TRANSITION AND RETIREMENT AGREEMENT

EXHIBIT 10.1

TRANSITION AND RETIREMENT AGREEMENT

This Transition and Retirement Agreement (hereafter this “ Agreement ”), dated as of December 19, 2008, is hereby entered into by and between Gedalio Grinberg (the “ Executive ”), and Movado Group, Inc., a New York corporation (together with its subsidiaries and affiliates, the “ Company ”).

WHEREAS, the Executive is currently employed by the Company as anexecutive officer and serves as the Chairman of the Board of Directors of the Company (the “ Board ”) and has informed the Company of his intention to retire from his employment immediately at the end of the current fiscal year (i.e., effective January 31, 2009);

WHEREAS, the Company wishes to continue to engage the Executive in his current position as Chairman of the Board until the effective date of his retirement and, thereafter, to provide for certain retirement benefits in consideration for the termination of that certain Death and Disability Benefit Plan Agreement made and entered into between the parties on September 23, 1994 (the “ Prior Agreement ”) and in further consideration of the restrictive covenants set forth herein;

THEREFORE, in exchange for the good and valuable consideration set forth herein, the adequacy of which is specifically acknowledged, the Executive and Company hereby agree as follows:

(a)        The Executive shall resign his employment with the Company and shall no longer serve as an executive officer of the Company, effective as of the end of business on January 31, 2009 (the “ Retirement Date ”). Notwithstanding, the Executive shall continue his service as a member of the Board after the Retirement Date through the end of his term as director.

(b)       From the date hereof until the Retirement Date (the “ Term ”), the Executive shall continue to perform his duties as Chairman of the Board in consideration for which the Company shall continue to pay him an annual base salary of $650,000 and provide all of the same benefits as it has heretofore provided and is currently providing to him. For so long as the Executive shall not be deemed an independent director under the rules of the New York Stock Exchange due to his employment with the Company, he shall not receive additional compensation for such service on the Board. For all other periods that the Executive serves on the Board, he may receive compensation in accordance with the Company’s director compensation policies as in effect from time to time.

(c)        This Agreement shall not affect (i) the retirement benefits previously earned by the Executive or to which the Executive is otherwise entitled (which benefits include, but are not limited to, all Company matching contributions with respect to fiscal year 2009 under the Company’s Savings and Investment Plan and Deferred Compensation Plan, whether paid prior to or after the Retirement Date), (ii) the Executive’s accrued benefits (including, but not limited to, earned salary, vacation, and reimbursement for expenses (“ Accrued Benefits ”), or (iii) the Executive’s outstanding equity, equity-based awards or other awards, which, to the extent applicable, shall continue to be governed by the Company’s plans.

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(d)        During the Term, the Executive shall continue to participate in the Company’s group medical, dental, vision, long-term disability and life insurance plans. Upon the Retirement Date, Executive shall have the right to elect to continue his participation in the Company’s medical, dental and vision plan under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

(a)        The Company shall immediately pay the Executive any unpaid Accrued Benefits as of the Retirement Date. In addition, beginning on the earlier of the Retirement Date or the date of the Executive’s death, the Company shall pay to Executive, or to Sonia Grinberg (hereinafter “ Surviving Spouse ”) if Executive predeceases her, $600,000 for the year ending January 31, 2010 and an annual payment of $500,000 thereafter (“ Retirement Income ”). The Retirement Income shall be paid as a 100% joint and survivor annuity in equal monthly payments for the life of the Executive and, if he predeceases the Surviving Spouse, for the lifetime of the Surviving Spouse. The Company shall have the right, in its sole and absolute discretion, to purchase an insurance policy or annuity for purposes of funding its payment obligation under this Section 2(a) and/or administering the related life expectancy risk. Each of the Company’s payment obligations hereunder, including, without limitation, its obligation in respect of the Retirement Income, shall be an unsecured, general obligation of the Company and the Executive and the Surviving Spouse shall be in the position of general unsecured creditors of the Company in respect of such obligations.

(b)       For the lifetime of the Executive, the Company shall continue to pay all premiums necessary to keep in force the life insurance policies listed on Schedule A annexed hereto, under which the Executive is the insured; provided, however, that all dividends, if any, paid under any such policies shall be applied towards the payment of such premiums.

3.          Termination of Prior Agreement. The parties agree that upon the effective date of this Agreement, the Prior Agreement shall automatically terminate and be of no further force or effect.

(a)         During the Term and for so long as the Company continues to pay the Retirement Income (the “ Non-Compete Period ”), the Executive shall not directly or indirectly in any capacity, without the prior written consent of the Company, which may be granted or withheld in the Company’s reasonable discretion, carry on or engage or participate in any business that competes in any manner whatsoever with any business of the Company, its affiliates or subsidiaries, in any individual or representative capacity, as a principal, for the Executive’s own account, jointly with others as a partner, joint venturer, or shareholder of any other firm, corporation, partnership, association, or other entity, or as a consultant, contractor, subcontractor or agent or employee of any person, firm, corporation, partnership, association or other entity; provided, however, that nothing herein shall limit the Executive’s right to own up to 5% of any of the debt or equity securities of any business organization that is then filing reports with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. The Executive acknowledges and agrees that this Section 4(a) is fair and reasonable and waives any defenses that he may in the future claim against enforcement hereof on the basis of public policy principles, excessive scope, duration or geographic coverage or on any other basis. If notwithstanding the foregoing the provisions of this Section should ever be deemed to exceed the scope, time or geographic limitations of applicable law regarding covenants not to compete, then such provisions shall be reformed to the maximum scope, time or geographic limitations, as the case may be, permitted by applicable laws. The Executive acknowledges that compliance with this Paragraph 4(a) is necessary to protect the business and good will of the Company and that a breach of any of these provisions will irreparably and continually damage the Company, for which money damages may not be adequate.

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(b)        During the Non-Compete Period, the Executive will not directly or indirectly, hire, recruit or otherwise solicit or induce any employee, consultant, director, wholesale customer, vendor, supplier, lessor or lessee, licensor or licensee of the Company to terminate its employment or business arrangement with the Company, or, for employees only, establish any service relationship with the Executive for any business purpose.

(c)        Executive shall maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for his benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets of or relating to the Company (or which the Company has a right to use), including, without limitation, confidential or proprietary information with respect to the Company’s operations, processes, systems, access codes or passwords, security protocols, databases, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, compensation paid to employees, other terms of employment or employee confident