MOVADO GROUP, INC. (NYSE:MOV) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On November 23, 2017, Movado Group, Inc., (the “Company”) entered into an Amended and Restated License Agreement (the “Amended License Agreement”) with Ferrari S.p.A. (the “Licensor”). The Amended License Agreement amends and restates the original license agreement between theLicensor and the Company dated March 22, 2012 (the “Original License Agreement”).
Material modifications to the Original License Agreement, as implemented by the Amended License Agreement, include the following:
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The term has been extended from December 31, 2017 until December 31, 2022. |
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Sales minima are specified for the extension term. |
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The royalty calculations have been revised. |
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The Company’s exclusive license has been extended to cover all Scuderia Ferrari-branded watches (the “Products”) with a suggested retail price up to €2,500 (versus €1,000 (€1,500 for limited editions) under the Original License Agreement). |
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New requirements for marketing and advertising expenditures have been established. |
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Commercial terms are specified for Product sales to Licensor’s affiliated and franchised stores and for the devotion of minimum floor space to the sale of the Products at Licensor-affiliated stores. |
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The provision in the Original License Agreement providing for an automatic five-year renewal in the event that total royalty payments each year exceed the applicable guaranteed minimum royalty payment amount has been replaced with a provision requiring the parties to negotiate a possible renewal in good faith. |
The other material provisions of the Amended License Agreement remain substantially unchanged from the Original License Agreement.
The Company intends to file the Amended License Agreement as an exhibit to its next periodic report and will seek confidential treatment of certain terms in the Amended License Agreement at such time.