Exhibit 10.1

 

SECOND AMENDED AND RESTATED

FOSSIL, INC. AND AFFILIATES
DEFERRED COMPENSATION PLAN

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

 

SECTION  I. DEFINITIONS

1

1.1.

Addendum

1

1.2.

Account

1

1.3.

Applicable Interest Rate

1

1.4.

Beneficiary

1

1.5.

Benefit

1

1.6.

Board

1

1.7.

Business Day

2

1.8.

Change in Control

2

1.9.

Code

3

1.10.

Committee

3

1.11.

Company

3

1.12.

Contributions

3

1.13.

Deferred Payments

3

1.14.

Deferred Payment Date

3

1.15.

Designated Affiliate

3

1.16.

Earnings

3

1.17.

Effective Date

3

1.18.

Election Form

3

1.19.

Eligible Employee

4

1.20.

Employee

4

1.21.

Employer

4

1.22.

Employer Account

4

1.23.

Employer Contribution

4

1.24.

Entry Date

4

1.25.

ERISA

4

1.26.

Grandfathered Benefit

4

1.27.

Installment Payment

4

1.28.

Investment Date

4

1.29.

Lump Sum

4

1.30.

Measurement Preference

4

1.31.

Participant

5

1.32.

Plan

5

1.33.

Plan Year

5

1.34.

Quarter

5

1.35.

Rules of General Application

5

1.36.

Salary

5

1.37.

Salary Deferral Account

5

1.38.

Salary Deferral Contributions

5

1.39.

Separation from Service

5

1.40.

Specified Employee

6

1.41.

Third-Party Record Keeper

6

1.42.

Trust

6

1.43.

Valuation Date

6

1.44.

Vest, Vesting or Vested

6

 

i

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

SECTION  II. ADMINISTRATION

7

2.1.

Appointment of Committee

7

2.2.

Employer Duties

7

2.3.

Authority of Committee

7

2.4.

Action by Committee

7

2.5.

Meetings of Committee

7

2.6.

Powers of Committee and Company

7

2.7.

Indemnification

8

2.8.

Bond and Expenses

8

2.9.

Reliance on Tables

8

 

 

 

SECTION  III. PARTICIPATION

8

 

 

SECTION  IV. CONTRIBUTIONS

8

4.1.

Election Dates

8

4.2.

Salary Deferral Contributions

9

4.3.

Crediting of Salary Deferral Contributions

9

4.4.

Employer Contributions

9

4.5.

Disposition of Contributions

9

 

 

 

SECTION  V. PARTICIPANT’S ACCOUNTS AND INVESTMENTS

10

5.1.

Establishment of Account

10

5.2.

Earnings Credited to Accounts

10

5.3.

Investment Direction

10

5.4.

Statements

10

 

 

 

SECTION  VI. VESTING

10

6.1.

Salary Deferral Account

10

6.2.

Employer Account

10

 

 

 

SECTION  VII. DISTRIBUTION OF BENEFIT

11

7.1.

Form and Timing of Distribution

11

7.2.

Special Rules for Specified Employees

11

7.3.

Election of Deferred Payments

11

7.4.

Installment Payments

12

7.5.

Change in Control

12

7.6.

Hardship Distribution

12

7.7.

Grandfathered Benefits

13

7.8.

Source of Distribution

13

 

 

 

SECTION  VIII. DESIGNATION OF BENEFICIARIES

13

8.1.

Designation by Participant

13

8.2.

Lack of Designation

14

 

 

 

SECTION  IX. AMENDMENT AND TERMINATION

14

 

ii

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

SECTION  X. CLAIMS PROVISIONS

15

10.1.

Presentation of Claim

15

10.2.

Notification of Decision

15

10.3.

Review of a Denied Claim

16

10.4.

Decision on Review

16

10.5.

Legal Action

16

 

 

 

SECTION  XI. GENERAL PROVISIONS

17

11.1.

No Assignment

17

11.2.

Incapacity

17

11.3.

Final Resolution of Disputes Relating to Plan

17

11.4.

Information Required

17

11.5.

Communications by, and Information from, Participant

17

11.6.

No Rights Implied

18

11.7.

Communications by Committee or Employer

18

11.8.

Interpretations and Adjustments

18

11.9.

No Liability for Good Faith Determinations

18

11.10.

No Employment Rights

18

11.11.

Withholding of Taxes

18

11.12.

Waivers

18

11.13.

Records

19

11.14.

Securities Laws

19

11.15.

Severability

19

11.16.

Captions and Gender

19

11.17.

Choice of Law

19

11.18.

Effective Date and Termination Date

19

 

iii

--------------------------------------------------------------------------------

 

SECOND AMENDED AND RESTATED
FOSSIL, INC. AND AFFILIATES
DEFERRED COMPENSATION PLAN

 

Effective January 1, 2005, Fossil, Inc. amended and restated the Fossil, Inc.
and Affiliates Deferred Compensation Plan (the “Predecessor Plan”) and
established the First Amended and Restated Fossil, Inc. and Affiliates Deferred
Compensation Plan to allow for a select group of highly compensated employees to
defer a portion of their compensation and possibly receive deferred employer
contributions.  Effective January 1, 2009, Fossil, Inc. amends and restates the
First Amended and Restated Fossil, Inc. and Affiliates Deferred Compensation
Plan and renames it the Second Amended and Restated Fossil, Inc. and Affiliates
Deferred Compensation Plan (the “Plan”) in the form provided herein in order to
comply with the Final Treasury Regulations of Section 409A of the Code.

 

For purposes of the Code, the Company intends this Plan to be an unfunded,
unsecured promise to pay on the part of each Employer.  For purposes of ERISA,
the Company intends this Plan to be an unfunded plan solely for the benefit of a
select group of management or highly compensated employees of the Employers for
the purpose of qualifying the Plan for the “top hat” plan exception under
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

 

SECTION  I.

DEFINITIONS

 

1.1.                              Addendum.  Addendum shall mean, collectively,
the pages which are attached to this Plan document, and incorporated by
reference, on which shall be reflected the information described in Section 4.4.

 

1.2.                              Account.  Account shall mean, collectively,
the Salary Deferral Account, and the Employer Account, maintained for each
Participant.

 

1.3.                              Applicable Interest Rate.  Applicable Interest
Rate shall mean, for each day during a period of reference (but computed without
compounding), a percentage equal to the product of (a), (b) and (c), where:
(a) is the sum of the one (1) year London Interbank Offered Rate (“LIBOR”) as
reported in the Wall Street Journal as of (i) the first Business Day, plus
(ii) the last Business Day, occurring during such period of reference, (b) is
fifty percent (50%), and (c) is a quotient of 1 divided by 360.

 

1.4.                              Beneficiary.  Beneficiary shall mean the
person or persons, entity or entities designated by the Participant and in
accordance with the requirements set forth in Section VIII as the beneficiary of
the Participant’s Benefit.

 

1.5.                              Benefit.  Benefit shall mean the Vested amount
credited to the Participant’s Account at the time of reference.

 

1.6.                              Board.  Board shall mean the Board of
Directors of the Company.

 

--------------------------------------------------------------------------------

 

1.7.                              Business Day.  Business Day shall mean, with
respect to each Measurement Preference, a day on which the exchange on which it
is traded is operating.

 

1.8.                              Change in Control.  Change in Control shall
mean the first to occur of the following events, which shall be deemed to have
occurred:

 

(a)                                   A change in ownership of the Company.  On
the date any “Person” (as defined in subparagraph (d) below) acquires ownership
of stock of the Company that, together with stock held by such Person,
constitutes more than fifty percent (50%) of the total fair market value or
total voting power of the stock of the Company; provided, however, that there
shall be no Change in Control and this subparagraph (a) shall not apply if such
acquiring Person is a corporation and a majority of the Board of Directors of
the acquiring Person immediately after the transaction consists of individuals
who constituted a majority of the Board immediately prior to the acquisition of
such fifty percent (50%) or more total fair market value or total voting power;
and provided, further, that if any Person is considered to own more than fifty
percent (50%) of the total fair market value or total voting power of the stock
of the Company, the acquisition of additional stock by the same Person is not
considered to be a Change in Control; or

 

(b)                                  A change in the effective control of the
Company.  On the date that either:

 

(I)                                     ANY PERSON ACQUIRES (OR HAS ACQUIRED
DURING THE TWELVE (12)-MONTH PERIOD ENDING ON THE DATE OF THE MOST RECENT
ACQUISITION BY SUCH PERSON) OWNERSHIP OF STOCK OF THE COMPANY POSSESSING
THIRTY-FIVE PERCENT (35%) OR MORE OF THE TOTAL VOTING POWER OF THE STOCK OF THE
COMPANY; OR

 

(II)                                  ON THE DATE A MAJORITY OF MEMBERS OF THE
BOARD IS REPLACED DURING ANY TWELVE (12)-MONTH PERIOD BY DIRECTORS WHOSE
APPOINTMENT OR ELECTION IS NOT ENDORSED BY A MAJORITY OF THE BOARD BEFORE THE
DATE OF THE APPOINTMENT OR ELECTION; PROVIDED, HOWEVER, THAT ANY SUCH DIRECTOR
SHALL NOT BE CONSIDERED TO BE ENDORSED BY THE BOARD IF HIS OR HER INITIAL
ASSUMPTION OF OFFICE OCCURS AS A RESULT OF AN ACTUAL OR THREATENED SOLICITATION
OF PROXIES OR CONSENTS BY OR ON BEHALF OF A PERSON OTHER THAN THE BOARD.

 

(c)                                   A change in the ownership of a substantial
portion of the Company’s assets.  On the date any Person acquires (or has
acquired during the twelve (12)-month period ending on the date of the most
recent acquisition by such Person) assets from the Company that have a total
gross fair market value equal to or more than forty percent (40%) of the total
gross fair market value of all of the assets of the Company immediately before
such acquisition or acquisitions.  For this purpose, gross fair market value
means the value of the assets of the Company or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets.  However, there is no Change in Control when there is such a sale or
transfer to (i) a shareholder of the Company (immediately before the asset
transfer) in exchange for or with respect to the Company’s then outstanding
stock; (ii) an entity, at least fifty percent (50%) of the total value or voting
power of the stock of which is owned, directly or indirectly, by the Company;
(iii) a Person that owns directly or indirectly, at least fifty percent (50%) of
the

 

2

--------------------------------------------------------------------------------

 

total value or voting power of the outstanding stock of the Company; or (iv) an
entity, at least fifty percent (50%) of the total value or voting power of the
stock of which is owned, directly or indirectly, by a Person that owns, directly
or indirectly, at least fifty percent (50%) of the total value or voting power
of the outstanding stock of the Company.

 

(d)                                  For purposes of subparagraphs (a),(b) and
(c) above, “Person” shall have the meaning given in Section 7701(a)(1) of the
Code.  Person shall include more than one Person acting as a group as defined by
the Final Treasury Regulations issued under Section 409A of the Code.

 

1.9.                              Code.  Code shall mean the Internal Revenue
Code of 1986, as amended.

 

1.10.                        Committee.  Committee shall mean those persons
designated to administer the Plan pursuant to Section II.

 

1.11.                        Company.  Company shall mean Fossil, Inc., a
Delaware corporation, and its successors and assigns.

 

1.12.                        Contributions.  Contributions shall mean,
collectively, the Salary Deferral Contributions, and the Employer Contributions,
with respect to each Participant, except that when it shall be appropriate to
refer to a particular Contribution, reference shall be to that Contribution.

 

1.13.                        Deferred Payments.  Deferred Payments shall mean
the payment of a Participant’s Benefits as described in Section 7.3.

 

1.14.                        Deferred Payment Date.  Deferred Payment Date shall
mean the date as of which a Participant’s Deferred Payments are made or
commenced.

 

1.15.                        Designated Affiliate.  Designated Affiliate shall
mean Fossil Partners, L.P., and each other entity of which fifty percent (50%)
or more of its value or, in the case of a corporation, of the total combined
voting power of all classes of stock, are held by the Company or another
subsidiary, whether or not such entity now exists or is hereafter organized or
acquired by the Company or another subsidiary, and which has been designated for
participation herein by the Committee.

 

1.16.                        Earnings.  Earnings shall mean the notated credits
or debits to a Participant’s Account based on changes in the value (including,
without limitation, unrealized appreciation or depreciation) of the
Participant’s Measurement Preferences, plus the amount, if any, attributable to
the crediting of the Applicable Interest Rate, all determined in accordance with
Rules of General Application.

 

1.17.                        Effective Date.  Effective Date shall mean
December 30, 1998.  The Effective Date of the Second Amended and Restated Plan
shall be January 1, 2009.

 

1.18.                        Election Form.  Election Form shall mean an
election in such form as specified by the Committee by which the Participant may
specify his: (a) Salary Deferral Contribution for

 

3

--------------------------------------------------------------------------------

 

the Plan Year, (b) Measurement Preferences, (c) form and timing of distribution
of his Benefit, and (d) such other matters as shall be determined by the
Committee at the time of reference.

 

1.19.                        Eligible Employee.  Eligible Employee shall mean an
Employee of an Employer who is: (a) a member of a select group of management or
a highly compensated Employee and after December 31, 2004, is at the level of
vice president or above, and (b) designated by the Committee as eligible to
participate in the Plan.

 

1.20.                        Employee.  Employee shall mean any person on the
U.S. payroll of the Employer.

 

1.21.                        Employer.  Employer shall mean, collectively, the
Company and each Designated Affiliate.

 

1.22.                        Employer Account.  Employer Account shall mean the
account maintained for each Participant who has received an Employer
Contribution, and which will reflect the amount of such Employer Contribution
and appropriate adjustments as provided herein.

 

1.23.                        Employer Contribution.  Employer Contribution shall
mean the amount, if any, credited under the Plan by an Employer to an Eligible
Participant, and evidenced by an Addendum.

 

1.24.                        Entry Date.  Entry Date shall mean January 1st for
each Plan Year; except that for any Employee who first became an Eligible
Employee on or between January 1st and June 30th  of a Plan Year, the Entry Date
shall mean  July 1st of that same Plan Year.

 

1.25.                        ERISA.  ERISA shall mean the Employee Retirement
Income Security Act of 1974, as amended.

 

1.26.                        Grandfathered Benefit.  Grandfathered Benefit shall
mean the Benefit earned and Vested and credited to the Account of any
Participant as of December 31, 2004, plus any Earning credited to the Account on
and after January 1, 2005 relating to the such Benefit.

 

1.27.                        Installment Payment.  Installment Payment shall
mean each of a series of annual distributions, in cash, of the Participant’s
Account balance.  A series of Installment Payments will be treated as a single
payment for purposes of Section 409A of the Code.

 

1.28.                        Investment Date.  Investment Date shall mean the
first Business Day in each Quarter, except that it also shall mean an Entry Date
(except that if the Entry Date is not a Business Day, then the first Business
Day following an Entry Date) with respect to each Eligible Employee who first
becomes a Participant on such Entry Date.

 

1.29.                        Lump Sum.  Lump Sum shall mean a single
distribution, in cash, of a Participant’s Benefit.

 

1.30.                        Measurement Preference.  Measurement Preference
shall mean the preference described in Section 5.3.

 

4

--------------------------------------------------------------------------------

 

1.31.                        Participant.  Participant shall mean an Eligible
Employee who participates in the Plan pursuant to Section 3.

 

1.32.                        Plan.  Plan shall mean the Second Amended and
Restated Fossil, Inc. and Affiliates Deferred Compensation Plan, as set forth in
this document and subsequent amendments.

 

1.33.                        Plan Year.  Plan Year shall mean calendar year.

 

1.34.                        Quarter.  Quarter shall mean calendar quarter.

 

1.35.                        Rules of General Application.  Rules of General
Application shall mean those rules promulgated by the Committee, in its sole
discretion, from time to time with respect to the matter of reference, but which
will be applied in a consistent manner to similarly situated Participants.

 

1.36.                        Salary.  Salary shall mean Participant’s base
salary determined as of December 31 preceding the effective date of the election
to defer Salary.  Salary shall include any amounts deferred under Sections 125
or 401(k) of the Code, plus any amounts under this Plan, but excludes bonuses,
expense reimbursements and fringe benefits.

 

1.37.                        Salary Deferral Account.  Salary Deferral Account
shall mean the amount credited under the Plan as a result of the Participant’s
Salary Deferral Contributions, and appropriate adjustments as provided herein.

 

1.38.                        Salary Deferral Contributions.  Salary Deferral
Contributions shall mean the amounts described in Section 4.2.

 

1.39.                        Separation from Service.  Separation from Service
means a termination of services provided by a Participant to an Employer,
whether voluntarily or involuntarily, as determined by the Committee in
accordance with Treas. Reg. §1.409A-1(h).  In determining whether a Participant
has experienced a Separation from Service, the following provisions shall apply:

 

(a)                                   For a Participant who provides services to
an Employer as an Employee, a Separation from Service shall occur when such
Participant has experienced a termination of employment with such Employer.  A
Participant shall be considered to have experienced a termination of employment
when the facts and circumstances indicate that the Participant and an Employer
reasonably anticipate that either (i) no further services will be performed for
such Employer after a certain date, or (ii) that the level of bona fide services
the Participant will perform for such Employer after such date (whether as an
Employee or as an independent contractor) will permanently decrease to no more
than twenty percent (20%) of the average level of bona fide services performed
by such Participant (whether as an Employee or an independent contractor) over
the immediately preceding thirty-six (36)-month period (or the full period of
services to such Employer if the Participant has been providing services to such
Employer less than thirty-six (36) months).

 

5

--------------------------------------------------------------------------------

 

(b)                                  If a Participant is on military leave, sick
leave, or other bona fide leave of absence, the employment relationship between
the Participant and an Employer shall be treated as continuing intact, provided
that the period of such leave does not exceed six (6) months; or if longer, so
long as the Participant retains a right to reemployment with such Employer under
an applicable statute or by contract.  If the period of a military leave, sick
leave, or other bona fide leave of absence exceeds six (6) months and the
Participant does not retain a right to reemployment under an applicable statute
or by contract, the employment relationship shall be considered to be terminated
for purposes of the Plan as of the first day immediately following the end of
such six (6)-month period.  In applying the provisions of this paragraph, a
leave of absence shall be considered a bona fide leave of absence only if there
is a reasonable expectation that the Participant will return to perform services
for an Employer.

 

1.40.                        Specified Employee.  Specified Employee means any
Participant who is determined to be a “key employee” (as defined under
Section 416(i) of the Code without regard to paragraph (5) thereof) for the
applicable period, as determined annually by the Committee in accordance with
Treas. Reg. §1.409A-1(i).  In determining whether a Participant is a Specified
Employee, the following provisions shall apply:

 

(a)                                   Identification of the individuals who fall
within the definition of “key employee” under Section 416(i) of the Code
(without regard to paragraph (5) thereof) shall be based upon the twelve
(12)-month period ending on each December 31st (referred to below as the
“identification date”).  In applying the applicable provisions of
Section 416(i) of the Code to identify such individuals, “compensation” shall be
determined in accordance with Treas. Reg. §1.415(c)-2(a) without regard to
(i) any safe harbor provided in Treas. Reg. §1.415(c)-2(d), (ii) any of the
special timing rules provided in Treas. Reg. §1.415(c)-2(e), and (iii) any of
the special rules provided in Treas. Reg. §1.415(c)-2(g); and

 

(b)                                  Each Participant who is a “key employee” in
accordance with part (a) of this Section shall be treated as a Specified
Employee for purposes of this Plan if such Participant experiences a Separation
from Service during the twelve (12)-month period that begins on the April 1st
following the applicable identification date.

 

1.41.                        Third-Party Record Keeper.  Third-Party Record
Keeper shall mean the person or entity selected by the Committee to maintain the
records necessary to the administration of the Plan.

 

1.42.                        Trust.  Trust shall mean a trust which
substantially conforms to the model rabbi trust provided in Section 5 of the
Internal Revenue Service’s Revenue Procedure 92-64, 1992-2 C.B. 422, that may be
established between the Company and the trustee(s) named in the Trust.

 

1.43.                        Valuation Date.  Valuation Date shall mean the last
Business Day of each Quarter.

 

1.44.                        Vest, Vesting or Vested.  Vest, Vesting or Vested,
shall mean the portion of a Participant’s Employer Account which is
nonforfeitable at the time of reference.

 

6

--------------------------------------------------------------------------------

 

SECTION  II.

ADMINISTRATION

 

2.1.                              Appointment of Committee.  The Board shall
appoint the Committee comprised of one or more persons who may or may not be
Employees.  The Board may change Committee membership at any time without cause,
and a member may resign by providing written notice to the Company.  Any vacancy
in the membership of the Committee may be filled by the Board.

 

2.2.                              Employer Duties.  An Employer shall, upon
request or as may be specifically required under the Plan, furnish or cause to
be furnished all of the information or documentation in its possession or
control that is necessary or required by the Committee to perform its duties and
functions under the Plan.

 

2.3.                              Authority of Committee.  The Committee shall
have the exclusive authority and responsibility for administering the Plan in
accordance with its terms.  All exercises of authority by the Committee under
this Plan shall be final, conclusive and binding.

 

2.4.                              Action by Committee.  The Committee may elect
a chairman who shall be a member of the Committee and a secretary who may, but
need not, be a member of the Committee.  Any and all acts and decisions of the
Committee shall be by at least a majority of the then members, but the Committee
may delegate to any one or more of its members the authority to sign notices or
other documents on its behalf or to perform ministerial acts for it, in which
event any person may accept such notice, document or act without questioning its
having been authorized by the Committee.

 

2.5.                              Meetings of Committee.  The Committee shall
hold meetings upon such notice, at such place or places, and at such time or
times as it may from time to time determine; provided, however, any decisions
made or action taken pursuant to written approval of a majority of the then
members shall be sufficient; and provided, further, and without limitation, that
the Committee may take actions which have retroactive effect.

 

2.6.                              Powers of Committee and Company.  The
Committee shall have all powers and discretion as may be necessary to discharge
its duties and responsibilities under this Plan, including, without limitation,
the power, exercisable in its sole discretion: (a) to interpret or construe the
Plan, (b) to make rules and regulations for the administration of the Plan,
(c) to determine all questions of eligibility, status and other rights of
Participants, beneficiaries and other persons, (d) to confirm or reject each
Participants selection of Measurement Preferences, and (e) to resolve any
dispute which may arise under this Plan involving Participants or
beneficiaries.  The Committee may engage agents to assist it and may engage
legal counsel, who may be counsel for the Company.

 

No member of the Committee shall vote or act upon any matter which relates
exclusively to such member’s own rights or benefits under this Plan.  If all
members of the Committee shall be disqualified with regard to one or more
matters, the President of the Company shall appoint one or more qualifying
persons to be the Committee only with regard to such specific matters.

 

7

--------------------------------------------------------------------------------

 

2.7.                              Indemnification.  Without limitation,
including Section 11.9, the members of the Committee shall be indemnified by the
Company against any and all liabilities arising by reason of any act, or failure
to act, pursuant to the provisions of the Plan, including expenses reasonably
incurred in the defense of any claim relating to the Plan, even if the same is
judicially determined to be due to such member’s negligence, but not when the
same is judicially determined to be due to the gross negligence or willful
misconduct of such member.

 

2.8.                              Bond and Expenses.  The Committee shall serve
without bond unless state or federal statutes require otherwise, in which event
the Company shall pay the premium.  The expenses of the Committee shall be paid
by the Company.  Such expenses shall include all expenses incident to the
functioning of the Committee, including, without limitation, litigation costs,
fees of accountants, counsel and other specialists and other costs of
administering the Plan.

 

2.9.                              Reliance on Tables.  In administering the
Plan, the Committee shall be entitled to the extent permitted by law to rely
conclusively on all tables, valuations, certificates, opinions and reports which
are furnished by accountants, legal counsel or other experts employed or engaged
by the Committee.

 

SECTION  III.

PARTICIPATION

 

An Eligible Employee will first become a Participant by filing an Election
Form prior to his Entry Date in accordance with Section 4.1(a) and will remain a
Participant until he receives the payment of his entire Benefit.  Being
designated as an Eligible Employee for one Plan Year does not entitle such
Employee to continued status as an Eligible Employee for subsequent Plan Years. 
A designation of an Employee as an Eligible Employee for any Plan Year shall be
made by the Committee in advance of such Plan Year, except that for the first
Plan Year such designation shall be made before January 1 or July 1, as
applicable.  Following removal of the status of Eligible Employee for any
Participant, such Participant shall not be able to elect Salary Deferral
Contributions for any subsequent Plan Year in which he is not an Eligible
Employee.

 

SECTION  IV.

CONTRIBUTIONS

 

4.1.                              Election Dates.

 

(a)                                 First Plan Year.  An Employee who first
becomes eligible to participate in the Plan on or after the beginning of a Plan
Year, as determined in accordance with Treas. Reg. §1.409A-2(a)(7)(ii) and the
“plan aggregation” rules provided in Treas. Reg. §1.409A-1(c)(2), shall file an
Election Form which shall include, among other things, any election to defer the
portion of his Salary attributable to services to be performed after such
election and elections as to the timing and form of payment of such Salary
Deferral Contributions and any Employer Contributions for such Plan Year,
provided that a Participant whose Entry Date is January 1st must submit an
Election Form no later than the December 31st immediately preceding such Entry
Date and a Participant whose Entry

 

8

--------------------------------------------------------------------------------

 

Date is July 1, must submit an Election Form no later than the June 30th
immediately preceding such Entry Date.  Any deferral election made in accordance
with this Section 4.1(a) shall become irrevocable as of the applicable Entry
Date that the Employee first becomes eligible to participate in the Plan.

 

(b)                                Subsequent Plan Years.    An Election
Form shall continue to apply to each subsequent Plan Year until a Participant
files a new Election Form before the December 31 preceding the Plan Year for
which the election is made.  For each succeeding Plan Year in which the
Participant continues to be an Eligible Employee, and the Participant wants to
change his elections for such succeeding Plan Year, an irrevocable deferral
election for the Salary Deferral Contributions and the timing and form of
payment of any such Salary Deferral Contributions and Employer Contributions
attributable to that Plan Year shall be made by timely delivering a new Election
Form to the Committee, in accordance with the Rules of General Application,
before the December 31st preceding the Plan Year for which the election is made.

 

4.2.                              Salary Deferral Contributions.  An Employee
who is an Eligible Employee on his Entry Date with respect to a Plan Year may
elect to defer from Salary any amount which is not less than Five Thousand
Dollars ($5,000) (prorated based on the remaining portion of the Plan Year if
the Participant’s Entry Date is not January 1st) and not more than fifty percent
(50%) of his Salary payable during the portion of the Plan Year following such
Entry Date, by filing an Election Form with the Committee prior to such Entry
Date.  Unless otherwise determined by the Committee, the election to defer
Salary must be designated as a fixed dollar amount.  If an Eligible Employee has
never timely filed an Election Form deferring a portion of his Salary, then such
Eligible Employee shall not have any portion of his Salary deferred. 
Notwithstanding any provision hereof to the contrary, the amount of a
Participant’s Salary Deferral Contributions will be deducted from a
Participant’s Salary on each payroll date during the Plan Year of reference in
an amount equal to the total Salary Deferral Contribution divided by the number
of payroll dates during the Plan Year of reference following the Entry Date of
reference.

 

4.3.                              Crediting of Salary Deferral Contributions. 
The portion of the Salary Deferral Contribution amount which will be deducted
from Salary shall be credited to the Participant’s Salary Deferral Account as
soon as administratively practicable, but no later than thirty (30) days, after
the payroll period from which such salary was deferred.

 

4.4.                              Employer Contributions.  At any time on or
after the Effective Date, in addition to the amount described in Section 4.2, an
Employer may credit a Participant’s Employer Account with such amount as it
shall determine in its sole discretion.  The name of the Participant, the amount
to be credited, the date as of which it is to be credited, the rate of Vesting,
and such other matters as are required to be set forth (as determined by the
Employer in its sole discretion), shall be set forth on the Addendum; provided
that one hundred percent (100%) of such amounts contributed for a Participant,
and related Earnings, shall be forfeited on such Participant’s Separation from
Service for reasons other than a Change in Control unless otherwise expressly
provided in an Addendum expressly relating to such Employer Contribution.

 

4.5.                              Disposition of Contributions.  At the
discretion of the Plan Administrator, Contributions may be delivered to the
Trust or the funds may be retained by the Employer.

 

9

--------------------------------------------------------------------------------

 

SECTION  V.

PARTICIPANT’S ACCOUNTS AND INVESTMENTS

 

5.1.                              Establishment of Account.  The Committee shall
establish separate Accounts for each Participant, to which shall be credited or
debited the Participant’s share of Contributions and Earnings, and to which
shall be debited the Account’s share of expenses and distributions. 
Grandfathered Benefits shall be accounted for separately within the
Participant’s Account.

 

5.2.                              Earnings Credited to Accounts.  Earnings on
amounts credited to an Account shall be credited or debited to such Account on
each Business Day based on the value of the Account’s Measurement Preferences on
such Business Day, all in the manner determined by the Committee in accordance
with Rules of General Application.

 

5.3.                              Investment Direction.  Effective as of each
Investment Date, in accordance with Rules of General Application, each
Participant may select investments (“Measurement Preferences”) from among the
different investment alternatives which are made available by the Committee, for
existing balances in his Account and for future Contributions, such selection of
Measurement Preferences to be made in increments of five percent (5%), and such
percentages to apply equally to the amount credited to the Participant’s Account
on the immediately preceding Valuation Date, and to Contributions credited to
such Account subsequent to such Valuation Date.  No actual investments shall be
made by Participants.  The Measurement Preferences, and the Applicable Interest
Rate, are only for the purpose of determining the Employer’s payment obligation
under the Plan and such Measurement Preferences do not control any actual
investments.

 

5.4.                              Statements.  In accordance with Rules of
General Application, but not less frequently than one statement for each Plan
Year, each Participant shall have a statement made available setting forth:
(a) the amount in his Account, (b) the amount of Contributions, separately
showing the Salary Deferral Contributions and Employer Contributions, credited
to his Account since the previous statement, (c) the Earnings credited or
debited to his Account since the previous statement, (d) any debited charges to,
or distributions from, his Account since the previous statement, and (e) any
other information or disclosures determined appropriate by the Committee.

 

SECTION  VI.

VESTING

 

6.1.                              Salary Deferral Account.  Participant shall
always be one hundred percent (100%) Vested in the amounts credited to his
Salary Deferral Account.

 

6.2.                              Employer Account.  A Participant shall Vest in
the amount credited to his Employer Account in accordance with the Vesting
Schedule set forth on the Addendum which evidences such Employer Contribution,
and otherwise shall be zero percent (0%) Vested.  Notwithstanding any other
provision in this Plan, a Participant’s Employer Account will become one hundred
percent (100%) Vested upon the first occurrence of a Change in Control, or

 

10

--------------------------------------------------------------------------------

 

Separation from Service for reason of death, disability, or normal retirement at
or after attaining age sixty-five (65).

 

SECTION  VII.

DISTRIBUTION OF BENEFIT

 

7.1.                              Form and Timing of Distribution.  Unless the
Participant is entitled to a Deferred Payment or is a Specified Employee, upon a
Participant’s Separation from Service he shall receive a Lump Sum distribution
within sixty (60) days after the Valuation Date next following his Separation
from Service.  The amount of such Lump Sum distribution shall be equal to his
Benefit determined as of the Valuation Date preceding the date of distribution.

 

7.2.                              Special Rules for Specified Employees. 
Notwithstanding anything to the contrary, distributions of Grandfathered
Benefits to Specified Employees shall be made in the form and timing set forth
in Section 7.1 above.

 

(a)                               To the extent (i) any payments to which the
Participant becomes entitled under this Plan in connection with the
Participant’s Separation from Service constitute deferred compensation subject
to Section 409A of the Code, and (ii) the Participant is deemed at the time of
such Separation from Service to be a Specified Employee, then such payment or
payments shall not be made or commence until the earliest of (x) the expiration
of the six (6) month period measured from the date of the Participant’s
Separation from Service with an Employer; and (y) the date of the Participant’s
death following such Separation from Service.  Upon the expiration of the
applicable deferral period, any payments which would have otherwise been made
during that period (whether in a single sum or in installments) in the absence
of this Section 7.2 shall be paid to the Participant or the Participant’s
beneficiary in one Lump Sum.

 

(b)                              Each Participant will be responsible for
discussing the tax consequences of this Plan and the transactions contemplated
hereby with his or her own tax advisors.  The Company, in its sole discretion,
may request that each Participant represent to the Company that he or she is
relying solely on his or her tax advisors and not on any statements or
representations of an Employer or any of their agents and acknowledge that he or
she understands that the Participant (and not an Employer) shall be responsible
for the Participant’s own tax liability that may arise as a result of this Plan
or the transactions contemplated hereby, except as otherwise specifically
provided in this Plan.

 

7.3.                              Election of Deferred Payments.  At the time a
Participant completes an Election Form with respect to a Plan Year, the
Participant shall elect the timing and form of payment of Benefits (the “Initial
Deferred Payment Date”) in the event the Participant is entitled to a Deferred
Payment upon his Separation from Service.  A Participant shall be entitled to a
Deferred Payment if his Separation from Service is not by reason of his death,
and if on his date of Separation from Service: (a) he has attained the age of
fifty-five (55) and completed at least five (5) Years of Service, and (b) has
filed an Election Form on which he has (i) selected a Deferred Payment Date, and
(ii) selected a form of payment.  A Participant’s Deferred Payments

 

11

--------------------------------------------------------------------------------

 

may be made or commenced at any time, after age fifty-five (55) and prior to the
later of age sixty-five (65) or his Separation from Service, and may be paid
either in a Lump Sum or in five, ten, or fifteen Installment Payments, as
elected by the Participant on his Election Form.  A Participant must submit his
Election Form prior to the Plan Year in which the Salary Deferral Contributions
and/or Employer Contributions occur in accordance with Section 4.1(b), unless
such Participant became a Participant in such Plan Year and filed an Election
Form in accordance with Section 4.1(a).

 

A Participant may make a subsequent election to change the Initial Deferred
Payment Date or form of a payment provided the following requirements are met:

 

(a)                               The Deferred Payment with respect to which the
subsequent election is made must be deferred for a period of not less than five
(5) years from the Initial Deferred Payment Date (in the case of Installment
Payments, five years from the date the first Installment Payment was scheduled
to be paid); and

 

(b)                              The subsequent election must be made not less
than twelve (12) months before the Deferred Payment Date (in the case of
Installment Payments, twelve (12) months before the date the first Installment
Payment was scheduled to be paid.

 

7.4.                              Installment Payments.  If the Participant
elects a Deferred Payment in the form of  Installment Payments, each installment
shall be equal to the product of: (i) his Benefit on the Valuation Date next
preceding the date of payment, multiplied by (ii) a fraction, the numerator of
which is one (1), and the denominator of which is the total number of
installments originally elected less the number of installments previously paid.

 

7.5.                              Change in Control.  Notwithstanding any other
provision to the contrary, upon a Change in Control, all Benefits hereunder
(including, without limitation, Benefits subject to Deferred Payment elections
or which are being paid in Installment Payments), shall be distributed to
Participants in a Lump Sum as soon as reasonably possible, but not more than
thirty (30) days, after such Change in Control.

 

7.6.                              Hardship Distribution.  A Participant may not
withdraw funds credited to the Participant’s Account, unless the Participant has
an Unforeseeable Emergency.  An “Unforeseeable Emergency” is a severe financial
hardship to the Participant resulting from (a) an illness or accident of the
Participant, or the Participant’s spouse, Beneficiary, or dependent (as defined
in Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2), and
(d)(1)(B) of the Code), (b) loss of the Participant’s property due to casualty,
or (c) other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the Participant’s control, all as determined by the
Committee based on the relevant facts and circumstances and as provided for in
Treas. Reg. §1.409A-3(i)(3) or any successor provision.

 

Whether a Participant is faced with an Unforeseeable Emergency under the Plan is
to be determined based on the relevant facts and circumstances of each case, but
in any case, a withdrawal on account of Unforeseeable Emergency may not be made
to the extent that such emergency is or may be relieved (a) through
reimbursement or compensation from insurance or

 

12

--------------------------------------------------------------------------------

 

otherwise, (b) by liquidation of the Participant’s assets, to the extent the
liquidation of such assets would not cause severe financial hardship, or (c) by
cessation of deferrals under the Plan.

 

Withdrawal because of an Unforeseeable Emergency must be limited to the amount
reasonably necessary to satisfy the emergency need (which may include amounts
necessary to pay any federal, state, local, or foreign income taxes or penalties
reasonably anticipated to result from the distribution), as determined by the
Committee, in its sole discretion.  The Participant must apply in writing for a
payment upon an “Unforeseeable Emergency,” using the form prescribed by the
Committee.  The Committee retains the sole and absolute discretion to grant or
deny a payment upon an Unforeseeable Emergency.  In the event of approval of a
payment upon an Unforeseeable Emergency, the Participant’s outstanding deferral
elections under the Plan shall be cancelled.

 

The Participant shall receive a Lump Sum cash payment of the amount approved by
the Committee within ninety (90) days of approval, and such amount shall be
deducted from his Account in accordance with Rules of General Application.  If a
Participant receives a hardship distribution he shall be ineligible to elect
Salary Deferral Contributions for the following Plan Year.

 

7.7.                              Grandfathered Benefits.  Prior to a
Participant’s termination of employment with an Employer, in accordance with
Rules of General Application, a Participant may elect to receive a distribution
of all (subject to the forfeiture), or a portion of his Grandfathered Benefit. 
If a Participant elects to receive such a distribution, he shall permanently and
irrevocably forfeit from his Grandfathered Benefit an amount equal to twenty
percent (20%) of the amount so distributed and such Participant shall be
ineligible to elect Salary Deferral Contributions for the following Plan Year. 
The amount forfeited shall inure to the benefit of the Employer in the manner
determined by the Committee, and such amount shall be deducted from his
Measurement Preferences in accordance with Rules of General Application.  Upon
termination of employment with an Employer for any reason, Grandfathered
Benefits shall be distributable in accordance with the provisions of the
Predecessor Plan.

 

7.8.                              Source of Distribution.  All payments of
Benefits shall be in cash from the funds in the Trust or, in the discretion or
the Employer, from the Employer’s funds held outside of the Trust.  Nothing
contained in the Plan, nor any action taken pursuant to the provisions of the
Plan, shall create or be construed to create a fiduciary relationship between
the Company, an Employer, Participant, Beneficiary, or Employee or other
person.  To the extent that any person acquires a right to be paid Benefits,
such right shall be no greater than the right of an unsecured general creditor
of his Employer.

 

SECTION  VIII.

DESIGNATION OF BENEFICIARIES

 

8.1.                              Designation by Participant.  Participant’s
written designation of one or more persons or entities as his Beneficiary shall
operate to designate the Participant’s Beneficiary under this Plan.  The
Participant shall file with the Committee a copy of his Beneficiary designation
under the Plan.  The last such designation received by the Committee shall be

 

13

--------------------------------------------------------------------------------

 

controlling, and no designation, or change or revocation of a designation shall
be effective unless received by the Committee prior to the Participant’s death,
and in no event shall it be effective as of a date prior to such receipt.

 

8.2.                              Lack of Designation.  If no Beneficiary
designation is in effect at the time of Participant’s death, if no designated
Beneficiary survives the Participant or if the otherwise applicable Beneficiary
designation conflicts with applicable law, the Participant’s estate shall be the
Beneficiary.  The Committee may direct the Employer or Trustee to retain any
unpaid Benefits, without crediting for either Measurement Preferences or
Applicable Interest Rate, until all rights to the unpaid Benefits are
determined.  Alternatively, the Committee may direct the Employer or Trustee to
pay the Benefits  into any court of appropriate jurisdiction.  Any such payment
shall completely discharge each Employer, the Trustee, and the Committee from
any liability under the Plan.

 

SECTION  IX.

AMENDMENT AND TERMINATION

 

The Plan, without cause and without prior notice, may be terminated, in whole or
in part, by the Board, in which case the Employer Account of any affected
Participant shall become one hundred percent (100%) Vested on such date of
termination.  In the event of a Plan termination, no new deferral elections
shall be permitted for the affected Participants and such Participants shall no
longer be eligible to receive contributions to his or her Employer Account. 
However, the Participants’ Accounts shall continue to be credited with amounts
attributable to a deferral election that was in effect prior to the Plan
termination to the extent deemed necessary to comply with Section 409A of the
Code and related Treasury Regulations.  The Measurement Preferences available to
Participants following the termination of the Plan shall be comparable in number
and type to those Measurement Preferences available to Participants under the
Plan prior to termination.  In addition, following a Plan termination, amounts
in Participant Accounts shall remain in the Plan and shall not be distributed
until such amounts become eligible for distribution in accordance with the
applicable provisions of the Plan.  Notwithstanding the preceding sentence, to
the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), an Employer may provide
that upon termination of the Plan, all Account balances of the Participants
shall be distributed, subject to and in accordance with any rules established by
such Employer deemed necessary to comply with the applicable requirements and
limitations of Treas. Reg. §1.409A-3(j)(4)(ix).

 

The Plan may be amended at any time by the Board or the Committee and, without
limiting the generality of any other provision hereof, if the Committee
determines that an amendment to the Plan would result in a substantial
prospective reduction in either the rights or benefits of one or more
Participants with respect to their Benefit determined as of the effective date
of such amendment, the Committee must give each affected Participant notice of
the amendment not less than ninety (90) days prior to the taxable year for which
the amendment is effective.  No such amendment, modification, or alteration
shall be exercised retroactively to alter or change the rights of Participants
or their Beneficiaries insofar as they relate to past deferrals, nor shall any
such amendment divest any Participant of any deferral made prior to the
amendment.  In addition, no such amendment shall modify the Plan in any way that
would

 

14

--------------------------------------------------------------------------------

 

violate Section 409A of the Code.  The Company intends to continue this Plan
indefinitely, but nevertheless assumes no contractual obligation to continue
this Plan or makes any promise to pay benefits other than as provided under this
Plan.

 

SECTION  X.

CLAIMS PROVISIONS

 

10.1.                        Presentation of Claim.  Any Participant or
Beneficiary of a deceased Participant (such Participant or Beneficiary being
referred to below as a “Claimant”) may deliver to the Committee a written claim
for a determination with respect to the amounts distributable to such Claimant
from the Plan.  If such a claim relates to the contents of a notice received by
the Claimant, the claim must be made within sixty (60) days after such notice
was received by the Claimant.  All other claims must be made within one hundred
eighty (180) days of the date on which the event that caused the claim to arise
occurred.  The claim must state with particularity the determination desired by
the Claimant.

 

10.2.                        Notification of Decision.  The Committee shall
consider a Claimant’s claim within a reasonable time, but no later than ninety
(90) days after receiving the claim.  If the Committee determines that special
circumstances require an extension of time for processing the claim, written
notice of the extension shall be furnished to the Claimant prior to the
termination of the initial ninety (90) day period.  In no event shall such
extension exceed a period of ninety (90) days from the end of the initial
period.  The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the Committee expects to render the
benefit determination.  The Committee shall notify the Claimant in writing:

 

(A)                                  THAT THE CLAIMANT’S REQUESTED DETERMINATION
HAS BEEN MADE, AND THAT THE CLAIM HAS BEEN ALLOWED IN FULL; OR

 

(B)                                 THAT THE COMMITTEE HAS REACHED A CONCLUSION
CONTRARY, IN WHOLE OR IN PART, TO THE CLAIMANT’S REQUESTED DETERMINATION, AND
SUCH NOTICE MUST SET FORTH IN A MANNER CALCULATED TO BE UNDERSTOOD BY THE
CLAIMANT:

 

(I)                                     THE SPECIFIC REASON(S) FOR THE DENIAL OF
THE CLAIM, OR ANY PART OF IT;

 

(II)                                  SPECIFIC REFERENCE(S) TO PERTINENT
PROVISIONS OF THE PLAN UPON WHICH SUCH DENIAL WAS BASED;

 

(III)                               A DESCRIPTION OF ANY ADDITIONAL MATERIAL OR
INFORMATION NECESSARY FOR THE CLAIMANT TO PERFECT THE CLAIM, AND AN EXPLANATION
OF WHY SUCH MATERIAL OR INFORMATION IS NECESSARY;

 

(IV)                              AN EXPLANATION OF THE CLAIM REVIEW PROCEDURE
SET FORTH IN SECTION 10.3 BELOW; AND

 

(V)                                 A STATEMENT OF THE CLAIMANT’S RIGHT TO BRING
A CIVIL ACTION UNDER SECTION 502(A) OF ERISA FOLLOWING AN ADVERSE BENEFIT
DETERMINATION ON REVIEW.

 

15

--------------------------------------------------------------------------------

 

10.3.                        Review of a Denied Claim.  On or before sixty (60)
days after receiving a notice from the Committee that a claim has been denied,
in whole or in part, a Claimant (or the Claimant’s duly authorized
representative) must file with the Committee a written request for a review of
the denial of the claim.  The Claimant (or the Claimant’s duly authorized
representative) may:

 

(a)                                   upon request and free of charge, have
reasonable access to, and copies of, all documents, records and other
information relevant to the claim for benefits;

 

(b)                                  submit written comments or other documents;
and

 

(C)                                  REQUEST A HEARING, WHICH THE COMMITTEE, IN
ITS SOLE DISCRETION, MAY GRANT.

 

10.4.                        Decision on Review.  The Committee shall render its
decision on review promptly, and no later than sixty (60) days after the
Committee receives the Claimant’s written request for a review of the denial of
the claim.  If the Committee determines that special circumstances require an
extension of time for processing the claim, written notice of the extension
shall be furnished to the Claimant prior to the termination of the initial sixty
(60) day period.  In no event shall such extension exceed a period of sixty (60)
days from the end of the initial period.  The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which
the Committee expects to render the benefit determination.  In rendering its
decision, the Committee shall take into account all comments, documents, records
and other information submitted by the Claimant relating to the claim, without
regard to whether such information was submitted or considered in the initial
benefit determination.  The decision must be written in a manner calculated to
be understood by the Claimant, and it must contain:

 

(a)                                   specific reasons for the decision;

 

(b)                                  specific reference(s) to the pertinent Plan
provisions upon which the decision was based;

 

(c)                                   a statement that the Claimant is entitled
to receive, upon request and free of charge, reasonable access to and copies of,
all documents, records and other information relevant (as defined in applicable
ERISA regulations) to the Claimant’s claim for benefits; and

 

(D)                                 A STATEMENT OF THE CLAIMANT’S RIGHT TO BRING
A CIVIL ACTION UNDER SECTION 502(A) OF ERISA.

 

10.5.                        Legal Action.  A Claimant’s compliance with the
foregoing provisions of this Article 10 is a mandatory prerequisite to a
Claimant’s right to commence any legal action with respect to any claim for
benefits under the Plan.

 

16

--------------------------------------------------------------------------------

 

SECTION  XI.

GENERAL PROVISIONS

 

11.1.                        No Assignment.  The right of any Participant to
Benefits shall not be assigned, transferred, pledged or encumbered, either
voluntarily or by operation of law, except as provided in Section 8 with respect
to designations of Beneficiaries.

 

11.2.                        Incapacity.  If the Committee shall find that any
person to whom any Benefit is payable under the Plan is unable to care for his
affairs because of illness or accident or is a minor, any payment due shall be
paid to the duly appointed guardian, committee or other legal representative for
such person.  Any such payment shall be a complete discharge of the liabilities
of each Employer and the Committee as to the amount paid.

 

11.3.                        Final Resolution of Disputes Relating to Plan.  If,
after the exhaustion of the claims procedure set forth in Article 10 one or more
disputes remain with regard to the rights under the Plan of any Employee,
Participant, Beneficiary or person claiming under them, such person(s) and the
Committee (collectively, “Interested Parties”) may agree to attempt to resolve
same by telephone conference with an agreed mediator.  If the Interested Parties
cannot resolve their differences by such telephone conference, then the
Interested Parties may agree to schedule a one day mediation with a mediator who
is mutually agreeable to the Interested Parties, within thirty (30) days to
resolve the disputes and to share equally the costs of such mediation.  The
costs and expenses of mediation will be paid by the Company.  If the Interested
Parties agree to mediation and are unable to resolve their dispute by mediation,
then the Interested Parties may institute an arbitration proceeding under the
auspices of the American Arbitration Association to construe or enforce the
provisions of the Plan.  The Interested Party prevailing in any such arbitration
shall recover from the adverse party its actual damages and reasonable costs and
expenses, including, without limitation, reasonable attorneys’ fees incurred in
connection with such dispute and arbitration.  If the Interested Parties seek
resolution through mediation and arbitration then they will waive their right to
institute litigation in a court of law to resolve a dispute concerning the
construction or enforcement of this Plan.

 

11.4.                        Information Required.  Each Participant shall file
with the Committee such pertinent information concerning the Participant and any
Beneficiary as the Committee may specify, and no Participant or Beneficiary or
other person shall have any rights or be entitled to any benefits under the
Plan, unless such information is properly filed.

 

11.5.                        Communications by, and Information from,
Participant.  All elections, selections, designations, requests, notices,
instructions and other Participant communications to the Committee, Third-Party
Record Keeper, Company, or Employer required or permitted under the Plan shall
be in such form as is prescribed in the Rules of General Application.  If the
Committee notifies the Participant or Beneficiary at his last known electronic
address or mailing address that he is entitled to a distribution, and the
Participant or Beneficiary fails to claim his benefits under the Plan within one
year after such notification, his Benefit will be forfeited and inure to the
benefit of the Employer in the manner determined by the Committee.  If the

 

17

--------------------------------------------------------------------------------

 

Participant or Beneficiary is subsequently located, such Benefit will be
restored, but without Earnings being credited subsequent to the date of the
forfeiture.

 

11.6.                        No Rights Implied.  Without limitation, nothing
contained in this Plan, nor any modification or amendment to the Plan, nor the
creation of any Account on the books of the Company, shall give any Employee or
Participant any legal or equitable right against the Company or any officer,
director, or Employee of the Company, except as expressly provided by the Plan.

 

11.7.                        Communications by Committee or Employer.  All
notices, statements, reports and other communications from the Committee or any
Employer to any person required or permitted under the Plan shall be deemed to
have been duly given when sent either (a) electronically or (b) via first-class
mail, postage prepaid, and addressed to such person at his address last
appearing on the Plan’s records.

 

11.8.                        Interpretations and Adjustments.  To the extent
permitted by law, each interpretation of the Plan and each decision on any
matter relating to the Plan made by the Board, the Company, or the Committee,
within their scope of their authority hereunder, shall be made in their sole
discretion and shall be binding on all persons.  A misstatement or other mistake
of fact shall be corrected when it becomes known and the person responsible
shall make such adjustment on account thereof as he considers equitable and
practicable.

 

11.9.                        No Liability for Good Faith Determinations. 
Neither the Company, the Board, nor the Committee shall be liable for any act,
omission, or determination taken or made with respect to the Plan which is not
judicially determined to be due to willful misconduct, and members of the Board,
and the Committee, shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage, or expense (including attorneys’
fees, the costs of settling any suit, provided such settlement is approved by
independent legal counsel selected by the Company, and amounts paid in
satisfaction of a judgment, except a judgment based on a finding of willful
misconduct) arising therefrom to the full extent permitted by law and under any
directors’ and officers’ liability or similar insurance coverage that may from
time to time be in effect.

 

11.10.                  No Employment Rights.  Neither the Plan nor any action
taken under the Plan shall be construed as giving to any Employee the right to
be retained in the employ of an Employer or as affecting the right of an
Employer to dismiss any Employee at any time, with or without cause.

 

11.11.                  Withholding of Taxes.  An Employer shall deduct from
Participant’s Salary or the amount of any payment made pursuant to this Plan any
amounts required to be paid or withheld by the federal government or any state
or local government.  By his participation in the Plan, the Participant agrees
to all such deductions.

 

11.12.                  Waivers.  Any waiver of any right granted pursuant to
this Plan shall not be valid unless the same is in writing and signed by the
party waiving such right.  Any such waiver shall not be deemed to be a waiver of
any other rights.

 

18

--------------------------------------------------------------------------------

 

11.13.                  Records.  Records of the Company, and of the Committee,
as to any matters relating to this Plan will be conclusive on all persons.

 

11.14.                  Securities Laws.  The Plan intends to comply with and be
exempt under The Securities Act of 1933, as amended.  The Participants under the
Plan are final purchasers and not underwriters or conduits to other beneficial
owners or subsequent purchasers.

 

11.15.                  Severability.  In case any one or more of the provisions
contained in this Plan shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
in this Plan shall not in any way be affected or impaired.

 

11.16.                  Captions and Gender.  The captions preceding the
Sections and Subsections of this Plan have been inserted solely as a matter of
convenience and in no way define or limit the scope or intent of any provisions
of this Plan.  Where the context admits or requires, words used in the masculine
gender shall be construed to include the feminine and the neuter also, the
plural shall include the singular, and the singular shall include the plural.

 

11.17.                  Choice of Law.  The Plan and all rights under this Plan
shall be governed by and construed in accordance with the laws of the State of
Texas, except to the extent preempted by ERISA.

 

11.18.                  Effective Date and Termination Date.  This amendment and
restatement is effective January 1, 2009, and shall terminate on the date no
further Benefits are credited hereunder, or on such earlier date as the Plan is
terminated pursuant to Section IX.

 

19

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Company has executed this Second Amended and Restated
Plan on this the 27th day of October, 2008.

 

 

FOSSIL, INC.

 

 

 

 

 

By:

/s/ Michael W. Barnes

 

 

 

 

Its:

President and COO

 

20

--------------------------------------------------------------------------------