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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): DECEMBER 12, 2005
MOVADO GROUP, INC.
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(Exact Name of Registrant as Specified in Charter)
NEW YORK
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(State or Other Jurisdiction of Incorporation)
1-16497 13-2595932
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(Commission File Number) (IRS Employer Identification Number)
650 FROM ROAD
PARAMUS, NEW JERSEY 07652
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (201) 267-8000
NOT APPLICABLE
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
BANK OF AMERICA LINE OF CREDIT AGREEMENT AND AMENDED AND RESTATED
PROMISSORY NOTE.
On December 12, 2005, Movado Group, Inc. (the "Company") executed a
line of credit letter agreement with Bank of America ("B of A") and an amended
and restated promissory note in the principal amount of up to $20,000,000
payable to B of A.
Pursuant to the line of credit letter agreement, B of A will
consider requests for short-term loans and documentary letters of credit for the
importation of merchandise inventory, the aggregate amount of which at any time
outstanding shall not exceed $20,000,000. The Company's obligations under the
agreement are guaranteed by its subsidiaries, Movado Retail Group, Inc. and
Movado LLC.
Pursuant to the amended and restated promissory note, the Company
promised to pay to B of A $20,000,000, or such lesser amount as may then be the
unpaid balance of all loans made by B of A to the Company thereunder, in
immediately available funds upon the maturity date of June 16, 2006. The Company
has the right to prepay all or part of any outstanding amounts under the
promissory note without penalty at any time prior to the maturity date. The
amended and restated promissory note bears interest at an annual rate equal to
either (i) a floating rate equal to the prime rate or (ii) such fixed rate as
may be agreed upon by the Company and B of A for an interest period which is
also then agreed upon. The amended and restated promissory note contains various
representations and warranties and events of default that are customary for
instruments of that type.
The line of credit letter agreement supersedes the line of credit
letter agreement from B of A to the Company dated June 19, 2005, as amended, and
the amended and restated promissory note supersedes the amended and restated
promissory note dated June 19, 2005.
JP MORGAN CHASE PROMISSORY NOTE.
On December 13, 2005, the Company executed a promissory note in the
principal amount of up to $37,000,000 payable to JPMorgan Chase Bank, N.A.
("Chase")
Pursuant to the promissory note, the Company promised to pay to
Chase $37,000,000, or such lesser amount as may then be the unpaid balance of
each loan made or letter of credit issued by Chase to the Company thereunder,
upon the maturity date of July 31, 2006; provided that during the period between
January 31, 2006 and the maturity date, the maximum principal amount of all
loans made by Chase to the Company, and outstanding under the promissory note,
shall not exceed $2,000,000. The Company has the right to prepay all or part of
any outstanding amounts under the promissory note without penalty at any time
prior to the maturity date. The promissory note bears interest at an annual rate
equal to either (i) a floating rate equal to the prime rate, (ii) a fixed rate
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equal to an adjusted London Interbank Offered Rate plus 0.625% or (iii) a fixed
rate equal to a rate of interest offered by Chase from time to time on any
single commercial borrowing. The promissory note contains various events of
default that are customary for instruments of that type. In addition, it is an
event of default for any security interest or other encumbrance to be created or
imposed on the Company's property, other than as permitted in the lien covenant
of the Credit Agreement, dated as of December 15, 2005, among the Company, the
lenders signatory thereto and Chase, as administrative agent, a copy of which
will be filed by the Company as an exhibit to its next periodic report or
registration statement under the Securities Act. Interested parties should read
those agreements in their entirety.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
See the discussion under Item 1.01 above, which discussion is
incorporated by reference herein.
ITEM 8.01. OTHER EVENTS.
On December 15, 2005, the Company issued a press release which is
attached hereto as Exhibit 99.1 and is incorporated by reference into this item.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
EXHIBIT
NUMBER DESCRIPTION
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99.1 Press release of Movado Group, Inc. dated
December 15, 2005.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report on Form 8-K to be signed on its
behalf by the undersigned, hereunto duly authorized.
Dated: December 16, 2005
MOVADO GROUP, INC.
By: /s/ Timothy Michno
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Name: Timothy Michno
Title: General Counsel
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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99.1 Press release of Movado Group, Inc. dated December 15, 2005.