Coach Fifth Amendment


    EXHIBIT
      10.2 *

    


    AMENDMENT
      NUMBER 5

    TO
      LICENSE AGREEMENT

    


    This
      amendment dated as of January 1, 2007 (the “Fifth Amendment”) further amends the
      License Agreement dated December 9, 1996, as amended by Amendments Number 1
      through 4 thereto (referred to herein as “the Agreement”) by and between Coach,
      Inc. (“Licensor”) and Movado Group, Inc. (“MGI”) and Swissam Products Limited
      (“SPL”) as licensees (collectively, “Licensee”). 

    


    WHEREAS,
      the parties desire to make certain additional changes to the Agreement as set
      forth below: 

     

    NOW
      THEREFORE in consideration of the mutual covenants and the premises set forth
      herein, the Agreement is hereby amended as follows: 

    


    1.  Licensor
      Channels. Section
      1.2 shall be amended and restated as follows: 

    


    1.2
      “Licensor Channels” shall mean retail outlets controlled by Licensor, including,
      without limitation, Licensor’s catalog, Licensor’s stand alone retail stores,
      Licensor’s factory outlet stores, Licensor Special Accounts (as hereinafter
      defined), Licensor’s Internet website or any similar electronic vehicle operated
      by or on behalf of Licensor, Licensor’s facilities for sales to employees of
      Licensor and its affiliates, and Licensor’s retail stores that are situated in
      department stores located outside the United States.

    


    2.  Contract
      Year. Section
      1.5 shall be amended and restated as follows: 

    


    1.5
      “Contract Year” shall mean each twelve (12) month period commencing July 1 and
      ending June 30. Contract Years shall be identified by the year in which they
      end; for example, Contract Year 2008 shall refer to the period commencing July
      1, 2007 and ending June 30, 2008. Notwithstanding the foregoing, Contract Year
      2007 shall mean the six (6) month period ending June 30, 2007. 

    


    3.  Marketing
      Samples. The
      following language shall be added as Section 7.4 of the Agreement: 

    


    Prior
      to
      the launch of each Licensed Product, Licensee shall, at its expense, provide
      Licensor with at least one (1) fully functioning and at least five (5)
      non-functioning samples of such Licensed Product. In addition, as soon as
      practicable following such launch, Licensee shall, at its expense, provide
      Licensor with at least twenty five (25) fully functioning specimens of such
      Licensed Products, to be used by Licensor primarily as “celebrity dressing”
samples.

    


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      FROM SCHEDULE I AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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      AMENDED ("1934 ACT").

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.  Third-Party
      Manufacturers. The
      following language shall be added as Section 7.5 of the Agreement: 

    


    Licensee
      may employ third parties to manufacture Licensed Products, provided that
      Licensee shall retain full responsibility under this Agreement for all aspects
      of such manufacture; Licensee shall actively supervise the production of
      Licensed Products by such third parties and shall ensure that such third parties
      employ appropriate quality controls to comply with this Agreement. Licensee
      shall ensure compliance by such third parties with all relevant provisions
      of
      this Agreement (including, but not limited to, Section 20.7) and shall be liable
      hereunder for any breach of the terms of this Agreement by such parties, unless
      such breaches are remedied within thirty (30) days after Licensee’s receiving
      notice of such breach.

    


    


    5.  Transfer
      Price to Licensor. The
      first
      sentence of Section 8.2 shall be amended and restated as follows: 

    


    All
      Licensed Products for retail sale in Licensor Channels shall be sold to Licensor
      at a price *

    Licensed
      Products.

    


    6.  Internet
      Sales. The
      following language shall be added as Section 8.10 of the Agreement:


    


    8.10
      Licensee acknowledges Licensor’s policy prohibiting Licensee or any of its
      customers from selling or distributing Licensor’s products via the Internet.
      Except as otherwise prohibited by applicable law, Licensee shall comply with
      such policy, advise its customers that they must comply with such policy, and,
      if directed by Licensor in writing, promptly cease taking additional orders
      for
      the Licensed Products with any customers who do not comply with such
      policy.

    


    7.  Modification
      of Licensee Account Lists. The
      last
      sentence of Section 8.8 shall be amended and restated as follows: 

    


    Any
      such
      modifications shall be agreed to by the parties, in a writing signed by both
      parties from time to time.

    


    


    8.  Sales
      Targets. The
      following minimums pertaining to Licensee’s sales of Licensed Products to
      Non-Licensor Channels replace those currently contained in Section 10.1 (as
      last
      restated in the Third Amendment to the Agreement):

    


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      SEC
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    RULE
      24b-2 OF THE 1934 ACT.

    


    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                                               

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    The
      foregoing minimums are predicated on the assumption that the number of
      Non-Licensor channels shall not be significantly reduced.

    


    9.  Royalties.
      The
      following sentence shall be added at the end of Section 11.1: 

    


    For
      Contract Years 2007 through 2015, the base royalty rate applied to Licensee’s


    sales
      *
      .

    


    


    10.  Reporting
      Requirements. The
      following sentence shall be added at the end of Section 11.5: 

    


    In
      addition, Licensee shall provide Licensor with a monthly unaudited sales report
      and a monthly latest estimate (LE) report, each in the format provided in
      Schedule 1 to the Fifth Amendment to this Agreement.

    


    In
      addition, the following language shall be added as paragraph (a) to Section
      13.2
      of the Agreement, with the existing language to follow as paragraph
      (b):

    


    Licensee
      must submit to Licensor monthly reports, on or before the dates each month
      set
      forth in the calendar approved annually by Licensor and Licensee, containing
      royalty reports and estimated shipment volumes, as compared to the projections
      estimated in the Plan established for the Contract Year, and including
      comparisons of royalties and shipment volume information compared to the prior
      month. In addition to the above documents, Licensee will also provide Licensor
      with the following business reports on or before the end of the first week
      of
      each month: monthly performance information for * .

    


    


    11.  Annual
      Operating Plan. The
      first
      sentence of Section 12.2 shall be amended and restated as follows: 

    


    


    


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    No
      later
      than the end of the first week in January (for high/medium/low estimates) and
      the first week in February (for all other information) in each Contract Year
      or
      by such date as may otherwise be agreed to by Licensee and by Licensor, Licensee
      shall prepare and present to Licensor for feedback and input an annual operating
      plan setting forth the information described below (the “Plan”).

    


    In
      addition, the following language shall be added at the end of Section
      12.2:

    


    Licensor
      will provide templates that must be used by Licensee in the preparation of
      the
      Plan, which will among other things require Licensee to provide sales volume
      projections for the Licensed Products by design/style type, in units and
      dollars, estimating a “High”, “Medium” and “Low” volume of sales. Licensor’s
      templates for the Licensee Plan also may include, without limitation: (a) a
      description (including timing) of the types and numbers of designs/styles
      intended to be developed or manufactured (including any new products); (b)
      price
      marketing strategies, including wholesale and suggested retail pricing by
      design/style type and market; (c) assessment of customer base and customers;
      (d)
      distribution, including distribution outlets and breakdown by geographic area;
      (e) advertising and media plans, including the proposed schedule of any and
      all
      major advertising campaigns and the format for all advertising not already
      approved by Licensor, including breakdown by geographic area; (f) packaging,
      point of sale and trade exhibitions; (g) the results of market research relating
      to the Licensed Products and similar products, and market trends; (h)
      organizational structure; (i) competitive scenarios; (j) industry trends; and
      (k) any other information reasonably requested by Licensor.

    


    12.  Licensee’s
      Staffing/Infrastructure. Section
      12.3 shall be amended and restated as follows: 

    


    12.3
      (a)
      At all times during the term hereof, Licensee shall employ a complete sales
      and
      planning team dedicated to the Licensed Products business. Such team shall
      include, among other functions, a Coach-only President or Senior Vice President,
      a Coach-only Marketing Director and, by no later than July 1, 2008, a Director
      for the Merchandise Coordinator team described in paragraph “b” below. Such
      executives shall be hired and employed by Licensee, subject to Licensor’s prior
      written approval which shall not be unreasonably withheld, conditioned or
      delayed. In connection with Licensee’s annual Plan submission to Licensor,
      Licensee shall also present Licensor with an organization chart for the Licensed
      Products business, including the names and titles of each executive or manager
      dedicated or substantially involved in the Licensed Products
      business.

    


    (b)
      In
      addition, beginning in Contract Year 2008, Licensee shall cause its Merchandise
      Coordinator team of executives to clearly communicate Licensor’s brand standards
      to Licensee’s associates and train such associates to meet or exceed such brand
      standards. The executives on this team shall support and cover 


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    accounts
      generating at least 50% of the total point-of-sale volume generated through
      all
      worldwide Non-Licensor Channels.

    


    


    13.  Required
      Advertising Expenditures. In
      Section 12.4, the following language shall be added to the table showing
      Licensee’s required annual advertising expenditures in connection with the
      Licensed Products:

    


    For
      the
      twelve (12) month period   

    ended
      June 30, 2007 and for     *

    Contract
      Years 2008 and beyond

     

    In
      addition, Section 12.7 of the Agreement is hereby omitted.

    


    


    14.  Trade
      Shows. The
      following language shall be added as Section 12.11 of the Agreement:


    


    12.11
      Licensor shall design a booth or similar display area for use at trade shows
      and
      similar exhibitions in which Licensee, in consultation with Licensor, decides
      to
      participate. Licensor will consult with Licensee in the design of each such
      booth or display area. Licensee shall construct and shall bear all reasonable
      costs to construct each such booth or display area in accordance with Licensor’s
      design, and Licensor shall reasonably cooperate with Licensee in connection
      therewith and furnish Licensee with all necessary information relating to such
      design. Licensor shall inspect and give its final approval to the finished
      area
      prior to Licensee using it at any exhibition; provided that such approval shall
      not be unreasonably withheld, conditioned or delayed.

    


    


    15.  Agreement
      Term. Section
      14.1 shall be amended and restated as follows: 

    


    14.1
      This
      Agreement shall remain in full force and effect from the date this Agreement
      is
      entered into by the parties until June 30, 2015, unless earlier terminated
      as
      provided herein.

    


    16.  Except
      as
      set forth in this Fifth Amendment, the Agreement shall remain in full force
      and
      effect.

    


    17.  This
      Fifth Amendment may be signed by the parties duly executing counterpart
      originals.

    


    


    


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      PORTION OF THIS EXHIBIT OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT
      

    TO
      RULE
      24b-2 OF THE 1934 ACT.

    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


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

    


    COACH,
      INC.       

    


    


    By: /s/
      K.L.
      Nedorostek   

    Name:    

    Title:
         

     

    


    


    SWISSAM
      PRODUCTS LIMITED   MOVADO
      GROUP, INC.  

    


    


    By:
      /s/
      Timothy F. Michno    
      By: /s/
      Richard J. Coté

    Name:
      Timothy F. Michno        Name:
      R J
      Coté 

    Title:
      Director                       Title:
      Exec. VP/ COO  

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      1

    


    Form
      of Monthly Report for Unaudited Sales and Latest Estimates

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


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