EXHIBIT 10.2*

 

TERM SHEET

MGI Luxury Group - Hugo Boss

October 11, 2017

 

 

Subject to the approval of the Supervisory Board of HUGO BOSS AG this Term Sheet
sets out the principal terms for an amended and restated  License Agreement
between HUGO BOSS Trade Mark Management GmbH & Co. KG, Germany with its branch
HUGO BOSS Trade Mark Management GmbH & Co. KG, D-Metzingen, Branch CH-Zug,
Switzerland (“Hugo Boss”) and MGI Luxury Group S.A. The License Agreement will
continue to remain in full force and effect with the exception of the following
points which will become binding with the execution by the parties and approval
of the Supervisory Board of HUGO BOSS AG and will subsequently be reflected in
the amended and restated license agreement.

 

Licensor

HUGO BOSS Trade Mark Management GmbH & Co. KG

Dieselstrasse 12

D-72555 Metzingen

Germany

 

With its Branch

HUGO BOSS Trade Mark Management GmbH & Co KG

D- Metzingen Branch Ch-Zug

Baarerstr. 131

CH- 6300 Zug

 

Licensee

MGI Luxury Group S.A.

Bahnhofplatz 2B

CH-2502 Bienne

Switzerland

 

With a guarantee of the mother company Movado Group Inc.

 

Product(s)

Traditional Watches for Men & Women

Technology-Enabled Watches for Men & Women

(in particular Smart Watches, Software Enabled Watches and Connected Watches
e.g. Display Watches, Analog-Smart Watches, Hybrid Smartwatches, Trackers)

 

Term

This Agreement enters into force retroactive on January 1, 2018, and, unless
sooner terminated as herein provided, expires on December 31, 2023. Not later
than 18 months before the final expiration of the Agreement the contracting
parties shall enter into negotiations for the purpose of agreeing on an
extension of this Agreement. Such extension (if any) shall be effective only
upon the signature and delivery by each of the parties of a definitive written
instrument extending the term of this Agreement.

 

Amendment of clause 17.2:

HUGO BOSS may terminate the Agreement if for two successive calendar years
(beginning after calendar year 2017) only the minimum license fees are paid. In
this case the notice period for termination is two months before the end of the
half calendar year following the relevant time periods. For the avoidance of
doubt, all payment obligations of Licensee under this Agreement shall continue
during such half year period.

 

*   CONFIDENTIAL PORTIONS OF THIS EXHIBIT IDENTIFIED BY ASTERISK (*) HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”)
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (“1934
ACT”).

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Net Sales

“Net Sales” shall mean Gross Sales of Licensed Products, sold by Licensee or its
affiliates, at wholesale basis is arms-length transactions to independent
retailers or distributors, Licensee Retail Stores and Licensor Retail Stores,
after the deduction of:

(a) actual credits for returns that Licensee actually authorizes and receives,
not exceeding in any year an amount equal to * of Licensee’s total sales of
Licensed Products in such year; and

(b) actual, reasonable and normal trade discounts and allowances to independent
third parties (including Licensor Retail Stores but not Licensee’s
affiliates/Licensee Retails Stores), including but not limited to volume and
early payment discounts that are defined as credits to a customer after delivery
and that Licensee actually grants in writing to the extend auditable, not
exceeding in any year an amount equal to * of Licensee’s total sales of Licensed
Products in such year; and

(c) expressly excluding Marketing Spend and cooperative advertising.

 

Currency

CHF (except USD for additional Marketing Spendings by Movado Group Inc.)

 

Guaranteed Minimum Net Sales for initial term

Licensee shall pay to HUGO BOSS a minimum annual license fee each year equal to
* of the amount which is * of the target Net Sales for such year under the
Business Plan.

 

Below Guaranteed Minimum Annual Fee (Guaranteed Minimum Royalty (GMR and
Guaranteed Minimum Advertising (GMA)) schedule:

 

 

Year

Net Sales Projection (CHF)

Minimum

Net Sales

(CHF)

GMR

(CHF)

GMA

(CHF)

GMR+

GMA (CHF)

 

 

2018

*

*

*

*

*

 

 

2019

*

*

*

*

*

 

 

2020

*

*

*

*

*

 

 

2021

*

*

*

*

*

 

 

2022

*

*

*

*

*

 

 

2023

*

*

*

*

*

 

Product Royalty

All Licensed Products: * of Total Net Sales

 

Advertising Royalty:

All Licensed Products: * of Total Net Sales

 

Marketing Spend

* Marketing Contribution

 

New clause:

Licensee will propose a detail BTL yearly Investment plan, by investment
category and country, to Licensor for approval at the latest by October of
previous year, and will provide quarterly spend appraisals. The Marketing
Contribution will be auditable by Licensor.

 

*   CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT.

2

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Licensor Retail Stores

Licensee will pay Product Royalty and Ad Royalty and give a discount of * on
Products to be sold at Licensor’s owned Full-Priced retail stores. Parties will
use their best efforts to ensure that Product will have a permanent presence in
these stores with mutually agreed presentation standards.  

Licensee will grant Licensor an annual return right of * of the Products.

 

Licensor Outlet Stores

Licensee will pay Product Royalty and Ad Royalty grant a discount of * on
Products to be sold at Licensor’s Outlet Stores. Parties will use their best
efforts to ensure that Product will have a permanent presence in these stores
with mutually agreed presentation standards. There are no return rights from
Licensor’s Outlet Stores.  

 

Connected / Smart

Watch Data

 

Customer data (excluding anonymous data) is property of HUGO BOSS

Dedicated Team

Commitment to expand the current dedicated team in addition to the existing team
as shown in attached chart.

 

Additional Marketing Spendings

Movado Group Inc. will invest an additional * of marketing investment in 2018 to
kick off the growth which will be invested as follows:

 

 

For Boss:

*

 

 

 

*

 

 

 

*

 

 

 

*

 

 

For Hugo :

*

 

 

 

*

 

 

 

 

For the following years, until 2023, Movado Group Inc will continue to invest
additional funds at the same value of * yearly and a total additional investment
of * to ensure driving sales and brand messaging.

 

 

 

 

 

 

 

MGI Luxury Group S.A.

 

 

 

Place, Date       Paramus, NJ    11 October 2017

 

Printed Name    Mitchell Sussis, Attorney-in-Fact

 

Signature           /s/ Mitchell Sussis

 

 

Movado Group Inc.

 

Place, Date        Paramus, NJ    11 October 2017

 

Printed Name     Efraim Grinberg, Chairman and CEO

 

Signature            /s/ Efraim Grinberg

 

 

HUGO BOSS

 

Place, Date         Zug   13 October 2017

 

Printed Name     Andrea Giacomelli          Paul Daly

 

Signature            /s/ Andrea Giacomelli     /s/ Paul Daly

 

*   CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT.

3

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Personnel 100% dedicated to HUGO BOSS watches

 

*

*   CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
RULE 24b-2 OF THE 1934 ACT.

4