of this Section 1.8, or (V) with respect to the Plan benefit of a particular Participant, any acquisition by such Participant or any group of persons including such Participant (or any entity controlled by such Participant or any group of persons including such Participant);

 

(ii) individuals who, on the date hereof, constitute the Board (the "Incumbent Directors") cease for any reason during any 12-month period to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof, whose election or nomination for election was approved by a  vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;

 

(iii) irrevocable termination and liquidation of the Plan within 12 months of the dissolution of the Company taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A);

 

(iv) the sale of all or substantially all of the business or assets of the Company; or

 

(v) the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company that requires the approval of the Company’s stockholders, whether for such transaction or the issuance of securities in the transaction (a "Business Combination"), unless immediately following such Business Combination: (A) at least 50% of the total voting power of (x) the corporation resulting from such Business Combination (the "Surviving Company"), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of sufficient voting

 

2

---

 

securities eligible to elect a majority of the directors of the Surviving Company (the "Parent Company"), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination, (B) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company or a "Permitted Transferee," as defined in the Company’s Certificate of Incorporation), is or becomes the beneficial owner, directly or indirectly, of 20% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Company (or, if there is no Parent Company, the Surviving Company) and (C) at least a majority of the members of the board of directors of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination.

 

1.9 Class Year Account.  The bookkeeping subaccounts established for each Participant as provided in Section 5.1.

 

1.10 Code.  The Internal Revenue Code of 1986, as amended.

 

1.11 Company.  Movado Group, Inc., a New York corporation.

 

1.12 Company Stock.  Common stock of the Company.

 

1.13 Compensation.  For a Participant who is not classified by the Employer as a sales executive, the Participant’s Base Salary and Bonus, and for a Participant who is classified by the Employer as a sales executive, the Participant’s Base Salary only.

 

1.14 Compensation Deferral Election.  The written agreement submitted to the Administrator, by which an Eligible Employee agrees to participate in the Plan and make Base Salary Deferrals, and if the Eligible Employee is not classified by the Employer as a sales executive, Bonus Deferrals or both, as applicable, under the Plan in accordance with Section 3.1.

 

1.15 Compensation Deferrals.  A Participant’s Base Salary Deferrals, and if the Eligible Employee is not classified by the Employer as a sales executive, Bonus Deferrals or both as applicable.

 

3

---

 

1.16 Effective Date.  The Plan was originally effective on June 1, 1995.  This amendment and restatement of the Plan is effective January 1, 2008, following good-faith operational compliance with the applicable requirements of Section 409A of the Code since January 1, 2005.

 

1.17 Eligible Employee.  An Employee of an Employer who is a "management or highly compensated" Employee within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

 

1.18 Employee.  Any person employed by an Employer.

 

1.19 Employers.  Movado Group, Inc., a New York corporation and Movado Retail Group, Inc., a New Jersey corporation.

 

1.20 Employer Contribution.  A discretionary contribution made by the Employers to the Trust that is credited to one or more Participant’s Accounts in accordance with Section 3.3.

 

1.21 ERISA.  The Employee Retirement Income Security Act of 1974, as amended.

 

1.22 Fair Market Value.  On a given date means (i) if the Company Stock is listed on a national securities exchange, the closing sale price reported as having occurred on the primary exchange with which the Company Stock is listed and traded on that date, or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported; (ii) if the Company Stock is not listed on any national securities exchange but is quoted in the National Market System of the National Association of Securities Dealers Automated Quotation System ("NASDAQ") on a last sale basis, the last sale price reported on that date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported; or (iii) if the Company Stock is not listed on a national securities exchange nor quoted in NASDAQ on a last sale basis, the amount determined by the Administrator to be the fair market value based upon a good faith attempt to value the Company Stock accurately and computed in accordance with applicable regulations of the Internal Revenue Service

 

4

---

 

1.23 Group I Employee.  An Employee who is designated as a Group I Employee by an Employer on Schedule A attached hereto, as such Schedule A may be amended by the Employer from time to time.

 

1.24 Group II Employee.  An Employee who is designated as a Group II Employee by an Employer on Schedule A attached hereto, as such Schedule A may be amended by the Employer from time to time.

 

1.25 Matching Contribution.  A contribution made by the Employers to the Trust that is credited to one or more Participant’s Accounts in accordance with Section 3.2.

 

1.26 Participant.  An Eligible Employee who has become a Participant as provided in Section 2.1 and whose Account has not been fully distributed.

 

1.27 Plan.  This Amended and Restated Movado Group, Inc. Deferred Compensation Plan for Executives.

 

1.28 Plan Year.  The twelve (12) month period commencing each January 1 and ending each December 31.

 

1.29 Total and Permanent Disability.  Any medically determinable physical or mental disorder that renders a Participant incapable of continuing in the employment of an Employer and which is expected to continue for the remainder of a Participant’s life, as determined by the Administrator in its sole discretion.

 

1.30 Trust.  The trust under the Plan, which trust shall at all times constitute a "rabbi trust".

 

1.31 Trustee.  The trustee under the Trust and any successor Trustee appointed pursuant to the Trust.

 

1.32 Unforeseeable Emergency.                                                                A severe financial hardship to a Participant resulting from (i) an illness or accident of the Participant, the Participant's spouse, the Participant's beneficiary, or the Participant's dependent (as defined in Section 152 of the Code, without regard to Section 152(b)(1), 152(b)(2) and 152(d)(1)(B)); (ii) loss of the Participant's

 

5

---

 

property due to casualty (including the need to rebuild a home following damage to a home which is not otherwise covered by insurance); or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant's control, including (a) the imminent foreclosure of or eviction from the Participant's primary residence, (b) the need to pay for medical expenses, including non-refundable deductibles, as well as for the costs of prescription drug medication, or (c) to pay for the funeral expenses of the Participant's spouse, beneficiary or dependent (as defined in Section 152 of the Code, without regard to Section 152(b)(1), 152(b)(2) and 152(d)(1)(B)).

 

1.33 Year of Service.  A Participant’s twelve (12) month period of employment with an Employer beginning on the Participant’s first day of employment with the Employer.  Periods of employment of less than twelve (12) full months shall not constitute a Year of Service.

 

ARTICLE II

 

 

Participation

 

 

2.1 Eligibility for Participation.

(a) The Employers shall determine which Eligible Employees shall become Participants and the category of benefits, under Section 2.3, to which they will be  entitled.  The Employers’ determination under this Section 2.1 and under Section 2.3 shall be set forth in Schedule A, attached hereto.

(b) An Employer may determine that a Participant shall cease being a Participant as of any date specified by it; provided, however, that the Employer may not reduce the Account of any such Participant as of the date such determination is made.  Any such determination shall be specified in Schedule B, attached hereto.

 

2.2 Commencement of Participation.

(a) Each Eligible Employee selected to become a Participant (pursuant to Section 2.1) shall become a Participant as of the date specified by an Employer.

(b) Notwithstanding Section 2.2(a), a Compensation Deferral Election with respect to a Plan Year shall not be effective except to the extent it complies with Section 3.1.

 

2.3 Benefits.  The Employers shall determine, from time to time, whether a Participant is to be treated as a Group I or Group II Employee.  An Employer may change the

 

6

---

 

classification of any Participant as of any date specified by it; provided, however, that the Account of any such Participant shall not be reduced by such change of classification.  The classification of any Participant shall be set forth in Schedule A, attached hereto.  Participants shall cease to contribute hereunder after they cease to be employed by any of the Employers.

 

ARTICLE III

 

 

Contributions

 

 

3.1 Compensation Deferrals.

(a) The Employers shall credit to the Account of a Participant an amount equal to the amount designated in the Participant’s Compensation Deferral Election for each Plan Year.  Such amounts shall not be made available to such Participant, except as provided in ARTICLE VI, and shall reduce such Participant’s Compensation from an Employer in accordance with the provisions of the applicable Compensation Deferral Election; provided, however, that all such amounts shall be subject to the rights of the general creditors of each of the Employers as provided in ARTICLE VIII.

(b) Each Eligible Employee shall deliver a Compensation Deferral Election to his or her Employer before any Compensation Deferrals become effective.  Such Compensation Deferral Election shall be void with respect to any Compensation Deferral unless submitted before the beginning of the calendar year during which the amount to be deferred will be earned; provided, however, that in the year in which an Employee is first eligible to participate in this Plan or in any other individual account nonqualified deferred compensation plan maintained by any of the Employers, such Compensation Deferral Election may be filed within thirty (30) days of the date on which the Employee is first eligible to so participate, respectively, with respect to Compensation earned during the remainder of the calendar year, and, provided further, that a Bonus Deferral Election may be submitted as late as by the end of the sixth month of the applicable Bonus performance period.

(c) The Compensation Deferral Election shall designate the amount of Compensation deferred by each Participant and such other items as the Administrator may prescribe.  A new Compensation Deferral Election shall be required for purposes of each Bonus Deferral.  With respect to Base Salary Deferrals, once the applicable Compensation Deferral Election has been made, the Participant's Base Salary Deferrals shall remain in effect until revoked by the Participant by his or her effecting a new Compensation Deferral Election with

 

7

---

 

respect to Base Salary Deferrals, which revocation shall be effective as of the next Plan Year following the filing of the New Compensation Deferral Election.  There shall be no maximum limit on the Compensation Deferrals permitted for each Participant.

 

3.2 Matching Contributions.

(a) For each Plan Year, each Employer shall credit to the Account of each Participant who (i) is employed thereby, (ii) is a Group I Employee and (iii) has made Compensation Deferrals for such Plan Year, a Matching Contribution in an amount equal to one hundred percent (100%) of the amount of such Participant’s Compensation Deferrals for such Plan Year, up to a maximum annual amount equal to ten percent (10%) of the amount of such Participant’s Base Salary in effect as of the last day of such Plan Year.

(b) Each Employer shall credit to the Account of each Participant who (i) is employed thereby, (ii) is a Group II Employee and (iii) has made Compensation Deferrals for such Plan Year, a Matching Contribution in an amount equal to one hundred percent (100%) of the amount of such Participant’s Compensation Deferrals for such Plan Year, up to a maximum annual amount equal to five percent (5%) of the amount of such Participant’s Base Salary in effect as of the last day of such Plan Year.

(c) Matching Contributions for a Plan Year will be credited to the Account of a Participant under this Section 3.2 only if the Participant is an Employee on the last day of such Plan Year; provided, however, that this requirement shall be waived in the event of: (i) the death of a Participant during such Plan Year, (ii) the termination of the Participant’s employment with the Employers during such Plan Year after having incurred a Total and Permanent Disability, or (iii) the termination of the Participant’s employment with the Employers during such Plan Year after having attained the age of sixty-five (65).

(d) Twenty percent (20%) of the amount of each Matching Contribution made for a Participant shall be made in rights to receive shares of Company Stock under Section 3.3.

 

3.3 Company Stock.

(a) Matching Contributions for a Participant in the form of rights to receive shares of Company Stock shall consist of bookkeeping credits to the Accounts and Class Year Accounts for such Participant.  Such credits will initially be determined by crediting to such Participant’s Accounts and Class Year Accounts the number of shares (including fractional

 

8

---

 

shares) of Company Stock that such Matching Contribution could purchase based upon the Fair Market Value of the Company Stock on the date on which such Matching Contribution is so credited.

(b) Dividends declared on Company Stock shall not be credited to the Accounts and Class Year Accounts of any Participant in connection with any rights to receive bookkeeping credits for Company Stock pursuant to Section 3.3(a).

(c) When a Participant or Beneficiary is entitled to a lump sum distribution pursuant to ARTICLE VI, the Company shall issue to the Participant or Beneficiary the number of shares of Company Stock that equal the number of full shares then credited to such Participant’s Account.  If payment to the Participant or Beneficiary is being made in installments, each installment shall include a proportionate portion of the aggregate number of shares then credited to such Participant’s Account. In all cases, the Company shall pay any fractional shares in cash.

 

3.4 Employer Contributions.  The Employers reserve the right to make discretionary contributions to Participants’ Accounts in such amount and in such manner as may be determined by the Employers.

 

3.5 Time of Contributions.

(a) Compensation Deferrals shall be transferred to the Trust as soon as administratively feasible following each payroll period.  Matching Contributions (other than rights to receive shares of Company Stock) shall be transferred to the Trust no later than thirty (30) days following the last day of the Plan Year.  The Employers shall also transmit at the same time any necessary instructions regarding the allocation of such amounts among the Accounts of Participants.

(b) Employer Contributions shall be transferred to the Trust at such times as the Employers shall determine.  The Employers shall also transmit at those times any necessary instructions regarding the allocation of such amounts among the Accounts of Participants.

 

3.6 Form of Contributions.  All Compensation Deferrals, Matching Contributions and Employer Contributions to the Trust shall be made in the form of cash or cash equivalents of United States currency, except as otherwise provided herein.  Notwithstanding the foregoing,

 

9

---

 

Compensation Deferrals may be made in the form of rights to receive shares of Company Stock if the Participant would otherwise be entitled to receive Company Stock as Compensation.

 

ARTICLE IV

 

 

Vesting

 

 

4.1 Vesting.

(a) Except as otherwise provided in this Section 4.1, a Participant shall have a nonforfeitable right to the vested portion of his or her Class Year Accounts; provided, however, that all such amounts shall be subject to the rights of the general creditors of the Employers as provided in ARTICLE VII.

(b) Except as otherwise provided in this Section 4.1, each Class Year Account of a Participant will vest twenty percent (20%) if the Participant is still an Employee on the last day of each Plan Year beginning with the Plan Year of such Class Year Account.  Thereafter, such Class Year Account shall vest an additional twenty percent (20%) on the last day of each Plan Year provided that the Participant continues to be an Employee, and therefore shall be fully vested on the last day of the fourth Plan Year following the first Plan Year of such Class Year Account provided that the Participant continues to be an Employee.  Further vesting shall cease once a Participant is no longer an Employee.

(c) The portion of a Participant’s Class Year Accounts attributable to Compensation Deferrals, and earnings thereon, shall be fully vested at all times.

(d) A Participant who attains the age of sixty-five (65) shall thereupon become fully vested in all the amounts credited to his or her Account.

(e) A Participant whose employment with the Employers is terminated following such Participant’s Total and Permanent Disability shall thereupon become fully vested in all the amounts credited to his or her Account.

(f) If a Change in Control occurs, all amounts attributable to Matching Contributions and Employer Contributions shall thereupon become fully vested as of the date of such Change in Control.

(g) Any amounts credited to a Participant’s Account that are not vested at the time of his or her termination of employment with the Employers shall be forfeited upon such termination of employment.

 

10

---

 

ARTICLE V

 

 

Accounts

 

 

5.1 Accounts.

(a) (1)           The Administrator shall establish and maintain an Account in the name of each  Participant.  Unless otherwise directed by the Employers, the Trustee shall also maintain and invest separate omnibus accounts that correspond to each Participant’s Account.

(2) The Administrator may also establish any subaccounts that it deems to be appropriate.  The Administrator shall also establish and maintain subaccounts in each Participant’s Account that shall be denominated as Class Year Accounts.  The Administrator shall also establish and maintain subaccounts in each Participant’s Account for rights to receive Company Stock.

(b) (1)           Each Participant’s Account shall be credited with Compensation Deferrals, any Matching Contributions allocable thereto, any Employer Contributions, and any investment earnings, gains and/or losses on the foregoing.  Each Participant’s Account shall be reduced by any distributions made plus any federal and state tax withholding and any social security withholding tax as may be required by law.

(2) Separate Class Year Accounts for a Participant shall consist of the Participant’s Compensation Deferrals, allocable Matching Contributions and Employer Contributions that are made with respect to a given Plan Year, and any investment earnings or losses on such amounts.  Class Year Accounts shall be separately maintained for Participants for each Plan Year until such Class Year Accounts are fully vested (as provided in ARTICLE IV), at which time such fully vested Class Year Accounts shall be merged.

 

5.2 Investments, Gains and Losses.

(a) (1)           By written investment directions to the Administrator from time to time, each Participant may request the investment funds (or a change thereof), and the relative portions of each if more than one investment fund is desired, to be used to credit investment earnings, gains and losses with respect to his or her Account (other than the subaccount for rights to receive Company Stock) among the investment funds available under the Plan.

(2) The Administrator and the Trustee shall take each Participant’s request under Section 5.2(a)(1) into account in making its determination as to how to invest the amounts credited to the Participant’s Account among the investment funds available for purposes

 

11

---

 

of the Plan.  Where a Participant has no written request under Section 5.2(a)(1) on file with the Administrator, the Administrator may direct the Trustee to invest such amount in a money market fund selected by the Administrator.

(3) The Employers, or the Trustee if an Employer so directs, shall, from time to time, establish the investment funds available for purposes of the Plan.

(b) The Administrator shall adjust the amounts credited to each Participant’s Account to reflect Compensation Deferrals, Matching Contributions, Employer Contribu­tions, investment experience, distributions and any other appropriate adjustments.  Such adjustments shall be made as frequently as is administratively feasible.

 

5.3 Forfeitures.  Any forfeitures from a Participant’s Account shall continue to be held in the Trust, shall be separately invested and shall be used to reduce succeeding Matching Contributions and Employer Contributions until such forfeitures have been entirely so applied.  As of the time it is determined that no further Matching Contributions or Employee Contributions will be made under the Plan, such forfeitures shall be returned to the Employer which employed the forfeiting Participant.

 

ARTICLE VI

 

 

Distributions

 

 

6.1 Payment.

(a) A Participant may elect to receive his or her Account balance in a single lump sum or in ten (10) annual installments.  If a Participant elects to receive his Accrued Benefit in the form of ten (10) annual installments, each payment shall be equal to the Participant’s Account balance as of the payment date, divided by the number of then remaining installment payments.  Distributions shall be made to the Participant or, if the Participant is deceased, to the Participant’s Beneficiary.  The method of distribution must be elected as part of the Participant’s initial Deferral of Compensation Election.

(b) A Participant’s subsequent election to delay a payment under the Plan or to change the form of a payment under the Plan shall be permitted only if (i) the new payment election does not take effect until at least twelve (12) months after the date on which the new payment election is made, and (ii) the new payment election delays payment for at least five (5)

 

12

---

 

years from the date that payment would otherwise have been met, absent the new payment election.

 

(c) Payment shall be made in Company Stock to the extent the Participant’s Account has been denominated in Company Stock (under Section 3.3 or otherwise).  Otherwise, payment shall be made in cash.

 

6.2 Commencement of Payment.

(a) Except as otherwise provided herein, payments to a Participant shall commence within ninety (90) days of the date of the Participant’s "separation from service" (within the  meaning of Section 409A of the Code) with the Employers.

(b) Notwithstanding Section 6.2(a), and except as provided in the next succeeding sentence, all payments to a Participant in connection with the Participant's "separation from service" (within the meaning of Section 409A of the Code) with the Employers, shall be delayed for six (6) months from the date of the Participant's separation from service with the Employers, and the aggregate of all such delayed payments shall be paid to the Participant in a lump sum on the first day following the last day of the sixth (6th) complete calendar month following the date of the Participant's separation from service with the Employers.  No delay shall be required pursuant to the immediately preceding sentence to the extent that the Participant's Plan payments (i) are payable to the Participant during the short-term deferral period set forth in Treasury Regulation Section 1.409A-1(b)(4), and/or (ii) do not exceed an amount equivalent to two hundred percent (200%) of the lesser of (A) the Participant's annualized compensation from the Employer for the Participant's taxable year immediately preceding his or her taxable year in which the Participant's separation from service with the Employers occurs, or (B) the maximum amount of compensation that may be taken into account under a tax-qualified retirement plan pursuant to Section 401(a)(17) of the Code, for the calendar year in which the Participant's separation from service with the Employers occurs.

(c) Upon the death of a Participant, all amounts credited to his or her Account shall be fully vested and shall be paid to his or her beneficiary or beneficiaries, as determined under ARTICLE VII, in a lump sum within ninety (90) days of the date of the Participant’s death.

(d) (1)           A Participant who has experienced an Unforeseeable Emergency, as determined by the Administrator on the basis of the applicable facts and circumstances, in its

 

13

---

 

sole discretion, shall be permitted to receive, in a lump-sum payment, a distribution of up to fifty percent (50%) of the vested portion of his or her Account, exclusive of the subaccount for Company Stock, subject to the remaining provisions of this Section 6.2(d).

(2) A Participant who receives an Unforeseeable Emergency distribution under Section 6.2(d)(1) shall not receive any Matching Contributions or Employer Contributions and shall not be permitted to make any further Compensation Deferrals for the balance of the Plan Year and for the following Plan Year.

(3) A distribution on account of an Unforeseeable Emergency under Section 6.2(d)(1) may not be made to the extent that such Unforeseeable Emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant's assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of Compensation Deferrals under the Plan.  Such distributions shall further be limited to the amount reasonably necessary to satisfy the Unforeseeable Emergency need (which includes amounts necessary to pay any federal, state, local or foreign income taxes or penalties reasonably anticipated to result from the distribution).  For purposes of the immediately preceding sentence, the determination of the amounts reasonably necessary to satisfy an Unforeseeable Emergency need shall take into account any additional Compensation that will be available to the Participant in connection with the requirement to discontinue the Participant's Compensation Deferrals pursuant to Section 6.2(d)(2).

(4) A Participant shall not be permitted to receive more than two (2) hardship distributions under Section 6.2(d)(1).

 

ARTICLE VII

 

 

Beneficiaries

 

 

7.1 Beneficiaries.  Each Participant may from time to time designate one or more persons (who may be any one or more members of such Participant’s family or other persons, administrators, trusts, foundations or other entities) as his or her beneficiary under the Plan.  Such designation shall be made on a form prescribed by the Administrator.  Each Participant may at any time and from time to time, change any previous beneficiary designation, without notice to or consent of any previously designated beneficiary, by amending his or her previous designation on a form prescribed by the Administrator.  If the beneficiary does not survive the Participant (or is otherwise unavailable to receive payment), or if no beneficiary is validly

 

14

---

 

designated, then the amounts payable under the Plan shall be paid to the Participant’s surviving spouse, if any, and, if none, to the Participant’s estate, and such person shall be deemed to be the Participant’s beneficiary hereunder.  If more than one person is the beneficiary of a deceased Participant, each such person shall receive a pro rata share of any death benefit payable unless otherwise designated on the applicable form.  If a beneficiary who is receiving benefits dies, all benefits that were payable to such beneficiary shall then be payable to the estate of that beneficiary.

 

7.2 Lost Beneficiary.

(a) All Participants and beneficiaries shall have the obligation to keep the Administrator informed of their current address until such time as all benefits due under the Plan have been fully paid.

(b) If a Participant or beneficiary cannot be located by the Administrator after it has exercised reasonable diligence for a period of three (3) years, then, in its sole discretion, the Administrator may presume that the Participant or beneficiary is deceased for purposes of this Plan and all unpaid amounts owed to the Participant or beneficiary shall be paid accordingly or, if a beneficiary cannot be so located, then such amounts shall be forfeited and returned to the Employer which employed the forfeiting Participant.

 

ARTICLE VIII

 

 

Funding

 

 

8.1 Prohibition Against Funding.  Should any investment be acquired in connection with the liabilities assumed under this Plan, it is expressly understood and agreed that the Participants and beneficiaries shall not have any right with respect to, or claim against, such assets nor shall any such purchase be construed to create a fiduciary relationship between the Employers and the Participants, their beneficiaries or any other person.  Any such assets (including any amounts deferred by a Participant or contributed by the Employers pursuant to ARTICLE III) shall be and shall remain a part of the general, unpledged, unrestricted assets of the Employers, subject to the claims of their general creditors.  It is the express intention of the Employers that the Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.  Each Participant and beneficiary shall be required to look to the provisions of the Plan and to the Employers themselves for enforcement of any and all benefits due under the Plan, and to the

 

15

---

 

extent any such person  acquires a right to receive payment under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Employers.  The Employers or the Trust shall be designated as the owner and beneficiary of each and every investment acquired in connection with any obligations under the Plan.

 

8.2 Deposits in Trust.  Notwithstanding Section 8.1, or any other provision of this Plan to the contrary, the Employers may deposit into the Trust any amounts they deem appropriate to pay the benefits under this Plan.  The amounts so deposited may include contributions made pursuant to Compensation Deferrals, Employer Contributions and Matching Contributions.

 

8.3 Withholding of Employee Contributions.  The Administrator is authorized to make any and all necessary arrangements with the Employers in order to withhold Participants’ Compensation Deferrals under Section 3.1 from their Compensation.

 

ARTICLE IX

 

 

Claims Procedure

 

 

9.1 General.  In the event that a Participant or his or her beneficiary does not receive any Plan benefit that is claimed, such Participant or beneficiary shall be entitled to consideration and review as provided in this ARTICLE IX.

 

9.2 Claim Review.  Upon receipt of any written claim for a benefit under the Plan, the Administrator shall be notified and shall give due consideration to the claim presented.  If the claim is denied to any extent by the Administrator, the Administrator shall furnish the claimant, within ninety (90) days of its receipt of the claim, with a written notice setting forth (in a manner calculated to be understood by the claimant):

(a) the specific reason or reasons for denial of the claim;

(b) a specific reference to the Plan provisions upon which the denial is based;

(c) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

(d) an explanation of the provisions of this ARTICLE IX.

 

16

---

 

9.3 Right of Appeal.  A claimant who has a claim denied under Section 9.2 may appeal to the Administrator for reconsideration of that claim.  A request for reconsideration under this Section 9.3 must be filed by written notice within sixty (60) days after receipt by the claimant of the notice of denial under Section 9.2.

 

9.4 Review of Appeal.  Upon receipt of an appeal, the Administrator shall promptly take action to give due consideration to the appeal.  Such consideration may include a hearing of the parties involved, if the Administrator feels such a hearing is necessary.  In preparing for the appeal, the claimant shall be given the right to review pertinent documents and the right to submit in writing a statement of issues and comments.  After consideration of the merits of the appeal, the Administrator shall issue a written decision which shall be binding on all parties.  The decision shall be written in a manner calculated to be understood by the claimant and shall specifically state its reasons and pertinent Plan provisions on which it relies.  The Administrator’s decision shall be issued within sixty (60) days after the appeal is filed, except that if a hearing is held the decision may be issued within one hundred twenty (120) days after the appeal is filed.

 

9.5 Designation.  The Administrator may designate one or more of its members or any other person of its choosing to make any determination otherwise required under this ARTICLE IX.

 

ARTICLE X

 

 

Administration of the Plan

 

 

10.1 Committee as Administrator.  The committee designated in this Section 10.1 shall be the Administrator.  The name of the committee shall be the "Deferred Compensation Committee" and shall consist of such individuals, corporations or other entities as the Employers shall from time to time appoint.  Until otherwise designated by the Employers, the members of the Deferred Compensation Committee shall be those persons holding the following positions (or their nearest equivalent) at the Company:  Chief Financial Officer; Treasurer; President and Chief Operating Officer; and Vice President, Human Resources.

 

10.2 Actions Taken by the Committee.  All resolutions or other actions taken by the Deferred Compensation Committee at a meeting shall be by the affirmative vote of a majority

 

17

---

 

of those present at the meeting.  More than half of the members must be present to constitute a quorum for a meeting.  Any member of the Deferred Compensation Committee may sign any document or instrument requiring the signature of the Deferred Compensation Committee or otherwise act on  behalf of the Deferred Compensation Committee, unless otherwise directed by the Deferred Compensation Committee.  The Deferred Compensation Committee may adopt such additional rules of procedures and conduct as it deems appropriate.

 

10.3 Bond and Compensation.  The members of the Deferred Compensation Committee shall serve without bond, except as otherwise required by law, and without remuneration for their services as such.

 

10.4 Duties of the Committee.  The Deferred Compensation Committee shall undertake all duties assigned to it under the Plan and Trust and shall undertake all actions, express or implied, necessary for the proper administration of the Plan.  All actions and decisions of the Deferred Compensation Committee shall be made in its sole discretion, unless expressly otherwise provided in the Plan.  The Deferred Compensation Committee’s duties and responsibilities include, but are not limited to, the following:

(a) adopting and enforcing such rules and regulations that it deems necessary or appropriate for the administration of the Plan in accordance with applicable law;

(b) interpreting the Plan, in its sole discretion, with its good faith interpretation thereof to be final and conclusive on any Employee, former Employee, Participant, former Participant, beneficiary or other party;

(c) deciding all questions concerning the Plan, including the eligibility of any person to participate in the Plan in accordance with the Plan’s provisions;

(d) computing the amounts to be distributed to any Participant, former Participant or beneficiary in accordance with the provisions of the Plan, determining the person or persons to whom such amounts will be distributed and determining when such amounts will be distributed;

(e) authorizing the payment of distributions;

(f) keeping such records and submitting such filings, elections, applications, returns or other documents or forms as may be required under the Code and applicable regulations, or under other federal, state or local law and regulations; and

 

18

---

 

(g) appointing such agents, counsel, accountants and consultants as may be required to assist in administering the Plan.

 

10.5 Employers to Furnish Information.  To enable the Deferred Compensation Committee to perform its functions, the Employers shall supply full and timely information to the Deferred Compensation Committee on all matters relating to the remuneration of all Participants, their retirement, death or other cause of separation from service, and such other pertinent facts as the Deferred Compensation Committee may require.

 

10.6 Expenses.  All expenses of Plan administration and operation, including the fees of any agents or counsel employed and including any expenses attributable to a termination of the Plan, shall be paid by the Employers.  To the extent that the Employers may be liable for social security or other withholding tax, the Administrator, in its sole discretion, may charge such expenses to the benefits due to the applicable Participant or Beneficiary.

 

10.7 Indemnification.  The Employers hereby agree to indemnify each and every member of the Deferred Compensation Committee or Employee acting on behalf of the Deferred Compensation Committee for any expenses or liabilities (other than those due to willful misconduct) actually incurred in or arising out of the performance of their duties under the Plan, including, but not limited to, litigation expenses and attorneys’ fees.

 

ARTICLE XI

 

 

General Provisions

 

 

11.1 No Assignment.  Benefits or payments under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of any Participant or any Participant’s beneficiary, whether voluntary or involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish the same shall not be valid, nor shall any such benefit or payment be in any way liable for or subject to the debts, contracts, liabilities, engagement or torts of any Participant or beneficiary, or any other person entitled to such benefit or payment pursuant to the terms of the Plan, except to such extent as may be required by law.  If any Participant or beneficiary or any other person entitled to a benefit or payment pursuant to the terms of the Plan becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber,

 

19

---

 

attach or garnish any benefit or payment under the Plan, in whole or in part, or if any attempt is made to subject any such benefit or payment, in whole or in part, to the debts, contracts, liabilities, engagements or torts of any Participant or beneficiary or any other person entitled to any such benefit or payment pursuant to the terms of the Plan, then such benefit or payment, in the discretion of the Administrator, shall cease and terminate with respect to such Participant or beneficiary, or any other such person.

 

11.2 No Employment Rights.  Participation in the Plan shall not be construed to confer upon any Participant the legal right to be retained in the employ of the Employers, or to give a Participant or beneficiary, or any other person, any right to any payment whatsoever, except to the extent of the benefits provided for hereunder.  Each Participant shall remain subject to discharge by the Employers to the same extent as if the Plan had never been adopted.

 

11.3 Incompetence.  If the Administrator determines that any person to whom a benefit is payable under the Plan is incompetent by reason of physical or mental disability, the Administrator shall have the power to cause the payments becoming due to such person to be made to another for his or her benefit without responsibility of the Administrator or the Employers to see to the application of such payments.  Any payment made pursuant to such power shall, as to such payment, operate as a complete discharge of the Employers, the Administrator and the Trustee.

 

11.4 Identity.  If, at any time, any doubt exists as to the identity of any person entitled to any payment hereunder or as to the amount or time of any such payment, the  Administrator shall be entitled to hold such sum until such identity or amount or time is determined or until an order of a court of competent jurisdiction is obtained in regard thereto.  The Administrator shall also be entitled to pay such sum into court in accordance with the appropriate rules of law.

 

11.5 Amendment and Termination.  The Employers shall have the sole authority to modify, amend or terminate the Plan; provided, however, that any modification or termination of the Plan shall not reduce, alter or impair, without the consent of the Participant, such Participant’s right to any amounts already credited to his or her Account on the day before the effective date of such modification or termination.

 

20

---

 

11.6 Employer Determinations.  Any determinations, actions or decisions of the Employers (including but not limited to, Plan amendments and Plan termination) shall be made by the boards of directors of the Employers in accordance with their established procedures or by such other individuals, groups or organizations that have been properly delegated by such boards of directors to make such determination or decision.

 

11.7 Construction.  All questions of interpretation, construction or application arising under or concerning the terms of this Plan shall be decided by the Administrator, in its sole and final discretion, the decision of which shall be final, binding and conclusive upon all persons.

 

11.8 Governing Law.  The Plan shall be governed by, construed and administered in accordance with the laws of the State of New York, other than its laws respecting choice of law.

 

11.9 Severability.  If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provision of the Plan and the Plan shall be construed and enforced as if such provision had not been included therein.

 

11.10 Headings.  The headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of the Plan nor in any way shall they affect the Plan or the construction of any provision hereof.

 

11.11 Terms.  Capitalized terms shall have the meanings as defined herein.  Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice versa, as appropriate.

 

11.12 Top Hat Plan. The Plan is intended to constitute a "top-hat plan" which is unfunded and maintained "primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees" for purposes of ERISA.

 

11.13 Section 409A. The Plan and all Compensation Deferral Elections are intended to comply with the applicable requirements of Section 409A of the Code, and shall be so interpreted and construed.  Any provision of the Plan that is determined to violate any applicable requirement of Section 409A of the Code shall be void and without effect.  Neither the Company nor any Participant, individually or in combination, may accelerate any payment under the Plan,

 

21

---

 

except in compliance with Section 409A of the Code, and no amount shall be paid under the Plan prior to the earliest date on which it is permitted to be paid under Section 409A of the Code.  Notwithstanding anything to the contrary contained in Section 11.5, no amendment or termination of the Plan will be permitted if it would cause the Plan or any payment to be made under the Plan to not be in compliance with any applicable requirement of Section 409A of the Code.

 

ARTICLE XII

 

 

Adoption

 

 

12.1 Execution.  To record the adoption of this Amendment and Restatement of the Plan by the Employers, the Employers have caused this instrument to be executed this 18 day of  June, 2008.

Attest:		MOVADO GROUP, INC.
/s/ Timothy F. Michno	By:	/s/ Efraim Grinberg
Secretary
		MOVADO RETAIL GROUP, INC.
	By	/s/ David R. Phalen
		President

NY717357.3 212281-10001

 

22

---

 

 

SCHEDULE A

 

Eligible Employees

 

Group I Employees:

 

Cohen, J.

 

Cote', R

 

Grinberg, E

 

Grinberg, G

 

Step, J

 

Group II Employees:

 

Addison, J

 

Alexander,R

 

Buonocore, R

 

Burns, J

 

Calmas, L

 

Chinich,A

 

Cohen, B

 

Cohen, S

 

Coopersmith,P

 

D'Elia, V

 

DeMarsilis,S

 

Diamond,S

 

Driansky, H

 

Friedman, K

 

Gietl, J

 

Grinberg, A

 

Halpin, J

 

Horn,P

 

James,C

 

Kantra, A

 

Karpovich. E

 

Leach, M

 

Massa, C

 

Massaro, J

 

Michno, T

 

Milgrom, M

 

Morelli, F

 

Nici,J

 

Novosel, J

 

Peterman,R

 

Phalen, D

 

Porfido, F

 

Rashotsky, E

 

Samitt, M

 

Schneider,G

 

Starry,K

 

Stuart,R

 

Torrente, M

 

Vuillet, R

 

Welch,R

 

Youkelson,J

 

Zanone,J

NY717357.3 212281-10001

 

 

---

 

EXHIBIT 31.1

CERTIFICATIONS

I, Efraim Grinberg, certify that:

1)	I have reviewed this quarterly report on Form 10-Q of Movado Group, Inc.;

2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5)	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 5, 2008

/s/ Efraim Grinberg

Efraim Grinberg

President and Chief Executive Officer

 

 

---

 

EXHIBIT 31.2

CERTIFICATIONS

I, Sallie DeMarsilis, certify that:

1)	I have reviewed this quarterly report on Form 10-Q of Movado Group, Inc.;

2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5)	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 5, 2008

/s/ Sallie DeMarsilis

Sallie DeMarsilis

Senior Vice President,

Chief Financial Officer and

Principal Accounting Officer

 

 

---

 

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Movado Group, Inc. (the “Company”) for the quarter ended July 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) the undersigned hereby certifies, in the capacity indicated below and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  September 5, 2008	/s/ Efraim Grinberg
	Efraim Grinberg President and Chief Executive Officer

 

 

---

 

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Movado Group, Inc. (the “Company”) for the quarter ended July 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) the undersigned hereby certifies, in the capacity indicated below and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  September 5, 2008	/s/  Sallie DeMarsilis
	Sallie DeMarsilis Senior Vice President, Chief Financial Officer and Principal Accounting Officer

 

 

---